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Wednesday, 2 September 2009

RAK seizes $800 mln failed realty project

The Ras Al Khaimah government said on Wednesday it has seized control of Khoie Properties, the failed developer behind an $800 million real estate project in the UAE emirate.

Rakeen, owned by the emirate's sovereign wealth fund Ras Al Khaimah Investment Authority (RAKIA), has taken over legal custodianship of Khoie and the La Hoya Bay project following a court order, RAKIA said.

Khoie has become insolvent after defaulting on land payments and failing to deliver properties to buyers.

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Qatar to become largest LNG supplier to China

Qatar is set to become the largest supplier of liquefied natural gas to the huge Chinese market, according to Fu Cheng Yu, Chairman of the Board of Directors of China National Offshore Oil Company (CNOOC).

“China will soon become the largest LNG market in the world. That is why as the world’s largest LNG supplier, Qatar should have its market share in China matching its supply capacity,” Fu Cheng Yu told reporters here on Monday evening.

He was speaking at the signing ceremony of a 25-year Exploration and Production Sharing Agreement (EPSA) for Qatar offshore Block ‘BC’ (Pre-Khuff) between Qatar Petroleum (QP) and CNOOC Middle East (Qatar) Ltd, a subsidiary of CNOOC. “Together with QP and Qatargas, we are confident that Qatar will have the largest market share of LNG in China compared to any other supplier around the world. If we both work together properly, I have full confidence that for the next 5 to 10 years you will see Qatar’s largest LNG market will be China,” said Fu Cheng Yu. CNOOC alone would need to import from 40 million tonnes to some 60 million tonnes of LNG by 2020, according to company estimates, he said.

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Aabar posts $594 million loss for Q2

Aabar Investments, the Abu Dhabi Government-backed investor, swung to a loss of Dh2.18 billion (US$594 million) in the second quarter after using derivative financial instruments to soak up risks from its acquisition in the luxury car maker Daimler.

The loss caps a period of frenetic investment for the group, which has seen it take stakes over recent months in Daimler and Sir Richard Branson’s Virgin Galactic space travel venture, and helped its stock price increase by half since the beginning of the year.

Aabar booked provisions of Dh2.2bn for losses from derivative instruments during the period. It had reported a Dh546m profit a year earlier.

JP Morgan assigns overweight rating to Aldar

The investment bank JP Morgan has rated Aldar Properties as overweight and said the company is its top pick in its coverage of the UAE property sector.

“Aldar Properties is Abu Dhabi’s largest property developer with a diversified construction portfolio and 37 per cent sovereign ownership,” Harm Meijer said in a MENA report dated today. “Despite the company’s relatively high debt our preference for ADX-listed Aldar is premised on our expectation for rising contributions of recurring income to its top line from investment properties relative to its local peers.”

Mr Meijer said he expects the company’s income for 2009-2012 will form nearly 19 per cent of Aldar’s bottom line, well above the averages of 10 per cent for Emaar and Sorouh.

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MSCI drops Saudi stocks after row

The global data provider MSCI will pull Saudi stocks from its indexes after refusing to comply with a deadline set by the Saudi bourse to resolve a month-long spat, which might concern some foreign investors.

The Tadawul had set the Monday midnight deadline in demanding veto rights over the composition of certain indexes compiled by MSCI.

The decision could threaten the international appeal of the kingdom’s capital markets as it seeks to attract greater foreign investment.

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UAE delays bank reserve-increase target - cbank (Update)

The United Arab Emirates central bank has delayed bank targets for increasing capital reserves as a buffer for surprise losses and changed the proportion of Tier 1 capital which banks need to set aside.

The rule, which will initially require banks to maintain a Tier 1 capital adequacy ratio of 7 percent, was added as a measure of "prudence and caution", the central bank said, as it strives to restore confidence among lenders and spur lending.

A circular issued by the central bank on Sunday, obtained by Reuters, said banks should work toward increasing their overall reserves to 11 percent by September 30 and that the Tier 1 component should be at least 7 percent.

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Banks for Sale! (Re-post)

After reading Adel’s most recent post which suggested going long GCC banks because they are lagging the rally; I decided to further examine the claim. To identify laggard banks, I put together a comparative chart of GCC banks P/BV multiples as of Sept 1st to country/GCC means:

As Adel implied, Qatari banks had their share in the rally which is evidently reflected in their high P/BV multiples. Kuwaiti banks have always traded at a premium, but we got a multiple of 2.47x after omitting Gulf bank’s figure. Boubyan bank is trading at an acquisition premium, hence justifying the high multiple. I believe Burgan Bank is trading at an attractive level. UAE banks seem to be the most attractive, but we have to take a closer look at the quality of their loan books.

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Murdoch in talks for Saudi media stake

News Corp is in talks with Saudi billionaire Prince Alwaleed bin Talal to take a stake in Rotana Media, marking its first major investment in the Middle East, according to people familiar with the deal.

The company, headed by Rupert Murdoch and publisher of this news wire, may buy a 20 percent interest in Rotana from Prince Alwaleed, who controls Saudi conglomerate Kingdom Holding Co, a person involved with the deal told the news agency Zawya Dow Jones.

It's not clear at this stage whether the deal will be for existing stock, or new shares. A formal bid valuing the stake is expected this month, the person said, without giving specifics on price.

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UPDATE 1-Dubai's Istithmar working on Barneys finances

Dubai's Istithmar World is working to improve Barneys New York's financial situation and is committed to the retailer despite tough market conditions, the Dubai-based group said on Tuesday.

Barneys is seeking a debt restructuring or bankruptcy filing, which may lead to owner Istithmar losing control over the retailer, media reports had said.

"Istithmar remains fully committed to Barneys and supportive of its management team," the Dubai-based firm said in an e-mailed statement. "These are challenging times for retailers, and the company continues to work aggressively to improve its financial position."

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DFM Seeking: A New Leader (Re-post)

Emaar PropertiesImage via Wikipedia

Here’s an interesting article in Arabic (30th August) about “The Sheikh of UAE Stock,” Emaar Properties. The article surveys the views of several UAE stock analysts and the reports and opinions of various banks and finance houses.

Naturally, the writer focused on the Worst Is Over views out there, and on the expected possibility that 2010 is a new year, and the birth of a new bull market in real estate. A big deal was made of some analysts’ views that this year’s write-offs by EMAAR are the final bad news shareholders will live with in the foreseeable future. Thankfully, the negative views of some investment houses and analysts regarding the expected merger of Emaar with one or two other of Dubai’s toxic real estate companies, were included in the article. Their view is that the current estimated book value of Emaar at 4.19 or something will look quite… expensive in comparison to what may happen after a “merger”

The way things stand at the moment: Let’s have a look at EMAAR.

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