Dubai market down 14% this week, throws silver lining in select stocks | GulfNews.com:
"Some large cap stocks in Dubai are looking attractive over a medium to long-term perspective, analysts said, after the Dubai index shed more than 14 per cent in the week.
“Stocks are attractive on a medium to long term perspective; we would wait for the fear factor to dissipate before entering stocks that have attractive valuations. I would stick to the large cap liquid stocks,” said Saleem Khokhar, head of equities at National Bank of Abu Dhabi’s asset management group told Gulf News.
On Thursday, Dubai index led the Gulf markets lower as a further decline in crude oil and global growth concerns continued to rattle investors."
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Friday, 17 October 2014
Egypt’s bold reforms start to bear fruit – beyondbrics - Blogs - FT.com
Egypt’s bold reforms start to bear fruit – beyondbrics - Blogs - FT.com:
"Stability and bold new reforms after a period of political and economic turmoil will yield Egypt GDP growth of 3.5 per cent in the year to 2015 and 5 to 6 per cent thereafter, according to Renaissance Capital.
Last week, Egypt posted GDP growth of 2.2 per cent for the year to June 2014. That is inadequate for a country with high unemployment and a youthful population. But the GDP figures also hinted at substance behind the hope that has surged through Egypt since President Fattah al-Sisi came to power earlier this year: in the three months to June, GDP rose 3.7 per cent.
Al-Sisi was elected in May 2014 with 97 per cent of the vote (in a two-candidate election from which the previous governing party was banned from competing). He has since used his sway to introduce much needed reforms. Renaissance Capital said it expected his reforms – primarily to cut energy subsidies, raise taxes and attract investment – to be sustained over the next two to three years."
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"Stability and bold new reforms after a period of political and economic turmoil will yield Egypt GDP growth of 3.5 per cent in the year to 2015 and 5 to 6 per cent thereafter, according to Renaissance Capital.
Last week, Egypt posted GDP growth of 2.2 per cent for the year to June 2014. That is inadequate for a country with high unemployment and a youthful population. But the GDP figures also hinted at substance behind the hope that has surged through Egypt since President Fattah al-Sisi came to power earlier this year: in the three months to June, GDP rose 3.7 per cent.
Al-Sisi was elected in May 2014 with 97 per cent of the vote (in a two-candidate election from which the previous governing party was banned from competing). He has since used his sway to introduce much needed reforms. Renaissance Capital said it expected his reforms – primarily to cut energy subsidies, raise taxes and attract investment – to be sustained over the next two to three years."
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Blurring the Lines | Mark Mobius
Blurring the Lines | Mark Mobius:
"There has been some convergence in terms of how one might classify emerging-, frontier- or developed-market companies—and how they might fit into investors’ portfolios. Recently, we have noted an increase in liquidity and transparency of many frontier-market stocks (the smaller and lesser-developed subset of emerging markets). We have encountered increased numbers of businesses quoted on developed-market exchanges that have a majority of their business operations, sales or earnings generated in emerging or frontier markets, and at the same time, we have also seen growing numbers of emerging-market companies acquiring businesses in developed markets, becoming true multinationals. In our opinion, suitable frontier- and even developed-market stocks can be used to add potential value to what investors might traditionally classify as emerging-market portfolios.
Market Convergence
Frontier markets have been of particular interest to us in recent years, as we perceive many of these markets as having good economic growth potential. Government reform efforts also present the potential for both earnings growth and revaluation for frontier-market companies.
Some have argued against investing in frontier markets because of their limited size and poor liquidity. We have not found these concerns to be justified in all cases. An overall market capitalization for frontier markets in the region of US$1.8 trillion1 and daily turnover of US$3.6 billion2 appear to us to be a very adequate opportunity. Considerable numbers of individual stocks sit within frontier markets, yet some have capitalizations and trading volumes that would place them comfortably on par with some emerging-market peers. Some banks in Pakistan and Nigeria, a telecommunications company in Argentina, and an oil and gas company in Central Asia come to mind. Moreover, we should note that, within emerging markets themselves, improving liquidity on exchanges in countries such as India means that stocks that we might once have regarded as appropriate only for specialist smaller-company portfolios now trade in sufficient volumes to be included within more traditional global emerging-market portfolios."
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"There has been some convergence in terms of how one might classify emerging-, frontier- or developed-market companies—and how they might fit into investors’ portfolios. Recently, we have noted an increase in liquidity and transparency of many frontier-market stocks (the smaller and lesser-developed subset of emerging markets). We have encountered increased numbers of businesses quoted on developed-market exchanges that have a majority of their business operations, sales or earnings generated in emerging or frontier markets, and at the same time, we have also seen growing numbers of emerging-market companies acquiring businesses in developed markets, becoming true multinationals. In our opinion, suitable frontier- and even developed-market stocks can be used to add potential value to what investors might traditionally classify as emerging-market portfolios.
Market Convergence
Frontier markets have been of particular interest to us in recent years, as we perceive many of these markets as having good economic growth potential. Government reform efforts also present the potential for both earnings growth and revaluation for frontier-market companies.
Some have argued against investing in frontier markets because of their limited size and poor liquidity. We have not found these concerns to be justified in all cases. An overall market capitalization for frontier markets in the region of US$1.8 trillion1 and daily turnover of US$3.6 billion2 appear to us to be a very adequate opportunity. Considerable numbers of individual stocks sit within frontier markets, yet some have capitalizations and trading volumes that would place them comfortably on par with some emerging-market peers. Some banks in Pakistan and Nigeria, a telecommunications company in Argentina, and an oil and gas company in Central Asia come to mind. Moreover, we should note that, within emerging markets themselves, improving liquidity on exchanges in countries such as India means that stocks that we might once have regarded as appropriate only for specialist smaller-company portfolios now trade in sufficient volumes to be included within more traditional global emerging-market portfolios."
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A Natural-Gas Strategy for Europe - WSJ - WSJ
A Natural-Gas Strategy for Europe - WSJ - WSJ:
"The European Commission on Thursday released the results of the stress test carried out on the European gas system. This test, conducted as part of the European Energy Security Strategy, is intended to give European Union leaders an indication of whether they have the infrastructure in place to cope with a potential disruption in gas supplies. Not surprisingly, the results demonstrate that a prolonged supply disruption would have a substantial impact on the EU. Particularly effected would be eastern EU member states and Energy Community countries.
With 27% of Europe’s gas coming from Russia—more than half of that flowing through Ukraine—the test was a direct response to the tensions between Moscow and Kiev and, more specifically, the fear that the Kremlin might cut off supplies in retaliation to sanctions.
Shortly after the crisis first erupted in Crimea, the EU established a policy to maintain a minimum 30-day supply of gas. What the stress test may reveal, however, is that countries need to increase their coordination with each other, including better interconnection between domestic systems and the removal of restrictions to cross-border energy exchanges."
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"The European Commission on Thursday released the results of the stress test carried out on the European gas system. This test, conducted as part of the European Energy Security Strategy, is intended to give European Union leaders an indication of whether they have the infrastructure in place to cope with a potential disruption in gas supplies. Not surprisingly, the results demonstrate that a prolonged supply disruption would have a substantial impact on the EU. Particularly effected would be eastern EU member states and Energy Community countries.
With 27% of Europe’s gas coming from Russia—more than half of that flowing through Ukraine—the test was a direct response to the tensions between Moscow and Kiev and, more specifically, the fear that the Kremlin might cut off supplies in retaliation to sanctions.
Shortly after the crisis first erupted in Crimea, the EU established a policy to maintain a minimum 30-day supply of gas. What the stress test may reveal, however, is that countries need to increase their coordination with each other, including better interconnection between domestic systems and the removal of restrictions to cross-border energy exchanges."
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Dubai Financial Market chases Saudi stocks into deeper losses | The National
Dubai Financial Market chases Saudi stocks into deeper losses | The National:
"Saudi Arabia’s stocks tumbled hard out of the gate on Thursday, sending already skittish Dubai investors into full retreat. Both bourses closed the day with big losses.
Dubai’s benchmark slid mildly during the first half of the trading session but took a more precipitous decline after midday, when Saudi Arabia’s bourse opened significantly lower.
“It’s panic-selling. Sometimes markets get hurt badly and today is one of those days, so it’s a domino effect,” said Fathi Ben Grira, the chief executive at Mena Corp, an Abu Dhabi-based brokerage. “But at the same time, the cash is staying in their account, rather than selling the shares and demanding the cheque. They’re waiting for the markets to rebound, that’s an important difference.”"
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"Saudi Arabia’s stocks tumbled hard out of the gate on Thursday, sending already skittish Dubai investors into full retreat. Both bourses closed the day with big losses.
Dubai’s benchmark slid mildly during the first half of the trading session but took a more precipitous decline after midday, when Saudi Arabia’s bourse opened significantly lower.
“It’s panic-selling. Sometimes markets get hurt badly and today is one of those days, so it’s a domino effect,” said Fathi Ben Grira, the chief executive at Mena Corp, an Abu Dhabi-based brokerage. “But at the same time, the cash is staying in their account, rather than selling the shares and demanding the cheque. They’re waiting for the markets to rebound, that’s an important difference.”"
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Russian ADRs Sink as Merkel Rekindles Sanctions Concern - Bloomberg
Russian ADRs Sink as Merkel Rekindles Sanctions Concern - Bloomberg:
"Russian stocks sank to a four-year low in the U.S. after German Chancellor Angela Merkel blamed the Kremlin for continuing to stir up the Ukraine conflict, damping optimism that international sanctions will be lifted.
OAO Sberbank (SBRCY), the country’s biggest bank, tumbled to a record low, leading a 1.2 percent decline in the Bloomberg Russia-US Equity Index in New York yesterday. The Market Vectors Russia ETF (RSX), the biggest U.S. exchange-traded fund that tracks the nation’s stocks, fell 1.9 percent to $21.12.
“People are beginning to realize that the sanctions will remain in place until real progress has been achieved in the Ukraine crisis,” Chris Weafer, a senior partner at Moscow-based consulting firm Macro Advisory, said by phone. “Oil is collapsing, the ruble is falling and the economy is slowing. All of those factors combined will have a negative impact on the corporate earnings outlook.”"
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"Russian stocks sank to a four-year low in the U.S. after German Chancellor Angela Merkel blamed the Kremlin for continuing to stir up the Ukraine conflict, damping optimism that international sanctions will be lifted.
OAO Sberbank (SBRCY), the country’s biggest bank, tumbled to a record low, leading a 1.2 percent decline in the Bloomberg Russia-US Equity Index in New York yesterday. The Market Vectors Russia ETF (RSX), the biggest U.S. exchange-traded fund that tracks the nation’s stocks, fell 1.9 percent to $21.12.
“People are beginning to realize that the sanctions will remain in place until real progress has been achieved in the Ukraine crisis,” Chris Weafer, a senior partner at Moscow-based consulting firm Macro Advisory, said by phone. “Oil is collapsing, the ruble is falling and the economy is slowing. All of those factors combined will have a negative impact on the corporate earnings outlook.”"
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