Bank shares weigh on Abu Dhabi bourse; other Gulf markets steady

Main building of Dubai International Financial Centre, the world's fastest growing international financial centre. (Shutterstock)
Updated 18 November 2019

Bank shares weigh on Abu Dhabi bourse; other Gulf markets steady

DUBAI: Abu Dhabi’s stock market fell sharply on Sunday, weighed down by the country’s largest lender First Abu Dhabi Bank, while other Gulf markets were mostly flat.

In Abu Dhabi, the index slid 1.5 percent, its biggest fall since August, as First Abu Dhabi Bank (FAB) retreated 2.4 percent, while telecoms firm Emirates Telecommunications was down 1.2 percent.

Among other stocks, Aldar Properties declined 2.7 percent, extending losses for a fourth straight session.

The property developer reported on Nov. 12 a near 8 percent drop in third quarter profit.

Arqaam Capital had a net profit forecast of AED435 million and EFG Hermes had projected AED429 million, whereas the firm reported a net profit of AED387 million.

In Saudi Arabia, the index reversed course to gain 0.1 percent driven by a 2.4 percent rise in Al-Rajhi Bank and a 0.9 percent increase in Alinma Bank.

Elsewhere, Saudi Paper Manufacturing advanced 2.9 percent following an approval for a SR52 million ($13.87 million) grant.

Dubai’s index edged up 0.1 percent, led by a 4.7 percent leap in Emirates NBD. On Wednesday, the emirate’s largest lender confirmed the sale of 31 million shares in Network International Holdings for $205 million.

Union Properties rose 2 percent after reporting third quarter losses that were narrower than in the previous quarter. However, the gains were capped by losses in Arabtec Holding, which dived 9.6 percent, its biggest fall since May.

The Dubai-listed contractor swung to a third quarter loss of AED437.4 million ($119.09 million), compared with a profit of AED67.5 million a year ago.

The Qatari index was down 0.5 percent with the Gulf’s largest lender Qatar National Bank decreasing 1.1 percent and Industries Qatar losing 1 percent.

Outside of the Gulf, Egypt’s blue-chip index edged up 0.1 percent with Commercial International Bank adding 0.7 percent. 

However, Sidi Kerir Petrochemicals closed down

6.4 percent, stretching its losing streak for a fifth session. On Tuesday, the firm reported a steep fall in its nine-month net profit.


US trade offensive takes out WTO as global arbiter

Updated 10 December 2019

US trade offensive takes out WTO as global arbiter

  • Two years after starting to block appointments, the US will finally paralyze the WTO’s Appellate Body
  • Two of three members of Appellate Body exit and leave it unable to issue rulings

BRUSSELS: US disruption of the global economic order reaches a major milestone on Tuesday as the World Trade Organization (WTO) loses its ability to intervene in trade wars, threatening the future of the Geneva-based body.
Two years after starting to block appointments, the United States will finally paralyze the WTO’s Appellate Body, which acts as the supreme court for international trade, as two of three members exit and leave it unable to issue rulings.
Major trade disputes, including the US conflict with China and metal tariffs imposed by US President Donald Trump, will not be resolved by the global trade arbiter.
Stephen Vaughn, who served as general counsel to the US Trade Representative during Trump’s first two years, said many disputes would be settled in future by negotiations.
Critics say this means a return to a post-war period of inconsistent settlements, problems the WTO’s creation in 1995 was designed to fix.
The EU ambassador to the WTO told counterparts in Geneva on Monday the Appellate Body’s paralysis risked creating a system of economic relations based on power rather than rules.
The crippling of dispute settlement comes as the WTO also struggles in its other major role of opening markets.
The WTO club of 164 has not produced any international accord since abandoning “Doha Round” negotiations in 2015.
Trade-restrictive measures among the G20 group of largest economies are at historic highs, compounded by Trump’s “America First” agenda and the trade war with China.
Phil Hogan, the European Union’s new trade commissioner, said on Friday the WTO was no longer fit for purpose and in dire need of reforms going beyond just fixing the appeals mechanism.
For developed countries, in particular, the WTO’s rules must change to take account of state-controlled enterprises.
In 2017, Japan brought together the United States and the European Union in a joint bid to set new global rules on state subsidies and forced technology transfers.
The US is also pushing to limit the ability of WTO members to grant themselves developing status, which for example gives them longer to implement WTO agreements.
Such “developing countries” include Singapore and Israel, but China is the clear focus.
US Commerce Secretary Wilbur Ross told Reuters last week the United States wanted to end concessions given to then struggling economies that were no longer appropriate.
“We’ve been spoiling countries for a very, very long time, so naturally they’re pushing back as we try to change things,” he said.
The trouble with WTO reform is that changes require consensus to pass. That includes Chinese backing.
Beijing has published its own reform proposals with a string of grievances against US actions. Reform should resolve crucial issues threatening the WTO’s existence, while preserving the interests of developing countries.
Many observers believe the WTO faces a pivotal moment in mid-2020 when its trade ministers gather in a drive to push through a multinational deal — on cutting fishing subsidies.
“It’s not the WTO that will save the fish. It’s the fish that are going to save the WTO,” said one ambassador.