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Kuwait Economic Brief - May 2011
'Flash crash' sees commodity sell-off in early May; FY10/11 budget could see KD 4–5 billion surplus…
May 24, 2011--Oil prices
After showing continued strength through most of April, oil prices suffered a ‘flash crash’ in early May, eliminating all of the gains made during the previous two months. The price of Kuwait Export Crude (KEC) dropped from a peak of $119 per barrel (pb) at the end of April to $100 pb on 6th May, including a drop of $12 pb – or 10% - in one day on the 6th. Similar price falls were seen among other benchmark crudes.
The price of both Brent crude – the main European blend – and West Texas Intermediate (WTI) were off $16-17 from their late April highs, with the latter falling back below the $100 mark, to $97.
The declines were part of a broader sell-off among commodities, which saw, for example, the price of silver fall by 26% in just over a week. There appears to have been no single cause for the rout, with analysts citing a number of contributing factors. A few factors, cited after the fact, were: a decline in the commodity risk premium in light of more stable geopolitics in the MENA region; a sudden shift in sentiment towards the US dollar, requiring a fall in prices to re-stabilize the market in foreign currency terms; and the risk of high prices triggering ‘demand destruction’, part fuelled by new figures showing declining US petrol demand.
view report-Kuwait Economic Brief - May 2011
Gulf investors see value in developed markers
May 24, 2011--Middle East investors are looking west for investment opportunities as financial crises in developed markets such as Europe create more value plays, a study released by US-based fund manager Invesco showed. Growth in emerging markets have been strong in the last year but investors are increasingly looking towards markets where investment have been under pressure.
A lot of investors are looking back to the developed market where they are seeing good value. If you look at the prices in Western Europe, for instance, they're cheap," Nick Tolchard, head of Invesco Middle East told reporters at a conference to launch the study yesterday. Gulf-based sovereign wealth funds, however, have not abandoned regional and local investments despite the widespread political unrest, according to Tolchard.
The political crises might mean short-term concerns but investors in the region, like sovereign wealth funds, are taking a more sensible long-term returns approach. There still appears to be a great deal of confidence. At least, there is no more cautiousness then there was last year," he said.
Dubai market dives two percent
May 23, 2011--Stocks a the DFM lost across the board, sending the DFM General Index down by 2.03% to 1,546.65 points. Emaar plummeted 3.18% to Dhs3.04.
Emaar lost 9.74% during the last month of trading. Cooling specialist Tabreed dived 10% to hit Dhs1.26. Abu Dhabi-based investment firm Mubadala increased its stake in Tabreed to 26.1%, Tabreed said yesterday. Dubai Insurance gained the most among the four gaining shares, closing up 0.92% to reach Dhs2.20. Twenty-four stocks lost and three ended flat. Some 171.24m shares valued at Dhs192.32m changed hands.
Abu Dhabi National Takaful rises to one-year high
May 23, 2011--The Abu Dhabi index ADX declined half a percent on Monday, closing at 2,631.83 points.
Islamic insurer Abu Dhabi National Takaful continued to soar, ending 7.14% higher at Dhs4.50. RAK Properties was the most liquid shares (down 5.13% at Dhs0.37). Abu Dhabi National Energy Co., known as Taqa, dipped 0.81% to Dhs1.23. Seven stock gained, 19 lost and seven closed flat.
Qatar bourse loses as turnover soars
May 23, 2011--The QE Index declined 1.92% to 8,441.35 points.
Qatar National Bank dived 2.50% to QR140.20. Al Khalij Commercial Bank bucked the trend by gaining 0.67% to reach QR17.98. Trading volumes increased almost three-fold as 10.7m shares valued at QR385.62m changed hands.
Real estate, industry shares interrupt Kuwait market rebound
May 23, 2011--The KSE's rebounf came to a halt on Monday as the KSE Market Index dipped 0.74% to close at 6,443.4 points.
Shares of telecom operator Zain dipped 1.82%, finishing at KD1.060. A'ayan Real Estate gained the most, closing 7.56% higher at KD0.071.
Tadawul market retreats by 0.71%
May 23, 2011--The Saudi Stock Exchange closed 0.71% lower at 6,702.76 points as weak performing energy and petrochemical shares weighed on the bourse.
Market bellwether Sabic dipped 0.23% to SR107.50. Jouf Cement was the most liquid share, adding 1.32% to close at SR15.30. Thirty-three shares gained, 99 lost and 13 ended even.
Mena equity markets to see growth
May 23. 2011--Ahead of a possible upgrade by MSCI of Qatar and the UAE markets, a regional asset management firm has said equity markets in the Middle East and North Africa (Mena) offers a "sizeable" opportunity for investors focusing on the emerging market economies.
The GCC economies are expected to witness sustained economic growth in the near and long term as a result of increased government spending on infrastructure, driven high oil prices, according to Yong Wei Lee, head of Mena equity investments at Emirates NBD Asset Management.
UAE Economy Minister predicts 3-3.5 per cent GDP growth
May 23, 2011--The UAE's gross domestic product (GDP) is expected to grow between 3 and 3.5 per cent in 2011, the Gulf Arab state's economy minister said on Tuesday.
"We are expecting this year's GDP to range between 3 and 3.5 per cent," Sultan bin Saeed Al Mansouri told reporters on the sidelines of an investment event.
DGCX Weekly Market Comentary -May 22, 2011
May 22, 2011-- Economic Data Overview
The economic data calendar will be fairly busy over the course of this week. The highlights are expected to be in numbers related to the housing market and consumer confidence. While the second estimate of first quarter GDP is set for release on Thursday and an upward revision is generally forecast.
The second quarter is already well-advanced, however, and markets will be more concerned with more recent numbers. SIFMA has recommended an early close in US bond markets on Friday, so once the morning's economic data is out of the way, the three-day Memorial Day weekend will have essentially begun.
The second estimate of first quarter GDP is set for release Thursday. The preliminary report placed growth at a disappointing 1.8%. However, upward revisions are expected due to higher consumer spending. Nonetheless, the second quarter is almost 2/3 over, and this data will be relatively old and of less immediate importance to markets that some of the other reports during the week.
Personal income and spending for April on Friday should show incomes rose modestly, while spending was a bit higher in part due to non-durables, which includes gasoline prices. The PCE deflator will probably be consistent with another notch up in the rate of inflation. The last monthly indexes for consumer confidence in May are due Tuesday for the Conference Board's Consumer Confidence Index and Friday for the final reading of the Reuters/University of Michigan Consumer Sentiment Index. The early May reports suggest that consumers are somewhat more optimistic than they were in April, but that may have deteriorated with the bad news about natural disasters in the Midwest. The report on durable goods orders in April are due Thursday and covers a month in which new orders for aircraft plunged. A steep drop in the transportation component is likely to pull the headline number down. The manufacturing surveys from the Richmond Fed and Kansas City Fed will provide a little more information about conditions in the factory sector in May, adding to the already released numbers from the New York and Philadelphia Fed Districts. Activity is likely to continue to expand at a respectable pace, but
