Renewed Confidence in Global Equities, Survey

Largest Recorded One-Month Improvement in Liquidity Conditions

Emerging markets benefit from bounce in risk appetite

Investors are showing renewed confidence in global equities amid radically improved market conditions and growing hopes of economic growth, according to the BofA Merrill Lynch Survey of Fund Managers for February.

Allocations towards equities have made the largest one-month leap since the beginning of 2011. A net 26 percent of asset allocators are overweight equities, up from 12 percent last month. Appetite for cyclical stocks, including Industrials and Materials sectors, has picked up while allocations towards defensive stocks, including Pharmaceuticals and Telecoms, have fallen. Investors have also reduced cash levels. A net 13 percent of asset allocators are overweight cash, down from a net 27 percent in January. Read more

Gold rallies again ahead of EU summit and Diwali

  Gold soared more than 3% on Tuesday and continues to climb in an electronic trading today, right now trading over $1720. Spot gold rose nearly 1 percent to its highest level in more than a month, as safe-haven demand returned on growing doubts over a resolution to the Euro zone debt crisis ahead of a key European Union summit later in the day.

The yellow metal usually rallies following periods in which gold timers are abnormally bearish – and vice versa. By the end of the last week, the average dropped to its lowest level in two and one-half years—minus 13%. That meant that the average gold timer was recommending that his clients allocate 13% of their gold portfolios to going short, which is an aggressive bet that gold will go lower. The last time the HGNSI was this low was in March 2009, when gold bullion was trading in the low $1400’s. Read more

ENBD Precious Metals Weekly Report

The Finance ministers of the Eurozone have recommended and agreed the next Tranche of 8 BLN Euros for Greece, subject to approval of the IMF. The summit of the Eurozone is expected to go into extra time until Wednesday, when they hope to finalize a common proposal. The European Financial Stability Facility (EFSF) is the bone of contention between France and Germany. These developments are widely covered in the media in Dubai and around the world. Read more

Fund Manager Survey finds Sovereign Debt Fears easing as Investors anticipate Greek Default

Global investors appear to be coming to terms with the prospect of a default by the Greek government, according to the BofA Merrill Lynch Survey of Fund Managers for October.

More than nine out of 10 (92 percent) of the 199 respondents to October’s global survey believe that Greece cannot avoid default. Seven out of 10 respondents predict a default by April 2012. Despite this overwhelming consensus, investors are less worried about sovereign risk than a month ago and less pessimistic about global growth. Read more

Precious Metals Weekly Outlook

Last week has been a much better week for the precious metals and the hope is that this trend will continue. US economic figures came out slightly better than expected, and progress seems to have been made in the quest for a solution in the ongoing European Sovereign Debt crisis. The European Financial Stability Facility (EFSF) has finally been ratified by all 17 members of the Eurozone but this is still the one with the 440 billion Euros cap. The market was and still is looking for a potential two Trillion EFSF umbrella. I find it very difficult to believe that this amount of money would find any political support from the major participants inside the Eurozone. Another point of contention is still the discussion about the size of the haircut for the Private Sector in a Greece debt restructuring. A 50 or even 60 per cent write-off would put huge pressures on the banking sector for re-capitalisation. France is favouring this money to come directly from the EFSF whilst Germany still insists that the various Governments first help their own banks and only a balance to be funded through the EFSF. The figures coming out of China show that a slowdown is visible and that could disturb the economic outlook for the rest of the year. So, there is still enough reason to be careful out there. Read more

Precious Metals Weekly, ENBD

Last week’s calendar was rich on events. The LBMA conference in Montreal was at the beginning of the week and all the bullishness displayed out there is all but gone and seems like a distant dream. The statement of the FED led to a major liquidation process which includes all asset classes. Equities, currencies (except the US $) and commodities have seen a torrid time. The state of the US economy and the European sovereign debt crisis led to massive sell-offs.

The industrial metals like copper led the way and the platinum group metals followed swiftly. Silver got caught up badly through its close association with the industrial metals and the liquidation was brutal. Gold also lost a lot of ground and the recent lows at 1703 were penetrated and swept away. Gold also lost ground on Thursday because investors sold their gold. Why? …Simply because they could. Gold came off as margin calls for other investments needed payments and gold was sold for this reason. Friday’s sell-off was much more a deployment of the all-out exit strategy and the technical environment has turned bearish for the precious metals. But, don`t despair. The price of Gold will rally again as soon as the first wave of this liquidation has finished. Read more

Weekly economic review: “Worries persist”

Weekly economic review by Gary Dugan

• US economic data shows ongoing weakness
• Good news- signs that inflation could be peaking
• High dividend paying companies offer some investment opportunity
• Eurozone ugly and unresolved

Investors continue to have to cope with a drip feed of negative news from around the world. The good news is that some of the bad news may start to abate. Inflation should start to fall back and Japanese growth should start to rebound. However some of the structural challenges remain a serious drag on sentiment. Read more

If you are into stocks, follow the big money

Higher energy prices, Japan supply chain disruptions and fear of continuous depreciation of the U.S. dollar were supposed to scare investors off tacking risks with stocks, but it hasn’t exactly turned out that way. Reporting quarterly results, most of the regional banks outdid the estimates.

Before one can understand which stocks are likely to advance the most in the upcoming economic cycle, one needs to understand who the big buyers are. People running money at the large investment funds, who drive the markets today are survivors of a previous decade. Most of them have watched colleagues, who made mistakes and who are left out now to bid for any kind of jobs. Read more

Varengold Bank participates in the ME Online Trading Summit & Awards Dubai 2010

Varengold Wertpapierhandelsbank AG, with its 15 years persistence and success in providing financial services and investments participates in the 2010 Dubai ME Online Trading Summit & Awards. Read more

NASDAQ Dubai Monthly Trading Report

September 2010 – Equities Traded Value Rises 31% In First Nine Months Of 2010

The value of equities traded on NASDAQ Dubai increased by 31% in the first nine months of 2010 compared to the same period in 2009, from USD722 million to USD948 million.

Volume fell by 13% from 2.32 billion shares to 2.02 billion. For both value and volume, this was the strongest performance by any UAE stock exchange over the nine-month period, measured by percentage change.

NASDAQ Dubai outsourced its trading, settlement, clearing and custody functions for equities to Dubai Financial Market on July 11, 2010, as part of a strategy to increase trading of its equities by individual investors and bring them together in one liquidity pool with institutional investors. Read more

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