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Sunday, 21 June 2009

Noor CEO Says Bk Gets Part Of Dubai $10B Bailout In Deposits

Noor Islamic Bank, a Dubai-based Shariat-compliant lender that's part-owned by the government, has received state aid from the emirate's $10 billion economic bailout bond, the company's chief executive told Zawya Dow Jones.

"We received part of the Dubai $10 billion bond in deposits," Hussain Al Qemzi said in an interview Sunday. "We also received deposits from the ministry of finance."

The funds have come from the $20 billion bond program announced by Dubai's government this year. The first $10 billion of the program, the emirate said, would be subscribed by the United Arab Emirate's government, essentially a federal bailout. At the time, Dubai said it would use proceeds from the bonds to pay off overseas and domestic debts of its various corporate entities.

"Our capital adequacy ratio now is at 15%, well above the central bank requirement of 11%," Al Qemzi said. "We've put on hold all expansion plans outside the U.A.E.. Our focus now is on protecting the bank's capital and preserving the liquidity."

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Emaar acquires $122 mln Golden Ace debt

Dubai-based builder Emaar Properties on Sunday said it had acquired debt amounting to $122 million provided to Golden Ace Ltd.

"The loan was in default due to the inability of Golden Ace's majority shareholder to service the loan," Emaar said in a media release.

The loan purchase gives Emaar the ability to exercise voting rights equivalent to 61.3 percent of the shares in RSH Ltd, a listed company in Singapore, Emaar said.END

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CBK owed $119 mln by Saad

Commercial Bank of Kuwait (CBK) gave about $119 million in loans to the troubled Saudi conglomerate Saad Group, a newspaper said on Sunday.

Local daily Al-Qabas said that CBK has taken more than 100 percent guarantees for loans worth $50 million given to Saad Group, and another loan worth around 20 million dinars ($69.42 million), citing an unidentified source at CBK as saying.

CBK's Chairman Abdulmajeed al-Shatti declined to comment on the report. "This is a privileged client relation, the bank has a policy not to comment on this," he said.

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Russia's VTB eyes string of Gulf deals

The investment arm of Russia's second biggest bank launched its Middle East office in Dubai on Sunday and is poised to position itself as a conduit for billions of dollars worth of deals between the Arab world and the world's No. 2 oil exporter.

Trillions of dollars of deals in infrastructure, agriculture and oil and gas await in Russia and billions of dollars of investment opportunities exist in the Middle East and North Africa, said Masroor Haq, managing director of VTB Capital Plc in the Middle East and North Africa (MENA) region.

VTB Capital is a subsidiary of Russian bank VTB Group, 77.5 percent owned by the Russian government. The bank - which went public in 2007 and has a current market cap of $10 billion - has more than $100 billion in assets. The bank has about a 1,000 branches in Russia and the Commonwealth of Independent States (CIS).

Egypt Weekly Market Report - June 18, 2009 (PDF)

Banks lead losers on Saudi bourse

Saudi Arabia's benchmark index fell for a second day yesterday, led by Al Rajhi Bank, which declined after being rated "equal-weight" at Morgan Stanley in new coverage.

Al Rajhi, the country's largest lender by market value, fell for a fifth day, losing as much as 1.5 per cent, to 67.5 Saudi riyals. Saudi British Bank, the second-largest lender by market value, was also rated "equal-weight" at Morgan Stanley. It fell for a fifth day, losing as much as 1.2 per cent to 49.2 riyals.

Morgan Stanley yesterday initiated coverage of Al Rajhi, Saudi British Bank and three other Saudi lenders. It rated Riyad Bank, Samba Financial Group and Arab National Bank as "overweight".

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Banks' capital exceeds Dh200bn for first time

A drive by UAE banks to bolster their financial position has allied with government funding to boost their combined capital to more than Dh200 billion for the first time, official figures showed yesterday.

The assets of the country's 24 national banks and 28 foreign units also approached Dh1.5 trillion for the first time to maintain the UAE's position as having the largest banking sector in the Middle East.

The UAE Central Bank figures showed the banks have largely recovered from the global financial turmoil as deposits gained nearly Dh67 billion although loans figures showed they are still adopting a cautious lending policy.

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Iraq's chilly welcome for oil majors

When US troops stormed into Iraq in 2003, expecting to be welcomed as liberators, they all too soon learnt the pitfalls of operating in one of the most politically fractious countries in the Middle East.

A similar fate could await international oil companies that are preparing to return to Iraq under long-term contracts to be awarded at the end of this month.

The 20-year deals to boost production from six of Iraq’s biggest oilfields and two gasfields offer access to 43 billion barrels of recoverable crude, or more than a third of the oil-rich country’s 115 billion barrels of total proved reserves, as well as 5.4 trillion cubic feet of gas.

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Oil adventurers strike rich booty in Kurdistan

Payday is approaching for Tony Buckingham and Jean-Claude Gandur, the buccaneering founders of Heritage Oil and Addax Petroleum, two oil firms based in Canada that are involved in the first exports from Iraqi Kurdistan.

The two companies have much in common. Both are small international players that have scored exploration coups in politically unstable corners of Africa and the Middle East. Both maintain stock listings in London and Toronto, the two exchanges most supportive of development-stage resource ventures.

And both are led and shaped by fast-moving adventurers.

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Currency union nations tidy central bank loans to fit new rules

Four GCC countries planning to adopt a common currency will take another step towards that goal by selling off central bank loans made to public companies, according to media reports.

Al Riyadh, a Saudi daily newspaper, said yesterday that the central banks of Saudi Arabia, Kuwait, Qatar and Bahrain would liquidate loan portfolios to the public sector. The draft monetary agreement prohibits central banks from lending to public-sector companies.

The move is meant to free a future central bank from subsidising the public sector in individual countries.

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End to property trough ‘in sight’

International investors will start snapping up distressed UAE property-backed assets by the end of this year, according to the regional chief of Morgan Stanley.

The purchase of distressed loans and other assets backed by property would unlock capital that could be deployed on infrastructure projects and help banks boost lending, said Georges Makhoul, who heads the Middle Eastern and North African operations of Morgan Stanley.

“Once you see distressed funds coming to the market and picking up whole portfolios from developers and banks then you know we are on the mend,” he said. “That is the way bubbles clear themselves. I am waiting to see that.”

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Saudis see hope in Fannie Mae model

The announcement that Saudi Arabia is planning to set up a Fannie Mae-style company, operating like the Federal National Mortgage Association in the US, to buy mortgages from financial institutions, has set the kingdom buzzing with the belief that at last the Saudi property sector will take off.

Given the considerable potential of the Saudi housing market, this should also be attractive news to Gulf investors seeking to diversify into property in Saudi Arabia.
The proposed company will in effect become the primary purchaser of eligible home loans from institutional issuers. It will have the mandate to securitise these loans into mortgage-backed securities, sell them to investors through Islamic sukuks and create a liquid secondary market. The company, which is due to launch by the end of the year, according to the Saudi finance minister, Ibrahim al Assaf, will come on the heels of the approval of the long-awaited Saudi mortgage law. This has been eagerly awaited by Saudi banks seeking to institutionalise mortgage financing.

There is not much first-hand information on the potential size of the Saudi property market. Housing market forecasts and estimates are based on huge projects in the pipeline. Some independent academic studies have been carried out, one of which was by King Fahd University of Petroleum and Minerals, based on input from Saudi developers on existing and planned projects. The study revealed that the value of Saudi projects, excluding individual housing supply carried out by individuals, was an estimated 2.71 trillion Saudi riyals (Dh2.66tn).

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Dubai development may be down, but it's not out

If a city can be spectacularly quiet, this waterfront city-state has certainly qualified in recent months. Hundreds of abandoned construction cranes languish above Dubai's gated communities and beach-side developments and, most dramatically, up and down Sheikh Zayed Road, its high-rise spine. According to a recent estimate in the Middle East Economic Digest, projects worth a staggering $335 billion in the United Arab Emirates -- of which Dubai, with a population of about 2 million, is the largest member -- are stalled or have been canceled outright.

Dubai's residents, roughly 85% of them expatriates, have been left to wonder if the current crisis is merely a pause, a recessionary lull that will be painful but temporary, or closer to a fundamental reckoning that will entirely reorder the emirate and how it does business. The same question is being asked in cities around the world, of course. But it's a particularly acute, even existential one here, since it goes right to the heart of Dubai's self-image.

During the boom years of the last decade, the emirate -- which has only a tiny fraction of the oil reserves held by the capital of the UAE, Abu Dhabi -- became synonymous with frenzied real estate speculation and headlong growth. It operated as a highly efficient machine for attracting capital from around the globe -- in some cases from investors who, for political reasons, rejected the idea of sending it to the U.S. -- and turning it into real estate. In a fundamental sense, many of Dubai's skyscrapers were conceived and designed primarily as vessels to store excess liquidity. If the endless rows of stalled towers now resemble mere shells, perhaps shells are all they were ever meant to be.

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Dubai's dream is built on sand

Dubai has been good to Chris Dommett. The 47-year-old banker moved to the emirate 13 years ago and set up a property company. He found success – his firm generated millions of pounds – and happiness. He met his fiancĂ©e, Teresa. He never had any doubts about joining the ranks of a new white tribe of Arabia. Until now. “I’m not sure the government knows how to get out of this mess,” he said.

The global recession has ripped through Dubai, leaving its dream of becoming the Switzerland of the Middle East looking like a mirage. Locals who used to joke that Dubai would be a great place “when it’s finished” now wonder whether it’s finished.

They’re counting the cost in Britain, too. The UK has invested more in Dubai than any other country – an estimated £3 billion. British companies are owed more than £400m by troubled state-backed firms.

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End of a glittering Dubai dream: three Britons in jail accused of $500 million 'fraud'

Of all the British businessmen who have flocked to the Gulf's shining new cities, few epitomised the sun-soaked expatriate lifestyle more than Charles Ridley, Ryan Cornelius, and Arthur Fitzwilliam.

Ryan Cornelius divided his time between his property and energy businesses in Bahrain and his beach hotel in Kenya. It was there he kept his yacht and pursued his passion for big game fishing.

Charles Ridley dealt out sums in the billions as local representative of a boutique bank owned by a Turkish multi-millionaire. He too kept a million-dollar yacht, berthed near his home in Bahrain, but he was perhaps most celebrated in his circle of friends for the style with which he celebrated the 50th birthday of his wife, Kino.

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Central Bank of Bahrain in funds inquiry

The Central Bank of Bahrain is investigating Global Investment HouseGlobal Investment House, a top Kuwaiti investment bank, over transactions the bank had entered into with funds it manages.

Various funds in Global's hedge fund group, some domiciled in Bahrain, entered into at least $25.75m of so-called murabaha transactions - a kind of short-term Islamic debt financing structure - with their parent towards the end of last year, shortly after the bank defaulted, according to documents seen by the Financial Times.

One $9m murabaha contract between Global's Japan Asia Hedge Fund and Global Bahrain, the bank's wholly-owned subsidiary, was dated December 4 and signed by Maha Al-GhunaimMaha Al-Ghunaim, the chairwoman and managing director of Global and Omar El-Quqa, formerly a senior executive and now an adviser to the bank.

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