Interpreting Middle East Economic News and Analyzing Market Trends

Category: Commentary & Analysis

Deflation, defaults, social unrest and other ‘surprises’ waiting for us in 2015

Financial Crisis - Slideshare

Photo: Slideshare.net

    

As 2014 comes to an end, we wanted to take a look back at events and trends over the past few years and give you some of our thoughts on what we expect to see in 2015.  We decided to make a list… a top 10 list of ‘surprises’ we expect to see in the coming year.  Here they are… enjoy…  

     

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Are Islamic banks riskier than conventional banks?

Islamic Bank of Britain

Photo: Islamic Bank of Britain in London.

 

 

With global GDP slowing down and constantly being revised lower by the IMF and World Bank, a question has been coming up in the Middle East regarding the safety of the banking system in the region, especially with the crashing oil price.  Islamic banks have been especially criticized in the past for their loose oversight and perceived reckless investment model.  Are Islamic banks really riskier than conventional banks?  Let’s take a look…

 

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More on the myth of the shale oil miracle…

 

The above video will give you the most comprehensive evidence on why shale oil is headed for disaster.  We have discussed the problems with shale oil in previous posts, most recently here, here and here.  However, we cannot stress the importance of falling oil prices on current shale plays, even though the financial media seem to believe that the industry can weather the current fall in prices.

 

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Supply and demand fundamentals no longer move the price of oil

NASDAQ WTI 10 Year Oil Price to 28-10-2014

WTI Crude Oil price from 2004 to 2014. Source: NASDAQ

I wish the so-called experts in the oil sector would stop talking about the fundamentals affecting the price of oil and start talking about what really moves the oil market – banks and commodity trading firms.  Can an oil analyst tell you with a straight face that the trippling of the oil price from 2005 to 2008 (see chart above) was due to a record rise in consumption or a record fall in production?

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Is it too late to join the IPO party?

Saudi Tadawul

Saudi Arabia’s Tadawul is the Arab world’s largest stock exchange.

 

The IPO has been set for Saudi Arabia’s National Commercial Bank’s (NCB), the largest bank in the country and one of the largest banks in the Middle East. If all goes well, the IPO will be the second largest IPO globally for 2014 after Alibaba, which debuted last month.  Has the IPO market topped or is this market just getting warmed up?

   

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