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Friday, 7 August 2009

BARNEYS BATTLE IS SET TO BEGIN

The tug-of-war for control of Barneys New York has officially begun.

Istithmar -- the Dubai-based private-equity firm that owns the struggling luxury chain -- this week hired boutique adviser Perella Weinberg Partners to help restructure the retailer's $500 million debt load.

Sources said any effort to refinance the company will likely pit Istithmar against hedge-fund kingpin Richard Perry, in what could amount to a battle for influence over Barneys and its strategic direction.

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Dubai gold market shifting from retail to export and investment driven demand

Dubai, one of the few hubs in the world that maintains a healthy growth in gold trade, may be shifting away from relying on retail towards increased export and investment driven demand.

Dubai Multi Commodities Centre (DMCC) announced Wednesday that gold trade through Dubai reached US$14.69 billion in the first half of 2009, an increase of 12% from US$13.07 billion during the same period in 2008.

In the first six months of 2009, a total of 300 tonnes of gold was imported into Dubai, an increase of 13% compared to 265 tonnes in the same period of 2008.

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Moody's cuts Tamweel on falling asset quality

Ratings agency Moody's downgraded the issuer rating of Dubai mortgage lender Tamweel on Thursday, citing factors including the firm's falling asset quality, a slow state support process and higher funding costs.

The downgrade to Baa1 from A3 was driven partly by "the deterioration of Tamweel's standalone financial profile in the wake of materially higher funding costs, heightened provision charges and frozen asset growth, with very limited capacity to absorb increasing charges with higher volumes", Moody's said.

Moody's also cited "high dependence on concentrated wholesale bank funding amplifying liquidity risks, and forcing indirect government support .. (and) a very slow merger and support process from the authorities, with delays placing Tamweel in a difficult operating position, which in turn contributes to a weakening of its franchise value".

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Moody’s puts two Bahraini banks on review

Moody’s Investors Service yesterday placed two Bahraini retail banks under review for possible downgrade, citing the need to reassess government support for the country’s financial sector.

The credit rating agency is reviewing the National Bank of Bahrain’s long-term local currency rating of “A1” and Bank of Bahrain and Kuwait’s (BBK) local and foreign currency ratings of “A2/Prime-1”, as well as its “A2” senior and “A3” subordinated debt ratings.

The announcement came on the same day that Rasheed al Maraj, the Bahraini central bank governor, gave reassurances that there was little impact on the country’s banking system from another two Bahrain-based banks owned by Saudi Arabia’s troubled Saad Group and Ahmad Hamad Al Gosaibi and Brothers.

Junior explorer strikes oil in Kurdistan

Gulf Keystone Petroleum, a Bermuda-registered company listed on the London Stock Exchange, is the latest oil patch minnow to have struck oil in Iraqi Kurdistan.

The oil junior, which in 2007 was a takeover target for the UAE’s RAK Petroleum, yesterday announced a “significant” discovery with its very first well in the region.
Based on preliminary data, it estimated the size of the discovery at between 300 million and 500 million barrels of oil in the ground.

That is by no means huge by Iraqi standards, but it is another indication of the country’s potential as a source of substantial new oil and natural gas reserves that are relatively easy to produce. Underexplored parts of the country such as Kurdistan, the semiautonomous northeastern region of Iraq, are especially rich in prospects.

Gulf economies to lag global recovery

Gulf economies, hit by the financial crisis and falling oil prices, will lag a nascent global rebound in the short term, hampered by worries about credit quality amid a long summer lull in business activity, analysts said on Thursday.

Gulf states did not fall as deeply into recession as other regions, buffered by earnings from energy exports and big sovereign savings, and were expected to rebound more quickly.

But a debt implosion at two Saudi Arabian conglomerates, Saad Group and Ahmad Hamad Algosaibi Bros, has sent shock waves through the region, with widespread concern about the extent of the impact.

Kuwait become net gas importer

Kuwait’s first cargo of liquefied natural gas (LNG) has arrived at its terminal, making the oil-rich state a net importer of gas.

The country’s decision to turn to LNG, a costly source of fuel, is a result of a severe gas supply crunch that has led to a shortage of electricity and made power cuts a fixture of summer months.

Sohar LNG, an Oman-based gas carrier, was anchored at the site of Kuwait’s floating gas terminal at Mina Ahmadi yesterday, according to ship-tracking data compiled by Bloomberg.

Few solid answers for weary investors

Three years ago, Sudesh Kapoor, a Londoner, put down her name and £45,000 for a £103,000 one-bedroom apartment in Marina Suites, a hotel-apartment development launched towards the end of 2005 and expected to be completed by early 2007.

Mrs Kapoor, 63, planned to live in Dubai for part of each year and supplement her income by renting out the apartment the rest of the time.

Today, however, work on the site remains stalled, with little to be seen beyond excavation and basic groundwork.

UAE banks seek cash recovery

The banking sector needs a further injection of liquidity to combat a decline in deposits and help revive lending as banks emerge from a quarter in which their earnings fell by more than 25 per cent, bankers and economists say.

With banks facing a shortage of deposits and rising delinquencies, lending has been sluggish, exacerbating the economic slowdown in the country.

The UAE has already taken steps to boost liquidity by guaranteeing banking deposits and arranging to pump Dh120 billion ($32.69bn) into the financial system. But analysts say the Central Bank may need to adopt more unconventional measures of the kinds being used in the US and Europe, including so-called quantitative easing, or the creation of money.

Dubai Marina's high-rise dreams deferred

Harvans Nagpal and his wife once dreamed of a relaxing retirement in Dubai, enjoying leisurely days beside a sun-drenched swimming pool and unbeatable views from a beautiful, brand new serviced high-rise apartment overlooking the city’s glamorous Marina.

Now the 70-year-old London accountant’s plans are on hold, dogged by uncertainty brought on by delays in the building of the apartment and the prospect of its cost rising beyond his means.

After four decades of working nine-to-five, he expected that, by now, he would be enjoying the fruits of his labour. Instead, he is going back to work as an accountant. “I’m trying to get subcontracted work, but it’s pretty difficult to do at late stages in life,” he says.

Global's Kuwait Weekly Market Report - August 06, 2009

Fitch affirms Kuwait ratings

Fitch Ratings affirmed Thursday Kuwait's long term foreign and local currency Issuer Default Ratings (IDR) at 'AA', with stable outlook.

"Kuwait has been hit by the fall in oil prices and falling global equity markets, but these have only temporarily halted the growth in its external assets," Charles Seville, Fitch Associate Director said.

"However, the financial sector is suffering from the spill-over of the global financial crisis and the after-effects of a domestic lending boom," Seville added.END

ADX Review II August 2009 (Re-post) Part 2 of 2

Following a general market index can be deceptive, and provides an incomplete picture of what the market players are doing with certain stocks or sectors.

Let’s have a look at 3 banks with shares publicy traded on ADX, Abu Dhabi’s stock exchange.

The biggest of the three is the de facto bank of the Emirate of Abu Dhabi’s government departments, National Bank of Abu Dhabi (NBAD).

ADX Review I August 2009 (Re-post) Part 1 of 2.

On a closing basis, the ADX index has gained 33% from its January closing low of 2136.64

The year’s closing high for the ADX index, according to Mubasher Pro, is 2963.63 registered on June 14.

2968.26 was the intraday high that day.

Dubai Developers Struggle to Pay, Builder Habtoor Leighton Says

Al Habtoor Leighton Group, the construction company partly owned by Australia’s largest builder, said getting paid in Dubai remains “challenging” as the financial crisis curtails lending.

“Definitely payment, primarily in Dubai, has been very challenging,” managing director David Savage said in a phone interview. “We continue to work with our partners, clients, subcontractors and suppliers to manage the situation, but I think at the moment liquidity generally is very challenging.”

Construction companies in Dubai have been hit by a lack of financing, causing project cancellations and payment delays. About 400 projects worth more than $300 billion have been put on hold or canceled in the United Arab Emirates, Proleads Group said in July. The worst global financial crisis since the 1930s weakened demand for properties as banks curtailed mortgage lending and speculators left the market.