Dubai Gold & Commodities Exchange Weekly Market Views - 4 October 2009
October 5, 2009--Commodities Overview
Commodities prices may move sideways to lower next week. Oil prices may trade around $70. Gold and silver are vulnerable to a round of profit-taking, having recorded strong advances over the past several weeks.
Other commodities are in a similar position: vulnerable to profit-taking and short-term selling. In this environment, prices could come off some. A series of holidays will reduce Chinese demand for most commodities over the coming week, which could serve as an occasion for opportunistic short-term selling. A stronger dollar, should one emerge, would be expected to contribute to such a sell-off in commodities. If the dollar does not break above its recent range, however, commodities may mark time. While the markets may show signs of being exposed to down-side moves, demand for gold and silver as safe-haven investments remains strong. Bargain hunting by fabricators and investors would be expected to limit any sell-off in commodities prices this week. Signs of economic recovery are continuing to mount, even as some economic data point to continued economic pain. The recovery is likely to be V-shaped, but with some aspects of demand subdued by on-going structural economic imbalances.
Currencies Overview
Currency markets may see continued volatility, as traders and others seek direction in a directionless market. While there remains concern that the dollar could fall further, a growing body of evidence suggests the dollar may find strength against the euro and yen, if not other currencies, in the short term. There is a risk for dollar bears that a wave of short-covering could trigger stop-loss liquidation of massive short positions taken on in the past several weeks. Such a development would push the dollar quickly higher, at least for a time. Barring such an event, currency markets seem more likely to trade sideways in a volatile fashion. The markets will be watching to see if the dollar mounts a convincing defence above recent lows. It may, but it may not rise sharply. This week the World Bank and International Monetary Fund are meeting in Istanbul. It is expected that very little agreement about major, substantive economic and financial issues will emanate from the meeting. Recent G20 and other meetings have shown growing disagreement among the major industrialized economies’ governments, which may shine through in the meetings communiqués. This could lead to further currency market turmoil, with the dollar moving sharply in both directions.
MENA region represents $30bn in asset management revenue opportunities for developers
October 4, 2009--.T. Kearney, one of the world's leading management consulting firms, sees an untapped revenue opportunity of $30bn in ancillary revenues for developers in the MENA region, of which around $5-10bn are in UAE and an additional $8-12bn are in Saudi Arabia.
Like a vast majority of economic sectors and geographies, real estate in the GCC has been impacted by the existing economic climate.
DIFC and MIGA collaborating to support development of bond & Sukuk market and promote FDI into MENA
October 1, 2009--The Dubai International Financial Centre (DIFC) announced today that it is working closely with the World Bank Group’s Multilateral Investment Guarantee Agency (MIGA), on an initiative to assist and support the development of the region’s bond and Sukuk market.
The two institutions are also co-operating closely on their overall aim of promoting Foreign Direct Investment (FDI) into the Middle East North Africa (MENA) region.
HE Dr. Omar Bin Sulaiman, Governor of the Dubai International Financial Centre (DIFC) and Vice Chairman of UAE Central Bank said: “DIFC’s partnership with MIGA will contribute significantly to enhancing the growth potential of the bond and Sukuk markets in the region. This partnership supports DIFC’s long-term strategy for developing highly efficient and liquid capital markets. By providing the means for mitigating political risks, this partnership can play a significant role in stimulating foreign investment, which is critical to the region’s economic growth.”
As part of the initiative, the DIFC and MIGA hosted a conference for the region’s capital markets industry at the DIFC Conference Centre. The delegates were welcomed by Abdulla Al Awar, Chief Executive Officer of the DIFC Authority.
Announcing the joint initiative, Al Awar explained that: “By leveraging DIFC’s knowledge of the regional markets and MIGA’s experience in working closely with emerging markets, the initiative will help create cost-efficient, cross-border financial structures, which are critical for facilitating investments.”
The DIFC Authority CEO pointed out that the risk perception of the region, and particularly of the Gulf Co-operation Council (GCC) member countries, is reducing rapidly with the abatement of the global financial crisis. “Despite the financial crisis, there have been a couple of successful bond issues, in the UAE for example this year, indicating a continuing appetite. The DIFC and MIGA are working closely to nurture, assist and support the industry to expand and gain depth,” Al Awar said.