MIDEAST STOCKS-Saudi falls as foreigners slow to enter newly opened market | News by Country | Reuters:
"Saudi Arabia's bourse fell on Monday as modest trading volumes indicated there were no big fund inflows from abroad on the first day that the market opened to direct foreign investment.
After rising as much as 0.5 percent in the opening minutes, the main Saudi stock index closed 0.9 percent lower as most blue chips in MSCI's provisional Saudi benchmark tumbled.
Saudi Basic Industries, the biggest petrochemicals firm in the kingdom, lost 1.5 percent and top lender National Commercial Bank retreated by 1.1 percent."
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Monday 15 June 2015
MIDEAST STOCKS-Gulf little moved; Dubai focuses on stabilising Amlak - Yahoo Maktoob News
MIDEAST STOCKS-Gulf little moved; Dubai focuses on stabilising Amlak - Yahoo Maktoob News:
"Gulf stock markets were narrowly mixed in early trade on Monday, lacking strong catalysts. Trading in Dubai focused on Amlak Finance, which stabilised after heavy profit-taking.
Amlak recovered from early losses and rose 3.2 percent after tumbling by its daily limit of 10 percent for two sessions in a row. The stock, which had previously more than doubled within one week, accounted for 70 percent of traded value in Dubai on Monday morning, as the main index climbed 0.2 percent.
The company resumed trading this month after a six-year suspension over debt issues which it has finally resolved. But analysts have described its rally as a momentum play and not based on fundamentals."
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"Gulf stock markets were narrowly mixed in early trade on Monday, lacking strong catalysts. Trading in Dubai focused on Amlak Finance, which stabilised after heavy profit-taking.
Amlak recovered from early losses and rose 3.2 percent after tumbling by its daily limit of 10 percent for two sessions in a row. The stock, which had previously more than doubled within one week, accounted for 70 percent of traded value in Dubai on Monday morning, as the main index climbed 0.2 percent.
The company resumed trading this month after a six-year suspension over debt issues which it has finally resolved. But analysts have described its rally as a momentum play and not based on fundamentals."
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UAE studying fuel subsidies, says Oil Minister | The National
UAE studying fuel subsidies, says Oil Minister | The National:
"The UAE’ Oil Ministry is studying the country’s system of fuel subsidies and a report will be submitted to the Government soon, the Oil Minister Suhail bin Mohammed Al-Mazroui said on Monday.
Speaking at an industry conference, he said the Government had requested the report after there were questions over why domestic fuel prices didn’t drop after the recent plunge of global oil prices.
Mr Mazroui did not elaborate. Government subsidies keep domestic prices of fuels such as gasoline in the UAE at rock-bottom levels, among the lowest in the world; some officials have suggested cutting the subsidies to reduce pressure on the state budget."
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"The UAE’ Oil Ministry is studying the country’s system of fuel subsidies and a report will be submitted to the Government soon, the Oil Minister Suhail bin Mohammed Al-Mazroui said on Monday.
Speaking at an industry conference, he said the Government had requested the report after there were questions over why domestic fuel prices didn’t drop after the recent plunge of global oil prices.
Mr Mazroui did not elaborate. Government subsidies keep domestic prices of fuels such as gasoline in the UAE at rock-bottom levels, among the lowest in the world; some officials have suggested cutting the subsidies to reduce pressure on the state budget."
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Etihad said to be in talks on $1bn bond debut with potential investors | The National
Etihad said to be in talks on $1bn bond debut with potential investors | The National:
"Etihad Airways, which is seeking to raise about US$1 billion from its first bond issue, is reportedly in talks with potential investors.
This month, the carrier received its first credit rating, paving the way to access capital markets amid a row with its American rivals over claims that it received billions of dollars in government subsidies to help it compete. Etihad and its Arabian Gulf peers, Emirates and Qatar Airways, deny the allegations.
Yesterday, Reuters quoted two sources as saying that Etihad was planning to launch its bond through a special purpose vehicle housing its equity stakes in global airlines."
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"Etihad Airways, which is seeking to raise about US$1 billion from its first bond issue, is reportedly in talks with potential investors.
This month, the carrier received its first credit rating, paving the way to access capital markets amid a row with its American rivals over claims that it received billions of dollars in government subsidies to help it compete. Etihad and its Arabian Gulf peers, Emirates and Qatar Airways, deny the allegations.
Yesterday, Reuters quoted two sources as saying that Etihad was planning to launch its bond through a special purpose vehicle housing its equity stakes in global airlines."
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Credit Suisse sees gradual pickup in fund flows in Saudi | GulfNews.com
Credit Suisse sees gradual pickup in fund flows in Saudi | GulfNews.com:
"Amid an initial euphoria due to opening of Saudi markets, Credit Suisse expects fund flows to pick up gradually until it gets reclassified by the global index providers, even as the firm plans to increase its staff, a senior official at Credit Suisse Saudi Arabia told Gulf News.
Saudi opens its $550 billion (Dh2 trillion) equities market on Monday, equivalent to the size of Russia and Poland, to foreigners, but analysts say international investors are not in a mood to buy stocks due to its expensive valuations.
“There won’t be any major fund flow at the beginning of the opening up. We would gradually see a pick- up in direct investments from the QFIs. Most of the clients will continue to access the Saudi markets through P-notes and swaps until they clearly understand the mechanism of how the market works,” Abdul Aziz Bin Hassan, Managing Director and Chief Executive Officer of Credit Suisse Saudi Arabia told Gulf News over the phone."
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"Amid an initial euphoria due to opening of Saudi markets, Credit Suisse expects fund flows to pick up gradually until it gets reclassified by the global index providers, even as the firm plans to increase its staff, a senior official at Credit Suisse Saudi Arabia told Gulf News.
Saudi opens its $550 billion (Dh2 trillion) equities market on Monday, equivalent to the size of Russia and Poland, to foreigners, but analysts say international investors are not in a mood to buy stocks due to its expensive valuations.
“There won’t be any major fund flow at the beginning of the opening up. We would gradually see a pick- up in direct investments from the QFIs. Most of the clients will continue to access the Saudi markets through P-notes and swaps until they clearly understand the mechanism of how the market works,” Abdul Aziz Bin Hassan, Managing Director and Chief Executive Officer of Credit Suisse Saudi Arabia told Gulf News over the phone."
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Sovereign investors in Middle East continue to diversify | GulfNews.com
Sovereign investors in Middle East continue to diversify | GulfNews.com:
"Despite a sharp decline in oil prices over the last year and a potential contraction in funding in the event oil prices continue declining over the next two years, most Middle Eastern sovereign funds remain focused on their investment strategies and objectives, according to according to Invesco’s Global Sovereign Asset Management Study.
The study revealed that Middle Eastern sovereign investors exhibited higher resilience to fund withdrawal risks due to low oil prices and domestic economic compulsions.
According to the study, in terms of investment objectives, Middle Eastern investors have the highest return objective and the longest investment horizons — making their investment strategies more resilient to the changing funding environment."
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"Despite a sharp decline in oil prices over the last year and a potential contraction in funding in the event oil prices continue declining over the next two years, most Middle Eastern sovereign funds remain focused on their investment strategies and objectives, according to according to Invesco’s Global Sovereign Asset Management Study.
The study revealed that Middle Eastern sovereign investors exhibited higher resilience to fund withdrawal risks due to low oil prices and domestic economic compulsions.
According to the study, in terms of investment objectives, Middle Eastern investors have the highest return objective and the longest investment horizons — making their investment strategies more resilient to the changing funding environment."
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GCC bank profits expected to moderate in next two years | GulfNews.com
GCC bank profits expected to moderate in next two years | GulfNews.com:
"GCC banks continue to operate with healthy profitability metrics despite the low interest rate environment they have been operating.
Banks continue to face low net interest margins (NIMs) due to low rates and margin squeeze on account of competition. NIMs have contracted by over 25 basis points in the past five years. The return on average assets for the 26 banks S&P rate was close to 1.85 per cent at the year-end 2014.
“Banks continue to benefit from their good efficiency, with a low cost of labour, limited distribution networks, and the absence of income tax. In the meantime, we expect some decline in profitability in 2015 and 2016 as the squeeze on margins continues and as credit losses begin to gradually increase from their current levels,” said Standard & Poor’s credit analyst Timucin Engin."
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"GCC banks continue to operate with healthy profitability metrics despite the low interest rate environment they have been operating.
Banks continue to face low net interest margins (NIMs) due to low rates and margin squeeze on account of competition. NIMs have contracted by over 25 basis points in the past five years. The return on average assets for the 26 banks S&P rate was close to 1.85 per cent at the year-end 2014.
“Banks continue to benefit from their good efficiency, with a low cost of labour, limited distribution networks, and the absence of income tax. In the meantime, we expect some decline in profitability in 2015 and 2016 as the squeeze on margins continues and as credit losses begin to gradually increase from their current levels,” said Standard & Poor’s credit analyst Timucin Engin."
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Saudi Arabia opens its $560bn stock market to foreign investors - FT.com
Saudi Arabia opens its $560bn stock market to foreign investors - FT.com:
"Saudi Arabia’s stock market is opening to foreign investors, marking a step forward in the oil-rich kingdom’s economic reform efforts that could attract a rush of overseas investment in the coming years.
From Monday, the Middle East’s biggest economy will allow direct market access to large overseas investors with more than $5bn in assets under management as the conservative kingdom continues a gradualist approach to financial reform.
The Tadawul market, with a capitalisation of more than $560bn, is expected to be upgraded from frontier to emerging markets status by 2017, encouraging more asset managers to allocate funds to Saudi Arabia."
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"Saudi Arabia’s stock market is opening to foreign investors, marking a step forward in the oil-rich kingdom’s economic reform efforts that could attract a rush of overseas investment in the coming years.
From Monday, the Middle East’s biggest economy will allow direct market access to large overseas investors with more than $5bn in assets under management as the conservative kingdom continues a gradualist approach to financial reform.
The Tadawul market, with a capitalisation of more than $560bn, is expected to be upgraded from frontier to emerging markets status by 2017, encouraging more asset managers to allocate funds to Saudi Arabia."
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MIDEAST STOCKS-Saudi opening may be non-event with no licences awarded yet | Reuters
MIDEAST STOCKS-Saudi opening may be non-event with no licences awarded yet | Reuters:
"The opening of Saudi Arabia's stock market to direct foreign investment on Monday may disappoint traders who have been hoping for large and immediate fund inflows, as the kingdom has yet to announce the award of any licences.
Saudi Arabia's Capital Market Authority announced plans to open the market last July, and bullish expectations have helped the kingdom's stock index outperform other Gulf markets by a wide margin. It has gained 15.7 percent this year.
But the CMA has indicated it does not want or expect large, sudden fund inflows. It has introduced tight ceilings for foreign investment and a licensing system for institutions; as of early Monday morning, it has not announced the issue of a single licence."
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"The opening of Saudi Arabia's stock market to direct foreign investment on Monday may disappoint traders who have been hoping for large and immediate fund inflows, as the kingdom has yet to announce the award of any licences.
Saudi Arabia's Capital Market Authority announced plans to open the market last July, and bullish expectations have helped the kingdom's stock index outperform other Gulf markets by a wide margin. It has gained 15.7 percent this year.
But the CMA has indicated it does not want or expect large, sudden fund inflows. It has introduced tight ceilings for foreign investment and a licensing system for institutions; as of early Monday morning, it has not announced the issue of a single licence."
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