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Sunday, 2 August 2009

Global's UAE Weekly Report - July 30, 2009 (PDF)

U.A.E., Qatar Shares Gain on Earnings, Oil; Saudi Index Drops

United Arab Emirates and Qatari shares advanced for a second day after earnings at property companies and banks boosted investor sentiment and oil advanced to a one-month high.

Drake & Scull International PJSC, a Dubai-based construction-engineering contractor which started trading in March, surged to a one-month high. Arkan Building Materials Co. gained 1.2 percent as it returned to profit in the second quarter. Ezdan Real Estate Co., Qatar’s largest developer, climbed the most since March after its chief financial officer said it aims to complete seven new compounds with a total of 2,000 units by next year. Abu Dhabi’s benchmark added 0.6 percent to 2,818.87, the highest close since June 17.

“Most of the real estate companies and banks reported pretty OK performance figures,” said Vyas Jayabhanu, head of Al Dhafra Financial Brokerage LLC in Abu Dhabi. “Since they are the ones who determine the economic cycle, investors are getting encouraged.”

Emaar Sucks* (Re-post)

Emaar PropertiesImage via Wikipedia

*All rights reserved to dxb kola

Emaar ($4.5bn market cap) continues to.. DISAPPOINT! The construction company’s stock is down 74% during the past 12 months. Desperate shareholders were waiting for a positive surprise (it seems we’re getting a bunch of these everywhere!). SORRY shareholders: you wouldn’t get it from Emaar.

The company came out with a miserable Q2-09 loss of AED1.2bn. Although the loss incorporates a AED1.7bn write-down on John Laing Homes (Chapter 7 bankruptcy), the company’s mere AED442m earnings doesn’t cut it. Not only that, but also Samsung Engineering is said to be suing Emaar for USD4.1bn for work related to Burj Dubai (This lawsuit seems suspicious especially since Samsung Engineering’s contract was worth only $1bn). Another potential negative is that although the write-down may appear prudent, it could negatively affect Emaar’s piece of the pie in the prospective merged company.END

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Shuaa Capital Q2 net rises 37 pct on investments

Shuaa Capital SHUA.DU reported a 37 percent rise in second-quarter net profit despite losses at its investment banking unit as its assets have regained in value.

The Dubai-based bank said net profit for the quarter climbed to 91.7 million dirhams ($24.97 million) from 67.1 million dirhams in the second quarter of 2008.

"We are pleased that we have turned the corner after three very difficult quarters," chief executive Iyad Duwaji said in a statement.

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Emaar clear to appeal $1.2 bln lawsuit

Emaar Properties has received a court ruling in its $1.2 billion compensation lawsuit with a Saudi firm, clearing the way for the UAE property company to appeal the unfavorable decision within 30 days, a newspaper said on Sunday.

The Board of Grievances, a Saudi arbitration authority which rules on commercial disputes, on Wednesday gave Emaar and Jadawel International the verdict, which was issued in April, Al-Riyadh newspaper reported without citing a source.

"This step gives Emaar and Jadawel 30 days to oppose the ruling," the newspaper said. Emaar has said it would appeal the ruling which reversed an earlier judgment in its favour in a lawsuit that had sought $1.2 billion in compensation.

Emaar was not immediately available for comment on Sunday.END

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Mitsubishi UFJ arranges $5 bln loan to UAE

Emirate of Abu DhabiImage via Wikipedia

Mitsubishi UFJ Financial Group (MUFJ) has put together a syndicated loan worth five billion dollars for a sovereign wealth fund in Abu Dhabi, a report said on Sunday.

Bank of Tokyo-Mitsubishi UFJ, part of the MUFJ group, has arranged the multibank credit for International Petroleum Investment Co. (IPIC), the business daily Nikkei reported, without citing sources.

The syndicate also involves 15 other banks, including Santander of Spain, HSBC Holdings Plc. of Britain and Sumitomo Mitsui Banking Corp of Japan, the report said.

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Gulf business dynasties must learn to adapt (Re-posted from comments)

Family history is an issue of extreme value in the Saudi Arabian culture. A family’s name carries along with it a reputation that is of significant value in terms of both social and business relations within the Kingdom. It is therefore imperative that one distinguishes between the two Algosaibi families; both Saudi families with impressive business backgrounds.

This article is amongst many in which the distinct histories of the two separate Algosaibis are merged, thereby confusing the facts and creating a portrayal that is not only misleading, but false.

While both families sharing the name Algosaibi may have originated from Gassab (hence the common surname referring in Arabic to this village); they are not closely related and neither are the histories of their ancestors.

The Algosaibi family who is renown for the fame and fortune they created in the early 1900’s is that led by Abdulaziz, Abdallah, Abdulrahman, Hassan, and Saad Algosaibi, commonly referred to as “the five brothers”. Originating in Gassab, members of this family moved to Huraymlah, and then settled between the Eastern Province of Saudi Arabia and Bahrain where they established a business empire based largely on pearling, international trading, and a large real-estate ownership. The sons of Hassan and Ibrahim Algosaibi moved beyond the business world to the political realm forging strong ties with the late king Abdulaziz Ibn Saud, the founder of the modern Kingdom of Saudi Arabia; thereby becoming his official representatives in the Kingdom of Bahrain and accompanying him frequently as official delegates on international business affairs. Descendants of the five Algosaibi brothers currently reside in Riyadh, the Eastern Province, and Bahrain; and include two current Saudi government ministers: Ghazi bin Abdulrahman Algosaibi, and Khalid bin Mohammad Algosaibi. The original conglomerate owned and run by the five brothers split in the 1940’s; their descendents operate today several family businesses including amongst others Khalifa Abdulrahman Algosaibi Holding Company, and Abdulrahman Algosaibi GTB.

The Algosaibi family currently dominating media outlets as a result of their complex entanglement in legal battles regarding their immense financial debt and convoluted relationship with Maan Alsanea, founder of Saad Group, is not the Algosaibi family mentioned above. While the troubled Algosaibi family may have also originated in Gassab, they left it for Zubair and then eventually settled in the Eastern Province where, led by Hamad Ahmad Algosaibi, they established a money exchange in the 1940’s. Descendents of Hamad Ahmad Algosaibi currently reside in the city of Khobar in the Eastern Province of the Kingdom where they operate under the name of Ahmed Hamad Algosaibi and Bros.

Apart from the common surname and possibly shared geographical roots, there exists only a very distant relationship between the two Algosaibi families. Distinguishing between the two families and their separate histories is therefore crucial.

* Further details regarding the two Algosaibi families can be found in Michael Field’s “The Merchants: The Big Business Families of Saudi Arabia and the Gulf States”.

Original lin here: http://rupertbumfrey.blogspot.com/2009/06/gulf-business-dynasties-must-learn-to.html

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Global's Egypt Weekly Market Report - July 30, 2009 (PDF)

MGM Mirage cuts price of Vegas homes

MGM Mirage, which is building the CityCenter development in Las Vegas in a joint venture with Dubai World, has cut the price of homes at the property and casino project.

Las Vegas is one of the worst affected cities of the US property downturn, with prices falling 53 per cent in May since August 2006, according to a home price index released by Standard & Poor’s and Case Shiller in June.

MGM Mirage’s chief executive, Jim Murren, told Bloomberg that the company was now re-pricing homes, of which there are 2,400, within the development. CityCenter includes several casinos, hotels, a new retail complex and office buildings across a 31-hectare site on the Las Vegas Strip.

US company admits to bribery, UAE a beneficiary

A California valve company has pleaded guilty in a US federal court to paying bribes to secure contracts in dozens of countries including the UAE.

Immediately following the guilty plea, Control Components, a California subsidiary of the UK engineering and manufacturing group IMI, was ordered to pay a criminal fine of US$18.2 million (Dh66.79m) and was placed on court supervised probation for three years.

On Friday, the company pleaded guilty to violating two US laws “in a decade-long scheme to secure contracts in approximately 36 countries by paying bribes to officials and employees of various foreign state-owned companies as well as foreign and domestic private companies,” the US justice department said in a statement.

Saudi financier to challenge $9bn Cayman asset freeze

Maan al Sanea, the Saudi financier at the centre of a fraud investigation, will challenge a Cayman Islands court order that froze US$9.2 billion (Dh33.79bn) of his assets.

Last week’s decision by the court to freeze Mr al Sanea’s worldwide assets was in response to complaints filed by Ahmad Hamad Al Gosaibi and Brothers, which is suing Mr al Sanea in a New York court for $10bn, alleging he “falsified documents” to obtain the money for personal use when he was a senior executive at Al Gosaibi’s financial division.

“Saad (the Saudi conglomerate founded and chaired by Mr al Sanea) will respond fully to all of these claims through the proper judicial process and definitively demonstrate their lack of any foundation,” said a spokesman for the billionaire, according to Bloomberg.

Emaar pushes Indian IPO

Emaar’s Indian subsidiary, Emaar MGF, will appoint investment banks to manage its planned US$800 million (Dh 2.94 billion) initial public offering on India’s stock exchanges next month, The National has learned.

Emaar was forced to withdraw plans to raise almost $2bn early last year, when India’s stock market collapsed, leaving the Indian subsidiary reliant on its parent company in Dubai to fund its projects.

Emaar MGF’s return to the market has been made possible by the surge in investor appetite for Indian stocks after the recovery of markets worldwide and with the stable government India voted into power in early May.

Insolvency laws must be stronger, say experts

Calls for stronger insolvency laws are growing as the financial crisis takes its toll on the economy.

Current laws governing the liquidation or restructuring of a troubled company remain largely unused and untested, lawyers say.

“In the event of business difficulties, creditors need a sound mechanism to protect their investments and maximise the value of the returns,” said Sumant Batra, the president of Insol International, the association of insolvency specialists.

Just When Africa’s Luck Was Changing

TWO years ago, when Dubai World said it would invest $230 million in Rwandan tourism, officials here rejoiced.

Among the many projects the company trumpeted were a sprawling luxury hotel on the 18-hole golf course here and an ecolodge in the Akagera National Park, a swampy grassland further northeast where herds of elephants and water buffalo roam.

In an interview at his offices in Kigali last fall, Rwanda’s president, Paul Kagame, cited the Dubai investment as one of many that his small east African country had managed to attract in its effort to reduce its dependence on aid in favor of private investments.