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Thursday, 25 June 2009

Nakheel May Offer Buyback of $3.5 Billion Sukuk, Barclays Says

Nakheel PJSC, the real-estate developer controlled by Dubai’s government, may offer to buy back its $3.52 billion Islamic bonds before they come due in December, Barclays Capital said.

“A tender could be launched in the next few weeks, offering immediate cash payment at a discount,” Alia Moubayed, London-based senior economist for the Middle East and North Africa at Barclays Capital, said in a June 19 report, e-mailed today. Nakheel may also offer to extend the maturity of the Islamic bond, or so-called sukuk, “on attractive terms,” she said.

The acceptance of the offer by international investors is likely to be low as many of them expect “the sukuk could be repaid in full upon maturity,” Moubayed said. Some local investors may prefer a maturity extension, she added.

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Media statement from Dubai World

Dubai World said today operational management relating to the real estate activities of some of its companies is being consolidated to better accommodate current market conditions and optimise resources and expertise.

The real estate development and property management activities of Dubai Maritime City, Leisurecorp, and Dubai Multi-Commodities Centre will be managed by Nakheel going forward.

The changes have no impact on the day-to-day core business of the companies.

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Dubai’s Saidi Calls G-8 ‘Obsolete,’ Says Gulf Needs FSB Role

Dubai International Financial Centre Chief Economist Nasser Saidi said the Group of Eight is an “obsolete” forum and called for a greater role for Gulf countries in global decision-making.

“The GCC should have strengthened representation on the Financial Stability Board,” Saidi said at a conference in London today. Gulf Cooperation Countries, which are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, should translate financial strength “into a more prominent role on the world stage,” he said.

The Group of 20 has overshadowed the G-8 in the revamp of global regulation following the worst financial crisis since the Great Depression. The FSB, comprised of central bankers, finance ministers and regulators from G-20 countries, has been elevated to a global supervisory role with more members from countries including China, India and Saudi Arabia.

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SEBI drops charges against Dubai co; continues ban for 2 yrs

Market regulator SEBI on Wednesday said the restrictions imposed on Dubai-based Jermyn Capital from buying and selling shares in stock markets will continue till November 30, 2010, though it dropped the show cause notice issued against the overseas company.

The regulator had earlier in January 2006, banned Jermyn Capital, which was registered as a sub-account of foreign institutional investor Taib Bank, from accessing the equity markets as it did not meet the criteria of `fit and proper person'.

SEBI banned the company from accessing the capital markets because "Huge Hamilton Andrews who managed the operations of the appellant (Jermyn Capital) was a close associate of Dharmesh Doshi who was a close associate of Ketan Parekh."

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Saudi Stock Market Weekly Report - 24-June-2009

DBG, Shuaa finally settle bond dispute

Dubai Banking Group (DBG) and Shuaa Capital settled a long-running bond dispute with DBG taking a 48.4 percent stake in the investment bank, Shuaa said on Thursday, in a move likely to ease investor concerns.

The deal, which follows months of negotiations and a threat by DBG to take Shuaa to court, will give DBG 515 million shares in Shuaa, more than twice the number of shares agreed to in the original convertible bond deal from 2007, Shuaa said.

The dispute had threatened to tarnish Dubai's image as a financial centre, pressured Shuaa shares down by over a third from a recent peak and triggered a cut in its credit ratings as the spectre of a drawn-out court battle with uncertain consequences for the bank weighed.

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The Leaders of Iran’s ‘Election Coup’

The rigged presidential election in Iran — a coup d’etat, according to Mohsen Makhmalbaf, a spokesman for the main reformist challenger Mir Hossein Mousavi, and other analysts — has prompted protests both inside and outside Iran. There is, however, little understanding about the ideology and motivation behind the operation.

The coup leaders represent the second generation of Iran’s revolutionaries. They tend to be in their early to mid-fifties, so they were young at the time of the Iranian revolution of 1978-1979. They all supported the Revolution, and most of them joined Iran’s Revolutionary Guards (IRGC) almost immediately after the Revolution that toppled Shah Mohammad Reza Pahlavi’s regime in February 1979. They fervently supported the young revolutionary government, and then fought two fierce wars in the 1980s under the command of their clerical masters — Ayatollah Ruhollah Khomeini, and Hojjatol-eslams Ali Khamenei (the present Supreme Leader) and Ali Akbar Hashemi Rafsanjani (the former President), and others. [Hojjatol-eslam is a clerical ranking lower than an ayatollah.]

The young revolutionaries fought against far better financed Iraqi forces for eight years, expelled them from all of the Iranian territory occupied by Saddam Hussein’s forces, and ended the war in a stalemate, which was a great achievement for Iran considering its international isolation while Iraq was supported by the West and the Soviet Union.

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Addax deal to take Sinopec into Iraq

Iraqi KurdistanImage via Wikipedia

China highlighted its ambitions to expand in the resources sector on Thursday when state-owned Sinopec - one of China’s largest oil companies - agreed to a C$8.3bn ($7.2bn) takeover of Addax, a Swiss-based oil company listed in Toronto and London with interests in Africa and Iraqi Kurdistan. The deal would mark China’s largest ever outbound investment in the oil and gas sector, according to Dealogic. Sinopec will pay C$52.80 per share to acquire Addax, a 16% premium to its closing price on Tuesday and an almost 50% premium to the price before it announced the talks.

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Dubai Full of Smiling UK Dentists According to TaxPenny

Online Tax Return Specialists, TaxPenny conducted a survey to see what people thought the best perk in a job was. Not suprisingly, the majority of respondents listed working on the BBC's Holiday programme as top perk. Jetting off to all those sun-drenched beaches at exotic locations would be a welcome boost to anyone who has experienced even the best of Britain's summers.

Unfortunately the Holiday programme was axed 3 years ago, so who took up the empty space on the mantle for best job perk? Well, Dental Professionals have had the ability to attend dental conferences in Dubai as part of their CPD (Continuing Professional Development) for the last few years so they're definitely in the running.

With Dubai's exquisite sun, sea and surf combination, the Dentists are understandably happy with the choice of location for their dental conferences. What makes them even happier is that they are able to claim tax relief for the cost of going on these trips. Sounds great doesn't it? Go for a great holiday, add some valuable experience to your repertoire and the taxman picks up the bill! But could they be pushing their luck?

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Mideast private equity market seen revived by end-09

Middle Eastern private equity firms sitting on $11 billion in cash are keen to put money in regional health and infrastructure projects, likely triggering a revival in the sector by the end of the year, industry leaders said.

Private equity activity, the investment in non-listed companies, has sunk to all-time lows as their main sources of funding have dried up.

Middle Eastern private equity firms that benefited from years of high oil prices and have unused capital at their disposal are now looking to take advantage of low valuations and meet an increasing demand in investments in the health care, transportation, infrastructure and education sectors.

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Tight credit may further slash Dubai steel imports

Dubai's steel imports could drop further as the tightness in credit availability is threatening ongoing construction projects, the managing director of Abu Dhabi Metal Pipes & Profiles Industries Complex (ADPICO) said on Wednesday.

Ali Hosseini of ADPICO, one of the top steel pipe producers in the United Arab Emirates, told a steel conference organized by the American Metal Market that bank lending has become even scarcer since late last year as the housing demand in Dubai has slumped after the global recession.

"The major problem is oversupply. The occupancy rates for the properties finished are at about 25 to 30 percent. The crisis has caused a lot of people to leave the city," Hosseini said.

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KDB in talks with Adic

Korea Development Bank (KDB) yesterday said it is in early talks with Abu Dhabi Investment Company (Adic) on cross-holding agreements, as part of broader discussions over increased ties between South Korea and the agency.

"That could be possible with Abu Dhabi Investment authorities as well as KDB," KDB Chief Executive Min Euoo-sung said when asked about potential cross stakes between the two financial firms. "Discussion are ongoing. It is too early to tell about the specific size of investment," he said.

South Korea is looking to the Middle East for a new source of investment as advanced economies struggle with recession.

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Saudi foreign assets to dip by $90bn in 2009

Saudi Arabia's push to fund its record budget this year to ease the fallout of the global economic crisis is expected to depress its foreign assets by nearly $90 billion (Dh330bn), a key Saudi financial centre said yesterday.

The Riyadh-based Jadwa Investments and Financing said the Gulf kingdom's economy could have shrunk in the first four months of 2009 because of a sharp cut in its oil output but expected an improvement in the non-oil sector in the next months because of high government spending.

From about $506.3bn at the end of 2008, the foreign assets of the kingdom's central bank, Saudi Arabian Monetary Agency (Sama), are projected to dive by nearly $90bn to $416.5bn at 2009-end because of Sama's withdrawal from the assets to fund public expenditure.

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ADCB and First Gulf have $500m in Saudi exposure

Abu Dhabi Commercial Bank and First Gulf Bank have more than $500 million (Dh1.83 billion) of exposure to the troubled Saudi business groups Saad and Algosaibi, according to a banking source.

"ADCB has significant exposure to the Saudi businesses. It could be easily more than $500m," said a person familiar with the issue yesterday, requesting anonymity.

Chief Executive Ala'a Eraiqat declined to comment on the nature or the magnitude of any possible exposure, but said it was mostly backed up with cash deposits held at ADCB.

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UAE Cabinet approves setting up Emirates Development Bank

The Cabinet approved establishing Emirates Development Bank with a capital of Dh10 billion.

The decision was made at a Cabinet meeting on Wednesday, presided by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, at the Presidential Palace.

The meeting was also attended by Lieutenant General Shaikh Saif Bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Interior, and Shaikh Mansour Bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs.

During the meeting, it was decided that Dh5 billion of the capital will be paid completely by the UAE Government.END

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Sinopec agrees to record takeover

Sinopec, the Chinese state-owned oil refiner, has agreed to acquire Canada’s Addax Petroleum for about C$8 billion (Dh25.63bn) in the largest foreign takeover by a Chinese company.

The board of Addax, which produces oil in west Africa and Iraqi Kurdistan, unanimously endorsed the C$52.50 per share offer, which was higher than analysts had expected,

Addax has been courted by several Asian suitors, and is understood to have received rival takeover bids from Korean National Oil Company and possibly two Indian firms, the state-controlled Oil and Natural Gas Corporation and Reliance Industries. Jean-Claude Gandur, the chief executive of Addax, said the deal would accelerate the company’s oil development and exploration plans.

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UAE's IPIC says near $3-$5 bln bank financing deal

Abu Dhabi government-owned International Petroleum Investment Company (IPIC) will not sell bonds this year and is close to finalising $3 billion to $5 billion bank financing to fund acquisitions, its chief executive said.

"We are targeting between $3 to $5 billion in financing from local and international banks," Khadem Al Qubaisi told Reuters by telephone on Wednesday without providing more details.

"It is secured and committed and in a few days we will be finalising it."

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UAE Millionaires Shrink 12.7pc

The UAE’s population of millionaires shrank by 12.7 per cent to 67,000 last year, as the ranks of the wealthy across the world thinned out amid the global economic downturn.

In the Middle East, total High Net Worth Individuals, or HNWI population, dropped to 373,600 and their wealth declined 16.2 per cent to $1.4 trillion, according to the latest annual World Wealth report by Merrill Lynch Global Wealth Management and Capgemini.

“The fall in UAE’s HNWI was steeper than the Middle East average of 5.9 per cent as the result of a huge contraction in market capitalisation as well as the overall drop in real estate prices and rentals,” said Amir H. Sadr, head of Middle East Global Wealth Management at Merrill Lynch. “Besides, UAE HNWIs had heavy investment in Asia and Europe where economic conditions were even more challenging,” he said.

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Oil rules Gulf equities after blow to bourses

Gulf bourses suffered a blow to their esteem last week when MSCI Barra, the index compiler, said it would not be upgrading the United Arab Emirates, Kuwait and Qatar to emerging market status.

The decision leaves all six Gulf Co-operation Council states monitored by MCSI Barra – the others are Bahrain, Oman and Saudi Arabia – designated as frontier markets.

Though the MSCI statement had little direct effect on trading, analysts say the structural problems highlighted by it, including low trading volumes and curbs on foreign investment, continue to hamper the development of local markets.

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Media activist quits Qatar

Robert Menard, a French activist who founded the Doha Centre for Media Freedom, said on Wednesday that he was quitting Qatar after a long-running dispute over press freedoms.

Mr Menard, who previously ran the Paris-based Reporters Without Frontiers, said that he had been invited into the country by the emir’s senior wife Sheikha Mozah Bint Nasser Al Missned but had been impeded by senior officials since that time.

Mr Menard had protested at Qatar’s refusal to reform repressive press laws and at the authorities’ refusal to give visas to Iranian and other journalists whom he said were at risk of persecution.

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Saudi Arabia goes mining for jobs

A kilometre below a rock-strewn green mountain in western Saudi Arabia, half a dozen Saudi and Filipino miners in orange helmets and olive-green overalls are boring into the ore veins of the Al Amar gold mine. Others carefully plant explosives in the cracks, while ore-laden trucks move back up the labyrinthine shaft to an extraction plant sweltering under the desert sun far above.

Al Amar, 200km southwest of Riyadh, is one of five gold mines operated by Ma’aden, the Saudi mining company. Ma’aden produced 127,744 ounces of gold worth SR420m ($112m) last year, and is responsible for the bulk of Saudi Arabia’s production which last year reached 5.7 tonnes.

But, despite gold discoveries which added another 1.3m ounces to reserves previously estimated at 8.2m ounces, gold production dropped by 14 per cent last year, from a peak of 8 tonnes in 2003.

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Opinion: Bond repayment will be Dubai’s test

Dubai Inc has fallen from grace over the past year in the eyes of international investors.

The spreads on debt issued by Dubai government-owned companies widened massively from September, surpassing 1,000 basis points in February. Although spreads have since narrowed, they remain much wider than those for similarly rated companies around the world and their counterparts up the road in Abu Dhabi.

We are concerned by the damage sustained by Dubai’s business model. On balance though, we think fears over Dubai Inc’s creditworthiness are overdone, primarily because of the proven willingness and ability of the United Arab Emirates federal government to support Dubai.

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Exodus of Expats In Dubai Adds Fuel To The Housing Fire

Over supply and population decline makes Dubai one of the riskiest property markets for investors, it is claimed.

As thousands of recently unemployed expats prepare to leave the emirate when the school terms ends next week the reality of the impact of the global recession will be felt, according to Saud Masud, an analyst at Swiss investment UBS.

'In my view Dubai's property risk profile appears to be one of the highest in the post war era and while one may debate the potential support factor from Abu Dhabi the fundamental oversupply and population dynamics risks are very much there,' he said.

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