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Thursday, 13 August 2009

Iraq oil auction flops on investor greed

The location of Baghdad within Iraq.Image via Wikipedia

The head of Iraq's state-owned North Oil Co (NOC) expects the next auction to develop the country's oil and gas fields to be a success, provided would-be foreign investors rein in their "greed".

Iraq's first tender offer in four decades last June - which saw investors snub all but one of the eight contracts put up for auction - failed because "foreign investors were a little bit greedy", Manaa al-Obaydi told news agency AFP earlier this week.

"I think the Iraqi government put up a price, which may or may not have been fair, but the bidders came with a price that is four times as much," Obaydi said.

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EFG-Hermes Q2 profit plummets 57 pct

Egyptian investment bank EFG-Hermes posted a 57 percent fall in second-quarter net profit to 176 million Egyptian pounds ($32 million) on Thursday.

The company made 409 million pounds in the second quarter of 2008, and 140 million pounds in the first quarter this year.

Second-quarter net revenue was 382 million pounds, down from 807 million pounds a year ago, with a sharp decline in fee and commission revenue to 220 million pounds versus 570 million in the second quarter of 2008.END

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Ansari tipped to replace Duwaji at Shuaa

Dubai International Capital (DIC) Chief Executive Officer Sameer al-Ansari may replace Iyad Duwaji as the new boss at the UAE’s largest investment bank Shuaa Capital, industry sources said on Thursday.

Duwaji stepped down on Wednesday after two decades at the company, in which DIC’s sister company Dubai Banking Group (DBG) is the single biggest shareholder with a stake of 48.4 percent.

An industry source said talk of Ansari as the likely successor of Duwaji has grown.

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Saudi Stock Market Weekly Report - 12-August-2009

Kuwait bourse warns 13 companies

kuwait towersImage by hamad M via Flickr

Kuwait's bourse Wednesday warned it would suspend the trading of 13 companies if they fail to publish their second-quarter results on time. "Trading in the shares of these companies will be halted, if the financial data ... are not submitted by 8.30am on Sunday," the bourse said in a statement on its website. Aref Investment Group, Burgan Company for Well Drilling, Trading & Maintenance and Aman Investment in which Securities House owns a 43.5 per cent stake, are among the firms facing a possible trading suspension.END

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Dh908 million laundering accused to be sentenced on August 20

Dubai Court of Misdemeanor will issue sentences related to the trial of four defendants along with six Dubai-based companies accused of money laundering on August 20.

The four defendants are of UAE, British, Pakistani and Indian nationalities.

Essam Eisa Al Humaidan, Dubai Attorney-General, had referred to the Court of Misdemeanor the case of money laundering and forgery and use of an unofficial document after a team finished a two-year investigation.

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Top official and banker to run Dubai fund

Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, Wednesday appointed his top financial official and a banker who specialises in selling property to run the new fund tasked with doling out US$20 billion (Dh73.45 billion) in emergency cash to government-related companies.

Sheikh Mohammed issued a royal decree naming Abdulrahman al Saleh, director of general of Dubai’s Department of Finance, as chairman of the Dubai Financial Support Fund, which was established last month. To head the fund’s day-to-day operations, he named Marwan Iqbal Abedin, who until recently was director of marketing and originations at the Emirates National Securitization Corporation, a government-controlled investment bank that sells mortgage-backed securities and other complex debt obligations.

“The Dubai Financial Support Fund is central to the achievement of Dubai’s long term strategy for economic growth,” said Mr al Saleh in a statement accompanying the announcement. “The new Board’s primary duty will be to prepare and adopt the criteria to be used in the allocation of funds for Dubai’s strategic revenue-generating projects.”

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Rates fall after Central Bank move

The interest rates banks charge each other have fallen by about 6 per cent in the past week, since the UAE Central Bank said it would take charge of setting a new interbank benchmark.

The three-month Emirates interbank offered rate (Eibor) dropped 0.15 percentage points, from 2.45 per cent on August 4 to 2.3 per cent Wednesday.

The drop comes as lenders respond to the Central Bank’s desire for interest rates to come down after injections of Dh120 billion (US$32.67bn) into interbank lending markets and deposits at local banks.

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One small step for starters, but no giant leap

Entrepreneurship in the UAE got a major shot in the arm this week with a decree that eliminates the minimum capital requirement for new enterprises.

Under the old law, which dated back to 1984, anyone setting up a limited liability company, or LLC, in the UAE had to have paid-up capital of at least Dh150,000 (US$40,838). Somewhere along the line, the emirate of Dubai doubled its own minimum to Dh300,000. Now, entrepreneurs will decide for themselves how much they need to get a new business up and running. Conceivably, one could now set up a business anywhere in the UAE with a single dirham. And by one I mean two, because an LLC still requires a minimum of two partners, at least one of whom must be an Emirati.

Imposing a minimum level of start-up capital was a sensible requirement in theory. It ensured that new LLCs would have enough cash to get going and offered suppliers and creditors a measure of confidence they could do business with unknown start-ups without worrying too much whether they would be able to pay up. Most of all, it demonstrated a level of seriousness by the partners.

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Qatar's RasGas says Train 6 starts LNG output

Qatar and Exxon Mobil have started producing liquefied natural gas (LNG) from a new facility in the Gulf state, LNG producer RasGas said on Wednesday.

"RasGas Company Limited (RasGas) announced today that Train 6 has produced its first liquefied natural gas," it said in a statement.

The new train is capable of producing 7.8 million tonnes of LNG per year, boosting the overall LNG production capacity of all RasGas companies to approximately 28.5 million tonnes per year, it said.

UAE faces a spanner in its monetary works

The conduct of monetary policy is normally an area reserved for wonks. But this week and last, the arcana of the United Arab Emirates money markets has spilled over into the public domain.

In theory, one of the functions of the money markets is to determine a rate, usually fixed by a committee of banks, at which institutions are willing to lend to each other.

But bankers and economists say the UAE’s monetary mechanisms are not working – in spite of low official rates and a Dh50bn ($13.6bn) liquidity support facility made available last September.

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Oil refiners opt for long-term strategy

Oil refining is tough at the best of times. Operators contend with narrow profit margins, volatile markets and the tightening noose of emissions controls. With world energy demand low, many western refineries face the threat of closure.

“The refining industry is now in dire straits,” says Aileen Jamieson of Wood Mackenzie, the Edinburgh-based energy research group. “Margins are weak and are forecast to stay weak for the foreseeable future. I think we will certainly see closures in the US and Europe.”

Yet the Middle East tells a contrasting story. The past month has seen a flurry of activity, with tenders issued and contracts awarded on a range of refinery schemes. More than $60bn of new refineries or expansions are planned in the Gulf states alone.

Gulf stymies the start-up spirit

Life for budding entrepreneurs in the Gulf can be tough. Governments dominate economic life, merchant families control most of the private sector and local banks are reluctant to lend to unproved businessmen, even at the best of times.

Nor are specialised, start-up financing firms much help in the hydro-carbon rich region.

In the west, venture capital firms have backed many promising entrepreneurs with funding and guidance, helping nurture corporate titans such as Google, Apple and Genentech, the US biotechnology group.

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