World markets soar but UAE tepid on US$600bn boost



The QE2 sailed around the globe yesterday, delivering good news.

Global stock and commodities markets soared yesterday after the US government launched a historic second round of quantitative easing - or QE2 - to bolster the economy.

Several global indexes reached two-year highs as the dollar continued to fall, although UAE bourses bucked the trend and ended the day mixed.

The US Federal Reserve said on Wednesday it would buy a further US$600 billion (Dh2.2tn) of treasuries through to June next year, expanding a stimulus programme to cut unemployment and avert deflation.

The central bank said it would buy about $75bn in longer-term Treasury bonds a month and adjust the amount depending on the path of the recovery. It added that it will keep interest rates low for an "extended period."

The dollar fell 0.9 per cent against the euro on the news yesterday evening.

Asian stocks led the momentum. They were first to react to the Fed's announcement. Japan's Nikkei 225 Average closed 2.2 per cent higher to 9,358.78 points.

Hong Kong also cheered the Fed's moves as the Hang Seng Index rose 1.6 per cent to 24,535.63.

Although the Fed's measures fell short of the most bullish stimulus projections of as much as $2tn, US stocks also opened sharply higher yesterday.

The Dow Jones Industrial Average surged more than 100 points in early trading yesterday.

In London, afternoon trading saw the FTSE 100 reach its highest point this year, adding 1.9 per cent to 5,858.34 points.

But the reaction from UAE bourses was muted.

The Dubai Financial Market General Index gained 0.1 per cent to 1,737.72, after initially opening in negative territory, while the Abu Dhabi Securities Exchange General Index dropped 0.4 per cent to 2,750.70.

Bank of America (BofA) Merrill Lynch said in a note yesterday the UAE would benefit from the Fed's actions more than most economies because a weakening dollar would encourage investors to turn to commodities.

"This is the medicine [the UAE] needs the most," said Turker Hamzaoglu, an analyst at BofA Merrill Lynch.

Oil jumped to fresh highs of $87.91 a barrel in response.

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Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

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Specs

Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request

The Settlers

Director: Louis Theroux

Starring: Daniella Weiss, Ari Abramowitz

Rating: 5/5

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Predictions

Predicted winners for final round of games before play-offs:

  • Friday: Delhi v Chennai - Chennai
  • Saturday: Rajasthan v Bangalore - Bangalore
  • Saturday: Hyderabad v Kolkata - Hyderabad
  • Sunday: Delhi v Mumbai - Mumbai
  • Sunday - Chennai v Punjab - Chennai

Final top-four (who will make play-offs): Chennai, Hyderabad, Mumbai and Bangalore

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.

Part three: an affection for classic cars lives on

Read part two: how climate change drove the race for an alternative 

Read part one: how cars came to the UAE

UK's plans to cut net migration

Under the UK government’s proposals, migrants will have to spend 10 years in the UK before being able to apply for citizenship.

Skilled worker visas will require a university degree, and there will be tighter restrictions on recruitment for jobs with skills shortages.

But what are described as "high-contributing" individuals such as doctors and nurses could be fast-tracked through the system.

Language requirements will be increased for all immigration routes to ensure a higher level of English.

Rules will also be laid out for adult dependants, meaning they will have to demonstrate a basic understanding of the language.

The plans also call for stricter tests for colleges and universities offering places to foreign students and a reduction in the time graduates can remain in the UK after their studies from two years to 18 months.