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Tuesday, 7 January 2014

Saudi Gazette - Investors switch to Kuwait, Oman as UAE peters out

Saudi Gazette - Investors switch to Kuwait, Oman as UAE peters out:

"Dubai’s stock index fell for a third consecutive session on Tuesday after the local regulator tightened margin lending rules and some investors started shifting into markets which saw slower growth last year, such as Kuwait and Oman.

Dubai’s index, which hit a five-year peak last week and more than doubled in 2013, fell 1.5 percent, extending a pull-back that began after the Securities and Commodities Authority said it would crack down on unlicensed margin lending.

That prompted some brokers to ask clients to sell shares to lower margin levels.

“I think the market was very stretched and it is completely natural to see some profit-taking now,” said Sebastien Henin, portfolio manager at The National Investor."

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Saudi Gazette - Sukuk issuances surge to $120b in 2013; Saudi Arabia takes lead

Saudi Gazette - Sukuk issuances surge to $120b in 2013; Saudi Arabia takes lead:

"Total sukuk issuances in December stood at $14.1 billion, an increase of $6 billion over last November, bringing the total sukuk issuances for 2013 to about $120 billion, KFH-Research, a subsidiary of Kuwait Finance House Group, KFH group, said in its sukuk monthly report on Tuesday.

The report added that Saudi Arabia, the United Arab Emirates and Qatar issued sukuk of $3.3 billion during December, while Malaysia whose currency is the ringgit came in the first place in terms of issuance volume and Saudi riyal came in third place after the ringgit and the US dollar in terms of the currency issuance.

Moreover, the report explained that sukuk issuance during the month of December reflected investors' desire to get cheaper funding rates. According to the report, the total issuance of sukuk during December was 126 compared to 53 in November, and 66 in October 2013."

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ERDAL SAĞLAM - Market forces Central Bank to raise interests

ERDAL SAĞLAM - Market forces Central Bank to raise interests:

"The Central Bank has not increased interest rates for a long time despite the demand of the markets; however, developments experienced in the short term capital exit, the increase of the domestic demand for foreign currency, together with the upward tendency of the inflation rate are all putting pressure on the Central Bank.

Market players have been saying for a long time a period has started when a global liquidity exit would begin and interest rates should be increased as a precaution. Despite this, the Central Bank did not increase interests; moreover, the corruption and bribery probe was added to this fragile environment, as well as the state crisis that followed it. The Central Bank, despite this increasing vulnerability, again refrained from increasing rates. This situation has been interpreted in all markets as, “The Central Bank cannot make the decision to raise interest rates in order not to trouble the government before elections.”

Now, almost everybody agrees because the Central Bank cannot act independently and does not raise the rates in order not to trouble the government, this situation aggravates the panic in the markets. "

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Menacorp rated as top brokerage house in UAE | GulfNews.com

Menacorp rated as top brokerage house in UAE | GulfNews.com:

"Menacorp, the UAE’s leading investment bank, has been ranked the number one brokerage house in the UAE by trade value for 2013, according to official data published by the Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX) last week..
The bank bested 49 competitors at the DFM and ADX exchanges for the entire year, consistently delivering industry-leading services behind its philosophy of ‘values creating value.’ As one of the few UAE-based brokers authorized by the Securities and Commodities Authority to offer Margin Trading and access to regional and international markets, Menacorp performed exceptionally well in 2013 through an ambitious expansion drive that saw the gathering of 40 brokers to form the largest sales force in the Mena region."

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Guest post: Putin and the Sochi Potemkin village | beyondbrics

Guest post: Putin and the Sochi Potemkin village | beyondbrics:

"Vladimir Putin has been acclaimed by many as the man of 2013. He outmanoeuvred the west first on Syria and then on Ukraine. He has tried to show a softer side with recent high-profile pardons, from Khodorkovsky to Pussy Riot and Greenpeace campaigners. Now momentum is building up to the Sochi Winter Olympics, which will be presented as a show case for Russia and the Putin regime.

It will be interesting to see if he remains at his peak in 2014, post-Sochi.

There is a trail of countries that ran high-profile global sporting events and suffered the “Olympics effect” of post-event depression, especially having had to pick up a rather large tab – for example, most recently, Greece and South Africa."

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MidEast Stocks Mixed, Dubai Continues to Fall On Tighter Margin Lending Rules - NASDAQ.com

MidEast Stocks Mixed, Dubai Continues to Fall On Tighter Margin Lending Rules - NASDAQ.com:

"Middle East shares were mixed, with Dubai falling again after the local regulator tightened margin lending rules.

Other markets like Kuwait and Oman edged up, though, as investors rotated into underperforming markets in the region. They expect these markets to rally to come more in line with 2013 gains in other parts of the region.

Dubai's main index fell 1.5% to 3,378 points, Abu Dhabi dropped 1.4% to 4,395 points, Oman firmed 0.8% to 6,985 points, Kuwait added 0.7% to 7,659 points, Saudi Arabia eased 0.03% to 8,609 points, Bahrain gained 0.4% to 1,256 points and Qatar inched up 0.1% to 10,799 points."

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Daily chart: Growing pains | The Economist

Daily chart: Growing pains | The Economist:

"The euro area celebrates its 15th anniversary with its 18th member

WHEN Europe’s single currency was born in 1999 it could never have anticipated such a troublesome four years. Since 2010 bail-outs of Greece, Ireland, Portugal and Cyprus have been followed by severe austerity, economic upheaval and political fractions across the euro area. In 2014 Latvia becomes the 18th member of the currency bloc. Ireland will exit the bail-out programme, though Greece, Portugal and Cyprus are likely to require additional funds (ie: another bail-out). Meanwhile Germany’s faith in the project remains strong—that may be because it has been one of the largest beneficiaries. GDP per person has risen by over 20% in Germany since 1999; that contrasts sharply with a 3% decline in Italy. Full article here.


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ECONOMICS - Turkey predicts brief economic impact from graft probe

ECONOMICS - Turkey predicts brief economic impact from graft probe:

"Uncertainty caused by Turkey’s corruption scandal could hit economic growth in the near term, Finance Minister Mehmet Şimşek said on Jan. 7, while ratings agency Fitch warned that a prolonged crisis could weaken the country’s creditworthiness.

A wide-ranging graft investigation, cast by Prime Minister Tayyip Erdoğan as a plot to undermine his government, is shaking investor confidence in Turkey when the lira is languishing around record lows, inflation rising and growth slowing.

“We are facing a significant challenge in the political arena but we think this will not be long-lived,” Şimşek said in an interview on CNN Türk television."

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Video: tapering is “not significant” for EM, says Mobius | beyondbrics

Video: tapering is “not significant” for EM, says Mobius | beyondbrics:

"
Guess what? Mark Mobius, chairman of Templeton Emerging Markets, is still an EM bull! He dismisses the 2013 taper tantrum as “overdone”, and says that the actual onset of tapering will prove ” not significant” to emerging markets as an asset class.

It may not come as a huge surprise to hear an EM perma-bull being bullish. But the often white-suited Mobius oversees around $50bn of assets, including Templeton’s $14bn Asian growth fund, making his views on the market worth hearing.

The main reasons for his chipper outlook would be familiar to any EM bull:


  • Growth may be slowing, but it’s still a lot higher than in the developed world
  • Debt may be rising, but it’s still a lot lower than in the developed world
  • Even with tapering, there’s still a lot of money out there
  • US assets have been in favour for ages – investors will soon seek alternatives
  • The 2013 sell-off left plenty of EM assets looking cheap


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UAE's federal credit bureau to start operations in Q1 2014 - Emirates 24/7

UAE's federal credit bureau to start operations in Q1 2014 - Emirates 24/7:

"Al Etihad Credit Bureau (AECB), a federal government company specialised in providing UAE-based credit reports and other financial information, has announced in a media statement today that it will be operational by the first quarter of 2014.

Supported by the UAE federal government, AECB has approached all UAE-based banks to sign agreements and provide credit information via a process which will be completed by the end of January 2014.

Additionally, AECB is currently finalising the installation of an electronic link with banks and financial institutions operating in the UAE in order to create a comprehensive database of individuals’ and businesses’ credit information.

Marwan Ahmad Lutfi, CEO of AECB, said: “Effectively run credit bureaux are internationally proven to support responsible lending, enhance payment behaviour and reduce credit losses from bad or non- performing debts.”"

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▶ Water Wars: Land snatched from Syria supplies third of Israel's H2O - YouTube

▶ Water Wars: Land snatched from Syria supplies third of Israel's H2O - YouTube:

"Water is life, so they say, but rivalry over supplies can lead to bitter conflicts. You can see here that, since the mid-20th century, the planet's seen nearly 180 conflicts connected to water resources. These include both small and large-scale clashes - a lot of them in the Middle East and Africa. So, it might surprise you to hear that it's water - rather than oil - that could be what's fought over in the coming years in the region. Paula Slier reports now from Israel.


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Noor Bank abandons its Islamic title as negative for future marketing strategy « ArabianMoney

Noor Bank abandons its Islamic title as negative for future marketing strategy « ArabianMoney:

"Noor Islamic Bank is abandoning its Islamic appellation and becoming plain Noor Bank after a two-year marketing study concluded that it would be more attractive to potential customers in the UAE without it.

This seems a strange move given that Dubai Government has just embarked on an expensive marketing campaign to brand Dubai as the centre of the global Islamic economy. But Noor Bank, as it is called from today, does have some logic on its side."

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Arabs, Oil Wealth And Power Struggle - OpEd Eurasia Review

Arabs, Oil Wealth And Power Struggle - OpEd Eurasia Review:

"In what way is the oil wealth of the Arab countries being spent? Is that wealth being used to promote sustainable social, cultural, political and economic development in Arab countries and, thus, plays a positive role in the life and livelihood of the Arab masses? Or is it being used in the opposite direction and is actually destroying the entire infrastructure in the Arab world, and instead of being a silver bullet for the maladies of the Arab countries, is only a scourge? It is not easy to pass a simple judgment on this issue and many positive or negative arguments can be offered here. However, if the current conditions in the Arab world are examined more closely, especially after the political developments that have come to be known as the Arab Spring, one can, at least, claim that more than being a cure to their intractable ailments, the Arab oil wealth has been a scourge in disguise."

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UPDATE 1-Kuwait appoints Islamist MP as oil minister in reshuffle | Reuters

UPDATE 1-Kuwait appoints Islamist MP as oil minister in reshuffle | Reuters:

"* MP Ali Saleh al-Omair is new oil minister

* Former commerce minister Anas al-Saleh to head Finance Ministry (Adds background and details)

By Sylvia Westall

KUWAIT, Jan 6 (Reuters) - Major oil producer Kuwait appointed an Islamist lawmaker as oil minister on Monday as part of a government reshuffle triggered by political tensions, although the move is unlikely to affect energy policy.

Ali Saleh al-Omair, who replaces Mustapha al-Shamali as oil minister, is part of a group of Salafi Islamist politicians who are generally cooperative with the government. He was elected as a member of parliament in July.

Anas al-Saleh, a former minister for commerce and industry, was selected to head the Finance Ministry, replacing Sheikh Salem Abdulaziz al-Sabah, who has repeatedly criticised high government spending in Kuwait."

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Value Stocks Beckon in Emerging Markets | PRAGMATIC CAPITALISM

Value Stocks Beckon in Emerging Markets | PRAGMATIC CAPITALISM:

"Years of playing defense have left many emerging-market (EM) equity portfolios laden with pricey safe-haven stocks. We think they risk missing the big opportunity that’s brewing in value stocks, especially as EM economies begin to stabilize.

The risk rally that has thundered across the developed markets (DM) over the past 18 months has largely bypassed the emerging world. Emerging economies have responded more slowly than usual to improving DM activity, while uncertainties about rich-world monetary policies loom. Nervous EM investors have been slow to abandon the relative safety of predictable, fundamentally stable stocks, while shunning riskier stocks—regardless of valuation.

We think it’s time for a rethink. Nearly two-thirds of actively managed EM equity assets are in stocks trading at premiums to the market of 10% or higher, with the largest portion skewed to those with premiums above 20% (Display 1). This is a big change from the past. As recently as 2006, allocations had been more evenly dispersed between expensive and cheap stocks, following a lengthy stretch of value outperformance in the wake of the bursting of the tech bubble.

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Flydubai confirms order of 86 Boeing jets - Your Middle East

Flydubai confirms order of 86 Boeing jets - Your Middle East:

"Boeing and flydubai announced Monday a firm order for 75 Boeing 737 MAX 8s and 11 Next-Generation 737-800s, the US company's largest single-aisle airplane order in the Middle East.

The order is valued at $8.8 billion at list prices, the companies said in a statement. Aircraft orders are often negotiated at a discount.

In addition, flydubai, the low-cost airline set up in 2008 by the government of Dubai, has an option to buy 25 additional 737 MAXs.

The purchase was first announced at the 2013 Dubai Airshow in November. At the time, flydubai made a commitment to buy up to 100 737 MAX 8s and up to 11 Next-Gen 737-800s."

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Saudi Gazette - Sipchem $5 billion share-swap merger deal seen this year

Saudi Gazette - Sipchem $5 billion share-swap merger deal seen this year:

"Saudi Arabia’s Sahara Petrochemical and Saudi International Petrochemical Company (Sipchem) hope to complete a share-swap merger in the first half of 2014 that would create a firm valued around $5 billion, Reuters reported.

The duo said in bourse filings they had signed a memorandum of understanding relating to the merger and that due diligence had begun, although they cautioned that this was not an announcement of an intention to make an offer and that talks were still non-binding.

Talks about a possible merger have been ongoing since June.

Mergers between two listed Saudi entities are rare: consolidation in the Gulf is often scuppered by major shareholders who are unwilling to cede control of businesses except for very high price tags."

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‘Shocking’ Saxo Bank 2014 predictions: How real? — RT Business

‘Shocking’ Saxo Bank 2014 predictions: How real? — RT Business:

"Oil will slump to $80 per barrel, Europe’s strongest economy – Germany – will slip into recession – these are some of the 10 predictions for 2014 by Saxo Bank. RT has talked to the bank’s CEO Steen Jacobsen to find out how real some of them are.

EU wealth tax heralds return to a Soviet style economy
With growth rate remaining pretty flat the wealth tax of people with savings over 100, 000 euros will be enforced in a move for quality for all, as well in the effort to create a so-called “crisis safety pillow”.

Steen Jacobsen (SJ) - I think, it’s very likely. Already being tabled by the IMF as an indication of what’s needed in Europe. And what Europe needs of course as we’ve seen from the banking deal is to secure a certain amount of funds that can be used to recapitalize the banking system and overall support the weaker nations. So, the European economy has pretty much moved to a Soviet – style economy, the planned economy. And, I think, this would be the final straw confiscating wealth from Europeans."

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Morocco seeks Gulf investment for solar power in Western Sahara | The National

Morocco seeks Gulf investment for solar power in Western Sahara | The National:

"Morocco is likely to seek investment for new solar power plants from Arabian Gulf states, after tensions between the government and the regional independence movement the Polisario Front put European investment in the country’s disputed Western Sahara region at risk, according to Reuters.

The country’s solar energy agency announced plans for five plants in the Western Sahara in 2009, which it will seek to tender imminently.

The German development bank KFW, the European Investment Bank and the European Union, have all expressed reluctance to invest in the politically contested region, however."

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Libya pays price of strikes despite oil boom | The National

Libya pays price of strikes despite oil boom | The National:

"Libya could more than double its oil production this year, but the prospect of potential disruptions will limit appetite for freshly unlocked supplies, said Goldman Sachs.

Pumping about 250,000 barrels per day (bpd), the home of Africa’s largest proved oil reserves is projected to increase production to 650,000 bpd or more this year by the bank. Before the disposal of Muammar Qaddafi in 2011, the provider of the light sweet crude prized by European refiners was pumping 1.6 million bpd, the source of nearly all its government revenues."

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Dubai-listed Gulf Navigation wins backing to sell tankers | The National

Dubai-listed Gulf Navigation wins backing to sell tankers | The National:

"Gulf Navigation has won shareholder approval to sell its two super tankers as part of a plan to restructure the company in the face of crippling losses.

But that was not enough to stop the Dubai-listed company’s stock from dropping 6.9 per cent yesterday.

The plan will also involve the sale of convertible bonds and raising the company’s foreign ownership threshold.

The measures were approved by shareholders at an extraordinary general meeting held on Sunday.

The meeting was the company’s third attempt to win shareholder approval for the proposals, with previous meetings thwarted by a failure to reach the required quorum levels."

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Goldman to JPMorgan Say Sell Emerging Markets After Slide - Bloomberg

Goldman to JPMorgan Say Sell Emerging Markets After Slide - Bloomberg:

"Wall Street’s biggest banks say the slump in emerging-market assets that left equities trailing advanced-nation shares by the most since 1998 last year will prove more than a fleeting selloff.

Goldman Sachs Group Inc. recommends investors cut allocations in developing nations by a third, forecasting “significant underperformance” for stocks, bonds and currencies over the next 10 years. JPMorgan Chase & Co. expects local-currency bonds to post 10 percent of their average returns since 2004 in the coming year, while Morgan Stanley projects the Brazilian real, Turkish lira and Russian ruble will extend declines after tumbling as much as 17 percent in 2013."

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Bearish Wagers on Yandex Climb After 2013 Stock Advance - Bloomberg

Bearish Wagers on Yandex Climb After 2013 Stock Advance - Bloomberg:

"Wagers against Yandex NV, Russia’s biggest Internet company, rose to a four-month high on concern it’s losing market share following a two-fold surge last year.

Short interest on Yandex climbed to 2 percent of shares outstanding Jan. 3, the highest since September, according to data compiled by Bloomberg and Markit, a London-based research firm. The stock rose less than 0.1 percent in New York yesterday. The Bloomberg Russia-US Equity Index of the most-traded Russian companies in the U.S. slipped 1.2 percent, led by OAO Rostelecom. The Russian stock market is closed today for the Orthodox Christmas holiday.

The stock reached a record on Dec. 31 as growth in Russia’s retail sales beat forecasts, indicating a robust market for Internet advertising. Yandex’s share of the online search market dropped for a second week to 61.1 percent as of Jan. 5, the lowest level in a year, data compiled by researcher LiveInternet in Moscow show. The company will report the slowest revenue growth on record in 2014, according to the average estimate of 12 analysts surveyed by Bloomberg."

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