Stock markets around the world and the price of oil tumbled yesterday as concerns over sovereign debt defaults in the US and the euro zone continued to worry investors.
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The price of gold, meanwhile, soared past US$1,600 for the first time as the same investors sought a safe haven from the global turmoil.
"There's a battle taking place in investors' minds," said Henk Potts, a market strategist at Barclays Wealth.
Despite improving corporate earnings, "you've got the dark clouds of a difficult macro-environment, the euro-zone debt crisis and worries about the creditworthiness of the US and the potential of default", he said.
Most Gulf markets ended lower as the negative sentiment soured regional investment appetite.
European stock markets took a battering after stress tests to the EU's banking system failed to ease concerns the region's debt crisis would worsen.
The Stoxx Europe 600 Banks Index dropped to a two-year low yesterday, with banking stocks among the worst performers.
European leaders are holding a special meeting this week in an effort to stem the debt crisis.
Greece, Portugal and Ireland have already required financial bailouts to avert risks of defaulting on government debts. Eight out of 90 banks in the EU failed stress tests, the European Banking Authority said after the close of trading on Friday.
But the tests have been criticised as not being vigorous enough because regulators did not include the potential impact of a Greek default in the assessment.
The euro yesterday weakened to a record low against the Swiss franc, while the cost of insuring European sovereign debt rose to a new high.
In the US, markets also opened lower as the deadline for a government debt deal nears with no resolution on the horizon. Politicians remain divided over the deal to raise the government's debt ceiling.
In early trading the Dow Jones Industrial Average was down more than 139 points, or 1.1 per cent, at 12,340.05. The Standard & Poor's 500 Index was down 1.06 per cent, at 1,302.13. The Nasdaq was down 1.18 per cent, at 2,756.94.
Brent crude prices fell for a third day in a row to US$116.45 a barrel.
Gold had its longest winning streak since 1980 as investors piled into the haven asset. The price of gold soared as high as $1,605.25 per troy ounce, having risen 6.24 per cent since the start of the month.
Negative sentiment from the EU and US also weighed on local markets yesterday, with the Abu Dhabi and Dubai bourses among those closing lower.
"The markets are under pressure, and the sentiment from Europe and US is not helping," said Mohammed Ali Yasin, the chief investment officer at CAPM Investment in Abu Dhabi. "Across the board we see a lack of appetite for buying."
The darkening outlook came as a Nomura report warned that sovereign debt woes in the EU risked spilling over to hurt banks and sovereign wealth funds in the Middle East and North Africa (Mena) region.
About 10 per cent of the foreign exposure of periphery European and French banks related to UAE lenders, estimated Nomura. Other exposure ranged from more than 90 per cent in the case of Moroccan banks to 40 per cent for Saudi Arabian lenders.
"The financial sector linkages could be the most immediate and if there's a significant impact on the euro it could impact sovereign wealth funds in the Gulf," said Ann Wyman, an analyst at Nomura.
The Mena region's banks were "meaningfully" exposed to Europe, the Nomura report said.
If linked European banks suffered either a significant risk event in Europe or balance-sheet impairment due to distressed sovereign debt conditions, the risk they would pull back on exposure to other areas including North Africa would increase, it said.
"This will leave most of the North African countries particularly exposed," Nomura said.
An assumption could be made that sovereign wealth funds had about 30 per cent exposure to the euro zone, it added, while other risks to the region stemmed from potential downward pressure on oil prices and lower trade and tourism.
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The bio
Favourite book: Kane and Abel by Jeffrey Archer
Favourite quote: “The world makes way for the man who knows where he is going.” - Ralph Waldo Emerson, American essayist
Favourite Authors: Arab poet Abu At-Tayyib Al-Mutanabbi
Favourite Emirati food: Luqaimat, a deep-fried dough soaked in date syrup
Hobbies: Reading and drawing
UAE%20ILT20
%3Cp%3E%3Cstrong%3EMarquee%20players%3A%3C%2Fstrong%3E%3Cbr%3EMoeen%20Ali%2C%20Andre%20Russell%2C%20Dawid%20Malan%2C%20Wanindu%20Hasiranga%2C%20Sunil%20Narine%2C%20Evin%20Lewis%2C%20Colin%20Munro%2C%20Fabien%20Allen%2C%20Sam%20Billings%2C%20Tom%20Curran%2C%20Alex%20Hales%2C%20Dushmantha%20Chameera%2C%20Shimron%20Hetmyer%2C%20Akeal%20Hosein%2C%20Chris%20Jordan%2C%20Tom%20Banton%2C%20Sandeep%20Lamichhane%2C%20Chris%20Lynn%2C%20Rovman%20Powell%2C%20Bhanuka%20Rajapaksa%2C%20Mujeeb%20Ul%20Rahman%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInternational%20players%3A%3C%2Fstrong%3E%3C%2Fp%3E%0A%3Cp%3ELahiru%20Kumara%2C%20Seekugge%20Prassanna%2C%20Charith%20Asalanka%2C%20Colin%20Ingram%2C%20Paul%20Stirling%2C%20Kennar%20Lewis%2C%20Ali%20Khan%2C%20Brandon%20Glover%2C%20Ravi%20Rampaul%2C%20Raymon%20Reifer%2C%20Isuru%20Udana%2C%20Blessing%20Muzarabani%2C%20Niroshan%20Dickwella%2C%20Hazaratullah%20Zazai%2C%20Frederick%20Klassen%2C%20Sikandar%20Raja%2C%20George%20Munsey%2C%20Dan%20Lawrence%2C%20Dominic%20Drakes%2C%20Jamie%20Overton%2C%20Liam%20Dawson%2C%20David%20Wiese%2C%20Qais%20Ahmed%2C%20Richard%20Gleeson%2C%20James%20Vince%2C%20Noor%20Ahmed%2C%20Rahmanullah%20Gurbaz%2C%20Navin%20Ul%20Haq%2C%20Sherfane%20Rutherford%2C%20Saqib%20Mahmood%2C%20Ben%20Duckett%2C%20Benny%20Howell%2C%20Ruben%20Trumpelman%3C%2Fp%3E%0A
Election pledges on migration
CDU: "Now is the time to control the German borders and enforce strict border rejections"
SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom"
Profile
Co-founders of the company: Vilhelm Hedberg and Ravi Bhusari
Launch year: In 2016 ekar launched and signed an agreement with Etihad Airways in Abu Dhabi. In January 2017 ekar launched in Dubai in a partnership with the RTA.
Number of employees: Over 50
Financing stage: Series B currently being finalised
Investors: Series A - Audacia Capital
Sector of operation: Transport
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Need to know
The flights: Flydubai flies from Dubai to Kilimanjaro airport via Dar es Salaam from Dh1,619 return including taxes. The trip takes 8 hours.
The trek: Make sure that whatever tour company you select to climb Kilimanjaro, that it is a reputable one. The way to climb successfully would be with experienced guides and porters, from a company committed to quality, safety and an ethical approach to the mountain and its staff. Sonia Nazareth booked a VIP package through Safari Africa. The tour works out to $4,775 (Dh17,538) per person, based on a 4-person booking scheme, for 9 nights on the mountain (including one night before and after the trek at Arusha). The price includes all meals, a head guide, an assistant guide for every 2 trekkers, porters to carry the luggage, a cook and kitchen staff, a dining and mess tent, a sleeping tent set up for 2 persons, a chemical toilet and park entrance fees. The tiny ration of heated water provided for our bath in our makeshift private bathroom stall was the greatest luxury. A standard package, also based on a 4-person booking, works out to $3,050 (Dh11,202) per person.
When to go: You can climb Kili at any time of year, but the best months to ascend are January-February and September-October. Also good are July and August, if you’re tolerant of the colder weather that winter brings.
Do not underestimate the importance of kit. Even if you’re travelling at a relatively pleasant time, be geared up for the cold and the rain.
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
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NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
2019 Asian Cup final
Japan v Qatar
Friday, 6pm
Zayed Sports City Stadium, Abu Dhabi
Ain Dubai in numbers
126: The length in metres of the legs supporting the structure
1 football pitch: The length of each permanent spoke is longer than a professional soccer pitch
16 A380 Airbuses: The equivalent weight of the wheel rim.
9,000 tonnes: The amount of steel used to construct the project.
5 tonnes: The weight of each permanent spoke that is holding the wheel rim in place
192: The amount of cable wires used to create the wheel. They measure a distance of 2,4000km in total, the equivalent of the distance between Dubai and Cairo.
Your rights as an employee
The government has taken an increasingly tough line against companies that fail to pay employees on time. Three years ago, the Cabinet passed a decree allowing the government to halt the granting of work permits to companies with wage backlogs.
The new measures passed by the Cabinet in 2016 were an update to the Wage Protection System, which is in place to track whether a company pays its employees on time or not.
If wages are 10 days late, the new measures kick in and the company is alerted it is in breach of labour rules. If wages remain unpaid for a total of 16 days, the authorities can cancel work permits, effectively shutting off operations. Fines of up to Dh5,000 per unpaid employee follow after 60 days.
Despite those measures, late payments remain an issue, particularly in the construction sector. Smaller contractors, such as electrical, plumbing and fit-out businesses, often blame the bigger companies that hire them for wages being late.
The authorities have urged employees to report their companies at the labour ministry or Tawafuq service centres — there are 15 in Abu Dhabi.
