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'No pressure' on Gulf dollar pegs
November 12, 2009--Merrill Lynch has said that Gulf countries are unlikely to come under pressure to abandon their currency pegs, as US interest rates remain low, Bloomberg has reported. The region's central banks have to limit monetary policy actions to stay in line with the US Federal Reserve, Merrill Lynch analyst, Turker Hamzaoglu said.
Merrill doesn't expect the Fed to raise rates until 2011, he said, adding that the region will not to go back to strong growth before the next two to three years.
ETF investment from GCC rises 50 percent
November 11, 2009--There is a 50 per cent rise in the number of individuals and firms from the GCC that are investing in exchange traded funds (ETFs), Deborah Fuhr, the global head of ETF research with Barclays Global Investors, told Emirates Business.
The comment came as the global investment into ETF rose to an all time high of $1 trillion (Dh3.67trn).
"More people from the region are getting attracted to ETFs. They are using ETFs for an exposure to Bric countries namely Brazil, Russia, India and China. They are looking at exposures to government products and towards an exposure to precious metals. They are looking in terms of consistency of results of investments. And ETFs are providing them all these features," Fuhr said. She added that there are significant private banks in the region that are adding ETFs to their list of investments.
Since ETFs are not offered in the region, GCC nationals venture elsewhere in search for the products. Robert Broadwell, the head of sales for iShares Middle East (a Barclays Global Investors entity), identified different trading cycles and a difficulty in finding online low-cost brokers as some of the lacunas adversely impacting flow of wealth from this region into ETFs.
Banker survey shows the growth in Islamic finance
November 10, 2009--Has Islamic finance reached a significant size and maturity to genuinely compete with conventional banking services? Can Islamic banking be more than a niche industry?
The Banker's third annual survey of the world's Top 500 Islamic Financial Institutions this month suggests that not only has the industry avoided the calamities of conventional banks that led to the current global banking crisis, it has also managed to maintain strong asset growth in turbulent economic conditions.
Healthy growth
The 2009 survey shows that the volume of sharia-compliant assets of the Top 500 grew by an extremely healthy 28.6%, rising to $822bn from $639bn in 2008. At a time when asset growth in the Top 1000 World Banks slumped to 6.8% from 21.6% the previous year, Islamic institutions were able to maintain the 28% annual compound growth achieved in the past three years.read more
Egyptian broker to buy investment bank
November 10, 2009--Pioneers Holding, a leading Egyptian brokerage, on Sunday said it would buy Beltone Financial, the Cairo-based regional investment bank, in an all-share deal that will create one of the largest financial institutions in the Middle East.
Pioneers, which has an extensive network in Egypt, Saudi Arabia and the United Arab Emirates, said it would issue 100m new shares to represent the as yet unannounced value of Beltone. The current shareholders of the investment bank will own a 17 per cent stake in the merged company.read more
Moody's: Sukuk issuance surges, dominated by government-related issuers
November 10, 2009--Global sukuk issuance grew more than 40% in the first ten months of this year with sovereigns and government-related entities dominating the scene, even as new corporate sukuks declined, according to global credit rating agency Moody’s.
Moody’s expects Islamic bonds issue to register a 50% full-year growth in 2009, offsetting the 55% decline seen in 2008. Rising sovereign sukuk issue will pave way for a strong secondary market, especially for corporate debt, the agency said.
“Amid current economic and capital market conditions, sukuk issuance is starting to become dominated by sovereigns and government-related entities, a development that will foster a more efficient and soundly based sukuk market,” Moody’s said in a special report.
Saudi gold consumption tops SR16.5bn
November 10, 2009--Gold consumption in Saudi Arabia grew last year by 17% in terms of value, breaking the SR16.5bn barrier, compared with SR13.8bn in 2007. Conversely, the total demand in terms of weight fell by 4% to 122.4 tonnes
In the fourth quarter of 2008 the kingdom fell to seventh in the world in terms of demand for jewellery and gold jewellery.
Dubai Gold and Commodities Exchange Weekly Market Views - November 8, 2009Weekly Market Views
November 9, 2009--November 9, 2009--Commodities
Commodity prices may move broadly sideways next week. There tremendous amount of bullishness in the precious metals complex, which saw gold move to record highs last week while silver, platinum, and palladium moved smartly upward.
While there still appears to be a good deal of upward momentum in precious metals prices, there may be a short-term pause over next week or two, before another surge in late November early December.
Currencies Overview
Currency markets may tread water for much of the coming week. The dollar may trade sideways against the euro, as investors have a largely balanced view of the economic outlook of both Europe and the United States. The dollar could gain some against other currencies, meanwhile, which could counter any weakness against the euro that the U.S. currency might experience. Overall, there are no immediate events on the horizon that could generate a compelling move out of recent ranges.
NASDAQ Dubai Monthly Trading Report: October 2009
November 8, 2009-Equity derivatives trading volumes on NASDAQ Dubai grew to a monthly record of 21,330 in October 2009, up 55 per cent from the previous record high of 13,775 traded in September.
This brought the total number of equity derivatives traded on the Exchange to 90,467 since NASDAQ Dubai launched the market in November 2008, with 52 per cent of the trades taking place in the last three months.
The Exchange’s equity derivatives market consists of futures listed on 21 individual UAE companies and on the FTSE NASDAQ Dubai UAE 20 share index. These have been designed as hedging and investment mechanisms for GCC and international investors. The index rose 76 per cent from end-2008 to end-October 2009, to 2,201.
Equities trading volumes on NASDAQ Dubai rose to 2.53 billion shares in the first 10 months of 2009, up 32 per cent from 1.92 billion reported in the same period of 2008. In the month of October 2009, 213 million equities traded, a fall of 39 per cent from the 350 million reported in October 2008 and 19 per cent down from 262 million in September 2009.
The Exchange introduced mandatory reporting of all over the counter equities trades in September 2008.
New World Bank Report Calls for a Level Playing Field for Business in the Middle East and North Africa Region
November 9, 2009--November 9, 2009 – A new report released by the World Bank’s Middle East and North Africa (MNA) region, From Privilege to Competition: Unlocking Private-Led Growth in the Middle East and North Africa, finds that the private sector is not yet generating enough jobs and sustaining higher growth in the region. A stronger private sector is needed as an estimated 40 million new jobs have to be created in MNA in the next decade.
For this to occur, countries in the region need to reduce discretion in the business environment to encourage more entrepreneurs to invest. The playing field must be leveled for the region’s businesses. It will require increasing transparency and strengthening institutions that enforce the rules.
Reforms implemented over the past two decades allowed private enterprises to become the principal source of wealth generated in MNA economies outside hydrocarbons and mining. However, the private sector has still not been able to transform MNA countries into diversified, vibrant economies with sustainable high growth record. With private investment averaging around 15 percent of GDP, MNA remains far behind more dynamic regions. Export diversification has increased recently. Yet, the best performers in the region export around 1,500 goods—most of them low in technological content—compared with close to 4,000 in countries like Poland, Malaysia or Turkey.
Although investment climate reforms have accelerated in many countries, the issue is not only the extent of reforms, but how they’re implemented. The report estimates that in response to previous reforms, private investment in the MNA region had increased by a modest 2 percentage points of GDP, compared to 5 to 10 points in Asia, Eastern Europe and Latin America. The limited impact of reforms in MNA is due to the unequal and unpredictable way in which policies are implemented, resulting in a lack of reform credibility in the eyes of many investors. Close to 60 percent of business managers surveyed do not think that the rules and regulations are applied consistently and predictably. These surveys also show that policy uncertainty, unfair competition and corruption appear as major concerns for investors.
As the business environment does not apply equally to everyone, new generations of entrepreneurs have been slow to emerge and compete with incumbents. The report estimates that the number of registered businesses per 1,000 people is less than a third of that in Eastern Europe and Central Asia. And with less entry and exits of firms, the average business is ten years older than in East Asia or Eastern Europe.
According to the report, unleashing the entrepreneurship potential of the region will require moving from deeply rooted privileges to a level playing field for all investors. “MNA is a region endowed with considerable human capital, creativity and resources, and its growth potential is immense. Meeting that potential will require a credible commitment to reduce discretion and ensure a more equal enforcement of the rules, so that more entrepreneurs can invest and create jobs.” said Shamshad Akhtar, MNA Vice President.
The report calls for a three pillar strategy for building a stronger foundation for longer term growth: First, governments need to remove formal and informal barriers to competition. Where they exist, privileged positions and conflicts of interests between public servants and private investors should be reduced. Second, policy reforms must be supported by strengthening the institutions that regulate markets and interact with firms, in order to reduce interference and discretion in the enforcement of rules and regulations. “To really improve the business environment for all in the region, transparency, accountability and quality of service in public agencies should be at the core of the reform agenda” added Shamshad Akhtar. Third, the region must foster a new partnership between the private and the public sectors, one that mobilizes all stakeholders in the design, implementation and evaluation of economic policies. Only then will consensus be built around the reforms, and their credibility and effectiveness reinforced. A more open dialogue between governments and the private sector will also help guard against narrow interests taking over the public interest. As Shamshad Akhtar notes: “The private sector has also a responsibility in this agenda. Too often, its voice has been dominated by proponents of the status quo in order to maintain their privileges. Already, a new generation of entrepreneurs is slowly emerging in MNA. Their ability to influence the future direction of reform will be crucial”.
The report emphasizes that the private sector in the MNA region needs to be a stronger agent of change. Its needs to be more inclusive and better organized to demand reforms that benefit all firms.
View MENA Development Report-From Privilege to
Competition
DFM rises, led by Emaar
November 09, 2009--- Dubai Financial Market rose 1.44% today to close on 2,153. The day's most heavily traded stock, Emaar, climbed 2.85% to Dhs4.33.
Other big gainers included Union Properties and Arabtec, which rose 4.17% and 2.90%, respectively. Overall, 23 stocks ended higher, 6 fell, and one remained unchanged.
