Real estate, alternative real assets and other diversions


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OPEC needs a “shock and awe” output cut in Vienna

OPEC's ministerial meeting on 6 December will have a seismic impact on the outlook for global oil markets. OPEC has been unnerved by a 30% fall in crude oil prices in the past two months on expectations of lower oil demand due to a Chinese economic slowdown, spectacular growth in U.S. shale oil supply, King Dollar’s chilling impact on the commodities complex and long liquidation of Brent/West Texas oil futures by Wall Street hedge funds. In addition, the Trump White House has pressured Saudi Arabia... Read More >

Recent Articles:

Crude oil’s collapse, recession and geopolitics
The swift, brutal 30% plunge in Brent crude since October 3, 2018 has reawakened fears of global recession, the economic rationale for past oil price crashes in 2000 and 2008. Fears over Trump’s tariffs have amplified the economic slowdown in Read More >
US dollars on a wooden table King dollar, currency pegs and the Arabian money souks
The post Lehman decade was defined by the Federal Reserve’s “lender of the last resort” strategy to stabilize the global banking system. The American central bank expanded its balance sheet from $900 billion to $4.5 trillion. This led to a Read More >
What next for global markets after October’s risk spasm?
The swift 10% correction in the S&P 500 index in October is a mild echo of the 25 – 35% bear markets emerging markets, led by the financial panics in China, Turkey, Argentina, Pakistan and the ASEAN markets. Even in the US, the homebuilder Read More >
What is the risk reward calculus for Emaar Properties? A look at GCC and Dubai real estate
2018 has been a difficult year for GCC and Dubai real estate. Rents and capital values continued to fall in the third quarter, albeit at different rates in specific segments and micro-markets. The Federal Reserve’s latest monetary tightening at Read More >
GCC Focus – Dubai property market and the 2018 credit cycle Rents in prime Dubai locations like Downtown, Palm Jumeirah and Sheikh Zayed Road continue to fall in 2018
Saudi Arabia and Russia engineered a dramatic rise in the price of Brent crude via output cuts, the French far right National Front did not win the Élysée Palace in the Presidential election and the US Dollar Index fell almost 10% in 2017. I Read More >
King Dollar is dethroned by political risk in Washington  Michael Cohen pleading guilty to multiple charges of tax evasion means political risk has risen
Political risk in Washington has risen alarmingly now that President Trump’s personal attorney Michael Cohen has pleaded guilty to multiple charges of tax evasion, money laundering and paying hush money to adult film Read More >
Global Investing: Risk is a four letter word – but then so is ruin! As a feared, US dollar short term rates have begun to rise, as the rise in LIBOR and even EIBOR in the past few months attests.
Market View – Risk is a four letter word - but then so is ruin! Trading the financial markets has taught me that often what Dr. Kissinger (or Sun Tzu, Von Clausewitz and Lord Acton) says about geopolitics and Sigmund Freud says about death Read More >
Market View – Federal Reserve embraced a tight money policy last week Foreign exchange reserves are $10 billion or two months import cover and external debt is $97 billion
While the Federal Reserve did not raise the overnight borrowing rate at the August FOMC last week, I was chilled to read the US central bank explicitly describe the economic growth as “strong”. The last time this happened was May 2006 at the Read More >
Currencies – King Dollar devastates emerging markets currencies The British pound fell below 1.30 last week as investors were horrified by another Tory revolt
Gold has fallen to 1231 an ounce. The Chinese yuan has depreciated to 6.76 and triggered a Black Death in emerging market currencies. Copper has fallen 18% in the past month. Emerging market equities/debt markets are in free fall. The US Treasury Read More >
Market View – Barclays, Big Bang and the City of London When will Barclays rerate? Not now.
Barclays was a traditional, Quaker High Street clearing bank whose roots in Britain and its colonies literally went back centuries. The bank was a traditional and commercial bank with branches across the world Barclaycard was the best known Read More >
Macro Ideas – Time to go bottom fishing on the Bosphorus for Turkish shares? Free fall in the Turkish lira and sovereign debt
There was nothing surprising about the reelection of Turkish President Recep Erdoğan’s victory with even more concentrated executive power and his Justice and Development (AKP) party coalition now has a parliamentary majority. This scenario Read More >
A lowdown on the Abraaj Capital saga US fund Colony Capital had earlier agreed to buy some of its key funds
​Market View – The tragedy, destiny and endgame of Abraaj Capital F. Scott Fitzgerald, the literary king of Jazz Age New York, and the author of the Great Gatsby, wrote “there are no second acts in American life”. The traumatic events Read More >
​​​GCC Focus – Saudi Arabia and the new economics of crude oil The impact of the Saudi oil policy shift in real time on my Bloomberg screen
There is absolutely no doubt that the next OPEC ministerial meeting in June will pit Saudi Arabia and its Gulf allies against Iraq, Iran and Venezuela, three founder members of the oil exporters organization. Saudi Arabia has increased its Read More >
Strategy ideas and macro risks in the Indian stock market The emerging markets convulsions in May were compounded by the political shock for the BJP in Karnataka
After a stellar 28% return in 2017, the BSE Sensex (down 2%) and the NSE Nifty 50 indices in India been a disappointment in 2018 to date. The emerging markets convulsions in May were compounded by the political shock for the BJP in Karnataka. The Read More >
Market View – Will a shift in OPEC and Russian output policy mean $56 Brent? Emerging market currencies and industrial commodities suggests a deflationary chill
Crude oil prices plunged by 7% in two sessions as Saudi Arabia and Russia confirmed that they would release 1 million barrels a day in the wet barrel markets. Speculative froth in the oil futures markets vanished, to be replaced by a new trading Read More >
Market View – The coming emerging markets meltdown The world is on the brink of yet another emerging market meltdown whose twin epicenters are now Istanbul’s Bosphorus and the Argentine pampas
Five years after the 2013 “taper tantrum”, the world is on the brink of yet another emerging market meltdown whose twin epicenters are now Istanbul’s Bosphorus and the Argentine pampas. There is now a tangible risk of contagion in the asset Read More >
Market View – The Federal Reserve and the rise in inflation risk Core inflation will continue to accelerate this summer and autumn
Market View – The Federal Reserve and the rise in inflation risk The dominant theme of 2018 has been a rise in the bellwether ten-year US Treasury note yield from 2.40% to 3% amid fears on Wall Street that a rise in wage inflation and Trump Read More >
GCC Focus – Saudi Arabian equities are global winners in 2018! Saudi Arabian equities have become the world’s second best performing stock market in 2018
I had written an article titled “six reasons to be bullish Saudi equities in 2018, published in the KT on January 28. Yet I was surprised to see Saudi Arabian equities become the world’s second best performing stock market in 2018 after Read More >
Macro Ideas – Is Iraq the world’s next hot frontier stock market? Money alone will not solve Iraq’s problems of systemic corruption
A dismal legacy of civil war, sanctions, insurgency, foreign invasion and terrorism has had a catastrophic impact on the Iraqi economy. Prime Minister Haider al-Abadi told the assembled global elite at Davos 2018 that Iraq needed $100 billion in Read More >
Market View – The case for profit taking in Indian equities Indian equities still face downside risks even though Dalal Street suffered its first real correction since March
The Sensex and Nifty seem near a cyclical peak though the declines in Indian midcap/smallcap shares have been draconian. There is no doubt in my mind that, after a stellar 2017, investors sentiment in the Indian equities market is at an Read More >
Global Investing Wall Street – Trade wars, risk and global stock markets
After a 1000 point midweek Dow rally, the US stock market was slammed again by 567 Dow points on Friday after President Trump announced $100 billion in additional tariffs on China and the March payroll growth number was a dismal 103,000 relative Read More >
Pocket watch on pile of dollars Wall Street – The rising LIBOR and the global financial markets All that's affected by the rise in LIBOR
Federal Reserve Chairman Jerome Powell made it clear that his strategy on interest rate hikes will be guided by the real time performance of the US economy, not the estoric econometric models of the central bank’s staff monetary economists. Read More >
Tug of war with hands pulling rope in opposite directions Macro Ideas – The bullish case for British equities British equities exhibit metrics of investor pessimism
Brexit, sterling’s fall from grace, the Read More >
Businessmen walking across a bridge Global Investing A study in commercial property, Europe’s financial fault lines and India’s Sensex and Sri Lankan equities
GCC Focus – Losing and making money in commercial property The sharp rise in US Treasury, British gilt, German Bund and other government bond yields is a disaster for real estate investment trusts (REIT’s) worldwide, including those in the Read More >
Can South Africa’s catastrophic land grab be stopped? All the evidence suggests that Ramaphosa's land grab will trigger economic disaster
On February 27, the South African National Assembly set in motion a process to amend that country’s Constitution so as to allow for the expropriation of land without compensation. If implemented, the measure will destroy the political Read More >
Currencies, Singapore property and crude oil A look at the indian rupee, sterling, yen and euro, property price rises in Singapore, and crude oil and the valuation discount in energy shares
Currencies – What next for the Indian rupee, sterling, yen and the Euro? I reiterate my call last week for a depreciation in the Indian rupee to at least 66 against the US dollar. Note that the India is showing the fastest GDP growth of any Read More >
Saudi oil and a look at the Southeast Asian financial markets What is happening in the global oil market and opportunities in Southeast Asia
Saudi Arabia has been the traditional voice of price moderation and long-term stability in the global oil market, given that it has the world’s highest long life reserves and lowest cost of production of crude oil. In the 1980’s and 1990’s, Read More >
Wall Street carnage and Walt Disney Fear has replaced greed with a vengeance
I will never forget last week’s stock market carnage. Global equities lost $5.2 trillion in value. The Dow Jones plunged 2000 plus points, with two 1000 point falls, its worst week since the post-Lehman meltdown in October 2008. The Chicago Read More >
Oil refinery at night The bullish case for Saudi Arabian stock market 6 reasons why the world financial markets will embrace this unloved stock market in 2018
2018 is the year the world financial markets will embrace the unloved, underowned Saudi stock market, whose TASI index is down 42% since mid-2014. Why? One, the kingdom has reassumed its role as OPEC’s swing producer after it cut its output by Read More >
Eagle The spike in three month LIBOR is bad news for borrowers Why the world is on the eve of a major rise in interest rates
I had projected a bloodbath in the US Treasury bond market since late 2016, when it was obvious that Trump’s tax reform would double the US budget deficit at the same time as the Federal Reserve prepared to 'normalize' or shrink its balance Read More >
Burj Khalifa in Dubai and aeroplane GII’s Amazon logistics deal is strategic winner for Dubai! Plus my thoughts on the forthcoming oversupply problem in Dubai's residential market
Dubai-based Gulf Islamic Investments (GII) acquired a one million square foot Amazon logistics centre in Dortmund, Germany for $144 million. This deal is a testament to the boutique global merchant bank created in Dubai by GII’s co-founder/CEO Read More >
Dubai skyscrapers with palm tree Dubai property market trends in 2018 What the new year has in store for the UAE's real estate
The rise in Brent crude to $60 a barrel and the trade volume ballast generated by the world’s first post Lehman synchronised economic recovery is hugely positive for UAE economic growth in 2018. After all, the UAE is unique because Abu Read More >
High rise building with balconies Goldmines and landmines in the property market My latest thoughts on global property investment
I am often asked by investors to articulate my 'philosophy' of real estate investing. Tough question. My ideal deal is one where it is possible to buy brick and mortar assets at 60–70% of replacement cost. This usually occurs in the aftermath Read More >
Computer screen showing stock price movements Greed and fear in the global stock market What the week's news means for investors
US and global equities surged on news that the US House of Representatives passed the tax reform bill, Cisco and Walmart posted blowout earnings and a potential bidding war emerged for Fox’s media assets. The rally on Thursday followed a week Read More >
Close up detail of banknote The end of easy money Why emerging markets will pay a high price
2017 has been a wonderful year for major emerging markets, thanks to a 7% fall in the US Dollar Index, no hard landing in China, the end of recessions in Brazil and Russia, falls in inflation that enabled central bank easing and stimulated Read More >
Dubai skyscrapers with palm tree Why the Emaar development IPO will make money for investors The latest in UAE property development news
Emaar Properties will sell 20% of its UAE development portfolio in an initial public offering in November. This is the first IPO in the UAE capital markets in the last three years and follows bellwether offerings such as Emaar Malls and Emaar Read More >
Mount Fuji with Cherry Blossom, view from Lake Kawaguchiko, Japan The Japanese stock market is not yet overvalued Why a yen hedged Japanese equities portfolio is absolutely essential
Japan experienced two “lost decades” of deflation and financial distress after its stock market and property market bubble burst in 1990. The Nikkei Dow index experienced one of history’s longest, most savage bear market, falling from Read More >
Cranes outlined against the sunset Saudi Arabia and the crude oil price surge Why September was an historic month for the global crude oil market
September 2017 was an historic month for the global crude oil market. West Texas rose to $52 and Brent rose to $58 as financial markets finally accepted that Saudi Arabia has been successful in brokering high compliance rates with last year’s Read More >
Numbers on a digital screen The bloodbath in bitcoin has only just begun Why cryptocurrencies are doomed to fail
Jamie Dimon, the unanointed king of Wall Street and chief executive of New York banking colossus JP Morgan did not mince his words. He called bitcoin “a fraud”, a speculative bubble comparable to the Dutch tulip mania of the 17th century and Read More >
Digital screen with abstract reflections The bullish case for Japan’s undervalued stock market Why Japan is the cheapest developed world stock market in 2017
The North Korea crisis has led to a 1000 point decline in the Nikkei. Japan is the cheapest developed world stock market in 2017. Any spasm of risk aversion leads to a rise in the Japanese yen and a correction in its Nikkei Dow averages lower. Read More >
London street with phone box and bright lights The anatomy of a British pound collapse Our Macro commentator on the outlook for sterling
It took a North Korean ballistic missile launch and Hurricane Harvey’s devastation of the $500 billion Houston/Galveston/Corpus Christi economy to push sterling higher to 1.2950 against the US dollar. While the British pound is the most Read More >
A pile of gold coins and bars The US dollar plunge and emerging market currencies Matein Khalid brings us the latest currencies news
The US dollar plunged after Janet Yellen did not talk about Fed monetary tightening and Mario Draghi did not protest 1.19 Euro at the Jackson Hole central banking symposium. This is a green light for the carry trade in emerging market currencies. Read More >
Skyscrapers seen from above The Trump White House and US stock market risk With the Volatility Index at 14, Wall Street’s pendulum of greed and fear has unquestionably tilted to fear
Trump’s post Charlottesville remarks, the Barcelona terrorist attacks and Cisco’s results unnerved the US stock market bulls last week. Friday was a surreal moment in the history of Wall Street. It was entirely rational for traders on the New Read More >
Chess pieces on a chessboard Global political instability: a threat to the markets? A macro view of volatility and market resilience
The old stock exchange cliché goes “markets go up like an escalator, go down like an unhinged elevator”. The world learnt this lesson the hard way as geopolitical tensions between the US and North Korea escalated to nuclear brinkmanship. Read More >
Computer screen showing stock price movements Ten macro reasons to buy Brazil shares Our Macro View commentator explains why he's buying into the emerging market
“Brazil is a country of tomorrow and always will be.” General Charles de Gaulle dissed Latin America’s largest economy with Gallic disdain. Quelle horreur! Yet I have been fascinated by the magical land of samba, carnival, Pele, Gisele, Read More >
A chart showing upwards progression The hunt for value in global equities Matein Khalid explores the dramatic shift in the US stock market from growth/momentum to value shares
The US stock market has been resilient to the political and policy firestorms created by the Trump White House. Trump’s failure to enact tax reform or a major fiscal stimulus has restrained but not destroyed the 'animal spirits' of the Wall Read More >
Brown bear in forest London property faces a bear market in 2018 Why the UK is heading for a period of stagflation
Prime London home prices (Mayfair, Kensington, Belgravia, Chelsea) are now down 20% from their pre-Brexit peaks. Theresa May’s general election gamble and the surprising success of the Labour Party under Jeremy Corbyn has negatively impacted Read More >
Abstract digital numbers Europe faces macro storm clouds this autumn My predictions for the next few months
European equities were the classic 'pain trade' of 2017, the bull market’s wall of worry was scalable, even a slam dunk. Geert Wilders and Marine Le Pen were defeated in the Dutch and French election, reducing political risk in Europe. Greece Read More >
A house roof with two dormer windows and the sun shining between them The Canadian house price bubble has now burst Plus the latest on Morgan Stanley and emerging markets
The Canadian housing bubble has gone so ballistic that the Ontario government is considering a 15% tax on foreign buyers to cool down the speculative spiral in Toronto condominiums. The smart money on Wall Street’s latest trade is to short Read More >
Three dollar bills tucked into the top of a hardback book Wall Street: a hawkish Federal Reserve and the US dollar comeback Also in this week's column: investing in Fox News and the Standard Oil twins
Dr Janet Yellen surprised the financial markets with her hawkish take on interest rate policy and inflation even as the FOMC raised the Fed Funds rate for the fourth time since December 2015. Despite successive weak CPI and auto/retail sales Read More >
Digital screen with abstract reflections The fallout from the UK election is self-evident Plus: the latest on investing in Singapore and the future of the US Dollar Index
Like David Cameron’s Brexit referendum, Theresa May gambled her political career on her decision to hold a snap election to consolidate the Tory majority in the House of Commons. With 318 seats, Mrs May’s gamble backfired and the Tories are Read More >
Sunlight coming through high rise buildings Can UAE emerge as an aircraft leasing hub? Plus my thoughts on Central Europe and the dollar
I was stunned to read a Boeing report that forecasts that the global passenger jet fleet will more than double to 45,250 by 2035. Given that almost 20,000 of the world’s in-service aircraft will be retired or converted to freighters in the next Read More >
Aerial view of a city Saudi Arabia and the age of shale In this week's update on global asset markets, Matein Khalid considers shale, European equities, and the emerging market of Argentina
Saudi Arabia engineered a short covering rally and cyclical bottom in Brent crude with its 15 May agreement with Russia to roll over last November’s oil output cuts for another nine months. The kingdom has, in essence, resumed its traditional Read More >
Digital tablet, mobile phone, credit card with lens flare What Trump’s political scandal means for investors The latest on the White House's influence on the financial markets, from Matein Khalid
Image (c) iStockphoto The financial markets have finally cottoned on to the increasingly sordid political realities created by the Trump White House. Trump could well be impeached for obstruction of justice if he tried to pressure FBI Director Read More >
Chess pieces on a chessboard The latest on oil and gas shares Plus, Matein Khalid shares his thoughts on investing in the Japanese stock market
The 11% fall in the price of crude oil in the past month on panic selling in the energy futures pits of New York, London and Singapore has unnerved the world’s leading oil and gas exporters. Saudi Arabia will both extend last November’s OPEC Read More >
Blurred photograph of crowds walking through London What next for G-10 currencies and crude oil?
The euro, the French stock market, OAT-German debt interest rates spreads, the Volatility Index (VIX) and the ghosts of Vichy, Oradour and Algérie française convince me that Emmanuel Macron will be the next President of France on Sunday. So I Read More >
Pile of euro coins on a chart France’s election and global financial risks
The French election is a game changer for global financial markets for multiple reasons. One: the worst case scenario of far right (Le Pen) and far left (Melenchon) as second round candidates for the Elysee Palace on May 7th is no longer a Read More >
Numbers on a digital screen Emerging markets: an update
Emerging market equities have been the darling asset class de jour in 2017, mainly in Asia and Latin America, despite the March FOMC rate hike, a US Dollar Index at or above 100 and a mini-swoon in crude oil after a Saudi-Russian output cut spat. Read More >
Dubai skyscrapers with palm tree Market View: Dubai property is in a bear market
I find it laughable when investment bankers come to my office and try to assure me that warehouse and logistics space in Dubai is a “defensive” investment. Mathematical reality does not support this argument. Rents in Jebel Ali Free Zone Read More >
Globe showing South America Macro Ideas: The bullish case for emerging markets and European equities
Emerging market equities have outperformed the S&P 500 index and the flagship asset class index fund (symbol EEM) is up 12.5% in 2017. The US dollar and the ten-year US Treasury bond yield have both fallen since the March 14 FOMC rate hike, Read More >
China skyline Market View: Are Chinese shares in a stealth bull market?
Chinese equities have risen steadily higher in 2017 in a stealth bull markets, despite $700 billion in capital flight last year, a fall in the renminbi to 6.90, periodic liquidity squeezes in the Shanghai money market, draconian credit controls, Read More >
Oil refinery at night Market View: What next for crude oil, silver and copper equities? 
I doubt if West Texas crude oil rebounds beyond $52 in the short term without clear evidence that Saudi Arabia and its GCC allies can persuade Russia, Iraq, Algeria and Iran to keep their output cut promises amid a global glut and resurgent US Read More >

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