UAE In-Focus — DMCC, SafeGold collaborate to digitize gold investments

UAE In-Focus — DMCC, SafeGold collaborate to digitize gold investments
The partnership will create an ecosystem for gold-backed digital certificates, initially in the UAE and then across the MENA region. (Supplied/WAM)
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Updated 24 November 2022

UAE In-Focus — DMCC, SafeGold collaborate to digitize gold investments

UAE In-Focus — DMCC, SafeGold collaborate to digitize gold investments

RIYADH: Dubai Multi Commodities Center and digital platform SafeGold have signed a memorandum of understanding to digitize gold assets in the Middle East and North African region.

The partnership will create an ecosystem for gold-backed digital certificates, initially in the UAE and then across the MENA region’s $20 billion gold market.

According to a DMCC press release, gold bars will be physically stored in secure vaults and verified by warrants issued on its Tradeflow platform, a central registry of ownership for gold and commodities stored in UAE facilities.

The digital certificates backed by gold can then be traded on SafeGold’s platform, providing investors with greater transparency and confidence.

“We look forward to making the UAE a hub for gold investors across the region and accelerating the digital gold ecosystem in the UAE,” said Gaurav Mathur, founder and managing director, SafeGold, in a press statement.

“DMCC is perfectly positioned to drive these efforts given our extensive knowledge in gold, world-class infrastructure across the entire gold value chain and ongoing work in blockchain and web3 sectors,” said Ahmed Bin Sulayem, executive chairman and CEO of DMCC.

SMEs could see $17.1bn boost from hyperscale cloud computing: report

Hyperscale cloud computing can generate 62.6 billion dirhams ($17.1 billion) in benefits for small and medium enterprises and startups in the UAE in the next eight years, according to a report commissioned by the Dubai Chamber of Digital Economy and Amazon Web Services.

According to the report titled “Impact of Hyperscale Cloud on UAE SMEs and Start-ups,” these enterprises could generate $10.1 billion in user benefits and $7 billion in partner benefits between 2022 and 2030 through regional hyperscale data centers in the UAE.

Hyperscale refers to an information technology infrastructure’s ability to accommodate the increased resource demand in a distributed computing environment. It could enable UAE businesses to scale globally and serve customers worldwide.

“Superior data center infrastructure tends to create local concentrations of enabling factors for innovation, such as early-stage venture capital funding and the development of skilled local talent, generating long-term startup ecosystem benefits and attractiveness,” the report stated.

For example, medium-term plans such as the Dubai Autonomous Transportation Strategy, which aims to automate a quarter of all transportation in Dubai by 2030, will require robust digital infrastructure and cloud access.

The report highlighted that key policy goals would require significant public cloud data services with low latency, high availability and reliability, and access to artificial intelligence and machine learning capabilities provided by hyperscale cloud.

The report further estimated that by 2030, hyperscale cloud computing would create 133,000 direct and indirect jobs in the UAE. In addition, the technology will achieve a 78 percent reduction in the country’s carbon footprint and reduce carbon dioxide emissions by 2.2 million metric tons in the next eight years.

(With inputs from WAM)


World food prices decline for 10th month running in January, says UN Food Agency

World food prices decline for 10th month running in January, says UN Food Agency
Updated 16 sec ago

World food prices decline for 10th month running in January, says UN Food Agency

World food prices decline for 10th month running in January, says UN Food Agency

ROME: The UN food agency’s world price index fell in January for a 10th consecutive month, and is now down some 18 percent from a record high hit last March following Russia’s invasion of Ukraine.

The Food and Agriculture Organization’s price index, which tracks the most globally traded food commodities, averaged 131.2 points last month against 132.2 for December, the agency said on Friday. It was the lowest reading since September 2021.

The December figure was revised down from an original estimate of 132.4.

Falls in the prices of vegetable oils, dairy and sugar helped pull down the index, while cereals and meat remained largely stable, the FAO said.

In separate cereal supply and demand estimates on Friday, the FAO raised its forecast for global cereal production in 2022 to 2.77 billion tons from a previous estimate of 2.76 billion tons. 


Oil stable as market awaits signs of China demand recovery

Oil stable as market awaits signs of China demand recovery
Updated 03 February 2023

Oil stable as market awaits signs of China demand recovery

Oil stable as market awaits signs of China demand recovery

SINGAPORE: Oil prices were little changed on Friday, with major benchmarks headed for their second straight week of losses, as the market awaited further signs of fuel demand recovery in China to offset looming slumps in other major economies.

Brent crude futures dipped 16 cents, or 0.2 percent, to $82.01 a barrel by 0445 GMT, while US West Texas Intermediate crude futures slid 17 cents, or 0.2 percent, to $75.71.

So far this week, Brent has dropped more than 5 percent, extending a 1 percent loss from the previous week. WTI has also fallen by nearly 5 percent, after sliding 2 percent in the prior week.

Mixed signals on fuel demand recovery in China, the world’s top oil importer, have kept a lid prices.

ANZ analysts pointed to a sharp jump in traffic in China’s 15 largest cities following the Lunar New Year holiday, but also noted that Chinese traders had been “relatively absent.”

The prospect of an economic rebound in China after COVID-19 curbs eased has buoyed the oil market so far this year, along with a weaker dollar that makes the commodity cheaper for those holding other currencies.

The dollar has fallen because aggressive interest rate hikes by the US Federal Reserve are no longer expected. Central banks for other major economies, though, are continuing with bigger rate increases even as inflation has eased.

While supported by a weaker greenback, oil’s gains have been limited by the prospect of slow growth in the US, the world’s biggest oil consumer, and recessions in places including Britain, Europe, Japan and Canada.

“The crude demand outlook needs a clear sign that China’s reopening will be smooth, and that the US economic growth momentum does not deteriorate quickly,” OANDA analyst Edward Moya said in a note.

The US central bank scaled back to a milder rate increase after a year of larger hikes, but policymakers also projected that “ongoing increases” in borrowing costs would be needed.

Upcoming interest rate hikes in 2023 are likely to weigh on the US and European economies, boosting fears of an economic slowdown highly likely to dent global crude oil demand, said Priyanka Sachdeva, market analyst at Phillip Nova.

Investors are also eyeing developments on the Feb. 5 European Union ban on Russian refined products as the EU countries will seek a deal on Friday to set price caps for Russian oil products. 


Who is Hindenburg, the firm targeting India’s Adani?

Who is Hindenburg, the firm targeting India’s Adani?
Updated 03 February 2023

Who is Hindenburg, the firm targeting India’s Adani?

Who is Hindenburg, the firm targeting India’s Adani?
  • Hindenburg is an investment research firm with a focus on activist short-selling. It looks for corruption or fraud in the business world, such as accounting irregularities and bad actors in management, and It can make money out of its work

NEW YORK: Hindenburg Research, the financial research firm with an explosive name and a track record of sending the stock prices of its targets tumbling, is taking on one of the world’s richest men.
Hindenburg is back in the headlines after last week accusing Indian conglomerate Adani Group of “a brazen stock manipulation and accounting fraud scheme.” It cited two years of research, including talks with former Adani senior executives and reviews of thousands of documents.
The Adani Group has blasted the accusations, calling them “a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India’s highest courts.”
Nevertheless, Hindenburg’s scorching allegations have caused the fortune of Adani Group’s founder, Gautam Adani, to slide by nearly $47 billion in just over a week, according to the Bloomberg Billionaires index. Here’s a look at the firm behind all the movement:
What is it?
Hindenburg says it specializes in “forensic financial research.” In layman’s terms, it looks for corruption or fraud in the business world, such as accounting irregularities and bad actors in management.
Hindenburg has even come to be known as Ponzi hunters in some circles, according to the Washington Post, which detailed how it helped bring down an alleged $500 million scheme that targeted Mormons.
Where did its name come from?
The firm says it sees the Hindenburg, the airship that famously caught fire in the 1930s to the cry of “Oh, the humanity,” as the “epitome of a totally man-made, totally avoidable disaster.” It says it looks for similar disasters in financial markets “before they lure in more unsuspecting victims.”
Who else has Hindenburg gone after?
It’s perhaps most famous for a 2020 report on Nikola, a company in the electric-vehicle industry whose founder Hindenburg said made misleading claims to ink partnerships with top auto companies hungry to catch up to Tesla.
Among its allegations, Hindenburg accused Nikola of staging a video to calm skepticism about its truck, one that showed the vehicle cruising on a road. Hindenburg said the video was actually just showing the truck rolling down a hill after getting towed to the top.
What has come of such accusations?
For Nikola, quick scrutiny from the government and investors.
The company and its founder, Trevor Milton, received grand jury subpoenas from the US Attorney’s office for the Southern District of New York and the N.Y. County District Attorney’s Office shortly after Hindenburg released its report.
The Securities and Exchange Commission also soon issued subpoenas to Nikola’s directors.
Milton was convicted this past October of charges he deceived investors with exaggerated claims about his company’s progress in producing zero-emission 18-wheel trucks fueled by electricity or hydrogen.
And Nikola in late 2021 agreed to pay $125 million to settle SEC charges that it defrauded investors by misleading them about its products, technical advancements, and commercial prospects.
What does Hindenburg get out of this?
It can make money. In its Adani report, it said that it had taken a “short position in Adani Group Companies” through bonds that trade in the US and other investments that trade outside India.
It has made similar “short” bets against other companies it published unflattering reports on. A “short” trade is a way for someone to make money if an investment’s price falls. Afterward, if the price of a company’s stock or bonds falls because of the negative attention from the report, Hindenburg can profit.
Such short sellers have been criticized for unfairly pushing down prices of stocks with potentially unfounded allegations. But proponents also call them a healthy part of a stock market, keeping stock prices in check and preventing them from running too high.


Adani’s market losses top $100 billion as crisis shockwaves spread

Adani’s market losses top $100 billion as crisis shockwaves spread
Updated 03 February 2023

Adani’s market losses top $100 billion as crisis shockwaves spread

Adani’s market losses top $100 billion as crisis shockwaves spread
  • Mukesh Ambani of Reliance Industries is now Asia’s richest person as Adani Group chairman's net worth plunges
  • S&P Dow Jones Indices said it would remove Adani Enterprises from widely used sustainability indices

NEW DELHI/MUMBAI: Adani’s market losses swelled above $100 billion on Thursday, sparking worries about a potential systemic impact a day after the Indian group’s flagship firm abandoned its $2.5 billion stock offering.
Another challenge for Adani on Thursday came when S&P Dow Jones Indices said it would remove Adani Enterprises from widely used sustainability indices, effective Feb. 7, which would make the shares less appealing to sustainability-minded funds.
In addition, India’s National Stock Exchange said it has placed on additional surveillance shares of Adani Enterprises , Adani Ports and Ambuja Cements .
However, Adani Group Chairman Gautam Adani is in talks with lenders to prepay and release pledged shares as he seeks to restore confidence in the financial health of his conglomerate, Bloomberg News reported on Thursday.
The shock withdrawal of Adani Enterprises’ share sale marks a dramatic setback for founder Adani, the school dropout-turned-billionaire whose fortunes rose rapidly in recent years but have plunged in just a week after a critical research report by US-based short-seller Hindenburg Research.


ALSO READ: Who is Hindenburg, the firm targeting India’s Adani?


Aborting the share sale sent shockwaves across markets, politics and business. Adani stocks plunged, opposition lawmakers called for a wider probe and India’s central bank sprang into action to check on the exposure of banks to the group. Meanwhile, Citigroup’s wealth unit stopped making margin loans to clients against Adani Group securities.

The crisis marks an dramatic turn of fortune for Adani, who has in recent years forged partnerships with foreign giants such as France’s TotalEnergies and attracted investors such as Abu Dhabi’s International Holding Company as he pursues a global expansion stretching from ports to the power sector.
In a shock move late on Wednesday, Adani called off the share sale as a stocks rout sparked by Hindenburg’s criticisms intensified, despite it being fully subscribed a day earlier.
“Adani may have started a confidence crisis in Indian shares and that could have broader market implications,” said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.
Adani Enterprises shares tumbled 27 percent on Thursday, closing at their lowest level since March 2022.

Other group companies also lost further ground, with 10 percent losses at Adani Total Gas, Adani Green Energy and Adani Transmission, while Adani Ports and Special Economic Zone shed nearly 7 percent.
Since Hindenburg’s report on Jan. 24, group companies have lost nearly half their combined market value. Adani Enterprises — described as an incubator of Adani’s businesses — has lost $26 billion in market capitalization.
Adani is also no longer Asia’s richest person, having slid to 16th in the Forbes rankings of the world’s wealthiest people, with his net worth almost halved to $64.6 billion in a week.
The 60-year-old had been third on the list, behind billionaires Elon Musk and Bernard Arnault.
His rival Mukesh Ambani of Reliance Industries is now Asia’s richest person.

Mukesh Ambani, chairman oil-to-telecom conglomerate Reliance Industries, is now Asia''s richest person. (AFP) file)


Broader concerns
Adani’s plummeting stock and bond prices have raised concerns about the likelihood of a wider impact on India’s financial system.
India’s central bank has asked local banks for details of their exposure to the Adani Group, government and banking sources told Reuters on Thursday.
CLSA estimates that Indian banks were exposed to about 40 percent of the $24.5 billion of Adani Group debt in the fiscal year to March 2022.
Dollar bonds issued by entities of Adani Group extended losses on Thursday, with notes of Adani Green Energy crashing to a record low. Adani Group entities made scheduled coupon payments on outstanding US dollar-denominated bonds on Thursday, Reuters reported citing sources.
“We see the market is losing confidence on how to gauge where the bottom can be and although there will be short-covering rebounds, we expect more fundamental downside risks given more private banks (are) likely to cut or reduce margin,” said Monica Hsiao, chief investment officer of Hong Kong-based credit fund Triada Capital.
In New Delhi, opposition lawmakers submitted notices in parliament demanding discussion of the short-seller’s report.
The Congress Party called for a Joint Parliamentary Committee be set up or a Supreme Court monitored investigation, while some lawmakers shouted anti-Adani slogans inside parliament, which was adjourned for the day.
Adani vs Hindenburg
Adani made acquisitions worth $13.8 billion in 2022, Dealogic data showed, its highest ever and more than double the previous year.
The canceled fundraising was critical for Adani, which had said it would use $1.33 billion to fund green hydrogen projects, airports facilities and greenfield expressways, and $508 million to repay debt at some units.
Hindenburg’s report alleged an improper use of offshore tax havens and stock manipulation by the Adani Group. It also raised concerns about high debt and the valuations of seven listed Adani companies.
The Adani Group has denied the accusations, saying the allegation of stock manipulation had “no basis” and stemmed from an ignorance of Indian law. It said it has always made the necessary regulatory disclosures.
Adani had managed to secure share sale subscriptions on Tuesday even though the stock’s market price was below the issue’s offer price. Maybank Securities and Abu Dhabi Investment Authority had bid for the anchor portion of the issue, investments which will now be reimbursed by Adani.
Late on Wednesday, the group’s founder said he was withdrawing the sale given the share price fall, adding his board felt going ahead with it “will not be morally correct.”


Oil steady as Russian crude products ban looms

Oil steady as Russian crude products ban looms
Updated 02 February 2023

Oil steady as Russian crude products ban looms

Oil steady as Russian crude products ban looms
  • A EU ban on Russian refined products is set to take effect on Feb. 5, potentially dealing a blow to global supply

LONDON: Oil prices were steady on Thursday as looming sanctions on Russian oil products added uncertainty over supply but the dollar lost value in a boost to the oil trade.

Brent crude futures fell 18 cents, or 0.2 percent, to $82.66 a barrel by 1415 GMT while West Texas Intermediate US crude futures lost 3 cents to $76.38.

Both benchmarks plunged more than 3 percent overnight after US government data showed a large build in oil stocks. A EU ban on Russian refined products is set to take effect on Feb. 5, potentially dealing a blow to global supply.

EU countries will seek a deal on Friday on a European Commission proposal to set price caps on Russian oil products after postponing a decision on Wednesday because of divisions among member states, diplomats said. The European Commission proposed last week that from Feb. 5 the EU apply a price cap of $100 a barrel on premium Russian oil products such as diesel and a $45 per barrel cap on discounted products such as fuel oil.

Meanwhile an OPEC+ panel endorsed the producer group’s current output policy at a meeting on Wednesday, leaving production cuts agreed last year unchanged amid hopes of higher Chinese demand and uncertain prospects for Russian supply.

OPEC+ agreed to cut its production target by 2 million barrels per day — about 2 percent of global demand — from November last year until the end of 2023 to support the market.