World stock markets rallied as Chinese manufacturing growth helped push oil to its highest since November and Gulf markets braced for a new wave of foreign capital.
The Gulf's industrial titans recorded some of the biggest gains in the region on news that manufacturing in China grew for a third month, bolstering hopes that the worst of the global financial crisis is over and stoking demand for commodities from Doha to Riyadh.
Saudi Basic Industries Corporation, the world's largest chemical maker by market value, gained 5.2 per cent while Industries Qatar, the country's largest public company, added 1.5 per cent.
The rising price of oil and renewed investor sentiment towards emerging markets also combined to drive Gulf stocks higher, amid fears that the dollar may no longer be a safe haven for those seeking to weather the global financial storm.
"If China, which imports a huge amount of oil from the GCC, increases its demand, that will certainly support fundamentals in the GCC. It wouldn't surprise me if petrochemicals benefited especially," said James Reeve, the senior economist at the Samba Financial Group.
The Dubai Financial Market General Index hit a five-month high, finishing 2.2 per cent higher after rising for the fifth consecutive trading session. The Abu Dhabi Securities Exchange General Index advanced 0.2 per cent, the fourth consecutive increase. The Kuwait Stock Exchange Index gained 1.2 per cent and Saudi's Tadawul rose 1.81 per cent. The Doha Securities Market Index climbed 1.4 per cent and the Bahrain All Share Index increased 0.6 per cent. Oman recorded the only decline as shares fell a marginal 0.1 per cent.
"People are bullish on emerging market equities now. Treasuries have lost a bit of their attractiveness in view of what the Fed is up to with its quantitative easing. There is a fear that the Fed is going too far and creating inflation," said Tim Fox, the chief economist at Emirates NBD.
Treasuries fell yesterday, reducing demand for the safety of government debt . Ten and 30-year securities led the declines as the MSCI World Index gained 1.57 per cent. China's Shanghai Composite Index advanced 3.4 per cent yesterday and Russia's RTS Index increased 7.34 per cent. Europe's Dow Jones Stoxx 600 Index rose by 2 per cent.
The price of crude oil climbed to its highest yesterday since November, reaching US$68.18 on new evidence that China's economy, and perhaps other emerging markets, may be rebounding from the effects of the global economic slowdown.
Yesterday's gain extended crude's 30 per cent rally last month, its biggest monthly increase in a decade. Oil has rebounded from below $33 a barrel in late December, after tumbling from a record $147 last July. The price recovery gave OPEC enough confidence to leave its output target unchanged at its meeting last week.
"The price of oil - which has had huge gains in the past couple of days - has reflected positively on our capital markets. We have seen more buying, more people are taking the chance, putting more liquidity in," said Ayman el Saheb, the director of operations at Darahem Financial Brokerage.
The Purchasing Managers Index in China remained in expansionary territory for the third straight month, raising hopes that the massive government fiscal stimulus is succeeding in boosting Chinese economic growth and with it global demand for commodities, such as oil.
"There is more risk appetite now. I think the emerging markets - particularly the ones who can benefit from the commodity boom - are seen as the areas where growth can evolve more quickly, partly because they were a little more sheltered from the global market storm," said Mr Fox.
The MSCI Emerging Market Index climbed 2.7 per cent yesterday in London to the highest level in eight months, according to Bloomberg. The index has jumped 55 per cent during the the past three months, the steepest rise since its creation in 1987. During the same period, the MSCI's developed market stock index rose only 29 per cent.
Analysts say the Dubai stock market could still outperform other emerging markets this year, as it was harder hit than than other emerging markets last year, and has not rebounded as much as comparable markets during the past few months.
"Most of the GCC markets are fairly placed with the UAE yet to catch up in the rally act, and therefore offering potential going forward," said MR Raghu, the head of research at the Kuwaiti investment firm Markaz.
Mr el Saheb cautioned that although the recent rally has been a boon, local traders should remain wary of gains caused by an influx of international money.
"It is important for us to know who exactly is driving this buying spree. Historically, foreign institutions used to come in fully loaded, then take the market up very fast but they exit just as fast," he said.
tpantin@thenational.ae
How to vote
Canadians living in the UAE can register to vote online and be added to the International Register of Electors.
They'll then be sent a special ballot voting kit by mail either to their address, the Consulate General of Canada to the UAE in Dubai or The Embassy of Canada in Abu Dhabi
Registered voters mark the ballot with their choice and must send it back by 6pm Eastern time on October 21 (2am next Friday)
MATCH INFO
CAF Champions League semi-finals first-leg fixtures
Tuesday:
Primeiro Agosto (ANG) v Esperance (TUN) (8pm UAE)
Al Ahly (EGY) v Entente Setif (ALG) (11PM)
Second legs:
October 23
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
Dirham Stretcher tips for having a baby in the UAE
Selma Abdelhamid, the group's moderator, offers her guide to guide the cost of having a young family:
• Buy second hand stuff
They grow so fast. Don't get a second hand car seat though, unless you 100 per cent know it's not expired and hasn't been in an accident.
• Get a health card and vaccinate your child for free at government health centres
Ms Ma says she discovered this after spending thousands on vaccinations at private clinics.
• Join mum and baby coffee mornings provided by clinics, babysitting companies or nurseries.
Before joining baby classes ask for a free trial session. This way you will know if it's for you or not. You'll be surprised how great some classes are and how bad others are.
• Once baby is ready for solids, cook at home
Take the food with you in reusable pouches or jars. You'll save a fortune and you'll know exactly what you're feeding your child.
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
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%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3ELuv%20Ranjan%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%20%3C%2Fstrong%3ERanbir%20Kapoor%2C%20Shraddha%20Kapoor%2C%20Anubhav%20Singh%20Bassi%20and%20Dimple%20Kapadia%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%203%2F5%3C%2Fp%3E%0A
MATCH INFO
Uefa Champions League final:
Who: Real Madrid v Liverpool
Where: NSC Olimpiyskiy Stadium, Kiev, Ukraine
When: Saturday, May 26, 10.45pm (UAE)
TV: Match on BeIN Sports
How to get exposure to gold
Although you can buy gold easily on the Dubai markets, the problem with buying physical bars, coins or jewellery is that you then have storage, security and insurance issues.
A far easier option is to invest in a low-cost exchange traded fund (ETF) that invests in the precious metal instead, for example, ETFS Physical Gold (PHAU) and iShares Physical Gold (SGLN) both track physical gold. The VanEck Vectors Gold Miners ETF invests directly in mining companies.
Alternatively, BlackRock Gold & General seeks to achieve long-term capital growth primarily through an actively managed portfolio of gold mining, commodity and precious-metal related shares. Its largest portfolio holdings include gold miners Newcrest Mining, Barrick Gold Corp, Agnico Eagle Mines and the NewMont Goldcorp.
Brave investors could take on the added risk of buying individual gold mining stocks, many of which have performed wonderfully well lately.
London-listed Centamin is up more than 70 per cent in just three months, although in a sign of its volatility, it is down 5 per cent on two years ago. Trans-Siberian Gold, listed on London's alternative investment market (AIM) for small stocks, has seen its share price almost quadruple from 34p to 124p over the same period, but do not assume this kind of runaway growth can continue for long
However, buying individual equities like these is highly risky, as their share prices can crash just as quickly, which isn't what what you want from a supposedly safe haven.
if you go
The flights
The closest international airport to the TMB trail is Geneva (just over an hour’s drive from the French ski town of Chamonix where most people start and end the walk). Direct flights from the UAE to Geneva are available with Etihad and Emirates from about Dh2,790 including taxes.
The trek
The Tour du Mont Blanc takes about 10 to 14 days to complete if walked in its entirety, but by using the services of a tour operator such as Raw Travel, a shorter “highlights” version allows you to complete the best of the route in a week, from Dh6,750 per person. The trails are blocked by snow from about late October to early May. Most people walk in July and August, but be warned that trails are often uncomfortably busy at this time and it can be very hot. The prime months are June and September.
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
THE SPECS
Engine: 1.5-litre
Transmission: 6-speed automatic
Power: 110 horsepower
Torque: 147Nm
Price: From Dh59,700
On sale: now
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Bio:
Favourite Quote: Prophet Mohammad's quotes There is reward for kindness to every living thing and A good man treats women with honour
Favourite Hobby: Serving poor people
Favourite Book: The Alchemist by Paulo Coelho
Favourite food: Fish and vegetables
Favourite place to visit: London
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
