By Matein Khalid Thankfully, I was not in the global markets during the Black Death, the Great Plague and the Spanish flu pandemic but coronavirus cases have now crossed 40,000 infections and this is way beyond a local Wuhan outbreak. Despite the blowout 225,000 US January non-farm payrolls growth data, I am alarmed by the global recession SOS in the capital markets metrics I track. One, the […]
By Matein Khalid My tactical idea last week to recommend buying sterling against the US dollar (cable) at 1.30 for a 1.34 target is 200 pips in the money now that the Bank of England kept the policy rate unchanged at 0.75% despite Governor Carney’s smoke signals. Sterling closed at 1.32 on Friday evening and will be well bid next week – hopefully. I expect Governor Bailey […]
By Matein Khalid I had recommended buying the Tadawul ETF iShares MSCI Saudi Arabia (symbol KSA on NYSE) on November 30 to benefit from the post-IPO surge in the price of the Saudi Aramco IPO shares on the Tadawul. This tactical trade was a beauty even before Saudi Aramco shares soared 20% on its Thursday December 12 to peak at 38.7 Saudi riyals (SAR). As I expected, […]
By Matein Khalid I literally laughed when I heard that Goldman Sachs put a valuation range of $1.6 to $2.3 trillion on the Saudi Aramco IPO. One, a valuation range of $700 million only means the Goldie analyst bankers (deal promoters?) are clueless about what Saudi Aramco is really worth. Two, I cannot fathom how the financial markets will assign a valuation of 17 to 23 times […]
By Matein Khalid George Soros once observed “the big money in emerging markets is made when things go from Godawful to just plain awful”. So true. The point of maximum pessimism in an emerging market is often an opportune moment to accumulate its shares, ideally after a political, economic or financial systemic shock. I sold my entire Pakistan equities portfolio in summer of 2017 after the Supreme […]
By Matein Khalid The S&P 500 index trades at 2990 as I write. The risk-reward calculus on the broad index no longer flashes a buy signal to me. The economic data around the world has deteriorated at an accelerating pace, as the decline in global PMI’s, 9% fall in German factory orders and $13 trillion in in government debt trading at negative interest rates attest. Commodities prices […]
By Matein Khalid Citigroup, the third largest US money center bank, owns subsidiaries in Latin America whose pedigrees go back almost a century. For instance, Banamex, Citi’s subsidiary in Mexico, is the second largest corporate/retail bank south of the Rio Grande. So it was no coincidence that Citi shares got sandbagged to a recent 61 as President Trump threatened to impose tariffs on Mexico’s $350 billion exports […]
By Matein Khalid I had published a column in the UK/MENA press arguing that the Uber IPO was “absurdly valued” last week. I was vindicated with a vengeance when Uber priced its IPO at 45, well below the level Saudi Arabia’s uber-sovereign wealth fund PIF invested $3.5 billion in the hose of Travis (now Dara) three years ago. Uber opened on the NYSE with a whimper, not […]
/By Matein Khalid/Are we on the precipice of another spasm of intercontinental contagion in the emerging markets like 2018, or the Asian flu, tequila crisis, Russian rouble default or the Turkish banking crisis in the 1990’s. Yes. The Shanghai Composite Index has plunged 12% and (17% fall for Shenzhen) since Trump got nasty on the tortuous US-China trade dialogue. The IMF cut its global growth forecast to […]
/By Matein Khalid/ Uber Technologies goes public in the most controversial and global tech IPO since Facebook seven years ago. Uber bulls claim that the ride sharing colossus is another embryonic Amazon, a firm that will dominate the digital constellation of the next two decades. I disagree. Uber loses $4 billion per annum and has already been forced to surrender Russia/CIS to Yandex, China to Didi and […]
|By Hassan Ali Mansoor| “Adversity reveals the genius, austerity conceals it”. This adage has emerged as the dominant theme used by a select few players in the GCC where during the last three years, massive cost cutting has emerged as the new dominant theme across the board. The last couple of years, we saw the entire commercial sector including businesses, commercial banks and financial institutions struggle to […]
|By Arabian Post Staff|The IMF has stressed that the external downside risks to the UAE’s outlook have risen and encouraged the authorities to continue their efforts to bolster economic growth and safeguard macro-financial stability. In this context, the Fund stressed the importance of increasing supervisory vigilance and strengthening management of contingent liabilities from borrowing by government-related enterprises, government guarantees, and public-private partnerships. The IMF advice came in […]
|By Matein Khalid| I had recommended buying the British pound at 1.2700 against the US dollar in successive columns in the past two weeks. Sterling is at 1.3200 as I write, the trade is already hugely profitable. Cable has now closed above its crucial 200 day moving average in a clear trend reversal. As markets dismiss the risk of a no deal Brexit, I believe the pound […]
|By Matein Khalid|If Asia is a growth warrant on the global economy, the omens look awful as the IMF just warned the financial glitterati at Davos. Asian equities were the victims of the grim macro investment themes in 2018. Four Federal Reserve interest rate hikes forced Asian central banks to raise borrowing costs to protect embattled local currencies. The Trump White House’s game of chicken on trade […]
|By Matein Khalid| The epic political dramas of last week (Aunty Theresa’s Brexit plan was rejected by the House of Commons but she managed to survive a no-confidence vote by a narrow margin) strengthened the British pound, exactly as I had expected. Yet sterling has not managed to rise above 1.30 to the US dollar in the past two months and now trades at its lowest levels […]
The Euro has been a disaster since its birth in 1999. Its monetary pathologies led to youth unemployment rates of 50-60% in Greece, Spain and the Italian Mezzogiorno. It gave a trillion-dollar windfall to German exporters at the expense of the hapless Club Med and amplified Berlin’s diktat over the lands once occupied by the Third Reich. It created the milieu for Brexit, the gilets jaunes riots […]
|By John Hardy| Just ahead of the US jobs data on Friday, the People’s Bank of China hiked reserve requirements on CNY forwards (for onshore institutions) a move clearly aimed at stemming the one-way CNY depreciation ahead of the 7.00 level in USDCNY and as the CFETS-defined RMB basket reached the bottom of its range from a year ago. The requirements went into effect today and haven’t triggered additional […]
|By Matein Khalid| Crude oil prices plunged by 7% in two sessions as Saudi Arabia and Russia confirmed that they would release 1 million barrels a day in the wet barrel markets. Speculative froth in the oil futures markets vanished, to be replaced by a new trading calculus based on the realities of supply and demand – as well as the unknowable (and unquantifiable!) arc of […]
|By Saifur Rahman, Executive Editor| The International Monetary Fund (IMF) finally recognised the Islamic banking principles by endorsing a proposal on the use of the Core Principles for Islamic Finance Regulation (CPIFR), according to a statement. This effectively means that the IMF now accepts Islamic financial principles to become a globally accepted system in parallel to the conventional interest-based economy. “The CPIFR will complement the international architecture for financial […]
Minor International( MINT) announced that it has reached agreement to acquire 30,000,000 shares in NH Hotel Group in a transaction valued at EUR 192 million, which together with its existing shareholding will increase MINT’s stake in NH Hotel Group to 8.6% on a fully diluted basis. NH Hotel Group is the sixth largest hotel chain in Europe and this investment offers important strategic benefits to MINT which, […]
By Arabian Post Staff Macro economic and market conditions remained stable in the UAE in 2017 and the global and domestic economic growth and outlook improved during the year. In financial markets, the money market spreads, dirham-dollar forward points and credit market spreads narrowed reflecting ample liquidity and confidence in the UAE financial system. The UAE’s economic growth and outlook showed an improvement in 2017, but the […]
|By Matein Khalid| I had written an article titled “six reasons to be bullish Saudi equities in 2018, published in the KT on January 28. Yet I was surprised to see Saudi Arabian equities become the world’s second best performing stock market in 2018 after Egypt. The Saudi equity index fund (KSA) I recommended in my column is up 18% at a time when the MSCI emerging markets […]
By James M. Dorsey The Gulf crisis that pits a United Arab Emirates-Saudi-led alliance against Qatar is escalating in discreet but no less worrisome ways that effect major third-party commercial interests and could increase international pressure for a resolution of the dispute. In a major shift away from Saudi and UAE restraint in attempting to force the international community and multi-nationals from taking sides in the 11-month […]
|By Matein Khalid| I had projected a bloodbath in the US Treasury bond market since late 2016, when it was obvious that Trump’s tax reform would double the US budget deficit at the same time as the Federal Reserve prepared to “normalize” or shrink its balance sheet by $470 billion. Fiscal stimulus is often a policy ballast amid a depression, as in the early 1980’s or 2009, not […]
