Recovery fears hit shares



Regional stock markets were down Monday and oil prices dropped to their lowest levels in five weeks as investors continued to lose faith in prospects for an early economic -recovery. US crude dipped as low as US$63.75 Monday, roughly 4 per cent below its level on Thursday, when markets closed for the US Independence Day holiday. "This could be a correction from overheated expectations of an economic recovery," JBC Energy of -Vienna said in a research note. Equity markets in the oil-rich Gulf also suffered as crude prices slipped. The Dubai Financial Market (DFM), which closed down 3.6 per cent at 1756.16 on Sunday, dropped another 2.01 per cent Monday. The Abu Dhabi Securities Exchange General Index dropped 0.44 per cent Monday to end at 2,625.47, after a fall of 1.3 per cent the previous day. Elsewhere in the region, the Saudi Tadawul exchange closed 1.6 per cent lower than the day before. The Kuwaiti stock index was down 3.64 per cent, while Qatari shares ended down 1.4 per cent and the stock market in Bahrain lost 1.05 per cent. "The price of oil is a major indicator for the region," said Chahir Hosni, an equity sales manager at the Egyptian investment bank EFG-Hermes. "GCC markets are pretty well correlated with the commodity prices, especially oil, and it is visibly weighing on the equities here." Faltering equities and a strengthening US dollar have helped push commodity prices down across the board in recent days, continuing the slide triggered last week by the release of weak economic figures from the US and Europe. Stefano Vincelli, an equities and derivatives trader from Halifax Investments in Sydney, told Reuters: "Two major pieces of data will be remembered from the past week: the UK economy shrank by 2.4 per cent, the biggest contraction since 1958, and the unemployment figure from the US, which hit a 26-year high of 9.5 per cent. Overall, the supply and demand picture for crude is still a bearish number." Michael Wittner, the global head of oil research at Société Générale, said recent price support for crude, based largely on economic optimism, had faded for now. He predicted crude would continue to slide, to average about $60 per barrel this month. Crude has fallen by more than $10 in less than two weeks from an eight-month high of $73.38, after new signals that the economy in the world's biggest energy consumer was continuing to struggle. The latest drop came after a six-month -rally that saw prices more than double from $33 a barrel in late December, after falling from a record peak of $147 a year ago. The region's stock markets, meanwhile, have seen an early summer rally erode. Ali Khan, the managing director at Arqaam Capital in -Dubai, said: "We have seen some weak trading on low volumes last week and the trend is expected to continue in the short term. "All eyes are fixed on second-quarter earnings reports by UAE firms," Mr Khan said. "Investors traditionally sit on the fence before earnings season, and that also explains low volumes." Oil market volatility over the past year has reached levels comparable to the energy shocks of the late 1970s and early 1980s, according to Costanza Jacazio, an energy analyst at Barclays Capital in New York. The gyrations have had major -effects on the world economy, with last year's price leap stoking inflation and contributing to the economic crash that has reduced -global demand for all kinds of goods and assets. Crude's recent rebound has unnerved the governments of energy-consuming nations, leading EU officials to warn last month that "the 2008 bubble could be -repeated". OPEC members are just as fearful of a replay of last year's price crash, which could slash state revenues and delay investment in oil projects further. The Centre for Global Energy Studies, a London-based consulting group founded by Sheikh Ahmed Zaki Yamani, the former Saudi oil minister, said in a recent report that neither OPEC nor its key members "has any real interest in halting the rise in oil prices". * with agencies tcarlisle@thenational.ae skhan@thenational.ae

if you go

The flights

Air Astana flies direct from Dubai to Almaty from Dh2,440 per person return, and to Astana (via Almaty) from Dh2,930 return, both including taxes.

The hotels

Rooms at the Ritz-Carlton Almaty cost from Dh1,944 per night including taxes; and in Astana the new Ritz-Carlton Astana (www.marriott) costs from Dh1,325; alternatively, the new St Regis Astana costs from Dh1,458 per night including taxes.

When to visit

March-May and September-November

Visas

Citizens of many countries, including the UAE do not need a visa to enter Kazakhstan for up to 30 days. Contact the nearest Kazakhstan embassy or consulate.

Sly Cooper and the Thievius Raccoonus

Developer: Sucker Punch Productions
Publisher: Sony Computer Entertainment
Console: PlayStation 2 to 5
Rating: 5/5

Scoreline

Real Madrid 1
Ronaldo (53')

Atletico Madrid 1
Griezmann (57')

UAE currency: the story behind the money in your pockets

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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

The specs: Lamborghini Aventador SVJ

Price, base: Dh1,731,672

Engine: 6.5-litre V12

Gearbox: Seven-speed automatic

Power: 770hp @ 8,500rpm

Torque: 720Nm @ 6,750rpm

Fuel economy: 19.6L / 100km

ROUTE TO TITLE

Round 1: Beat Leolia Jeanjean 6-1, 6-2
Round 2: Beat Naomi Osaka 7-6, 1-6, 7-5
Round 3: Beat Marie Bouzkova 6-4, 6-2
Round 4: Beat Anastasia Potapova 6-0, 6-0
Quarter-final: Beat Marketa Vondrousova 6-0, 6-2
Semi-final: Beat Coco Gauff 6-2, 6-4
Final: Beat Jasmine Paolini 6-2, 6-2

Blue Beetle

Director: Angel Manuel Soto
Stars: Xolo Mariduena, Adriana Barraza, Damian Alcazar, Raoul Max Trujillo, Susan Sarandon, George Lopez
Rating: 4/5 

Things Heard & Seen

Directed by: Shari Springer Berman, Robert Pulcini

Starring: Amanda Seyfried, James Norton

2/5

CREW

Director: Rajesh A Krishnan

Starring: Tabu, Kareena Kapoor Khan, Kriti Sanon

Rating: 3.5/5

Company Profile

Name: HyveGeo
Started: 2023
Founders: Abdulaziz bin Redha, Dr Samsurin Welch, Eva Morales and Dr Harjit Singh
Based: Cambridge and Dubai
Number of employees: 8
Industry: Sustainability & Environment
Funding: $200,000 plus undisclosed grant
Investors: Venture capital and government

Honeymoonish

Director: Elie El Samaan

Starring: Nour Al Ghandour, Mahmoud Boushahri

Rating: 3/5

Name: Peter Dicce

Title: Assistant dean of students and director of athletics

Favourite sport: soccer

Favourite team: Bayern Munich

Favourite player: Franz Beckenbauer

Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates 

 

COMPANY PROFILE

Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
Number of staff: 120
Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
$3.6 million led by Global Ventures

A QUIET PLACE

Starring: Lupita Nyong'o, Joseph Quinn, Djimon Hounsou

Director: Michael Sarnoski

Rating: 4/5


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