Monthly Archives: October 2014

Oil slips to $86 on NY Ebola case, slowing growth

By Sam Wilkin

LONDON
Fri Oct 24, 2014 2:37pm IST

LONDON (Reuters) – Brent crude fell oil to around $86 a barrel on Friday after a confirmed case of Ebola in New York raised fears that travel restrictions could trim jet fuel demand, and poor economic growth expectations weighed on projected oil demand.
European equities and U.S. stock futures fell sharply on news that a doctor in New York City had been diagnosed with Ebola.The doctor, who had worked in West African countries afflicted by the deadly virus, was diagnosed after returning to New York.”Such news is not good for risk assets, with investors looking for a flight to safety. This could curb travel and that’s how it could feed through to the oil markets,” said Ben Le Brun, market analyst at OptionsXpress. Brent crude for December fell $1.02 a barrel to a low of $85.81 before recovering slightly to around $86 by 0835 GMT. U.S. December crude fell 70 cents to $81.39 a barrel.Economists anticipate subdued growth in China and the euro zone next year, though signals from India are more positive, according to a Reuters poll released on Friday.The gloomy outlook in two major oil consuming markets added to fears of slowing oil demand at a time of global oversupply.Manufacturers in China and the euro zone performed better than expected, according to purchasing managers’ surveys released on Thursday, but industrial growth in the United States fell to its slowest rate since July.Brent was on track to end the week flat, after four straight weeks of steep losses. The global benchmark rose $2.12 on Thursday on news that Saudi Arabia supplied less to the market in September.But many analysts thought that the market had overreacted to the news, given that overall Saudi production rose month-on-month, with unsupplied oil being placed in storage.”The reaction to the Saudi news was surprisingly high, and we may see a correction today,” said Bjarne Schieldrop, chief commodity analyst at SEB in Oslo.Saudi Arabia, the world’s top exporter, has previously sent signals it is comfortable with markedly lower oil prices and willing to maintain high supply levels to compete for market share.The Organization of the Petroleum Exporting Countries, of which Saudi Arabia is a leading member, will meet on Nov. 27 to review its output target for the first half of 2015. So far, only a minority of members have called for an output cut, including Libya. (Additional reporting by Jane Xie in Singapore; Editing by Christopher Johnson)
Source: Newsjyoti Bollywood

China economic reforms may result in $14.4 trillion GDP, growth at 6 percent – Asia Society report

Sweeping economic reform initiated by China President Xi Jinping in November 2013 marked a turning point for the world’s second biggest economy. If implemented fully, China’s potential GDP growth can be sustained at 6 percent through 2020. One risk: Falling short of that growth rate could result in growth at half that projection, or worse, leading to a new economic crisis, according to a new study.
Dan Rosen, founding partner, Rhodium Group
Dan Rosen, author of a report for the Asia Society Policy Institute, argues that China’s growth model is no longer working. The drivers that contributed to China’s post-1978 growth are weakening, with existing investments showing diminished returns and overall total-factor productivity, or TFP, falling. TFP is an economic term that broadly measures efficiency using input factors such as labor and capital. ”Demographic dividends propelled China through the 1980s, 1990s, and 2000s, but the labor force is now at its largest and is poised to shrink,” he writes.
Yet Rosen said China has not exhausted its growth potential. He forecasts decades of solid growth if President Xi can pull off bold economic reform. No small task.
“We conclude that the overhaul is well conceived and showing movement, and that if fully implemented can sustain growth at 6% through 2020,” Rosen told the Global Markets Forum. “Keeping GDP at or above 6% though 2020 delivers a $14.4 trillion Chinese GDP, which supports $10 trillion in two-way financial flows and a Chinese trade deficit thanks to greater imports. That’s great for the region and great for the global outlook.”
Rosen has been analyzing China’s economy for about two decades, first at the Peterson Institute, then at the White House/National Security Council and most recently at the Rhodium Group, a research and advisory group he co-founded.
“On the important elements, first is to streamline responsibility for implementing reform in the president’s hands — in Xi Jinping’s, ” he said. ”The previous, committee approach was no longer working,” he said. China’s leadership also needs “to redefine what functions government should and should not by playing.”
Rosen also identified three main drivers of past growth: capital stock deepening, labor growth and increases for total-factor productivity. “Capital growth can no longer deliver more than 4% annual boost today and 3% in 2020 at best. Labor force growth can’t do better than 0% in 2020. That leaves TFP. With reform, they can eke out another 3% in 2020 — so 6% potential GDP growth total,” he said.
Source: Newsjyoti Investments

China economic reforms may result in $14.4 trillion GDP, growth at 6 percent – Asia Society report

Sweeping economic reform initiated by China President Xi Jinping in November 2013 marked a turning point for the world’s second biggest economy. If implemented fully, China’s potential GDP growth can be sustained at 6 percent through 2020. One risk: Falling short of that growth rate could result in growth at half that projection, or worse, leading to a new economic crisis, according to a new study.
Dan Rosen, founding partner, Rhodium Group
Dan Rosen, author of a report for the Asia Society Policy Institute, argues that China’s growth model is no longer working. The drivers that contributed to China’s post-1978 growth are weakening, with existing investments showing diminished returns and overall total-factor productivity, or TFP, falling. TFP is an economic term that broadly measures efficiency using input factors such as labor and capital. ”Demographic dividends propelled China through the 1980s, 1990s, and 2000s, but the labor force is now at its largest and is poised to shrink,” he writes.
Yet Rosen said China has not exhausted its growth potential. He forecasts decades of solid growth if President Xi can pull off bold economic reform. No small task.
“We conclude that the overhaul is well conceived and showing movement, and that if fully implemented can sustain growth at 6% through 2020,” Rosen told the Global Markets Forum. “Keeping GDP at or above 6% though 2020 delivers a $14.4 trillion Chinese GDP, which supports $10 trillion in two-way financial flows and a Chinese trade deficit thanks to greater imports. That’s great for the region and great for the global outlook.”
Rosen has been analyzing China’s economy for about two decades, first at the Peterson Institute, then at the White House/National Security Council and most recently at the Rhodium Group, a research and advisory group he co-founded.
“On the important elements, first is to streamline responsibility for implementing reform in the president’s hands — in Xi Jinping’s, ” he said. ”The previous, committee approach was no longer working,” he said. China’s leadership also needs “to redefine what functions government should and should not by playing.”
Rosen also identified three main drivers of past growth: capital stock deepening, labor growth and increases for total-factor productivity. “Capital growth can no longer deliver more than 4% annual boost today and 3% in 2020 at best. Labor force growth can’t do better than 0% in 2020. That leaves TFP. With reform, they can eke out another 3% in 2020 — so 6% potential GDP growth total,” he said.
Source: Newsjyoti Investments

Strong dollar, weak oil and emerging markets growth

Many emerging economies have been banking on weaker currencies to revitalise economic growth.  Oil’s 25 percent fall in dollar terms this year should also help. The problem however is the dollar’s strength which is leading to a general tightening of monetary conditions worldwide, more so in countries where central banks are intervening to prevent their currencies from falling too much.
Michael Howell, managing director of the CrossBorder Capital consultancy estimates the negative effect of the stronger dollar on global liquidity (in simple terms, the amount of capital available for investment and spending) outweighs the positives from falling oil prices by a ratio of 10 to 1. Not only does it raise funding costs for non-U.S. banks and companies, it also usually forces other central banks to keep monetary policy tight, especially in countries with high inflation or external debt levels. Howell says:
If you get a strong dollar and intervention by EM cbanks what it means is monetary tightening…The big decision is: do they allow currencies to devalue or do they defend them? But when they use reserves to protect their currencies, there is an implicit policy tightening.
The tightening happens because central bank dollar sales tend to suck out supply of the local currency from markets, tightening liquidity.   That effectively drives up the cost of money, as banks and companies scramble for cash to meet their daily commitments.  Central banks can of course offset interventions via so-called sterilisations – for instance when they buy dollars to curb their currencies’ strength, they can issue bonds to suck up the excess cash from the market. To ease the tight money supply problem they can in theory print more cash to supply banks.  But while many emerging central banks did sterilise interventions in the post-crisis years when their currencies were appreciating, they are less likely to do so when they are trying to stem depreciation, says UBS strategist Manik Narain.  So what is happening is that (according to Narain):
Markets are forcing central banks into supporting growth or the currency. You absolutely have to sacrifice growth as we have seen in places like Turkey where liquidity has impacted the growth profile
The silver  lining could yet be oil.
Despite a clear economic recovery in the United States, real wages remain below pre-crisis levels, meaning the U.S. consumer has so far been reluctant to open his wallet too wide. So developing countries have been unable to significantly boost exports of goods and services.  The falling oil price could change that as it will improve household budgets in the United States hugely – one study from Citi estimates the global windfall so far at $660 billion, which includes a  $600 per-household bonus in the United States.  A separate study from Deutsche Bank says every one-cent drop in oil prices means a $1 billion annual decline in energy spending by Americans.
That cash may be used on consumer goods, including those imported from the developing world. Some fund managers are betting on that to happen
Source: Newsjyoti Investments

Strong dollar, weak oil and emerging markets growth

Many emerging economies have been banking on weaker currencies to revitalise economic growth.  Oil’s 25 percent fall in dollar terms this year should also help. The problem however is the dollar’s strength which is leading to a general tightening of monetary conditions worldwide, more so in countries where central banks are intervening to prevent their currencies from falling too much.
Michael Howell, managing director of the CrossBorder Capital consultancy estimates the negative effect of the stronger dollar on global liquidity (in simple terms, the amount of capital available for investment and spending) outweighs the positives from falling oil prices by a ratio of 10 to 1. Not only does it raise funding costs for non-U.S. banks and companies, it also usually forces other central banks to keep monetary policy tight, especially in countries with high inflation or external debt levels. Howell says:
If you get a strong dollar and intervention by EM cbanks what it means is monetary tightening…The big decision is: do they allow currencies to devalue or do they defend them? But when they use reserves to protect their currencies, there is an implicit policy tightening.
The tightening happens because central bank dollar sales tend to suck out supply of the local currency from markets, tightening liquidity.   That effectively drives up the cost of money, as banks and companies scramble for cash to meet their daily commitments.  Central banks can of course offset interventions via so-called sterilisations – for instance when they buy dollars to curb their currencies’ strength, they can issue bonds to suck up the excess cash from the market. To ease the tight money supply problem they can in theory print more cash to supply banks.  But while many emerging central banks did sterilise interventions in the post-crisis years when their currencies were appreciating, they are less likely to do so when they are trying to stem depreciation, says UBS strategist Manik Narain.  So what is happening is that (according to Narain):
Markets are forcing central banks into supporting growth or the currency. You absolutely have to sacrifice growth as we have seen in places like Turkey where liquidity has impacted the growth profile
The silver  lining could yet be oil.
Despite a clear economic recovery in the United States, real wages remain below pre-crisis levels, meaning the U.S. consumer has so far been reluctant to open his wallet too wide. So developing countries have been unable to significantly boost exports of goods and services.  The falling oil price could change that as it will improve household budgets in the United States hugely – one study from Citi estimates the global windfall so far at $660 billion, which includes a  $600 per-household bonus in the United States.  A separate study from Deutsche Bank says every one-cent drop in oil prices means a $1 billion annual decline in energy spending by Americans.
That cash may be used on consumer goods, including those imported from the developing world. Some fund managers are betting on that to happen
Source: Newsjyoti Investments

Measuring political risk in emerging markets

(Corrects to say EI Sturdza is UK investment firm, not Swiss)
Commerzbank analyst Simon Quijano-Evans recently analysed credit ratings for emerging market countries and concluded that there is a strong tendency to “under-rate” emerging economies – that is they are generally rated lower than developed market “equals” that have similar profiles of debt, investment or reform. The reason, according to Quijano-Evans, is that ratings assessments tend to be “blurred by political risk which is difficult to quantify and is usually higher in the developing world compared with richer peers.
However there are some efforts to measure political risks, and unfortunately for emerging economies, some of those metrics seem to indicate that such risk is on the rise. Risk consultancy Maplecroft which compiles a civil unrest index (CUI), says street protests, ethnic violence and labour unrest are factors that have increased chances of business disruption in emerging markets by 20 percent over the past three months. Such unrest as in Hong Kong recently, can be sudden, causing headaches for business and denting economic growth, Maplecroft says. Hong Kong where mass pro-democracy protests in the city-state’s central business district which shuttered big banks and triggered a 7 percent stock market plunge last month.
As a result, Hong Kong jumped to 70th place in the index from a relatively safe 132nd place in the CUI which analyses governance, political and civil rights and the frequency and severity of incidents to assess the current and future civil unrest picture.
Hong Kong performs comparatively well in the economic, social and rights factors in the CUI, but performs poorly for democratic governance, Maplecroft says:
The scale of the protests, which has cost retailers upwards of $283 million, has seen Hong Kong move from the ‘medium risk’ category to ‘high risk’. Beijing’s response will be key to determining whether the situation deteriorates further.”
Disease, global warming, economic disparities can also boost political risk. Ebola-ravaged Liberia rose to 74th place in the CUI, up from 113th, Maplecroft said, while Guinea (25th) and Sierra Leone (58th) have also seen violent protests related to Ebola. Nigeria fell six places in the ranking to 24th, Maplecroft said, predicting more unrest before elections next February
What do investors think?  Few investors venture into the world’s most turbulent places such as Yemen or Syria of course. But companies and funds can be hard hit when problems erupt in financial centres such as Hong Kong or manufacturing hubs like Vietnam or Bangladesh as has happened this year. Mining companies such as African Minerals and London Mining, active in Ebola-hit West Africa, have seen share prices fall 80-90 percent this year. Still, most investors are confident about their ability to ride out the turbulence – possibly because they have seen it all before. Diana Layfield, Standard Chartered Chief Executive for Africa told a briefing:
In the medium term this is not something we think will affect the business in a negative way…I may be an optimist here, but I think in the medium to long-term this is something we will get collectively get a grip of.
And Lilian Co, portfolio manager at UK investment firm EI Sturdza, sees the Hong Kong protests as causing merely short-term volatility for stock markets:
This may potentially be a buying opportunity for investors.
Source: Newsjyoti Investments

Measuring political risk in emerging markets

(Corrects to say EI Sturdza is UK investment firm, not Swiss)
Commerzbank analyst Simon Quijano-Evans recently analysed credit ratings for emerging market countries and concluded that there is a strong tendency to “under-rate” emerging economies – that is they are generally rated lower than developed market “equals” that have similar profiles of debt, investment or reform. The reason, according to Quijano-Evans, is that ratings assessments tend to be “blurred by political risk which is difficult to quantify and is usually higher in the developing world compared with richer peers.
However there are some efforts to measure political risks, and unfortunately for emerging economies, some of those metrics seem to indicate that such risk is on the rise. Risk consultancy Maplecroft which compiles a civil unrest index (CUI), says street protests, ethnic violence and labour unrest are factors that have increased chances of business disruption in emerging markets by 20 percent over the past three months. Such unrest as in Hong Kong recently, can be sudden, causing headaches for business and denting economic growth, Maplecroft says. Hong Kong where mass pro-democracy protests in the city-state’s central business district which shuttered big banks and triggered a 7 percent stock market plunge last month.
As a result, Hong Kong jumped to 70th place in the index from a relatively safe 132nd place in the CUI which analyses governance, political and civil rights and the frequency and severity of incidents to assess the current and future civil unrest picture.
Hong Kong performs comparatively well in the economic, social and rights factors in the CUI, but performs poorly for democratic governance, Maplecroft says:
The scale of the protests, which has cost retailers upwards of $283 million, has seen Hong Kong move from the ‘medium risk’ category to ‘high risk’. Beijing’s response will be key to determining whether the situation deteriorates further.”
Disease, global warming, economic disparities can also boost political risk. Ebola-ravaged Liberia rose to 74th place in the CUI, up from 113th, Maplecroft said, while Guinea (25th) and Sierra Leone (58th) have also seen violent protests related to Ebola. Nigeria fell six places in the ranking to 24th, Maplecroft said, predicting more unrest before elections next February
What do investors think?  Few investors venture into the world’s most turbulent places such as Yemen or Syria of course. But companies and funds can be hard hit when problems erupt in financial centres such as Hong Kong or manufacturing hubs like Vietnam or Bangladesh as has happened this year. Mining companies such as African Minerals and London Mining, active in Ebola-hit West Africa, have seen share prices fall 80-90 percent this year. Still, most investors are confident about their ability to ride out the turbulence – possibly because they have seen it all before. Diana Layfield, Standard Chartered Chief Executive for Africa told a briefing:
In the medium term this is not something we think will affect the business in a negative way…I may be an optimist here, but I think in the medium to long-term this is something we will get collectively get a grip of.
And Lilian Co, portfolio manager at UK investment firm EI Sturdza, sees the Hong Kong protests as causing merely short-term volatility for stock markets:
This may potentially be a buying opportunity for investors.
Source: Newsjyoti Investments

Russia: There’s cheap and then there is “near-death” cheap

Russia’s equity market has always been cheap, argues USAA‘s Wasif Latif, but at present levels it is just too cheap to ignore. Russia’s economic decline, driven by not only falling oil prices, its main source of income, but also Western sanctions over its intervention in Ukraine has caused a major sell-off that Latif and other asset managers believe is an overshoot. This has brought Russia’s benchmark dollar-denominated RTS stock index to its lowest level since March and before that, a level not seen since Sept. 2009.
“We’re not looking for it to go way up, but looking for it to go up from its near-death cheap to its normal-cheap condition,” said Latif, head of global multi-assets at USAA Investments.
From a high in late June through Oct. 3, the RTS stock index is down over 23 percent. Its market cap is just over $418 billion while the price/earnings ratio is 6.45 with a dividend yield of 4.86 percent. 
The Russian benchmark stock index has dropped 23.15 percent from a recent high in June, 2014.
“Russia, with its warts and all such as its governance issues, poor capital allocations has always been cheap…. We’re buying it in small amounts and by no means are we backing up the truck and loading up on Russia. We are mindful of the risks and buying selectively. We’re more comfortable buying through the ETFs (exchange traded funds) such as the Van Eck Market Vectors Russia or the iShares MSCI Russia Capped fund,” Latif said.
As my colleagues Sujata Rao and Karin Strohecker wrote, the risks to investing in Russian stocks are tied up in a sharp decline in the value of the rouble, which is trading just under 40 to the dollar, a record low. In June it was around 33.60. For the investor looking for hard currency returns this can pose a problem, they explain.
Latif, who oversees $28 billion in mutual fund assets at San Antonio, Texas-based USAA, also notes that Chinese equities are cheap too, with a lot of room for consumer consumption to increase and boost earnings longer term.
For emerging market specialists at London-based Ashmore, Russia poses a challenge.
“There is definitely a lot of country risk associated with the sanctions,” said Julie Dickson, portfolio manager and head of equities for Ashmore. “The market has more than priced this into Russia. It is very cheap and hard to ignore. It is truly trading at trough levels,” Dickson said.
Ashmore has $6.1 billion in emerging market equities. Both Dickson and Latif believe emerging market small-cap stocks have the greatest upside potential looking in to 2015.
But it was back in May, when I wrote about Dickson and others holding fast in Russia, that a relief rally started, pulling the RTS index up 23 percent. Now, all of that move is gone and then some. The shooting down of Malaysian Air flight MH17 over eastern Ukraine on July 17 accelerated the Russian sell-off and exacerbated a situation whereby investors looked elsewhere to put their money. It also highlighted a big decline in corporate debt issuance from eastern Europe and Russia. Dickson still believes there will eventually be a political resolution rather than endless fighting in Ukraine.
The geopolitical risks that have roiled emerging markets seem to be taken more in stride, even as news of more beheadings by Islamist State militants brings a military bombardment from the air. 
“The Middle East is getting attention for all the wrong reasons. There are changes happening,” said Dickson.
In this case it is Saudi Arabia, she said, where investors are faced with attractive valuations when it is scheduled to open up to foreign investors in mid-2015.
“The market is attractively priced because it has been off the radar due to the difficulty in trying to ivnest and operate there,” Dickson said.
Banks make up the vast majority of the stocks on offer, according to Dickson, but she adds there is a growing diversification underway.
“Assets in the Saudi market are mostly financial, with both direct and indirect consumer sector access. Consumer spending is up 27 percent over the past 10 years, according to research we have seen. Less than 50 percent of the population is below the age of 30 years. That’s UN data. Health, education, housing, retail and discretionary spending are all growth areas in Saudi. 20 percent of our Middle East exposure is in Saudi Arabia,” she said.
Saudi Arabia’s benchmark stock index, the Tadawul FF index is up 27.11 percent so far this year. The market capitalization is hovering around $585 billion with a price-to-earnings ratio of 18.24 percent and a dividend yield of 3.22 percent. Since the announcement on July 22, market cap has risen by about $55 billion while the benchmark index has shot higher by 11.32 percent. In contrast, the U.S. benchmark Standard & Poor’s 500 stock index is trading with a p/e ratio of 18.36 percent and a dividend yield of 2.38 percent. It’s market capitalization is $18 trillion.
The Saudi Arabian benchmark stock index has gained 11.32 percent since July when the government announced foreigners could have direct ownership starting in mid-2015
So even as emerging market equities overall are now back to a slight negative performance on the year, Dickson is ever the optimist and perhaps just as in May when we last spoke, it will be the start of another rally.
“Emerging markets, yes, the sentiment has come off a bit but I’m not overly concerned. Fundamentals are still there. Valuations overshot and have returned, but I’m looking at a rebound,” she said.
Source: Newsjyoti Investments

Russia: There’s cheap and then there is “near-death” cheap

Russia’s equity market has always been cheap, argues USAA‘s Wasif Latif, but at present levels it is just too cheap to ignore. Russia’s economic decline, driven by not only falling oil prices, its main source of income, but also Western sanctions over its intervention in Ukraine has caused a major sell-off that Latif and other asset managers believe is an overshoot. This has brought Russia’s benchmark dollar-denominated RTS stock index to its lowest level since March and before that, a level not seen since Sept. 2009.
“We’re not looking for it to go way up, but looking for it to go up from its near-death cheap to its normal-cheap condition,” said Latif, head of global multi-assets at USAA Investments.
From a high in late June through Oct. 3, the RTS stock index is down over 23 percent. Its market cap is just over $418 billion while the price/earnings ratio is 6.45 with a dividend yield of 4.86 percent. 
The Russian benchmark stock index has dropped 23.15 percent from a recent high in June, 2014.
“Russia, with its warts and all such as its governance issues, poor capital allocations has always been cheap…. We’re buying it in small amounts and by no means are we backing up the truck and loading up on Russia. We are mindful of the risks and buying selectively. We’re more comfortable buying through the ETFs (exchange traded funds) such as the Van Eck Market Vectors Russia or the iShares MSCI Russia Capped fund,” Latif said.
As my colleagues Sujata Rao and Karin Strohecker wrote, the risks to investing in Russian stocks are tied up in a sharp decline in the value of the rouble, which is trading just under 40 to the dollar, a record low. In June it was around 33.60. For the investor looking for hard currency returns this can pose a problem, they explain.
Latif, who oversees $28 billion in mutual fund assets at San Antonio, Texas-based USAA, also notes that Chinese equities are cheap too, with a lot of room for consumer consumption to increase and boost earnings longer term.
For emerging market specialists at London-based Ashmore, Russia poses a challenge.
“There is definitely a lot of country risk associated with the sanctions,” said Julie Dickson, portfolio manager and head of equities for Ashmore. “The market has more than priced this into Russia. It is very cheap and hard to ignore. It is truly trading at trough levels,” Dickson said.
Ashmore has $6.1 billion in emerging market equities. Both Dickson and Latif believe emerging market small-cap stocks have the greatest upside potential looking in to 2015.
But it was back in May, when I wrote about Dickson and others holding fast in Russia, that a relief rally started, pulling the RTS index up 23 percent. Now, all of that move is gone and then some. The shooting down of Malaysian Air flight MH17 over eastern Ukraine on July 17 accelerated the Russian sell-off and exacerbated a situation whereby investors looked elsewhere to put their money. It also highlighted a big decline in corporate debt issuance from eastern Europe and Russia. Dickson still believes there will eventually be a political resolution rather than endless fighting in Ukraine.
The geopolitical risks that have roiled emerging markets seem to be taken more in stride, even as news of more beheadings by Islamist State militants brings a military bombardment from the air. 
“The Middle East is getting attention for all the wrong reasons. There are changes happening,” said Dickson.
In this case it is Saudi Arabia, she said, where investors are faced with attractive valuations when it is scheduled to open up to foreign investors in mid-2015.
“The market is attractively priced because it has been off the radar due to the difficulty in trying to ivnest and operate there,” Dickson said.
Banks make up the vast majority of the stocks on offer, according to Dickson, but she adds there is a growing diversification underway.
“Assets in the Saudi market are mostly financial, with both direct and indirect consumer sector access. Consumer spending is up 27 percent over the past 10 years, according to research we have seen. Less than 50 percent of the population is below the age of 30 years. That’s UN data. Health, education, housing, retail and discretionary spending are all growth areas in Saudi. 20 percent of our Middle East exposure is in Saudi Arabia,” she said.
Saudi Arabia’s benchmark stock index, the Tadawul FF index is up 27.11 percent so far this year. The market capitalization is hovering around $585 billion with a price-to-earnings ratio of 18.24 percent and a dividend yield of 3.22 percent. Since the announcement on July 22, market cap has risen by about $55 billion while the benchmark index has shot higher by 11.32 percent. In contrast, the U.S. benchmark Standard & Poor’s 500 stock index is trading with a p/e ratio of 18.36 percent and a dividend yield of 2.38 percent. It’s market capitalization is $18 trillion.
The Saudi Arabian benchmark stock index has gained 11.32 percent since July when the government announced foreigners could have direct ownership starting in mid-2015
So even as emerging market equities overall are now back to a slight negative performance on the year, Dickson is ever the optimist and perhaps just as in May when we last spoke, it will be the start of another rally.
“Emerging markets, yes, the sentiment has come off a bit but I’m not overly concerned. Fundamentals are still there. Valuations overshot and have returned, but I’m looking at a rebound,” she said.
Source: Newsjyoti Investments

GMF @HedgeWorld West, World Bank/IMF and Financial & Risk Summit Toronto 2014

(Updates with guest photos and new links).
Join our special coverage Oct. 6-10 in the Global Markets Forum as we hit the road, from the West Coast to Washington to the Great White North.
GMF will be live next week from the HedgeWorld West conference in Half Moon Bay, California, where we’ll be blogging insight from speakers including Peter Thiel, former San Francisco 49ers great Steve Young and other panelists’ viewpoints on the most important investment themes, allocation strategies, reputation risk management ideas and more.

 
Eric Burl, COO, Man Investments USA
Our LiveChat guests at HedgeWorld West include Jay Gould, founder of the California Hedge Fund Association, on Monday; Rachel Minard, CEO of Minard Capital on Tuesday; and Eric Burl, COO of Man Investments, on Wednesday discussing the evolving global investor. If you have questions for them, be sure to join us in the GMF to post your questions and comment.
Follow GMF’s conference coverage and post questions live via our twitter feed @ReutersGMF as well, where we’ll post comments from other HedgeWorld panelists. They include: 
Peter Algert, Founder and CIO, Algert Global
Adrian Fairbourn, Managing Partner, Exception Capital
Nancy Davis, Founder & CIO, Quadratic Capital
R. Kipp deVeer, CEO, Ares Capital
Judy Posnikoff, Managing Partner, PAAMCO
Caroline Lovelace, Founding Partner, Pine Street Alternative Asset Management
Cleo Chang, Chief Investment Officer, Wilshire Funds Management
Brian Igoe, CIO, Rainin Group
Mark Guinney, Managing Partner, The Presidio Group
In a preview of the HedgeWorld West conference, Rachel Minard said what matters most to investors today is “not so much what something is
Rachel Minard, CEO of Minard Capital
called but what is its behavior,” she told the forum. “What investment instruments are being used — what is the ROI relative to cost, liquidity, volatility, market exposure, price/rates and is this the most “efficient” method by which to achieve return. What’s great from our perspective is the meritocracy of the business today — the proof necessary to validate the effective and sustainable ROI of any fund or investment strategy.”
Those topics, and more, will be on tap, as top global hedge fund managers and members of the California Hedge Fund Association gather this week. Meanwhile, the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group each year bring together central bankers, ministers of finance and development, private sector executives, civil society, and academics to discuss issues of global concern. The Reuters GMF editorial team will cover real-time interviews and blog throughout the event to highlight Reuters’ best analysis and interviews. 
Thomas Caldwell, founder and chairman, Caldwell Securities

GMF also will kick off our Financial and Risk Summit in Toronto, starting on Monday, with a LiveChat with Thomas Caldwell, founder and chairman of Caldwell Securities on Canada and the global economy. The conference starts on Tuesday, with keynotes including Tom Kloet, TMX Group CEO; Luo Zhaohui, China’s ambassador to Canada; Ron King, Scotiabank’s compliance head; and more to come.
Source: Newsjyoti Investments