http://www.tradeflow21.com Sat, 04 Feb 2012 20:29:44 +0000 en hourly 1 http://wordpress.org/?v=3.0.1 http://www.tradeflow21.com/2008/09/gulf-equities-down-but-not-out-idiosyncrasies-aside/ http://www.tradeflow21.com/2008/09/gulf-equities-down-but-not-out-idiosyncrasies-aside/#comments Thu, 18 Sep 2008 12:44:26 +0000 admin http://tradeflow21.com/2008/09/18/gulf-equities-down-but-not-out-idiosyncrasies-aside/ In consecutive days the FT has reported on the situation for equities in the Gulf region (see clipped excerpts below). In spite of the U.S. induced credit withdrawal felt around the world, the fact remains that the Gulf is liquid in every sense and can intervene via SWFs, if truly need be, without longer term repercussions, unlike the funny money show on front stage elsewhere around the world.

clipped from www.ft.com Mideast states urged to prop up stocks Middle East governments and their sovereign wealth funds were yesterday urged to intervene in their domestic stock markets by a leading Gulf banker following sharp declines in the region’s equity markets. There are fears that, despite the unprecedented oil boom, the Gulf could be heading towards a dramatic correction, similar to 2006 when hundreds of billions of dollars were wiped off the region’s equity markets. On Tuesday the Kuwait Investment Authority, Kuwait’s $200bn sovereign wealth fund, started buying into the country’s stock exchange, which was up about 20 per cent in the first half of the year, but has since fallen 21 per cent. clipped from www.ft.com Flight of foreign capital adds to woes So much for decoupling. The MSCI Gulf index is down nearly a third this year, and paradoxically, the foreign capital that was supposed to decrease the volatility of regional equity markets has been blamed for much of the slump.

]]> http://www.tradeflow21.com/2008/09/gulf-equities-down-but-not-out-idiosyncrasies-aside/feed/ 0 http://www.tradeflow21.com/2008/05/hedge-funds-sought-in-middle-east-setting-up-shop-while-walking-a-fine-line-in-longshort/ http://www.tradeflow21.com/2008/05/hedge-funds-sought-in-middle-east-setting-up-shop-while-walking-a-fine-line-in-longshort/#comments Wed, 07 May 2008 15:03:58 +0000 admin http://tradeflow21.com/2008/05/07/hedge-funds-sought-in-middle-east-setting-up-shop-while-walking-a-fine-line-in-longshort/ The Financial Times reports of growing demand for regional hedge funds in the Middle East and greater capabilities to mitigate risk of traditionally long-only investments in the region given the inability to short stocks. Ali al-Shihabi, chief executive of Rasmala Investments, says, “There is no such thing as a regional hedge fund – it is a marketing gimmick,” referring to the difficulties of shorting stocks, along with restrictions on leverage — both matters of which fall under specific limitations of Islamic Finance. Nevertheless, clients are demanding not only better access to regional investments, but also better risk management given inherent volatility of the developing capital markets, resulting in rapid booms and busts. In fact, FT says the Dubai International Financial Centre is responding to the louder calls for new regulations of the finance industry and plans to launch derivative products on some regional stocks in September. In the meantime, regional hedge funds are said to be increasingly utilizing synthetic OTC products (such as swaps) already heavily used by leading global investment banks, some of which are setting up shop in the region. Regional funds such as Ajeej Capital of Saudi Arabia and Evolvence Capital of Dubai are even finding the likes of Deutsche Bank, Merrill Lynch and Credit Suisse as trading counterparties, says FT.

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