MIDEAST STOCKS-Gulf boosted by stronger oil; Egypt starts rebounding | Reuters:
"Major Gulf stock markets rose on the back of stronger oil prices on Tuesday, while Egypt began rebounding after a three-week bout of heavy profit-taking.
Brent crude jumped nearly 6 percent on Monday to $58.24 a barrel, its highest since March 27, although it partially dropped back to $57.52 on Tuesday.
That was enough to trigger a 2.1 percent rise in the Saudi stock index to 8,802 points as daily turnover more than doubled. The index rose further from chart support at the March low of 8,497 points, which was tested and held on Sunday, and may now be at least a short-term bottom for the market."
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Tuesday, 7 April 2015
FT Alphaville | FT Alphaville – Market Commentary – FT.com
FT Alphaville | FT Alphaville – Market Commentary – FT.com:
"It’s apparently sorely needed, if this from Nomura’s Jens Nordvig on EM FX pessimism is anything to go by:
Nordvig is less than convinced such an extreme is warranted. And we’d wonder, in passing, if FX is somehow more vulnerable to a desire for broad narrative than other markets. Maybe it’s simply that my inbox is more heavily populated by FX notes but the idea that FX traders and markets are “in need of a theme” to get by just keeps cropping up."
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"It’s apparently sorely needed, if this from Nomura’s Jens Nordvig on EM FX pessimism is anything to go by:
During my presentation [at Nomura's annual central bank conference], I asked a number of simple questions about currencies. One of them was on the 2015 outlook for EM currencies – 67% of the audience was bearish, with the rest evenly split between bullish and neutral, a pretty extreme result, as these polls usually have a lot of neutral answers.
Nordvig is less than convinced such an extreme is warranted. And we’d wonder, in passing, if FX is somehow more vulnerable to a desire for broad narrative than other markets. Maybe it’s simply that my inbox is more heavily populated by FX notes but the idea that FX traders and markets are “in need of a theme” to get by just keeps cropping up."
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Record Gasoline Output to Curb Biggest U.S. Oil Glut in 85 Years - Bloomberg Business
Record Gasoline Output to Curb Biggest U.S. Oil Glut in 85 Years - Bloomberg Business:
"Refiners are poised to make gasoline at a record pace this year, keeping the biggest U.S. crude glut in more than 80 years from overflowing storage.
They’re enjoying the best margins in two years as they finish seasonal maintenance of their plants before the summer driving season. They’ll increase output to meet consumer demand and they’ve added more than 100,000 barrels a day of capacity since last summer, when they processed the most oil on record.
Booming crude production expanded inventories this year by 86 million barrels to 471 million, the highest level since 1930. Analysts from Bank of America Corp. to Goldman Sachs Group Inc. have said storage space may run out. What looks like an oversupply to banks is turning into an all-you-can-eat buffet for those making gasoline and diesel fuel."
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"Refiners are poised to make gasoline at a record pace this year, keeping the biggest U.S. crude glut in more than 80 years from overflowing storage.
They’re enjoying the best margins in two years as they finish seasonal maintenance of their plants before the summer driving season. They’ll increase output to meet consumer demand and they’ve added more than 100,000 barrels a day of capacity since last summer, when they processed the most oil on record.
Booming crude production expanded inventories this year by 86 million barrels to 471 million, the highest level since 1930. Analysts from Bank of America Corp. to Goldman Sachs Group Inc. have said storage space may run out. What looks like an oversupply to banks is turning into an all-you-can-eat buffet for those making gasoline and diesel fuel."
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Saudi regulators tighten their grip ahead of opening to foreign investment | The National
Saudi regulators tighten their grip ahead of opening to foreign investment | The National:
"When Saudi Cable said last month it was delaying the release of its 2014 earnings statement because it was still compiling information required by an external auditor, it was a sign of growing regulatory pressure on companies in the kingdom.
Regulators are signalling they want companies to tighten governance and strengthen internal controls as the $500 billion Saudi stock market prepares to open to direct foreign investment in the next few months.
The process has become more urgent since an accounting scandal at the telecoms company Mobily, which in February revised its 2014 earnings to a loss of $243 million from the $58.6m profit previously claimed."
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"When Saudi Cable said last month it was delaying the release of its 2014 earnings statement because it was still compiling information required by an external auditor, it was a sign of growing regulatory pressure on companies in the kingdom.
Regulators are signalling they want companies to tighten governance and strengthen internal controls as the $500 billion Saudi stock market prepares to open to direct foreign investment in the next few months.
The process has become more urgent since an accounting scandal at the telecoms company Mobily, which in February revised its 2014 earnings to a loss of $243 million from the $58.6m profit previously claimed."
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Dubai realty awaits the Iranian lift-off |GulfNews.com
Dubai realty awaits the Iranian lift-off |GulfNews.com:
"Iranian investors have already started making approaches on taking possible exposures in Dubai’s real estate, according to market sources.
“In the last 48 hours, we have been taking calls from Iranian prospects, who have sounded out the possibility on exposures in locations such as the Downtown and for mid-tier properties elsewhere in Dubai’s freehold areas,” said Juwaad Beg, CEO of Al Madina Al Raeda Real Estate, a developer. “These are definitely early days, but if the sanctions are lifted in full, Dubai’s real estate will be a clear — and immediate — winner from Iranian fund flow into the UAE.”
On whether the Iranian rial’s continued weakness against the dollar will not be a deterrent, Beg said: “These investors don’t care … they have been cut off from the enough investment/asset options for way too long under the sanctions regime. They are good to go the moment these are lifted."
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"Iranian investors have already started making approaches on taking possible exposures in Dubai’s real estate, according to market sources.
“In the last 48 hours, we have been taking calls from Iranian prospects, who have sounded out the possibility on exposures in locations such as the Downtown and for mid-tier properties elsewhere in Dubai’s freehold areas,” said Juwaad Beg, CEO of Al Madina Al Raeda Real Estate, a developer. “These are definitely early days, but if the sanctions are lifted in full, Dubai’s real estate will be a clear — and immediate — winner from Iranian fund flow into the UAE.”
On whether the Iranian rial’s continued weakness against the dollar will not be a deterrent, Beg said: “These investors don’t care … they have been cut off from the enough investment/asset options for way too long under the sanctions regime. They are good to go the moment these are lifted."
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Russia seeks UAE investments to boost its economy |GulfNews.com
Russia seeks UAE investments to boost its economy |GulfNews.com:
"As Russian economy shrinks due to sanctions and falling oil revenue, the country is seeking to strengthen its trade ties with the UAE and other Gulf countries.
The trade figures between the two countries stand at $2 billion and are set to grow in the coming days, Russian Business Council Chairman Igor Egorov said in an interview with Gulf News.
He said that Islamic finance is the new area where the country is trying to increase its cooperation with the UAE."
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"As Russian economy shrinks due to sanctions and falling oil revenue, the country is seeking to strengthen its trade ties with the UAE and other Gulf countries.
The trade figures between the two countries stand at $2 billion and are set to grow in the coming days, Russian Business Council Chairman Igor Egorov said in an interview with Gulf News.
He said that Islamic finance is the new area where the country is trying to increase its cooperation with the UAE."
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Iran Accord Gives Hope to World’s Largest Islamic Banking System - Bloomberg Business
Iran Accord Gives Hope to World’s Largest Islamic Banking System - Bloomberg Business:
"Few people are likely to be counting on a successful conclusion to Iran’s nuclear agreement more than the country’s bankers.
Sanctions and loose monetary policy under former President Mahmoud Ahmadinejad led to the highest level of bad loans in the Middle East after Libya and Yemen, the latest International Monetary Fund data show. An end to economic isolation would allow some banks to tap foreign funding and bolster government revenue enough to rescue troubled institutions.
“The banking sector is not in terribly good shape after some of the more aggressive policies of the last decade,” Emad Mostaque, a London-based strategist at research company Ecstrat Ltd., said by e-mail. “A nuclear deal would be a huge positive to the overall economy and local banks.”"
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"Few people are likely to be counting on a successful conclusion to Iran’s nuclear agreement more than the country’s bankers.
Sanctions and loose monetary policy under former President Mahmoud Ahmadinejad led to the highest level of bad loans in the Middle East after Libya and Yemen, the latest International Monetary Fund data show. An end to economic isolation would allow some banks to tap foreign funding and bolster government revenue enough to rescue troubled institutions.
“The banking sector is not in terribly good shape after some of the more aggressive policies of the last decade,” Emad Mostaque, a London-based strategist at research company Ecstrat Ltd., said by e-mail. “A nuclear deal would be a huge positive to the overall economy and local banks.”"
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Once Over $12 Trillion, the World’s Currency Reserves Are Now Shrinking - Bloomberg Business
Once Over $12 Trillion, the World’s Currency Reserves Are Now Shrinking - Bloomberg Business:
"The decade-long surge in foreign-currency reserves held by the world’s central banks is coming to an end.
Global reserves declined to $11.6 trillion in March from a record $12.03 trillion in August 2014, halting a five-fold increase that began in 2004, according to data compiled by Bloomberg. While the drop may be overstated because the strengthening dollar reduced the value of other reserve currencies such as the euro, it still underlines a shift after central banks -- with most of them located in developing nations like China and Russia -- added an average $824 billion to reserves each year over the past decade.
Beyond being emblematic of the dollar’s return to its role as the world’s undisputed dominant currency, the drop in reserves has several potential implications for global markets. It could make it harder for emerging-market countries to boost their money supply and shore up faltering economic growth; it could add to declines in the euro; and it could damp demand for U.S. Treasury bonds."
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"The decade-long surge in foreign-currency reserves held by the world’s central banks is coming to an end.
Global reserves declined to $11.6 trillion in March from a record $12.03 trillion in August 2014, halting a five-fold increase that began in 2004, according to data compiled by Bloomberg. While the drop may be overstated because the strengthening dollar reduced the value of other reserve currencies such as the euro, it still underlines a shift after central banks -- with most of them located in developing nations like China and Russia -- added an average $824 billion to reserves each year over the past decade.
Beyond being emblematic of the dollar’s return to its role as the world’s undisputed dominant currency, the drop in reserves has several potential implications for global markets. It could make it harder for emerging-market countries to boost their money supply and shore up faltering economic growth; it could add to declines in the euro; and it could damp demand for U.S. Treasury bonds."
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