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Monday, 9 February 2009

Saudi Market Performance & Profitability - 2008

"In continuation of Global Investment House coverage of the listed companies in Saudi Arabia, we have come out with a report on Saudi Market Performance & Profitability - 2008

The year 2008 was a hard year for stock markets around the world and the Saudi bourse was no exception. During the last quarter of the year 2008, Saudi stocks tracked the sharp fall in international oil prices and faced the prospect of a regional economic slowdown amid a global financial crisis. Tadawul All-Share Index (TASI), the Saudi market benchmark, registered 56.49 percent in annual losses for the year 2008. The market capitalization, including the new listings, stood at SR924.53bn on December 31, 2008 compared to SR1,947.21bn at the start of the year, as investors’ wealth declined by 52.52 percent.

Saudi corporate profit margins fell in the fourth quarter of last year after companies started to feel the impact of declining oil prices and the overall economic slowdown. Overall profitability decreased by 7.57% in 2008 compared to the corresponding period last year. Those results excludes losses registered by Kingdom Holding Company and newly listed, non operational insurance stocks.

In order to view the full report, kindly click on the blog headline."

FEDERATION OF EURO ASIAN STOCK EXCHANGES 4th Quarter 2008 - January Supplement

"January Supplement:
In addition, with this issue, the compilation of comments from the FEAS member exchanges on their 4th Quarter 2008 performance combined with quarterly statistical comparisons are included in this Newsletter Supplement. To view the supplement go blog headline."
















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Global's Monthly Technical Analysis Overview - February 2009

"Given the importance of Technical Analysis, Global has published its “MENA, International Markets & Oil – Technical Overview”. This report includes all seven GCC Stock Market Indices, Levant, North Africa, NYMEX Crude Oil, and major International Indices with a brief technical overview up till the month ending in January 2009. The report highlights: Trend Status, Resistance, Support, Highest and Lowest level expected for the coming month for each Index & Product.



In order to view the full GCC research for the week, kindly click on the link above."

Bleak times for the funds of hedge funds

Funds of hedge funds in Asia look as if they may be having a better time than their counterparts in the rest of the world. Of course, “better” is a relative term. Life has still been pretty awful over the past six months for everyone, as panicked investors wanted their money back, in cash, as quickly as possible.

“2008 will go down in history as the worst year for hedge funds. Period,” says the Singapore-based hedge fund consultancy GFIA in its February newsletter to clients.


Funds of funds in Asia have underperformed the broader hedge fund indices for the region. But global funds of funds have underperformed global indices by a larger margin, according to returns data compiled by Eurekahedge in Singapore.

BarCap unveils replication index

Investors looking to profit from the woes of hedge funds will have a fresh tool at their disposal from today with the launch of a replication index designed to provide short exposure to the struggling sector.

The Shortable Barclays Alternatives Replication Index, as well as a sister long index, are being launched by Barclays Capital after a year in which the average hedge fund lost 23.3 per cent, according to Credit Suisse.

Antti Suhonen, head of fund-linked structuring at BarCap, said the bank had seen interest in the short index from hedge fund investors who were unable to liquidate their positions, or chose not to, but wanted to manage their directional exposure to the sector.

An undiminished faith in the resurgent Silk Road

Over the past 10 years most European and US stock markets have generated returns close to or below zero. During the same period, markets in Africa and the Middle East generated double-digit returns. The world is shifting.

Thus runs the core rationale behind Silk Invest, an investment boutique specialising in Africa and the Middle East, set up in June 2008 by Zin Bekkali, formerly of Fortis Investments.

It is a simple prediction, says Mr Bekkali, and one his firm is not alone in making. The developed countries will face nil growth in the coming years; growth will take place elsewhere, for example in Africa where population growth is 3 per cent a year. “People on the Mediterranean see this change the best,” he says. “Japan also sees it more clearly than we do.”

Ukraine pushes for loans to meet shortfall

Ukraine has appealed for emergency loans from the world’s richest countries to help support its economy, which has been battered by the global financial crisis.

Yulia Tymoshenko, prime minister of Ukraine, said her government had sent letters to the US, Russia, China, Japan and the European Union asking for loans to fill a shortfall in budget revenues for this year.

“We have already received a positive response from some countries, including Russia,” Ms Tymoshenko said at the Munich Security Conference at the weekend. “Russia is ready to sign such loan agreements.” She did not clarify how much Kiev was seeking to borrow but reports in Ukraine suggested Russia could lend $5bn (€3.9bn, £3.4bn).

Rouble trouble

It is 10 years ago that Russia returned to economic growth after the collapse of the 1990s. It is also 10 years since Vladimir Putin, Russia’s premier, ascended to the pinnacle of power. His popularity has rested in large part on the good fortune of high oil prices. As Russia enters its first recession on his watch, his government cannot afford any serious mistakes in its most consequential economic decisions yet.

Exchange rate policy presents the most urgent challenge. As declining oil prices have dragged the rouble down, the central bank has tried to brake its fall. This effort has not come cheaply: about $200bn, a third of the central bank’s foreign exchange reserves, flowed out of its vaults in the past three months. The authorities found the price worth paying to prevent a repeat of 1998 when the rouble precipitously lost three-quarters of its value, the government defaulted on its debts and many Russians were ruined.

Still, the bleeding of reserves must stop, or it will haemorrhage until nothing is left. Much of the drained reserves benefited banks that borrowed roubles from the central bank itself in order to speculate against it. By committing to the current rouble floor, the central bank is setting itself up as a target for speculative attack. Hoping that oil prices will recover is no option; waiting will just make the losses larger and the eventual adjustment more painful. Russia should let the rouble float, stabilise its reserves and focus on fighting the recession and softening the impact on Russians of the rouble’s fall.

Growth in Gulf states set to halve in 2009

Growth in Arab Gulf states will almost halve in 2009 on lower than expected oil prices amid the gloomiest global economic outlook in more than half a century, according to the IMF.

Masood Ahmed, the IMF’s regional director, said Gulf Co-operation Council states – which include Saudi Arabia and the United Arab Emirates – would see gross domestic product fall from 6.8 per cent in 2008 to 3.5 per cent this year.

In its October economic report, before the Opec oil producers’ cartel slashed production as the recession deepened, the IMF predicted a relatively moderate easing of growth in the GCC from 7.1 per cent last year to 6.6 per cent this year.

Abu Dhabi urges UAE stimulus package

An important Abu Dhabi policy advisory board headed by the emirate’s influential crown prince has urged the capital of the United Arab Emirates to establish a “comprehensive economy stimulant package” for the entire country.

The report comes as bankers and credit analysts warn that oil-rich Abu Dhabi’s unilateral decision last week to recapitalise its own five banks exposes other UAE institutions to unwelcome scrutiny. Fitch Ratings said in a report on Thursday that Abu Dhabi’s action “leaves other banks in the UAE looking potentially more vulnerable in the event of a significant domestic downturn”.

This sparked fears that the capital of the UAE may hesitate to support neighbouring emirates such as Dubai. A senior Abu Dhabi official told the FT at the end of last week that there had been no formal approach by Dubai to ask for help in securing banks and other institutions in the UAE’s commercial capital.

Kuwait to guarantee loans worth $6.75b

Kuwait City: Kuwait's government will guarantee half of as much as 4 billion dinars (Dh50.2 billion) in new loans provided by local banks this year and the next, as part of a plan to protect its economy from the global financial crisis.

"The state will guarantee new credit obtained by clients of Kuwaiti banks from all sectors of the local economy," central bank governor Shaikh Salem Abdul Aziz Al Sabah said.

"This credit must be used locally and with a maximum limit of 4 billion dinars for 2009 and 2010, provided that the guarantee should not exceed 50 per cent of credit."

ADX signs MoU with Shanghai exchange

Abu Dhabi: Abu Dhabi Securities Exchange (ADX) said yesterday it has signed a memorandum of understanding (MoU) with the Shanghai Stock Exchange (SSE).

The agreement will also see ADX and SSE working closely together in terms of information sharing and product development.

"Shanghai is a large and well established stock exchange," said Tom Healy, chief executive of ADX.