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Dubai Gold And Commodities Exchange Weekly Views-November 14, 2010
November 14, 2010--Economic Data Overview
The week of November 15 has a variety of data reports, and much of it is of first tier data to shape the economic outlook.
A few Fed officials will be out giving speeches. Most of them have already made public comments in the post-FOMC period and staked out their respective positions in regards to the large-scale asset purchase program. The Senate Banking Committee is expected to vote on Tuesday on the nomination of Peter Diamond for the Board of Governors. If passed by the full Senate, there could well be a Fed Board with no empty seats by the December 14 FOMC meeting.
Topping the list is probably the retail sales numbers for October to be released on Monday. The weekly data on retail activity were mostly lacklustre over fiscal October, but ended on a strong note in the final week with the approach of Halloween. There may be a pause in October for many types of retailers as the back-to-school shopping period ended in September and the holiday sales period has yet to rev up in November. Total retail sales may get a boost from higher gasoline prices and a rise in motor vehicle sales.
The October CPI report on Wednesday is preceded by the PPI data on Tuesday. Both are likely to reflect the recent increases in commodities costs for food and energy and for other items like precious metals, industrial metals and cotton. On the producer side, most companies will do whatever they can to avoid passing on rising input costs, but some pass-through is likely. For consumers, prices have already been increasing for items like coffee and jewellery.
OPEC Monthly Oil Market Report -November 2010
November 12, 2010--Oil Market Highlights
The OPEC Reference Basket moved within a higher but narrow range of $78.50-81.50/b in October. This resulted in a monthly average of nearly $80/b, the second highest so far this year after April’s $82.33/b. The rise in the OPEC Reference Basket was driven by bullish sentiment in the futures market, mainly attributable to the weaker US dollar following the second round of quantitative easing.
The Basket continued moving higher in November to stand at $85.27/b on 10 November. The Nymex WTI front-month rose $6.43 to stand slightly below $82/b in October before going on to
hit a two-year high in the first week of November. Similarly, ICE Brent gained a further $5.12 to average $83.54/b and then moved beyond $88/b in November.
Growth in the world economy was revised up to 4.1% for 2010, supported by a better-thanexpected expansion in the manufacturing sector of the OECD. Growth for 2011 remains unchanged at 3.6% as it is still unclear if the current momentum can be carried over into the coming year. A relative resilient US economy is now forecast to grow at 2.7% in 2010 and 2.4% in 2011. The forecast for Japan was revised up slightly to 2.9% for 2010 and left unchanged at 1.3% for 2011. Germany’s manufacturing base has been driving the expansion in the Euro-zone to 1.4% in 2010 and 1.1% in 2011. Growth expectations for China remain at 9.5% in 2010 and 8.6% in 2011, while India’s forecast was revised up to 8.5% in 2010 and remains unchanged at 7.7% in 2011.
Depa Ltd. shares remain volatile
November 11, 2010--At the Nasdaq Dubai, The FTSE NASDAQ Dubai UAE 20 index closed at 1796.660 today, down 0.47%, from the previous close.
DP World regained the level above $0.60, closing 2.20% up at $0.605. Interior designer Depa Ltd. lost 4.20% to finish at $0.73. During the last four weeks, Depa shares advanced 14.1%
Dubai market dips slightly ahead of Eid al-Adha
November 11, 2010--The local Dubai bourse failed to defend the level above 1,700 points. The Dubai Financial Market (DFM) General Index declined 0.86%, to finish at 1,691.65.
Shares of real estate developer Union Properties (UP) ended four percent lower at Dhs0.407. Earlier in the day, UP reported a net loss of Dhs751m for the first nine months 2010. Islamic bank Ajmanbank gained, along with four other shares, and closed 1.18% higher at Dhs0.86. Over the week, the DFM General Index lost 1.8%.
Industrial, real estate shares drag Abu Dhabi bourse down
November 11, 2010--The ADX General Index ended 0.12% lower to close at 2,758.44. Sharjah Cement and Industrial Development plummeted 3.19%, finishing at Dhs0.90.
Real estate bellwether Aldar Properties also posted heavy losses, ending down 3.42% to finish at Dhs2.27. Etisalat closed 0.45% lower at Dhs11 straight. Earlier in the day, the first UAE telecom provider announced it will establish a $7bn Global Medium Term Note (GMTN) Programme and a $1bn Sukuk programme in the coming days. Over the week, the ADX market gained 0.29%
Kuwait market weakens 0.66% to close at 6,950
November 11, 2010--Amar for Finance and Leasing gained the most, ending nine percent up at KD0.060. Banking and industry shares weighed on the market.
Gulf Bank of Kuwait dipped 1.92%, finishing at KD0.510. Telecom giant Zain lost 6.66% on profit booking to close at KD1.400. The share topped a new 2010 at the start of November.
Qatar Exchange up, up and away
November 11, 2010--Nothing seems to stop the Qatar market QE in Doha at this time. Closing with a day profit of 0.41% (at 8,073.72 points), the QE extended its year-to-dat advance to 16%,
the highest profit of all GCC markets. Qatar Telecom gained 0.22% to finish at QR180.40, close to its 2010-high which stands at QR182.1.
Determinants of the Foreign Exchange Risk Premium in Gulf Cooperation Council Countries-IMF Working paper
November 11, 2010--Summary:
This paper analyzes macroeconomic determinants of the foreign exchange risk premium in two Gulf Cooperation Council (GCC) countries that peg their currencies to the U.S. dollar: Saudi Arabia and the United Arab Emirates. The analysis is based on the stochastic discount factor methodology, which imposes a no arbitrage condition on the relationship between the foreign exchange risk premium and its macroeconomic determinants.
Estimation results suggest that U.S. inflation and consumption growth are important factors driving the risk premium, which is in line with the standard C-CAPM model. In addition, growth in international oil prices influences the risk premium, reflecting the important role played by the hydrocarbon sector in GCC economies. The methodology employed in this paper can be used for forecasting the risk premium on a monthly basis, which has important practical implications for policymakers interested in the timely monitoring of risks in the GCC.
view Determinants of the Foreign Exchange Risk Premium in Gulf Cooperation Council Countries
Lebanon may amend Shariah banking law
November 10, 2010--Lebanon's central bank is considering legislation to boost Islamic finance after the industry failed to garner 1% of total banking assets, Bloomberg has reported.
Bank of Lebanon is working with a group of local lenders to amend a 2004 law that allowed the establishment of Shariah-compliant banks, first vice-governor Raed Charafeddine told the news service. The central bank is also considering introducing a product in the first quarter that helps Islamic lenders manage their liquidity, he said.
Dubai market dips 0.54%
November 10, 2010--The Dubai Financial Market (DFM) General Index lost 0.54% Wednesday, closing at 1,706.39. Dubai-based investment bank Shuaa Capital ended flat at Dhs1.17.
Earlier in the day, Shuaa reported a Q3 net profit attributable to equity holders of Dhsa180,000 compared to a loss of Dhs269.72m in the corresponding period in 2010. Market bellwether Emaar declined 1.33% to finish at Dhs3.72.
