‘Decade of Emerging Markets’ May Be About to Regain Traction - Bloomberg
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Emerging-market bulls are still upbeat on the asset class, even after China’s highly-touted reopening rally fizzled and proved Wall Street’s early 2023 optimism to be misplaced.
Developing-nation assets stand to finally take off in the second half, they say, as long as global interest rates peak, Chinese authorities prop up growth and structural reforms in India bolster sentiment. A revival may still make this the decade of emerging markets that Morgan Stanley Investment Management flagged earlier this year.
“India, Brazil, China, they don’t have an inflation problem any longer, so they may cut rates faster than the Federal Reserve,” said Xavier Baraton, global chief investment officer at HSBC Asset Management in Paris, on Bloomberg Television. “If you’re looking for true diversification at this time, you’ve got to look into true EM. You’ve got to look into Asia. You’ve got to look into India, which is under-appreciated.”
While the first half of 2023 hasn’t been a disaster for EM investors, it has fallen far short of buoyant forecasts.
Major Gulf bourses end lower on falling oil prices | Reuters
Major stock markets in the Gulf ended lower on Sunday in response to falling oil prices and weaker-than-expected Chinese economic data.
Oil prices - a key catalyst for the Gulf's financial markets - tumbled more than a dollar a barrel on Friday to record a second straight weekly decline as disappointing Chinese data added to doubts about demand growth after Saudi Arabia's weekend decision to cut output.
The Qatari Stock index (.QSI) dropped 0.5%, extending its losses to a second session. The index recorded a drop in all sectors with Gulf's biggest lender Qatar National Bank (QNBK.QA) falling 0.6% and Qatar International Islamic Bank (QIIB.QA) shedding 0.7%.
Saudi Arabia's benchmark index (.TASI) fell marginally, ending its six-session winning streak. Losses in the energy and utilities sectors outweighed gains in most of the sectors.
Bank Aljazira (1020.SE) climbed 3.6% and Saudi Industrial Investment Group (2250.SE) gained 3.4%.
However, the oil giant Saudi Aramco (2222.SE) and the kingdom's biggest bank Saudi National Bank (1180.SE) lost 0.3% and 0.9% respectively.
Outside the Gulf, Egypt's blue-chip index (.EGX30) climbed 1.3%, extending its previous session gains.
The index was lifted up by a 6.2% jump in Fawry Banking (FWRY.CA) and 7% rise in Misr Fertilizers Production (MFPC.CA).
Separately, Egypt's annual urban consumer inflation rate in May accelerated to 32.7% from 30.6% in April, approaching an all-time record and higher than analysts had expected.
Saudi Arabia's Hot Summer May Be Next Driver for Oil Prices - Bloomberg
Saudi Arabia may push more crude oil into power generation as it faces sizzling summer temperatures, providing the demand boost that bulls have been waiting for.
The use of crude oil in power generation may rise to as high as 800,000 barrels a day during the summer as a way to soak up excess supplies from the market, said Vikas Dwivedi, a global oil and gas strategist for Macquarie Group. The move may give a boost to oil prices, which recently fell below $70 a barrel.
“There are some signs that they may use more crude oil to produce electricity than in previous years as a way to help manage global supplies,” Dwivedi said in a interview. The Saudi move could send Brent prices near $80 a barrel in the third quarter.
Power plants in the kingdom can produce electricity from a variety of feedstocks, including natural gas, fuel oil and crude. Last year, demand for crude for electricity generation rose to 671,000 barrels a day between June and August, up 53% from the previous three months, according to data from the Joint Organizations Data Initiative.
Average temperatures during the Saudi summer can be as high as 109F (43C).
UAE bank investments at all-time-high of $149.45bln in March
Bank investments in UAE hit AED 548.5 billion by the end of March, the highest level in the country's history, a report by the Central Bank of the United Arab Emirates revealed.
The report, issued today, showed a YoY growth of 16 % compared to about AED 472.7 billion in March 2022.
Month over month, these investments climbed by 1.3% from AED541.4 bn in February 2023.
Securities accounted for the majority of bank investments, around 45.6%, or AED 250.1 billion during the reference period.
Held-to-maturity (HTM) securities accounted for 43% of the total investments, reaching AED236.3 billion in March, a YoY growth of 74.1% from AED135.7 billion in March 2022, and a 2.6 % monthly increase from AED230.3 billion in February 2023.
The bank stock investments reached AED11.9 billion in March, a rise of approximately 0.8% from around AED11.8 billion in December 2022.
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