Though foreign investors have slowly started coming back to the region, there still exists a 40-50 percent discount between the Middle East markets and that of the emerging economies, mainly the BRIC nations, said Zin Bekkali. “BRIC is still beautiful, the fundamentals are similar to the region but it has got expensive now. So that valuation gap has to bridge and the discounts will disappear,” said Bekkali, who heads the asset manager focused on the Middle East, Central Asia and Africa. The MSCI Emerging stocks Index, gained more than 78 percent in 2009, significantly outperforming the MSCI Arabian Markets Index, which rose only around 22...
China’s agency overseeing big state-owned businesses has received plans from 78 state companies spelling out how they intend to sell out of the nation’s heady property market, according to sources. The China Securities Journal also reported that the state-owned Assets Supervision and Administration Commission (SASAC) was compiling a general plan to achieve the divestment, intended to help cool fast-rising real estate prices. “In the specific implementation, divestment from commercial real estate will come first,” said the newspaper, citing an interview with an unidentified SASAC official. But the official said asset sales could be com...
The World Bank is set to approve a controversial $3.75bn loan to help South African state utility Eskom develop a coal-fired power plant despite objections from the US and environmental groups. Eskom has argued it has no immediate alternative but to develop the 4,800-megawatt Medupi coal-fired plant in the northern Limpopo region to ease chronic power shortages in South Africa and ensure power supplies to neighbouring states. While $3bn of the loan will fund the bulk of the coal-fired plant, the remainder of the financing will go toward renewables and energy efficiency projects. “We believe this project is important for South Africa and Sou...
The World Bank stepped up lending in July 2008 at the request of member countries as demand from developing countries increased in the face of a worsening world recession and sharp drop in global trade. The bulk of the lending since the onset of the crisis in 2008, about $60.3bn, was to middle-income countries, which struggled to borrow on global financial markets. Typical lending for these countries had averaged about $15bn a year before the crisis. Meanwhile, loans and grants through the bank’s fund for the world’s poorest countries reached $21.2bn during the crisis. This compares to about $12bn a year prior to the crisis. Kyle Peters, ...
The US should consider raising taxes to help bring deficits under control and may need to consider a European-style value-added tax, White House adviser Paul Volcker has announced. Volcker, answering a question from the audience at a New York Historical Society event, said the value-added tax “was not as toxic an idea” as it has been in the past and also said a carbon or other energy-related tax may become necessary. Though he acknowledged that both were still unpopular ideas, he said getting entitlement costs and the US budget deficit under control may require such moves. “If at the end of the day we need to raise taxes, we should rais...
Southeast Asian economies will grow up to 5.6 percent this year but the expansion could be jeopardised if economic stimulus is withdrawn too early, according to a report by a regional body. Nevertheless, the governments of the 10-member Association of Southeast Asian Nations (ASEAN) need to design an orderly exit strategy to show that they have inflation expectations under control, said the latest draft of the ASEAN Surveillance Report. “Following the pace of growth in Asia, the ASEAN economy will grow by about 4.9 percent to 5.6 percent in 2010 with ASEAN economies recording moderate to strong growth,” it said. The report was presented a...
China’s increasing regional influence will keep Asian governments from pressuring the world’s fastest growing economy into letting its currency strengthen for fear of economic or political repurcussion. China has repeatedly said a decision on unshackling the yuan would depend on domestic conditions, after effectively pegging it to the US dollar for the past 20 months, even while it is under threat by Washington of being labled a “currency manipulator” in April. Policymakers from Bangkok to Tokyo told Reuters they are unwilling to challenge China on its currency, giving Beijing some diplomatic breathing room in the face of pressure fro...
Taiwan has leveraged its goal of a landmark trade deal with China to open talks with Japan, the US and other powers on free trade deals expected to boost the long-isolated island economy, officials have declared. Appealing to countries that have been barred by Taiwan’s political rival China from signing FTAs with the island, Taiwan has hinted to wary foreign governments that Beijing is unlikely to protest once the two sides sign their own trade deal. Taiwan has talked to Japan, the US and Singapore, with Europe and the Association of Southeast Asian Nations also on the list, Hu Chung-ying, deputy minister of the Council for Economic Plannin...
The Dubai government unveiled plans to recapitalise its indebted Dubai World flagship and repay Nakheel bonds in full, injecting what it said was $9.5bn in new funding, but without new aid from Abu Dhabi. In a statement, the government said $5.7bn in remaining funds from a loan made by Abu Dhabi would provide the lion’s share of the overall $9.5bn and would also include what it called “internal Dubai government resources”. “There is no new money from Abu Dhabi,” said a government official on a conference call. “This proposal is based on amounts remaining from the loans provided previously by the government of Abu Dhabi and from in...
Here and there around the world, governments are urging central banks to ease the pain of belt-tightening – and ward off the risk of an economic relapse – by taking their time to shrink balance sheets that have billowed during the financial crisis. The risk for markets is clear: if supine central banks are unwilling to stand up to domineering politicians, investors will take fright at the threat of inflation and bid up interest rates, short-circuiting the very recovery that governments crave. Yet it’s fair to ask in the light of experience whether the conventional wisdom is right that independence is the be-all and end-all for a central...