Trump comeback drives gains in US stocks and dollar; Bitcoin roars to record, Treasuries slide

Trump comeback drives gains in US stocks and dollar; Bitcoin roars to record, Treasuries slide
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Representations of bitcoin are seen in this illustration picture taken in Paris on March 9, 2024. (REUTERS/File Photo)
Trump comeback drives gains in US stocks and dollar; Bitcoin roars to record, Treasuries slide
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A pedestrian walks past a bank showing the exchange rate between the US dollar and Mexican peso in Mexico City on Nov. 6, 2024. (AP)
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Updated 07 November 2024
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Trump comeback drives gains in US stocks and dollar; Bitcoin roars to record, Treasuries slide

Trump comeback drives gains in US stocks and dollar; Bitcoin roars to record, Treasuries slide
  • Trump’s pledges to raise tariffs, cut taxes and slash regulations encouraged investors to dive into a range of assets that looked likely to benefit from such policies
  • Markets that could suffer under tougher tariffs bore the brunt of the sell-off. Mexican peso slumps while the euro was set for its largest daily drop since 2020

NEW YORK/LONDON: Donald Trump’s victory in the US presidential election unleashed a massive rally in the dollar, drove stocks to record highs and punished bond prices as expectations of tax cuts and tariffs on imports drove optimism about economic growth while fueling worries about inflation.
US equity indexes soared, with the benchmark S&P 500 up 2.51 percent to a record high and huge gains in areas such as small-cap stocks and banks that are poised to benefit from Trump’s expected lighter regulatory touch.
The dollar hit its highest level in over four months. Bitcoin hit record highs and Treasuries were battered.
“Everywhere you look, there’s the thumbprints of these election results for markets,” said Paul Christopher, head of global investment strategy at the Wells Fargo Investment Institute.
Trump’s pledges to raise tariffs, cut taxes and slash regulations encouraged investors to dive into a range of assets that looked likely to benefit from such policies.
Markets that could suffer under tougher tariffs bore the brunt of the sell-off. The Mexican peso slumped to its lowest level in over two years while the euro was set for its largest daily drop since 2020.
Currency trading was intense. CME Group said by 10 a.m. CT, online trading of the Offshore Chinese Renminbi already had hit $33 billion in notional value, an all-time high. In the same time span, the traded notional value of futures contracts on the Mexican peso was 43 percent above the average daily volume.

 

Bolstering confidence in “Trump trades,” Republicans won control of the US Senate. Investors were still awaiting results in the House of Representatives, and Republican control would clear the path for Trump’s agenda.
The election could have far-reaching implications for tax and trade policy, as well as US institutions, affecting assets globally.

Interest rates seen higher
Investors sold US Treasuries, partly on the expectation that higher tariffs would inevitably filter through to consumer prices, but also because Trump’s promises on spending could boost government debt levels. The benchmark 10-year Treasury yield rose as high as 4.48 percent, its highest level in over four months but retreated slightly.
“If he’s able to fully implement his agenda, it means bigger deficits, bigger tax cuts, and also, because of tariffs, higher inflation,” said David Kelly, chief global strategist at JPMorgan Asset Management. “The higher inflation and the bigger deficits should push up long-term interest rates.”
In stocks, shares of Tesla, headed by Trump supporter Elon Musk, jumped 14.75 percent. The small-cap Russell 2000 rose nearly 6 percent, while the S&P 500 banks index jumped 10.68 percent.
Bitcoin surged to a record high, betting on a softer line on cryptocurrency regulation.
“Trump’s win likely means some deregulation, including rolling back banking regulations,” BlackRock Investment Institute said.
Investors started trading early. Retail trading platform Robinhood Markets had its largest-ever overnight trading session since it introduced that option in May 2023. The company said its total volume was 11 times a typical overnight trading session, with investors flocking to securities that pundits believe are likely to benefit from a second Trump presidency, ranging from Coinbase Global and the iShares Bitcoin Trust ETF to companies owned by Trump and his wealthiest fan, Elon Musk.

The results meant markets gained clarity about the presidency faster than in 2020, when Joe Biden was announced the victor some four days after election night.
“This is an economy that’s in good shape as we go into the next Congress and the next administration, and the stock market is reflecting that with the removal of this uncertainty overhang,” said Kurt Reiman, head of fixed income Americas and lead of the ElectionWatch at UBS Wealth Management.
Market attention is turning to the Federal Reserve’s monetary policy decision on Thursday, with Trump’s victory set to potentially put the central bank on a slower and shallower path for interest-rate cuts, should the Republican’s plans juice the economy.
“We now expect just one Fed cut in 2025, with policy on hold until the realized inflation shock from tariffs has passed,” economists at Nomura said in a note.
 


COP16: Blended financing key to Saudi agri-tech innovation, say experts

COP16: Blended financing key to Saudi agri-tech innovation, say experts
Updated 11 December 2024
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COP16: Blended financing key to Saudi agri-tech innovation, say experts

COP16: Blended financing key to Saudi agri-tech innovation, say experts
  • SALIC has expanded its focus beyond global food security to also strengthen local GDP and address Saudi Arabia’s trade deficit
  • Panelists discussed the importance of government incentives to encourage private sector participation

RIYADH: Saudi Arabia’s innovative use of blended financing is playing a key role in advancing sustainable agricultural practices and addressing food security challenges, a senior executive said at COP16 in Riyadh. 

During a panel session, Hamad Al-Batshan, senior adviser at Saudi Agricultural and Livestock Investment Co., discussed the importance of blended financing as a tool for de-risking investments in agriculture and technology. 

“Blended financing is a significant step forward into the future, adopting new technology and mitigating risks within Saudi Arabia,” he said, emphasizing its role in supporting high-risk sectors such as climate technology. 

Al-Batshan added: “Without having this enablement tool, it will be more challenging to mobilize capital from private sector or traditional investors toward riskier domains.” 

Al-Batshan also praised the creation of the Research, Development and Innovation Authority, which he believes is crucial for linking government and private sector efforts. 

“De-risking investment is the way to go,” he said, highlighting SALIC’s alignment with the RDI strategy to drive sustainable innovation in health, sustainability, energy, and future economies. 

SALIC, a Public Investment Fund-owned entity, has expanded its focus beyond global food security to also strengthen local gross domestic product and address Saudi Arabia’s trade deficit. 

Al-Batshan stressed the need to “transform the local agriculture sector to mitigate the risks of water security and to utilize state-of-the-art technology” to achieve these goals. 

Ahmad Al-Saidalani, founder and CEO of ROOTS, also emphasized the importance of blended financing in advancing early-stage innovations. 

“Blended finance is an incredible tool to de-risk investments for investors in solutions and technologies that address these challenges,” Al-Saidalani said. 

Anne Le More, a UN Food Systems Champion, described blended finance as a niche but essential mechanism for impact investment. 

“Blended finance can really be a useful tool, especially in areas which are more impact investment, where we only look at risks and benefits,” Le More said. She added that concessional loans and technical assistance, especially for startups, make blended financing particularly valuable. 

“The beauty about blended finance is that it really can bring the best of the public world and the private sector world,” she said. 

Panelists also discussed the importance of government incentives to encourage private sector participation. 

“The government clearly needs to incentivize the private sector... sometimes not necessarily through financing, but by improving the investment ecosystem,” Al-Batshan said, suggesting measures such as tax cuts and concessional loans. 

Reflecting on lessons learned from the COVID-19 pandemic, Al-Batshan stressed the urgency of bolstering Saudi Arabia’s supply chain. 

“It’s very important for us to look seriously about the interruption in the world market and try to invest locally to mitigate this type of risk,” he said. 

Addressing hurdles in sustainability investments 

In another panel session, Hasan Al-Abdulgader, head of produced water treatment R&D at Saudi Aramco, outlined the challenges faced by startups and small to medium enterprises in Saudi Arabia’s sustainability sector, particularly in funding and regulatory compliance. 

“SMEs and businesses here in Saudi have been facing a constantly evolving regulatory environment,” he said. 

While he praised the government’s progress in developing robust regulations, he noted that regulatory maturity in the sustainability sector remains a challenge for smaller businesses. 

Al-Abdulgader pointed out that these challenges also present opportunities for innovation, such as Saudi startups using generative AI to help businesses comply with changing regulations and stay competitive in the sustainability sector. 

On the funding side, Al-Abdulgader highlighted the scarcity of venture capital firms in the region that specialize in environmental, social, and governance investments. 

“Private equities don’t have the appetite to wait for 10-plus years to reap the benefits and returns of these technologies,” he said. 

He called for a hybrid approach, involving collaboration among government, universities, and the private sector to de-risk investment and support commercialization. 

“We need more investment, more awareness when it comes to ESG in general, but also a more top-down approach to really incentivize these investment firms and universities to start with low TRL levels,” he added, emphasizing the critical need to sustain startups through the piloting and demonstration stages. 

Jamil Wayne, co-founder of Riffle Ventures, echoed these sentiments, highlighting the long timelines required for high-impact climate technology investments, such as green cement. 

“To create, though, the solutions that are going to be needed to replace the current assets that we use in cement production, we have to almost take a completely different mindset when it comes to investing and waiting for returns,” he said. 

He added: “We’ve gotten spoiled as investors by the software period, where, in that same amount of time, you can have about five to 10 unicorns created and many IPOs. For climate technology, that same timeframe is just the starting point for a solution to reach the market.” 

Wayne emphasized the need for a tailored investment strategy, combining patient capital and government support, to allow climate technology solutions to scale and achieve commercial viability. 

Panelists agreed on the need for innovative funding mechanisms, regulatory clarity, and public-private partnerships to overcome these challenges and accelerate progress in the sustainability sector. 


Saudi Arabia’s PIF wins 2024 Middle East PMO of the Year award

Saudi Arabia’s PIF wins 2024 Middle East PMO of the Year award
Updated 11 December 2024
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Saudi Arabia’s PIF wins 2024 Middle East PMO of the Year award

Saudi Arabia’s PIF wins 2024 Middle East PMO of the Year award
  • PIF is involved in numerous large-scale projects to transform the Kingdom into a global tourism hub
  • It launched its PMO in 2016 and it has since expanded from a five-person team to 77 full-time employees

RIYADH: Saudi Arabia’s Public Investment Fund has been awarded the 2024 Middle East Project Management Office of the Year, recognizing its role in advancing the Kingdom’s Vision 2030 transformation plan. 

In addition to the regional honor, PIF ranked second globally and received three Excellence Distinctions at the PMO Global Awards. 

The PMO Global Alliance presented the awards, highlighting PIF’s leadership in the project management field. “This recognition exemplifies the superior role that PIF is playing as a leading organization in the project management field,” PIF said in a post on X. 

The sovereign wealth fund has been a key driver of Saudi Arabia’s economic diversification efforts since the launch of Vision 2030 in 2016. 

The fund, which manages $925 billion in assets, is involved in numerous large-scale projects to transform the Kingdom into a global tourism hub by the end of the decade. 

“The PMO is considered as one of the critical functions and the main enablers in achieving PIF targets under Vision 2030,” said Saad Al-Kroud, the chief of staff and secretary-general to the board of directors at PIF. 

PIF launched its PMO in 2016 and it has since expanded from a five-person team to 77 full-time employees, according to PMOGA. 

The PMO currently operates with an annual budget of $7 million and oversees 66 active projects valued at $17 billion. PMOGA said that the number of projects managed by PIF’s PMO increased by 76 percent from 2016 to 2023, with the project success rate rising by 94 percent during the same period. 

“We initially were primarily focusing on managing our strategic projects, in addition to establishing our giga-projects and the portfolio companies across various sectors and domains,” said Areej Naqshbandi, senior director and PMO head at PIF. 

Globally, PIF’s PMO ranked second, while SPC Brazil was named the 2024 World PMO of the Year. SPC Brazil’s office manages between 35 and 65 projects annually. 

Other regional winners included Waha Oil Co. from Libya as Africa PMO of the Year, Indonesia’s Persero as Asia-Pacific PMO of the Year, and ING Spain and Portugal as Europe PMO of the Year. Moffitt Cancer Center in the US received the 2024 North America PMO of the Year honor. 

PMOGA, founded in 2017, is one of the largest global communities of PMOs and project management professionals, with members across over 100 countries, according to its website. 


Closing Bell: Saudi main index closes in red at 12,149

Closing Bell: Saudi main index closes in red at 12,149
Updated 11 December 2024
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Closing Bell: Saudi main index closes in red at 12,149

Closing Bell: Saudi main index closes in red at 12,149
  • MSCI Tadawul Index decreased by 5.94 points, or 0.39%, to close at 1,526.38
  • Parallel market Nomu lost 278.70 points, or 0.88%, to close at 31,278.91

RIYADH: Saudi Arabia’s Tadawul All Share Index dipped on Wednesday, losing 44.45 points, or 0.36 percent, to close at 12,149.19.

The total trading turnover of the benchmark index was SR6.06 billion ($1.61 billion), as 90 of the listed stocks advanced, while 138 retreated.   

The MSCI Tadawul Index decreased by 5.94 points, or 0.39 percent, to close at 1,526.38.

The Kingdom’s parallel market Nomu dipped, losing 278.70 points, or 0.88 percent, to close at 31,278.91. This comes as 40 of the listed stocks advanced while 44 retreated.

The best-performing stock of the day was Etihad Atheeb Telecommunication Co., with its share price surging by 3.36 percent to SR116.80.

Other top performers included Sumou Real Estate Co., which saw its share price rise by 3.31 percent to SR40.60, and Dallah Healthcare Co., which saw a 3.3 percent increase to SR162.60. 

Saudi Real Estate Co. saw its share price surge by 3.25 percent to reach SR25.40, while Seera Group Holding saw an increase of 3.13 percent to reach SR23.76.

The worst performer of the day was Jahez International Co. for Information System Technology, whose share price fell 7.16 percent to SR31.75.

Anaam International Holding Group also saw a decline of 7.04 percent, with its shares dropping to SR1.32, while Banan Real Estate Co. experienced a 4.87 percent decrease, bringing its shares down to SR7.03.

Moreover, Zamil Industrial Investment Co. saw a decline of 3.94 percent, with its share price dropping to SR31.70, while Acwa Power Co. experienced a 3.23 percent decrease, bringing its share price down to SR383.20.

On the parallel market Nomu, the top performer was Enma AlRawabi Co., with its share price surging by 12.21 percent to reach SR23.90.

In second place was Molan Steel Co., which saw a 10.98 percent surge in terms of share price to SR3.64, followed by Purity for Information Technology Co., which witnessed an 8.63 percent surge in its share price to reach SR21.90.

Nomu’s worst two performers for the day were Leen Alkhair Trading Co., whose share price dipped by 9.83 to reach SR23.40, and Alwasail Industrial Co.’s price dropped by 7.32 percent to reach SR3.04.

Gas Arabian Services Co. followed with a dip of 7.12 percent in its share price, reaching SR18.


OPEC slashes global oil demand growth forecast

OPEC slashes global oil demand growth forecast
Updated 11 December 2024
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OPEC slashes global oil demand growth forecast

OPEC slashes global oil demand growth forecast
  • OPEC also cut the global demand growth outlook for 2025 to 1.4 million bpd.

RIYADH: The Organization of the Petroleum Exporting Countries on Wednesday revised the global oil demand growth forecast for 2024 to 1.6 million barrels per day down from 1.8 million bpd in the previous report.

Total world oil demand is expected to reach 105.5 million bpd in the fourth quarter of 2024 and 103.8 million bpd in the full year of 2024.

OPEC also cut the global demand growth outlook for 2025 to 1.4 million bpd. Total world oil demand should stand at 105.3 bpd in 2025.

“Growth is expected to be bolstered by strong air travel demand and healthy road mobility, including on-road diesel and trucking, as well as healthy industrial, construction and agricultural activities in non-OECD countries,” OPEC said in its monthly report.

OPEC+ earlier this month delayed its plan to start raising output until April 2025 against a backdrop of falling prices.

OPEC had kept the 2024 outlook unchanged until August, a view it had first taken in July 2023.

According to OPEC, the downgrade for this year owes to more bearish data received in third quarter while the projections for next year relate to the potential impact that will arise from US tariffs.

The 210,000 bpd cut in the 2024 figure is the largest of the five reductions OPEC has made in its monthly reports since August. In July, OPEC had expected world demand to rise by 2.25 million bpd.

“The bulk of this revision is made in the third quarter, taking into account recently received bearish data for the third quarter,” OPEC said in the report.

China accounted for part of the latest downgrade, as did India, other Asian countries, the Middle East and Africa, OPEC said. OPEC now expects Chinese oil demand to rise by 430,000 bpd in 2024, down from 760,000 bpd in July.

After decades as the dominant driver of expanding oil consumption, China’s crude oil imports are on track to peak as soon as next year as transport fuel demand begins to decline for the world’s top crude buyer.


Qatar’s real estate market shows resilience with luxury and office sectors leading growth

Qatar’s real estate market shows resilience with luxury and office sectors leading growth
Updated 11 December 2024
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Qatar’s real estate market shows resilience with luxury and office sectors leading growth

Qatar’s real estate market shows resilience with luxury and office sectors leading growth
  • Over the past 12 months, villa rents declined by 7.5% to an average of 15,085 Qatari riyals per month
  • Apartment rentals in Qatar’s premium locations have emerged as a key growth driver

RIYADH: Qatar’s real estate market is showing resilience amid shifting dynamics, with a clear divergence between the performance of luxury and standard offerings, a new report showed. 

Over the past 12 months, villa rents declined by 7.5 percent to an average of 15,085 Qatari riyals ($4,139) per month, while luxury apartment rents rose by 2.3 percent to 11,200 riyals per month, according to the latest Qatar Real Estate Market Review from Knight Frank. 

The market has been evolving in recent years, driven by government reforms and infrastructure investments aimed at fostering long-term economic growth and diversification.

The government’s introduction of property-linked residency schemes and designated freehold zones for expatriates has spurred activity in the residential market. 

For apartments, this has meant stronger demand for premium locations like the Pearl Island and Lusail, reinforcing their status as highly coveted destinations for both living and investment. 

Apartment rentals in Qatar’s premium locations have emerged as a key growth driver, reflecting shifting tenant preferences. Areas such as West Bay and the Marina District have become hotspots for expatriates and professionals, with rental increases of 9.6 percent and 3.2 percent, respectively. 

In contrast, villa rents have continued to decline, with key neighborhoods like Nuaija and West Bay Lagoon seeing even steeper drops of 20 percent and 9 percent, respectively. This reflects a supply glut and shifting tenant priorities toward more compact, urban living. 

Price office spaces 

Despite some pressures in the residential sector, Qatar’s office market is experiencing growth, supported by demand for prime office spaces. Grade A office rents have risen by 3.2 percent over the past 12 months, driven by increased activity from government ministries, state-owned enterprises, and multinational firms. 

Prime districts such as Lusail have reported a 3 percent annual increase in rents, with rates reaching 92 riyals per sq. meter per month. West Bay remained a leading destination, commanding rents as high as 150 riyals per sq. meter for premium spaces. 

This growth aligns with Qatar’s National Vision 2030, the report stated, adding that the vision aims to foster a sustainable and diverse economy, with plans to double the size of the economy on track, supported by an expected increase in government revenues to 2014 levels this year. 

The report noted that an emphasis on high-quality, contemporary spaces continues to drive tenants. away from secondary locations, where rents have dropped to 50 riyals to 70 riyals per sq. meter. This shift reflects the broader “flight to quality” trend, with tenants increasingly prioritizing modern facilities in central business hubs. 

Hospitality sector 

The Qatari hospitality market continued to expand, driven by a series of major developments and a growing influx of tourists. 

The country’s efforts to diversify its tourism industry have led to the creation of new attractions such as the Qatar National Museum, Meryal Water Park, and the upcoming $5.5 billion Simaisma theme park. 

“Qatar’s tourism sector has solidified its position as a vital driver of economic growth, achieving an impressive 31 percent growth in 2023 to reach a historic high of 81.2 billion riyals, which equates to 10.3 percent of the gross domestic product,” the report stated. 

This growth has fueled the hospitality market, with more than 1,300 new hotel rooms added in 2023 alone. The report noted that the quality room supply is expected to grow further, with projections reaching 47,290 keys by 2026.