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Monday, 26 January 2009

Gold breaks $900 barrier

Gold rose above $900 a troy ounce on Monday, hitting a three and a half month high and posting record highs in euro and sterling as investors sought safe haven from troubled equities markets and expensive government bonds.

Precious metals traders said that investors, particularly in Europe, were pouring money into gold exchange traded funds – a popular way to gain access to the metal – and also buying physical gold, from coins to large bars.

“Effectively what we are seeing is safe haven buying,” said one London-based trader.

The total amount of gold held by the world’s gold ETFs last week rose above 40m ounces for the first time, consolidating the investment vehicles as the largest holders of physical gold after the official reserves of the US, Germany, the International Monetary Fund, France and Italy.

PwC staff detained in Satyam probe

Indian police have detained two PwC auditors in their first move against the professional services firm over the scandal afflicting Satyam Computer Services. Police said the pair were detained for interrogation over the scandal, in which B. Ramalinga Raju, former chairman of Satyam, confessed to fixing the accounts for several years. Price Waterhouse was the auditor of India’s fourth largest outsourcing firm by revenue. The arrests mark a widening of the fraud probe beyond the immediate family and former executives of Satyam. Investigators said the two auditors would be held in judicial custody until Feb 6.

Fledgling markets in shock after the battering of 2008

If the central and eastern European markets had their day in the sun in 2007, when local stock markets were booming and inflows to funds were strong, 2008 was more like a total solar eclipse.

With stock markets in freefall and local currencies taking a pasting, money was cascading out of investment funds across the region.

“The markets saw outflows in all categories and the collapse of a number of bubbles, such as small cap and Russia,” says Nicolas Faller, head of distribution partners at Fortis Investments. “Even bond funds suffered due to higher rates on bank deposits and rising interest rates at the beginning of 2008.”

Institutions stick with hedge funds in 2008

Institutional investors’ appetite for hedge funds remained intact as 2008 drew to a close, although pension funds and their ilk are becoming more concerned about the industry’s dire performance.

Some 85 per cent of institutions surveyed by SEI and Greenwich Associates in November said they planned to maintain or increase their allocations to hedge funds, with only a quarter saying they had liquidated some investments or planned to do so.

Appetite for oil ETCs on the increase

Appetite for oil-based exchange traded commodities is rising as investors anticipate a rebound in global oil prices.

The market value of outstanding long oil ETCs, listed securities backed by a commodity, issued by ETF Securities surged to a record $670m (£490m, €522m) in the week ending January 16, a jump of $147m in just one week and the fastest rise since inception in 2005.

Saudi warning

Anyone with a stake in the stability of the wider Middle East should take very seriously the warning set forth in the Financial Times last Friday by Prince Turki al-Faisal.

Prince Turki, a man who expresses himself with care and moderation, was recently the Saudi ambassador to the UK and the US and, before that, the long-serving chief of Saudi intelligence. He and his brother, foreign minister Prince Saud al-Faisal, have represented the pro-US kingdom to the world for well over three decades. They are also part of the reforming wing of Saudi Arabia’s absolute monarchy and allies of King Abdullah.

Prince Turki, citing equally forthright remarks by King Abdullah and Prince Saud, is now telling the new administration of Barack Obama it can either change course radically on the Israeli-Palestinian conflict or forfeit the US “special relationship” with Saudi Arabia. The US, he warns, risks losing its leadership role in the Middle East.

Joint initiatives can rescue eastern Europe

The financial crisis of 2008 has turned into the economic crisis of 2009 and the first signs of social unrest are emerging just as the full effects of the downswing are starting to be felt in eastern Europe.

The region’s problems are deeply interwoven with those of the rest of Europe and the solution lies in a co-ordinated response on the part of both public authorities and international financial institutions. Narrow domestic approaches in individual countries would worsen the situation for all.

Most eastern European countries have seen a rapid deterioration of their real economies since last September, when credit flows dried up and their main western trading partners entered into recession. This has had a severe impact on eastern European countries’ all-important exports.

KIA cuts global stocks exposure

A government report has confirmed that the Kuwait Investment Authority (KIA), the nation's sovereign wealth fund, has reduced its exposure to global stock markets since October, shifting assets instead into short-term cash funds.

In a briefing to parliament, the government said KIA had cut the ratio of international share investments in a key fund in a bid to minimise the effect of the global financial crisis on Kuwait, the world's seventh-largest oil exporter.

The news comes after KIA, which manages Kuwait's substantial oil-generated assets, last year burned its fingers by buying into U.S. banks such as Citigroup and Merrill Lynch before both stocks nosedived and the latter filed for bankruptcy protection.

Global's Jordan Weekly Market Report - January 22 , 2009

"In our effort to provide the investment community, economists and researchers with an array of market reviews, we at Global Investment House are proud to present "The Weekly report on Amman Stock Exchange (ASE)". The report views the latest developments in the ASE, trading activity, indices performance and economic and corporate news.

In order to view the full reports kindly click on the link below:

English Report: "Jordan Weekly Market Report"

Arabic Report: "Jordan Weekly Market Report"

To view more reports on the Kuwaiti and other markets, please visit our website:"