Middle East ETF News Older than One Year
Weekly Market Views-Dubai Gold And Commodities Exchange
October 20, 2009--Commodities Overview
Commodities prices continue to benefit from growing optimism about global economic trends and conditions. Gold,silver, and oil all have benefited from this. Other commodities also have done well, as investors, some fabricators, and others have built inventories.
The inventory building largely ended when the prices of many commodities, including base metals, rose sharply in the second quarter. This has left commodities vulnerable to a sell-off and a drop in prices.
Currencies Overview
The U.S. dollar continued to sell off against most major currencies last week. The dollar index fell to 75.45 points on 15 October, which was the lowest level so far this year. Growing optimism over the state of the global economy has been encouraging many investors to part from some of their dollar-denominated assets and diversif into higher yielding assets.
Source: Dubai Gold And Commodities Exchange (DGCX)
Commentary By Majd Shafiq United Advisors: Middle East Investors Stake In Plus Markets
October 21, 2009--Recent news that a group of Middle East investors have taken a stake of around 17% in Plus Markets, an alternative trading platform in London, is an interesting development and a possibility that I had mentioned in a recent article entitled Middle East Exchanges: The case for consolidation.
The investment in Plus should prove a profitable exercise for Amara Dhari Investments. Plus is run by Simon Brickles, the former head of AIM, the London Stock Exchange’s junior, and at times, controversial sibling. So far, Plus has managed to capture most of the trading in about 300 AIM quoted companies. The alternative venue seems to have a defendable business model. Its core revenue stream is data sales; an increasingly coveted commodity given what MiFID has wrought on the European landscape.
It is not clear whether the Middle Eastern investors will attempt to take Plus home or not. There is certainly ample room for an alternative such as Plus, Chi-X or BATS to launch a regional network for the trading of certain securities in the Middle East. Riding on the coat tails of price discovery on the region’s established, government-owned exchanges, the alternative route could offer cheaper and more efficient trading and data dissemination services.
Source: Mondo Visione
Arabian Gulf hydrocarbon projects worth $690bn
October 20, 2009--A full 30 per cent by value of hydrocarbon projects in the Gulf Arab countries have been put on hold or cancelled according to a new report, however GCC countries remain the most active construction markets in the world for the oil, gas and petrochemical industries with projects budgeted at more than $690bn.
The report published today by Dubai-based research house Proleads Global, was compiled following research into a total of 578 hydrocarbon projects across the six GCC countries, and found that 30 per cent by value have been placed on hold or cancelled with a further 30 per cent currently in construction and 40 per cent in the pre-construction phase.
Source: Power Engineering
Qatar to sell 379m Barclays shares
October 21, 2009-Qatar Holding, a unit of the Qatar Investment Authority, said today it plans to sell more than 379 million shares of Barclays. Qatar will first exercise warrants at 197.775 pence, and stands to make more than 630 million pounds ($1bn) on the transaction at today's market price, according to Bloomberg.
'The decision to exercise the warrants and dispose of the resultant shares forms part of Qatar Holding's portfolio management program and does not impact on our current intention to remain a long-term strategic shareholder in Barclays,' Chief Executive Officer Ahmad Al-Sayed said in a statement
Source: AME Info
ADX Signs MoU with ADCCG
Agreement to Enhance Investor Awareness and Market Transparency
October 19, 2009--Abu Dhabi Securities Exchange announced today the signing of a Memorandum of Understanding (MoU) with the Abu Dhabi Center for Corporate Governance (ADCCG) aimed at enhancing institutional cooperation in the UAE.
The agreement was signed by Rashed Al Baloushi, ADX’s Deputy Chief Executive and Director of Operations, and Khalfan Al Kaabi, Chairman of ADCCG in the presence of a number of officials from both organizations.
On this occasion Rashed Al Baloushi proposed that the agreement will assist in strengthening the mechanisms the exchange requires to ensure an orderly market while improving investor awareness.
Mr. Al Baloushi emphasized that the agreement reflects the desire of ADX and ADCCG to cooperate in all mechanisms aimed at supporting integrity, transparency and disclosure and related research and studies.
“The MoU with the Abu Dhabi Securities Exchange will help clarify the need for Corporate Governance for all the sectors including, public and private companies and government organizations through seminars, discussion groups and awareness sessions in addition to training and development programs”, said Khalfan Al Kaabi, Chairman for the Abu Dhabi Center for Corporate Governance.
“There are a lot of misunderstandings on the proper use of tools for Corporate Governance implementation in the market”, said Mr. Khalid Deeb, Director General for the Abu Dhabi Center for Corporate Governance (ADCCG), "This topic is still vague to many organizations, therefore, ADCCG intends to benefit from those MOU’s to increase the level of awareness in the country and get it to the required level”, Deeb added.
Rashed Al Baloushi also revealed that “achieving that goal will include organizing seminars and conferences, and providing training programs and specialized consultations in the field of corporate governance and related issues.”
“These tasks are to be accomplished by ADCCG in cooperation with ADX and in accordance with the highest standards, where the exchange plays a vital role in supporting economic development. Such a role is enhanced by this kind of agreement, which makes a direct contribution to the Abu Dhabi Economic Vision 2030,” the Deputy Chief Executive stated before adding, that this will further fortify international best practice principles of integrity, transparency and disclosure.”
Source: Abu Dhabi Securities Exchange (ADX)
GCC Oil and Gas Reserves Are Worth US$18.3 Trillion: DIFC Authority Report
The enormous energy commodity assets are large enough to finance the transformation of the GCC economies, as well as to impact global asset valuations
October 13, 2009-
The present value of the oil and gas reserves of the six countries of the Gulf Cooperation Council is estimated at US$18.3 trillion, larger than the 2008 GDP of the United States, according to an economic note released today by the Dubai International Financial Centre Authority (DIFCA).
That figure assumes a conservative price of oil at US$50 per barrel and gas at US$9 per million BTU; if oil prices were to average US$100 per barrel and gas US$15, the present value of GCC energy reserves would be US$ 37.7 trillion, equal to the world's total stock market capitalization at the end of 2008.
According to Economic Note No. 6, prepared by the DIFC Authority's Economics unit and entitled "Wealth Effects in the GCC from Energy Commodity Prices", this energy commodity wealth is sufficient to finance the transformation of GCC countries into diversified economies through investments in infrastructure and education. The report's authors also note that this wealth, as it is extracted, will be invested worldwide, with "non-negligible repercussions on asset valuations and in particular on the continuing restructuring of the world's financial and corporate sectors."
Commenting on the economic note, Dr Omar Bin Sulaiman, Governor of the DIFC, said that the significance of the results cannot be overstated. "The DIFC considers it a part of its mission, not only to provide the legal, regulatory and operating infrastructure necessary to support the growth and deepening of capital markets in the region, but also to contribute to the body of research and analysis that is so crucial to efficient decision making by all participants in today's sophisticated global financial markets."
In announcing the study, Dr Nasser Saidi, Chief Economist of the DIFC Authority, said, "Higher oil and gas prices over the past five years have resulted in large budget and current account surpluses and an enormous increase in the net foreign assets and international reserves of the GCC countries, with global repercussions. However, what we have seen pales in comparison to the astounding value of hydrocarbon wealth still in the ground. The implications of this are enormous, both in terms of long-term policymaking and in terms of the behaviour of market participants."
"For example, GCC governments have effectively outsourced the management of their external assets to banks and asset managers in traditional financial centres. Yet the financial crisis has undermined the basis and credibility of this practice. Instead they need to invest in, and develop, their own capacity to manage their financial wealth, whether they are deploying or investing it in their domestic economies, or making foreign investments. There should be a strategy of concerted investment in financial human capital and a large and systematic investment in the banking and financial sector of a magnitude on a par with, if not larger than, the existing and prospective investments in the energy and petrochemical industries. As a strategic matter, and for the safety of their assets, the GCC should develop the capacity, markets and institutions to manage their wealth."
Commenting on the economic note, Dr Omar Bin Sulaiman, Governor of the DIFC, said that the significance of the results cannot be overstated. "The DIFC considers it a part of its mission, not only to provide the legal, regulatory and operating infrastructure necessary to support the growth and deepening of capital markets in the region, but also to contribute to the body of research and analysis that is so crucial to efficient decision making by all participants in today's sophisticated global financial markets."
Another implication of the study is that ratings agencies and other analysts should revise how they assess the fiscal situation and debt capacity of these countries, given "the vast current and prospective wealth of the GCC countries". While typically they make their decisions based on current flows of oil revenues, exports, GDP and other indicators, the study notes that they neglect the underlying natural resource and financial wealth of the countries. There should be a national balance sheet approach to credit assessments and ratings.
Breaking down the US$18.3 trillion total, the study shows that the present value to 2030 of GCC oil reserves is US$11.2 trillion, assuming a 3% rate of return (and discount rate) and a price of $50 per barrel (at 2009 constant prices), while GCC natural gas reserves would be US$7.1 trillion, assuming a discount rate of 3% and a price of US$9 per million BTU.
The analysis explores results under a variety of hypotheses, including energy prices with oil at US$25, US$50 and US$100 per barrel; gas prices at US$4, US$9 and US$15 per million BTU and three levels of the real discount rate, 1%, 3% and 5%.
The research calculations were conducted under the assumption that oil and gas production is kept constant at 2008 levels and that both oil and gas reserves in the GCC (as a result of new discoveries and/or improved recovery rates resulting from improved extraction technologies) grow, though at a decreasing rate from 0.5% in 2009 to 0 in 2030.
View the Economic Note 6: Wealth Effects in the GCC From Energy Commodity Prices
Source: Dubai International Finance Center (DIFC)
Dubai International Financial Centre
After successfully weathering the financial crisis and following reforms and structural changes, the regional banking and finance industry is poised for growth
October 13, 2009--After successfully weathering the global financial crisis, the Middle East banking sector is poised for growth in light of widespread regional market reforms and global structural changes favouring the region, said HE Dr Omar Bin Sulaiman, Governor of the DIFC and Vice Chairman of the UAE Central Bank.
“During a period of great strain on financial systems across the globe, markets, governments, regulators and institutions here in the Middle East have responded professionally and appropriately, working in concert to steadily bring this region through the most serious test ever of its systems and structures. The legacy of this experience is improved policymaking and more powerful monetary policy tools,” Dr Omar said during the opening keynote address to the Banking Outlook Middle East 2009 conference, which opened today in Dubai.
Source: Dubai International Financial Centre (DIFC)
NASDAQ OMX Forms Technology Partnership With the Kuwait Stock Exchange
Lars Ottersgard, Senior Vice President NASDAQ OMX Market Technology
said, "We look forward to partnering with KSE to support development of
its financial market, and, as part of this, deliver a state-of-the-art
system that will put them at the technology forefront among Middle East
exchanges. Kuwait is a key financial center in the Middle East region
and we are confident that our collaboration with KSE will act to
further attract investor awareness both to the exchange and Kuwait's
financial market as a whole."
A spokesman for Kuwait Stock Exchange said, "NASDAQ OMX's experience
and track record in implementing systems around and the world and
particularly in this region, together with their ability to contribute
to our development, led us to select them to work with us. KSE intends
to use the new IT systems to introduce new products and services in the
future. We also intend, with NASDAQ OMX's help, to implement best
practices and to ensure compliance with relevant international
standards. We look forward to enjoying a long and mutually rewarding
partnership with NASDAQ OMX."
Since January 2009 NASDAQ OMX has a regional office in Dubai driving
new business endeavours and supporting existing customers in the Middle
East, Africa and South Asia region.
Source: NASDAQ OMX
BFX Announces Product Development Working Group
This initiative is part of the BFX strategy which ensures that its products meet the needs of
its users whilst adding value, and is part of a process to ensure that BFX remains market driven.
Two distinct PDWGs have been launched: a PDWG Conventional and a PDWG Islamic.
The PDWG Conventional working group has a cross section of representatives with a high degree of expertise from the financial services industry in the GCC region.
It comprises of participants from Bahrain Mr. Fadhel Makhlooq, Principal, Investment and Treasury at SICO Bank, Mr. Hemant Kulkarni, Head of Funds and Investments, National
Bank of Bahrain, Mr. Yaser Humaidan, Acting Head of Investment Management, Gulf International Bank, Mr. Wayne Andrews, Regional Treasurer Gulf and Pacific Rim, Arab
Bank. Participants from UAE are Mr. Fozan Al Mofleh, Executive Sales Trader, Shuaa
Capital, Mr. Nabil Al Rantisi, Senior Vice President Brokerage, Rasmala Investment Bank,
and from Saudi Arabia, Mr. Saeed Saif, Head of Regions - Brokerage, NCB Capital.
Similarly the PDWG Islamic working group has been selected with a focus on satisfying the
specific market requirements of this dynamic industry.
The Islamic working group includes Mr. Marco Mauri, Head of Listed Securities - Asset
Management, Unicorn Investment Bank, Mr. Helmi Rashid, General Manager Treasury and
Capital Markets, Elaf Bank, Mr. Hussam Saif, Khaleeji Commercial Bank, Mr. Anjum
Shahzad, Head of Risk Management, Bahraini Saudi Bank.
Arshad Khan, Board Director at BFX expressed his happiness on completion of an important
milestone in the setting up of BFX and said “These groups consist of experts drawn with the
relevant background to ensure a robust process of product development and continual
improvement in the BFX products which will ultimately result in greater participation and
increased liquidity”.
He added “The PDWGs primary function is to provide input, guidance and feedback on the
requirements of market participants in the development of products and the suitability ofthese products, in satisfying that demand. I welcome all participants and look forward to
working with them and making the BFX product portfolio a market leader’’.
This achievement of the BFX underscores its commitment to the market for developing
products which are in line with market requirement and its users.
Source: Bahrain Financial Exchange (BFX)
Dubai Gold And Commodities Exchange Weekly Market Views - 11 October 09
Other commodities have followed this trend,
although not as sharply. This reflects the role of investors and
commodities trading banks in the rise in commodities prices
over the past several weeks: Gold, silver, and crude oil are the
most traded commodities, and financially driven trades have
a more pronounced influence in these markets. A weaker U.S.
dollar, and concerns over currency market instability, is helping
investors see commodities as attractive investments. This trend
should continue. That said, prices may come off slightly this week
on profit-taking, following sharp increases last week. If the price
increases pause, banks covering of their shorts also will pause,
and that would open the door for investors to take profits. If
this occurs this coming week, prices could fall. The longer term
trends fueling investor interest in all three commodities, and
commodities in general, remain in place, however, so any drop
in prices due to such profit-taking would be expected to be limited in time and depth.
Source: Dubai Gold And Commodities Exchange (DGCX)
Expanding Middle East Technology Footprint With Eleventh Customer in
the Region
October 11, 2009--Bahrain Financial Exchange (BFX), the first multi - asset exchange in the Middle East and
North Africa, launching in Q1, 2010, has announced the establishment of its Product
Development Working Groups (PDWGs) for Islamic and Conventional asset classes.
October 12, 2009--Commodities
Gold, silver, and oil prices have risen sharply over the past
several trading days. While prices came off a bit last Friday,
gold remains at record highs, while silver and petroleum are at
levels that are confounding some of the more bearish market
participants.
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