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Wednesday, 19 August 2009

Makaseb Monthly Commentary for July 2009 (PDF)

Saudi Stock Market Weekly Report - 19-August-2009 (PDF)

BBC NEWS | Business | PetroChina in huge Australia deal

BBC NEWS | Business | PetroChina in huge Australia deal

UAE to launch new interbank rate in Sept

The UAE Central Bank will introduce an official interbank offered benchmark rate mechanism in the first half of September, a treasury official said on Wednesday.

"To finalise the project it will probably take until the first half of September," Mohamed al-Tamimi, assistant executive director of the central bank's treasury department told news agency Reuters.

The central bank said earlier this month it was mulling the introduction of a new Emirates interbank offered rate mechanism, citing its concern that current rates did not reflect the market.

The bank will apply its official overnight repo rate for one month, instead of one week, to make it easier for banks to utilise the facility and in an effort to bring down interbank lending rates, Tamimi said.

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Kuwait looks to revive U.S. refinery project

Kuwait may revive plans to build a joint venture refinery in Louisiana after the Gulf Arab state cancelled last year a joint venture deal with U.S. petrochemical giant Dow Chemical Co, Al-Watan newspaper reported on Wednesday.

The joint-venture refinery project in Louisiana would be considered compensation to the U.S. for cancelling the Dow project, the paper reported, citing unidentified sources.

Kuwait and the state of Louisiana signed in 2006 a memorandum of understanding to add refining capacity in the southern state.END

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Dubai reviews $4.5 bln Malaysian investment

Dubai World is reconsidering its investment in a 16 billion ringgit ($4.5 billion) Malaysian maritime centre with MMC Corp, as the global financial downturn impacts the government-owned conglomerate's overseas projects.

"As a consequence of the economic crisis that had negatively impacted the global community including Dubai, Dubai World is reassessing its priorities with respect to its investment allocation," the Malaysian power producer and port operator said in a statement on the Kuala Lumpur bourse website.

"Hence, there is no further progress on the MoU since the last announcement in May 2009," it said.

Dubai World was not immediately available for comment on Wednesday when contacted by news agency Zawya Dow Jones.END

From 28th May, 2009:
http://rupertbumfrey.blogspot.com/2009/05/malaysias-mmc-says-dubai-world-reviews.html

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Bird and Fortune - Subprime Crisis (Video)

United Arab Emirates: Dubai expatriate allure fading

Subject: Questions over Dubai's continued attractiveness to Western expatriates.

Significance: Dubai's reputation as an open, Western-friendly Arab country has suffered setbacks over the past few months as the negative impact of the financial crisis has been compounded by a series of new legal measures and changing social norms. This could have a significant impact on Dubai's ability to attract foreigners from the West. Go to conclusion

Analysis: Dubai has built a reputation for being an innovative global centre for tourism and business. However, its ability to maintain this is in doubt with the advent of the financial crisis and rising unemployment among its native population, coupled with heavy debt burdens due to bailouts by its more conservative neighbours, Abu Dhabi and Saudi Arabia. The cost-benefit analysis that goes into expatriates' decisions to relocate to Dubai is shifting as the benefits become fewer and the costs -- in terms of giving up rights and lifestyle -- increase.

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Dow Jones to measure Shariah indices in Mena

Dow Jones Indexes yesterday launched an additional set of conventional and Shariah-compliant indices measuring the performance of stocks listed in the Gulf Co-operation Council (GCC), Middle East and North Africa (Mena).

The four benchmarks are the Dow Jones GCC Index, Dow Jones GCC Islamic Market Index, Dow Jones GCC Titans 50 with Saudi and Dow Jones Islamic Market Mena indices.

The Gulf indices include companies from all six member states of the GCC.

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Moderate reforms save GCC banks from global crisis

Gulf banks have been only slightly affected by the financial turmoil because of massive local investment opportunities during the boom period and the slow pace of reforms in the region, a key Saudi fund said yesterday.

Apart from losses by a handful of banks and other financial institutions in the six-nation Gulf Co-operation Council (GCC), the banking sector has remained relatively safe from the devastating repercussions of the crisis that has jolted giant banks worldwide, NCB Capital said in a study.

It noted that the number of GCC financial establishments that has been hit by the financial crisis has been limited, citing such institution as Kuwait's Gulf Finance House, which incurred the maximum loss of around $1.4 billion (Dh5.1bn) on a derivatives deal.

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Presence of all witnesses sought in Deyaar case

The Dubai Criminal Court yesterday adjourned hearings to September 15 in a case about financial irregularities at real estate firm Deyaar, asking the defence lawyer to produce all his witnesses together in the next session.

Presiding judge Al Saeed Bargouth refused to hear the testimony of the only defence witness present in court, Terry Thomas. Earlier, defence lawyer Dr Habib Al Mulla, had petitioned the court to hear the testimonies of three witnesses in support of his client – UAE national SA – the main accused in the case.

The court had adjourned twice before when the witnesses failed to appear. In yesterday's hearing, only one of the three defence witnesses – Thomas – appeared in court while the other two were absent. The court demanded that all witnesses attend in the same session to give their testimonies to prevent repeated adjournments.

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Credit Suisse starts new regional equities fund

Investment bank Credit Suisse Tuesday launched a new regional equities fund targeted at both retail and institutional investors.

The launch of the Credit Suisse SICAV One (Lux) Equity Middle East and North Africa Fund coincides with a period of volatility in the region's stock markets and the global meltdown.

However, the Middle East region, and particularly the Gulf countries, are well placed to emerge with a positive growth outlook, benefiting from their natural resources, demographic trends and government and foreign investment in the economy.

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Dubai exports show growth in Q2

Dubai’s exports grew 6.5 per cent to Dh46.5 billion in the second quarter of 2009 compared to the previous three months, according to the Dubai Chamber of Commerce and Industry.

Exports to the GCC totalled Dh21.8bn, accounting for 47 per cent of the total shipments during the second quarter, ending in June.

“Despite the global economic downturn, monthly exports followed the moderately increasing pattern defined over the period prior to the dramatic surge in exports in the latter part of 2007 and into 2008,” said Hamad Buamim, director general, Dubai Chamber.

Al Gosaibis raise the stakes in Saad Group affair

While the European bankers head off to the Mediterranean and the Arab world prepares for Ramadan, the stakes in the biggest financial scandal to hit the Middle East are being slowly wound up. Neither the al Gosaibi family of Saudi Arabia, nor their erstwhile confidant Maan al Sanea, will have much time for relaxation, though.

New readers start here: Mr al Sanea is a Kuwaiti-born entrepreneur who married into the wealthy al Gosaibi dynasty of Al Khobar in Saudi Arabia and built his own multibillion-dollar business, the Saad Group.

Earlier this year, tensions between them exploded into the open when two Bahraini banks were unable to meet loan repayment schedules. The al Gosaibi family has since claimed it was the victim of a US$10 billion (Dh36.73bn) fraud by Mr al Sanea.

Battle against corruption lays new foundation - Opinion

While the sharp decline in Dubai’s property prices wreaked havoc on investment portfolios, the overall effect should be a boon to the city in the long term. The cause may have been the global credit crunch, but the market was overdue for a correction. As painful as they are, downturns bring economies back to their senses. And like the aftermath of any cataclysm, the first order of business is to clean house.

The downturn exposed financial misdeeds that were either masked by the boom or ignored while times were good. The phenomenon was most evident on Wall Street, where fraudsters such as Bernie Madoff were finally exposed, but our region was not unaffected. Dubai authorities had begun investigating reports of fraud, bribes and embezzlement as early as March 2008 as part of a push to tackle corruption and boost transparency and investor confidence. In some ways the global financial crisis, as devastating as it has been, aided these efforts.

Only two months after Dubai formally revealed its campaign to investigate white collar crimes, the financial crisis hit the UAE, sending property prices plummeting. What investigators discovered afterwards was astounding. Cases of fraud and misappropriation of funds accounting for more than Dh3 billion are being investigated by the authorities, as The National reports today. It would seem that the allure of easy money was too much temptation not only for some private borrowers, but also for high-powered executives, some 34 of whom are being investigated or have had their day in court since April.

Corruption inquiries total Dh3.6bn

More than a year ago, Dubai quietly launched a wide-ranging anti-corruption investigation to revitalise investor confidence in the emirate.

The results of the operation so far, revealed to The National, are staggering: 11 investigations or court cases are under way; 34 executives are either in court or on their way there; and Dh3.58 billion (US$950 million) has allegedly been stolen or used as bribe money, according to files from public prosecutors that give the first overview of the whole operation.

Since March 2008, investigators appointed by the Dubai Government have been looking into executives from some of Dubai’s leading real estate and financial firms, a move acknowledged by the Government for the first time a year ago this week. In an online question-and-answer session earlier this year, Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, said the reason was simple: “No one in the Emirates is above the law and accountability.”

Saudi economy, banking system solid, says IMF

Saudi Arabia's economy remains solid and its banks have weathered the global crisis, the IMF said in a report on Tuesday which also commended the world's leading oil exporter for helping stabilise oil prices.

"The outlook remains broadly positive" despite a projected one percent contraction in GDP this year due to lower oil production, the International Monetary Fund executive board said in the report.

It noted that non-oil GDP, which points to the ability of the economy to create jobs, is expected to grow 3.3 percent this year on the back of a massive government capital spending programme.

Wealth funds merge forces to invest

An increasing number of sovereign wealth funds are working in concert to make joint strategic investments in order to reduce risks and maximise returns, which could provide a stabilising force in financial markets.

State-owned funds from China, Singapore, Malaysia, Korea, Abu Dhabi and Kuwait are among those which have recently signed agreements to form investment partnerships with each other.

These partnerships will enable state-owned funds to optimise local knowledge, leverage capital, spread investment risks and maximise returns.

Hordes of Al-Gosaibi lawyers meet in Dubai

About 100 bankers and lawyers met in Dubai Monday night with representatives of Ahmad Hamad Al-Gosaibi and Brothers Co, a Saudi conglomerate that's trying to restructure about $9 billion of debt, according to people familiar with the matter.

Creditors at the meeting were given a legal overview and shown details of alleged fraud by Maan al-Sanea, a senior executive at one of Al-Gosaibi's financial services units and chairman of Saad Group.

"The Al-Gosaibi family made clear that they are intent on holding Maan Al Sanea accountable and working with the banks to secure a just outcome," a spokesperson for the Al-Gosaibi group told the news agency Zawya Dow Jones, referring to the meetings.