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Monday, 8 June 2009

Mark Mobius eyes Iraq as new investment frontier (Registration required)

Image representing Franklin Templeton Investme...Image via CrunchBase

Franklin Templeton emerging markets veteran Mark Mobius is looking to invest in Iraq in the next year, just as soon as he can persuade a custodian bank to set up there.

Speaking at a press briefing to mark the 20th anniversary of his UK investment trust, TEMIT, Mobius spoke of the next growth markets he was interested in for his frontier markets funds.

'In the frontier markets you have to look at Africa, and countries like Nigeria and Kenya.' he says. 'Also in the Middle East, countries like Iraq, Iran and Syria are all potential growth targets going forward, although it doesn’t seem plausible right now.

'Iran has lot of potential. We are also looking at Iraq, though we are not invested there now. We would have to convince a custodian bank to set up there though, and make sure the walls of the safe are thick enough... It could be six months to a year until that really comes together, and volumes would be small when it does.'

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Morgan Stanley slashes DP World price target

Location of United Arab EmiratesImage via Wikipedia

Morgan Stanley slashed its price target on Dubai-based port operator DP World by 59 percent, saying the market is underestimating the depth and duration of the container port downturn, particularly in the Middle East.

"Also, given that the UAE economy has slowed later than the rest of the world, we think the destocking phase, and hence recovery in volumes at Jebel Ali, will lag global ports," Morgan Stanley said.

A recovery in the global economy may be imminent but is likely to be "tenuous and slow", according to Morgan Stanley's economics team.

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Bk Saderat Chmn To Seek US Sanction Talks Post IPO

The chairman of Iran's state-run Bank SaderatBank Saderat plans to seek meetings with U.S. Treasury officials after the lender's privatization in June to remove sanctions against it.

In an interview with Dow Jones Newswires in Tehran, Chairman Hamid Borhani said once SaderatSaderat is privatized he would like to travel to the U.S. to discuss allegations by the Treasury's Office of Foreign Assets Control, or OFAC, and present evidence refuting them.

"Mr. Obama says: 'we are going to change our policy.' If we become a private bank, I will take a flight to the U.S. and talk with OFAC. If the change is real, then they will remove the sanctions. And then there will be great potential for any investor," Borhani said.

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BlackRock scrambles for BGI

BlackRock was on Sunday in discussions with Barclays as it raced to seal the purchase of Barclays Global Investors and see off an 11th-hour challenge from Bank of New York Mellon. Barclays is expected to decide early this week on who should buy its BGI unit. If BlackRock succeeds, Barclays is likely to take a stake of up to 20% in the US money manager, said people briefed on the deal. BlackRock is considered the most probable buyer, but if it fails to offer an attractive price, BNY Mellon could step in.

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Gulf investors to help buy Barclays

Abu Dhabi, Kuwait and Qatar will partly finance the US money manager BlackRock's acquisition of British bank Barclay's asset management unit.

The Sunday Telegraph newspaper, which cited people close to the matter, said the deal is worth $13 billion (Dh47.7bn) and the sale of Barclays Global Investors could be announced this week.

Gulf investors are financing in return for a stake of up to 12 per cent.

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Mubadala mulls project bond

Mubadala, the Abu Dhabi-based and -backed business development and investment company, is considering a project bond to help finance its six largest projects, estimated at $5.5 billion (Dh20.1bn).

Greg Fewer, Assistant Director and Advisor, Project & Corporate Finance Unit at Mubadala said launching a project bond will provide a new liquidity pool in a market burdened by shrinking capital.

"We are very keen to do it. We are exploring and considering project bonds as a liquidity alternative for all our major projects," he said.

"Here, you generally want at least $500m, so you have to find a project that can support this amount of long-term financing and needs to carry an investment grade rating. We have very strong and big projects," he added. Project bonds are normally sold or issued to someone directly involved in the project, typically the primary developer.END

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Ex-minister's acquittal to be challenged

Prosecutors are to challenge an acquittal verdict of former minister of state Khalifa Bakheet Al Falasi and other defendants in a fraud case, Dubai Attorney General Essam Al Humaidan announced yesterday.

The Court of First Instance jailed the defendants, but on May 28 the Court of Appeal declared them innocent and refused to allow a civil lawsuit.

Al Falasi said the challenge by Dubai Public Prosecution would be considered by the Court of Cassation. In February the Court of First Instance sentenced Al Falasi to two years in prison for deceiving a Lebanese businesswoman. A US national and an Indian involved in the case were each jailed for two years, to be followed by deportation.

Al Falasi was sacked from his ministerial post in February 2008. He was formerly minister of education and the UAE's ambassador to Australia.END

Emirates eyes new AC Milan deal

Emirates wants to become the main sponsor of Italian football club AC Milan and could offer as much as €150 million (Dh769m), Il Sole 24 Ore has reported, citing unidentified people close to the Italian soccer club.

The airline will offer €20m per season, double what current sponsor Bwin pays, and aims to control 40 per cent of the club, the newspaper said.

Airline advertising account 'up for grabs'

Dolphin Energy's Dh12.6bn debt refinancing close to finalisation

The refinancing of Dolphin Energy's $3.45 billion (Dh12.6bn) loan that matures in July is now in its "final documentation" stage, a source close to the deal told Emirates Business.

Greg Fewer, Assistant Director and Advisor, Project & Corporate Finance Unit at Mubadala – which owns 51 per cent of Dolphin – said the commitments are all in and Dolphin Energy, an Abu Dhabi based-energy company, is currently ironing out the final details.

Fewer, who declined to give specific details, said the company is "not worried" about re-financing the debt, which was financed in 2005 through a $2.45bn conventional facility and a $1bn Islamic loan.

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Abu Dhabi seeks power project bids

Abu Dhabi will be inviting international companies to bid for its ninth independent water and power project (IWPP), the Taweelah C project, by year-end at the latest, a top official said today.

Abdulla Saif al-Nuami, the director of privatisation at the Abu Dhabi Water & Electricity Authority (Adwea), said the request for proposals will be issued soon after the refinancing for its eighth IWPP Shuweihat 2 is closed.

“It will be after summer, certainly before the year end. It could be October or November this year,” he said.

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Courting insolvency reform

Gary Bell has not been paid in full for six months. He says his company, a project management and consulting firm, owes him almost Dh500,000 (US$136,165) in wages, and he is suing in the UAE’s labour courts to recover that sum.

Mr Bell is also working through legal channels to force the company into insolvency.

The company he works for is not alone. Many firms in the Emirates that have been hit by declining orders are taking drastic steps to survive, revising contracts, seeking delays in payment and cutting back on benefits, bonuses and raises.

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Mubadala seeks to increase stake in home lender

Mubadala Development, the investment arm of the Abu Dhabi Government, is in talks with its joint shareholders of Abu Dhabi Finance to increase its ownership stake to 52 per cent, a spokeswoman said.

Under the current plans, Mubadala would take over the full 20 per cent shareholding of the Tourism Development and Investment Company (TDIC), as well as portions of the stakes held by Abu Dhabi Commercial Bank, Aldar Properties and Sorouh Real Estate, the Mubadala spokeswoman said.

Lee Tabler, the chief executive of TDIC, confirmed the discussions over the stake “were ongoing”.

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Shuaa Capital's value climbs

Shares of Shuaa Capital gained 1.2 per cent on Sunday after extending a deadline either for converting bonds it issued to Dubai Banking Group or agreeing on a new conversion price.

The bank said it agreed to extend the deadline until June 15 to reach an agreement on its Dh1.5 billion (US$408.4) convertible bond with Dubai Banking Group. Shuaa had earlier agreed a June 4 deadline and said it could buy back some or all of the convertible bond issued to Dubai Banking Group.

“The extension was made in the hope of bridging the remaining gap between their respective positions, and both parties continue to work toward a resolution which may be reached prior to the new deadline,” Shuaa said in a statement on the Dubai stock market web site where its shares are traded.

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Shares jump to four-year high

Dubai shares rose for a ninth consecutive session Sunday, capping the longest winning streak in more than four years as oil traded near US$70 a barrel.

The Dubai Financial Market (DFM) gained 2.36 per cent, breaking the 2000 level for the first time this year, with banks and property companies recording the biggest gains.

“The 2,000 resistance barrier was broken on the DFM so confidence levels are at a peak for the year and increasing day by day,” said Shiv Prakash, an equity investment analyst at MAC Capital Advisors.

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30% of investors delay payments on $4.1bn Dubai Pearl

Up to 30 percent of investors on the $4.1bn Dubai Pearl mega-project have rescheduled their payments amid concerns over defaulting, Arabian Business can reveal.

In an interview, Dubai Pearl CEO Santhosh Joseph also admitted that only a fifth of residential units and half of the commercial space had been sold.

It is understood more than 150 of the 530 investors on the project have delayed payments – with Dubai Pearl now asking its shareholders for an advance capital injection of up to $500m to cover the spiralling rate of defaults. A further 32 investors have defaulted on their payments.

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Emirati money exchange accused of embezzlement

A well-known Emirati businessman who has been accused of embezzling millions of dirhams from customers of a money exchange that he owns has vowed to pay back the money.

Dozens of customers have filed complaints with Dubai police against the Federal Money Exchange, accusing the company of embezzling 44 million dirhams. Some customers have claimed their payments have been delayed for three months.

Speaking to Al-Emarat Al-Yaum newspaper, Mohideen bin Hendi, owner of Bin Hendi Enterprises, a UAE conglomerate, blamed his finance manager for problems at the exchange house.

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Iraq to award foreign oil contracts late June

The location of Baghdad within Iraq.Image via Wikipedia

Iraq will at the end of June announce which major foreign oil companies have been awarded new contracts to work in the country, a government spokesman said on Sunday.

The deals will be service agreements in which successful bidders are paid a fee by Baghdad and not production sharing contracts where profits are shared.

"The Ministry of Oil will announce the names of companies who won business contracts in Iraq's oil industry on the 29th or 30th of this month," Assim Jihad, the ministry's spokesman, told AFP.

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Jordan Weekly Market Report - June 04, 2009 (PDF)

Saudi Electricity looks to bonds to expand

Saudi Electricity, the Gulf's largest utility firm by market value, will issue Islamic bonds that could be worth about 5 billion riyals ($1.33 billion) to help fund expansion, its top executive said on Sunday.

Bourse regulator, the Capital Market Authority (CMA), said earlier on Sunday that it has approved the issuance of the sukuk over the June 13-28 period. It did not elaborate.

The issue will be Saudi Electricity's second after it raised two years ago 5 billion riyals from its first Islamic bond, or sukuk.

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British-based investors fear losses in UAE

British investors with millions of pounds in a property scheme run by Sulaiman al-Fahim, the soon-to-be owner of Portsmouth Football Club, fear that their investments are at risk.

Since 2007, investors have handed over nearly £60 million to Hydra Village, a venture of Dr al-Fahim’s Hydra Properties. There has been no significant construction on the site in Abu Dhabi, in the United Arab Emirates (UAE).

British companies operating in the region — hit hard by the global slowdown — face similar problems and claim to be owed up to £50 million by UAE-based clients.

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Spectacular fall from grace for Global

The financial crisis has been a great leveller of reputations. But few have fallen as far and as fast as Maha Al-Ghunaim and Global Investment House, the Kuwaiti investment bank she helped found in 1998.

Until recently, Global was one of the largest investment banks in the oil-rich Middle East, with $10bn of assets under management and investments in countries from Morocco to Malaysia.

Last summer it raised nearly $1.7bn by selling global depository receipts and listing an investment company subsidiary, Global MENA Financial Assets, on the London Stock Exchange.

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Debt structures may spell trouble for Global

Global Investment House, one of the best-known investment banks in the Middle East, has drawn millions of dollars of financing from an investment company subsidiary through so-called murabaha, an Islamic debt structure.

But investors have raised concerns over how the financing has been managed.

Global MENA Financial Assets , a London Stock Exchange-listed investment company owned 29.99 per cent by Global and managed by Global’s private equity team, has entered into a $47.8m murabaha with its parent company and $59.1m of murabaha with two unnamed Kuwaiti companies that are also struggling to repay debts, the company said in January.

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Saudi urges US to withhold Israel aid

Saudi Arabia’s foreign minister has urged Barack Obama, the US president, to follow up his speech to the Muslim world with tangible action, including applying stronger pressure on Israel to accept a viable Palestinian state.

“The United States has the means to persuade the Israelis to work for a peaceful settlement,” Prince Saud al-Faisal, the foreign minister, said in an interview with Newsweek, a US magazine. “It needs to tell them that if it is going to continue to help them, they must be reasonable and make reasonable concessions.”

Asked if the US should withhold aid to Israel, Prince Saud said: “Why not? If you give aid to someone and they indiscriminately occupy other people’s lands, you bear some responsibility.”

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Gulf states sign agreement on monetary union

Foreign ministers of four Gulf Arab states formally agreed in Riyadh on Sunday to form a monetary union, in a show of unity to underline their commitment to the scheme after the United Arab Emirates pulled out last month.

The Saudi press agency reported that the ministers had signed an agreement on the union in a closed meeting but gave no further details on matters such as timing or on how reserves or debt would be managed.

The UAE, the second-largest Gulf economy, withdrew from the proposed monetary union and plans for regional economic integration last month. It pulled out after Riyadh, the Saudi capital, was selected as the headquarters for the future regional central bank over Abu Dhabi, the capital of the UAE.

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