Pater Tenebrarum submits:

<< Return to Part 1

</a

Complete Story »

StreetAuthority submits:

By David Sterman

The current social unrest spreading throughout the Middle East has its roots in many causes. In some places, despotic leadership is no longer being tolerated. In other instances, such as Bahrain, religious groups that constitute a majority of the population have been shut out of important roles in the economy. Yet in all of the countries involved, one clear theme has emerged: The citizens are tired of corrupt, sclerotic and nepotistic leaders, and simply want improved access and a shot at a better lifestyle.

What’s in the interests of these citizens is also in the interest of investors. Corruption-free, merit-based economies are always the best place to do business. That’s why the Heritage Foundation annually issues a Freedom Index of 10 components that measure a series of “economic freedoms” such as business freedom, trade freedom, fiscal freedom, property rights and corruption.

It’s no coincidence that Iran, Syria,

Complete Story »

Tom Lydon submits:

Complete Story »

Tom Lydon submits:

Frontier markets is an investment sector that is just gaining traction with investors. ETFs tracking these markets have given individual and institutional investors alike exposure to exotic markets with growth potential. This exposure doesn’t come with out risks though, just take a look at what is happening in North Africa and the Middle East.

The term “frontier markets” is often used to describe growing markets that are generally less developed, smaller in market capitalization, less liquid and less accessible to investors than “emerging market” countries. Dennis Hudacheck for Index Universe helps decipher some of the latest frontier market ETFs.

Some to keep an eye on:

• Guggenheim Frontier Markets ETF (FRN) – Tracks the BNY Mellon New Frontier DR Index; countries are classified according to GDP, per capita income, inflation rates, privatization of infrastructure, and social inequalities. Chile, Egypt and Colombia are top weightings, representing 59% of the portfolio.
• PowerShares MENA

Complete Story »

Mike Maher submits:

Reports out of Abu Dhabi today that Saudi Arabia plans to spend over $100 billion dollars on new energy infrastructure over the next decade failed to rally oil or copper prices Monday. However, the long term impact of this spending is sure to have an impact in commodity markets, adding more demand to several markets that are already in tight supply.

Saudi Arabia is facing rising electricity demand, expected to increase about 8% a year over the next five years, as it builds new cities and diversifies into new energy intensive industries. The $67 billion plan King Abdullah announced March 18 will, among other things, build 500,000 new houses, all of which will obviously need to be connected to

Complete Story »

Wall Street Strategies submits:

By Conley Turner

The price of crude oil remains volatile, as geopolitical events continue to impact investor psychology. Since the onset of the popular uprising against Libyan leader Colonel Muammar Gaddafi in mid- February, the price of the commodity has risen by well over 20 percent. A significant amount of attention is still being directed towards the events in that country. However, the evolving situation in Yemen requires added consideration, as it can conceivably have a more enduring impact on the balance of power in the region.

In order to fully appreciate the situation, some historical context pertaining to the region is useful. The majority of the world’s more than one billion Muslims fall under either the Shiite or Sunni branches of Islam, with between 85 and 90 percent being Sunni. While all Muslims believe that the Prophet Muhammad was the messenger of Allah, there are differences in the beliefs

Complete Story »

Kent Moors submits:

This morning I am returning home from St. Petersburg, Florida, where I spent the last several days with the Money Map team at 2011 Investment U. But while we were enjoying the sun, good food, and good conversation, matters continued to develop elsewhere that will impact investor approaches to global energy.

Information has surfaced that forces opposing Libyan leader Muammar Gaddafi secured the major oil towns of Brega and Ras Lanuf (both port cities on the Mediterranean). The insurgents now control fields producing between 100,000 and 130,000 barrels a day, and they say that will quickly increase to 300,000, with exports renewing in a week. That higher figure would account for about 19% of daily exports from Libya before the unrest started.

To the extent that anti-Gaddafi forces can secure the oil fields presently under their control, at least some of those exports should begin to flow again. Yet those

Complete Story »

Jens Heycke submits:

In a previous article, I mentioned that Syria was a real risk for Middle East stability and global oil markets. Syria only exports about 80,000 bbl/day of oil. However, it is in a key position to trigger a sequence of events that could end with all-out conflict in the Middle East. Let’s see how.

Since 1970, Syria has been ruled by the Assad family– first Hafez and then his son Bashar. The Assads belong to a small sect known as Alawis (or Nusayris). While the Alawis only account for 10% of Syria’s population, they completely dominate the upper ranks of its military and state bureaucracy. This is particularly irksome for Sunni Islamists, because they consider Alawis to be heretics. Islamist Sunnis lead by the Muslim Brotherhood have long resisted the Assads’ government, but have been brutally suppressed, with the Syrian army massacring tens of thousands of them (along with many

Complete Story »

CFA Institute submits:

By Ed Bace

When it comes to the Middle East, it’s all too easy for global investors to lump countries into the same category. Indeed, sovereign risk premia as reflected in CDS spreads have widened dramatically across the region, with spikes of as much as 88% in Bahrain and 80% in Saudi Arabia. Meanwhile, with the price of crude oil up 21% for the year, the S&P Pan Arab index has lost roughly 10%.

But yesterday, M. R. Raghu, CFA, reminded delegates at the Second Annual CFA Institute Middle East Investment Conference in Abu Dhabi that important distinctions must be made between the Gulf Cooperation Council (GCC) countries and the rest of the Middle East and North Africa (MENA) region in terms of relative wealth and unemployment. Raghu, who is president of the board of the CFA Society of Kuwait and senior vice president of research at Kuwait Financial Centre

Complete Story »

Ron Rowland submits:

After many delays, the Egyptian Stock Exchange reopened yesterday. A 10% drop within minutes of the opening triggered circuit breakers and suspended trading for the day.

During the nearly two-month closure, many investors mistakenly assumed the Market Vectors Egypt ETF (EGPT) was a good proxy for the Egyptian stock market. I pointed out what I saw as the fallacy of that view in my Impending Collapse of the 30% Premium for EGPT article.

Instead of jumping 30%, the NAV for EGPT dropped 7.3% overnight to $15.31, as Van Eck deployed the 41% cash stake that had built up while Egypt was closed. Trading in EGPT closed at $16.65 yesterday and was halted before the market opened this morning. Trading commenced one hour later, with the price dropping to $15.26 – the premium totally collapsed and a slight discount was momentarily available.

EGPT traded for $19.21 just 10 market days ago

Complete Story »