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Friday, 31 July 2009

Exclusive: Burj Dubai linked to US $4bn claim

Burj Dubai taken from a construction site.Image via Wikipedia

A top contractor employed on the Burj Dubai has sought legal advice for a mammoth US $4.1 billion (AED15 billion) claim related to work it carried out on the world’s tallest tower, Construction Week can reveal.

Korean giant Samsung Engineering & Construction sought advice from UAE-based law firm Al Tamimi & Company, according to the Legal 500 2009: Europe, Middle East & Africa, published by UK-based Legalease.

All three parties concerned in the Legal 500 report have refused to discuss the possible multi-billion-dollar claim further.

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No green light yet on Shah sour gas project

A final investment decision on the US$10 billion (Dh36.7bn) Shah sour gas project has still not been made by the Abu Dhabi National Oil Company (ADNOC) and ConocoPhillips, the US energy company, despite the two signing a joint venture agreement earlier this month.

The investment decision would be made next year, said Sigmund Cornelius, the chief financial officer of ConocoPhillips.

“We had been operating informally under interim agreements at Shah. What you saw recently was just replacing the interim agreements to formally establish the joint venture,” Mr Cornelius said. “So it should not be construed as a decision that was made to go forward with the project.” The go-ahead would depend on the bids received for several key engineering, procurement and construction packages related to the proposed gasfield development, Mr Cornelius said.

DP World comes in better by volumes

Container handling volumes at DP World fell 10 per cent in the first half of this year across its network of ports worldwide as the economic downturn devastated global trade.

“The first six months of 2009 have seen some of the most challenging operating environments our industry has ever known,” said Mohammed Sharaf, the chief executive of DP World, the world’s fourth-largest ports operator.

“Unpredictable” trade trends are also continuing in the second half of the year, Mr Sharaf said.

Sagging oil refineries

With oil prices being streamed live on bubblevision, it is easy to obsess on the hyperkinetic futures market and forget that the large, integrated companies dominating the industry also make plenty of money from refining and marketing the stuff. “Crude” is much more than just benchmark WTI or Brent, and the gyrations of different varieties, along with a glut of refined products, have rained on the supermajors’ parade.

ExxonMobil’s unpleasant earnings surprise on Thursday, for example, came from a two-thirds drop in refining earnings. The story was much the same at BP, Shell and especially ConocoPhillips, all of which suffered from a convergence in prices of low-quality heavy crude with lighter grades.

Chevron signalled its results will be similarly hit, while pure refiners Valero and Tesoro both swung to losses in the last quarter. With Latin American and Middle Eastern producers paring heavy crude output, expensive refineries suited to handle it are sputtering. And, with demand falling amid plenty of new capacity in Asia, poor utilisation is sapping earnings.

The problem may be secular, rather than cyclical, for refiners in the developed world. The coming years will be particularly tough for US refineries as a result of ebbing demand, competition from biofuels and new emissions rules. Consulting firm Deloitte compares the coming years to the collapse in US refinery profits in the early 1980s, which led to many closures. There were 319 US refineries in 1980 and 149 by 2006.

Meanwhile, utilisation, which peaked at 90 per cent in 1977, fell below 70 per cent by 1981. More recently, utilisation peaked at 93 per cent in 2004 and Deloitte forecasts it will drop to 77 per cent by 2020.

Refining, recently promoted to being a high-flying profit-centre, is back to being a drag. Talk about a crude awakening.END

Caymans court puts freeze on Sanea's $9bn

A Cayman Islands court has ordered a worldwide freeze of assets belonging to Maan al Sanea and dozens of his companies in a ruling that steps up the pressure on the Saudi billionaire who is struggling with financial difficulties.

The decision by the court to freeze $9.2bn (€6.5bn, £5.5bn) was in response to a complaint filed by Ahmad Hamad Algosaibi and Brothers, another Saudi company that is embroiled in a bitter dispute with Mr Sanea, the owner of Saad Group.

Ahab, which is owned by one of Saudi Arabia's most prominent families, has accused Mr Sanea of "massive fraud" involving as much as $10bn in a separate suit filed in a New York court.

Bahrain central bank intervenes in dispute

Bahrain’s central bank said on Thursday it had taken control of the Bahrain-based banks owned by two prominent Saudi companies that are locked in a bitter dispute as they struggle with financial difficulties.

The central bank said it had assumed the administration of The International Banking Corporation, which is owned by Ahmad Hamad Algosaibi and Brothers (Ahab), and Awal Bank, which is part of Saad Group.

The problems with the two groups first surfaced when TIBC defaulted in May because Ahab was planning a group-wide debt restructuring.

Thursday, 30 July 2009

Kuwait Weekly Market Report - July 30, 2009 (PDF)

Bahrain takes control of Saudi groups' banks

Bahrain's central bank has taken control of banks belonging to two Saudi groups, it said on Thursday, the latest escalation in one of the largest financial scandals the region has seen.

The central bank said it has assumed control of Awal Bank, owned by Saudi group Saad and The International Banking Corporation (TIBC), owned by Ahmad Hamad Al-Gosaibi and Brothers (AHAB).

TIBC had assets of $3.8 billion and Awal Bank had $7.6 billion at year-end.

Dubai's Emaar lost $350M in 2Q, mostly on US unit

Emaar PropertiesImage via Wikipedia

The Middle East's biggest listed property developer says it lost about $350 million in the second quarter, largely because it believes its $1 billion bet on the U.S. housing market is now worthless.

Emaar Properties posted a loss Thursday of 1.29 billion dirhams, or $351.5 million, from April through June. That's down from a profit of 2.12 billion dirhams ($577.7 million) a year earlier.

Part of the drop comes from a 65 percent revenue slide stemming from a severe property slump in Dubai and other effects of the global downturn.

But the biggest hit to Emaar's balance sheet comes from a 1.73 billion dirham ($471.4 million) total writedown of its John Laing Homes division in the U.S. It paid $1.05 billion for the company in 2006.END



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Sama Dubai chump change inditements (Re-post)

This is a photo showing a model of The Lagoons...Image via Wikipedia

More prosecutions and sentences that of course can all be appealed, this time related to bad behaviour at Sama Dubai. Five men apparently have received various sentences and fines for various offenses.

The Public Prosecution had earlier charged the accused of receiving bribes and commissions, and embezzling an estimated Dh2.28m from the company, along with disclosing company secrets to competitors.


2.28 million dirhams?




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Saudi Stock Market Weekly Report 29 July 2009

Major shift in investment preferences in the region (Interview)

Majid Al Futtaim Asset Management evolved from Majid Al Futtaim Trust. Mafam launched its Elite Mena Equity Fund in April this year. Habib Oueijan, Managing Director of Mena in Majid Al Futtaim Asset Management, says the company would continue with its relatively conservative approach to investing.

"We are fundamental investors – we target growth and value stocks. Our objective is long-term capital appreciation while preserving capital. We aim to capture the market upside while keeping our risk in check. This has been our approach since we first started managing the family office, and this is an approach that we will continue with," he told Emirates Business. He is bullish on Mena markets and is a strong advocate of adopting a long-term approach to investment.

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Five sentenced in Sama case

Five men were sentenced to fines and prison terms by the Dubai Criminal Court yesterday in a case of embezzlement and bribery at Sama Dubai, a subsidiary of Dubai Holding.

UAE nationals Mohammed Abdulrahim Al Merri and Nawaf Qasim Shahin, and Majid Saleh Ali Al Ban, of unconfirmed nationality, were sentenced to one year in jail and a shared fine of Dh1.3 million. In addition, Al Merri, Syrian Amer Munir Al Halabi, and Majid Saleh Ali Naser, also of unconfirmed nationality, were sentenced to one year's imprisonment and jointly fined Dh650,000 for another charge relating to the case.

The court, presided over by judge Fahmi Munir Fahmi, acquitted the defendants of other charges brought against them and also acquitted another accused, Abdulsalam Mohammed Ahmed Al Merri, of all charges.

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Iraq removes state oil company head

For the second time this year, Iraq has removed the head of South Oil Company (SOC), the biggest of its three state-owned oil producers.

The move came as the government approved a plan to re-establish a national oil company to oversee most operations in Iraq’s oil and gas sector.

Fayad al Nema, who last month criticised the oil ministry’s plan to auction off contracts to foreign companies to raise production from Iraq’s biggest oilfields, has been transferred to a ministry job, according to Ali al Dabbagh, an Iraqi government spokesman.

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Ex-Tamweel officials accused of making Dh44m in illegal land deals

Four senior executives of the country’s largest mortgage lender, Tamweel, appeared in court yesterday, charged with making an estimated Dh44 million (US$12m) in profits through illegal land deals involving company-owned properties.

The four, including Tamweel’s former chief executive officer, and a fifth man denied the charges.

The chief defendant in the case is a 38-year-old Emirati man identified as AA, who officials say was the chief executive at the time of the crime. His co-defendants are: Tamweel’s former chief investments officer, identified as FK, a 28-year-old Jordanian; the lender’s deputy chief executive, a 44-year-old Emirati identified as AH; and another Emirati, SA, 40, who was Tamweel’s executive manager and a member of the board.

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AZERBAIJAN: NO JITTERS OVER TURKMENISTAN’S CASPIAN SEA THREAT

Maiden's Tower, Baku, Azerbaijan 2Image by teuchterlad via Flickr

Turkmenistan’s pledge to take Azerbaijan to court over the two countries’ rival claims to Caspian Sea oil fields has sparked more confusion than anger in Baku. Some Azerbaijani experts even believe that an international arbitration hearing could prove the best way to resolve a long-standing energy dispute.

At a special July 24 government meeting in Ashgabat, Turkmen President Gurbanguly Berdymukhamedov ordered Foreign Minister Rashid Meredov to have lawyers investigate the legitimacy of Azerbaijan’s claims to the Omar, Osman and Serdar fields. These fields are known as Azeri, Chirag and Kapaz in Baku. Berdymukhamedov also expressed a desire to probe the legality of foreign energy companies’ participation in the fields’ development. Berdymukhamedov called for the lawyers’ findings to be sent to an unspecified international arbitration court, according to the Turkmen state-owned TDH news agency.

The fact that a BP-led consortium has already begun development work in the Omar/Azeri and Osman/Chirag fields under a 1994 agreement with Azerbaijan suggests that Baku holds a "one-sided" approach to the issue, Berdymukhamedov said. "Such one-sided work practices in the Caspian are unacceptable for Turkmenistan."

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Billion dollar bailout for Iran car maker

Iran Khodro, the Middle East's biggest car manufacturer, is to receive $1 billion in a government-backed rescue package, a company official said on on Wednesday.

Debts of several billion dollars were reportedly threatening to force the bankruptcy of the company, which has 60 percent of the Iranian car market and sends exports around the world.

"The Monetary and Credit Council finally agreed with the one-billion-dollar aid to Iran Khodro," Etemad newspaper said.

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UAE's NBQ says Global loses court bid

National Bank of Umm al-Qaiwain (NBQ) said on Wednesday that Kuwait's Global Investment House (GIH) has lost a court bid to scrap its deal to buy a $642.5 million stake in the UAE bank, after defaulting on payment.

Global, which defaulted on most of its debt earlier this year amid the credit crunch, last year signed a deal to buy a 20-percent stake in NBQ through convertible bonds.

NBQ, in a statement announcing second-quarter earnings results, reiterated the Kuwait firm had paid only $249.9 million of the purchase price and defaulted on the rest.

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Green shoots emerging in arid Qatar

If there is anywhere in the global economy where green shoots are emerging, it is in the parched desert around Doha, the capital of gas-rich Qatar.

After a pause of a few months over the New Year, Doha-based bankers say the financial services sector in the emirate is roaring back to life, providing opportunities for regional institutions.

Credit Suisse, for one, has let go underperforming staff but has been increasing its net number of bankers through the downturn.

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Mortgage lenders await upturn

The Gulf has largely avoided the writedowns of repackaged subprime mortgages that unleashed such havoc on global financial markets last year. But instead, the nascent local mortgage industry has been hit by a slump in domestic property.

Across the region residential property values and rental costs have declined, some even more deeply than in the US. Analysts say house prices in Dubai, the most developed mortgage market, have fallen by about 50 per cent.

“Until recently, the real estate markets were a one-way street where prices always went up,” says Ventakesh Srikantan, head of assets and liabilities at HSBC Middle East. “But now we are witnessing a serious property downturn and credit stresses are emerging in many portfolios.”

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Dubai acquits executive of bribery charges

A Dubai court on Wednesday found the former chief executive of a state-linked developer innocent of bribery charges in an embarrassing turn of events for the government’s high-profile anti-corruption campaign.

Abdulsalam Al Marri, former chief executive of the Lagoons development, was found innocent of charges including bribery, said Habib al-Mulla, whose law firm defended the UAE national. Three junior colleagues were found guilty of accepting bribes and jailed for a year each.

The verdict is a setback to the city-state’s anti-corruption campaign launched last year to root out corruption and financial mismanagement at state-linked real estate companies and banks. The unexpected verdict, however, also appears to undermine criticism of a lack of independence within the judiciary.

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Wednesday, 29 July 2009

Dubai's Mashreqbank Q2 net profit falls 38 pct

DUBAI, July 29 (Reuters) - Mashreqbank MASB.DU on Wednesday reported a 38-percent drop in quarterly net profit, citing increased provisions against bad loans.

Mashreqbank, the largest lender by market value in Dubai, said net profit fell to 435 million dirhams ($118.4 million) from 706.86 million dirhams in the same period in 2008.

Mashreqbank booked provisions of 319 million dirhams in the quarter. Total provisions stood at 551.4 million dirhams in the first half of 2009, compared with 200.3 million dirhams in the same period last year, it said.

A slew of Gulf lenders have been forced to boost provisions as they face an economic downturn, and against their exposure to a pair of troubled Saudi firms.

The provisions "are key to ensuring that the bank operates in a sustainable manner while the ups and downs of the current crisis play out," Chief Executive Abdul Aziz Al Ghurair said.

Mashreqbank last week confirmed it was suing Ahmad Hamad Algosaibi & Bros, one of the two Saudi companies at the heart of a large financial dispute. [ID:nLL566732]

Mashreq's Tier 1 ratio - a measure of financial strength - now stands at 14.8 percent, a level it achieved following help from the government and by reducing risk-weighed assets. ($1=3.673 Uae Dirham) (Reporting by Nicolas Parasie; editing by Simon Jessop)END

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'Get back to basics,' Dubai urged

With the global economy going through one of the most challenging periods of economic stress in generations, Dubai’s future domestic economy must focus heavily on continuing to attract expatriates and foreign companies, says a leading property developer.

“I believe we will soon see the bottom of the current crisis but if we are to avoid a recovery like the boom and bust cycle of the recent past, Dubai must return to the basics which first put it on the map,” said Mohammed Nimer, CEO of mid-market development company MAG Group Properties.

“Dubai was hugely successful before the real estate bubble,” said the boss of a company with AED3 billion worth of construction projects in the United Arab Emirates. “As the Arabian Gulf’s most globalised economy, Dubai’s existence has been driven by its power to attract foreign direct investment and the resources necessary to make it work.



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Creditors near deal with Global

Global Investment House, a struggling Kuwaiti investment company, is close to an agreement with its creditors on a possible restructuring of its debt, according to a banker familiar with the negotiations.

The restructuring will mean that Global, which defaulted on a $200m syndicated loan mostly from international banks in December, will pay back its creditors in full in return for which it is seeking to extend the maturity of the loans.

"Global has taken a very co-operative approach to the restructuring process," the banker told the Financial Times. "Unlike many institutions in the region, Global has continued to service its debts and intends to fully repay its loans."

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When is an SWF not an SWF?

Map of Singapore.Image via Wikipedia

For a secretive kind of outfit, Temasek is certainly generating a lot of publicity these days. Following the storm of media interest last week over news of the sudden departure of its chief executive-designate Chip Goodyear, the Singaporean state investment agency is again in the news.

This time, the Temasek newsmaker is none other than Ho Ching, the SWF’s low-profile chief executive, wife of Singapore’s prime minister and a renowned shunner of media interviews.

In a rare public appearance on Wednesday, Ho in a speech in Singapore acknowledged that the value of Temasek’s assets may have slumped by more than S$40bn ($27.7bn) in the year through March. The fund had predicted last year a 16 per cent probability that the value of its assets may drop by more than S$40bn in the year through March, she said.

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Federation of Euro-Asian Stock Exchanges Newsletter July 2009 (PDF)

Here are some headlines from this issue:

ABU DHABI SECURITIES EXCHANGE
Non-GCC investors were net buyers on ADX in the first half of 2009 announced Tom Healy, Chief Executive of Abu Dhabi Securities Exchange. Giving details of first half performance and trading statistics, Mr Healy also said that the ADX Index, market capitalisation and volumes were all up in the first half of 2009.

BAKU INTERBANK CURRENCY EXCHANGE
The General Manager of the Baku Interbank Currency Exchange (BBVB) F.F.Amirbekov has taken part on the 2nd July of 2009 on general meeting of the International association of exchanges-CIS countries (IAEx of CIS), passed in St.-Petersburg (Russia).

BELARUS
The Executive Board of the International Monetary Fund (IMF) today completed the first review of Belarus’s performance under a program supported by a Stand-By Arrangement (SBA) and increased the financial support to SDR 2.27 billion (about US$3.52 billion), equivalent to 587 percent of Belarus’s quota or 7 percent of its GDP.

BOSNIA AND HERZIGOVINIA
The Executive Board of the International Monetary Fund (IMF) today approved a 36-month SDR 1.01 billion (about US$1.57 billion) Stand-By Arrangement for Bosnia and Herzegovina to support an economic program designed by the authorities to mitigate the effects of the global financial crisis.

EGYPT
Egyptian President Mohamed Hosni Mubarak issued Presidential Decree No. 192/2009 concerning the principle system of the General Authority for Financial Supervision.

TEHRAN STOCK EXCHANGE
Tehran Stock Exchange appointed Dr. Abulfazl Sharabadi as Director of its newly established Public Relations & International Department. "We will be able to introduce and release our high volume of activities and performance to the public by a dynamic Public Relations & International Department" said Dr Ghalibaf Asl, managing director of TSE, in an introduction meeting.

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Emaar merger to reshape Dubai property market

DUBAI, UNITED ARAB EMIRATES - DECEMBER 13:  Th...Image by Getty Images via Daylife

The recently proposed merger between Dubai real estate developers, Emaar Properties and units of Dubai Holding Commercial Operations Group (DHCOG), will have big ramifications for the local market, ratings agency Moody's Investors Service said in a report on Tuesday.

"Moody's recognises that consolidating Emaar and DHCOG's real estate interests into one entity will create a new giant in Dubai's market, with unrivaled access to a sizable land bank," said Martin Kohlhase, an associate analyst in Moody's Corporate Finance Group based in Dubai.

"Furthermore, several drivers - such as the opening of Dubai's Metro (public transportation system), the inauguration of Burj Dubai (the world's tallest skyscraper) and the end of the school year/beginning of the summer period - will shape Dubai's residential property market in the near term and lead to greater differentiation within Dubai's residential areas, from which Emaar and DHCOG's real estate divisions may benefit," he added.

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UAE projects worth over $300 billion on hold

Over 400 projects worth more than $300 billion have been placed on hold or cancelled in the United Arab Emirates due to the global financial crisis, Dubai-based research firm Proleads Global said on Tuesday.

The construction sector in the UAE will stabilise this year and is expected to show signs of recovery in 2010, the firm said, adding multiple projects in several sectors are scheduled for completion up to 2011, with most in 2010, it said.

'The study identifies a slowdown in new projects in the commercial and retail; education and healthcare projects being placed on hold more often than in the past; a slowdown in leisure and entertainment and an increasing rate of cancellations in the residential sector,' the report added.

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Love ‘em or hate ‘em, they still have to rate ‘em

The ratings agencies have had a bad crisis. Many have blamed them – and by “them” I mean mainly the big three of Moody’s, Standard & Poor’s and Fitch – directly for the subprime crisis that lit the fuse on the global credit crunch.

The US authorities are in the process of a thorough reform of the raters to pre-empt the possibility that such a fiasco could recur.

Gulf corporations have had a love-hate relationship with the raters for some time now. Before the crisis hit the region last year, corporate treasurers were falling over themselves to get that elusive “AAA” star prize that meant they could get the best possible terms in international capital markets.

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Laid off Kuwaitis start to fight back

Khaled al Duwaisan was in hospital for two days when he checked his phone’s inbox expecting to see supportive messages from family and friends. Instead, it was a message from his boss, and the news was not good: he had been fired.

“Why didn’t they talk to me, I am a human being,” Mr al Duwaisan said. “There was no clear reason. They only mentioned the economic problem.”

Mr al Duwaisan said he had been working for the Islamic financial institution Investment Dar for a year and a half before his job was terminated this May when he took a week off to seek treatment in hospital.

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UAE stocks are positive July 28th (Re-post)

The important stocks, and you should know what they are if you read this blog, look very strong, whether they lost some or gained more today.

Abu Dhabi’s stocks gained some more relative to Dubai’s, and that is just the ADX DFM General Index Ratio readjusting the ratio after the extreme moves of the past several trading sessions.

Even if stocks lose a few more percentage points in this last week of July, the bounce has been powerful for most liquid stocks. The great thing for traders who use charts is that the dramatic early to middle July plunge helped explore where important support levels lie. Some stocks revealed dangerous weakness, like Emaar Properties, and Al Dar and Sorouh. Other stocks reaffirmed their strength and their leadership, like ARMX, ARTC and AABAR. AABAR is probably the weakest of the three as seen in the recent panic attack.

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In Teetering Dubai, A New Metro And World’s Tallest Building Are About To Debut (Photo Tour) [Re-post]

Oh, Dubai. Sometimes we wish you success, because you’re so funny. Other times we can’t wait till you run out of oil and just turn back into a desert wasteland, because you’re so gross.

Of late, the Gulf city-state has been trending somewhere between those two courses. They’ve shut down all kinds of massive half-baked construction projects, but are pushing ahead on a select few. Most notable in the “pushing ahead” category are the world’s tallest building and the city’s new metro system (exempted on the “half-baked” count). The powers that be in Dubai have been planning a grand simultaneous unveiling of the two in September, in fact — seeing it as a perfect opportunity to get massive amounts of media attention and declare to the world, “We’re still actin’ all rich!”

Sadly, there’s a hitch. Construction on the Burj Dubai, the 206-story luxury residential and office tower–space will supposedly go for $3,500/square foot and up–is running behind schedule, and will not be complete by September. So the metro–which features a “Gold class” section for “VIPs”–will debut alone and therefor won’t get anywhere close to as much media attention.


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Abu Dhabi group backs Branson’s space tourism push

An Abu Dhabi state-linked investment company is planning to buy a 32 per cent stake in Virgin Galactic, the commercial space venture of British entrepreneur Sir Richard Branson, in the latest sign of the oil-rich emirate’s rising ambitions.

Aabar Investments will pay $280m for the holding in the company, which was launched in 2004 and aims to start flying private passengers to space within two years at a cost of $200,000 per ticket.

The Abu Dhabi group also plans to invest an extra $100m to help pay for research that would give Virgin Galactic the option of launching small satellites from unmanned rockets.

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Tuesday, 28 July 2009

Dubai's opaque bond plan leaves investors wary

Foreign investors are unlikely to tap into a $10 billion (six billion pounds) Dubai bond unless officials give details such as whether it has federal backing, raising the prospect the central government may intervene again to support the emirate.

Dubai, one of the seven United Arab Emirates, propelled itself into the spotlight as a tourism hub during a six-year oil-fuelled boom, but the downturn rocked its foundations based on excess lending and a transient expatriate population.

The UAE's central bank took up the first tranche of a $20 billion bond issue in February and Dubai's new finance chief announced last week that the second tranche would be open to local and foreign investors.



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Rasmala launches Shariah compliant Saudi equity fund

Rasmala Investments Saudi announced today the launch of its Sharia Compliant “Rasmala Saudi Equity Fund”.

The new fund will predominantly invest directly in the Shariah Compliant securities listed on Tadawul. The fund is denominated in Saudi Riyal with a minimum subscription amount of SAR 50,000.

“We believe that the fundamentals of the Saudi economy will remain robust given the growth in spending by government entities.

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Abu Dhabi backs Branson’s space tourism push

Virgin GalacticImage via Wikipedia

Aabar, an Abu Dhabi state-linked investment vehicle, plans to acquire a 32 per cent stake in Virgin’s commercial space venture in the latest sign of the oil-rich emirate’s rising ambitions.

Aabar will pay $280m for the holding in Virgin Galactic, which was launched by Sir Richard Branson, the British entrepreneur, in 2004 to develop commercial vehicles that will enable wealthy individuals to travel into space.

The Abu Dhabi company has also committed to invest $100m to fund a “small satellite development capability”, a statement said.

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SEC accuses UAE citizen of insider dealing

The US Securities and Exchange Commission has named a citizen of the United Arab Emirates in connection with alleged insider dealing, the second such charge of a Gulf national in the past week.

The SEC complaint, filed in Manhattan on Monday, accuses Khaled Mohammed Sharif Al Sayed Al Hashemi of Abu Dhabi of buying 120,000 shares in Nova Chemicals, a petrochemical producer, in February in the run-up to a takeover. Nova was eventually acquired by International Petroleum Investment Company, an Abu Dhabi state investment vehicle, for $2.3bn on 6 July.

The SEC alleges that Mr Hashemi used an online brokerage account to buy Nova stock at $1.41 per share. On 23 February, the day of the takeover announcement, he sold the shares for an average of $5.24 per share, making $458,760 in profits, the SEC alleges.

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Result Update report on Emirates NBD. (Global PDF)

Emirates NBD (ENBD) announced its 1H09 results, reporting a net profit of AED2,111mn (EPS: 38fils). The results exhibit decline of 20%YoY in profitability while QoQ growth also declined by 32%. Even though, the net interest income (NII) of the bank declined by 11%QoQ, the rise in it on a yearly basis was significant, evident from a 33%YoY increase over 1H08. Growth in interest earning assets was slow but positive and that combined with improving spreads led to a coupling effect, pushing the NII to exhibit buoyancy. As per our calculations, ENBD’s net interest margin (NIM) grew by 42bps from 2.6% in 1H08 to 3.1% in 1H09. Increasing NIMs were seen in most banks for 1H09, driven by favourable repricing of loans. It is interesting to note that, ENBD’s NIM dropped on a QoQ basis, by a hefty 42bps from 3.3% in 1Q09 to 2.9% in 2Q09, driven by reduced differential between US$ LIBOR and EIBOR and due to upward pressure in the cost of deposits. Growth in earning assets remained slow (10%YoY and 6.6%YTD) due to controlled lending carried out by the bank amidst challenging times.

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Death of al Braikan reveals cost of investing

The arc of Hazem Khalid al Braikan’s short life story has yet to fully unfurl, but the end of it, at least, is starting to take shape.

On Sunday, the 37-year-old was found dead at his home just south of Kuwait City, a three-storey, tan-coloured villa surrounded by hedges and a few palm trees. A single bullet, apparently fired by Mr al Braikan, was found lodged in his head.

It was a sad end to his life. After all, the businessman turned accused con man appeared to have a passion for investing.

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Bad loans to mount, warns bank

Emirates NBD yesterday warned that bad loans could continue to mount before peaking next year, as customers continue to default on loans.

The UAE’s largest bank by assets saw second-quarter net profit fall 41 per cent and said non-performing loans could rise to 2 per cent of its overall loan book at the end of this year before peaking at about 2.5 per cent next year.

“We are taking a cautious view. The pressure will remain on non-performing loans,” said Rick Pudner, the chief executive of Emirates NBD. “We expect non-performing loans to peak in 2010. This has been on our planning radar in recent months.”

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SEC Sues Abu Dhabi’s Hashemi Over Nova Insider Trades

The U.S. Securities and Exchange Commission sued Khaled Al Hashemi, claiming the manager at Abu Dhabi Oil Refining Co. had inside information when he traded in shares of Nova Chemicals Corp. before it was acquired by an Abu Dhabi government entity this year.

Al Hashemi, a citizen of Abu Dhabi who may still be working at AORC, earned illicit profits of $458,760, the SEC said in a complaint filed today in Manhattan federal court. He may also be employed as an administration director by the Abu Dhabi Tourism Authority. Both AORC and the tourism agency are state-run.

Nova Chemicals, Canada’s largest chemical maker, agreed on Feb. 23 to be acquired by Abu Dhabi’s International Petroleum Investment Co. for about $499 million in cash to gain financing required by lenders. Shareholders received $6 per common share.

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Kuwait Investment Authority mulls Zain stake sale, says paper

Zain GroupImage via Wikipedia

Kuwait Investment Authority (KIA), the Gulf state's sovereign wealth fund, could consider selling its stake in mobile operator Zain if the price is right, newspaper al-Rai said on Monday.

KIA, which owns a 24.61% stake in Zain, has not received any offers from Etisalat, to date, the paper added.

"The KIA has no objection to discussing any offer to buy its stake in Zain whether made by the UAE's Etisalat or others under the condition that the offer would be serious and with attractive returns," daily Rai said, citing unnamed sources.

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Kuwait financier saga shows weak regulation

The apparent suicide of a Kuwaiti broker, sued for fraud by U.S. regulators in a case linked to Kuwait's ruling family and its top investment firm, shines an unwelcome light on the weak regulatory environment in the Gulf Arab state.

Kuwaiti Hazem Khalid Al-Braikan, 37, who had been at the centre of a financial scandal that erupted last week, was found dead on Sunday, days after being sued by the U.S. Securities and Exchange Commission over suspicious stock trades.

His sudden death sent shockwaves through the financial sector in the world's biggest oil-exporting region, already hard hit by the global crisis and facing concerns about transparency.

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AZERBAIJAN: FOR SOCAR, BIGGER MEANS BETTER WITH AZERIGAZ TAKEOVER

BakuImage via Wikipedia

The Azerbaijani government’s recent decision to make state-owned gas distribution company Azerigaz part of the mammoth State Oil Company of the Azerbaijani Republic (SOCAR) signals that Baku wants to transform SOCAR into an "economic symbol" similar to Russia’s Gazprom or Kazakhstan’s KazMunaiGas, experts say.

Reasons for President Ilham Aliyev’s July 1 order remain hazy, however. No information was released that suggested that Azerigaz was losing money. The day before, at Azerigaz’s request, Azerbaijan’s Tariff Council had agreed to increase the consumer retail price of gas to a profit-making 100 manats ($124.36) per 1,000 cubic meters.

Some energy analysts had hoped that the takeover would mean greater efficiency at Azerigaz, a company of several thousand employees with a reputation for non-transparent management.

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Mumtalakat banks on transparency

After publishing its second set of annual results last week, and with an international rating on the way, Bahrain Mumtalakat Holding Company seems determined to earn a reputation as the most transparent sovereign wealth fund in the Gulf.

“Unlike most of the funds in the region, we do not get our income from oil revenues,” says Talal al-Zain, chief executive. “But what also differentiates us, and makes us more of an investment company, is the level of transparency we strive for.”

Transparency can prove a double-edged sword, however. Its latest results show that Mumtalakat made a BD69.3m ($183.8m) loss last year, which it attributes to BD370m of impairment charges for Gulf International Bank and Gulf Investment Company. Both financial institutions, which are jointly owned by the governments of the Gulf Co-operation Council, were hit hard by the credit crisis last year.

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Gulf’s eye needs to be kept on goals for home

Abu Dhabi by SPOT SatelliteImage via Wikipedia

It feels as though Abu Dhabi has barely been out of the news in recent weeks, particularly in the British media.

The coverage has stretched across tabloids, broadsheets, radio and television. But the column inches have not been tucked away in sombre business sections; rather, attention has focused on the back pages.

With the English football season enjoying its summer break, scribes turn their attention to the transfer market – who is buying whom and spending what. And Manchester City, the club bought by Sheikh Mansour bin Zayed Al Nahyan last year, has been on a shopping spree that has eclipsed the elite of the English Premiership.

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Dubai’s airlines run risk of overcapacity

HAMBURG, GERMANY - JULY 28:  Tom Ender s (L), ...Image by Getty Images via Daylife

Airlines – in particular Emirates – are synonymous with Dubai. From the rebadging of Arsenal’s Highbury football stadium in London to high-profile purchases of giant Airbus A380 aircraft, Dubai has used its flag carrier as a pillar of a decades-long marketing effort to project an image of dynamism and club-class luxury.

Emirates has enjoyed a number of advantages over its competitors. Its base at Dubai airport, along with others in the Gulf, is a 24-hour operation, which means aircraft time is not wasted on stand overnight. The emirate also levies little or no corporation tax on profits.

Emirates “has managed to find its niche as this long-haul, low-cost carrier which is almost the holy grail of the airline industry. If you can operate long-haul at low-cost then you are likely to be very profitable”, says David Kaminski of Flight International, a trade publication.

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