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Dubai Financial Market '09 profit falls 43%
March 3, 2010--Dubai Financial Market, the only Arab stock market to sell shares to the public, has announced that its full-year profit dropped 43% as the global financial crisis slowed its trading volume, Bloomberg has reported
Net income fell to Dhs346.6m ($94.4m), or 0.04 dirhams a share, from Dhs605m, or 0.08 dirhams a share, a year earlier, DFM said.
ISDA Announces Further Industry Commitments to Increase Robustness of OTC Derivatives Markets
March 3, 2010--The International Swaps and Derivatives Association, Inc. (ISDA) today jointly submitted a letter with market participants and industry associations to global supervisors. The letter is the sixth in a series that publicly details how the industry will work to further strengthen the robustness of the OTC derivatives market infrastructure, improve transparency and build a more resilient risk management framework.
“ISDA and the industry recognize the need for further enhancements to the infrastructure and framework of the OTC derivative markets,” said Eraj Shirvani, Chairman of ISDA and Managing Director, Head of Fixed Income EMEA, Credit Suisse. “The commitments that the industry is making today build upon solid foundations already laid and further underscore our focus on transforming and strengthening OTC derivatives markets. They reflect the strong partnership of the major dealers, significant buy-side institutions and global supervisors, with a goal of reducing systemic risk by improving market transparency, standardization and risk management practices.”
SHUAA Capital releases KSA Vision 2010
March 2, 2010--SHUAA Capital, the leading financial services institution in the GCC, has today published its Saudi Vision 2010. The vision provides an overview of Saudi Arabia’s market outlook for 2010 with a special focus on the petrochemical, banking and telecom sectors as well as stock briefs for more than 30 Saudi listed companies. In addition, the report also reviews the Kingdom’s markets throughout 2009.
The SHUAA Saudi Vision 2010 offers an indispensable reference guide on how to navigate the dynamic market environment of Saudi Arabia for local, regional and international investors. Saudi Arabia has weathered the storm of the financial crisis well, thanks to timely and appropriate fiscal and monetary policies that have helped to support growth and the stability of the financial system. Real GDP growth is estimated at 0.2% in 2009 and we expect growth to accelerate to 3.2% this year. The key drivers behind our macro view are a sustained global recovery and the associated higher oil prices, continued expansionary fiscal policy and the resumption of local bank lending, easing financing constraints on the private sector. We forecast nominal GDP will reach SAR1.5 trillion this year.
As we anticipated in our Vision 2009 report, the Saudi market had a positive year in 2009 as the petrochemical sector led the gainers. The Tadawul All-Share Index recorded a net gain of 27.5% in 2009, falling slightly short of our estimate, in our Vision 2009 report, of 30%. Overall, and after recording a dismal 56% drop in 2008, the Saudi market managed to outperform all other GCC markets, which recorded a composite growth of 15.3% in 2009, as per the SHUAA Capital GCC Index.
On corporate earnings SHUAA Capital’s Research department anticipates 26% earnings growth in 2010. Boosted by significantly expanding earnings in the petrochemical sector, which was the main culprit behind the lower aggregate growth in 2009. Coming from a low base, it forecasts an increase of around 90% in the sector’s aggregate earnings.
Similarly, the report expects the banking sector to record a growth of circa 31% as banks’ top line will benefit from the resumption of lending, and their bottom line will be further supported by the reduction in specific provision levels compared with the peaks of 2009. Furthermore, reaching a settlement in the Saad/AHAB case in favour of local banks would be a major catalyst for the sector specifically, while significantly restoring confidence in the Saudi market as a whole.
Looking at what lies ahead for the Saudi Arabian market and its corporate the Vision 2010 explains: “We anticipate a circa 20% increase in the Saudi index in 2010, corresponding to a Tadawul All-Share Index benchmark target in the proximity of 7,400, on the back of strong commodities prices, expansionary fiscal policy, recovering private sector growth, and a steadily improving local credit environment. We expect 2010 earnings to grow by around 26%, after having witnessed a 21% decline in 2009. The strong headline earnings growth across the board would be one of the key drivers of market performance for the year.
Jordan's debt rises 12.9% in 2009 to $13.6bn
March 2, 2010--Figures released by the Jordanian finance ministry have revealed the kingdom's gross domestic and foreign debt rose 12.9% to JD9.66bn ($13.6bn) in 2009 against the previous year, Reuters has reported.
Foreign debt, mostly to major Western donors and international financial institutions, rose by 6% to JD3.869bn at end of December against JD3.64bn at the end of 2008, the data showed. Public debt is expected to reach beyond a record $14bn this year, nearing a legal limit of 60% of GDP, as recession reduces local revenue and foreign aid.
DGCX volume hits all time high on March 1st
March 2, 2010--Exchange trades 19,255 contracts, valued at US $1.27 billion on March 1st - the highest daily volume and notional value since inception
Euro/Dollar futures record highest daily volume and notional value at 11,546 contracts and US $783 million
The Dubai Gold & Commodities Exchange (DGCX) today announced that it recorded its highest ever daily volume on March 1st, trading 19,255 contracts at a record notional value of US $1.27 billion affirming the sustained demand for its commodity and currency derivatives contracts.
Breaking all earlier records, daily volume on the Exchange exceeded the previous daily high of 14,066 contracts on 11th July 2008. The record trading activity was supported primarily by increased volume in currencies. Interest was most significant in the Euro/Dollar futures contract, which also achieved a record daily volume and notional value of 11,546 contracts and US $783 million.
The daily record on DGCX firmly endorses the success of our business strategy and the diversified product range of the exchange which meets the needs of our market participants, said Eric Hasham, Chief Executive Officer, DGCX.
The sustained growth and record daily volume is also testimony to the Exchanges efforts, in conjunction with its members and market makers, to strengthen liquidity by providing competitive spreads and prices, he added.
Eric Hasham said that DGCX had witnessed numerous records over the past year, which has reinforced its status as the leading derivatives exchange in the region.
Positive returns for funds in GCC in 2009
March 1, 2010--The latest Fund Market Insight Report from Lipper for the Gulf Co-operation Council (the GCC) countries reveals that all 69 Lipper equity categories posted positive annual performances for 2009, with the exception of the 39 funds invested in Kuwait which lost 18.13% on average during 2009, reflecting the weak performance of the Kuwait Stock Exchange.
Funds invested in emerging markets topped the annual ranking; Equity Russia returned 159%, Equity Indonesia rose 124%, and Equity Emerging Markets Latin America gained 104%. JPM Russia A Acc USD was the best performing fund registered for sale in the GCC over the year, returning more than 164%.
IIFM releases Sukuk Report on its newly redeveloped website
February 27, 2010--The International Islamic Financial Market (IIFM) today released its Sukuk Report (1st Edition) and the Sukuk Issuance Analysis 2001-2009 on its newly developed website. “Information and specific Islamic Capital and Money Market research is part of IIFM’s mandate and although IIFM has been providing Sukuk issuance analysis for some time, this report covers Sukuk history, trends, specific case studies and recent developments in the international Sukuk market which will be helpful to IIFM members and the industry at large,” said Mr. Ijlal Ahmed Alvi, Chief Executive Officer of IIFM.
He also said that IIFM plans to cover other topics such as restructuring and defaults, short-term Sukuk, floating vs fixed rate analysis and other case studies in the next edition.
The report is available on IIFM’s newly redeveloped website (www.iifm.net), which now has very easy access to documentation and other information modules. It is user friendly with easy to navigate tools. The technical layout has been developed by the IIFM team and Mr. Alvi congratulated them on their efforts. The enhancement work will continue for the next few months with the aim to have a comprehensive information portal for the industry.
Dubai's debt is $109bn, says IMF
March 1, 2010--Dubai and the companies it controls have as much as $109bn of debt, which is equal to 130% of its GDP, the National has reported, citing a new report the IMF.
The estimate is larger than previous consensus projections of roughly $85bn for the combined debts of Dubai.
New infrastructure to spur growth in logistics for GCC, says expert
February 28, 2010--More logistics infrastructure are expected to be created in the GCC that would pave the way for competitive logistics services, as regional governments, municipalities and private investors have placed logistics development on their agenda, said a logistics expert in the region.
According to Dr. Roland Zibell, Director of ADI Services FZE, although Dubai remains to be the only outstanding hub for trading and logistics in the GCC, more locations have the potential to develop into platforms with good logistics infrastructure and service offerings.
Dubai Gold And Commodities Exchange Weekly Views February 28, 2010
February 27, 2010--Commodities Overview
Commodities prices were volatile last week. There continues to be strong investor interest in commodities, but the investors are not fully committed to the view that prices will rise sharply. As a result, each round of buying has been met by profit-taking as soon as prices reach short-term technical resistant levels and stall out. On the flip side of the market, investors appear reluctant to be short precious metals, energies, and other commodities for any length of time.
There appears to be very little short interest from institutional investors at recent prices. Also, there continues to be interest in buying into dips as soon as they appear to stall out. This has kept many commodities in trading ranges, albeit some of the trading ranges are rather wide. This pattern may continue for the next few weeks, as investors continue to equivocate about the overall direction of the global economy and thus the likely direction of commodities prices. At present the most likely outcome seems to be that at some point investors will commit to a view that the global economic recovery is underway.
Currencies Overview
The U.S. dollar is expected to continue on its recent path again this week. There clearly is an upward bias toward the dollar, at least against the euro and other major traded currencies. Investors are not rushing blindly into the greenback, however. Instead, they clearly remain very nervous about prospects for U.S. budget and trade deficits. Testimony by Federal Reserve Board Chairman Benjamin Bernanke before Congress last week helped fortify invest tor views that the U.S. economy is heading in the right direction and that monetary authorities have the capacity to manage the aftermath of their 2008 and 2009 monetary largesse.
