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Dubai Mercantile Exchange Achieves New Records In Open Interest And Physical Delivery
August 4, 2010- The Dubai Mercantile Exchange (DME) announced today that two new trading records were set in July 2010 as the exchange entered its fourth year of operations.
Total open interest in its flagship DME Oman Crude Oil Futures Contract (DME Oman) during July 2010 reached a new record of 20,160 contracts. Open interest is the total number of outstanding futures contracts held by market participants and is regarded as a leading performance indicator in the industry. Open interest in DME Oman has increased steadily in 2010, the latest figure exceeding the previous total open interest record of 19,867 contracts set in February 2010.
The DME also announced that the number of DME Oman contracts going to physical delivery has reached an all-time high, with a record 15.1 million barrels due for physical delivery in September 2010, surpassing the previous high of 14.1 million barrels set for delivery in August 2010.
DME Oman is the largest physically delivered crude oil futures contract in the world with an average of 12 million barrels per month delivered through the exchange in 2010. Since its launch in June 2007, more than 324 million barrels of Oman crude have been delivered through the DME.
The DME has reported a 130% increase in liquidity since 2008, averaging 2,930 lots per day since the start of 2010, equivalent to approximately 3 million barrels of oil traded daily.
Making the announcement, Thomas Leaver, Chief Executive Officer of the DME, commented: “Today’s announcement provides further compelling evidence of the market’s growing confidence in the DME Oman contract as a transparent and effective mechanism for pricing Middle East sour crude oil. These two new records clearly demonstrate the strengths of DME Oman, which is rooted firmly in the fundamentals of supply and demand.”
Bahrain's financial services sector grows 4% in Q1 2010
August 4, 2010--Bahrain's financial services (FS) sector grew by 4% in the first quarter of 2010 - representing six% year-on-year growth - according to a report by the Kingdom's Central Informatics Organisation (CIO).
The Bulletin of Quarterly National Accounts also reports that the Kingdom's insurance industry grew 5% in the first three months of 2010 - or 15% year-on-year.
Islamic finance regulator to change scholar rules
August 3, 2010--Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) is set to overhaul rules governing Islamic finance scholars whose role and potential conflicts of interest have come under increased scrutiny, Reuters has reported.
The industry body plans to devise new standards to regulate shareholdings of Shari'ah scholars in financial institutions and advisory services provided by companies owned by scholars. AAOIFI also said it has approved two new accounting standards on financial reporting and investments in sukuk, or Islamic bonds.
Women in the Middle East controlled 22% or $0.7 trillion of the region's total assets under management AUM in 2009
August 2, 2010--Oil rich Saudi Arabia has a veritable treasure trove of human and financial capital in the form of its women, who control a large portion of the country's wealth and are sitting pretty on pure cash alone totalling a staggering $11.9bn. However, their true maximum potential lies untapped owing to rigid religious, social and political constraints over the years.
Saudi women could become a major growth driver for the country's diversification policy with the considerable wealth lying idle with them being channelled into the country's money supply, the Cayman Islands-based asset management firm Al Masah Capital said in its latest report: 'The Saudi Woman - A catalyst for change' which was released yesterday.
Markaz report: GCC bonds & sukuk market review for H1 2010 - Kuwait first in value
August 2, 2010--
“Markaz” published a market review for the GCC fixed income market in H1 2010 covering both conventional bonds & Shari’ah compliant sukuk.
GCC Aggregate Bonds & Sukuk Market H1 2009
Total value of GCC bonds and sukuk, issued during the first half of 2010 dropped by 32%, compared to the respective period of 2009, to USD24.2 billion. The month of April predominated in terms of issuance frequency and value, with 17 issuances and USD6.1 billion, raising 25.1% of H1 2010 total issuances value.
During H1 2010, sovereign/government issuances dominated the majority of the amount raised, with USD17.2 billion or a 71.0% of the total amount raised; this represents a continuation with the trend observed since 2003 except for the peak years of 2006-2007 and 2008, where corporate issuances dominated the market.
Continuing with the trend witnessed since 2003, conventional issuances raised the largest amount during H1 2010 with USD20.1 billion through 68 issues, which is five times the total value of sukuk issued during the same period.
Excluding sovereign/government issues, four sectors were active during H1 2010: the Financial Services sector which, continuing with the trend that has been witnessed since 2003, issued the greatest number and raised the largest amount, with USD3.3 billion through eight issuances, followed by the Power and Utilities sector with USD2.9 billion through two issuances, the Real Estate sector with USD0.6 million through three issuances, and finally the Oil and Gas sector with USD0.3 million through one issuance.
Kuwait first in value
In H1 2010, Kuwait raised the largest amount with USD10.8 billion, representing 44.7% of the total amount issued through 31 issuances, most of which were by Central Bank of Kuwait. Followed by Saudi Arabia with USD4.2 billion raised through five issuances.
However, in terms of frequency, Bahrain was the most active issuing 37 bonds and sukuk representing 45.1% of the total number of issuances and raising USD2.0 billion.
The Kuwaiti Dinar denominated issuances raised the largest amount in H1 2010 with USD10.8 billion, The US Dollar denominated issuances raised USD4.9 billion through 6 issuances, followed by the Qatari Riyal denominated issuances with USD3.3 billion and the Saudi Riyal denominated issuances raised USD3.1 billion. While the Bahraini Dinar denominated issuances were the most active, representing 42.7% of the total number of issuances.
Jordan budget deficit drops by over 30%
August 1, 2010--Jordan's state budget deficit in the first six months of this year dropped by over 30% to JD156m ($219m) from JD560m recorded in the same period of 2009, Jordan Times has reported.
Effective austerity measures taken by the government earlier this year contributed to the decline, finance minister Mohammad Abu Hammour told the daily. The government is to continue with these measures adopted in its action plan in order to address the unprecedented JD1.5bn deficit, he added.
Global sukuk bonds gain 2.1% in July
August 1, 2010--Islamic bonds gained at half the pace of emerging-market debt in July, Bloomberg has reported. Global bonds that comply with Shariah law gained 2.1%, double the return in June and the most since a 4.1% advance in March, according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index.
JPMorgan Chase & Co.'s EMBI Global Diversified Index, which tracks debt from 46 emerging-market countries, climbed 3.9%.
Egypt GDP grows 5.9% in last quarter
August 1, 2010--The Egyptian government has said the country's economic growth had accelerated to an annualised 5.9% in the three months to end-June, Reuters has reported. "This indicates a near full recovery from the global crisis and a return to the path of rapid economic growth similar to the period before the global crisis," economic development minister Osman Mohamed Osman said in a statement.
Gross domestic product for the financial year to end-June grew 5.3%, faster than the 4.7 % growth in 2008/09. Egyptian growth hit a record 7.2% in 2007/08 before the global downturn curbed tourism, foreign direct investment and Suez Canal revenues in the Arab world's most populous country.
Dubai Gold And Commodities Exchange Weekly Views-August 1, 2010
August 1, 2010--Commodities Overview
Volatility in the gold, silver, and crude oil markets has eased in recent weeks. This in large part may be attributed to the summer doldrums, typical of markets in the Northern Hemisphere. Investor activity is reduced as many of the market participants in this region go on vacation. Concerns over Europe’s financial troubles have eased over the past week and second quarter corporate earnings results are coming in better than expected.
This may be weighing on gold prices along with the reduced investor activity. Low trading volumes, however, will provide potential for increased volatility should market participants decide to enter or exit positions en masse. Structural problems in developed economies remain and should keep longer term investors interested in gold and silver.
Currencies Overview
The U.S. dollar may begin to trend lower again this week, after having managed to consolidate last week. The dollar moved sideways against most currencies as financial markets digested the results of the European banking sector stress tests. Mixed macroeconomic data also kept the dollar from moving forcefully out of recent support and resistance levels. Investor focus has been shifting toward the possibility that economic activity in the United States will be less robust for the remainder of the year than in the past few quarters. A growing chorus of market observers indicate that conditions will be much gloomier. There are even some market participants who have suggested the likelihood of another recession.
Shuaa stress test report: UAE banking system capable of withstanding deterioration in asset quality
August 1, 2010--: SHUAA Capital, the leading financial services institution in the GCC, has today published its “UAE Banks Put To The Test” report, a stress test of the UAE banking sector. This report comes at a time when the worst of the recession appears to be over but local banks remain risk averse and reluctant to extend credit to the private sector due to concerns around future losses and write downs. SHUAA has estimated the extent of those losses and write downs and the ability of UAE banks to absorb them should they materialize. Ultimately, the report concludes that the local banking sector as a whole is sufficiently capitalised to withstand further deterioration in asset quality.
The report stress tests eight local banks: Emirates NBD, National Bank of Abu Dhabi, Abu Dhabi Commercial Bank, Mashreqbank, First Gulf Bank, Dubai Islamic Bank, Union National Bank and Commercial Bank of Dubai. The report focuses on what SHUAA considers to be the banks’ riskiest assets on their balance sheets; these include real estate and personal loans extended in 2008, potential losses associated with banks’ exposure to Saad, Al Gosaibi and Dubai World, and “renegotiated loans” which appeared on most banks' FY09 financials. Moreover, the report takes into account the fact that Dubai-based banks incur a higher risk associated with their real estate exposure than Abu-Dhabi based lenders.
Local banks continue to be nervous about extending credit to the private sector due to fears around potential future losses and write-downs they may face. However, the report’s results suggest that the UAE banking sector overall has the ability to withstand potential losses associated with further deterioration in asset quality, largely due to the authorities’ efforts to strengthen banks’ balance sheets since the onset of the financial crisis.
