Saudi Arabia is an important country in the oil market and a member of the OPEC. Known for its production of natural gas and petroleum, it also has an emerging stock market called the Tadawul. It is the main stock exchange among the Gulf countries since 2007. Being a relatively new exchange, it did not offer derivative products like options or futures. But now the stocks in Saudi Arabia are gaining the attention of investors and fund managers as they are soon going to be listed in the emerging-markets benchmark.

The Dubai market has had a terrible few years due to the real-estate slump which is the backbone of the country’s economy, but despite that investors believe that the Dubai market offers better gains than the Saudi market.

But should investors switch to Saudi or the Dubai market is the question that needs to be answered?  

Some of the views expressed by experts:

Change global investments portfolio manager, Thea Jamison was of the opinion that the market in Saudi Arabia is expensive and when compared to Dubai, the returns and the operating margin are ‘not attractive’. Thea, says that the Saudi stocks are rallying due to the MSCI inclusion and thus the investors are optimistic about the stocks, but many companies are cautious about making any investments. Moreover, with the Saudi government adding stimulus to help the economy, companies will be under pressure to profitability making Dubai stocks a better option at least for now.

RWC Partners said that when compared to Dubai shares, the Saudi shares have always been expensive with fewer earnings for the value as the stocks have reached its maximum price. The RWC considers Dubai as a place which is good for companies which are looking to expand and foray into the African and the Middle Eastern markets due to it being a business hub. The property stocks in Dubai is expected to do well and yield great results. James Johnstone, who is the head of the RWC partners said, “We think the UAE has reached the bottom of its real-estate cycle. We have been using the opportunity to reduce some of our Saudi holdings and reallocate it back into the property stocks that are very cheap and attractively priced.”

The Saudi market is likely to join the MSCI emerging index from May and with Dubai posting strong fourth-quarter things deciding on where to invest is not going to be easy.

While the trade war with China rages, United States President Donald Trump has decided to focus on another trade agreement and this time he has turned his gaze at the preferential trade agreement with India, another giant economy in Asia. On Monday, the US President stated that preferential trade agreement is going to be ended for India since it is not in the US’ best interests. For decades, India has enjoyed being exporting products to the US to the tune of $5.6 billion per year without paying any duties. This move is directed at ending asymmetrical trade with India and remains a part of Donald Trump’s larger promise of substantially curbing the country’s trade deficits.

In a letter to the leaders of the United States Congress, Trump stated, “I am taking this step because, after intensive engagement between the United States and the government of India, I have determined that India has not assured the United States that it will provide equitable and reasonable access to the markets of India.” A copy of that letter has been sent to the Government of India as well, and the measures could go into effect in 60 days.

The entire issue is related to India being part of the Generalised System of Preferences (GSP) programme that gives preference to certain developing countries. The US believes that high tariffs imposed by India on US products and regulation that has hurt US companies have made the whole thing untenable. It is believed that one of the biggest reasons behind this move is the new regulatory measures for e-commerce companies that were imposed by India, earlier this year. Those measures adversely affected the businesses of Amazon India and Walmart’s Flipkart. Both companies have invested billions in the country, and the sudden change in the ground rules has not been taken kindly.

The being said, the Government of India is not perturbed at all regarding the move, and a source inside the government told Reuters that the ‘actual benefit’ received by the country stands at around $250 million. It is not a particularly large amount in the large scheme of things; however, the source did add that he hoped that this does not lead to barriers to trade with the US. Considering the fact that India is going to have its elections this year; it would be interesting to see if New Delhi retaliates in any way to this move from Trump.

The U.S. President Donald Trump criticized the Federal Reserve again about its tight monetary policy which has made the dollar strong and as a result hurt the country’s competitiveness. At the annual Conservative Political Action Conference held in Oxon Hill, Maryland, Trump said that the gentleman at the Federal Reserve Bank likes a very strong dollar. Although, Trump mentioned his preference for a strong dollar, he mentioned that he would rather have a dollar that is strong and yet does not prohibit the United States from delaying with other nations.

Trump had made the economy an important part of his political platform. As a result, he has been repeatedly critical of the country’s central bank and its chairman, Jerome Powell. Although, Trump himself had appointed Powell, he remained critical of the Fed’s decision to raise interest rates several times last year. With rising concerns about slowing global economy trade war between the U.S. and China as well as financial markets volatility, the United States central bank has indicated that it will remain patient about the further tightening of the monetary policy.

The Federal Reserve had raised interest rates four times in 2018 as a part of tightening the monetary policy. On Saturday, Trump talked about lowering the dollar by avoiding quantitative tightening and by leaving the interest rates alone. He also mentioned that a weaker currency helps improve the competitiveness of a country’s exports. Powell, Chairman of Federal Reserve, has made it clear that he will not bow down to political pressure. He has already given a clear signal of the central bank’s independence in January 2019 by saying that he will not be resigning if requested to do so by Trump. This followed the reports in December that the United States President had discussed the feasibility of firing the Federal Reserve Chairman with his advisors after the interest rates were raised again by the Fed.

The Federal Reserve’s measure of purchasing large quantities of U.S. government bonds in order to boost economic growth especially during the financial crisis is called quantitative easing. This measure was taken by the Federal Reserve, which dropped its overnight lending rate to zero in order to lower long term lending rates.

According to investors, the Federal Reserve’s attempts at trimming its four trillion dollar balance sheet by at least $50 billion a month has resulted in tightening financial conditions. The Federal Reserve’s benchmark overnight lending rate is at present between 2.25 percent to 2.50 percent.