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Monday, 7 September 2009

Abu Dhabi to Buy Chartered Semi for S$2.5 Billion

Abu Dhabi agreed to buy Singapore’s state-controlled Chartered Semiconductor Manufacturing Ltd. for S$2.5 billion ($1.8 billion) to create a challenger to the world’s second-biggest maker of customized chips.

Advanced Technology Investment Co., an investment company owned by Abu Dhabi, will pay S$2.68 ($1.86) a share in cash for Chartered Semiconductor, ATIC said in a Business Wire statement today. That compares with the closing price of S$2.66 on Sept. 4, and is 14 percent more than the company’s 30 trading-day volume weighted average price. Singapore’s Temasek Holdings Pte, owner of about 62 percent of Chartered Semiconductor, backs the deal.

Abu Dhabi plans to combine the maker of chips used in Microsoft Corp.’s Xbox 360 game console with Globalfoundries Inc., a venture ATIC created with Advanced Micro Devices Inc. last year. Temasek is ending a 22-year investment in the unprofitable company, which has eliminated workers and cut overtime to reduce costs.

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UAE to join hands with 82 nations to fight dirty funds

The UAE said yesterday it will sign new anti-money laundering agreements with 82 countries as part of an intensified strategy to combat dirty funds.

The National Anti-Money Laundering Committee (NAMLC) discussed the plans at a meeting that also covered recent cases of currency fraud and other issues.

The Central Bank, which organised the meeting in Dubai, said the committee heard that a memorandum of understanding (MoU) had so far been signed between the anti-money laundering unit and 21 countries.

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Masdar Institute to get $1.2b funds

The government of Abu Dhabi plans to invest as much as $1.2 billion (Dh4.41 billion) in the Masdar Institute of Science and Technology, the world's first graduate academic institution dedicated to the research of alternative energy, environmental technologies and sustainability, the chief executive officer of Masdar (Abu Dhabi Future Energy Company) said yesterday.

"That's the total budget until the end of 2018 for the Masdar Institute," Dr. Sultan Al Jaber told Gulf News. In a statement, Masdar said lectures at the institute in Abu Dhabi began yesterday for the first batch of 92 graduate students. The students were selected from more than 1,200 applicants from 82 countries.

The students, who represent 22 nations, are part of Masdar Institute's two-year Master's programme, which offers five multidisciplinary specialised areas geared towards the research and development of alternative energy and sustainability. The UAE has 13 per cent of the total students.

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State-run pension fund increases investment in seven companies

Saudi Arabia's state-run pension fund spent 1.26 billion riyals to raise its stake in seven companies as it seeks to expand investments and benefit from a market rally, NCB Capital said.

The General Organisation for Social Insurance, also known as Gosi, increased its stake in Saudi Arabian Fertiliser Co, Saudi Arabian Mining Co, Savola Al Azizia United Co, Jabal Omar Development Co, Southern Province Cement Co and Qassim Cement Co, NCB Capital said in an e-mailed report on Saturday. The fund also bought into Saudi National Petrochemical Co.

Gulf countries, including Saudi Arabia, are using their sovereign wealth funds to expand their investments at home and abroad as they diversify their economies away from oil and seek to increase trading on local exchanges. The Saudi bourse, the biggest stock exchange in the Middle East, advanced as much as 18 per cent this year after losing more than half its value in 2008 as oil prices dropped.

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UAE economy to post 3% growth

Stocks in the UAE hit a three-month high yesterday after a government minister predicted the economy would expand this year, countering widespread expectations of a contraction.

The country’s economy is on track to achieve 3 per cent growth by the end of the year, with the recovery propelled by the private sector, according to Sheikha Lubna Al Qasimi, the Minister of Foreign Trade.

The forecast, one of the most upbeat to be made by a minister this year, comes after comments from Sultan al Mansouri, the Minister of Economy, who said the country’s economy would start to grow again by the fourth quarter of this year.

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Saudi provides realistic outlook on energy future

Peak oil predictions – including that dreaded day when the maximum rate of extraction is reached, after which the rate of production enters decline, leading to depletion of reserves – are back.

Unlike some previous forecasts, recent reports are more sober.

The debate on output highlights the Saudi government’s increasing calls for a more “equitable” oil pricing level at US$75 a barrel. This would encourage continuous investment in this vital energy sector, while at the same time ensuring that peak oil thresholds are pushed back.

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Russia's LUKOIL hopeful on Iraq oil deal

LUKOIL, Russia's biggest private oil producer, will keep its original investment plans for the next two or three years and could expand them if it wins tenders in Iraq, the company's president said.

Last year, LUKOIL said it could halve its original $8 billion 2009 investment programme if oil prices fell to $45 per barrel. They now stand at around $70 per barrel.

Speaking to reporters on Saturday, Vagit Alekperov described the current price of around $68 per barrel as "comfortable" for LUKOIL and said it allowed the company to go ahead with investment.

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Rumor: ADIA and an Indian Co Buy a 46% Majority Stake in Zain (Update 2)

We usually don’t post rumors until a story is confirmed, but since the rumors on Zain have been the single largest driver of the whole market, this will be an exception.

At the beginning there was talk about a strategic partner buying the African operations, then rumors that a couple of investors are interested in buying a majority stake in the mother company, Indian Bharti then UAE Etisalat; but Etisalat recently denied their interest in the acquisition and we may have finally reached the end of the Zain saga.

Today, a strong rumor emerged that the Abu Dhabi Investment Authority (ADIA) and an Indian Co. are in agreement with majority shareholders (Kharafi-led consortium) to buy a 46% stake excluding treasury shares at a deal price of USD 13.8 billion which translates into KD 2.000 per share. Zain shares closed up 5.40% at KD1.580 today. Further, Kharafi’s National Investment Co. will manage the sale. Please note that Zain has treasury shares equal to 10%. Thus, a sale of 46% is indeed absolute majority based on a float of 90%.

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Asian Investors Close to Buying 46% of Kuwait’s Zain (Update1)

A group of Asian companies is close to buying 46 percent of Zain, Kuwait’s biggest telephone firm, Al Arabiya reported, without saying where it got the information.

The group, in the final stages of finalizing the agreement, offered 2 dinars ($6.97) a share for their stake in the Kuwaiti company, the Dubai-based news channel reported. Zain’s shares closed up 5.41 percent at 1.56 dinars today.

In August, Zain’s shareholders approved removing ownership restrictions from its statutes, paving the way for a foreign or local investor to own a majority stake. Shareholders agreed to cancel articles that limited individual ownership to 2 percent of the company’s capital and restricted public shareholding companies to holding no more than 5 percent.

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Abu Dhabi, Dubai Shares Climb to 3-Month High; NBAD, Emaar Gain

United Arab Emirates shares rose to the highest level in almost three months, leading gains among Gulf markets, as slowing job losses in the U.S. increased speculation the global economy is pulling out of recession.

National Bank of Abu Dhabi, the U.A.E.’s second-biggest lender by assets, gained as much as 2.6 percent as it became the country’s first bank to sell five-year notes this year. Emaar Properties PJSC, Dubai’s largest developer, climbed to the highest level since June as Al Dhafra Financial Brokerage LLC said the stock could trade at 5 dirhams by the end of the year. All but one of the seven benchmark indexes in Gulf Cooperation Council states increased.

“The rally in U.S. and European markets had the greatest impact on GCC over all today,” said Mohamed Abu Ghoush, head of equity brokerage at Al-Ahli Bank in Doha. “U.S. job data reinforced sentiments that the economy is recovering.”

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ADX on 6th September (Re-post)

On August 6th, 2867.57 was identified as key weekly breakout level for the ADX index. Patient holders of shares who gambled on a once and for all good weekly break of that level look like they’ll be richly rewarded in a very strong market. The index closed today some 2.3% above the aforementioned level after finally forcing a convincing close above it last week.

Which stock has powered the breakout? ALDAR, which has breached the 5 handle quite convincingly amidst a speculative frenzy.

A breakout in some select stocks this week can stimulate the Abu Dhabi stock market. See if ADIB breaks 3 convincingly, or manages to close above it by the end of the week. FGB and NBAD look poised to break through some significant resistance to record fresh new highs this year. RAKCC is looking to say good bye to 1.30’s that has served as a ceiling of late.

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Saudis invest $100bn in oil and political influence

While most of the world is cutting back on oil investments, Saudi Arabia has quietly achieved a formidable feat of engineering - increasing its oil production capacity to a record 12.5m barrels a day.

The size and complexity of the five-year, $100bn (€70bn, £61bn) project are unmatched in the industry, as is Saudi Arabia's willingness to postpone the gains the project will bring by keeping many of its oil spigots closed.

Today the kingdom pumps 8.3m barrels a day, keeping a third of its capacity shut down. The restraint of Saudi Arabia, and of a handful of other countries of the Arabian Gulf, has propped up oil prices. Oil is trading at about $70 a barrel, very close to where Saudi Arabia and the Opec oil cartel want it to be.

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