Europe and Egypt look set to share the limelight

Investors will be eyeing cues from Europe this week to assess whether there is enough momentum to sustain global equities' gains.

The interest comes after euro-zone leaders took further steps to resolve the region's debt crisis.

Euro-zone leaders on Friday agreed to allow their rescue fund starting next year to directly recapitalise debt-stricken banks rather than going through governments.

They also approved a mechanism in which they can intervene in bond markets and buy government debt.

Officials also agreed to create a single banking watchdog for the region's lenders, housed under the European Central Bank.

"It looks like a major policy shift for the European Union, especially for Germany, which has been opposed to the idea in the past," said Anastasios Dalgiannakis, the head of trading at Mubasher Financial Services in Dubai.

"I think we will definitely have to see a continuation in an upward movement, especially if measures attached are benign and not very strict. We could see a positive start for the month of July."

The Saudi Tadawul All-Share Index rose 2.1 per cent at the open to 6,724.74 yesterday, tracking the performance of global markets the day before. It closed 1.89 per cent higher at 6,709.91.

In Europe, Germany's DAX jumped 4.3 per cent to 6,416.28 on Friday. The Stoxx 50 Index climbed 4.9 per cent to 2,264.72, while the FTSE 100 Index gained 1.4 per cent to 5,571.15. In the United States, the Dow Jones Industrial Average climbed 2.2 per cent to 12,800.10, while the S&P 500 Index advanced 2.4 per cent to 1362.16, its biggest rally since 1999.

As the second quarter drew to a close, investors in the Arabian Gulf are now positioning ahead of earnings results, expected to be released during Ramadan.

The Abu Dhabi Securities Exchange General Index declined 2.4 per cent to 2,447.62 last week, while the Dubai Financial Market General Index fell 1.2 per cent to 1,451.87.

"It has been a headline-driven market but this will all eventually go back to the fundamental of companies," said Fadi Al Said, a senior fund manager at ING Investment Management in Dubai.

Egypt's stock-market will be the key focus this week, after the Moslim Brotherhood's Mohammed Morsi became the first democratically elected president, triggering a euphoric rally for local shares.

Investors will be looking for cues from Mr Morsi on how the country's government plans to tackle the political and economic challenges ahead.

"Clearly there was a knee-jerk reaction after the presidential results but now the real work begins, with the IMF loan still in limbo and other pledges on hold," said Julian Bruce, EFG Hermes' director of institutional equity sales in Dubai.

"We will probably see some consolidation and gains on selected gains but for significant allocations, we still have to wait until things pan out and become clearer and better."

Egypt's EGX 30 Index rose more than 11 per cent in the days following the announcement that Mr Morsi was Egypt's president following the revolution that ousted Hosni Mubarak.

The market had declined about 10 per cent in the past two months on fears of violence and as the ruling military council clamped down on protestors while limiting the president's powers only days before Mr Morsi's victory.

Sworn in yesterday, the new president said he was "still looking" at the possibility of securing a much-needed US$3.2 billion (Dh11.75bn) loan facility from the IMF, Bloomberg reported.

Foreign investors are likely to remain on the sidelines until Egypt for now, analysts said.

"There is a lot of value in Egyptian companies but that won't be realised until stability comes back,' said Mohammed Ali Yasin, the managing director of Abu Dhabi Financial Services, the brokerage arm of National Bank of Abu Dhabi.

"It has been a highly volatile but positive year for the Egyptian stock market, in spite of all the turmoil. People in general really want to move forward, if that happens, regional players will come back to Egypt stocks."

halsayegh@thenational.ae

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Iraq negotiating over Iran sanctions impact

US sanctions on Iran’s energy industry and exports took effect on Monday, November 5.
Washington issued formal waivers to eight buyers of Iranian oil, allowing them to continue limited imports. Iraq did not receive a waiver.
Iraq’s government is cooperating with the US to contain Iranian influence in the country, and increased Iraqi oil production is helping to make up for Iranian crude that sanctions are blocking from markets, US officials say.
Iraq, the second-biggest producer in the Organization of Petroleum Exporting Countries, pumped last month at a record 4.78 million barrels a day, former Oil Minister Jabbar Al-Luaibi said on Oct. 20. Iraq exported 3.83 million barrels a day last month, according to tanker tracking and data from port agents.
Iraq has been working to restore production at its northern Kirkuk oil field. Kirkuk could add 200,000 barrels a day of oil to Iraq’s total output, Hook said.
The country stopped trucking Kirkuk oil to Iran about three weeks ago, in line with U.S. sanctions, according to four people with knowledge of the matter who asked not to be identified because they aren’t allowed to speak to media.
Oil exports from Iran, OPEC’s third-largest supplier, have slumped since President Donald Trump announced in May that he’d reimpose sanctions. Iran shipped about 1.76 million barrels a day in October out of 3.42 million in total production, data compiled by Bloomberg show.
Benchmark Brent crude fell 47 cents to $72.70 a barrel in London trading at 7:26 a.m. local time. U.S. West Texas Intermediate was 25 cents lower at $62.85 a barrel in New York. WTI held near the lowest level in seven months as concerns of a tightening market eased after the U.S. granted its waivers to buyers of Iranian crude.

Gender pay parity on track in the UAE

The UAE has a good record on gender pay parity, according to Mercer's Total Remuneration Study.

"In some of the lower levels of jobs women tend to be paid more than men, primarily because men are employed in blue collar jobs and women tend to be employed in white collar jobs which pay better," said Ted Raffoul, career products leader, Mena at Mercer. "I am yet to see a company in the UAE – particularly when you are looking at a blue chip multinationals or some of the bigger local companies – that actively discriminates when it comes to gender on pay."

Mr Raffoul said most gender issues are actually due to the cultural class, as the population is dominated by Asian and Arab cultures where men are generally expected to work and earn whereas women are meant to start a family.

"For that reason, we see a different gender gap. There are less women in senior roles because women tend to focus less on this but that’s not due to any companies having a policy penalising women for any reasons – it’s a cultural thing," he said.

As a result, Mr Raffoul said many companies in the UAE are coming up with benefit package programmes to help working mothers and the career development of women in general.