Thursday, 2 September 2010
“Markets opened with enthusiasm today because of yesterday’s great performance in U.S. markets,” said Saad Al- Chalabi, institutional trader at Al Ramz Securities in Abu Dhabi. The gains were limited “because of low volumes and lack of interest.”
The Standard & Poor’s 500 Index jumped 3 percent yesterday, the most since July, after the ISM’s factory index rose to a three-month high of 56.3 in July. Readings greater than 50 signal growth, and the figure was projected to drop to 52.8, according to the median forecast of economists in a Bloomberg News survey. The MSCI Asia Pacific Index gained as much as 1.2 percent.
Amwal AlKhaleej sued the brothers, who are majority shareholders of Damas International, after accusing the jewellery retailer of not paying for shares it acquired before the Dubai company went public in 2008.
The settlement of the dispute clears a major hurdle for Tawfique, Tawhid and Tamjid Abdullah, who already owe Dh606m to Damas International after making “unauthorised transactions” at the company without the approval of shareholders."
The MSCI Emerging Markets Index is valued at 14.1 times reported profits and 1.9 times net assets, compared with ratios of 14.9 and 1.7 for the MSCI World Index, according to data compiled by Bloomberg. When developing-nation equities traded at these levels versus advanced-country stocks in June 2008, the emerging gauge sank 48 percent in four months and trailed the MSCI World index by 16 percentage points.
HSBC Global Asset Management, Morgan Stanley and Deutsche Bank AG say this time is different because developing nations have less debt, more profitable companies and are growing twice as fast as advanced economies. Global money managers are more bullish on emerging markets than any region, while mutual fund investors poured $35 billion into the countries this year, even as they pulled $28 billion from the U.S., Europe and Japan, data from Bank of America Corp. and JPMorgan Chase & Co. show.
The index provider’s decision to move the country to a developed nations index prompted Harvard University, T. Rowe Price Group Inc. and Eaton Vance Corp. to sell a combined $210 million in Israeli stocks from their emerging markets investments last quarter, according to Bloomberg estimates. Funds focusing on mature economies have been slow to buy the shares because Israel accounts for just 0.4 percent of the developed markets index, compared with about 3 percent of MSCI’s emerging markets measure.
“Israeli stocks might be in no-man’s land for a while,” John Derrick, the director of research at San Antonio-based U.S. Global Investors Inc., said in an interview. “It’s small enough in the developed market index to avoid altogether,” said Derrick, whose firm’s Global Emerging Markets Fund sold 9,346 shares of Israel Chemical Ltd. during the second quarter, according to data compiled by Bloomberg.
Saudi Arabia’s Tadawul stock market may be the largest and the most liquid in the oil-rich Arab world – but until recently it was nearly impossible for international investors to access. That is now tentatively changing.
The swaps do not give voting rights, but the decision allowed international investors to gain direct access to individual shares for the first time. Previously only Saudi and Gulf Arab investors or “local” international banks such as HSBC were allowed to buy shares, which severely curtailed international capital inflows.
Millennium, part-owned by Dubai Islamic Bank PJSC, the United Arab Emirates’ largest Shariah-compliant bank, bought $10 million of four-year convertible notes in July that were sold by International Innovative Technologies Ltd., a clean energy company in Gateshead.
“We are looking at transactions in Europe and other areas,” Vally Khamisani, a director at Millennium said in an interview in Dubai yesterday. “They can tap into capital which is focused on Shariah principles. The structures can fly well here.”
It has certainly been a lucrative industry for Saudi Basic Materials Corporation (Sabic), the state-controlled giant that has emerged as a global player in plastics, chemicals, fertilisers and metals (which are used to make golf clubs), with operations spanning from the US to China.
With a market capitalisation of over $70bn Sabic is by some distance the largest listed company in the Gulf, and makes up more than a fifth of Saudi Arabia’s Tadawul stock market.