Latest news with #VijayValecha
Khaleej Times
3 days ago
- Business
- Khaleej Times
Gold prices in UAE: Is Dh400 per gram the new normal?
For UAE residents considering gold for long-term investment or savings, now may be the right time to act. According to analysts and industry insiders, the precious metal is expected to remain above Dh400 per gram in the medium to long term. This marks a significant shift in market dynamics. In April, 24-carat gold crossed the Dh400-per-gram threshold for the first time in Dubai. This surge was driven by a mix of global uncertainties, including former US President Donald Trump's tariff policies, geopolitical tensions, falling interest rates, and strong demand from central banks. As of Wednesday evening, 24-carat gold was trading at Dh400.25 per gram, while 22-carat gold was priced at Dh370.75. On the global stage, spot gold hovered around $3,306 per ounce, a modest increase of 0.13 per cent. 'Volatility is likely to persist in the short term, primarily influenced by the pace and outcomes of ongoing trade negotiations,' said Vijay Valecha, Chief Investment Officer at Century Financial. 'Any major development — be it a breakthrough deal or new tariffs — could trigger sharp market reactions.' Valecha noted that although short-term fluctuations are expected, gold prices are likely to remain above Dh400 per gram over the long term. 'Trump's unpredictable tariff strategies have contributed to global trade uncertainty, increasing demand for safe-haven assets like gold. Recently, he threatened a 25 per cent tariff on all iPhones manufactured outside the US and a 50 per cent levy on EU goods — though these were temporarily postponed as trade negotiations continue.' Even if new trade agreements are reached and tariffs are lowered, Valecha believes gold will maintain its appeal due to broader economic concerns. He forecasts that gold could rise to $3,700 by the end of the year and potentially reach $4,000 by mid-2026, up from the current $3,335 per ounce. 'America's widening trade deficit, the sharp increase in the US debt-to-GDP ratio from 35 per cent in 2007 to an expected 100 per cent by 2025, and the fiscal impact of Trump's tax cuts have all contributed to a global flight to safety,' he added. 'These factors strengthen gold's position as both a portfolio diversifier and stabiliser.' Valecha cautioned that while significant trade deals could cause a temporary dip in gold prices, the broader macroeconomic fundamentals support a continued rally. Aditya Singh, Head of International Jewellery Business at Titan Company, echoed these sentiments. 'Although today's elevated gold prices may seem unusual, they align with historical trends where prices rise during periods of economic uncertainty,' he said. He advised retail buyers not to panic but to monitor key global indicators such as interest rates, inflation, geopolitical tensions, and central bank reserves. 'Small, consistent purchases tend to yield strong returns over time. We encourage customers to view gold as a blend of emotional and financial value — whether for weddings, milestones, or as a store of wealth, informed decision-making is essential.' Ramesh Kalyanaraman, Executive Director at Kalyan Jewellers, emphasised the enduring value of jewellery as a long-term asset. 'While natural price fluctuations will occur, steady demand in culturally rich markets like the UAE reassures us that gold will continue to be a preferred choice,' he said.
Zawya
3 days ago
- Business
- Zawya
Valuation concerns, profit booking weigh on United Carton's debut trade on Tadawul
Shares of Saudi Arabia's United Carton Industries Company (UCIC) closed flat on Tuesday's trading debut, with tariff threats, along with profit booking and overstretched valuations turning away investors, according to analysts. Despite being nine times oversubscribed and raising proceeds to the tune of 600 million Saudi Arabian riyals ($160 million), the stock closed lower by 1.5% at 49.25 riyals per share, as against its offer price of 50 riyals. The mixed performance was also visible on Wednesday with the stock dropping to lows of SAR 46.60 in early trade, with the last trade settling at SAR 46.85 by 2.30pm local time. Vijay Valecha, Chief Investment Officer, at UAE brokerage Century Financial said that even though the stock opened 6% higher at 53 riyals apiece and had rallied as much as 9% later during the day, 'signalling strong investor interest and participation in the IPO,' the stock's overall performance was a result of a confluence of factors, 'chief among them being concerns around valuation.' 'With a market capitalisation of approximately SAR 2 billion and operating earnings of SAR 124.7 million in 2024, the company is trading at a price-to-earnings multiple of 16.16x — notably above the Asia Pacific (developed) industry median of 13.53x. This premium may have tempered investor appetite at the time of listing,' Valecha explained. He continued: 'Additionally, the stock may have closed lower after a round of profit-booking, as some IPO participants were likely short-term traders aiming to capitalise on immediate listing gains rather than holding for long-term value. Lastly, although the company has limited direct exposure to [US President Donald] Trump's tariffs, its industry could face some indirect pressures in the form of elevated input costs and softer demand from international customers impacted by tariffs.' Profit booking UCIC shares opened at SAR 53 and hit a high of SAR 54.5 within the first five minutes of trading before finally closing at a low of SAR 50.5 on day one. Trading volume exceeded 17 million shares, representing approximately 1.5 times the 12 million secondary shares offered. 'It must be noted that the volume in the first five minutes was at 1.68 million shares. For comparison, the IPO was for about 12 million or 30% of the company's total issued share capital, meaning that about 14% of the company's floating shares were traded within the first five minutes alone. Given this, there was an immense profit booking after the price hit the high mark of SAR 54,' Valecha said. Added pressures emerged from the 'slightly stretched valuations,' he added. 'UCIC is a corrugated company in the Developed Asia Pacific region. The median P/E ratio of the listed companies operating in the containers and packaging segment is approximately 13.5. Meanwhile, the P/E ratio for UCIC is approximately 16.2 (market cap of SAR 2.016 billion / net income from operations of SAR 124.7 million). This implies that UCIC is slightly overvalued in comparison to its peers.' Flynas, SMC IPO Following the UCIC debut, all eyes are on the Saudi Flynas IPO, with Specialized Medical Company (SMC) close behind. 'The market could find support as it continues to see strong interest in Saudi IPOs, including the upcoming Flynas listing. Successful IPOs could help attract local and international capital to the stock market, which could help stabilise prices,' Valecha said. 'The SAR 4.1 billion IPO of Flynas, which opened today for retail participation, while being about 100 times subscribed by institutions, indicates massive investor demand,' said Valecha. 'On the other hand, Specialized Medical Company (SMC) extended its book-building period to allow qualified investors to review their bids, while postponing the retail offering period to June 15.' SMC has though confirmed its commitment to the IPO, stating the listing remains on track, and the business fundamentals and long-term growth strategy remain unchanged. One deal still awaiting an intention to float is Ejada Systems, with its Capital Market Authority approval expiring on June 23. (Writing by Bindu Rai, editing by Seban Scaria)
Khaleej Times
5 days ago
- Business
- Khaleej Times
Dubai: Gold prices slip further; 24K at above Dh400 per gram
Gold prices slipped at the opening of the markets in Dubai on Tuesday but the 24-carat stayed above Dh400 per gram. Dubai Jewellery Group data showed the 24-carat trading at Dh401.25 per gram on Tuesday morning, down from Dh402.5 per gram at the close of the markets on Monday. It has lost Dh3.5 per gram this week so far. Among the other variants of the precious metal, the 22-carat was trading lower at Dh371.75 per gram, the 21-carat at Dh356.25 and the 18-carat at Dh305.5 per gram. Spot gold was trading at $3,331.7 per ounce, down 0.28 per cent. Despite a slight drop in prices this week, analysts expect prices will stay on the higher side. Vijay Valecha, chief investment officer at Century Financial, said the yellow metal ended last week with a gain of almost 5 per cent amidst US President Donald Trump's threats to impose 50 per cent tariffs on goods from the European Union from June 1 and 25 per cent on Apple Inc., if it does not manufacture iPhones in the US. 'The demand was further influenced by escalating concerns regarding America's fiscal deficit, with the tax cut bill exacerbating the deficit and the associated Moody's credit rating downgrade. These factors have fueled a risk-on sentiment, leading the bullion to surge by almost 27 per cent this year. Additional factors contributing to the support of gold include ETF inflows and ongoing geopolitical tensions in the Middle East. Central banks worldwide have been increasing their gold reserves by over 1,000 metric tonnes annually for the past three years, nearly double the last decade's average,' he said. 'Technically, on the daily chart, a bullish engulfing candlestick was formed in the previous session, closing at $3,356, indicating strong continued demand for the asset,' he said.
Hi Dubai
21-05-2025
- Business
- Hi Dubai
UAE Banks Raise Minimum Balance Requirement as Fee Exemptions Tighten
Several UAE banks will raise their minimum balance requirement to Dh5,000 starting June 1, tightening fee exemptions for customers who do not hold a credit card or personal financing. The move, up from the longstanding Dh3,000 threshold, means many account holders may now face a monthly fee of Dh25. According to a report by Emarat Al Youm , one bank has already rolled out the updated policy. The change is aimed at encouraging customers to either maintain higher balances or sign up for banking products such as credit cards or loans. Customers who do not meet the new balance requirement and lack qualifying financial products will incur the Dh25 monthly fee. Banks justify the shift as necessary for liquidity and operational cost management. Vijay Valecha, chief investment officer at Century Financial, said higher minimums help banks increase deposits, enhance loan offerings, and offset rising service costs. However, finance expert Dr Ben Lebig raised concerns over the burden this places on low-income residents, particularly those in the service sector. 'For workers whose salaries barely cover expenses and remittances, this rule may be impossible to fulfill,' he said. He urged banks to introduce tiered requirements based on income levels. Fee waivers will apply to customers with a total balance of Dh20,000 or more, or those transferring a salary of Dh15,000 or higher. Partial exemptions are also available for those earning between Dh5,000 and Dh14,999, provided they hold additional financial products. To ease the impact, experts suggest alternatives such as payroll cards, corporate accounts for low-wage employees, and zero-balance digital accounts. These options, commonly used in the Wage Protection System, can help workers stay compliant without added financial strain. News Source: Khaleej Times
Khaleej Times
20-05-2025
- Business
- Khaleej Times
Dubai: Gold prices slip Dh1.5 in early trade on Tuesday
Gold prices slipped one-and-a-half dirham per gram at the opening of the markets in Dubai on Tuesday. At 9am UAE time on Tuesday, 24-carat slipped to Dh387.75 per gram, down from Dh389.25 per gram at the close of the markets on Monday. Similarly, 22-carat, 21-carat and 18-carat fell to Dh359.25, Dh344.5 and Dh295.25 per gram, respectively. Spot gold was trading at $3,217.7 per ounce, down 0.37 per cent due to a firmer dollar and optimism around the Russia-Ukraine war ceasefire. Linh Tran, a market analyst at said gold prices are likely to continue trading within a narrow range as markets await clearer signals from the high-level dialogue and upcoming economic data to determine the next directional move. Gold started the year off on solid footing at around $2,624.50 after rallying nearly 27 per cent in 2024. The momentum gained steam this year, as gold exhibited a relentless rally, creating a series of record highs amid a global flight to safety. By April 22, it had risen to a peak of over $3,500 – rallying more than 875 points or around 34 per cent in less than 4 months. 'However, the emergence of trade deals has since triggered a drop, with gold currently trading 8.4 per cent below its peak at $3,223. The precious metal was exhibiting a double top pattern on the day chart, which is typically indicative of bearish forces,' said Vijay Valecha, chief investment officer of Century Financial.
