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Monday, 13 July 2009

UAE'S Aabar buys 40 pct of Daimler's Tesla stake

Abu Dhabi-based Aabar Investments AABAR.AD has purchased 40 percent of Daimler AG's (DAIGn.DE) stake in electric-car start-up Tesla Motors Inc, with the aim of launching a joint venture, Aabar said on Monday.

In May, Daimler acquired an equity interest of just under 10 percent in Tesla.

Tesla is one of the biggest players in the burgeoning electric car sector, while Aabar is viewed as a spearhead investor for the emirate of Abu Dhabi in non-energy assets.

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UAE's IPIC talks to two firms on Fujairah refinery

Abu Dhabi's government-owned IPIC is talking to two international companies that could operate and part-own the Fujairah oil refinery project, IPIC's managing director said on Monday.

The International Petroleum Investment Company would make a decision on whether to proceed with the refinery next year, Khadem Al Qubaisi told Reuters.

"We are in touch with two well-known companies to operate and own a stake in the refinery," he said. He declined to name the companies.

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Nakheel to revise payment of $750 mln sukuk

Dubai-based real estate developer Nakheel on Monday said it plans to revise the payment terms of its $750 million sukuk due in 2011 as the company faces financing difficulties amid a downturn in the local property market.

Under the revised terms, Nakheel would decrease the coupon payment due later this month and increase the final amount payable on the bond redemption date, according to a notice sent to investors by Deutsche Bank AG, the bond's principal paying agent and seen by news agency Zawya Dow Jones.

The next payment for the Islamic bond is due July 16 and the last is Jan. 16, 2011, according to the document.

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Kuwaiti Banking Crisis 2009

In Kuwait, several rumors across the market have spurred concern as a couple local companies are believed to have defaulted on over $10 billion this past week. If these are the defaults of only two company’s, one may wonder how high the figure would reach once all the companies disclose their liabilities.

Rumors of a major company’s default have led the Kuwait Stock Exchange in to a deep decline past major support levels. The Insurance, Financial, and Banking sectors were the hardest hit these past few weeks.

“There is a lot of negative news flow from the banking sector in Kuwait… Banks across the region are under pressure because of fears over potential impairments from Saad and Algosaibi… Kuwait banks’ potential losses from these two groups would be minimal compared to the size of their loan books, but any write downs will hit profits.”

- Talal al-Loghani, Kuwait Finance and Investment Co.

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Kingdom Installment redeems its 2006 Sukuk

Saudi Arabia’s Kingdom Installment Company (KIC) announces that it has redeemed its maiden Sukuk issued in 2006, despite the exceptionally difficult circumstances in the international capital markets.

KSA MBS I International Sukuk was lead arranged by Unicorn Investment Bank, which also acted as Shari’ah Advisor and, along with Standard Bank Plc, Joint Bookrunner to the transaction.

The Sukuk, which attracted investors from Europe, the Far East and the GCC, was credit enhanced by the International Finance Corporation (IFC), a member of the World Bank Group, and backed by real estate lease contracts developed by Dar Al-Arkan Real Estate Development Company (Dar Al-Arkan) based in Saudi Arabia.

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Russia, India & China six month volatility! (FMG Funds)

After three strong months in a row for equity investors, June saw profit taking and a needed break from the powerful rally.

FMG Funds behaved well given the high level of intra-month volatility.

Summer doldrums seems to have started and further profit taking on lower volumes will add to the volatility the next few weeks.

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Global's GCC Weekly Market Report – July 09, 2009 (PDF)

Economic laws need amendment to keep pace with rapid growth (Interview)

The UAE's Federal National Council (FNC) has no objections to complete foreign ownership of businesses in huge and strategic industrial projects, according to its Speaker.

In an exclusive interview with Emirates Business, Abdul Aziz Al Ghurair, FNC Speaker, said as long as small and medium enterprises (SMEs) are protected and allowed to be the domain and preserve of UAE nationals, the government could allow 100 per cent foreign ownership to foreign investors in mega projects of strategic importance to the country.

The Speaker also said it was very difficult to de-peg the UAE dirham from the US dollar and experience has proved that the dollar peg has been beneficial to the UAE in the long run.

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Key witness fails to turn up for Mizin case hearing

The latest hearing in a case involving a former CEO of Mizin real estate firm was adjourned yesterday after a key witness failed to appear.

The ex-CEO, UAE national SA, and a Lebanese businessman, JH, face a number of charges arising from alleged financial irregularities. Both men were at Dubai Criminal Court yesterday when Mizin's accounts auditor MR, who was said to have had the complete file on the case, failed to turn up for unspecified reasons.

Meanwhile, JH's lawyer was unable to attend as he had to travel abroad on a medical matter, and his place was taken by another lawyer.

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Lawyers defend former minister in fraud case

Lawyers defending a former minister and two managers who are charged with defrauding a businesswoman, reiterated on Sunday in Dubai's highest court that she knew the ex-minister partnered her late brother before waiving his share. The court will deliver its judgment soon.

"My Emirati client, K.B., didn't defraud or deceive the Lebanese businesswoman, M.J., who was aware that my client partnered her late brother in an information technology company, before she willingly waived her stake& When she signed the wavier agreement she was fully aware that K.B. was her brother's partner," K.B.'s lawyer Samir Jaafar told an eight-judge panel at the Dubai Court of Cassation yesterday.

On May 28, the Dubai Appeals Court acquitted the former state minister, K.B., American general manager, S.A., and Indian financial manager, P.M., of swindling and misleading the woman in order to waive her stake in the IT company. Appeals Judge Mustafa Al Shennawi scrapped the initial verdict - two-year jail term for each of the defendants - and acquitted K.B., S.A. and P.M.

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Burj Dubai opening delayed

Proposed height of the Burj Dubai compared to ...Image via Wikipedia

The Burj Dubai, the tallest tower in the world, will be completed in December, three months later than scheduled, according to two contractors involved with the project.
The contractors said work still needed to be completed outside and inside the building and the new deadline was December.

A person close to Emaar Properties, the company developing the Burj Dubai, dismissed previous reports that there would be a “soft opening” on Sept 9 to coincide with the launching of the first phase of Dubai Metro. The date was never confirmed by the company, the person said.

Emaar would not confirm the December opening, but said the building was scheduled to open this year.

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End of easy credit for Gulf's mighty family businesses

From selling ice cream to building petrochemical plants, the big Gulf families dominate the region’s commercial landscape and have long traded on their reputation.
But that is now being questioned for the first time as bankers reassess so-called “name lending” to Gulf-based family conglomerates in the wake of the crisis surrounding Saudi Arabia’s Saad and Al Gosaibi groups.

Many banks, including the international giants BNP Paribas and Citigroup and local institutions such as Abu Dhabi Commercial Bank, Mashreqbank and First Gulf Bank, have admitted being exposed to the two Saudi groups, both of which are undergoing massive debt restructurings.

“Almost every single bank we talk to in the UAE is seeing an increased occurrence of renegotiating and restructuring loans, often with family-owned businesses,” says Mardig Haladjian, who heads GCC banking coverage for Moody’s Investors Service.
Now analysts and investors across the Gulf are asking why some families have been permitted to accumulate an apparently unsustainable burden of debt.

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Treasury chief Geithner in Gulf to explain US economic defense

Timothy Geithner is scheduled to pay his first visit to the Gulf as US Treasury secretary this week with a message that may sound jarringly familiar to the one his predecessor delivered a little over a year ago: the US and its dollar remain sound destinations for the region’s oil profits.

Mr Geithner’s visit is part of a zigzag journey across Europe and the Middle East to explain the American response to the global economic recession and win support for greater financial pressure on Iran and international terrorist networks.

Analysts say Mr Geithner may also urge Saudi Arabia and the UAE to lend more money to the IMF to help bail out nations ravaged by the global economic crisis.

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Fantasy world of stocks July 2009 (Re-post)

The collapse of the Saad and Al Gosaibi (AHAB) groups of companies has hardly ruffled the feathers of the pundits at Sharewadi’s Dubai Share Talk. They have larger concerns over there, like trying to eke out the minor gains to be had from timing bounces in moribund stocks like EMAAR and UPP.

There are no princely gains to be made by buying on any time frame in an established long-term bear market.

Oh well. The girl who cried wolf and all that… I guess. I hope the “silent majority” who check market commentary websites are a little more… … you know…

Bahrain's Batelco to start India operations

Bahrain Telecommunications Co (Batelco) expects its Indian mobile phone affiliate S Tel Ltd to start operations in the fourth quarter, it said in a statement on Sunday.

The company said in April its 2009 net profit would depend on whether it starts the operations in the fourth quarter or the first quarter of 2010.

"We have been working very closely with our partners and we are looking forward to the launch of full services from S Tel during quarter four this year," Chief Executive Peter Kaliaropoulos said in the statement.

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Lawyers drop troubled Algosaibi in Saad case

A Saudi-based law firm said on Sunday it had stopped representing Ahmad Hamad Algosaibi and Bros (AHAB) in a dispute with billionaire Maan Al-Sanea, who heads privately owned Saad Group, due to disagreements on strategy.

The pullout by law firm Salah Al-Hejailan comes as banks and regulators grapple with the multibillion-dollar restructuring efforts of AHAB and Saad, the biggest blow yet to strike Gulf Arab states since the start of the financial crisis.

Numerous banks from the Gulf Arab region have said they face potential writedowns on loans made to the troubled groups.

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Downturns hurt but solid economies will endure

Just returned from a multi-country visit shortly before Middle East Business Focus 2009 went to press, Middle East Association Director General Michael Thomas is keen to encourage British business to focus on the genuine opportunities that still exist for doing business in the Gulf region.

Don't be dissuaded by headlines that focus on problems created by global economic contraction. No-one can deny that many Middle Eastern economies have been hard hit by the global economic crisis and falling oil prices, but this does not mean that the opportunities for UK businesses to increase their commercial presence in the region have evaporated. Saudi Arabia and its neighbours number among the world's biggest exporters and investors; the needs of their predominantly youthful populations are huge, in everything from health and education to creating jobs in advanced technology sectors like aerospace, IT and petrochemicals.

With its status unchallenged as the world's largest oil exporter, and with massive development plans in new 'economic cities' and, especially, in downstream hydrocarbons and petrochemicals, Saudi Arabia is a good prospect for long-term business. In the midst of the global contraction, it is still an expanding market for UK goods and services. And it has global-scale potential: the kingdom is on the way to becoming the world's leader in petrochemicals, as well as oil exports - a move downstream that will keep Saudi Arabia as a major economy in the decades ahead.

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