As the debate over how bad things in China are rages on, growing Sino-sceptic Albert Edwards offers his two pennies on the country’s latest statistics.
Well, to be accurate, he laughs out loud at them:
That this outturn was bang in line with the median estimate of economists surveyed by Bloomberg makes it all the more unbelievable in my mind. All other economic data worldwide have been surprising massively on the downside and China should be no exception. A few hours earlier, for example, South Korea reported Q4 GDP had declined a hefty 5.6% QoQ, massively worse than a Reuter’s consensus which looked for a contraction of 2.7%! I naively thought that this QoQ decline was already annualized, but it was not. On a US style of reporting, the South Korean economy contracted at a 20% annualised rate in Q4. Asia is in depression. Whatever the heavily manipulated Chinese GDP is telling us, that economy must now be contracting. The Yuan needs to be devalued.
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Friday 23 January 2009
Global's UAE Weekly Report - January 22, 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 UAE Stock Markets”. The report views the latest developments in Abu Dhabi Stock Market (ADSM) & Dubai Financial Stock Market (DFM), trading activities, indices performance and corporate news. We hope you find this publication useful.
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Global's Palestine Weekly Market Report - January 22 , 2009
"Following the successful series of Global Weekly reports covering various markets in the region, and in our effort to provide the investment community, economists and researchers with an array of such market reviews, we at Global Investment House are proud to present "The Weekly report on Palestine Securities Exchange (PSE)". The report views the latest developments in PSE, trading activities, indices performance and corporate news."
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Global's Kuwait Weekly Market Report - January 22, 2009
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Warning: rating agencies can do you harm
Standard & Poor’s has downgraded Greece, Spain and Portugal and has warned Ireland that it might suffer a similar fate. Do I hear this right?
Is S&P still in the business of producing risk analyses? Should the rating agencies not have gone out of business after they told us for years that the risk associated with the ballooning debt of banks and large companies was nothing to worry about? How can these agencies, which were systematically wrong in the past, have any credibility in whatever risk analysis they make?
Yet, remarkably, they are alive and well, and their credibility seems to have been restored. The rating agencies are now believed by the market when they warn us of risks associated with a number of eurozone governments’ debt. As a result, the interest rate these governments have to pay on their borrowings increases.
Is S&P still in the business of producing risk analyses? Should the rating agencies not have gone out of business after they told us for years that the risk associated with the ballooning debt of banks and large companies was nothing to worry about? How can these agencies, which were systematically wrong in the past, have any credibility in whatever risk analysis they make?
Yet, remarkably, they are alive and well, and their credibility seems to have been restored. The rating agencies are now believed by the market when they warn us of risks associated with a number of eurozone governments’ debt. As a result, the interest rate these governments have to pay on their borrowings increases.
Gapper blog: Fiddling while Merrill burned
Reputations get shredded fast in a financial crisis, but the speed of John Thain’s descent from hero to zero is extraordinarily rapid, says the FT’s John Gapper. In mid-October, he seemed the smartest guy in the pack, delivering Merrill Lynch to Bank of America for $50bn. Since then, it has been all downhill. Symbolism matters, and Thain’s initial attempt to gain a $10m bonus for 2008, as well as details of his $1.22m office redecoration, have turned him into a symbol of Wall Street excess. But most shocking is the FT report that Thain accelerated payments of Merrill bonuses. That act has a ring of fiddling while Rome burned, particularly in view of the Roman theme of his office decorations.
Saudi patience is running out
In my decades as a public servant, I have strongly promoted the Arab-Israeli peace process. During recent months, I argued that the peace plan proposed by Saudi Arabia could be implemented under an Obama administration if the Israelis and Palestinians both accepted difficult compromises. I told my audiences this was worth the energies of the incoming administration for, as the late Indian diplomat Vijaya Lakshmi Nehru Pandit said: “The more we sweat in peace, the less we bleed in war.”
But after Israel launched its bloody attack on Gaza, these pleas for optimism and co-operation now seem a distant memory. In the past weeks, not only have the Israeli Defence Forces murdered more than 1,000 Palestinians, but they have come close to killing the prospect of peace itself. Unless the new US administration takes forceful steps to prevent any further suffering and slaughter of Palestinians, the peace process, the US-Saudi relationship and the stability of the region are at risk.
Prince Saud Al-Faisal, the Saudi foreign minister, told the UN Security Council that if there was no just settlement, “we will turn our backs on you”. King Abdullah spoke for the entire Arab and Muslim world when he said at the Arab summit in Kuwait that although the Arab peace initiative was on the table, it would not remain there for long. Much of the world shares these sentiments and any Arab government that negotiated with the Israelis today would be rightly condemned by its citizens. Two of the four Arab countries that have formal ties to Israel – Qatar and Mauritania – have suspended all relations and Jordan has recalled its ambassador.
But after Israel launched its bloody attack on Gaza, these pleas for optimism and co-operation now seem a distant memory. In the past weeks, not only have the Israeli Defence Forces murdered more than 1,000 Palestinians, but they have come close to killing the prospect of peace itself. Unless the new US administration takes forceful steps to prevent any further suffering and slaughter of Palestinians, the peace process, the US-Saudi relationship and the stability of the region are at risk.
Prince Saud Al-Faisal, the Saudi foreign minister, told the UN Security Council that if there was no just settlement, “we will turn our backs on you”. King Abdullah spoke for the entire Arab and Muslim world when he said at the Arab summit in Kuwait that although the Arab peace initiative was on the table, it would not remain there for long. Much of the world shares these sentiments and any Arab government that negotiated with the Israelis today would be rightly condemned by its citizens. Two of the four Arab countries that have formal ties to Israel – Qatar and Mauritania – have suspended all relations and Jordan has recalled its ambassador.
Middle East private equity sees lower returns
Previously bullish Middle East buy-out kings and financiers have lowered their expectations for the next year, predicting that delayed exits and tough economic conditions will lower returns, according to a new report.
More than 80 per cent of senior private equity executives in the Middle East and North Africa surveyed by Deloitte, the consultants, said they expected returns to decrease, compared to 11 per cent when surveyed in the first half of 2008. Nearly three quarters said exit activity would decrease, compared to just 6 per cent when polled in the first half of last year. Deloitte surveyed 30 private equtiy companies from around the world last month.
Years of oil-backed growth and willing investors have swelled the regional private equity industry. There are now nearly 100 funds focused on the region which have raised US$19.5bn in capital, according to Preqin, a private equity data provider.
More than 80 per cent of senior private equity executives in the Middle East and North Africa surveyed by Deloitte, the consultants, said they expected returns to decrease, compared to 11 per cent when surveyed in the first half of 2008. Nearly three quarters said exit activity would decrease, compared to just 6 per cent when polled in the first half of last year. Deloitte surveyed 30 private equtiy companies from around the world last month.
Years of oil-backed growth and willing investors have swelled the regional private equity industry. There are now nearly 100 funds focused on the region which have raised US$19.5bn in capital, according to Preqin, a private equity data provider.
etisalat expands global footprint
Dubai: Emirates Telecommunication Corporation (etisalat), one of the region's largest telecom companies, has spread its reach to 18 countries in the past 32 years.
The large leap is evidence of its aims to be one of the top 10 operators worldwide by 2010. The expeditious acquisition plan, which began with Tanzania's fourth mobile licence provider, Zanzibar Telecom (Zantel) in 1999, is well under way with less than a year left. Early last year, the operator was ranked among the 20 largest operators in the world.
"etisalat is in its strongest position ever and is on course to achieving its goal of being one of the top 10 operators in the world by 2010," said Mohammad Hassan Omran, chairman of etisalat.
The large leap is evidence of its aims to be one of the top 10 operators worldwide by 2010. The expeditious acquisition plan, which began with Tanzania's fourth mobile licence provider, Zanzibar Telecom (Zantel) in 1999, is well under way with less than a year left. Early last year, the operator was ranked among the 20 largest operators in the world.
"etisalat is in its strongest position ever and is on course to achieving its goal of being one of the top 10 operators in the world by 2010," said Mohammad Hassan Omran, chairman of etisalat.
Qatar snaps up Dubai workers
While construction firms in Dubai are shedding jobs, their counterparts in Qatar see the downturn as an opportunity to source staff for their projects.
Building, consultancy and engineering firms in the country have long struggled to attract key skills because of competition from Dubai, but they hope to take advantage of the redundancies that are sweeping across the emirate.
Developers, contractors and other property-related companies in Dubai have cut thousands of jobs in recent months as the financial slowdown has gripped the sector, grinding many projects to a halt.
Building, consultancy and engineering firms in the country have long struggled to attract key skills because of competition from Dubai, but they hope to take advantage of the redundancies that are sweeping across the emirate.
Developers, contractors and other property-related companies in Dubai have cut thousands of jobs in recent months as the financial slowdown has gripped the sector, grinding many projects to a halt.
UAE leads world in Rolls-Royce sales
DUBAI // Abu Dhabi has become the world’s biggest market for Rolls-Royce cars, edging out Dubai and Beijing in sales last year.
Rolls-Royce’s Abu Dhabi and Dubai dealerships achieved the highest sales and second-highest sales respectively, said Frank Tiemann, Rolls-Royce’s communications manager for Europe and the Middle East.
This was ahead of Beijing and London, which tied for third place, and Beverly Hills in the US in fifth place.
Rolls-Royce’s Abu Dhabi and Dubai dealerships achieved the highest sales and second-highest sales respectively, said Frank Tiemann, Rolls-Royce’s communications manager for Europe and the Middle East.
This was ahead of Beijing and London, which tied for third place, and Beverly Hills in the US in fifth place.
Kuwait’s culture of risk suffers a shock
KUWAIT CITY // Only one traded stock in Kuwait is more valuable than one Kuwaiti dinar (Dh12.5) after the regular market fell for the sixth consecutive day yesterday, bringing the exchange’s index to its lowest value in almost four years.
The drop is a serious concern in a country where most citizens invest in the market.
In the past year, 36 companies’ stocks were valued at more than one dinar, but the effects of the global credit crunch ravaged the market. The Middle East’s second largest exchange nosedived more than 50 per cent in the past year.
The drop is a serious concern in a country where most citizens invest in the market.
In the past year, 36 companies’ stocks were valued at more than one dinar, but the effects of the global credit crunch ravaged the market. The Middle East’s second largest exchange nosedived more than 50 per cent in the past year.