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Odd Lot Summary
108.29Why list at KSE?
Source of Funds
- Ability to tap a broader universe of investors as well as larger pool of investment capital.
- More capital can be raised through additional stock offerings if sufficient investor interest exists.
- In a tight monetary cycle, with high debt costs, equity markets are a more efficient and cost effective way for companies to get funded.
Flexibility of Use
- Hire new staff, expand existing operations or fund acquisitions.
- Use Listed Shares as “swaps” for acquisitions and mergers; this can accelerate domestic, regional and global growth strategies.
- Decreases a company’s reliance on raising funds on debt markets and reduces annual interest payments.
- Be able to attract and retain more highly qualified personnel if it can offer stock options, bonuses, or other incentives with a known market value, especially in a tight labor market.
- KSE is amongst the lowest listing and annual fees in the region.
Exit Strategy
- Existing shareholders can more easily sell their interests at retirement, for diversification, or for any other reason. A ready market always exists for a publicly listed company.
Profile Building
- More public attention due to more media interest.
- Coverage from Investment Analysts both domestically and internationally can provide the company with a greater profile and visibility.
- Ultimately, a more diversified group of investors will take an interest in the company, increasing demand for its shares thus raising its value.
Thai Baht Declines on Political and Civil Crisis
The Thai baht continued its decline against the U.S. dollar today and touched its lowest level in the last 21 months as the political protests and the civil unrest raged through the country.
The political turmoil in the country is caused by the demands of the opposition and the military leaders for the current Prime Minister Somchai Wongsawat to resign. He still rejects these demands despite the fact that the opposition has already captured the two country’s most important airports.
Analysts don’t see anything positive for the baht for as long as the situation in the country remains at such a dangerous level. And there are no signs that it will end soon, causing the baht to depreciate further.
The Thailand’s baht falls under the double pressure — the currencies of the Asian region fall because of the recession in the developed countries and the foreign capital outflow and also because of the current political crisis, which doesn’t add optimism to the investors and the currency traders.
USD/THB rose from 35.26 to 35.32 as of 10:00 GMT today after reaching as high as 35.51 during the early trading session — a level not seen since February 2007.
Kuwait: GCC to Abandon Dollar
Kuwaiti Finance Minister has said that the Gulf Cooperation Council countries, U.A.E., Qatar and Bahrain specifically, are planning to scrap their currencies’ peg to dollar soon.
Mustafa Al Shimali is confident that other Middle Eastern countries will be doing what Kuwait has done in May 2007. Recently financial officials from the United Arab Emirates stated that depegging is not in the country’s interest, while the commission was established to analyze the possible consequences of such decision.
The U. S. dollar, which is the base currency for the whole GCC region, except Kuwait, dropped 13% against the euro in the last 12 months. Depreciating dollar is believed to be a reason for the elevated inflation rate in the region.
Yesterday U. A.E., Qatar and Bahrain followed the Fed’s decision to lower the rates to stay pared with the U.S. dollar lending rates — they decreased national rates from 2.25% to 2%. Saudi Arabia chose not to follow the decision, spurring the riyal’s growth on the Forex market.
New Zealand Dollar – Victim of Carry Trade
While the Japanese yen is surely a benefiting currency when it comes to the carry trade panic, some currencies feel extremely bearish at the times of global financial instability and other factors that bring down risk appetites. New Zealand dollar is one such currency.
Carry trade is a global trend in the high-yielding investment industry, where traders buy high-risk currencies such as South African rand and New Zealand dollar, that has a very high interest rate, with a cheaper currency such as Japanese yen, which costs just 0.5% a year to borrow.
Popularity of the carry trading contributed a lot to the past years of the NZD growth. Traders could earn not only from the huge interest rates difference between New Zealand and Japanese Central Banks, but also from the growing appreciation of the high-yielding currencies. Carry trade has been growing into a enormous bubble for almost 4 years. And it looks like the time for its bursting has come.
The financial crisis based on the subprime lending crash triggered massive buying of the Japanese yen, as the investment safe haven. Strong demand for yen started to outweigh its offer from the carry trade speculators and it started to grow against riskier currencies. Rising yen began to trigger stop-loss orders of the carry traders, accelerating the yen growth. So, combination of global financial instability and the carry trade stop-losses caused a real rally for the low-yielding currencies.
Too bad for the high-yielders, such as the New Zealand dollar, there is a very high probability of their depreciation, which if left unstopped can inflict damage to many world economies.
Australian Dollar Trades Near 2009 Record High
After falling from the highest level in more than 14 months towards the end of last week’s session in a day of bearish performance in stock markets, the Australian dollar started this week climbing once again on speculations regarding increased interest rates in the country.
The Australian dollar together with its New Zealand counterpart rebounded from a corrective movement Friday as stocks rose adding confidence that interest rates in the South Pacific region will return to pre-crisis levels gradually, after a Reserve Bank of Australia official affirmed that interest rates in the country are due to move towards normality, suggesting that record low levels will be lifted as soon as the economic conditions provide support for elevating borrowing costs in Australia, fact which is fueling an intense rally in South Pacific currencies, setting the Aussie and the kiwi among the 3 top performers in foreign-exchange markets, together with the Brazilian real, originated as well from a commodity exporter country.
The renewed risk appetite that fueled stocks in Asia also brought investors back to the Australian dollar-priced assets, suggesting that the Aussie is likely to remain at very high-levels towards the end of the year, as more than one rate hike is expected from the central bank in that nation for the following months.
AUD/USD traded at 0.9211 as of 13:11 GMT from an opening rate yesterday of 0.9144. AUD/JPY traded at 83.65 from 83.05.
If you want to comment on the Australian dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.
Crude Oil Record High Helps Russian Ruble to Gain
Russia is the main energy supplier to Europe, and this week, as the crude oil continued to extend gains reaching the highest values since it tumbled last year after the global slump, the ruble is gaining, as demand for Russian natural resources are influencing the national currency positively.
The Russian ruble is leading gains among emergent market currencies today after the crude oil touched $79 a barrel, fact which is extremely favorable to the biggest country in the world since oil is its main export product. JPMorgan Chase & Co. stated that Russian stocks are more appealing in the current global economic scenario, creating attractive conditions in Moscow equities market, posting a significant rise today. Russian stocks remain the best performing globally in 2009 as the crude oil rates more than doubled since the beginning of the year, attracting investors to Russia, which had suffered one of the biggest impacts among global powers, mainly in its financial sector.
The Russian ruble, which has its fluctuations controlled by the Bank of Russia, is witnessing better rates due to injection of foreign capital in Russian stock markets, as well as the increased demand for Russian exports provides support for the national currency to gain. As long as the crude oil rates continue to rise, the Russian currency is likely to remain strong.
USD/RUB traded at 29.30 as of 14:17 GMT from an opening rate of 29.43 today.
If you want to comment on the Russian Ruble’s recent action or have any questions regarding this currency, please, feel free to reply below.
Canadian Dollar Near Parity With Greenback
Optimism and risk appetite ignite speculations that the Canadian dollar will soon trade in parity with its U.S. counterpart, as demand for Canadian exports are rising worldwide, as well as stocks in Toronto.
The Canadian dollar is once again trading near parity with its U.S. counterpart as the greenback suffers from a decreased attractiveness, while Canadian stocks rise, benefiting from rising crude oil prices, that is trading in the highest rate for 2009 this week, providing support for the loonie to gain before a Bank of Canada meeting tomorrow.
USD/CAD traded at 1.0286 as of 11:56 GMT from a previous rate of 1.0417 when markets opened yesterday.
If you want to comment on the Canadian dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.
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