Dubai to get spillover boost from Aramco listing says DIFC chief

Dubai International Financial Center (DIFC) Governor Essa Kazim. (Photo courtesy: social media)
Updated 11 November 2017
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Dubai to get spillover boost from Aramco listing says DIFC chief

DUBAI: Dubai is set to benefit from the spillover effect of a Saudi Aramco listing and other market reforms underway in Saudi Arabia, according to the chief of the emirate’s financial hub
The planned listing of Saudi Aramco and the opening of financial markets in Saudi Arabia will “increase the pie” of financial services in the region, said Dubai International Financial Center (DIFC) Governor Essa Kazim, in an interview on the sidelines of a World Economic Forum meeting in Dubai.
“Opening Saudi is completely a positive for the whole region,” said Kazim. “Our market is highly interactive with the Saudi market, so the investment flow that would come to Saudi would have a spillover into our market.
“So we are very much supportive of Saudi opening up , reforming, restructuring and meeting their 2030 Vision. It’s good for the whole region,” he said.
The planned listing of Saudi Aramco could be worth about $100 billion based on a 5 percent offering – about four times the size of the existing record held by Chinese e-commerce giant Alibaba, which listed in 2014.
London and New York are among the international financial centers seeking to attract the prized Aramco share sale, which represents a touchstone for wider financial reforms underway in the Kingdom, as it opens up to increased foreign investment.
DIFC reported a 14 percent rise in the total number of firms last year despite a prolonged period of oil price weakness that contributed to economic jitters in the emirate.
Kazim said that despite wider economic headwinds facing the region, DIFC had managed to double the number of new occupiers at about 300 on an annual basis over the last three years – compared to the previous three years.
“That means companies are still coming here despite geopolitical issues,” he said. “Life and business has to go on.”
He said that the business park remains 99 percent occupied as it expands with new buildings under development.


Stronger US dollar unlikely to derail bullish view on commodities — Goldman Sachs

Updated 42 min 48 sec ago
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Stronger US dollar unlikely to derail bullish view on commodities — Goldman Sachs

  • The dollar has been lifted by a stronger-than-expected US economy, the world’s largest
  • A stronger greenback makes the purchase of dollar-denominated international commodities more expensive for holders of other currencies

BENGALURU: Goldman Sachs said a stronger dollar is unlikely to derail its bullish view on commodities, which are likely to find support from physical shortages.
The dollar has been lifted by a stronger-than-expected US economy, the world’s largest, and that’s a positive sign for global growth, the US investment bank said.
The US dollar index has lost more than 1 percent this week, but this follows months of strong demand over US-China trade-related tensions, as investors bet the greenback would gain at the expense of riskier currencies.
“The risk aversion this summer created significant emerging market destocking, particularly in China, as consumers attempted to avoid a strong dollar and tariffs by liquidating inventories,” Goldman said in a note dated on Thursday.
A stronger greenback makes the purchase of dollar-denominated international commodities more expensive for holders of other currencies, making buyers and users more likely to draw on any stored materials in preference to imports.
“This liquidation, however, has a physical limit with Chinese destocking having already created significant increases in physical (premiums) for oil and metals – a sign of physical shortages.”
Going forward, oil had a strong fundamental outlook helped by US demand growth, supply losses and disruptions, and still constrained US shale output, Goldman said.
The bank said its near-term Brent crude oil price target remained at $80 a barrel.
The bank said it was moderating its bullish view for gold due to a sell-off in emerging markets, and it lowered its 12-month price forecast for the metal to $1,325 per ounce, down from $1,450 an ounce earlier.