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Sunday, 14 June 2009

New figures from Cityscape reveal only 4% of Saudi projects cancelled or on hold

Prince Misha'al bin Majed bin Abdulaziz, the Governor of Jeddah Province, officially opened the inaugural Cityscape Saudi Arabia on Sunday.

“Launching Cityscape Saudi Arabia highlights the strength of the Saudi Arabian real estate sector as well as confidence in the wider economy. Saudi developments have been carefully planned and regulated. As such the Kingdom has managed to avoid certain pitfalls that have affected projects elsewhere in the Gulf, such as short-term investment speculation,” said Deep Marwaha, Event Director of Cityscape Saudi Arabia.

Details of a study carried out by Dubai-based Proleads research house for Cityscape were released Sunday.

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Bursa Malaysia plans to expand its appeal

With an Islamic finance market worth $1,000bn (£611bn, €713bn) in assets, Malaysia has long held up its desire to be the Asian hub for sharia-compliant products.

Now, according to the head of Bursa Malaysia, it wants to extend that expertise and become an Asian hub for commodities too.

Yusli Mohamed Yusoff, chief executive of Malaysia’s stock exchange, reels off a list of innovations aimed at achieving that ambition. “A few years ago we launched an Islamic index. Last month we launched a plantation index. We’ve also created a [dollar denominated] crude palm oil future contract.

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UAE To Sell Bonds To Help Fund Budget - Official

The United Arab Emirates will sell federal bonds to help fund budgetary spending on infrastructure in the Gulf's second-largest economy and seek a sovereign rating for the first time, a top finance official told Zawya Dow Jones Sunday.

"The government is moving to a long term budgeting process and whatever we need will be done through a bond issuance," Younis Al Khoori, the Ministry of Finance's director general told Zawya Dow Jones in an exclusive interview. "The Federal government mandated the Ministry of Finance to start issuing a bond for a few purposes."

The U.A.E. may need to tap the bond market to help make up for a steep decline in oil revenues expected this year with average crude prices well below the near $99 a barrel achieved last year. Oil and gas exports account for about a third of the country's total economy, according to the U.S. Energy Information Administration.

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Abu Dhabi's IPIC to expand investments to $30 bln

Abu Dhabi's state-owned International Petroleum Investment Company (IPIC) is expanding its investment target to $30 billion after selling its stake in Barclays, IPIC's CEO said on Sunday.

IPIC has a current investment portfolio of between $16 to $20 billion, Khadem Al Qubaisi told Reuters in an interview.

He also said IPIC has closed deals worth $10-$12 billion since the middle of last year and is working on some 30 to 40 investment deals in the energy and other sectors.

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ENBD wealth management to offer tactical asset allocation (Interview)

The global wealth of high-net-worth individuals will grow to $59.1 trillion (Dh217trn) by 2012, advancing at 7.7 per cent per year, according to Merrill Lynch and Capgemini's 12th World Wealth Report.

The forecast takes into account the financial downturn in the US.

Robert-Jan Voogt, Private Banking (Global) General Manager at Emirates NBD, said the UAE has about 20,000 millionaires (a millionaire being described as anyone with $1 million (Dh3.7m) of investable assets).

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Saudi bond trading hits Dh20.5bn on first day

Saudi Arabia yesterday launched the bond market and officials said foreigners can tap the new investment tool in the Middle East's largest economy.

Analysts said the move could form the nucleus of a Gulf bond market that will offset bank liquidity shortages and give public and private institutions a safe and less costly instrument to fund their budgets and development plans.

Banking on foreign capital flow, Saudi Arabia's Capital Market Authority (CMA) organised a forum in London last week to explain the new plan and invite foreign investors to take advantage of an expected deluge of bond and sukuk issues. The first bond session yesterday involved SR21billion (Dh20.5bn), including SR16bn bonds by Saudi Arabian Basic Industries Corporation and SR5bn by Saudi Electricity Company.

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UAE and Saudi to lead GCC M&As in H2

Even though merger and acquisition agreements have fallen considerably across the GCC, in sync with the global slowdown, the UAE and Saudi Arabia may see most of the agreements happening in the second half of this year as far as the region is concerned.

According to Azhar Zafar, Head of Mergers and Acquisitions at Ernst & Young Middle East, the UAE and Saudi Arabia will see the most number of deals in the Middle East.

Nawal Roy, Managing Partner, Shobhit Capital Group based in the US, sees the UAE as one market where maximum number of deals are expected to happen in the latter part of the year.

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Credit bureau approval welcomed by industry

The UAE Cabinet's approval for the establishment of a credit bureau is welcome news for the country's numerous banks and financial institutions. "This is a significant step in the development of the UAE's economy and its financial system," Sanjay Uppal, Group CFO, Emirates NBD, told Emirates Business.

"Visa supports the launch of a federal credit bureau in the UAE and believes it will contribute to the development of a more secure lending environment, benefiting the entire financial sector," added Kamran Siddiqi, Visa Inc, General Manager, Mena.

Although the liquidity position of UAE banks has improved considerably since the beginning of the economic crisis, they are being extremely cautious with their lending process, with some analysts expecting the banks' collective non-performing loans to go up as the tail of the recession begins to wag and individual and corporate default rates edge higher.

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Citibank sees 'flood' of deposits

Citibank's loan-to-deposit ratio is now "significantly" lower than the Central Bank's 100 per cent mandate, thanks to improved liquidity in the country and flood of deposits from retail customers.

Sanjoy Sen, Citibank's Consumer Bank Head, Middle East, said the bank's loan-to-deposit ratio in the last two quarters of 2008 was higher than required due to a drying up of liquidity and a decrease in deposit volumes.

"In the third and fourth quarters of last year a lot of clients wanted to move out their money from banks but starting from January 2009 there has been a lot of liquidity coming in this market," he told Emirates Business in an interview.

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Trader bolts with Dh40m tea debt

A tea trader from Iran is allegedly absconding without paying for Dh40 million worth of tea he bought from dealers in Dubai to sell in other markets, Emirates Business has learnt.

Several traders whom he allegedly cheated said they were planning legal action and will approach various embassies and business chambers in key tea producing countries to prevent the erring trader from pulling the same fraud elsewhere.

The Iranian trader who owns a tea brand that operates in Iran and other GCC countries, has also been accused of violating long-term supply contracts.

Jalal Balala, Executive Director, Al Azizah Food Company, said many traders in the UAE are now finding it difficult to get finance as banks and wholesalers affected by the alleged fraud have tightened credit terms.END

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Utility begins sukuk roadshow

Saudi Electricity, the Gulf's largest utility by market value, on Saturday began a roadshow for its second Islamic bond issue, which bankers expect will raise up to seven billion riyals ($1.87 billion).

Bourse regulator the Capital Market Authority (CMA) said last week it had approved the issuance of the sukuk over the June 13-28 period. It did not elaborate.

Ali Al Barrak, Electricity's chief executive, said last week the state-controlled firm would raise about five billion riyals from the issue.

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Economic slowdown deals painful blow to Mideast hospitality industry

The Middle East's hospitality industry witnessed a decline in occupancy rates and revenue per available rooms (RevPARs) in key markets during the first four months of the year as the global economic slowdown impacted the inflow of tourists and business people into the region, an industry expert said.

"The Middle East to a large extent has been impacted by low levels of economic activity around the world. The region suffered a 9.6 per cent fall in occupancy rates and 14.9 per cent in RevPAR," Robert O'Hanlon, Tourism, Hospitality and Leisure Partner at Deloitte Middle East, said.

He said in the Middle East, Dubai experienced a significant decline of 16 per cent in occupancy and RevPAR of 34.5 per cent during the first four months to April 2009 when compared to 2008, based on data provided by STR Global.

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Gulf business dynasties must learn to adapt

The al Gosaibi family has faced business disaster before. Michael Field, the author of the classic study of the great trading families of the region, The Merchants, tells of how the family, from humble origins in the poverty-stricken village of Gassab, north of Riyadh, had risen to prominence in Saudi Arabia and Bahrain by 1930 through tax collection, sheep and camel farming and, most importantly, the pearling industry.

The al Gosaibis made money not just from the global trade in Gulf pearls, then much in demand by the ostentatious classes from Shanghai to New York, but also from financing the pearl diving business.

Loans to boat captains had brought the family a steady stream of revenue, as well as influence at the court of Ibn Saud, the founder of the Kingdom of Saudi Arabia. In modern business parlance, it was a diversification into financial services from a core commercial activity

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Saudi shares rise

Saudi Arabian shares rose for a third day, led by Saudi Basic Industries Corporation (SABIC) on evidence that global economies are headed for a recovery.
The Tadawul All Share Index rose 2.59 per cent to 6094.91.

SABIC, the world’s largest chemical maker by assets, gained for the third day. Saudi Arabian Fertiliser Company (SAFCO), a unit of SABIC, advanced as much as 3.25 per cent. Almarai, the kingdom’s largest food producer, rose for the second day after announcing it would buy an Egyptian agriculture company.

The region’s largest bourse has gained 24 per cent this year after losing more than half its value last year as oil prices dropped.

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Tadawul opens bond trade for first time

Sukuk and other bonds were traded for the first time on the Saudi bourse yesterday with the listing of four existing issues worth 21 billion riyals (Dh20.56bn), according to agencies.

The bonds market in the kingdom is expected to help diversify financing sources for rated firms in tight credit conditions.

Three of the issues were by Saudi Basic Industries Corporation (SABIC), and are worth 16bn riyals. The other was issued by Saudi Electricity and is worth 5bn riyals, according to a newspaper report.

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$1bn aerospace cluster for Al Ain

Abu Dhabi firms will this week reveal details of a US$1 billion (Dh3.67bn) aerospace cluster in Al Ain and several Gulf carriers will make major orders at an otherwise subdued Paris Air Show beginning tomorrow.

Mubadala Development, the investment arm of the Government, and Abu Dhabi Airports Company (ADAC) are jointly developing a centre in and around Al Ain International Airport for aerospace manufacturing and services firms.

ADAC is due to sign a partnership with bavAIRia Aerospace Cluster, a German business association, to develop the centre. “We look forward to making a number of significant announcements here at the show,” said Khalifa al Mazrouei, the chairman of ADAC.

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Emirate must decide whether oil partners are worth keeping

Abu Dhabi National Oil Company ADNOC {{lang|ar...Image via Wikipedia

The production of oil in Abu Dhabi has always been a group effort.

International oil companies such as Shell and ExxonMobil deploy engineers in the emirate’s oil fields and help build the pipes and wells that generate the country’s wealth, in return for minority ownership stakes in subsidiaries of the Abu Dhabi National Oil Company (ADNOC).

But the Government faces a momentous decision as the expiry of concessions that form the basis of those partnerships nears: should it stick with modified agreements or abandon the international partners altogether?

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Emaar to build 1.1km tall tower

Kingdom Holding CompanyImage via Wikipedia

Emaar Properties has won the contract to build a tower higher even than its own Burj Dubai, at present the world’s tallest building.

In a deal worth 100 billion Saudi riyals (US$26.6bn, Dh98bn), Kingdom Holding chose Emaar from a list of five bidders to build the 1,100m tower and surrounding Kingdom City in Jeddah, according to a statement on the Kingdom website yesterday.

“The alliance between Kingdom Holding Company and Emaar is strategic,” said Prince Alwaleed bin Talal bin Abdulaziz Alsaud, the chairman of Kingdom Holding.

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