Foreign investors bought $1.18 billion in Middle East and North African equities in March, especially Saudi ones amid the kingdom’s upgrade to emerging market status by FTSE Russell, according to a report by the Egyptian investment bank EFG-Hermes.
Nine of the most purchased stocks by international investors in March were Saudi Arabian ones, led by Al Rajhi Bank, the country’s biggest publicly traded lender by market value. The possible inclusion of Saudi Arabia in the MSCI Emerging Market index may also boost investment in the nation’s listed companies.
“Following FTSE’s country classification announcement on 28 March, the focus now turns to MSCI’s May review,” said Mohamad Al Hajj, a strategist at EFG-Hermes.
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Mr Al Hajj said that EFG-Hermes was expecting an upgrade for Saudi Arabia, which along with the FTSE inclusion, is set to attract billions of dollars into the kingdom’s stock market.
Saudi Arabia's Tadawul, the region's biggest equity market, has surged 8.9 per cent so far this year amid investor anticipation of inclusion in the benchmarks, a rebound in oil prices and higher government spending.
Analysts expect investors who track indexes, typically known as passive investors because they do not pick stocks, will buy between $10bn and $12bn of Saudi equities as a result of the upgrades. Meanwhile investors that pick stocks, called active investors, will invest a further $30bn to $35bn.
Saudi Arabia is seeking to revive its economy after several years of low oil prices that curtailed job creation and growth.
The measures include a reduction of energy subsidies, plans to raise taxes such as a VAT and selling off state assets including a 5 per cent stake in Saudi Aramco, the world's biggest oil producer whose sale may fetch as much as $100bn.
The country’s financial regulators are also streamlining regulations and bringing capital markets in line with global norms. As well as introducing T+2 settlement, which means that securities settle two days after they are bought, the country’s Capital Market Authority also introduced Nomu, a parallel market for smaller cap companies. It also enabled securities borrowing and lending, and the adoption of International Financial Reporting Standards for listed companies.
EFG-Hermes also noted that Emaar Development, the Dubai-based real estate development company, and El Sewedy Electric, the Cairo-based cable manufacturer, may also be added into the MSCI index in the May review while Dubai-based leisure company DXB Entertainment may be removed.
International investors continued to be net buyers of Middle East and North African stocks in March while GCC buyers also became net buyers, compared to February, the survey found. The only non-Saudi Arabian stock in the top 10 most heavily purchased equities by foreigners in March was First Abu Dhabi Bank, UAE's biggest lender which received $55 million in investment.
Meanwhile, foreigners invested $326m in Al Rajhi Bank in March and $143m in Saudi Arabian lender National Commercial Bank.
The Saudi Arabian upgrade by FTSE follows a similar promotion for Kuwait to emerging market status in September. That move, which will take effect in two stages this year, is also set to attract an inflow of foreign investment.
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Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
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F1 drivers' standings
1. Lewis Hamilton, Mercedes 281
2. Sebastian Vettel, Ferrari 247
3. Valtteri Bottas, Mercedes 222
4. Daniel Ricciardo, Red Bull 177
5. Kimi Raikkonen, Ferrari 138
6. Max Verstappen, Red Bull 93
7. Sergio Perez, Force India 86
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A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Dubai works towards better air quality by 2021
Dubai is on a mission to record good air quality for 90 per cent of the year – up from 86 per cent annually today – by 2021.
The municipality plans to have seven mobile air-monitoring stations by 2020 to capture more accurate data in hourly and daily trends of pollution.
These will be on the Palm Jumeirah, Al Qusais, Muhaisnah, Rashidiyah, Al Wasl, Al Quoz and Dubai Investment Park.
“It will allow real-time responding for emergency cases,” said Khaldoon Al Daraji, first environment safety officer at the municipality.
“We’re in a good position except for the cases that are out of our hands, such as sandstorms.
“Sandstorms are our main concern because the UAE is just a receiver.
“The hotspots are Iran, Saudi Arabia and southern Iraq, but we’re working hard with the region to reduce the cycle of sandstorm generation.”
Mr Al Daraji said monitoring as it stood covered 47 per cent of Dubai.
There are 12 fixed stations in the emirate, but Dubai also receives information from monitors belonging to other entities.
“There are 25 stations in total,” Mr Al Daraji said.
“We added new technology and equipment used for the first time for the detection of heavy metals.
“A hundred parameters can be detected but we want to expand it to make sure that the data captured can allow a baseline study in some areas to ensure they are well positioned.”
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
TRAINING FOR TOKYO
A typical week's training for Sebastian, who is competing at the ITU Abu Dhabi World Triathlon on March 8-9:
- Four swim sessions (14km)
- Three bike sessions (200km)
- Four run sessions (45km)
- Two strength and conditioning session (two hours)
- One session therapy session at DISC Dubai
- Two-three hours of stretching and self-maintenance of the body
ITU Abu Dhabi World Triathlon
For more information go to www.abudhabi.triathlon.org.
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The specs: 2019 Haval H6
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Transmission: Seven-speed automatic
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
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At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
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