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Sunday, 7 June 2009

Dubai stocks June 7th (Re-post)

Some observations:

The rally in Dubai Financial Market has become broad-based, whereas in February to April it seemed confined to a handful of stocks, mainly ARTC. Volume on the exchange has increased tremendously the past couple of weeks. DFM Exchange volumes the past two weeks have been consistently massive relative to the past 9-10 months, at least.

DFMGI (General Index) has gained 19.55% in 9 trading session. The gain has been 25.19% in 15 trading sessions

EMAAR, an index heavyweight, has carried the market to the next level.

As a reminder to keep perspective, and to avoid being blown away by misleading news of a local economic recovery to pre financial crisis valuations that were skewed positively anyway, take note that:

Namibia Overall Index climbed 53.4% from lows early March to highs (618) early June, in 3 months.

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Qatar Economic and Strategic Outlook - June 2009 (PDF 69 pages)

Qatar 'to help Porsche clear heavy debt burden' (Update 1)

Qatar will strike a deal with Porsche by mid-June that will help the German sports car maker to pay down its 9 billion euro (Dh46.1 billion) debt pile, German weekly Focus reported.

Porsche's chief executive Wendelin Wiedeking has already travelled to Qatar several times and has worked out two possible options for an agreement with Doha, the magazine said in an article to be published on Monday.

Qatar's prime minister had told Reuters on May 30 that Qatar was considering taking a stake in debt-laden Porsche or other German auto companies after Porsche scaled down a bid for Volkswagen.

One option is for Qatar to buy up Porsche's options for 24 per cent of shares of Volkswagen via its fund Qatar Investment Authority (QIA), flushing cash into Porsche's coffers and giving Volkswagen a new major shareholder.

Another option would be for Qatar to buy a direct stake in Porsche Holding, which controls the company's sports car business as well as its 51 per cent stake in Volkswagen. This option would be more complicated because it would require a capital increase as well as an extraordinary shareholders meeting.

Neither Porsche nor Qatar Investment Authority were immediately available for comment.END

Organisers optimistic as auction sells a plot of land

Just one plot of land out of 25 offerings was sold at an auction held by Sherwoods Real Estate last week, although organisers said they were swamped with requests from potential buyers after the sale looking to strike a discreet deal with vendors.

A total of 25 properties, ranging from offices and completed villas to off-plan apartments and plots of land in Dubai and Abu Dhabi, went under the hammer.

While about a dozen bids were entered across the lots, the only one that met the reserve price was for a 40,000 square foot (sq ft) plot of land close to Dubai International Airport in Al Qusais, which was only open to bidders from the GCC. It sold for Dh750 (US$204) a sq ft.

Tadawul slips on profit-taking

Saudi Arabia’s stock market closed lower Saturday as investors booked profits after a week that saw the Tadawul gain more than 4 per cent.

Banks and financial services companies pulled the Tadawul All-Shares Index 1.1 per cent lower to close at 5,984.56.

Regional stock markets recorded major gains last week as the Dubai Financial Market surged 13 per cent, Qatar’s Doha Securities Market advanced nearly 11 per cent and Abu Dhabi Securities Exchange rose 5.4 per cent. In the meantime, oil prices topped US$70 a barrel.

Qatari banks projected to face a challenging year

Qatari banks are expected to see their 2009 profitability challenged by slower loan growth, funding constraints and increasing impairment charges, Fitch Ratings said in a report.

"Asset quality remains the biggest issue facing Qatari banks in 2009. Fitch expects loan defaults to rise given the rapid growth in lending during the boom," said Robert Thursfield, Director, Fitch's Financial Institutions team.

Retail credit risks have also risen, as the sector remains over leveraged, but Fitch does not believe retail risks in Qatar are as high as in other GCC markets.

GCC in a better position than bourses in the West

The global financial distress has created a strong link between world stock markets and the oil-rich Gulf but regional bourses remain fundamentally in a better position, a key Saudi investment fund said yesterday.

NCB Capital said the companies in the markets of the six-nation GCC enjoy better asset quality and superior earnings given the massive size of toxic assets in the United States and other Western markets.

In a study, it said it expected an end to the tight relationship between regional markets and those of the West once the global economy begins to recover.

Crisis to induce transparency in oil companies

The global financial crisis and the resulting difficulty in raising finances may force national oil companies to become more transparent in their operations.

Analysts at the World national oil companies congress' said oil firms, particularly those of consumer countries and emerging oil producers such as Petrobras of Brazil, raise finances through new business partnerships and issue of bonds.

Gulf majors such as Saudi Aramco, Adnoc and Kuwait National Petroleum Company (KNPC) will, however, remain immune to these changes, considering the low costs involved in extracting crude and strong financial positions. However, even they will be forced to diversify their sources of funding during the prevailing turbulent times, an analyst said.

Work not put on hold at Tiger Woods Dubai (Update 1)

Work has not been suspended on The Tiger Woods Dubai (TTWD) project, according to its project director.

"We are not aware of his [Tiger Woods] comments but we have not suspended work on-site. As the developers and contractors for Tiger Woods Dubai, we are pushing towards completing the project," said Abdulla Al Gurg, Project Director, The Tiger Woods Dubai. He told Emirates Business the timeline of the project would be announced in the "near future". The project developer is Tatweer, a division of Dubai Holding.

A recent agency report said the first golf course Tiger Woods is designing in the region might not be the first to open. According to the report, Woods told media on Friday that construction on Al Ruwaya Golf Course in Dubai is on hold because of the economic slowdown in the UAE, pushing back the scheduled opening by at least six months.

Amlak, Tamweel need Dh18.7bn

Tamweel may be under pressure to find fresh funds to the tune of about Dh5.7 billion before June 30 to honour its financial commitments. This is revealed by the contractual asset-liability mismatch in the UAE's largest Islamic mortgage financer's first quarter financials.

In the case of Amlak Finance, the second largest player in the Islamic home finance market, the fund requirement before December 31, will be in the region of Dh13bn. While Tamweel shows cash and bank balances of Dh332 million as of March 31, Amlak's bank balance is at approximately Dh600m, as of December 31, 2008.

These two mortgage financiers, which are together thought to control nearly 60 per cent of the mortgage business in the country, may not be able get back to business until fresh funds are injected into their kitty. No fresh loans are being processed currently, according to market sources.

Saudi Arabia plans sukuk, bonds market - regulator

The Saudi stock market regulator has approved setting up a market for debt securities, it said on Saturday, responding to a long-standing demand by some firms to diversify sources of financing amid tight credit conditions.

The Capital Market Authority's (CMA) decision is part of its "continunous and gradual effort to develop the Saudi capital market", it said in a statement posted on the bourse's website.

The Saudi stock exchange - Tadawul - has already developed the market, which will trade bonds and sukuk Isamic bonds through licensed intermediaries, CMA said. The date of the market's launch will be announced later, it added.

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