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Tuesday, 25 August 2009

Saudi money supply growth slows 15.3 pct

The annual growth in Saudi Arabia's M3 money supply fell for a third month in a row in July to 15.3 percent, as loans to the private sector posted their lowest annual expansion in at least three years.

Bank claims on the private sector, a key indicator of lenders' confidence in the economy, stood at 728.84 billion riyals in July, inching up from 728.7 billion riyals in June, according to data published by the Saudi Arabian Monetary Agency (SAMA) on Tuesday.

In terms of annual growth, bank claims on the private sector slowed to 3.6 percent in July, down from 5.6 percent in June.

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Dubai commercial property prices 'to continue slide'

Commercial property prices in former boomtown Dubai in the United Arab Emirates are set to slide even further, consultancy firm Jones Lang LaSalle said in a report on Tuesday.

Although the rate of decline in office rental prices slowed in the second quarter from the previous quarter, they are still poised to fall further because of increased market supply, it said.

"The Dubai commercial property market is becoming more competitive on a global scale as falling rents and increased vacancy make the city more attractive to potential tenants," the report said.

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Yahoo Buys in Mideast Push

Yahoo, owner of the second-most popular Internet search engine in the United States, agreed to buy Arabic-language Internet venture as it seeks to enter the Middle East market, Bloomberg News reported.

Yahoo, which announced the acquisition Tuesday at a press conference in Dubai, did not disclose the terms of the agreement. The transaction is set to be completed in the fourth quarter of this year.

“Yahoo sees tremendous growth opportunities in the region,” Keith Nilsson, Yahoo’s senior vice president and head of emerging markts, said at the press conference. “Maktoob is a terrific local brand. Yahoo will be combining its global technology and Maktoob’s local Arabic content.”

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Shuaa Capital Puts Dubai Fund's Al Ansari As New CEO

-Sameer Al Ansari, the head of Dubai International Capital, has been appointed as the new chief executive of Dubai-based investment bank Shuaa Capital (SHUAA.DFM) and is currently working under the supervision of his predecessor Iyad Duwaji, Al Riyadh daily reports Tuesday.

Duwaji, who resigned earlier this month, is temporarily assisting Al Ansari in his new role to ensure "a smooth transition,", the people familiar with the matter told the Saudi daily.

In February, Al Ansari became joint-chairman of Dubai Holding Investment Group, a new entity set up by the government. Al Ansari was an architect in the formation of Dubai International Capital.

A Shuaa spokesman wasn't immediately available for comment.

Newspaper Web site:

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Gulf Cash Could Support Virgin BMI Buy

Virgin Atlantic's reported interest in acquiring BMI British Midland from Deutsche Lufthansa AG (LHA.XE) leaves open the question of how Virgin could fund such a deal.

As a private company, numbers for Virgin are hard to come by. But funding could depend on the appetite of Gulf investors, who are unlikely to stay on the sidelines of airline consolidation for long.

Of the two potential BMI bidders, British Airways PLC (BAY.LN) and Virgin Atlantic, the latter is the more likely. As RBS notes, funding is a constraint for both airlines. But with third-party investors' support, buying BMI - a short and medium-long haul airline with a sizeable number of takeoff slots at London's Heathrow airport - could become a reality for Virgin.

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No merit in Ahab counter claim, says Mashreq

Even as the Saudi conglomerate Ahmad Hamad Algosaibi and Brothers Company (Ahab) was getting set to file a counter-claim against Mashreq in the Supreme Court of the State of New York, the Dubai-based bank last night termed Ahab's move as "outrageous" and "without merit".

Mashreq had earlier sued Ahab and its Bahrain-based subsidiary The International Banking Corporation for the alleged non-payment of two currency swaps worth $150 million (Dh550m) and $75m and, subsequently, sued Ahab's individual partners, seeking an attachment of their assets. Yesterday's filing was in relation to the individual partners' case, but the two cases are related.

The latest salvo fired by Ahab accuses Mashreq of "aiding and abetting the fraud of [Saad Group founder Maan] Al Sanea by being wilfully blind to the ultimate purposes of transactions on which the bank was making excessive profits," said Eric Lewis, Partner at Baach, Robinson, and Lewis, and legal counsel to Ahab.

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UAE money supply shrinks as consumers hold back

Banks in the UAE are lending less while consumers may also be spending less despite a summer sales offensive from retailers, according to new economic data.
Lending fell last month as banks remained cautious about extending their loan books at a time when bad loans from defaulting customers are increasing, central bank data show.

At the same time, a key measure of money supply in the UAE, which takes account of currency in circulation and monetary deposits, shrunk for the second month running in July, indicating a slowdown in consumer spending and a possible easing in inflationary pressure.

“Many people have overspent and you can only guess that there are debt-ridden consumers who are cutting back on their spending,” said Eckart Woertz, an economist at the Gulf Research Center. “This also shows a reluctance on the part of banks to lend,” he said.

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Fund chief to redraft business landscape

Marwan Abedin is not exactly a household name, but he is now very likely one of the most influential men in Dubai.

A career banker, Mr Abedin was appointed earlier this month to run the new Dubai Financial Support Fund (DFSF), the agency that will oversee how Dubai’s US$20 billion (Dh73.46bn) in emergency funds are disbursed, deciding which of the companies in the Dubai Inc stable receive how much, and under what conditions.

He will be determining which government-controlled companies must swallow their weaker counterparts and which are swallowed – and presumably which will live or die.

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SEC eases hold on two Gulf banks

The US Securities and Exchange Commission (SEC) has agreed to reduce the scope of an asset freeze against two Gulf firms named in an insider trading case.

The Bahrain-based United Gulf Bank (UGB) and the Kuwait-based Kipco Asset Management Company both had assets in US bank accounts frozen after the SEC charged that Hazem al Braikan, a Kuwaiti businessman, used the accounts as part of a share manipulation scheme.

Mr al Braikan allegedly used Kipco and UGB accounts, as well as accounts owned by Al Raya Investment Company, the Kuwaiti firm where he was chief executive, to buy large amounts of stock in Harman International Industries, a maker of high-end audio equipment, and Textron, a manufacturing conglomerate. He then is alleged to have planted fake stories about takeovers of both companies, leading to a jump in their share prices.

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Kuwait govt to pay privately-sacked workers

The government of oil-rich Kuwait decided on Monday to pay lucrative benefits to citizens who have been dismissed by private sector companies because of the impact of the global economic meltdown.

The council of ministers agreed Kuwaitis who have lost their jobs since August last year will receive 60 percent of their final pay monthly plus 220 dinars ($765) for a maximum of a year in arrears or until they find a new job.

It will be the first time Kuwait has paid out such unemployment benefit.

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A vast fun-park dream stalls in Dubai's downturn

Walk through the grand arched entrance of Universal Studios' Dubai theme park, and you step into ... wind-swept desert.

No Hollywood thrill rides, no ticket kiosks, no studio backlots. Even the guard house and the construction office sat empty during a recent visit.

The planned park is part of a vision by Dubai officials to turn a patch of sand on the edge of the Mideast city-state into Dubailand — a vast amusement complex twice the size of Walt Disney World studded with theme parks including Universal Studios, Six Flags and Legoland, along with resorts, the world's biggest shopping mall and the first golf course designed by Tiger Woods.

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Dubai developer raises cash by ‘credit notes’

Nakheel, a troubled real estate developer owned by the government of Dubai, is quietly raising cash by processing what people are calling “credit notes” in respect of developments it has delayed or cancelled, according to brokers and executives.

Dubai Waterfront, a development that was planned to be twice the size of Hong Kong island, and Palm Jebel Ali, an offshore island, are the main projects where Nakheel is offering its customers consolidation deals on selected properties.

The growing use of these transactions comes as the developer, arguably the most high-profile victim of the Dubai property crash, seeks to raise $4bn needed to settle a $3.5bn Islamic bond, plus profits, due in December, and to meet invoices from contractors and suppliers. Thousands of “credit notes” have been issued since April, as the developer seeks to shrink its $80bn project portfolio and to cut expenditure, the brokers say.

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Israel springs interest rate rise

The Bank of Israel on Monday became the first leading central bank to raise interest rates since the global economic crisis intensified last September, increasing its policy rate from 0.5 per cent to 0.75 per cent.

Stanley Fischer, governor of the Jerusalem-based bank, lifted the rate in a move unexpected by many economists. The increase was the first since July 2008 for the central bank, which had cut its key rate by 3.75 points from last October to March.

The bank said its decision “strikes a balance between the need to moderate inflation and the need to continue to support the recent recovery in economic activity, given that unemployment is expected to continue increasing in the next few months. Setting the interest rate at the low level of 0.75 per cent continues to represent an expansionary monetary policy.”

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Lending in Gulf plunges as banks play it safe

International banks stress their commitment to the Gulf region and local houses insist they will continue to lend to support sagging economies, but syndicated lending has nonetheless plunged this year.

So far this year, only $22.8bn of syndicated loans, project finance and bonds have been issued in the Middle East, down from $85.5bn last year and a peak of $126.9bn in 2007, says Dealogic, a data provider.

The slump is understandable. International banks are under pressure from investors to cut lending, and many governments want their banks to favour the home market, rather than the Middle East.

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