Friday 19th December 2014
NEWS TICKER: THURSDAY DECEMBER 18TH 2014: Scotiabank’s Commodity Price Index dropped -4.8% m/m in November (-6.1% yr/yr) and will end 2014 in a ‘deflationary’ mode, says economist Patricia Mohr. "Significant capacity expansion and the defence of market share by major oil and iron ore producers— against a backdrop of lacklustre world economic growth — account for the softness at the end of the year," she says. Mohr adds that the decision by Saudi Arabia not to reduce output to shore up international oil prices, but instead to allow prices to drop to levels curbing US shale development appears to be having a negative impact on confidence in a wide variety of other commodity as well as equity markets. She predicts prices will fall further this month, but will start to rebound in mid 201 - Jonathan Hill, the EU's financial-services commissioner, says he plans to pursue rules that separate a bank's proprietary trading from retail operations. "The sensible thing to do is to seek to make progress quickly" on the issue, Hill said. "There are still areas of risk in some of the biggest and most complicated banks,” reports Bloomberg- CME Group, said yesterday that it will change daily price limits in its CME Feeder Cattle futures effective today, pursuant to its emergency action authority. The current daily price limit for CME Feeder Cattle futures is $3.00 per hundredweight and will change to $4.50 per hundredweight effective on trade date December 18th Additionally, effective December 19th (tomorrow) these limits will have the ability to expand by 150% to $6.75 per hundredweight on any business day in the event that one of the first two contract months settles at limit on the previous trading day. CME Feeder Cattle futures have been locked limit for five consecutive days as a result of various factors. The change to daily price limits is necessary to ensure continued price discovery and risk transfer, says the CME. Daily price limits for CME Live Cattle futures will remain unchanged at $3.00 per hundredweight. Effective Friday, December 19th, these limits will have the ability to expand by 150 percent to $4.50 per hundredweight in the event that one of the first two contract months settles at limit on the previous trading day - The Straits Times Index (STI) ended +16.42 points higher or +0.51% to 3243.65, taking the year-to-date performance to +2.49%. The FTSE ST Mid Cap Index gained +0.29% while the FTSE ST Small Cap Index gained +0.71%. The top active stocks were Keppel Corp (+2.68%), SingTel (-1.02%), DBS (+2.36%), Global Logistic (-3.21%) and UOB (+0.30%). The outperforming sectors today were represented by the FTSE ST Basic Materials Index (+3.13%). The two biggest stocks of the FTSE ST Basic Materials Index are Midas Holdings (+6.38%) and Geo Energy Resources (unchanged). The underperforming sector was the FTSE ST Telecommunications Index, which declined -0.98% with SingTel’s share price declining -1.02% and StarHub’s share price declining-0.73%. The three most active Exchange Traded Funds (ETFs) by value today were the IS MSCI India (+2.56%), DBXT CSI300 ETF (+0.42%), STI ETF (+0.61%). The three most active Real Estate Investment Trusts (REITs) by value were Ascendas REIT (-0.42%), Keppel DC REIT (unchanged), Suntec REIT (+0.26%). The most active index warrants by value today were HSI23400MBeCW150129 (+7.32%), HSI22600MBePW150129 (unchanged), HSI24000MBeCW150129 (+12.50%). The most active stock warrants by value today were KepCorp MBeCW150602 (+21.95%), DBS MB eCW150420 (+29.29%), DBS MB ePW150402 (-18.03%) - Spain’s Director of Public Prosecutions, Eduardo Torres Dulce, has resigned from the post for “personal reasons”, Spanish daily El Mundo reported this morning. A spokesman for the Public Prosecutor’s office confirmed the news by telephone to The Spain Report, saying that Mr. Torres Dulce had informed Justice Minister Rafael Catalá of his decision: “but that it perhaps would not come into effect until they find a replacement”. That decision is taken at cabinet level. The next cabinet meeting for Rajoy’s government is tomorrow morning - Hedge funds including Marshall Wace, Odey Asset Management and Lansdowne Partners are shorting OTP Bank Plc, a Hungarian lender with a Russian subsidiary whose shares have fallen almost 6% this month reports Albourne Village. All three London-based funds took or increased their position this month in OTP, Hungary’s largest lender, according to data compiled by Bloomberg. The ruble rose today in Moscow after plunging as much as 19%against the dollar yesterday, when Russia’s central bank increased interest rates to 17% percent from 10.5 percent in an attempt to stem the decline. The ruble is down 52% this year and has taken a disproportionate beating in the wake of sanctions and falling oil prices. The country still has the third largest currency reserves in the world and so is unlikely to default. According to Eric Chaney, Manolis Davradakis and Greg Venizelos from AXA IM’s Research and Investment Strategy team Russia will likely resort to fiscal stimulus to contain the risk of social and political unrest. Capital controls, political unrest and even default on private hard currency debts are possible outcomes they say. They credit default swaps market is pricing a one-third probability of sovereign default within five years - Indonesia is ramping up financing for its $439bn development program, planning an almost fivefold increase in sales of project sukuk. The government is seeking to raise IDR7.14trn rupiah (around $568m) from notes that will fund particular construction ventures next year, compared with IDR1.5trn this year, which say local press reports, will help finance its estimated spending of about IDR5,519trn from 2015 to 2019 to build roads, railways and power plants.

A Clarion Call for Investors in Youth-led Enterprise

Tuesday, 01 July 2008
A Clarion Call for Investors in Youth-led Enterprise At the Doha Summit on young people and employment, held in February this year, the issues of chronic youth unemployment, discrimination against women in the job market, lack of skills required for particular jobs among university graduates and the negative perception about private sector jobs were key discussion topics. In a groundbreaking development, involving FTSE Group with youth initiative Silatech, established by Her Highness Sheikha Mozah bint Nasser Al Missned of Qatar, is now leading a regional wide index project to support youth-led small and medium sized enterprises (SMEs) in the Middle East and North African region. Over the medium to long term, the project hopes to encourage sustained private sector institutional investment in seed companies in the region to facilitate equal opportunity and employment. Francesca Carnevale reports. http://www.ftseglobalmarkets.com/
At the Doha Summit on young people and employment, held in February this year, the issues of chronic youth unemployment, discrimination against women in the job market, lack of skills required for particular jobs among university graduates and the negative perception about private sector jobs were key discussion topics. In a groundbreaking development, involving FTSE Group with youth initiative Silatech, established by Her Highness Sheikha Mozah bint Nasser Al Missned of Qatar, is now leading a regional wide index project to support youth-led small and medium sized enterprises (SMEs) in the Middle East and North African region. Over the medium to long term, the project hopes to encourage sustained private sector institutional investment in seed companies in the region to facilitate equal opportunity and employment. Francesca Carnevale reports.
A 2007 report by the International Business Leaders Forum (IBLF) puts the scale of the problem in context. In the report, IBLF notes that over 290m people live in the Middle East and North African region (MENA) and the demographic is expected to double over the next thirty years. Out of today’s population, some 60% is under 24. That in turn means that 20m jobs have to be found right now to reduce current levels of unemployment, and over 100m new jobs have to come on stream in the next 20 years to meet supply.

Youth unemployment is chronic in emerging markets and for all its much vaunted riches and resources, the story is the same in the MENA region. Finding a job is the top priority for 68% of Arab youth and if the means to find work are not there, then the result could be very challenging indeed. The problem has been in mind for some time. A few years ago, at an International Fund for Agricultural Development meeting in Rome, Gulf Co-operation Council (GCC) secretary-general Abdul Rahman al-Attiyah compared unemployment to a ticking bomb likely to cause a “revolt” should the region fail to act comprehensively and soon. His fears may be justified. IBLF’s report says that 80% of young Arabs do not believe they will find employment easily; while 70% of young Arabs think it is up to the government to solve the unemployment problem.



The private sector can play an important role in tackling the growing crisis of youth unemployment and perhaps for too long governments and aid agencies have been seen as the only solutions to what could be an impending crisis. However, businesses and pressure groups across the Middle East now appear to be picking up cudgels and instigating—albeit in a small way—initiatives to help create new employment and enterprise opportunities for young people. IBLF’s report was published, for instance, with the support of the Young Arab Leaders, Emirates Environmental Group, Young Entrepreneurs Association, the United Nations Development Programme (UNDP) and a consortium of companies. Now comes a clarion call to action by FTSE Group and Silatech, which together are working to attract global investors into the process of change through the launch of a special index project to support youth led small businesses in the MENA region.

The initiative will promote the creation of small and medium sized enterprise (SME) markets and indices across the MENA region in order to “facilitate their growth and development and thereby increase youth employment opportunities,” notes Imogen Dillon-Hatcher, managing director of Europe, Middle East and Africa at FTSE Group. The initiative will encourage and support individual exchanges “in establishing their junior SME markets, that are lightly regulated and thereby encourage the development of smaller, entrepreneurial companies. We know that such companies are more likely to employ and even be run by the 18 to 30 age group,” she adds. The first initiative will be implemented in Qatar, where local regulator, the Qatar Financial Markets Authority (QFMA) is working with the Doha Securities Market to establish a ”younger market that will attract investors. The next stage is to establish credible investible indices supporting the junior markets that will attract institutional investment,” explains Dillon-Hatcher. Moreover, she adds, the World Bank and the International Labour Organisation (ILO) are also supporting the broader Silatech initiative.

“This initiative is about energising SMEs, which are critical to the creation of youth employment opportunities, [which is] our main goal,” says Rick Little, chief executive of Silatech. Silatech, is focused on connecting young people across MENA to encourage employment and provide new business development services, unlocking capital and encouraging new business start-ups. Moreover, other exchanges in the region have indicated their interest in the project. “We have already had the commitment of the QFMA and expect to make announcements related to other exchanges which are in accord with the project very soon,” adds Dillon Hatcher.

The initiative also has broader connotations. According to Dillon-Hatcher, “it also resonates in markets such as Syria and Yemen, for instance, where there is no formal exchange arrangement, but where we can encourage small firms to list on other exchanges in the wider region to get access to investor funds.” In Syria, for instance, the major issues are lack of skills among the youth and a high preference for the public sector; a common trend in most countries of the region. In Tunisia, unemployed youth from rural areas are increasingly migrating to the cities. In Yemen, unemployment among women is six times higher compared to that of men. These dissonances have economic consequences, and it is estimated that MENA countries are losing as much as $25bn in income every year due to unemployment.

Global firms are also investing in the initiative. Cisco Systems is in the process of creating “an incredible web based communications network supporting the project,” notes Dillon-Hatcher, “designed to appeal to 18 to 30 year olds, providing forums, chat rooms and providing advice and access to training and meeting facilities.”

It is important to remember, notes Dillon-Hatcher, that the project has sound business principles behind it. “Without that it simply would not work. Although our involvement fits neatly with our high standards of corporate citizenship driven by our relationship with UNICEF, we also have a business stake in the project. What we are creating here sits alongside our day job. That ensures its longevity and our commitment as a business. Unless it fitted in with our strategy, it could wither on the vine.” By way of explanation, she points to the perennial requirement of exchanges in the MENA region to establish national indices and pan regional indices. “Our job is to create appropriate indices for the junior markets, perhaps with different frameworks to suit local market conditions, but with a common methodology.”

Ultimately, “All exchanges in the region are keen to establish new products, such as exchange traded funds (ETFs) and this project should be seen in this regard, as a means of diversifying indices in the MENA region, and offering investors access to the growing prosperity of the region as a whole across the business spectrum. The youth opportunity project in this regard is a very exciting development, which also has significant repercussions for youth employment in the region over the longer term,” highlights Dillon-Hatcher. In other words, its business case is based on the fact that the overall success of the Middle East in increasing prosperity among its population, and in particular, younger members of that population, is of central importance to every business with long-term operations in the region.

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