US Equity markets in negative territory YTD after October mauling…

Global Markets Update:
Global stock markets took another dive last week: the S&P 500 lost almost 4% amid lackluster Q3 corporate earnings reports, especially for industrial, and tumbling new home sales, which point to weaker growth. Contagion spread from Wall Street to European markets that were already wobbly due to the Italian budget crisis and markedly declining economic activity. The notable exception was the UK’s FTSE 100 which gained 1.0% thanks to the depreciation of the GBP. But the sharpest downturn was in Japan (the Nikkei 225 dropped 6.0%) and most of Asia, with the exception of China, where the Chinese government assured credit support to private enterprises. The MSCI EM continued its slide started in mid-September and regional markets were no exception to the global dark mood. The flight to safety lifted US Treasuries prices — thereby reversing their downward trend — and to a lesser extent the price of gold, which consolidated the gains of the past few weeks. In currency markets the USD and the JPY gained vis à vis most other major currencies, supported by “safe-haven” demand. The euro suffered from negative macro news and Italy-related concerns. Oil prices recorded heavy losses especially on Tuesday when Saudi Arabia promised to make up for any supply shortfalls.

MENA News:
Bahrain’s foreign minister disclosed that the planned security alliance (Middle East Strategic Alliance or MESA, which also includes Egypt and Jordan) will be active by next year.
Iraq central bank announced foreign reserves in excess of USD 60bn, thanks to an improvement in oil prices amidst supportive monetary and financial policy.
Kuwait is nationalizing public sector jobs: plan is to replace all expats with citizens in administrative, media, PR, IT, development, follow-up and statistics jobs within five years, 95% in scientific, financial, economic and commercial jobs and 80% in craft jobs.
Kuwait signed a MoU with the Chinese oil major Sinopec to build a refinery in the south of China.
The Future Investment Initiative conference held in Saudi Arabia last week saw deals worth USD 56bn being signed. Majority of the deals were oil and gas sector-based with Aramco, and US companies accounted for most of the deals signed in the conference.
UAE and Omani CEOs are more optimistic about the future prospects of their businesses than their global counterparts, according to the annual global KPMG CEO Outlook. As many as four in ten UAE and Omani CEOs say their biggest challenge in meeting the needs of millennials is to understand how the needs of this generation differ from those of older consumers.
Middle East hotel occupancy levels dropped 7% to 59.8% in September and the average daily rate slipped 18% to USD 124.49, resulting in a 23.7% dip in revenue per available room (USD 74.47), according to STR data.

UAE News:
Non-oil trade in Abu Dhabi increased by 24.2% YoY to AED 14.08bn in August, with non-oil exports at AED 2bn and non-oil imports at AED 1.8bn. US topped the list of Abu Dhabi’s non-oil exporters (AED 1.61bn), followed by Saudi Arabia.
Abu Dhabi’s trade of pearls and other gemstones rose 7.1% YoY to AED 4.5bn in January-August this year; this accounts for 57.6% of total trade in the emirate.
UAE’s Federal Tax Authority will introduce a new biannual tax period next month for certain sectors: this will include some small businesses, commercial real estate owners, and board members.
DP World reported gross container volumes growing at 2.6% YoY on a reported basis and 3.7% on a like-for-like basis in the first nine months of this year to 53.6mn TEU across its global portfolio.
About 26 new initiatives have been announced to ensure the happiness and welfare of senior Emiratis: this includes keeping a database of seniors, training healthcare providers, home care mobile units, housing benefits, and financial protection among others.
The MBRF of Dubai SME has signed a MoU with RAKBANK to facilitate SME access to competitive financing solutions. The MoU will enable Dubai SME members to secure financing at preferential rates and also take advantage of RAKBANK’s suite of Business Banking products and services including a business current account with no minimum balance required or maintenance fees.

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SOURCES:
Nasser Saidi & Associates
CPI Financial