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Sunday, 21 August 2011

Business : Dubai direct trade surges 27% to Dh289b

Dubai’s direct trade exchange with the world has seen a significant rise of 27 per cent in the first five months of the year, reaching Dh289 billion compared to Dh228 billion in the same period in 2010.

Ahmed Butti, the Executive Chairman of Ports, Customs and Free Zone Corporation, said the indicators of Dubai trade with the world spanning exporting, importing and re-exporting, recorded positive and promising rates from January to May 2011.

“Likewise, free zone trade scored a 25 per cent growth valued at Dh160 billion as opposed to Dh128 billion in the same period last year.”

Kingdom leads MENA in asset management | A1SaudiArabia.com

The Middle East North Africa (MENA) regions funds industry registered $64.5 billion in assets under management at the end of the first quarter of 2011 for funds domiciled in the region, with Saudi Arabia, having 243 domiciled funds, continues to lead the way with $23.7 billion in assets under management, Zawya, an online provider of business intelligence, said in its recent quarterly funds ranking results.

Morocco followed with $13.2 billion and Kuwait with $8.9 billion.

Compared to the previous quarter, only two countries posted net funds inflow: Jordan ($1.6 million) and Oman ($1.3 million). All others showed net outflow.


MENA stock markets close - August 21, 2011

ExchangeStatus IndexChange
TASI (Saudi Stock Market)
5916.31-0.25%
DFM (Dubai Financial Market)
1452.54-1.08%
ADX (Abudhabi Securities Exchange)
2555.86-1.07%
KSE (Kuwait Stock Exchange)
5764.3-1.07%
BSE (Bahrain Stock Exchange)
1259.8-0.11%
MSM (Muscat Securities Market)
5492.29-0.63%
QE (Qatar Exchange)
8096.09-1.16%
LSE (Beirut Stock Exchange)
1299.690.27%
EGX 30 (Egypt Exchange)
4593.39-3.24%
ASE (Amman Stock Exchange)
2022.63-0.06%
TUNINDEX (Tunisia Stock Exchange)
4442.64-0.44%
CB (Casablanca Stock Exchange)
11354.9-0.48%
PSE (Palestine Securities Exchange)
489.46-0.14%

Egypt Stocks Drop Most in Week as Tensions With Israel Increase - Bloomberg

Egypt’s benchmark stock index dropped the most in more than a week as protesters demonstrated outside the Israeli embassy in Cairo after a deadly incident at the border and following a slump in global markets.

Orascom Construction Industries (OCIC), Egypt’s biggest publicly traded builder, fell 3.3 percent. Al Arafa Investments & Consulting, a clothing manufacturer that uses Israeli products, lost the most since Aug. 9. The EGX 30 Index (EGX30) retreated 3.2 percent, the most since Aug. 9, to 4,593.39 at the 1:30 p.m. close in Cairo.

“This drop is clearly due to the political tensions in Sinai,” said Tamer Nigm, head of sales and trading at Cairo- based Watheeqa Securities Brokearage. “There are fears that the situation may escalate.”


Finding the Right Price for Oil | Crossroads Arabia

Science Blog runs a piece about the economics of oil pricing and alternative energies, with a allusion to the environmental effects of the combination of those factors. While noting that a conspiracy among oil producers is unlikely—impossible, I would say—alternative energies do actually represent a threat to them. If alternative fuels became an inexpensive reality, then it would be to the producers benefit to pump a much oil at whatever the price to get rid of a depreciation asset. Cheap oil would mean that more of it was used and that, we’re told, is bad for the environment.
Is oil pricing itself out of the market?
University of Alberta researcher Andrew Leach likes the way Saudi Prince Alwaleed bin Talal thinks.
A new paper by Leach, an associate professor in the Alberta School of Business, and fellow University of Alberta economics researcher Ujjayant Chakravorty, posits scenarios that parallel a statement Alwaleed made in May declaring that it is in the best interests of Saudi oil producers to keep oil around the $70 mark to prevent the West from developing alternative energy sources. Their paper, co-written with a colleague from the Toulouse School of Economics , hypothesizes scenarios wherein a narrowing of the gap between developing renewable energy resources and fossil fuel resources might mean a rush to drain the oil from its source.
But . . . will we need oil for 100 years?



National Bank of Abu Dhabi Advising Kuwait on Failaka Island - Bloomberg

National Bank of Abu Dhabi PJSC (NBAD), the United Arab Emirates’ second-biggest bank, is part of a group advising Kuwait on the development of Failaka island.

Other members include Pinsent Masons, WSP Environmental and EC Harris Consultancy, Nicholas Gilani, co-head of investment banking at the Abu Dhabi lender, said today in an interview.

Kuwait signed a 2.1 million dinar ($7.7 million) agreement with a group led by the Abu Dhabi bank to conduct technical and feasibility studies over 27 months for the development of Failaka Island, state-run news agency Kuna reported on Aug. 18. The planned transformation of the island into an international tourist destination may cost as much as 500 million dinars, Kuna said, citing Adel al-Roumi, head of Kuwait’s Partnerships Technical Bureau.

Kuwait Salary Spending « Alpha Dinar- talking Gulf finance

Government workers’ salaries in Kuwait are a hot topic these days. Parliament members are trying to win the confidence of their voters by increasing their salaries without any thought to the implications. The government is now awarding its employees with certain majors special salary additions. They also increase everybody else’s salary by KD 100 (to be fair).

These actions are causing a huge strain on the government budget. Salary expeditures have grown by 150% in the past 8 years (up from KD 1.7 billion in 2005 to KD 4.4 billion this year). Kuwait’s budget has been in a surplus for the past couple of years due to high oil prices, but as these expenses increase, and the outlook on oil and the global economy remain bearish, Kuwait’s budget outlook seems dim. If the global economy does go into a recession, and oil drops again to $30, then Kuwait would probably receive KD 6 billion less than the budgeted oil revenues (in the budget, oil is forecasted to be at $60), raising the deficit for the year to KD 13 billion, up from the KD 7 billion forecasted.

These salary increases are also having a negative unintended affect on the Private Sector. These increases are negating the effect of the Manpower Government Restructuring Program (the monthly support the government offers to Kuwaitis in the private sector to encourage citizens to work in the private sector).

Dubai Shares Decline Most in a Week, Lead Gulf Drop, Paced by Emaar, DIB - Bloomberg

Persian Gulf shares fell, with Dubai’s index retreating the most in a week, after oil declined and reports signaled the global economic recovery is faltering.

Emaar Properties PJSC (EMAAR), developer of the world’s tallest tower, dropped 1.8 percent. Dubai Islamic Bank PJSC (DIB), the United Arab Emirates’ biggest Shariah-compliant lender, slipped as much as 2 percent. The DFM General Index (DFMGI) fell 1.3 percent, the most since Aug. 11, to 1,448.81 at 10:58 a.m. in Dubai. The Bloomberg GCC 200 Index (BGCC200) retreated 0.3 percent. The 147-company Tadawul All Share Index (SASEIDX) lost 2.6 percent yesterday.

Markets are trading lower on the “back of Saudi Arabia yesterday and global markets worsening over the weekend,” said Haissam Arabi, chief executive officer at Gulfmena Alternative Investments in Dubai. “We’re seeing 100 percent correlation with global marco themes. The correlation will continue for some time, although at some point that should change as our fundamentals are entirely different.”

SPECIAL COMMENT – The need of the hour: an Islamic Sovereign Wealth Fund | alifarabia

It took Islamic finance forty years to reach the magical US$1 trillion benchmark (in terms of size or assets under management), and this niche market is on the march towards the next milestone of $2 trillion within the next five years — with Moody’s predicting $5 trillion.

Considering the fact that it took almost twenty years for the conventional industry to reach the US$ 1 trillion mark, but only ten to reach US$ 6 trillion (see figure 1), it is highly likely that Islamic finance will reach that level within the next five to six years, subject to the clearance of certain bottlenecks.


MS's Recession Warning - Zawya


IM READING: MORGAN STANLEY'S GLOBAL

ECONOMIC FORECAST


2009

2010

2011

2012




Old

New

Old

New


Global


-0.7


5.1


3.9


4.2


3.8


4.5


G10


-3.6


2.6


1.5


1.9


1.5


2.4


United States


-2.6


3


1.8


2.6


2.1


3


Euro Area


-4.1


1.7


1.7


2


0.5


1.2


Japan


-6.3


4


-0.6


-1.2


1.3


2.9


UK


-4.9


1.4


1.2


1.2


1.4


1.8


EM


2.6


7.8


6.4


6.6


6.1


6.7


China


9.2


10.3


9


9


8.7


9


India


7.2


9


7.3


7.3


7.4


7.8


Russia


-7.8


4


4.7


5


5.2


5.5


Brazil


-0.2


7.5


3.7


4


3.5


4.6


Source: Morgan Stanley Research; E = Morgan Stanley Research estimates

Morgan Stanley just downgraded the world's economic outlook, and blames U.S. and European leaders for the mess. In its grim prognosis of the global economy, Morgan Stanley completely ignores the Middle East countries.


So we don't know how MS really feels about the outlook of the regional economies, but here is a clue: the Middle East oil producers' biggest clients - the United States, Europe and even the hot emerging markets - have seen growth forecasts slashed by the bank.


"We cut our global GDP growth forecasts to 3.9% in 2011 and 3.8% in 2012, from 4.2% and 4.5%, respectively," notes Joachim Fels, head of Morgan Stanley's global economics research team. "DM (developed markets) growth looks set to average only 1.5% this year and next (down from 1.9% and 2.4% previously), making the BBB recovery even more bumpy, below-par and brittle."