2007
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US-UAE FTA on hold
Negotiations for a free trade agreement (FTA) between the US and the UAE will not be resumed under the current US administration, according to the US Trade Representative (USTR) office and cited by Emirates Business 24/7. A USTR spokeswoman said both sides remained 'committed' to the FTA and talks will resume 'at a later point in time'. Delays occurred due to concerns over the UAE's labour laws and human rights record.
Oman, Bahrain bourses gain
Many regional financial markets remained closed yesterday, Sunday, for the Eid Al Adha holiday but, aside from the UAE's bourses, exchanges were open for business in Oman and Bahrain. Oman's Muscat Securities Market climbed 0.8% to 9,108.5 points, while the Bahrain Stock Exchange advanced nearly 0.3% to 2,659.6 points.
UAE foreign debt triples
A bulletin from the Dubai Chamber of Commerce and Industry (DCCI) has revealed that the UAE's foreign debt has nearly tripled in the last two years, due to major borrowing by banks and other corporations, reported Gulf News. The DCCI has predicted that the share of the UAE's external debt in the gross domestic product (GDP) will rise from 58.4% next year to 62.5% by 2010.
Bahrain official unsure on union
Bahrain's Central Bank Governor Rasheed Mohammed Al Maraj has told our sister publication Meed that he has 'no idea' when GCC wide currency union is likely to occur. Al Maraj stressed that the establishment of a common market and closer economic 'convergence' was required first. The official deadline for monetary union has been set at 2010.
UAE may revalue in H1
Egyptian bank EFG-Hermes has said the UAE has a 60% chance of revaluing its dollar pegged dirham at some point in H1 next year, reported Reuters. The country could make its move independently, or in harness with other Gulf states, and it may choose to let its currency rise in value by up to 5%. The UAE saw inflation hit a 19 year high in 2006.
DFM, ADSM make gains
The Dubai Financial Market (DFM) resumed business today, Sunday, after the Eid Al Adha festivities, with a 1.6% gain, closing on 5,829.6 points. The day's big mover was the Gulf Finance House which advanced by 8.8% to Dhs11.8. The Abu Dhabi Securities Market (ADSM) also ended in the green on 4,580.2 points, a rise of 59.4 points, or 1.3%.
Iran inflation hits 19.1%
Iranian President Mamhoud Ahmadinejad is facing mounting criticism after the rate of inflation in the Islamic Republic hit 19.1% at the end of last month, reported the AFP. The figures, released by Iran's Central Bank, represent a 7% increase since Ahmadinejad came to power in 2005. Last week, former President, Akbar Hashemi Rafsanjani, accused Ahmadinejad of tackling inflation with 'slogans and political games'.
Iran has $8bn in OSF
The Governor of Iran's Central Bank Tahmasb Mazaheri has said the Islamic Republic presently has $8bn in its Oil Stabilisation Fund (OSF), reported Reuters. The OSF was set up several years ago to absorb extra oil revenues when prices are high, with the accumulated savings then being used for investment purposes or to support the economy when prices are low. In October, Mazaheri suggested there was actually $9.6bn in the fund.
Mideast mutual funds do well
The Middle East's mutual funds sector saw strong growth this year as 87 new funds were released, with 52 of them being shariah compliant, reported Gulf News. A good performance by the region's equity markets, with some advancing 30% or more, alongside keen interest from institutional investors, should enable the sector to continue to move forwards in 2008. In 2007, 24 of the new funds were established to track Kuwaiti firms.
Caution advised on Sensex
Investors in India's stock markets have been warned to expect a volatile week's trading as worries over global markets, capital flows and the expiration of monthly derivatives contracts make an impact, reported Gulf News. The ongoing holiday period will also keep trading volumes low with major investment funds and retail investors absent from proceedings. The benchmark Sensex Index has climbed 39% this year but could 'swing widely' this week.
Saudi mega sovereign fund
Saudi Arabia plans to set up a mega sovereign wealth fund which will 'dwarf' Abu Dhabi's $900bn investment vehicle and become the biggest in the world, reported the Financial Times. The fund will provide stiff competition to others based in both the Middle East and Asia which are currently looking to take advantage of the impact of the credit crunch on western financial firms.
FTSE, Dow Jones, Nasdaq up
The FTSE 100 gained 1.4% yesterday, Friday, to reach 6,434.1 points. Troubled bank Northern Rock had another unsteady day shedding 7.1% to close on 85.5 UK pence. In the US, the Dow Jones climbed 1.6% to finish on 13,450.7 points, while the Nasdaq also closed in the green on 2,692 points, an advance of 1.9%.
Indian inflation eases slightly
India's inflation rate eased earlier this month, with lower food prices being a key contributory factor, reported Reuters. Wholesale price inflation rate in the 12 months to December 8 dropped to 3.7%, down from the previous week's 3.8%, but analysts believe there is no prospect of an interest rate cut at next month's policy review with a possible increase in fuel prices on the cards.
Volatility in UAE's bourses
Egypt's EFG-Hermes Bank has said the UAE's stock markets will be driven by 'robust earnings growth, high oil prices, abundant liquidity and a steady real estate market' in 2008, according to the Gulf News. The lender also warned that these key factors will heighten volatility in the exchanges. An increase in western institutional investment is expected, while more Saudi Arabian money should appear after the Tadawul All Share Index's rally.
Alwaleed behind Africa fund
Saudi billionaire Prince Alwaleed bin Talal is behind a private equity fund looking to invest around $500m in Africa, reported Reuters. The Pan-African Investment Partners II Fund is managed by the Kingdom Zephyr Africa Management Company, a joint venture between Alwaleed's Kingdom Holding Company and the US based private equity firm Zephyr Management. Alwaleed has pledged $250m to the fund and the same amount again is sought from institutional investors.
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