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Friday, 21 August 2009

UAE investors increasingly see gold as independent asset class

Total demand for gold in the UAE dropped 19% in the second quarter of 2009 compared with a 31% fall in the first quarter, according to the World Gold Council (WGC).

Total demand for gold in the Middle East region fell by 18% in the second quarter to 72 tonnes (total demand was up 33% on the previous quarter).

The investment component of demand fell 31% to 3.8 tonnes, while jewellery off-take was 17% below Q2 2008 levels at 68 tonnes (demand for jewellery was up 37% on the previous quarter, but this was to a significant extent a seasonal improvement).

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Dubai group sells Mirvac stake

MIRVAC, the property developer, has lost its largest shareholder after Dubai group Nakheel dumped its final holding on the market yesterday in a $206 million deal.

Nakheel emerged as Mirvac's cornerstone investor less than two years ago and steadily built up its stake in the group to 12 per cent. But the group has been gradually selling down its shareholding over the past year, even though it spent $95m to participate in Mirvac's recent $1.1billion equity raising.

It made the surprise decision yesterday to quit the remaining 6.1 per cent of stock on market, prompting speculation a deal was needed to address Nakheel's financing issues in its home market.

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Lehman clients must wait a while longer…

Clients of Lehman Brothers’ European operations face further delay in recovering their assets after an English judge decided he could not approve a scheme that would help expedite the winding up of the collapsed bank’s complicated operation.

PwC, administrator of the defunct bank’s main European operations, had proposed a scheme of arrangement to divide more than 1,000 clients into three classes and allow the administrators to deal with claims by class rather than individually.

However, Mr Justice Blackburne decided that the English courts did not have the jurisdiction to modify the bank’s clients’ claims, a step which was required to sanction the scheme.

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EFG-Hermes sees stronger H2 performance by Emaar

EFG-Hermes has upgraded Emaar to a 'neutral' from 'reduce' rating in the short-term, according to a report.

The investment bank cited Emaar’s better-than-expected second quarter results and its expected stronger performance in the second half, the Khaleej Times daily reported.

EFG-Hermes said that had it not been for the one-off write-down of AED1.697bn for its US subsidiary, JL Homes, Emaar would have reported a solid net profit of Dh413m, nearly three times higher than its own estimate of AED145m.

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Case will throw light on funds before Bear Stearns collapsed

When it emerged that two of Bear Stearns' hedge funds were in trouble in June 2007, few could have realised the implications.

As word spread that the funds needed to raise $4bn (£2.4bn) to cover losses, it appeared it might be an isolated situation that could be dealt with by selling assets.

But two years on, Bear has collapsed; Lehman Brothers has been liquidated, Merrill Lynch has jumped into the arms of Bank of America and the entire global economy has faced the worst recession for 70 years.

When pinpointing the start of the downturn, most commentators agree the implosion of Bear's Credit Strategies Master Fund and its sister Enhanced Master Fund mark the beginning of a cataclysmic series of events that provoked the financial crisis.

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Gazprom, Taqa sign deal to store gas in Dutch field

OAO Gazprom and Abu Dhabi National Energy Co., the state-controlled oil and natural gas producer known as Taqa, signed an agreement for gas storage services at the Bergermeer storage site in the Netherlands.

Gazprom, Russia's gas export monopoly, will deliver cushion gas for injection into the depleted field in return for working capacity and a participating interest in operating the facility, the companies said in a joint statement today. Cushion gas is necessary to ensure that the reservoir has optimal pressure to start commercial storage operations.

Bergermeer has a storage capacity equivalent to the annual gas consumption of about 1.6 million households in the Netherlands, making it one of western Europe's largest. The estimated working volume amounts to about 4.1 billion cubic meters and commercial operations are expected to start in 2013. Bergermeer is Taqa's second gas storage project in the Netherlands. It already operates the 500 million cubic meter Peak Gas Installation in Alkmaar.

Fund managers hunt for new opportunities

Fund managers in the Middle East and North Africa region are looking for good opportunities to invest in suitable private equity ventures. Though market conditions are certainly restrictive, the notion that investors have retreated from the private equity or venture capital domains is inaccurate.

"In the global private equity scene, valuations are good but investors are shy; the exiting funds are highly leveraged, and banks are not willing to lend," says Waseem Khan, director at Silk Invest, a regionally focused boutique asset management firm which currently manages two funds specialising in the Arab and African markets.

"However, there are still great opportunities in start-ups; valuations are very good, and we can invest in companies cheaply across sectors," Khan adds.

Hurdles remain for small businesses

Potential small business owners are still required to show proof of a minimum Dh150,000 bank deposit in Abu Dhabi and Dh300,000 in Dubai to register their companies despite the August 10 Presidential Decree eliminating the requirement.

According to analysts, the law is likely to take time to be implemented at the local level since several emirates, including the largest three, Dubai, Abu Dhabi and Sharjah, have their own economic departments.

“Based on press and legal commentary so far this month, there appear to be some divergent views among business and legal professionals regarding the possible advantages and disadvantages of the new Article 227,” said Sadiq Jafar, managing partner of the Hadef & Partners Dubai office, referring to the amended minimum capital requirement article of the 1984 law.

Nakheel presses buyers for cash

Nakheel is asking investors using credit transfers for property purchases to top up their payments with cash, as it seeks to raise funds ahead of a mid-December due date for a Dh3.5 billion (US$953 million) bond.

According to brokers, the Dubai Government-controlled developer allows investors in delayed projects to sell their downpayments to other investors who have already invested in other Nakheel developments.

But now the company is no longer allowing customers to use credit transfers alone to fund instalments, and is demanding that part of the payments are made in cash, brokers say.

Mashreq takes Al Gosaibi to US court

A judge in New York will next week hear arguments in a US$150 million (Dh550.9m) case filed by the Dubai-based Mashreqbank against Ahmad Hamad Al Gosaibi and Brothers, a Saudi conglomerate allegedly hit by a huge fraud.

The case is part of a continuing tussle between Al Gosaibi and its creditors, who are monitoring the firm carefully as it undergoes a sweeping debt restructuring.Al Gosaibi has held a series of meetings, including one on Monday in Dubai, to keep banks and other creditors abreast of efforts to resolve legal issues and get to the bottom of “financial irregularities” it found in its financial services arm in June.

Al Gosaibi has alleged in court filings and elsewhere that its troubles stemmed from a $10 billion fraud committed by Maan al Sanea, the founder and chairman of the Saad Group, another Saudi conglomerate. Saudi Arabian authorities froze Mr al Sanea’s assets at the end of May, and a judge in the Cayman Islands put an additional freeze on $9.2bn of his worldwide assets this month.

Iran spurns US threat over petrol imports

The Iranian president, Mahmoud Ahmadinejad, has shrugged off possible US sanctions targeting its petrol imports, stepping up anti-US rhetoric amid the post-election tumult that threatens the legitimacy of his government.

In remarks reported by Islamic Republic of Iran Broadcasting, a state-run radio station, Mr Ahmadinejad said Iran “broke down” previous punitive measures against his regime and talk of a petrol embargo showed how “politically backward” its foes were.

“The Iranian nation is no longer afraid of any threat or sanction,” the semi-official Fars news agency quoted him as saying.

Dubai festival rescues retailers

The good news for Dubai retailers is that sales at the emirate’s malls rose by 17 per cent during Dubai Summer Surprises (DSS); the bad news is many individual retailers report sales have declined in the same period.

The increase in sales can largely be attributed to a nearly 30 per cent boost in shop space in the past year, according to the Dubai Shopping Malls Group (DSMG).

Total revenues at 23 shopping malls across Dubai in the 65-day festival, which ended on August 14, were Dh1.49 billion (US$406 million), up from Dh1.27bn at 21 participating centres last year.

Ramadan starts in UAE on Saturday Aug. 22nd, 2009

The United Arab Emirates has announced Saturday, Aug. 22nd, 2009 as the first day of the Holy Month of Ramadan.

Minister of Justice and Head of the Ramadan Crescent Moon Sighting Committee Hadef Jua'n Al-Dhaheri, in a statement said, Friday Aug 21st, 2009 will be the 30th day of the Hijri (lunar) month of Sha'ban, month preceding Ramadan, and therefore Ramadan will begin on Saturday August 22nd, 2009.

Following contacts with neighboring countries, following the traditional methods of observation and the credible technical capabilities used over the past years, the new moon signifying the arrival of Ramadan was not visible and therefore the start of Ramadan was determined to be on next Saturday, Al-Dhaheri explained.

"Ramadan kareem, to all readers."