Interpreting Middle East Economic News and Analyzing Market Trends

What’s a better gauge of economic health; the stock market or global trade?

DP World

DP World, one of the world’s largest port operators reported a drop volume at its ports.  Stock markets are hitter new highs and stock markets in the region have risen too high too fast.  The Dubai Financial Market (DFM), for example, is up over 60% year-to-date.  So should we believe the stock market, which is telling us that all is well and the good times are here, or shall we believe global trade, which is saying things are slowing down?


DP World said  that challenging market conditions meant the amount of goods shipped through its  ports fell 5.8 per cent during the first six months of the year.

The government-controlled company, which is the world’s third- largest ports  operator, said yesterday that its terminals around the world handled 26.6  million standard container units of cargo, a significant decline on the same  period the previous year as volumes fell in Europe, Asia and the Middle  East.

Global container operators are battling in a depressed market and DP World  said although trade had improved slightly in the three months from April, the  difficult market was set to continue.

“Despite a softer first half when compared with the same period last year, we  saw an encouraging uplift in containers handled during the second quarter,” said  the group chief executive Mohammed Sharaf. “This uplift, while positive, has  occurred in challenging market conditions which we anticipate will continue into  the second half.

DP World, which is controlled by the conglomerate Dubai World, said container  port trade in the UAE remained “relatively flat” compared with the same period  last year, handling 6.5 million cargo units.

Across Europe, the Middle East and Africa, DP World’s ports handled 12.8  million cargo units during the six months, down 5.7 per cent on last year and  3.9 per cent on a like for like basis.

The group said the performance was mitigated by an improvement in trade  volumes in the Americas and Australia that had increased 2.7 per cent on a like  for like basis.

Read the full story from The National.


Our take is that stock markets are in for a surprise once reality catches up with them.