Middle East ETF News Older than One Year
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.
Source: SHUAA Capital
Dubai Investments Q2 profit drops 32%
July 28, 2010--Dubai Investments, the largest investment company listed on the Dubai Financial Market, reported a 32% decline in second-quarter profit as investment income dropped. Net income fell to Dhs196.3m ($53m) from Dhs287m a year earlier, the company said in a statement. Income from sale of goods and services fell 1.8% to Dhs309.4m, while contract revenue rose 30% to Dhs213.8m.
Dubai Investments wrote down the value of its investments by 49.7 million dirhams in the quarter, while it had a profit of 53 million dirhams a year ago, the results showed. has said it has started with the process of launching an initial public offering for its subsidiary, M'Sharie, by next year. "The company has already initiated processes for the M'Sharie IPO planned for 2011 and is in active discussions with local stock exchanges. The IPO of M'Sharie will result in raising liquidity and will provide a platform for future growth," Khalid Bin Kalban, DI managing director and CEO said. The conglomerate has reported net profit of Dhs474m for the first half of this year with total income at Dhs1.67bn.
Source: AME Info
OPEC Monthly Oil Report-July 2010
July 28, 2010--Oil Market Highlights
The OPEC Reference Basket declined by $1.53 to average $72.95/b in June. The market remained volatile throughout the month as mixed economic data painted an uncertain picture about
the strength of the economic recovery. Sovereign debt concerns in Europe and fiscal and monetary tightening in China offset the slightly improving gasoline demand in the US and at times falling
jobless claims. Equities and exchange rate fluctuations also impacted prices. In early July, the Basket fell below $70/b as market sentiment turned temporarily bearish on economic concerns. However, by the second week, prices recovered to stand at $73.93/b on 14 July.
The world economy has gained momentum in 2010 and is expected to grow by 3.8%. The recovery has so far been supported by unprecedented fiscal and monetary stimulus. Both are expected to gradually diminish over the coming months, and private consumption and investment will have to compensate. This, combined with announced fiscal austerity measures in most of the developed countries and monetary and fiscal tightening in China, should lead to a slight moderation in growth next year. As a result, the world economy is expected to grow by 3.7% in 2011. The OECD is seen growing by 2.0%, led by the US at 2.5%, while Japan is at 1.4% and the Euro-zone at 0.9%. The main contribution to global growth is again projected to come from the non-OECD countries, mainly China at 8.8% and India at 7.7%.
World oil demand growth in 2010 is unchanged at 0.9 mb/d. The OECD region is not expected to see any growth this year, mainly due to declining European demand. In 2011, world oil demand is projected to grow by 1.0 mb/d, reflecting continued caution about the pace of the global economic recovery. Growth will take place in the non-OECD, mainly China, India, the Middle East and Latin America. The demand for industrial fuel will be strong as a result of the continuing economic recovery, with healthy growth also expected in demand for transportation fuels. US gasoline demand is expected to return to normal growth, although with considerable uncertainty about the pace of growth.
Source: OPEC
Yemen currency hits record low
July 28, 2010--Mohammed Awad bin Hamam, governor of Yemen's central bank, has said that injecting more cash in the exchange market is possible after an $80m injection failed to raise the country's rial currency, Reuters has reported.
The rial has fallen about 12% from a level of 208 versus the dollar in mid-January. He said that demand is expected to decrease as supply of foreign currencies like the dollar, increase in coming days when remittances would be sent to Yemen by expatriates.
Source: AME Info
Kuwait inflation holds steady
July 28, 2010--According to figures by Kuwait's central bank, the Gulf state posted annual inflation of 2.8% in April, in line with levels since the start of the year as food and transport costs remained steady, Reuters has reported.
Food prices, which account for 18 percent of the basket, fell by 0.1% from the previous month, following a 0.8% rise in March, while transport prices, the third biggest component, rose 0.1% after remaining unchanged in March.
Source: AME Info
Yemen wants to raise prices to Korea Gas
July 27, 2010--The Yemeni foreign minister has said the government is seeking to increase the prices at which Yemen LNG has contracted to sell liquefied natural gas to one of its shareholders, Korea Gas Corp, Bloomberg has reported.
The prices set in a 20-year contract between the companies are "unfair" to Yemen because they are below those that regional suppliers Qatar and Oman charge for their liquefied gas, Abu Bakr al-Qirbi said, without giving a price target. The government will take "any legal steps" to try to ensure that Yemen LNG negotiates higher prices with Korea Gas, he said.
Source: AME Info
Kuwait Finance House launches e-trading hall for women
July 27, 2010--Kuwait Finance House "KFH" has announced starting the special arrangements for the establishment of a special trading hall for its female clients to help them trade electronically in the Kuwaiti Stock Exchange as the first local bank taking the initiative towards this achievement.
In in an extension of a series of activities and services provided by "KFH" to its female clients meeting the needs and aspirations of this growing important sector of the society and giving them more privacy and benefits.
Source: AME Info
BFX Announces Key Index Products
Region’s first multi-asset exchange licensed by FTSE Group to list and trade a range of derivatives based
on its indices
July 27, 2010-The Bahrain Financial Exchange (BFX), the first multi?asset exchange in
the Middle East and North Africa (MENA) region, today announced a new licensing agreement with FTSE roup, the award?winning global index provider, to list, trade and market a number of derivatives
products based on a range of FTSE’s regional and international indices.
The derivatives, which are part of the BFX’s first phase product launch in October this year will be listed and traded through the BFX’s internationally?accessible trading platform. They will be based on the following indices: FTSE Emerging, FTSE Europe, FTSE BRIC 50, and FTSE Coast Kuwait 40.
By using FTSE indices, the BFX offers regional investors the advantage of gaining exposure and diversifying their portfolios with products based on international indices from developed and emerging economies which are traded and settled in US dollars on the same integrated platform.
Commenting on the announcement, Arshad Khan, Managing Director & Chief Executive Officer of the BFX and BCDC, said, “This is a significant addition to the BFX product portfolio and further enhances the BFX’s position as the preferred choice for the financial services sector by providing liquid futures contracts based on these regional and international indices.”
FTSE indices provide ready access to investors in the region to profit from the growing markets of the Emerging Nations, Middle East and Europe. As well as allowing participants to take exposure in multiple geographies through a single currency, the indices not only enable investors to diversify their portfolios but to also include some of the best performing stocks in the underlying market. More importantly, as each index covers a wide range of underlying markets, investors have the opportunity to reduce volatile conditions often experienced in the underlying cash markets without compromising on returns.
The BFX agreement with FTSE creates an innovative value proposition in the region, which has generated a lot of interest during the BFX’s ongoing MENA?wide membership campaign since its inception in June. To date, the BFX has received interest from over 50 leading financial institutions and brokerage houses.
Jonathan Cooper Managing Director, Middle East & Africa, FTSE Group said of the launch “We are delighted to work with the BFX, one of the key financial institutions in the region. By extending the range of our innovative and transparent index solutions in the region, we can give investors new opportunities to access local and international markets.”
This new development will go a long way in widening and deepening the capital markets in the GCC. The BFX and FTSE have worked hard to provide investors in the region with access to some of the best performing stock markets globally. The product line?up has been selected as a result of a robust research process covering the value chain of investors in the region.
Retail participation is also expected to account for a considerable proportion of trade volume due to low margin payments and as the indices enable individuals who have limited funds to participate and trade in the Index market – be it locally or internationally.
Source: BFX and FTSE
Tehran Exchange Trades Futures to Attract Investors
July 26, 2010--The Tehran Stock Exchange, home of the world’s second-best performing equity index, began offering derivatives based on local banks to diversify and attract foreign investors.
Four futures contracts were “symbolically” traded at an opening ceremony yesterday, Hassan Ghalibaf-Asl, the exchange’s managing director, said in a phone interview today. The exchange is introducing six futures contracts based on Parsian Bank and Karafarin Bank, which will expire in two, four and six months, he said. The exchange hopes to increase the number of companies covered by futures contracts to at least 10 by March.
“This new product will attract the foreign investors to Iran’s capital market, which isn’t very well known to them,” Ali Karamad, owner of Tehran-based asset management company Karamad Group, said by telephone July 23. “It gives them security, knowing that Iran’s market is introducing instruments similar to those in international markets.”
Source:Bloomberg Business Week
NASDAQ Dubai Monthly Trading Report: June 2010
July 26, 2010--The value of equities traded on NASDAQ Dubai rose by 52% in the first six months of 2010 to 728 million dollars, from 479 million dollars in the same period of 2009. Equities volumes fell by 10% to 1.58 billion shares in the same period, from 1.75 billion.
Measured by percentage change, both the value and volume figures were the best performing of any UAE stock exchange in the six-month period, compared to the same period in 2009.
Traded equities value on NASDAQ in the month of June 2010 fell by 19%, reaching 61 million dollars, compared to 75 million dollars in June 2009. Equities volumes in June 2010 were 123 million, 35% lower than the total of 189 million in June 2009. The June 2010 figures were also the best performing of the UAE's stock exchanges, measured by percentage change from the year before.
Citigroup was the most active Member of the exchange by equities volume in the first six months of 2010, followed by Deutsche Bank and then HSBC. EFG Hermes was the most active regional Member during the period, followed by Arqaam Capital and then Shuaa Capital.
The FTSE Nasdaq Dubai UAE 20 index ended June 2010 at 1,516, down 8% from the end of May 2010 and 18% lower than at the start of the year.
The index tracks 20 stocks listed on Dubai Financial Market, the Abu Dhabi Securities Exchange and NASDAQ Dubai.
It has been designed as a hedging and investment mechanism for GCC and international investors.
Source: NASDAQ Dubai
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