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Thursday, 30 July 2009

Kuwait Weekly Market Report - July 30, 2009 (PDF)

Bahrain takes control of Saudi groups' banks

Bahrain's central bank has taken control of banks belonging to two Saudi groups, it said on Thursday, the latest escalation in one of the largest financial scandals the region has seen.

The central bank said it has assumed control of Awal Bank, owned by Saudi group Saad and The International Banking Corporation (TIBC), owned by Ahmad Hamad Al-Gosaibi and Brothers (AHAB).

TIBC had assets of $3.8 billion and Awal Bank had $7.6 billion at year-end.

Dubai's Emaar lost $350M in 2Q, mostly on US unit

Emaar PropertiesImage via Wikipedia

The Middle East's biggest listed property developer says it lost about $350 million in the second quarter, largely because it believes its $1 billion bet on the U.S. housing market is now worthless.

Emaar Properties posted a loss Thursday of 1.29 billion dirhams, or $351.5 million, from April through June. That's down from a profit of 2.12 billion dirhams ($577.7 million) a year earlier.

Part of the drop comes from a 65 percent revenue slide stemming from a severe property slump in Dubai and other effects of the global downturn.

But the biggest hit to Emaar's balance sheet comes from a 1.73 billion dirham ($471.4 million) total writedown of its John Laing Homes division in the U.S. It paid $1.05 billion for the company in 2006.END

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Sama Dubai chump change inditements (Re-post)

This is a photo showing a model of The Lagoons...Image via Wikipedia

More prosecutions and sentences that of course can all be appealed, this time related to bad behaviour at Sama Dubai. Five men apparently have received various sentences and fines for various offenses.

The Public Prosecution had earlier charged the accused of receiving bribes and commissions, and embezzling an estimated Dh2.28m from the company, along with disclosing company secrets to competitors.

2.28 million dirhams?

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Saudi Stock Market Weekly Report 29 July 2009

Major shift in investment preferences in the region (Interview)

Majid Al Futtaim Asset Management evolved from Majid Al Futtaim Trust. Mafam launched its Elite Mena Equity Fund in April this year. Habib Oueijan, Managing Director of Mena in Majid Al Futtaim Asset Management, says the company would continue with its relatively conservative approach to investing.

"We are fundamental investors – we target growth and value stocks. Our objective is long-term capital appreciation while preserving capital. We aim to capture the market upside while keeping our risk in check. This has been our approach since we first started managing the family office, and this is an approach that we will continue with," he told Emirates Business. He is bullish on Mena markets and is a strong advocate of adopting a long-term approach to investment.

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Five sentenced in Sama case

Five men were sentenced to fines and prison terms by the Dubai Criminal Court yesterday in a case of embezzlement and bribery at Sama Dubai, a subsidiary of Dubai Holding.

UAE nationals Mohammed Abdulrahim Al Merri and Nawaf Qasim Shahin, and Majid Saleh Ali Al Ban, of unconfirmed nationality, were sentenced to one year in jail and a shared fine of Dh1.3 million. In addition, Al Merri, Syrian Amer Munir Al Halabi, and Majid Saleh Ali Naser, also of unconfirmed nationality, were sentenced to one year's imprisonment and jointly fined Dh650,000 for another charge relating to the case.

The court, presided over by judge Fahmi Munir Fahmi, acquitted the defendants of other charges brought against them and also acquitted another accused, Abdulsalam Mohammed Ahmed Al Merri, of all charges.

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Iraq removes state oil company head

For the second time this year, Iraq has removed the head of South Oil Company (SOC), the biggest of its three state-owned oil producers.

The move came as the government approved a plan to re-establish a national oil company to oversee most operations in Iraq’s oil and gas sector.

Fayad al Nema, who last month criticised the oil ministry’s plan to auction off contracts to foreign companies to raise production from Iraq’s biggest oilfields, has been transferred to a ministry job, according to Ali al Dabbagh, an Iraqi government spokesman.

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Ex-Tamweel officials accused of making Dh44m in illegal land deals

Four senior executives of the country’s largest mortgage lender, Tamweel, appeared in court yesterday, charged with making an estimated Dh44 million (US$12m) in profits through illegal land deals involving company-owned properties.

The four, including Tamweel’s former chief executive officer, and a fifth man denied the charges.

The chief defendant in the case is a 38-year-old Emirati man identified as AA, who officials say was the chief executive at the time of the crime. His co-defendants are: Tamweel’s former chief investments officer, identified as FK, a 28-year-old Jordanian; the lender’s deputy chief executive, a 44-year-old Emirati identified as AH; and another Emirati, SA, 40, who was Tamweel’s executive manager and a member of the board.

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Maiden's Tower, Baku, Azerbaijan 2Image by teuchterlad via Flickr

Turkmenistan’s pledge to take Azerbaijan to court over the two countries’ rival claims to Caspian Sea oil fields has sparked more confusion than anger in Baku. Some Azerbaijani experts even believe that an international arbitration hearing could prove the best way to resolve a long-standing energy dispute.

At a special July 24 government meeting in Ashgabat, Turkmen President Gurbanguly Berdymukhamedov ordered Foreign Minister Rashid Meredov to have lawyers investigate the legitimacy of Azerbaijan’s claims to the Omar, Osman and Serdar fields. These fields are known as Azeri, Chirag and Kapaz in Baku. Berdymukhamedov also expressed a desire to probe the legality of foreign energy companies’ participation in the fields’ development. Berdymukhamedov called for the lawyers’ findings to be sent to an unspecified international arbitration court, according to the Turkmen state-owned TDH news agency.

The fact that a BP-led consortium has already begun development work in the Omar/Azeri and Osman/Chirag fields under a 1994 agreement with Azerbaijan suggests that Baku holds a "one-sided" approach to the issue, Berdymukhamedov said. "Such one-sided work practices in the Caspian are unacceptable for Turkmenistan."

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Billion dollar bailout for Iran car maker

Iran Khodro, the Middle East's biggest car manufacturer, is to receive $1 billion in a government-backed rescue package, a company official said on on Wednesday.

Debts of several billion dollars were reportedly threatening to force the bankruptcy of the company, which has 60 percent of the Iranian car market and sends exports around the world.

"The Monetary and Credit Council finally agreed with the one-billion-dollar aid to Iran Khodro," Etemad newspaper said.

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UAE's NBQ says Global loses court bid

National Bank of Umm al-Qaiwain (NBQ) said on Wednesday that Kuwait's Global Investment House (GIH) has lost a court bid to scrap its deal to buy a $642.5 million stake in the UAE bank, after defaulting on payment.

Global, which defaulted on most of its debt earlier this year amid the credit crunch, last year signed a deal to buy a 20-percent stake in NBQ through convertible bonds.

NBQ, in a statement announcing second-quarter earnings results, reiterated the Kuwait firm had paid only $249.9 million of the purchase price and defaulted on the rest.

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Green shoots emerging in arid Qatar

If there is anywhere in the global economy where green shoots are emerging, it is in the parched desert around Doha, the capital of gas-rich Qatar.

After a pause of a few months over the New Year, Doha-based bankers say the financial services sector in the emirate is roaring back to life, providing opportunities for regional institutions.

Credit Suisse, for one, has let go underperforming staff but has been increasing its net number of bankers through the downturn.

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Mortgage lenders await upturn

The Gulf has largely avoided the writedowns of repackaged subprime mortgages that unleashed such havoc on global financial markets last year. But instead, the nascent local mortgage industry has been hit by a slump in domestic property.

Across the region residential property values and rental costs have declined, some even more deeply than in the US. Analysts say house prices in Dubai, the most developed mortgage market, have fallen by about 50 per cent.

“Until recently, the real estate markets were a one-way street where prices always went up,” says Ventakesh Srikantan, head of assets and liabilities at HSBC Middle East. “But now we are witnessing a serious property downturn and credit stresses are emerging in many portfolios.”

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Dubai acquits executive of bribery charges

A Dubai court on Wednesday found the former chief executive of a state-linked developer innocent of bribery charges in an embarrassing turn of events for the government’s high-profile anti-corruption campaign.

Abdulsalam Al Marri, former chief executive of the Lagoons development, was found innocent of charges including bribery, said Habib al-Mulla, whose law firm defended the UAE national. Three junior colleagues were found guilty of accepting bribes and jailed for a year each.

The verdict is a setback to the city-state’s anti-corruption campaign launched last year to root out corruption and financial mismanagement at state-linked real estate companies and banks. The unexpected verdict, however, also appears to undermine criticism of a lack of independence within the judiciary.

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