Equity markets could lose up to 10% in bumpy end to year: Deutsche survey

Equity markets could lose up to 10% in bumpy end to year: Deutsche survey
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Updated 13 September 2021

Equity markets could lose up to 10% in bumpy end to year: Deutsche survey

Equity markets could lose up to 10% in bumpy end to year: Deutsche survey
  • An equity market correction of 5 percent to 10 percent by the end of the year was the overriding prediction in a September market sentiment survey published by Deutsche Bank
  • It found 58 percent of respondents said they expected an equity sell-off by the end of the year

An equity market correction of 5 percent to 10 percent by the end of the year was the overriding prediction in a September market sentiment survey published by Deutsche Bank today, in a note of caution that the recent equity bull run's days are numbered.


The report surveyed over 550 market professionals globally earlier this month and revealed that 58 percent of respondents said they expected an equity sell-off by the end of the year.

The summer saw markets buoyant as Covid-19 restrictions eased, sentiment and confidence grew, in addition to stimulus from central banks which helped ease the post-pandemic transition. However, recent sessions have seen a correction from those record highs with global markets. The S&P 500 logged its worst week in more than two months last week, and Wall Street indexes also lost between 1.6 percent to 2.2 percent then, with the benchmark index sinking for five straight days.


DB said that economic growth and corporate profits have recovered faster than expected, but now data from the United States and China suggests that recovery may be running out of steam.

COVID-19 was still considered the biggest risk to market stability, with 53 percent of Deutsche Bank survey participants citing concerns over new virus variants that bypass vaccines. This was followed by higher-than-expected inflation.

Very few respondents expected to see full scale lockdowns reinstated, with a majority, 44 percent seeing restrictions either remaining stable or loosening 18 percent.


Around a third of respondents (32 percent) cited strong economic growth not materialising or being short-lived, and a central bank policy error, as risks to market stability.

The Bank also asked respondents about their return to work following the pandemic and found that around one in five people still had not returned to their office since March 2020, when the pandemic triggered lockdowns globally. This number was even lower in the United States at one in three, Deutsche Bank said.


China to keep up scrutiny of internet sector

China to keep up scrutiny of internet sector
Updated 6 sec ago

China to keep up scrutiny of internet sector

China to keep up scrutiny of internet sector

BEIJING: China will continue its scrutiny of the internet sector, rooting out practices including the blocking of site links by rival platforms and ensuring smaller players have room to develop, its industry minister said in an interview published on Sunday.

China has been engaged this year in a sweeping campaign across regulators to rein in its massive and free-wheeling online economy, led by giants Alibaba Group Ltd., Tencent Holdings Ltd. and others.

In July, the Ministry of Industry and Information Technology launched a six-month regulatory campaign aimed at tackling issues including disrupting market order, infringing on the rights of users, compromising data security and bombarding users with pop-up windows that could not be closed.

“Currently, corporates have increased their awareness of compliance, and some outstanding problems have been solved preliminarily,” Xiao Yaqing, China’s industry and information minister, told the official Xinhua news agency.

He said that the blocking of rivals’ links had been resolved, while uncloseable pop-ups had mostly been eliminated.

Xiao said the ministry will work with other government departments and the industry to ensure more space for the development of small- and medium-sized firms in the sector. 


Euro zone’s trade surplus narrows; supply bottlenecks continue: Economic wrap

Euro zone’s trade surplus narrows; supply bottlenecks continue: Economic wrap
Updated 15 min 40 sec ago

Euro zone’s trade surplus narrows; supply bottlenecks continue: Economic wrap

Euro zone’s trade surplus narrows; supply bottlenecks continue: Economic wrap
  • In addition, imports from Russia and the United States rose noticeably as they jumped by yearly rates of 107.1 percent and 18.4 percent respectively

 

The trade surplus of the Euro area steeply shrank to EUR4.8 billion in August, compared to EUR20.7 billion in the previous month. According to Eurostat data, this was mainly driven by a 26.6 percent surge in imports as energy prices rose. 

In particular, imports of fuels and lubricants soared by 84.4 percent year-on-year. Imports of crude materials also grew significantly in August, rising by a yearly rate of 65.4 percent.

In addition, imports from Russia and the United States rose noticeably as they jumped by yearly rates of 107.1 percent and 18.4 percent respectively.

Global inflation risks

Following elimination of pandemic-related restrictions, a rising global demand has been met with supply shortages all over the world. The Wall Street Journal reported that surging costs for energy and raw materials are the result of this clash.

While more than a dozen central banks have raised their interest rates, two of the most influential, the Federal Reserve and the European Central Bank, are yet to raise their rates. 

This likely means that different central banks have different views over the current inflationary fears. Some predict it to be temporary and will gradually taper off; others expect that it will feed into even more inflationary pressures and thus act accordingly with a contractionary monetary policy.

Italy’s growth forecasts

Italy’s business lobby, Confindustria, has favorably revised its growth outlook for the country. The lobby’s research unit now forecasts the economy to grow by 6.1 percent this year and 4.1 percent in 2022. 

In April, the forecast for 2021 was a lower 4.1 percent.

This means that GDP will be above pre-pandemic levels in the first half of 2022. Limited impact of the Delta variant and robust economic indicators were cited as reasons for this revision.

European Inflation 

Official data showed that France's consumer price inflation rate recorded its highest rate since October 2018, as it increased to 2.2 percent year-on-year in September, higher than last month’s 1.9 percent. Energy costs had the highest jump, growing by 14.9 percent. 

Moreover, according to Italy’s National Institute of Statistics, the country’s yearly inflation rate rose to 2.5 percent in September 2021, rising from 2% in August. Higher energy costs drove this increase as they rose by 20.2 percent. This is the highest inflation rate since November 2012.

However, Italian consumer prices declined by 0.2 percent month-on-month compared to a 0.4 percent rise in August.

Indonesian balance of trade 

In the 17th straight month of continued trade surplus, Indonesia's surplus expanded from $2.4 billion in September 2020 to $4.4 billion in this year’s September, data from Statistics Indonesia showed.

This was mainly due to significantly high export growth, as it increased by a yearly rate of 47.6 percent due to larger oil and non-oil exports. Imports also surged, albeit at a slightly slower pace, growing by 40.3 percent. Oil and gas imports soared by 59.2 percent while purchases of non-oil and gas rose by 38.2 percent.


Tunisia in talks with Saudi Arabia, UAE for financial support

Tunisia in talks with Saudi Arabia, UAE for financial support
Getty Images
Updated 17 October 2021

Tunisia in talks with Saudi Arabia, UAE for financial support

Tunisia in talks with Saudi Arabia, UAE for financial support
  • The nation is looking to secure $4 billion from the IMF over three years

CAIRO: Tunisia has reached out to Saudi Arabia and the UAE for financial assistance, while talks with the International Monetary Fund are also ongoing, a central bank official said.

Central bank official Abdelkarim Lassoued said an agreement with the two gulf states could be reached soon, amid mounting pressure to repay its debts, as reported by Asharq.

The nation is looking to secure $4 billion from the IMF over three years, which will be used to meet its foreign commitments. 

“There will be no problem in repaying debts” after the deal, Lassoued said. 

Tunisia has been battling long-running economic troubles since July as the country’s political crisis continues to deepen, leading Moody’s Investor Service to cut its assessment of the country by a notch last week.


Saudi petroleum firm Aldrees records 50% net profit growth as pandemic threat eases


Saudi petroleum firm Aldrees records 50% net profit growth as pandemic threat eases

Updated 17 October 2021

Saudi petroleum firm Aldrees records 50% net profit growth as pandemic threat eases


Saudi petroleum firm Aldrees records 50% net profit growth as pandemic threat eases

  • This growth is due to a rise in sales of transport and petroleum services sector, as well as the reevaluation of its investments

Saudi Arabia’s Aldrees Petroleum and Transport Services Company reported a 50 percent net profit rise in the first 9 months of 2021, signaling a strong recovery from COVID-19 pandemic. 

Profit rose from from SR81.6 million during the first nine months of 2020, to SR122.7 million in the same period this year, the company said in a bourse filing.

This growth is due to a rise in sales of transport and petroleum services sector, as well as the reevaluation of its investments.

Revenues have almost doubled in the third quarter of 2021, compared to the same time the previous year.  

The new figures came despite higher marketing, general, administrative expenses, financial and Zakat charges, as well as a decrease in the joint venture’s investment profit. 


TASI Stocks up by 0.6 percent in early trading: Market wrap

TASI Stocks up by 0.6 percent in early trading: Market wrap
Updated 17 October 2021

TASI Stocks up by 0.6 percent in early trading: Market wrap

TASI Stocks up by 0.6 percent in early trading: Market wrap
  • Aldrees net profit surges 50 percent to SR122.7 million for the first nine months of 2021

RIYADH: Saudi Arabia’s main market, Tadawul, traded 0.6 percent higher on Sunday morning, at 11,750 points.

Here’s a wrap of market movements as of 10:30 a.m. Riyadh time:

Aldrees net profit surges 50 percent to SR122.7 million for the first nine months of 2021. 

Derayah-REIT goes ex dividend today. 

Saudi Real Estate Co.’s subsidiary, Saudi Real Estate Infrastructure Co. (Binyah), signed a contract with Diriyah Gate Development to carry out Wadi Hanifa's infrastructure work with the Diriyah Development Authority.

AlKathiri Holding Co’s subsidiary, Alian Industry Co. received a land plot of 7,000 square meters from the Abdul Rahman Al-Rashed Company to build a ready-mixed concrete plant.

UCA recommends capital hike through SR300 million right Issues.

“The Market Authority” approves the public offering of the units of the “Capital Flexible Investment Fund for Saudi Equities”.

Nayifat Finance announces the initial prospectus for subscription.

Savola Group’s wholly-owned subsidiary, Savola Foods Co., completed the acquisition of 100 percent of Bayara Holding Limited.