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Dubai Gold & Commodities Exchange Weekly Market Commentary - June 19, 2011
June 19, 2011--Economic Data Overview
The June 20 week has a light US data calendar with little to distract from the upcoming FOMC meeting on Tuesday and Wednesday. Among the economic data, it will be that related to the housing market that has the most impact on wider markets. The Richmond Fed's Survey of Manufacturing for June on Tuesday comes on the heels of soft reports from the New York and Philadelphia Districts. Last month the Richmond report's general activity index slipped back into a contractionary reading for the first time since September 2010.
The Richmond number tends to lead the other District Bank outlooks. If it turns higher, it may be consistent with temporary conditions that led to a brief slowdown in manufacturing. If it holds in negative territory, it will raise the possibility that the current slowdown will be more sustained. The advance report on durable goods orders for May on Friday should look a bit stronger than the 3.6% decline in April. Last month the transportation component was quite soft after declines in civilian aircraft orders. Aircraft orders advanced modestly in May, and should support overall orders. Nonetheless, there may be other disruptions from the supply chain or weather impacts that will restrain orders. The release of the third estimate of first quarter GDP on Friday will probably be a non-event. At this point the second quarter is well advanced, and any revisions to the first quarter are likely to be small.
Initial claims for the week ended June 18 on Thursday will be for the survey comparison week to May, and levels of new filings are likely to be lower than the 414,000 level in the May 14 week. The general trend for new and continuing claims is working its way..
Source: DGCX
United Arab Emirates: Selected Issues and Statistical Appendix
June 16, 2011--I. RISKS POSED BY GOVERNMENT-RELATED ENTITIES IN THE UNITED ARAB EMIRATES1
A. Introduction
1. Government-related entities (GREs) have been a major source of growth and
development for the United Arab Emirates (U.A.E.) economy. The U.A.E. economy is dominated by a web of commercial corporations, financial institutions, and investment arms,
owned directly by the Government of Dubai (GD), the Government of Abu Dhabi (GAD), or the ruling family under the umbrella of major holding companies (Figure I.1). Benefiting
from government transfers and from extensive borrowing-in light of a perceived implicit government guarantee-in 2004-08, Dubai Inc.2 funded a major push into large-scale commercial and residential property developments.
Dubai became a regional hub, and the economy achieved high growth rates. More recently, Abu Dhabi has also been developing major infrastructure projects through its GREs.
2. The global financial and economic crisis has, however, unveiled the fiscal and financial risks posed by GREs. Despite government support in 2008–09, the global financial crisis and the price correction in the local property market, combined with the maturity mismatch between short-term liabilities and long-term cash flows, forced Dubai World (DW), one of the main GREs in Dubai, to restructure its debt. The DW debt restructuring led to an increase in Dubai sovereign debt, with ramifications for the banking sector and financial markets. Other Dubai GREs are also in DW-style debt restructuring type negotiations with banks.3 There are also signs that some Abu Dhabi GREs heavily investing in the real estate sector are undergoing financial difficulties.4
view the United Arab Emirates: Selected Issues and Statistical Appendix report
Source: IMF
Lacklustre trading drags Kuwait market slightly down
June 16, 2011--The KSE Market Index ended down 0.14% at 6,336.9 points.
National Bank of Kuwait closed even at KD1.200. Livestock transport and trading company surged 7.27% to KD0.295. As oil prices eased over the week, Burgan Company for Well Drilling lost the most, closing 6.41% lower at KD0.365.
Source: AME Info
Despite MSCI-upgrade rumors, Qatari investors book profits
June 16, 2011--In Doha, the QE index declined by 0.79% to 8,319.65 points, ending a series of daily gains this week on rumors the QE could be upgraded to 'emerging market' from 'frontier market' by index provider MSCI.
Property heavyweight Barwa Real Estate dipped 1.98% to QR29.70. Qatar National Bank bucked the trend, closing 0.14% higher at QR139.80.
Source: AME Info
Abu Dhabi bourse outperforms on year-to-date basis
June 16, 2011--Driven by advances in the banking, energy and real estate sector, the ADX General Index added 0.65% and finished at 2,761.48 points.
Gulf Cement Co. gained the most (up 9.37% at Dhs1.40) while Aldar (1.45% higher at Dhs1.39) was the most liquid share. Fourteen stocks gained, six ended lower at ten closed flat, among them Dana Gas and RAK Properties. The ADX is currently the only Arab bourse which added value (up 1.53%) in relation to its year-to-date performance.
Source: AME Info
Dubai stock exchange closes unchanged
June 16, 2011--The DFM General Index rose in the early hours of trading on Thursday but eventually lost momentum and closed even at 1,600.98 points.
Emaar shares outperformed and added another 0.31% to close at Dhs3.23. Investors booked profits at Shuaa Capital (off 1.92% at Dhs1.02) and Emirates NBD (down 1.73% at Dhs4.55). Islamic home financing company Tamweel dipped 1.33% to Dhs0.961. Earlier in the day, Bloomberg has reported that Tamweel will be included in the DFM General Index and the banking sub-index from July 3 Tamweel shares restarted trading on May 10 after being halted for almost two years pending its reorganisation. Twelve shares gained, 15 lost and three closed even. Around 192.86m stocks changed hands, valued at Dhs265.6m.
Source: AME Info
Global and Regional Spillovers to GCC Equity Markets-IMF Working Paper
June 15, 2011--Summary: This paper analyzes the impact of global and regional spillovers to GCC equity markets. GCC equity markets were impacted by spillovers from U.S. equity markets despite varying degrees of foreign participation. Spillovers from regional equity markets were also important but the magnitude of the effects were on average smaller than that from mature markets.
The results also illustrated episodes of contagion in particular during the recent global financial crisis. The findings suggest that given the degree of openness, and open capital accounts the financial channel is an important source through which volatility is transmitted. In this regard, GCC equity markets are not immune from global and regional financial shocks. These findings refute the notion of decoupling between the GCC equity and global equity markets.
view the IMF working paper-Global and Regional Spillovers to GCC Equity Markets
Source: IMF
Companies in MENA region perform well despite recent unrest, reveals Amwal AlKhaleej report
June 15, 2011--Amwal AlKhaleej, a regional alternative investment firm in the MENA region, headquartered in Riyadh with offices in Dubai and Cairo, recently gave their insights into the Middle East and North Africa (MENA) turmoil and its effect on the economic and private equity (PE) sectors in the short-term.
The economic sector has been strongly impacted following the unrest that began in Tunisia in December 2010 and consequently spread through the Middle East and North Africa.
According to Fadi Arbid, CEO of Amwal AlKhaleej, from a business perspective, companies in the MENA region are still performing well despite the unrest. However, private equity firms have been impacted by the situation.
Arbid commented, "Re-emergence of private equity depends on the success of the exit returns of today's funds, most of which were raised and deployed between 2004 and 2007."
Source: AME Info
Petrochemicals weigh on Tadawul market
June 15, 2011--The Saudi Stock Exchange failed to join the general positive trend in the GCC on Wednesday and ended 0.34% lower at 6,546.06 points.
Saudi Basic Industries Corporation (Sabic) continued its up-and-down-trading, closing a quarter percent lower at SR102.74. Shares of Dar Alarkan Real Estate Development Company gained 3.11% to reach SR8.30.
Source: AME Info
Qatar Exchange data now on SIX Telekurs
June 15, 2011--The Doha-based QE Index closed 0.90% higher at 8,386.30 points as banks were the drivers today.
Earlier in the day Swiss financial information provider SIX Telekurs announced that live trading data from Qatar Exchange is available to investors across the globe via its platform. "As the first financial information provider to access Qatar Exchange's newly launched SFTI connectivity, SIX Telekurs' clients in the US, Europe and Asia will benefit from the resilience and enhanced liquidity provided by Qatar's SFTI connection," the statement to the QE says. Qatar National Bank, the country's largest bank by assets, jumped two percent higher at QR139.60.
Source: AME Info
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