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June 12 (Reuters) - The stock market rose. The stock market fell. But Migbil al-Anezi was only concerned about the lack of water and electricity in his shanty Nadhim district on the outskirts of Saudi Arabia's capital Riyadh.
While half of the country's 17 million Saudis have been counting their losses following the bourse's crash earlier this year after a spectacular rise in 2005. others only hope for more largesse from a state awash with cash thanks to record oil prices.
"There are no services." Migbil says dismissively. preparing cardamom-flavoured coffee inside the wooden hut he calls home. "And I wouldn't dare ask in case they force us off the land ... There's talk of putting a recreational facility here."
While soaring oil prices have given the world's biggest oil exporter record revenues. many Saudis still find themselves living on the margin despite promises of reform and a more equitable distribution of wealth.
Migbil says he moved to this scrub land six months ago because of rising rents in the city's formal neighbourhoods. putting a strain on the 2.000 riyals ($533) he earns a month as a driver for the Ministry of Agriculture.
"There's no water so I go around mosques or shops to take from their taps. and running the air cooler needs too much water in summer so I've sent the children to relatives. embarrassed to entertain guests in such meagre surroundings.
As he speaks. the engineer who installed the generator-powered air cooler passes by to check on the progress of the rickety contraption. "I put 50.000 riyals in the stock market." the visitor confesses. "but now it's all gone."
"What do I want with the bourse?" responds an incredulous Migbil. who has to provide for six children including a hospitalised daughter with kidney trouble.
Before he ascended the throne last year. King Abdullah had warned of the threat of growing poverty and unemployment while visiting a poor district in 2002.
But there are still no statistics on how many Saudis actually struggle to make ends meet and the topic remains taboo in a kingdom fabled for its tremendous wealth.
"There is a problem of figures. Maybe there's been a slight fall in the number of poor. but we must remember that five years ago no one even wanted to recognise this issue." said Turki Fadak. an analyst with the Saudi Economic Association.
Though the rise in world oil prices has offered a certain reprieve. the authorities still fear that an underclass who perceive they are left out of the kingdom's development drive could provide recruits for al Qaeda. which launched a violent campaign to topple the monarchy in 2003.
Last month. the king -- whom Forbes magazine says is worth $21 billion -- promised cheap housing. He also cut fuel prices. in a move which drew praise from the underclass and confirmed the political sway the question of poverty now carries.
"The rich don't feel it. but for the poor this fuel cut really makes a difference. It was a great idea and I thank him (the king) for it." says Hussein al-Walda. another squatter in Nadhim. sitting cross-legged in a makeshift tent.
"I see it on television. but what capital do I have to put in there?" he said. "We've got scorpions and snakes here. and in the winter it gets really cold. Two years ago we had hailstones as big as this coffee cup."
Ali Sadek. an economist who used to work with the Arab Monetary Fund in the United Arab Emirates. said low-income Saudis were a festering problem for the kingdom with consequences that are hard to predict.
"There is no reason to have poor people in a rich country like Saudi Arabia." he said. "If there are poor in a country and they see conspicuous consumption. they are resentful of other people as well as the government because they should be doing something to help them."
Although the kingdom is striving to diversify its oil-based economy. the private sector is failing to provide jobs. Unemployment is officially put at between 6 to 12 percent. and most Saudis long for government jobs and state hand-outs.
A decade-old drive of "Saudisation". intended to replace over 6 million foreign workers with Saudi nationals. has failed to produce major results and the government plans to bring even more Asian labour to fuel its industrial expansion.
"It's not a matter of just giving people food. The state has to train them to really earn their income." Sadek said. "Nobody really knows when the oil boom will change. so it's better for the government to create projects that will give jobs to the segments of the population who are unemployed and unskilled."
stock investing
While half of Saudi Arabia's 17 million nationals have been counting their losses following the stock market's crash earlier this year after a spectacular rise in 2005. others only hope for more largesse from a state awash with cash thanks to record oil prices.
While soaring oil prices have given the world's biggest oil exporter record revenues. many Saudis still find themselves living on the margin despite promises of reform and a more equitable distribution of wealth.
Migbil says he moved to this scrubland six months ago because of rising rents in the city's formal neighbourhoods. putting a strain on the 2.000 riyals ($533) he earns a month as a driver for the Ministry of Agriculture.
'There's no water so I go around mosques or shops to take from their taps. and running the air cooler needs too much water in summer so I've sent the children to relatives. embarrassed to entertain guests in such meagre surroundings.
As he speaks. the engineer who installed the generator-powered air cooler passes by to check on the progress of the rickety contraption. 'I put 50.000 riyals in the stock market.' the visitor confesses. 'but now it's all gone.'
'What do I want with the bourse?' responds an incredulous Migbil. who has to provide for six children including a hospitalised daughter with kidney trouble.
Before he ascended the throne last year. King Abdullah had warned of the threat of growing poverty and unemployment while visiting a poor district in 2002.
But there are still no statistics on how many Saudis actually struggle to make ends meet and the topic remains taboo in a kingdom fabled for its tremendous wealth.
'There is a problem of figures. Maybe there's been a slight fall in the number of poor. but we must remember that five years ago no one even wanted to recognise this issue.' said Turki Fadak. an analyst with the Saudi Economic Association.
Though the rise in world oil prices has offered a certain reprieve. the authorities still fear that an underclass who perceive they are left out of the kingdom's development drive could provide recruits for al Qaeda. which launched a violent campaign to topple the monarchy in 2003.
Last month. whom Forbes magazine says is worth $21 billion. promised cheap housing. He also cut fuel prices. in a move which drew praise from the underclass and confirmed the political sway the question of poverty now carries.
'The rich don't feel it. but for the poor this fuel cut really makes a difference. It was a great idea and I thank him (the king) for it.' says Hussein al-Walda. another squatter in Nadhim. sitting cross-legged in a makeshift tent.Like Migbil. he says the stock market means nothing to him.-Reuters
stock investing
The stock market rose. The stock market fell. But Migbil Al Anezi was only concerned about the lack of water and electricity in his shanty Nadhim district on the outskirts of Saudi Arabia's capital Riyadh.
While half of the country's 17 million Saudis have been counting their losses following the bourse's crash earlier this year after a spectacular rise in 2005. others only hope for more largesse from a state awash with cash thanks to record oil prices.
"There are no services." Migbil says dismissively. preparing cardamom-flavoured coffee inside the wooden hut he calls home. "And I wouldn't dare ask in case they force us off the land ... There's talk of putting a recreational facility here."
While soaring oil prices have given the world's biggest oil exporter record revenues. many Saudis still find themselves living on the margin despite promises of reform and a more equitable distribution of wealth.
Migbil says he moved to this scrub land six months ago because of rising rents in the city's formal neighbourhoods. putting a strain on the 2.000 riyals ($533) he earns a month as a driver for the Ministry of Agriculture.
"There's no water so I go around mosques or shops to take from their taps. and running the air cooler needs too much water in summer so I've sent the children to relatives. embarrassed to entertain guests in such meagre surroundings.
As he speaks. the engineer who installed the generator-powered air cooler passes by to check on the progress of the rickety contraption. "I put 50.000 riyals in the stock market." the visitor confesses. "but now it's all gone."
"What do I want with the bourse?" responds an incredulous Migbil. who has to provide for six children including a hospitalised daughter with kidney trouble.
Before he ascended the throne last year. The Custodian of Two Holy Mosques King Abdullah bin Abdulaziz of Saudi Arabia had warned of the threat of growing poverty and unemployment while visiting a poor district in 2002.
But there are still no statistics on how many Saudis actually struggle to make ends meet and the topic remains taboo in a kingdom fabled for its tremendous wealth.
"There is a problem of figures. Maybe there's been a slight fall in the number of poor. but we must remember that five years ago no one even wanted to recognise this issue." said Turki Fadak. an analyst with the Saudi Economic Association.
Though the rise in world oil prices has offered a certain reprieve. the authorities still fear that an underclass who perceive they are left out of the kingdom's development drive could provide recruits for Al Qaeda. which launched a violent campaign to topple the monarchy in 2003.
Last month. the king promised cheap housing. He also cut fuel prices. in a move which drew praise from the underclass and confirmed the political sway the question of poverty now carries.
"The rich don't feel it. but for the poor this fuel cut really makes a difference. It was a great idea and I thank him (the king) for it." says Hussein Al Walda. another squatter in Nadhim. sitting cross-legged in a makeshift tent.
"I see it on television. but what capital do I have to put in there?" he said. "We've got scorpions and snakes here. and in the winter it gets really cold. Two years ago we had hailstones as big as this coffee cup."
Ali Sadek. an economist who used to work with the Arab Monetary Fund in the United Arab Emirates. said low-income Saudis were a festering problem for the kingdom with consequences that are hard to predict.
"There is no reason to have poor people in a rich country like Saudi Arabia." he said. "If there are poor in a country and they see conspicuous consumption. they are resentful of other people as well as the government because they should be doing something to help them."
Although the kingdom is striving to diversify its oil-based economy. the private sector is failing to provide jobs. Unemployment is officially put at between 6 to 12 per cent. and most Saudis long for government jobs and state hand-outs.
A decade-old drive of "Saudisation". intended to replace over 6 million foreign workers with Saudi nationals. has failed to produce major results and the government plans to bring even more Asian labour to fuel its industrial expansion.
"It's not a matter of just giving people food. The state has to train them to really earn their income." Sadek said. "Nobody really knows when the oil boom will change. so it's better for the government to create projects that will give jobs to the segments of the population who are unemployed and unskilled."
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Saigon Thuong Tin Commercial Bank (Sacombank). Vietnam's first bank licensed to list. said Monday it would make its stock debut on July 12. a move that is expected to boost the stock market's value by more than half.
Once listed on the exchange . Sacombank's near 190 million shares should increase the value of the Ho Chi Minh City Securities Trading Center by 51 percent to $2.87 billion 'C or around 6.4 percent of 2004 gross domestic product.
Sacombank Chairman Dang Van Thanh said in a statement seen by Reuters that the bank will issue more than 30 million shares after the debut. 20 million of which will be sold to the public via an auction on the Ho Chi Minh City market.
The World Bank's International Finance Corp.. British fund manager Dragon Capital and Australia and New Zealand Banking Group Ltd. each has 10 percent in Sacombank. which has 38 branches in communist Vietnam.
Vietnam allows foreign investors to hold a maximum 49 percent in a listed firm. but current regulations still limit foreign ownership of a listed bank at 30 percent.
The Ho Chi Minh City exchange. has been the best performing market in Asia so far this year as investors look for ways to cash in on Vietnam's strong economic growth. projected at 8 percent this year.
Thanh was quoted by state media on Monday as saying Sacombank's assets were 18.9 trillion dong ($1.2 billion) as at May 31. up 30.7 percent from the end of last year. Gross profit was estimated at 235 billion dong at the end of May. almost double a year earlier. he said.
Finance Minister Nguyen Sinh Hung said last month that Vietnam this year plans to double the number of companies listed on the exchange while also doubling the market value.
stock investing
NEW YORK - Now that the Dow Jones industrial average has shed 6.3 percent since May 10. it's time to ask the question: How do you distinguish a short-term stock market correction from a full-blown bear market? of course. But already there are clues in technical market data. such as who is doing the buying and selling. the price of stocks relative to corporate earnings. and the length of time since the last recession.
Corrections. defined as a drop of 5 percent over a few weeks or a month or two. the Dow has fallen at least that much more than 300 times. or an average of more than three times a year. according to Ned Davis Research Inc.
But nine out of 10 such slides bottom out and start rising again. It's the other 10 percent that scare the pants off investors. They turn into bear markets. in which the broad market indicators lose 20 percent or more and take their own sweet time coming back.
In 2005. the Dow dropped more than 800 points - 8 percent - in March and April before rallying. then dropped an additional 400 points in September and October before climbing some more. In both cases. investors who jumped out prematurely would have suffered losses and missed another good rise.
On the other hand. analysts were full of rosy predictions in 2000 and 2001 that the market was simply resting briefly and would soon resume its dizzying climb. None of the major indicators have ever returned to their early 2000 highs.
"Picking the short-term movement of the stock market is like standing at the roulette table and saying. "I think red is coming up next' and then congratulating yourself when you are right." said Andrew Smithers. a British economic consultant. Though he published a book in March 2000 that correctly predicted that stocks were overvalued and about to tank. he called the timing "pure luck."
"There's some panic in the street. chief equity strategist for brokerage firm A.G. Edwards & Sons. "but I don't feel it's justified. . . . We don't have any signs that a recession is at hand. is still pretty well contained."
George Feiger. who runs Contango Capital Advisors. a wealth-management business. looks at the same signals and sees trouble. "All the technical indicators are showing that we must be getting near the end. The economy is slowing down. the dollar is tanking. people are pulling their money out of equities and putting them in cash. huge amounts of debt have been issued by below-grade (high-risk) issuers. The real question is not where will it go but how far."
Interviews with nearly a dozen economists and market analysts turned up widely varying views on whether this particular market correction will develop fur and claws. That's partly because each one looks at different signals to determine where the equity markets are going:
Charles Biderman. chief executive of TrimTabs Investment Research. argues that the real answers lie in mutual fund flows and in whether companies are spending money to buy their own stock or that of other companies as part of a merger.
He noted that at the market peak in early 2000. individual investors were piling into equity funds but that companies were net sellers of stock. By contrast. at the bottom of the last bear market from June 2002 to February 2003. individuals pulled $100 billion out of equity funds. while companies were net buyers by $30 billion.
"Typically. individual investors are always wrong. for every year when companies were net buyers of their own shares. the market has gone up."
Right now. companies are again net buyers - he calculated that in May. 135 companies announced a total of $63 billion in stock buybacks and $40 billion more in stock purchases as part of takeovers. Meanwhile. individuals pulled money out of equity funds in May. His conclusion: "The economy is doing very well. and the market is underperforming."
James W. Paulsen. chief investment strategist for Wells Capital Management. also predicts good times ahead for stock buyers. He argues that corporate profits and consumer spending are still relatively strong and notes that even though the Federal Reserve has repeatedly raised the benchmark short-term interest rate over the past two years. the current level of 5 percent is still low by historical standards.
"I think the odds favor us getting over this and going back up to where we were." Paulsen said. "My bet is that we have not shut down the speed of world growth yet."
Some analysts are far less sanguine. Many of them rely on the relationship between a company's share price and its earnings to determine whether it is over- or undervalued. and they say that rapidly rising corporate earnings were the crucial engine behind the stock market's long rise from late 2002 through the first part of this year. S&P 500 companies are trading around 15 times operating earnings. well below where they were at the last market peak in 2000.
But some analysts are worried that high energy prices and the possibility - also mentioned by Bernanke last week - of a cooling economy could combine to make it harder for companies to post strong earnings growth.
"Earnings are going to be a little harder from now on." said Peter Jankovskis. director of research for OakBrook Investments LLC. Though he thinks the current drop is a correction rather than a bear market. he said small investors with extra money in their pockets might do well to put it in a money market fund or high-interest bank account until the current trend becomes clearer.
"The market definitely has cycles: Sell in May. stay away. Markets are generally weak in the summer." he said. "It won't hurt you to stay on the sidelines for a while."
"The worst thing that can happen is that people panic at the bottom. and it takes them a year or two to get over that panic. By that time. you've missed most of the next bull market. chief market strategist for CyberTrader. a Charles Schwab Co. subsidiary that focuses on active traders.
stock investing
The Nasdaq Stock Market.; NDAQ) today announced that it has hired James Ogilvy-Stuart as its Head of Asia Pacific. Based in Hong Kong. Ogilvy-Stuart will be responsible for NASDAQ's new listings business throughout the Asia Pacific region. He will report to Charlotte Crosswell. Head of NASDAQ International. Ogilvy-Stuart takes up his position on July 3rd. 2006.
Ogilvy-Stuart joins NASDAQ after 17 years at Bloomberg L.P. where latterly he was the Regional Sales Manager for North Asia Pacific. Until recently. he oversaw all sales operations for Hong Kong. Thailand and the Philippines. He established and managed Bloomberg's Asia Pacific Advisory Board and was responsible for the company's regional senior relationships with local government and regulatory bodies.
Charlotte Crosswell. Head of NASDAQ International said. "We are delighted that James is joining NASDAQ. his depth of business experience throughout the region will be a great asset to our ongoing business there. NASDAQ continues to demonstrate its commitment to Asia Pacific. it is dedicated to the region and it welcomes all Asian companies from all industry sectors that are looking to raise US capital through its superior market."
NASDAQ currently has 85 companies from Asia listed on its exchange with a combined global market cap of approximately US$253 billion. In China alone NASDAQ has 28 listings.
June 13 (Reuters) - Latin America's leading stock markets fell further early on Tuesday. after Mexican and Brazilian stocks fell more than 4.0 percent on Monday on concern rising global interest rates will slow economic growth.
Colombia's stock market <.IGBC> posted the steepest losses in the region early on Tuesday. falling over 6 percent. On Monday stock market authorites halted trade after a 10.46 percent plunge in the benchmark index.
Latin American currencies kept losing ground on Tuesday also. The Chilean peso. under pressure from falling prices in its chief export copper. weakened about 0.8 percent. the Colombian peso fell about 1.3 percent. the Brazilian real weakened about 0.6 percent. and the Mexican peso edged 0.07 percent lower.
The slide in emerging markets stocks was worldwide on Tuesday. with the Morgan Stanley Capital Index emerging stock market index <.MSCIEF> off 4.06 percent to 666.86.
Driving the global stock market sell off was the recent rise in interest rates around the world that is making safer markets more attractive to international investors. analysts said.
And on Tuesday. futures traders in Chicago pushed up the chances of a Federal Reserve interest rate hike on June 29 to 92 percent after May's U.S. core producer prices rose more than expected. On Monday the chances were seen at 84 percent.
In Mexico City.986.27 in its steepest plunge since September 2002.
Even though stocks have fallen sharply in recent weeks and Wall Street thinks the stock market is in a funk. individual investors who focus on picking stocks for the long-term are still poised for growth.
stock investing
Colombia -- Colombia's small stock market was hammered for a second day on Tuesday. closing down 8.7 percent. one day after a record slide of 10.5 percent. Other Latin American markets also took a beating as investors spooked by rising global interest rates pulled money out of emerging markets.
After shedding 9.7 percent in early trading. Colombia's benchmark stock index recovered slightly to close at 6.160.25. The fall came despite a government estimate of 5.8 percent year-to-year gross domestic product growth in the first quarter.
It was the third-largest slide in the brief history of the index. which was created in 2001 with the merger of three regional markets. The index has lost 25 percent so far this year after more than doubling last year and rising 87 percent in 2004.
Traders said investors in emerging markets are concerned accelerating inflation will lead the U.S. Federal Reserve to raise rates. making risky assets less attractive than U.S. fixed-income assets. High energy prices and other costs are forcing central banks around the globe to raise rates in a bid to counteract inflationary pressure.
The Colombian exchange. according to the stock market regulator citing the latest available figures.
The government announced Tuesday it will eliminate capital controls imposed in 2004 under which foreign investors could move only profits out of Colombia. while the principal had to remain in the country for at least a year. Heavy fines were imposed on investors who tried to skirt the rules.
The benchmark IPC index of the 35 most-traded companies fell 333.12 points. its lowest level since Nov. 18. 2004. The IPC has shed nearly 24 percent of its value since the last record-high close of 21.823 on May 9.
"What's happening in global markets and here in Mexico is concern about how far the Fed is going to raise rates." said Miguel Olavarri. head equity trader at Accival in Mexico City. noting that the market is already looking beyond a likely U.S. rate hike later this month.
A close presidential race in Mexico. with a local newspaper poll published Thursday showing leftist candidate Andres Manuel Lopez Obrador retaking the lead. is also making the market nervous.
Brazilian share prices closed sharply lower. with the benchmark Ibovespa stocks index off 2.11 percent at 32.455 points.
Argentine stocks finished lower after a roller-coaster session that was briefly buoyed by a rally by market heavyweight Tenaris. The benchmark Merval Index slid 0.98 percent to a six-month low of 1. played catch-up with the rest of the region's slide following Monday's market holiday. Chile's 40-share benchmark Ipsa index ended at 1. down 4.4 percent from Friday's close.
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Colombia (AP) - Colombia's small stock market was hammered for a second day on Tuesday. closing down 8.7 percent. one day after a record slide of 10.5 percent. Other Latin American markets also took a beating as investors spooked by rising global interest rates pulled money out of emerging markets.
After shedding 9.7 percent in early trading. Colombia's benchmark stock index recovered slightly to close at 6.160.25. The fall came despite a government estimate of 5.8 percent year-to-year gross domestic product growth in the first quarter.
It was the third-largest slide in the brief history of the index. which was created in 2001 with the merger of three regional markets. The index has lost 25 percent so far this year after more than doubling last year and rising 87 percent in 2004.
Traders said investors in emerging markets are concerned accelerating inflation will lead the U.S. Federal Reserve to raise rates. making risky assets less attractive than U.S. fixed-income assets. High energy prices and other costs are forcing central banks around the globe to raise rates in a bid to counteract inflationary pressure.
The Colombian exchange. according to the stock market regulator citing the latest available figures.
The government announced Tuesday it will eliminate capital controls imposed in 2004 under which foreign investors could move only profits out of Colombia. while the principal had to remain in the country for at least a year. Heavy fines were imposed on investors who tried to skirt the rules.
The benchmark IPC index of the 35 most-traded companies fell 333.12 points. its lowest level since Nov. 18. 2004. The IPC has shed nearly 24 percent of its value since the last record-high close of 21.823 on May 9.
"What's happening in global markets and here in Mexico is concern about how far the Fed is going to raise rates." said Miguel Olavarri. head equity trader at Accival in Mexico City. noting that the market is already looking beyond a likely U.S. rate hike later this month.
A close presidential race in Mexico. with a local newspaper poll published Thursday showing leftist candidate Andres Manuel Lopez Obrador retaking the lead. is also making the market nervous.
Brazilian share prices closed sharply lower. with the benchmark Ibovespa stocks index off 2.11 percent at 32.455 points.
Argentine stocks finished lower after a roller-coaster session that was briefly buoyed by a rally by market heavyweight Tenaris. The benchmark Merval Index slid 0.98 percent to a six-month low of 1. played catch-up with the rest of the region's slide following Monday's market holiday. Chile's 40-share benchmark Ipsa index ended at 1. down 4.4 percent from Friday's close.
stock investing
(For other news from the Reuters Investment Outlook Summit. updates declines of major indexes)
NEW YORK. U.S. stock investors may have to brace themselves for what could prove to be a prolonged downbeat market as major indexes test key technical support levels. a leading market technical analyst said on Tuesday.
Louise Yamada. founder and managing director of Louise Yamada Technical Research Advisors. told the Reuters Investment Outlook Summit in New York that major U.S. stock indexes could well see further downside.
Even if the stock market entered a period where it could be deemed to be in oversold territory. Yamada said there was a possibility for more selling pressure to jolt stocks before stocks attempted another breakout higher.
"During a bull market you can get away with saying. the market is oversold. you want to buy.' Oversold conditions are holding a little longer than they have for the past three years. So we have to stay alert to the fact that we may be in for a more corrective trend." said Yamada.
"At a minimum we suspect that we're going to experience a corrective trend. but whether or not we go to a bear market. which you define as 20 percent or more down off the highs. it isn't clear yet. It's a possibility. We can go to a cyclical bear market. within a structural bear environment."
Gains that the stock market registered earlier this year. coincided with a declining number of stocks hitting new highs -- a bearish technical signal.
Even though stocks have fallen sharply in recent weeks and Wall Street thinks the stock market is in a funk. individual investors who focus on picking stocks for the long-term are still poised for growth.
stock investing
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