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Sunday, 15 February 2009

Egypt Economic and Strategic Outlook - February 2009

"The world economic crisis has extended its shadows on the Egyptian economy in FY2008/09, as after three consecutive years of strong GDP growth of around 7%, the forecast by the Egyptian government as well as the International Monetary Fund (IMF) was set at an average between 5% and 5.5% for the FY2008/09, compared to a world projected average of 0.9%. Having said that, in general Egypt’s medium term outlook remains sound. We believe that the Egyptian economy is capable of surpassing the current storm, thanks to the reforms implemented since 2004. Most likely, the government will work on curbing inflation, maintaining economic growth and balance of payments stability, throughout 2009.

In FY2007/08, the government's total revenues and grants surpassed the budget where it stood at LE221.4bn, reporting an increase of 22.9% compared to the budget growth of 3.9% over FY2006/07. The increase came on the back of the 20.0% growth witnessed in the tax revenues in FY2007/08. However, the real threat that could hinder growth is the high inflation rate, which peaked in August 2008 to 23.6% and declined in December 2008 to 18.3%. The trade deficit is not expected to worsen in 2009 as the imports decline, as a result of a weaker domestic demand and plunging commodity prices will offset the expected drop in the country’s exports. Although under the current world circumstances the increase in FDI inflows would seem not likely, Egypt could benefit from its location and natural resources in attracting more inflows. Despite the challenges that currently face the Egyptian government to sustain the economic growth above 5%, the financial intermediation will not be hampered by the international credit crunch, supported by a strong banking sector with healthy balance sheets and low level of financial integration, thanks to the government reforms."

Global's Jordan Weekly Market Report - February 12, 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 headline above."

Qatar sees huge hike in abandoned cars

Doha has seen a 791 percent increase in the number of cars being abandoned on its streets and outskirts, it was reported on Sunday.

The city’s municipality has revealed that in January this year 1,448 vehicles were deemed to be left unclaimed.

This is a huge hike on the 183 found abandoned in January 2008, according to local Arabic daily Arrayah and reported in Qatar daily Gulf Times.

Failure to save East Europe will lead to worldwide meltdown

The unfolding debt drama in Russia, Ukraine, and the EU states of Eastern Europe has reached acute danger point.

If mishandled by the world policy establishment, this debacle is big enough to shatter the fragile banking systems of Western Europe and set off round two of our financial Götterdämmerung.

Austria's finance minister Josef Pröll made frantic efforts last week to put together a €150bn rescue for the ex-Soviet bloc. Well he might. His banks have lent €230bn to the region, equal to 70pc of Austria's GDP.

Global's DSM Weekly Report - February 12, 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 Doha Stock Market (DSM)". The report views the latest developments in DSM, trading activities, indices performance and corporate news.

In order to view the full reports kindly click on the headline above."

Pakistan 'in fight for survival'

Pakistan's president says his country is fighting for its survival against the Taleban, whose influence he said has spread deep into the country.

In an interview with US TV channel CBS, President Asif Zardari said the Taleban had established a presence across "huge parts" of Pakistan.

The country had failed to increase its forces in response, he said.

A Closer Look at Harvard's Portfolio Changes

There has been lots of chatter about Harvard Management letting go a significant chunk of its staff, as well as winding down much of its equity portfolio, as a filing this week showed. I thought it would be interesting to take a little closer look at what Harvard has done.

From September 30th to today, Harvard has cut the public equity portion (outside of hedge fund holdings, etc.) of its $28.8-billion portfolio from $2.8-billion and 174 positions, to $571-million and 57 positions. That is a remarkable change in such a short period.

Things are equally interesting when you go down to individual holdings. Here is a table of the top ten Harvard positions back in September, and what has happened to them since.

Puzzled by Harvard's Weight in Emerging Market ETFs

Yesterday Paul Kedrosky (you read him, right?) posted some info about the holdings of the Harvard Management Company.

Before we get too far into this, I would remind that these are just the holdings of publicly traded stocks and funds directly managed by HMC, and not representative of the part of the fund that is hired out.

Below is the table that Paul had of the top ten holdings via filings dated December 31. That it is so heavy in narrower ETFs says a couple of things to me. Given their resources and personnel, if Harvard wanted to own more individual stocks they certainly have the wherewithal to pick more stocks. So I take the ETFs as a comment about individual stocks not having a great risk / reward proposition, which, if correct, is an interesting comment at SPX 800.

Arab buying boom in London property market

More Arabs are buying into the prime property market in London as a result of a strong dirham to the pound and falling real estate prices, it was reported on Saturday.

A survey by UK estate agent Knight Frank shows that foreign demand for property in the capital has risen by 35 percent in a year, with 52 percent of the increase coming from the Middle East, according to UAE daily The National.

The reason for the surge is the collapse of the GBP which has fallen from more than AED7.5 to GBP1.00 to as low as AED5.00 to GBP1.00.

US package passes, Saudi shares get boost

Dubai: Saudi Arabian shares advanced yesterday, led by Almarai Co and Saudi Basic Industries Corp, the world's biggest chemicals maker by market value, after the US Congress passed an economic stimulus package.

Almarai, the kingdom's largest food producer by market value, climbed as much as 10 per cent after it formed a venture with PepsiCo Inc Tabuk Agricultural Development Co, the Saudi fruit and vegetable exporter, rose for the first time in three days after announcing plans to pay its 2008 dividend. Saudi Basic, also known as Sabic, advanced as much as 3.7 per cent.

The Tadawul All Share Index rose 2 per cent to 4,944.18 in Riyadh. The measure has risen 2.9 per cent this year after losing more than half its value in 2008 as oil prices dropped.

Iran plans privatisation of state bank for first time

Tehran: Iran plans to offer 5 per cent of Bank Mellat to private investors on February 18, a Tehran Stock Exchange official said on Saturday, in the Islamic Republic's first part-privatisation of a state-owned bank.

The official, who declined to be identified, said the sale was aimed at determining the level of demand and the share price ahead of the possible sale of more Bank Mellat shares if there was interest from buyers. The plan comes in spite of a sharp fall in Iran stocks over the last six months.

Bank Mellat, Iran's second-largest bank after state-owned Bank Melli, is estimated to have a share of around 15 per cent of the country's banking industry.

Mashreq reports Dh1.64 billion net profit

Dubai: Mashreqbank Group on Saturday reported a net profit of Dh1.64 billion, down by 13.6 per cent compared to 2007.

The total Assets of the Bank rose by 6.4 per cent compared to 2007, reaching Dh93 billion. Net Customer Advances, including Islamic financing grew by 55.8 per cent to reach Dh 55 Billion.

Mashreq’s loan portfolio quality, despite the pace of growth, continues to remain exceptionally strong, the bank said in a statement. The Non-performing loans (NPLs) marginally declined to Dh364 million and NPL to Gross Loans ratio further improved to 0.6 per cent in 2008 compared to 1 per cent in 2007.

Proposal moots job security for Emiratis

Dubai: A proposal to ban companies in the private sector from sacking Emiratis other than for labour law violations is under consideration.

The National Human Resource Development and Employment Authority (Tanmia) has submitted a draft proposal to the Ministry of Labour under which cases pertaining to the termination of Emiratis working in the private sector are to be evaluated.

Feddah Lootah, the acting director-general at Tanmia, said the proposal aims to safeguard jobs of Emiratis in the private sector. "The main task of the authority is to preserve the jobs of Emiratis," he said.