Investors cheered by the sharp rebound of UAE stocks on Thursday should brace themselves for more ups and downs until the bottom for the oil market becomes clearer, fund managers said.
“One thing I am sure of for next week is that the volatility will be there,” said Sebastien Henin, the head of asset management at the Abu Dhabi-based investment firm The National Investor.
“In the past week we have had some factors that have affected this volatility, like margin calls, which won’t be here next week,” he added. “I think the volatility will go down, but it might take a couple of weeks for things to stabilise. Markets should go up and down until a floor for oil is found. The market will trade both ways.”
Dubai's main benchmark index rallied 13 per cent on Thursday, its biggest jump to date, while Abu Dhabi's main equities gauge, the ADX General Index increased by 6.7 per cent, its biggest gain since 2009. The DFM General Index had shed 14 per cent since the beginning of the week before Thursday's rebound, and more than Dh60 billion was wiped off the market value of the country's equities in the same period. That drop came as Brent crude extended losses to levels not reached since 2009 as the cost of a barrel declined below $60.
The UAE is the world's eighth-biggest oil producer and the Federal Government funds more than 60 per cent of its budget from crude exports. The drop in oil, which has shed 45 per cent of its value this year, comes amid increasing production in countries such as the United States and waning demand amid global economic uncertainty.
The Energy Minister, Suhail Al Mazrouei, said on Tuesday that the country could cope with the drop in oil prices, and that the large fiscal reserves that the UAE has built up would allow it to keep spending on development projects in coming years.
“Thankfully the environment is very different from 2008,” said Mr Henin. “There is consensus in the market that the governments will not reduce spending. We had some calls with some prospective clients in Europe. They are contemplating the idea of allocating money to the region. Before, even if our prospects were very positive in terms of visibility and fundamentals of the region, they were not comfortable with one point, which was valuations.”
After the recent drop, the price-to-earnings ratio, a measure of gauging the cheapness of stocks, has dropped in line with other emerging markets. The Standard & Poor's/IFC Global United Arab Emirates Price Index, a measure of equities in Dubai and Abu Dhabi, now trades at a forward multiple of 10.1 times earnings compared to 10.6 for the MSCI Emerging Markets Index. The MSCI AWCI Index, which tracks stocks in the developed world and emerging markets, trades at a multiple of 14.3 times earnings.
Still, despite the attractive valuations, other global factors, such as Russia’s economic meltdown, might affect the direction of UAE stocks this week, even after the US Federal Reserve said it was not in a rush to raise short-term interest rates. Low interest rates on the dollar typically give investors more appetite for investing in riskier emerging-market assets.
mkassem@thenational.ae
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IF YOU GO
The flights: FlyDubai offers direct flights to Catania Airport from Dubai International Terminal 2 daily with return fares starting from Dh1,895.
The details: Access to the 2,900-metre elevation point at Mount Etna by cable car and 4x4 transport vehicle cost around €57.50 (Dh248) per adult. Entry into Teatro Greco costs €10 (Dh43). For more go to www.visitsicily.info
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2070km to run
38 days
273,600 calories consumed
28kg of fruit
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45 pairs of running shoes
1 yoga matt
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The Melbourne Mercer Global Pension Index
The Melbourne Mercer Global Pension Index
Mazen Abukhater, principal and actuary at global consultancy Mercer, Middle East, says the company’s Melbourne Mercer Global Pension Index - which benchmarks 34 pension schemes across the globe to assess their adequacy, sustainability and integrity - included Saudi Arabia for the first time this year to offer a glimpse into the region.
The index highlighted fundamental issues for all 34 countries, such as a rapid ageing population and a low growth / low interest environment putting pressure on expected returns. It also highlighted the increasing popularity around the world of defined contribution schemes.
“Average life expectancy has been increasing by about three years every 10 years. Someone born in 1947 is expected to live until 85 whereas someone born in 2007 is expected to live to 103,” Mr Abukhater told the Mena Pensions Conference.
“Are our systems equipped to handle these kind of life expectancies in the future? If so many people retire at 60, they are going to be in retirement for 43 years – so we need to adapt our retirement age to our changing life expectancy.”
Saudi Arabia came in the middle of Mercer’s ranking with a score of 58.9. The report said the country's index could be raised by improving the minimum level of support for the poorest aged individuals and increasing the labour force participation rate at older ages as life expectancies rise.
Mr Abukhater said the challenges of an ageing population, increased life expectancy and some individuals relying solely on their government for financial support in their retirement years will put the system under strain.
“To relieve that pressure, governments need to consider whether it is time to switch to a defined contribution scheme so that individuals can supplement their own future with the help of government support,” he said.
'Gehraiyaan'
Director:Shakun Batra
Stars:Deepika Padukone, Siddhant Chaturvedi, Ananya Panday, Dhairya Karwa
Rating: 4/5
Cry Macho
Director: Clint Eastwood
Stars: Clint Eastwood, Dwight Yoakam
Rating:**
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
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.
Fanney Khan
Producer: T-Series, Anil Kapoor Productions, ROMP, Prerna Arora
Director: Atul Manjrekar
Cast: Anil Kapoor, Aishwarya Rai, Rajkummar Rao, Pihu Sand
Rating: 2/5
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
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
MATCH INFO
Fixture: Ukraine v Portugal, Monday, 10.45pm (UAE)
TV: BeIN Sports
PROFILE OF SWVL
Started: April 2017
Founders: Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh
Based: Cairo, Egypt
Sector: transport
Size: 450 employees
Investment: approximately $80 million
Investors include: Dubai’s Beco Capital, US’s Endeavor Catalyst, China’s MSA, Egypt’s Sawari Ventures, Sweden’s Vostok New Ventures, Property Finder CEO Michael Lahyani
'Moonshot'
Director: Chris Winterbauer
Stars: Lana Condor and Cole Sprouse
Rating: 3/5
All the Money in the World
Director: Ridley Scott
Starring: Charlie Plummer, Mark Wahlberg, Michelle Williams, Christopher Plummer
Four stars
Specs
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