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Thursday, 4 June 2009

DOW JONES INDEXES AND THE FEDERATION OF EURO-ASIAN STOCK EXCHANGES TO DESIGN REGIONAL INDEXES

Dow Jones & Company Inc.Image via Wikipedia

NEW YORK (Jun. 3, 2009) ― Dow Jones Indexes, a leading global index provider, and the Federation of Euro-Asian Stock Exchanges (FEAS) plan to launch the Dow Jones FEAS Indexes on Friday, June 5. This is the first time indexes are created to measure the performance of companies across the Euro-Asian region. The three indexes that are being launched on Friday are a composite, and two regional sub-indexes. The Dow Jones FEAS Indexes are designed to underlie index-linked investment products such as funds and structured products.

Dow Jones FEAS Composite Index currently includes component stocks of 10 of the 32 member states of the Federation of Euro-Asian Stock Exchanges. The exchanges included are Abu Dhabi (UAE), Amman (Jordan), Bahrain (Kingdom of Bahrain), Belgrade (Serbia), Bulgaria (Bulgaria), Istanbul (Turkey), Karachi (Pakistan), Macedonia (Republic of Macedonia), Muscat (Oman), and Zagreb (Croatia).

The Dow Jones FEAS Middle East/Caucasus Index currently includes stocks from the following four FEAS member exchanges: Abu Dhabi, Amman, Bahrain, and Muscat.

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Al Khalij Bank Plans to Close Al Khaliji Services Unit in Dubai

Al Khalij Commercial Bank QSC, a Qatari lender, plans to close its Al Khaliji Services Ltd. unit in the tax-free Dubai International Financial Centre.

Al Khalij’s board approved the proposal to wind up the unit at a board meeting yesterday, the bank said in a statement to the Doha bourse today.

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Qatar ‘Welcomes Opportunity’ to Invest in Porsche, Minister Says

Qatar “welcomes the opportunity” to invest in Porsche Automobil Holding SE, said Youssef Kamal, the Gulf state’s finance minister.

“I don’t know how much, I don’t know when,” Kamal said in an interview at the St. Petersburg International Economic Forum in Russia today.

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Rwanda: Dubai World Slashes Local Investments

Dubai World logoImage via Wikipedia

Dubai World, a major holding company owned by the United Arab Emirates, has scaled down its investments in Rwanda, preferring to concentrate on two projects out of a handful it had picked on.

Almost two years ago, the Middle-East giant announced it was to invest up to $230 million (approx.Rwf130bn) mainly in the hospitality industry.

The company promised to invest into Akagera National Park, home to the 'big five' wildlife species and re-develop Akagera Game Lodge.

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India exports 30 tons gold coins, scrap gold to Dubai

Burj al Arab Hotel in DubaiImage via Wikipedia

High gold prices, slumping jewellery sales and rising stock market conditions are prompting several Indian bullion dealers to export scrap gold and gold coins to several destinations in the Middle East, especially to Dubai.

In the last few years, India has been the largest importer and consumer of gold. In 2008, India imported around 400 tonnes of gold, which is mainly used for making jewellery items and gold coins. But in the last five months of 2009, India’s gold imports have fallen to negligible levels, compared to previous years, that bullion dealers are now importing scrap gold to Dubai.

India has so far imported only around 47 tons of gold this year.

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Dubai: Has the tourism bubble really burst? (Scroll down to article)

Press reports are full of the collapse of the Middle East's most lavish metropolis. Is the party really over for Dubai? Chloe Berman looks behind the headlines
(04 June 2009)

Forty years ago, Dubai was nothing more than a small fishing village where people came to dive for pearls. The fortunes of the city were completely transformed when oil was discovered in 1966.

However, Sheikh Rashid bin Saeed Al Maktoum, the ruler at the time, could see that the oil reserves would not last forever. In a bid to diversify the economy, he created a vision of a city that would rely on manufacturing, construction and, of course, tourism.

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Temasek loses from Barclays stake sale

Temasek, the Singapore state investment company, sold out of its shareholdings in Barclays this year, making an estimated £500m loss on its investment, it has emerged. Temasek reduced its stake of almost 2% in Barclays over several weeks from the turn of the year, as the bank’s shares fell as low as 51p in January amid speculation it would need a government bail-out. Since early March, however, they have risen fivefold. On Wednesday they fell 14.5p to 259p.

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12% corporate tax in Oman

Oman has changed its corporate tax laws to woo foreign investors, in an attempt to diversify its economy beyond oil income, an official publication and analysts said yesterday.

"The new tax law has been made easy for foreign investors to allow them to retain a bigger share of their profit to encourage a bigger international participation to our economy," the official gazette said.

The new corporate tax rate is 12 per cent and applicable to all companies registered in Oman, owned by local or international firms. It will take effect from January 2010.

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Qatar banks to get bonds, cash in rescue plan

Banks in Qatar will get cash and bonds in exchange for selling their real estate investments to the government under a QR15 billion (Dh15bn) programme unveiled last week.

Qatar said last week it would offer to buy up to QR15bn of banks real estate investments and loans, more than tripling a support package to help lenders cope with a slump in equity and property markets.

Under the plan, banks would receive state cash and 10-year government bonds carrying a fixed coupon of 6.5 per cent per year in lieu of their real estate portfolios, Gulf Times reported, citing sources.

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Foreigners emerge as bulk buyers as Gulf Capital fund raises Dh1.75bn

Private equity company Gulf Capital's second partnership fund, which was launched in the second quarter of last year, has raised Dh1.75 billion, Chief Executive Officer Dr Karim El Solh said.

And the bulk of the money has come from foreign investors. GC Equity Partners II was launched with the target of attracting Dh2bn by July this year. But El Solh said the fund was expected to raise up to Dh2.5bn by the end of 2009, lifting the value of the assets managed by the Abu Dhabi-based company to above $1bn (Dh3.67bn).

"We have launched GC Partners Fund II and exceeded the Dh1.75bn-mark during what is probably the toughest time ever for fundraising," he said. "This shows the region is still growing and investors believe in the region and want to put in money.

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DIB maintains high liquidity

Dubai Islamic Bank (DIB), the largest Islamic bank in the world, has Dh15 billion on deposit with the Central Bank. This is Dh10bn more than the statutory minimum required, analysts said.

The listed bank boasts a 11.1 per cent Tier 1 ratio as of March 31, 2009 [as per Basel II].

The above figures have been deduced after an analysis of the bank's financials and they are in contrast to most UAE banks that were suffering from a liquidity squeeze towards the end of Q1.

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RAK Steel aims to have 750,000 tonne capacity mill

RAK Steel, a steel manufacturing facility, plans to increase its annual deformed steel reinforcement bars capacity by 50 per cent by the end of this year to 750,000 tonnes.

The plant currently has a capacity of 500,000 tonnes of deformed steel reinforcement bars.

The boost in production capacity is also expected to increase RAK Steel's presence in the market as it is already the second largest producer of steel rebars in the UAE.

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Saudi to commission two new oil developments

Saudi Arabia will commission two new oil developments on schedule this summer to boost the country’s production capacity, even as it delays new refinery projects, a Saudi oil official said yesterday.

The two projects, together with a field that is just starting production, have a combined capacity of 1.55 million barrels per day (bpd).

They give the world’s largest oil producer a much bigger margin of new supply to call on as demand recovers after the recession.

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Deyaar creates distressed asset fund

Deyaar Development, the Dubai property company, has secured Dh200m from regional investors for a new distressed asset fund that will buy property from buyers who default on their payments.

Markus Giebel, Deyaar’s chief executive, said the creation of the fund was the final step in a strategy to lower the company’s default rate from about 50 per cent to the low single digit range.

“The fund is finished and ready to go,” he said. “We are going on a roadshow to Saudi Arabia and other countries in the next couple of weeks. There is still strength and liquidity in the region.”

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SWF's no tool of fiscal policy

Ka-ching! IPIC scored big for Team Abu Dhabi this week when it sold part of its stake in Barclays, the British bank.

Readers may recall that at the height of the financial crisis last October, Barclays raised £7 billion (Dh42.55bn) in an effort to stay afloat without taking money from the British government, and with it all the strings that would have been attached.
Instead, it ended up with two other government shareholders, Qatar (whose Qatar Investment Authority already held Barclays stock) and Abu Dhabi, through IPIC, otherwise the International Petroleum Investment Company.

The deal gave Abu Dhabi a roughly 16 per cent stake in the bank, and sent Barclays’ other shareholders into paroxysms over a deal they complained had been made behind their backs.

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Iran enlists China for South Pars gas project

Iranian oil fieldsImage via Wikipedia

Iran is moving to develop the remaining phases of its biggest gasfield without western help.

Tehran signed a US$4.7 billion (Dh17.26bn) “co-operation contract” in Beijing yesterday for the development of phase 11 of the South Pars field in the Gulf with China National Petroleum Corporation (CNPC), replacing the French energy group Total, Iran’s official IRNA news agency reported, quoting the head of the National Iranian Oil Company (NIOC).

IRNA said Seifollah Jashnsaz, the managing director of NIOC, had signed the deal after closing negotiations with CNPC in the Chinese capital. Total has a memorandum of understanding with NIOC for the project phase but had failed to reach an agreement on contract terms.

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Intelspec to Acquire Stake in U.A.E. Construction Company

WWA Group, Inc. (OTCBB: WWAG) (“WWA Group”) today announced that Intelspec International, Inc. (“Intelspec”) has signed a memorandum of understanding to acquire a controlling interest in North Coast Construction, LLC (“North Coast”) in a stock for stock exchange. The transaction is expected to close by August 1, 2009, subject to the execution of definitive documentation and requisite approvals.

North Coast is a two-year-old U.A.E. licensed company engaged in the construction of residential and industrial projects. The company also owns property that is being developed internally into middle market residential villas and apartments targeted at the local rental market. North Coast has in-house engineering staff and is licensed to operate anywhere in the U.A.E. Intelspec has been negotiating with North Coast to act as project manager for two of its residential projects in Ras Al Khaimah, U.A.E.

“This agreement is a very good fit for us,” said Tom Morgan, Intelspec’s CEO, as “we need an LLC construction license in the U.A.E. which is very difficult to obtain under new regulations. We can use their in-house engineers to assist us with other projects we have under way and like the target market positioning of the residential projects North Coast has in development. North Coast’s business will benefit from our overall project management expertise that will better position it to bid for larger projects. On completion we expect this transaction to boost our balance sheet in advance of public quotation.”

Cairo address a chance to drive out Bush’s ghost

Fresh asphalt gleams on the palm-lined avenue leading to Cairo University, where Barack Obama, the US president, is to deliver his eagerly anticipated address to the Muslim world on Thursday.

Workers have been busy scrubbing pavements and anything else likely to be seen by Mr Obama as he arrives to make a speech intended to scrape away from US-Muslim relations the thick grime of mistrust accumulated over the eight years in which George W. Bush was president.

“Events like this do not happen frequently in international relations,” said Abdel Moneim Said, head of the Cairo-based Al Ahram Centre for Political and Strategic Studies. “This is as big as Nixon’s visit to China. After eight years of talk about the clash of civilisations, this guy comes to an Islamic country to make a point about our shared humanity.”

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Gulf kindles a spirit of enterprise

Since they were kids, the al-Awadhi brothers had dreamed of setting up their own restaurant business. But banks balked at the idea of two Emirati nationals opening an outlet serving and delivering “fusion” shawarmas, blending traditional and international ingredients in this staple meat and sauce sandwich.

Similar barriers are curbing the enterprise spirit of other aspiring small businesses. Although the issue is rising up the agenda with the creation of more venture capital funds and government-backed initiatives to support entrepreneurship, this area of financing has yet to take off.

And, culturally, nationals have to be lured out of the public sector into the tougher conditions of expatriate-dominated private enterprise if the Arab world is to create the 100m jobs needed for its fast-growing population by 2020.

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Bookstores edited for Saudi tastes

Crowds of expatriate and Saudi shoppers mill about the door of the Jarir Bookstore in Riyadh, waiting impatiently for it to reopen after a brief closure for evening prayer.

As the lights go on and the doors are unlocked, Saudi men in traditional robes, women in abayas, and expatriates all pour in, rushing to crowded computer and electronics stations – and rows of bookshelves. Combining elements of Barnes & Noble, Staples, Michaels, and Best Buy, Jarir’s slogan, “not just a bookstore”, seems almost an understatement.

It is the largest listed book retailer in Saudi Arabia, with 21 stores and additional outlets in Kuwait, Qatar and Abu Dhabi. It also has nearly 50 per cent of the market for laptops in the kingdom. And Abdulkarim Alagil, chief executive, has ambitious plans to expand, with four more stores scheduled to open in Kuwait and two additional ones planned in Riyadh.

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Flurry of Gulf bonds risks ‘indigestion’

After a rocky half-year, the Gulf’s regional bond market is showing signs that it is beginning to thaw with a flurry of government and government-linked company debt issuance in recent weeks.

The aggregate spread of Gulf Islamic and conventional bonds over US Treasuries has narrowed from 825 basis points at the peak on February 12 to under 500 basis points, according to an index compiled by HSBC and Nasdaq Dubai.

But bankers warn that the nascent demand for Gulf debt could be strained by a deluge of bond issuance.

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Algosaibi saga stresses Gulf frailty

Saad Group company logoImage via Wikipedia

When it emerged that a wholly-owned subsidiary of one of Saudi Arabia’s oldest and most respected family companies, the Algosaibi group, had defaulted Gulf bankers were astonished.

Their disbelief was compounded when it was revealed that the Saudi central bank had ordered banks in the kingdom to freeze personal accounts of Maan Al Sanea, another of the nation’s most powerful businessmen and the owner of the Saad Group.

Analysts are now warning the groups’ woes may have ramifications for other private companies in the Gulf, particularly if they are seeking to raise capital.

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