Google+ Followers

Sunday, 5 April 2009

Dubai raises $635m to refinance debt

The Dubai government raised a $635m Islamic loan on Sunday to help retire $1bn in civil aviation authority debt maturing later this month.

The loan should help assuage international investor concerns about the Gulf commercial hub’s ability to attract bank funding as it looks to refinance around $15bn this year, part of the emirate’s $75bn-$80bn debt pile.

The government is seeking to refinance as much of its debt as possible and then to pay off the remainder from internal resources, which have been boosted by a $10bn loan from the United Arab Emirates central bank.

Tadawul Monthly Investment Report March 2009

Global's GCC Weekly Market Report – April 02, 2009 (PDF)

Global's Egypt Weekly Market Report - April 02, 2009 (PDF)

Saudi money supply picks up

Saudi Arabia's net foreign assets made their sharpest fall in at least two years in February after the global crisis hit markets, but money supply growth picked up pace for the first time since October, official data showed.

The Saudi Arabian Monetary Agency's (Sama) net foreign assets stood at 1.585 trillion riyals (Dh1.553 trillion) in February, down 2 per cent from January, data published on the central bank's website showed.

Although Sama's foreign assets rose by about 28 per cent in February from their level a year earlier, they were at their lowest level since August, 2008.

GCC mergers and acquisitions value fell 54.9% in 2008

The value of mergers and acquisitions carried out by Gulf oil producers plunged by around 54.9 per cent in 2008 and most of the decline was in the fourth quarter, a Kuwait investment bank said yesterday.

The decline was a result of a severe liquidity shortage in the region's financial sector because of the global economic distress, the Kuwaiti-based Global Investment House (GIH) said in a study sent to Emirates Business.

But the report expected such activities to resurge in the short term as ailing companies will have to be either acquired or merged with strong entities, while rich firms will try to take advantage of low prices and make acquisitions. GIH said the six-nation Gulf Co-operation Council accounted for more than 58 per cent of the total value of the M&As concluded in the Middle East and North Africa region in 2008.

Regional power projects hinge on recovery of credit markets

Dozens of billion-dollar power stations have sprouted across the GCC in the past decade, nourished by a flow of syndicated loans from western banks. But the current credit crisis has interrupted that movement of funds, leaving project developers scrambling to find alternate sources of funding even as electricity demand continues to rise.

When credit was easily available, banks across the world were happy to commit to power projects in the region since they were viewed as priority investments backed by resource-rich governments.

Now, dependable entities such as the Abu Dhabi Water and Electricity Authority (ADWEA) have been forced to seek expensive, short-term financing, while some projects across the region are threatened with delays.

Qatar Airways strips out lounges

Qatar Airways put into service its new Airbus A340-600 nearly three years ago. With two lounges on board, the airline trumpeted it as the latest five-star amenity for first and business class long-haul travellers. Now it wants the space back.

The airline plans to add more economy seats in its existing four-engine A340-600s as the volatile economics of the airline industry pushes carriers to boost revenues. And in a setback to Airbus, the airline has also cancelled plans to buy more of the aircraft because of concerns about its fuel efficiency.

Both moves underscore the challenges aircraft makers, and in particular Airbus, face in selling four-engine versions for long-haul routes as airlines shift towards twin-engine alternatives, on which Boeing has taken an early lead.

UAE to meet IMF quota

Economists say not to expect the UAE to provide more funds than it has already committed to pump up the rescue funds available at the IMF.

The Group of 20 (G20) announced on Thursday that it would boost to more than US$1 trillion (Dh3.67tn) the amount of bailout funds available to the IMF to lend to countries hit hardest by the global economic crisis.

Expectations had been high that the Gulf and other big exporters with sizeable foreign currency reserves would be under pressure to provide a significant portion of any new IMF funding.

Saudi stock market up 5% on G20 measures

Saudi shares rose sharply today as investors started to believe the worst of the financial crisis is over after the Group of 20 meeting in London agreed on measures worth US$1 trillion (Dh3.67tn) to help the world economy.

The Saudi Tadawal All Share Index gained 5.28 per cent to 4,966.38 led by petrochemical and banking sectors. Saudi Basic Industries Corporation ended up almost 10 per cent to 46.30 Saudi riyals. Bank Al Jazeera, Saudi Fransi, Al Rahji and Saudi Hollandi Bank were among the major gainers.

Aymen el Saheb, the head of operations at Drahem Financial Brokerage in Dubai, said that with oil staying above US$50 a barrel, energy stocks would remain in focus and markets would consolidate at present levels.

Funds with UAE focus excel early

Although UAE markets were see-sawing during the first quarter, some UAE-focused funds managed to buck the trend and emerge as some of the region's best-performing funds during the period.

Indeed, Makaseb Emirates Equity Fund was the region's best-performing fund in the first quarter, rising 14.71% during the period, compared with 6.62% by its benchmark MSCI UAE Domestic, according to Zawya Funds Monitor.

"Fund strategy for 2009 will be a combination of stock selection and asset allocation tactics," notes a Makaseb commentary on the fund in February. "The reason for focusing on asset allocation is that markets are not stable yet and market conditions are still bad."