Emerging market stocks are about to get a $600 billion boost.
That’s how much the asset class will expand after MSCI said on Wednesday it will add both Saudi Arabia and Argentina to its equity index of developing nations. Neither decision was assured, and together, they could prompt a relief rally after a sell-off knocked $2.7 trillion from emerging economies since late January amid threats of a global trade war and higher US rates.
Saudi Arabia - home to the Middle East’s biggest bourse - and Argentina, pummelled by a currency rout that prompted it to seek help from the International Monetary Fund, join the likes of China, India and Brazil. The change could attract billions of dollars of foreign-investment flows from index-tracking funds.
"The news on Saudi and Argentina will boost inflows to those markets short-term, but the outlook for EM assets will depend more fundamentally on global conditions - notably the dollar, US yields and the risk of an escalating trade war," said Geoff Dennis, head of global emerging-market strategy at UBS in Boston. "It’s only a short-term lift to the asset class overall."
The potential for an MSCI inclusion made the market in Riyadh a magnet for foreign investors, turning it into the world’s second-best performer this year. By contrast, waning confidence in Argentina’s economy, a currency slump and one of the world’s highest inflation rates is shrinking the Buenos Aires market.
“By supporting the inclusion of Saudi Arabia and Argentina in emerging markets, international institutional investors confirmed that they are now able and ready to access and operate in these markets,” Sebastien Lieblich, MSCI’s managing director and global head of equity solutions, said in a statement.
The index provider did add a caveat, saying that it would reconsider the Argentine decision should authorities introduce "any sort" of restrictions on market accessibility. The index compiler also said that due to lower liquidity in the nation’s local markets, only foreign listings such as American Depositary Receipts will be initially eligible to enter the index.
Exchange-traded funds tracking equities listed in both countries climbed in post-market trading. The Global X MSCI Argentina ETF spiked 7.4 per cent, while the iShares MSCI Saudi Arabia ETF jumped 2.4 per cent.
For Saudi Arabia the upgrade will help improve liquidity after regulators implemented a series of changes aimed at adapting the bourse to international standards. Argentina’s benchmark index stands to rally by as much as 20 per cent, Morgan Stanley says, after a peso rout created one of the world’s worst-performing stock markets in dollar terms.
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Read more:
Saudi Arabia wins MSCI emerging market status
Franklin Templeton funds gets Qualified Foreign Investor status in Saudi Arabia
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Inclusion “is a game-changer for Saudi Arabia’s capital markets”, said Antoine Maurel, head of global markets for Middle East, North Africa and Turkey at HSBC Bank Middle East, who estimates it will lead to $35bn of inflows. “This will create a much deeper and more liquid market,“ said Mr Maurel, whose bank was among the first qualified foreign investors to trade Saudi stocks directly three years ago.
Saudi Arabia may see inflows of as much as $40bn in the coming year, said Khalid Al Hussan, chief executive of the bourse.
Modernization of the Saudi stock market is part of a broader plan spearheaded by Crown Prince Mohammed Bin Salman to steer the nation’s economy away from oil and diversify the government’s sources of revenue.
That includes selling shares in government-owned Saudi Aramco, which is expected to stage an initial public offering in Riyadh that could be the world’s biggest. The IPO could happen before the end of 2018, according to Capital Markets Authority chairman Mohammed El Kuwaiz.
Saudi Arabia opened its $524bn stock market to foreign investors three years ago. Since then, it eased requirements for these investors with measures such as lowering the minimum amount of assets under management to get QFI status and aligned trade settlement times with international standards.
In Argentina, hopes for an upgrade had faltered as the peso tumbled, making the central bank jack up interest rates to a world-beating 40 per cent and leading the government to turn to the IMF for a record $50bn credit line. Finance Minister Nicolas Dujovne welcomed the return to a status the nation last held nine years ago, saying Argentina will gain access to cheaper credit and bring more investment, growth and employment.
It’s a welcome outcome as well for investors who had been pinning hopes on an upgrade as the nation’s stocks head for the worst year in almost 10 years. An upgrade will allow funds that track more than $1 trillion to invest in the nation’s stock market, leading to about $3.5bn of inflows, according to Ernesto Allaria, the president of stock operator BYMA.
The inclusion, coupled with the IMF deal, is expected to lead to capital inflows into the country, helping to ease pressure over the central bank to stabilise the currency, Jim Barrineau, head of emerging-market debt at Schroders in New York, wrote in a note. The recent sell-off in stocks and an "attractive" exchange rate means that Argentine stocks offer "interesting opportunities" for foreign investors, according to BlackRock.
"The decision will bring a positive confidence shock that the market will welcome, because it needed it," said Alberto Bernal, chief strategist at XP Securities in Miami.
Other analysts and investors were still a bit sceptical. Win Thin, the New York-based head of emerging markets at Brown Brothers Harriman & Co, said Argentine stocks may see some knee-jerk buying following the MSCI decision to upgrade the country to emerging-market status, but this doesn’t solve the country’s problems.
The Travel Diaries of Albert Einstein The Far East, Palestine, and Spain, 1922 – 1923
Editor Ze’ev Rosenkranz
Princeton
BEACH SOCCER WORLD CUP
Group A
Paraguay
Japan
Switzerland
USA
Group B
Uruguay
Mexico
Italy
Tahiti
Group C
Belarus
UAE
Senegal
Russia
Group D
Brazil
Oman
Portugal
Nigeria
'Laal Kaptaan'
Director: Navdeep Singh
Stars: Saif Ali Khan, Manav Vij, Deepak Dobriyal, Zoya Hussain
Rating: 2/5
DEADPOOL & WOLVERINE
Starring: Ryan Reynolds, Hugh Jackman, Emma Corrin
Director: Shawn Levy
Rating: 3/5
The Gandhi Murder
- 71 - Years since the death of MK Gandhi, also christened India's Father of the Nation
- 34 - Nationalities featured in the film The Gandhi Murder
- 7 - million dollars, the film's budget
Sarfira
Director: Sudha Kongara Prasad
Starring: Akshay Kumar, Radhika Madan, Paresh Rawal
Rating: 2/5
MATCH INFO
Chelsea 0
Liverpool 2 (Mane 50', 54')
Red card: Andreas Christensen (Chelsea)
Man of the match: Sadio Mane (Liverpool)
CRICKET WORLD CUP LEAGUE 2
Mannofield, Aberdeen
All matches start at 2pm UAE time and will be broadcast on icc.tv
UAE fixtures
Wednesday, Aug 10 – Scotland v UAE
Thursday, Aug 11 - UAE v United States
Saturday, Aug 14 – Scotland v UAE
Monday, Aug 15 – UAE v United States
UAE squad
Ahmed Raza (captain), Chirag Suri, Muhammad Waseem, Vriitya Aravind, CP Rizwan, Basil Hameed, Rohan Mustafa, Zawar Farid, Kashif Daud, Karthik Meiyappan, Zahoor Khan, Junaid Siddique, Sabir Ali, Alishan Sharafu
Table (top three teams advance directly to the 2023 World Cup Qualifier)
1. Oman 36 21 13 1 1 44
2. Scotland 24 16 6 0 2 34
3. UAE 22 12 8 1 1 26
--
4. Namibia 18 9 9 0 0 18
5. United States 24 11 12 1 0 23
6. Nepal 20 8 11 1 0 17
7. Papua New Guinea 20 1 19 0 0 2
PRESIDENTS CUP
Draw for Presidents Cup fourball matches on Thursday (Internationals first mention). All times UAE:
02.32am (Thursday): Marc Leishman/Joaquin Niemann v Tiger Woods/Justin Thomas
02.47am (Thursday): Adam Hadwin/Im Sung-jae v Xander Schauffele/Patrick Cantlay
03.02am (Thursday): Adam Scott/An Byeong-hun v Bryson DeChambeau/Tony Finau
03.17am (Thursday): Hideki Matsuyama/CT Pan v Webb Simpson/Patrick Reed
03.32am (Thursday): Abraham Ancer/Louis Oosthuizen v Dustin Johnson/Gary Woodland
What is Dungeons & Dragons?
Dungeons & Dragons began as an interactive game which would be set up on a table in 1974. One player takes on the role of dungeon master, who directs the game, while the other players each portray a character, determining its species, occupation and moral and ethical outlook. They can choose the character’s abilities, such as strength, constitution, dexterity, intelligence, wisdom and charisma. In layman’s terms, the winner is the one who amasses the highest score.
if you go
Getting there
Etihad (Etihad.com), Emirates (emirates.com) and Air France (www.airfrance.com) fly to Paris’ Charles de Gaulle Airport, from Abu Dhabi and Dubai respectively. Return flights cost from around Dh3,785. It takes about 40 minutes to get from Paris to Compiègne by train, with return tickets costing €19. The Glade of the Armistice is 6.6km east of the railway station.
Staying there
On a handsome, tree-lined street near the Chateau’s park, La Parenthèse du Rond Royal (laparenthesedurondroyal.com) offers spacious b&b accommodation with thoughtful design touches. Lots of natural woods, old fashioned travelling trunks as decoration and multi-nozzle showers are part of the look, while there are free bikes for those who want to cycle to the glade. Prices start at €120 a night.
More information: musee-armistice-14-18.fr ; compiegne-tourisme.fr; uk.france.fr
If you go
The flights Etihad (www.etihad.com) and Spice Jet (www.spicejet.com) fly direct from Abu Dhabi and Dubai to Pune respectively from Dh1,000 return including taxes. Pune airport is 90 minutes away by road.
The hotels A stay at Atmantan Wellness Resort (www.atmantan.com) costs from Rs24,000 (Dh1,235) per night, including taxes, consultations, meals and a treatment package.
Match info
Uefa Champions League Group H
Juventus v Valencia, Tuesday, midnight (UAE)
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
World Cup final
Who: France v Croatia
When: Sunday, July 15, 7pm (UAE)
TV: Game will be shown live on BeIN Sports for viewers in the Mena region
POSSIBLE ENGLAND EURO 2020 SQUAD
Goalkeepers: Jordan Pickford, Nick Pope, Dean Henderson.
Defenders: Trent Alexander-Arnold, Kieran Trippier, Joe Gomez, John Stones, Harry Maguire, Tyrone Mings, Ben Chilwell, Fabian Delph.
Midfielders: Declan Rice, Harry Winks, Jordan Henderson, Ross Barkley, Mason Mount, Alex Oxlade-Chamberlain.
Forwards: Harry Kane, Raheem Sterling, Marcus Rashford, Jadon Sancho, Tammy Abraham, Callum Hudson-Odoi.
European arms
Known EU weapons transfers to Ukraine since the war began: Germany 1,000 anti-tank weapons and 500 Stinger surface-to-air missiles. Luxembourg 100 NLAW anti-tank weapons, jeeps and 15 military tents as well as air transport capacity. Belgium 2,000 machine guns, 3,800 tons of fuel. Netherlands 200 Stinger missiles. Poland 100 mortars, 8 drones, Javelin anti-tank weapons, Grot assault rifles, munitions. Slovakia 12,000 pieces of artillery ammunition, 10 million litres of fuel, 2.4 million litres of aviation fuel and 2 Bozena de-mining systems. Estonia Javelin anti-tank weapons. Latvia Stinger surface to air missiles. Czech Republic machine guns, assault rifles, other light weapons and ammunition worth $8.57 million.
World record transfers
1. Kylian Mbappe - to Real Madrid in 2017/18 - €180 million (Dh770.4m - if a deal goes through)
2. Paul Pogba - to Manchester United in 2016/17 - €105m
3. Gareth Bale - to Real Madrid in 2013/14 - €101m
4. Cristiano Ronaldo - to Real Madrid in 2009/10 - €94m
5. Gonzalo Higuain - to Juventus in 2016/17 - €90m
6. Neymar - to Barcelona in 2013/14 - €88.2m
7. Romelu Lukaku - to Manchester United in 2017/18 - €84.7m
8. Luis Suarez - to Barcelona in 2014/15 - €81.72m
9. Angel di Maria - to Manchester United in 2014/15 - €75m
10. James Rodriguez - to Real Madrid in 2014/15 - €75m
Ain Dubai in numbers
126: The length in metres of the legs supporting the structure
1 football pitch: The length of each permanent spoke is longer than a professional soccer pitch
16 A380 Airbuses: The equivalent weight of the wheel rim.
9,000 tonnes: The amount of steel used to construct the project.
5 tonnes: The weight of each permanent spoke that is holding the wheel rim in place
192: The amount of cable wires used to create the wheel. They measure a distance of 2,4000km in total, the equivalent of the distance between Dubai and Cairo.
Brief scores
Barcelona 2
Pique 36', Alena 87'
Villarreal 0
Dengue fever symptoms
- High fever
- Intense pain behind your eyes
- Severe headache
- Muscle and joint pains
- Nausea
- Vomiting
- Swollen glands
- Rash
If symptoms occur, they usually last for two-seven days
COMPANY PROFILE
Name: Xpanceo
Started: 2018
Founders: Roman Axelrod, Valentyn Volkov
Based: Dubai, UAE
Industry: Smart contact lenses, augmented/virtual reality
Funding: $40 million
Investor: Opportunity Venture (Asia)
COMPANY PROFILE
Company: Eco Way
Started: December 2023
Founder: Ivan Kroshnyi
Based: Dubai, UAE
Industry: Electric vehicles
Investors: Bootstrapped with undisclosed funding. Looking to raise funds from outside
Friday's schedule at the Etihad Airways Abu Dhabi Grand Prix
GP3 qualifying, 10:15am
Formula 2, practice 11:30am
Formula 1, first practice, 1pm
GP3 qualifying session, 3.10pm
Formula 1 second practice, 5pm
Formula 2 qualifying, 7pm
It’ll be summer in the city as car show tries to move with the times
If 2008 was the year that rocked Detroit, 2019 will be when Motor City gives its annual car extravaganza a revamp that aims to move with the times.
A major change is that this week's North American International Auto Show will be the last to be held in January, after which the event will switch to June.
The new date, organisers said, will allow exhibitors to move vehicles and activities outside the Cobo Center's halls and into other city venues, unencumbered by cold January weather, exemplified this week by snow and ice.
In a market in which trends can easily be outpaced beyond one event, the need to do so was probably exacerbated by the decision of Germany's big three carmakers – BMW, Mercedes-Benz and Audi – to skip the auto show this year.
The show has long allowed car enthusiasts to sit behind the wheel of the latest models at the start of the calendar year but a more fluid car market in an online world has made sales less seasonal.
Similarly, everyday technology seems to be catching up on those whose job it is to get behind microphones and try and tempt the visiting public into making a purchase.
Although sparkly announcers clasp iPads and outline the technical gadgetry hidden beneath bonnets, people's obsession with their own smartphones often appeared to offer a more tempting distraction.
“It's maddening,” said one such worker at Nissan's stand.
The absence of some pizzazz, as well as top marques, was also noted by patrons.
“It looks like there are a few less cars this year,” one annual attendee said of this year's exhibitors.
“I can't help but think it's easier to stay at home than to brave the snow and come here.”
FIVE TRENDS THAT WILL SHAPE UAE BANKING
• The digitisation of financial services will continue
• Managing and using data effectively will become a competitive advantage
• Digitisation will require continued adjustment of operating models
• Banks will expand their role in the customer life through ecosystems
• The structure of the sector will change
SOUTH KOREA SQUAD
Goalkeepers: Kim Seung-gyu, Jo Hyeon-woo, Song Bum-keun
Defenders: Kim Young-gwon, Kim Min-jae, Jung Seung-hyun, Kim Ju-sung, Kim Ji-soo, Seol Young-woo, Kim Tae-hwan, Lee Ki-je, Kim Jin-su
Midfielders: Park Yong-woo, Hwang In-beom, Hong Hyun-seok, Lee Soon-min, Lee Jae-sung, Lee Kang-in, Son Heung-min (captain), Jeong Woo-yeong, Moon Seon-min, Park Jin-seob, Yang Hyun-jun
Strikers: Hwang Hee-chan, Cho Gue-sung, Oh Hyeon-gyu
What is the FNC?
The Federal National Council is one of five federal authorities established by the UAE constitution. It held its first session on December 2, 1972, a year to the day after Federation.
It has 40 members, eight of whom are women. The members represent the UAE population through each of the emirates. Abu Dhabi and Dubai have eight members each, Sharjah and Ras al Khaimah six, and Ajman, Fujairah and Umm Al Quwain have four.
They bring Emirati issues to the council for debate and put those concerns to ministers summoned for questioning.
The FNC’s main functions include passing, amending or rejecting federal draft laws, discussing international treaties and agreements, and offering recommendations on general subjects raised during sessions.
Federal draft laws must first pass through the FNC for recommendations when members can amend the laws to suit the needs of citizens. The draft laws are then forwarded to the Cabinet for consideration and approval.
Since 2006, half of the members have been elected by UAE citizens to serve four-year terms and the other half are appointed by the Ruler’s Courts of the seven emirates.
In the 2015 elections, 78 of the 252 candidates were women. Women also represented 48 per cent of all voters and 67 per cent of the voters were under the age of 40.
Zayed Sustainability Prize
Her most famous song
Aghadan Alqak (Would I Ever Find You Again)?
Would I ever find you again
You, the heaven of my love, my yearning and madness;
You, the kiss to my soul, my cheer and
sadness?
Would your lights ever break the night of my eyes again?
Would I ever find you again?
This world is volume and you're the notion,
This world is night and you're the lifetime,
This world is eyes and you're the vision,
This world is sky and you're the moon time,
Have mercy on the heart that belongs to you.
Lyrics: Al Hadi Adam; Composer: Mohammed Abdel Wahab