UAE equities rebound in low trade

Markets in the UAE resumed gains on Tuesday, although trading was volatile as an early-year surge in share prices faltered.

Dubai’s index rose 0.6 per cent, having been down as much as 0.9 per cent in early trade. That initial drop followed a 2.3 per cent decline on Monday, Dubai’s largest in 15 months, but low volumes — less than 20 million shares changed hands in the opening 30 minutes, considerably below recent norms — indicated that few investors were willing to sell at those prices.

Trading then picked up as stocks rebounded. The DFM General Index rose 0.6 per cent to 2,358 points. Abu Dhabi main index climbed 0.3 per cent to 3,567 points. “The market, as expected, is volatile and there’s no clear trend at the moment,” said Sebastien Henin, portfolio manager at The National Investor. Dubai is up 45.3 per cent in 2013 and Abu Dhabi has gained 35.6 per cent over the same period, with this surge likely to give way to more sustained profit taking eventually.

A potential trigger for a sell-off may be MSCI’s decision on whether to upgrade the UAE and Qatar to emerging market status. The index complier will announce its verdict at 2100GMT. “The market will correct whether we get upgraded by MSCI or not — it’s more of a short-term consolidation period as we come closer to the summer,” said Musa Haddad, head of investment advisory services at National Bank of Abu Dhabi.

“The market still looks very strong, volumes are positive and liquidity is available, which shows the longer-term upward trend isn’t about to change.”

MSCI has opted against upgrading the UAE and Qatar from frontier markets classification on multiple occasions since 2009, but traders are hopeful the UAE will make the cut this time following market reforms. An upgrade would likely attract additional foreign money to UAE stocks, although the country’s weighting on MSCI’s emerging market index would be less than one per cent so the impact could be limited.

“The big question is how the market would react after the announcement,” added Henin.

Long-term investors will likely use any market pull-back to accumulate shares at lower prices, said NBAD’s Haddad. “We expect the market to have further upside this year, but at this point in time it will be in a consolidation phase,” he said.

Emaar Properties was Dubai’s main support, rising 0.7 per cent.

Emirates NBD fell 1.9 per cent. Dubai’s largest bank said on Tuesday it had completed the acquisition of BNP Paribas’ Egyptian assets after receiving regulatory approval in the North African country.

Egypt’s bourse rose 1.5 per cent from Monday’s 10-month low, ending a seven-session losing streak. Trading fell to a week-low, with investors wary due to ongoing political instability in the Arab world’s most populous country.

Protesters are preparing for mass demonstrations on June 30 to mark President Mohamed Mursi’s one-year anniversary in office. “Egypt’s market is driven by political factors and whenever politics is the main driver, we would rather stay away,” added Haddad. —


Source: Khaleej Times

Petronas to spend $16 billion on Canadian facility

Malaysian national oil company Petronas says it expects to spend up to $16 billion to build a liquefied natural gas export facility in western Canada.

Arif Mahmood, Petronas vice president of corporate planning, says the company will invest between $9 billion and $11 billion to construct two LNG liquefaction plants.

Another $5 billion will be invested in a 750 kilometer-long pipeline, to be built by TransCanada Corp., to supply gas to the two plants, he said Tuesday in an email to The Associated Press.

The Pacific Northwest LNG project, located on Lelu Island in the Port Edward district, will liquefy and export natural gas produced by Progress Energy Canada. Both companies are owned by Petronas, which secured its first LNG buyer, Japan Petroleum Exploration Co.

Source: Khaleej Times

Dubai SME100 rankings Nominations up 171 percent

Dubai SME on Tuesday announced that nearly 3,000 small and medium enterprises have been nominated for the 2013 Dubai SME100 rankings, with their estimated output pegged at over Dh53 billion.

The nominations represent a 171 per cent increase over the 1,092 SMEs nominated for the 2011 ranking. Sector-wise, 53 per cent of SMEs nominated are from the trading sector, 36 per cent from services and 11 per cent from manufacturing.

“The Government of Dubai has launched various initiatives aimed at promoting entrepreneurship and SME development under its SME five-year plan. This commitment to promote entrepreneurship and SMEs is in the DNA of Dubai, supported and led by our socio-economic stability, openness and visionary leadership. Dubai has moved to the next level of growth, and in our renewed dynamism and development outlook, SMEs play a strategically significant role in creating new value-add to the economy of Dubai and the UAE,” Sami Al Qamzi, director-general of Dubai Department of Economic Development, said in a statement.

“Over 95 per cent of the businesses in Dubai today are small and medium enterprises. Together, SMEs constitute the largest reserve of knowledge, innovation and human capital in the UAE as well as a significant contributor to the nation’s GDP. The Dubai SME 100 initiative provides an added incentive for SMEs to keep growing. They will definitely feel encouraged to think outside accepted parameters, push their creativity and thus achieve their unique goals.”

Dubai SME100 identifies the top-performing SMEs in Dubai to help groom them into bigger and more sustainable enterprises, and support them through their growth into larger, internationally-oriented companies.

Post ranking, the SMEs are given specialised capability development training in such critical areas as investment development, corporate governance, valuation, legal support and risk management. The ranking is valid for two years.

“We are delighted at the substantial increase seen in Dubai SME100 applications compared to 2011. It shows the level of interest in the ranking and its growing market recognition. We hope that more SMEs will apply for the ranking as it will help them gain greater value in the market, as demonstrated by the 2011 batch of Dubai SME100 companies,” Dubai SME CEO Abdul Baset Al Janahi said.



Source: Khaleej Times

Oil prices up in Asia after upbeat US jobs data

Oil prices rose in Asian trade Monday as moderate growth in new jobs in the United States raised hopes about a pick-up in demand in the world’s biggest crude consumer, analysts said.

New York’s main contract, West Texas Intermediate for delivery in July, gained five cents to $96.08 a barrel and Brent North Sea crude for July added three cents to $104.59 in the afternoon.

“At this moment, the crude market is driven by the positive sentiment about job creation in the United States, which points towards a growing economy,” Desmond Chua, market analyst at CMC Markets in Singapore, said.

US Labour Department figures released Friday showed 175,000 jobs were generated in May, despite worries that huge government spending cuts would lead to a slowdown in hiring.

The numbers for May were a firm gain from April’s 149,000 rise, though still below the 193,000-a-month January-April average.

The jobs data, which came after several lacklustre US economic reports last week, also boosted hopes the Fed will hold off any moves to rein in its monetary easing programme any time soon.



Source: Khaleej Times