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Saturday, 5 September 2009

Saudi Central Bank Won’t Buy Algosaibi, Saad Debt

Muhammad al-Jasser, Saudi Arabia’s central bank governor, said the bank won’t buy up debts from two family businesses that defaulted after borrowing more than $15 billion.

“Absolutely not,” al-Jasser said when asked whether the Saudi Arabian Monetary Agency would buy up the debt of Ahmad Hamad Algosaibi & Bros. and Maan al-Sanea’s Saad Group from local banks. He spoke to Bloomberg News at a meeting of central bank governors and finance ministers of the Group of 20 countries in London today.

Units of the two groups have borrowed at least $15.7 billion from more than 80 regional and international banks, including Paris- based BNP Paribas SA, New York-based Citigroup Inc. and Arab Bank Plc in Amman, Jordan, according to documents provided by lenders. About $5 billion of that is owed to Saudi banks, Standard Chartered Plc said in an Aug. 26 report.

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Saudi Arabian Shares Gain for First Time in Six Days

Saudi Arabian shares gained for the first time in six days as the U.S. reported a slowdown in the pace of job losses, fueling hope that economic recovery is in sight.

The Tadawul All Share Index gained 1 percent to 5,670.92, the biggest advance since Aug. 24.

“Right now Saudi’s market is taking its cue from continued optimism from an ongoing global recovery,” said Akram Annous, deputy fund manager at Al Mal Capital PSC. “But I would keep an eye out for a continuing weakening in crude prices moving forward.”

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Chinese JV bags $720 mln Saudi rail deal

Saudi Railway Co (SAR) has awarded a 2.7 billion riyal ($720 million) contract to a consortium that includes China Civil Engineering Construction Corp to build a rail link, a senior executive said on Saturday.

The group includes Al-Ayuni Trading and Contracting Co and Al-Abdulaziz al-Omer Establishment for Trading and Contracting, said Abdulrahman al-Hoari, finance manager at Al-Ayuni.

The contract involves civil works for the 500 km rail section linking the capital Riyadh to Al-Qassim, part of the mega North-South rail project. The Chinese firm will build the metal tracks.

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Oil India, Partners May Invest $5 Billion in Iran Gas Block

Oil India Ltd., the nation’s second- biggest state-run explorer, said it may invest $5 billion with its partners to develop a natural gas field in Iran.

The expenditure on the offshore Farsi block may be incurred over seven to eight years and the grouping is in talks with the National Iranian Oil Co. over a contract to develop the field, according to Oil India’s share-sale document.

“We are still thinking whether we should invest and we are talking to Iran,” B.N. Talukdar, director of exploration, told reporters in New Delhi today. “It’s a lot of money. We can only get a service contract which offers a fixed rate of return.”

Oil India has a 20 percent share in the grouping. ONGC Videsh Ltd., the overseas investment arm of Oil & Natural Gas Corp., and Indian Oil Corp., the nation’s largest refiner, own 40 percent each.END

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The west plays Gaddafi’s game

Whether or not Libya’s Colonel Muammer Gaddafi considers himself a Leninist, there are plenty of capitalists eager – as Lenin predicted – to sell him the rope to hang them with. It is the government of Gordon Brown that has suffered most since Kenny MacAskill, the Scottish justice minister, authorised an early release for the ailing terrorist Abdelbaset al-Megrahi. A Libyan intelligence operative, Mr Megrahi was convicted eight years ago of involvement in the 1988 bombing of Pan Am flight 103 over Lockerbie, which left 270 dead. It seems unlikely the decision would have been made without the intercession of business. In July, the Libyan British Business Council, chaired by Lord Trefgarne, warned Mr MacAskill that the prospect of Mr Megrahi’s dying in prison was of “grave concern”.

You would think Col Gaddafi would be under a cloud. But no. He is now celebrating the 40th anniversary of the coup that brought him to power and preparing to visit New York as a Libyan takes over the presidency of the United Nations General Assembly. The Swiss daily Le Temps recently described Mr Gaddafi as a “master of manipulation”. But western politicians and businessmen are not being outsmarted by Col Gaddafi. They are caving in to him.

Over the past fortnight, Switzerland has subjected itself to a humiliation at Col Gaddafi’s hands alongside which Britain’s pales. Fourteen months ago, the colonel’s son Hannibal was arrested in Geneva on suspicion of beating two of his servants in the Hotel Président Wilson in Geneva. He has been in similar trouble before. In 2005, he was arrested for brandishing a 9mm semi-automatic pistol at police in the Intercontinental in Paris. Libya has generally extricated him by claiming diplomatic immunity.

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Post-Ramadan rally harder to justify

Last September, as the world tilted from an international financial crises into a global recession, analysts and fund managers were still hopeful that the return of retail investors to the UAE markets after their summer holidays would save the emirates.

They were relying on the retail investors to fill the void left by foreign traders to perk up the markets.

But that never happened - and UAE markets slid with the rest of the world.

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Tadawul may be closing windows to open doors

Saudi Arabia likes to play hard to get with foreign investors, restricting ownership of companies on its stock exchange to its own citizens and those of the UAE and other Gulf Cooperation Council states.

The authorities are carrying that diffidence to a new extreme in a dispute with MSCI Barra, a compiler of stock indices followed by professional investors around the world. The subject matter probably will seem trivial to anyone who does not create indices or operate a stock exchange for a living, but the disagreement may have significant implications – possibly bearish, but more likely, if unexpectedly, bullish – across GCC markets and especially in the UAE.

Here are the details: The Saudi exchange, known as Tadawul, has threatened to withhold market information from MSCI unless it promises to seek the exchange’s approval before licensing indices that use the information to third parties that create financial products, such as exchange-traded funds. MSCI has counter-threatened, saying it would drop Saudi stocks from its Middle East indices.

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Fitch affirms Nakilat bonds

Global credit rating agency Fitch has reaffirmed Nakilat’s Series A senior secured bonds at ‘A+’, and subordinated second priority secured bonds at ‘A-’ with a stable outlook.

The affirmations to the bonds, due 2033, reflect the stable performance of the underlying project in line with vessel delivery expectations and the charterers’ construction schedule, according to Fitch spokesman.

The bonds are part of a debt that would finance 90% of the $7.46bn estimated delivered costs of 25 large LNG tankers that will be chartered to upstream LNG projects in Qatar.

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Let-down in Libya

* (en) Libya Location * (he) מיקום לובImage via Wikipedia

Doing business with Muammer Gaddafi is a perilous task, as the release of Abdelbaset Ali al-Megrahi, the Lockerbie bomber, has painfully demonstrated in Britain.

Libya’s mercurial colonel operates under the assumption that he can do as he pleases as long as he stays clear of funding terrorists or building weapons of mass destruction. Sadly, politicians have been willing to indulge him.

But now the Libyan leader is taking his mischief to a new level, imposing restrictions on foreign businesses dazzled by Africa’s biggest proven oil reserves and the promise of an impressive under-explored territory.

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