Readings: Financial stress, ME/GCC stocks, FMP defaults
- BCA Research: Panic Reigns In Financial Markets
The market in Saudi Arabia sank by 7% while the biggest percentage loss was reported in Egypt, where the key index plummeted by more than 16% to its lowest level in two years.
The Tadawul All-Shares Index in Saudi Arabia, home to the Arab world’s biggest market, finished down 7% to a four-year closing low of 6,253.72 points. The index had tumbled 9.81% on Monday and lost 16.1% in the past two days. TASI is 43.35% off last year’s close.
Shares in real estate giant and market leader Emaar shed 2.14% to under AED6 (US$1.63), less than half book value, analysts said.
The drop came despite attempts by government-controlled real estate firms in Dubai to maintain investor confidence by announcing new multi-billion-dollar projects that have become a hallmark of the booming city state.
- Business Standard: Defaults threaten fixed maturity plans
Fixed maturity plans (FMPs), which have garnered Rs 102,133 crore of average assets under management (AAUM), are facing the prospect of rising defaults on their investments in real estate and non-banking financial companies (NBFCs).
FMPs contribute almost 19 per cent to the Rs 5.29 lakh crore average assets of the industry.
. . . some of the leading real estate companies have defaulted on their repayments and are seeking rollovers. And though there hasn’t been any huge redemption pressure, mutual funds are gearing up for it, especially from companies that have invested in the FMPs.
. . . around 10 to 15 per cent money of the total AAUM has been invested in real estate and NBFC papers.
Those extra 2-3% p.a. returns might just be not worth it?
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