Share prices in Dubai soared to their highest level in a year yesterday as hopes rose that a fresh injection of cash into the euro-zone economy would boost investor confidence.
The benchmark Dubai Financial Market General Index advanced 1.9 per cent to 1,730.41. Also gaining was the Abu Dhabi Securities Exchange General Index, up 0.5 per cent to 2,607.73 yesterday.
Both markets closed shortly before the European Central Bank (ECB) said it was loaning 800 banks in the euro zone €529.5 billion (Dh2.61 trillion) in cheap three-year funds. Investors hope the extra firepower will help banks survive the euro-zone crisis, while also freeing up cash to businesses.
"This is just enough to cover banks' needs," said Nick Stadtmiller, the head of fixed income research at Emirates NBD. "This provides European banks with funds to cover their own maturing debt and the funding needs of Spain and Italy this year. They will be able to do that without taking new liquidity out of the system."
The offering exceeded the amount expected by many traders and was also well above the €489bn handed out to banks during the previous operation in December.
Expectations of the cash injection gave another lift to Dubai benchmark stocks, which have already leapt to a 21 per cent gain this month on signs of a strengthening local and global economic outlook.
Most European markets also responded positively to the announcement. The Euro Stoxx 50 index of euro-zone bluechips rose 0.39 per cent in afternoon trading. The euro dropped against the US dollar.
Investors are hoping the extra cash will help to sustain a lift for equity and bond markets in the coming months.
Mr Stadtmiller said the loans may also help to benefit the Middle East, if European banks stop a pull-back in exposure to the region.
"There was evidence of a refocus on home markets by European banks last year and this may make it less urgent for them to reduce their exposure to emerging markets, and I would not make so much of a pull-back this year," he said.
Banks used much of the previous cash they tapped in December to cover maturing debt. But Mario Draghi, the ECB president, has urged banks to use the latest injection to lend to businesses and consumers to restore economic growth.
Officials also hope banks will use the money to snap up higher-yielding bonds, especially from Italy, to stop the euro-zone crisis deepening.
But economists have warned the loans will not offer a sudden solution to the euro zone's turmoil.
Even if banks had more money to invest it was unlikely they would invest in "risky government bonds", economists at Capital Economics wrote in a research note yesterday.
"Hopes that the funds will solve the fiscal crisis and breathe life into the ailing euro-zone economy are likely to be [dashed]," they wrote.
Paul Volcker, a former chairman of the US Federal Reserve and an economic adviser to the administration of the US president Barack Obama, backed the action.
"You have to use what instruments are available. Central banks have responded forcibly," he said.
"You can be concerned about and worry about future inflationary concerns [of monetary expansion] but I don't think those concerns override the need to provide for large amounts of liquidity at the moment."
tarnold@thenational.ae
* additional reporting by Gregor Stuart Hunter
How they line up for Sunday's Australian Grand Prix
1 Lewis Hamilton, Mercedes
2 Kimi Raikkonen, Ferrari
3 Sebastian Vettel, Ferrari
4 Max Verstappen, Red Bull
5 Kevin Magnussen, Haas
6 Romain Grosjean, Haas
7 Nico Hulkenberg, Renault
*8 Daniel Ricciardo, Red Bull
9 Carlos Sainz, Renault
10 Valtteri Bottas, Mercedes
11 Fernando Alonso, McLaren
12 Stoffel Vandoorne, McLaren
13 Sergio Perez, Force India
14 Lance Stroll, Williams
15 Esteban Ocon, Force India
16 Brendon Hartley, Toro Rosso
17 Marcus Ericsson, Sauber
18 Charles Leclerc, Sauber
19 Sergey Sirotkin, Williams
20 Pierre Gasly, Toro Rosso
* Daniel Ricciardo qualified fifth but had a three-place grid penalty for speeding in red flag conditions during practice
Review: Tomb Raider
Dir: Roar Uthaug
Starring: Alicia Vikander, Dominic West, Daniel Wu, Walter Goggins
two stars
BACK%20TO%20ALEXANDRIA
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3ETamer%20Ruggli%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%20%3C%2Fstrong%3ENadine%20Labaki%2C%20Fanny%20Ardant%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E3.5%2F5%3C%2Fp%3E%0A
A Cat, A Man, and Two Women
Junichiro Tamizaki
Translated by Paul McCarthy
Daunt Books
Things Heard & Seen
Directed by: Shari Springer Berman, Robert Pulcini
Starring: Amanda Seyfried, James Norton
2/5
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
History's medical milestones
1799 - First small pox vaccine administered
1846 - First public demonstration of anaesthesia in surgery
1861 - Louis Pasteur published his germ theory which proved that bacteria caused diseases
1895 - Discovery of x-rays
1923 - Heart valve surgery performed successfully for first time
1928 - Alexander Fleming discovers penicillin
1953 - Structure of DNA discovered
1952 - First organ transplant - a kidney - takes place
1954 - Clinical trials of birth control pill
1979 - MRI, or magnetic resonance imaging, scanned used to diagnose illness and injury.
1998 - The first adult live-donor liver transplant is carried out
The biog
Name: Greg Heinricks
From: Alberta, western Canada
Record fish: 56kg sailfish
Member of: International Game Fish Association
Company: Arabian Divers and Sportfishing Charters
The Brutalist
Director: Brady Corbet
Stars: Adrien Brody, Felicity Jones, Guy Pearce, Joe Alwyn
Rating: 3.5/5
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Killing of Qassem Suleimani
Profile of Tamatem
Date started: March 2013
Founder: Hussam Hammo
Based: Amman, Jordan
Employees: 55
Funding: $6m
Funders: Wamda Capital, Modern Electronics (part of Al Falaisah Group) and North Base Media
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
