A deadline approaches this week to determine whether the UAE and Qatar have done enough to secure an upgrading to "emerging market" status by MSCI Barra - with wary traders feeling a sense of deja vu.
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Both countries' markets are classified as "frontier" by the index provider, largely because of undeveloped market infrastructure, despite per-capita wealth levels higher than in some developed markets.
In June, MSCI declined to upgrade either market, saying more time was needed to ensure the smooth functioning of the then newly introduced delivery-versus-payment mechanism (DvP), which ensures that payment is made the same day that an investor trades a share.
The announcement on whether the UAE had done enough to merit reclassification is due on Thursday morning at 2am local time, with speculation among traders driving trading activity on the Dubai Financial Market (DFM) to a two-month high last week.
Despite some optimism among brokerages, many traders were guarded after numerous failed attempts by the UAE to gain inclusion, said Fathi ben Grira, the chief executive at Mena Corp, an Abu Dhabi financial services firm.
"From my side, we're preparing ourselves and our budget as if there's no upgrade at all," he said.
And investors were split on whether the UAE would secure an upgrading, with Qatar viewed as even less likely because of tighter limits on foreign ownership, said Marc Foss, an executive director at Silk Invest, an investor in frontier and emerging markets.
"Most people's opinion is that not enough has changed [since June] to justify or warrant making the upgrade," he said.
Despite a rally for the UAE's markets last Sunday after the National Day weekend, markets inched back on Thursday to cap a lacklustre week for Middle Eastern bourses.
The newly launched S&P AFE 40 index of Arab blue-chip stocks rose 0.7 per cent to 54.39, while Abu Dhabi's and Dubai's indexes ended the week within a few points of where they started.
Some issues remain with the DvP mechanisms, particularly regarding cancelled trades of illiquid stocks, said Arindam Das, the head of securities services at HSBC Middle East.
"It's not a perfect 10, but it's an eight," he said. "There's a slight chance that something can still go wrong. Practically, that chance is very, very low. But from the MSCI point of view, they would probably say that they cannot rule that out."
The jury is still out on just how much local stocks would benefit even if the UAE were reclassified.
Since February 2009, managers of global emerging-market funds have shown "no willingness to own the UAE", with the Emirates sinking to 0.1 per cent of most portfolios, according to data from Bank of America Merrill Lynch.
In the event of an upgrading, the combined weighting of the UAE and Qatar of 0.35 per cent globally would be "too small to matter" for many fund managers, analysts from Credit Suisse wrote in April.
The real trouble for the UAE's markets was more fundamental, said Eric Swats, the head of assets management at Rasmala Investment Bank.
"For investors outside the region, it'll broaden their universe of potential securities," he said. "But the problem is related to the investment merits of the companies listed on the exchange. People don't want to participate in the companies here because they don't see strong opportunities for growth."
Markets have not experienced the sharp gains that preceded MSCI's last decision in June.
The DFM General Index rallied 16.7 per cent from the lows reached in March, driven at least in part by a sense that Dubai was a haven compared with countries in which governments had been overthrown during the Arab Spring.
This time around, investors are warier. Amid a sense of gloom surrounding the euro-zone debt crisis, the Dubai index fell last month to its lowest level all year. It has rallied 3 per cent since.
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However, investors have increasingly shifted towards stocks such as First Gulf Bank, which recently increased its limit on investment by foreigners by 15 per cent to 25 per cent of share capital, and away from other stocks with tight limits on foreign shareholding.
Recent laws, such as the revised Companies Law, which allows the Cabinet to decide on how closely UAE stocks are held by nationals, and draft regulations on short selling, securities lending, market making and liquidity providers are also considered signs of a maturing market and are likely to be viewed positively by MSCI.
[ ghunter@thenational.ae ]
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Simran
Director Hansal Mehta
Stars: Kangana Ranaut, Soham Shah, Esha Tiwari Pandey
Three stars
Results:
6.30pm: Handicap (Turf) | US$175,000 2,410m | Winner: Bin Battuta, Christophe Soumillon (jockey), Saeed bin Suroor (trainer)
7.05pm: UAE 1000 Guineas Trial Conditions (Dirt) | $100,000 | 1,400m | Winner: Al Hayette, Fabrice Veron, Ismail Mohammed
7.40pm: Handicap (T) | $145,000 | 1,000m | Winner: Faatinah, Jim Crowley, David Hayes
8.15pm: Dubawi Stakes Group 3 (D) | $200,000 | 1,200m | Winner: Raven’s Corner, Richard Mullen, Satish Seemar
8.50pm: Singspiel Stakes Group 3 (T) | $200,000 | 1,800m | Winner: Dream Castle, Christophe Soumillon, Saeed bin Suroor
9.25pm: Handicap (T) | $175,000 | 1,400m | Winner: Another Batt, Connor Beasley, George Scott
MATCH INFO
Uefa Champions League semi-finals, first leg
Liverpool v Roma
When: April 24, 10.45pm kick-off (UAE)
Where: Anfield, Liverpool
Live: BeIN Sports HD
Second leg: May 2, Stadio Olimpico, Rome
Results
2pm: Maiden (PA) Dh 40,000 (Dirt) 1,200m, Winner: AF Thayer, Tadhg O’Shea (jockey), Ernst Oertel (trainer).
2.30pm: Maiden (PA) Dh 40,000 (D) 1,200m, Winner: AF Sahwa, Nathan Crosse, Mohamed Ramadan.
3pm: Handicap (PA) Dh 40,000 (D) 1,000m, Winner: AF Thobor, Szczepan Mazur, Ernst Oertel.
3.30pm: Handicap (PA) Dh 40,000 (D) 2,000m, Winner: AF Mezmar, Szczepan Mazur, Ernst Oertel.
4pm: Sheikh Hamdan bin Rashid Al Maktoum Cup presented by Longines (TB) Dh 200,000 (D) 1,700m, Winner: Galvanize, Nathan Cross, Doug Watson.
4.30pm: Handicap (PA) Dh 40,000 (D) 1,700m, Winner: Ajaj, Bernardo Pinheiro, Mohamed Daggash.
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Engine: 5.2-litre V10
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Blonde
Director: Andrew Dominik
Stars: Ana de Armas, Adrien Brody, Bobby Cannavale
Rating: 3/5
Ballon d’Or shortlists
Men
Sadio Mane (Senegal/Liverpool), Sergio Aguero (Aregentina/Manchester City), Frenkie de Jong (Netherlans/Barcelona), Hugo Lloris (France/Tottenham), Dusan Tadic (Serbia/Ajax), Kylian Mbappe (France/PSG), Trent Alexander-Arnold (England/Liverpool), Donny van de Beek (Netherlands/Ajax), Pierre-Emerick Aubameyang (Gabon/Arsenal), Marc-Andre ter Stegen (Germany/Barcelona), Cristiano Ronaldo (Portugal/Juventus), Alisson (Brazil/Liverpool), Matthijs de Ligt (Netherlands/Juventus), Karim Benzema (France/Real Madrid), Georginio Wijnaldum (Netherlands/Liverpool), Virgil van Dijk (Netherlands/Liverpool), Bernardo Silva (Portugal/Manchester City), Son Heung-min (South Korea/Tottenham), Robert Lewandowski (Poland/Bayern Munich), Roberto Firmino (Brazil/Liverpool), Lionel Messi (Argentina/Barcelona), Riyad Mahrez (Algeria/Manchester City), Kevin De Bruyne (Belgium/Manchester City), Kalidou Koulibaly (Senegal/Napoli), Antoine Griezmann (France/Barcelona), Mohamed Salah (Egypt/Liverpool), Eden Hazard (BEL/Real Madrid), Marquinhos (Brazil/Paris-SG), Raheem Sterling (Eengland/Manchester City), Joao Félix(Portugal/Atletico Madrid)
Women
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Mina Cup winners
Under 12 – Minerva Academy
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J Street Polling Results
97% of Jewish-Americans are concerned about the rise in anti-Semitism
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MATCH INFO
Everton 0
Manchester City 2 (Laporte 45+2', Jesus 90+7')
Dr Amal Khalid Alias revealed a recent case of a woman with daughters, who specifically wanted a boy.
A semen analysis of the father showed abnormal sperm so the couple required IVF.
Out of 21 eggs collected, six were unused leaving 15 suitable for IVF.
A specific procedure was used, called intracytoplasmic sperm injection where a single sperm cell is inserted into the egg.
On day three of the process, 14 embryos were biopsied for gender selection.
The next day, a pre-implantation genetic report revealed four normal male embryos, three female and seven abnormal samples.
Day five of the treatment saw two male embryos transferred to the patient.
The woman recorded a positive pregnancy test two weeks later.
THE BIO
Favourite car: Koenigsegg Agera RS or Renault Trezor concept car.
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Favourite holiday destination: Being at home in Australia, as I travel all over the world for work. It’s great to just hang out with my husband and family.
On the menu
First course
▶ Emirati sea bass tartare Yuzu and labneh mayo, avocado, green herbs, fermented tomato water
▶ The Tale of the Oyster Oyster tartare, Bahraini gum berry pickle
Second course
▶ Local mackerel Sourdough crouton, baharat oil, red radish, zaatar mayo
▶ One Flew Over the Cuckoo’s Nest Quail, smoked freekeh, cinnamon cocoa
Third course
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Dessert
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Uefa Nations League: How it works
The Uefa Nations League, introduced last year, has reached its final stage, to be played over five days in northern Portugal. The format of its closing tournament is compact, spread over two semi-finals, with the first, Portugal versus Switzerland in Porto on Wednesday evening, and the second, England against the Netherlands, in Guimaraes, on Thursday.
The winners of each semi will then meet at Porto’s Dragao stadium on Sunday, with the losing semi-finalists contesting a third-place play-off in Guimaraes earlier that day.
Qualifying for the final stage was via League A of the inaugural Nations League, in which the top 12 European countries according to Uefa's co-efficient seeding system were divided into four groups, the teams playing each other twice between September and November. Portugal, who finished above Italy and Poland, successfully bid to host the finals.
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UAE medallists at Asian Games 2023
Gold
Magomedomar Magomedomarov – Judo – Men’s +100kg
Khaled Al Shehi – Jiu-jitsu – Men’s -62kg
Faisal Al Ketbi – Jiu-jitsu – Men’s -85kg
Asma Al Hosani – Jiu-jitsu – Women’s -52kg
Shamma Al Kalbani – Jiu-jitsu – Women’s -63kg
Silver
Omar Al Marzooqi – Equestrian – Individual showjumping
Bishrelt Khorloodoi – Judo – Women’s -52kg
Khalid Al Blooshi – Jiu-jitsu – Men’s -62kg
Mohamed Al Suwaidi – Jiu-jitsu – Men’s -69kg
Balqees Abdulla – Jiu-jitsu – Women’s -48kg
Bronze
Hawraa Alajmi – Karate – Women’s kumite -50kg
Ahmed Al Mansoori – Cycling – Men’s omnium
Abdullah Al Marri – Equestrian – Individual showjumping
Team UAE – Equestrian – Team showjumping
Dzhafar Kostoev – Judo – Men’s -100kg
Narmandakh Bayanmunkh – Judo – Men’s -66kg
Grigorian Aram – Judo – Men’s -90kg
Mahdi Al Awlaqi – Jiu-jitsu – Men’s -77kg
Saeed Al Kubaisi – Jiu-jitsu – Men’s -85kg
Shamsa Al Ameri – Jiu-jitsu – Women’s -57kg
CREW
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Rating: 3.5/5
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Shelby Lynne and Allison Moorer
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Director:+Lee+Isaac+Chung
Starring:+Glen+Powell,+Daisy+Edgar-Jones,+Anthony+Ramos
Rating:+2.5/5