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Thursday, 10 September 2009

Dubai house prices record highest yearly decline in the world

House prices in Dubai suffered the biggest 12-month fall among global property markets but price declines are easing as global markets recover, a global property survey said.

Prices in Dubai fell 47.3% from the second quarter of 2008 to the the second quarter of 2009, Knight Frank said in its latest Global House Price Index.

"Prices are still falling in Dubai, but the decline has slowed sharply," the report said on Thursday.

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Abu Dhabi's Taqa sells $1.5 bln in bonds

Abu Dhabi National Energy Company (TAQA) sold $1.5 billion of five and 10-year global bonds on Wednesday, the latest issues from a $9 billion bond program to help finance investments and repay debt.

TAQA TAQA.AD is 75 percent owned by the government of Abu Dhabi and is one of the vehicles the emirate uses to invest oil money. Abu Dhabi holds most of the oil reserves and wealth in the United Arab Emirates, the world's third-largest oil exporter.

The five-year tranche worth $1 billion was sold at a price of 99.451 with a yield of 4.875 percent and a coupon of 4.75 percent. The 10-year tranche worth $500 million was sold at a price of 99.201 with a yield of 6.359 percent and a coupon of 6.25 percent.

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Monthly Funds Review. Middle East Funds Industry round up...


Fund managers are scratching their heads after Tadawul, the Saudi stock exchange, and MSCI, the index provider, have been unable to meet on licensing agreements, which could lead to the index company dropping Saudi stocks from its indices.

Many regional asset managers benchmark their funds against the regional MSCI indices, which bundle stock data from various markets for investors and fund managers to measure against their performance. Indices that may be affected are the popular MSCI Arabian Markets and MSCI GCC Countries Indices - both include Saudi stocks.

The bone of contention is Tadawul's stipulation in a new agreement that gives it the right to prohibit MSCI from licensing certain indices to third parties.

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Common ground in Kurdistan

Not many businessmen cite safety as the biggest attraction of investing in Iraq. But for Maaruf Ataoglu, owner of an Istanbul-based restaurant and construction group, Iraqi Kurdistan is a haven.

An ethnic Kurd, Mr Ataoglu first came to the region in 1992, when he was involved in pro-Kurdish politics in Turkey. In 2004, urged by Jalal Talabani, now the Iraqi president, he returned to invest more than $5m and open what was then Suleimaniya's most sophisticated restaurant.

But the connection with Mr Talabani caused him difficulties in Turkey. When rebels from the separatist Kurdistan Workers Party mounted a murderous cross-border attack on Turkish soldiers, he faced accusations of channelling funds from Mr Talabani to the militants.

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Saudi Stock Market Weekly Report - 9-September-2009

UAE looking into inter-city metro | Business | Construction News |

UAE looking into inter-city metro | Business | Construction News |

Spot On PR’s MENA Twitter Demographics & User Habits Survey (Re-post)

2009 has been a big year for Twitter with the micro-blogging platform’s rate of growth rocketing up to more than 20% per month and now showing annual growth of 1,460 percent (June 2008 to June 2009) according to Comscore. Although it’s still early days for Twitter in the Middle East and North Africa, Twitter is now growing fast and the numbers of Twitter users in the Middle East and North Africa is now increasing at a rate of 17% per month. The MENA Twitter community overall has increased ten times over the first seven months of 2009.

Spot On Public Relations has been active on Twitter since August 2008, has been tracking Twitter usage in the MENA region and, in the absence of any data on the region’s Twitter growth or demographics, has been conducting its own research. This report is the result of the region’s first extensive Twitter usage survey which focuses on the demographics, Twitter habits and experiences of a sample of 216 registered Twitter users across the Middle East and North Africa.

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TAQA switches focus to electricity

Abu Dhabi National Energy Company (Taqa) will turn its focus back to electricity generation after snapping up oil and gas wells across the world, the company’s chief executive said today.

The new emphasis on acquiring electricity, or “downstream” assets, coincides with the release of a bond prospectus proposing the issuance of up to US$9 billion (Dh33bn) worth of commercial paper, and comes a day after a Taqa official said the firm would enter the Asian power market.

The company has acquired a number of oil and gas assets in the North Sea this year, including exploration blocks and existing wells and pipelines. But Mr Barker Homek said Taqa would now look to bolster its power generation assets, which provide a stable source of revenue for the company.

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Air Arabia to launch new carrier

The low-cost airline Air Arabia has entered a joint venture to launch a new budget carrier based in Egypt as it continues to expand its presence despite a global downturn in the industry.

The carrier, Air Arabia Egypt, will fly to destinations in Europe, the Middle East and Africa, with Egypt becoming the Sharjah-based company’s third hub after the UAE and Morocco.

Egypt’s Travco Group has taken a 60 per cent share of the venture as specified by Egyptian law governing the airline industry.

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Law planned to boost investment

The Government plans to increase efforts to boost foreign investment in the UAE with the publication this year of a draft law that will provide legal protection for overseas investors.

The foreign investment law will set down “systematic incentives” to attract international money to the country as it speeds up economic diversification in response to the global financial crisis.

“We are preparing a draft law that guarantees a suitable climate for investors to do business according to the fundamentals of justice,” said the Minister of Economy, Sultan al Mansouri, in a speech to the Dubai Chamber of Commerce and Industry (DCCI).

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UAE's Dana, Crescent to build Yemen "gas city"

UAE firms Dana Gas and Crescent Petroleum said on Wednesday it had signed a memorandum of understanding with Yemen to build a "gas city" in the Arab state facing dire economic straits and a revolt.

"(Gascities) has reached an agreement with the Yemeni government to investigate the development of its proprietary gas city concept within Yemen," a statement said, referring to the Gascities Ltd joint venture between Dana Gas and its parent company Crescent Petroleum.

"Gas cities" are large, gas-fed industrial complexes housing petrochemical and heavy manufacturing plants. Dana Gas and Crescent plan to build at least four in the Middle East and North Africa, including in Egypt.

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UAE satellite heralds new space race

While the western world was celebrating the 40th anniversary of the Apollo 11 moon landing this summer, the United Arab Emirates took its own small step towards the conquest of space. For the past month, DubaiSat-1, the country’s first remote-sensing satellite, has been sending images home of the ports and palm-shaped artificial islands that distinguish its coastline.

But DubaiSat-1 is more than a boost to the national ego. Built by local scientists – aided by South Korea’s finest satellite engineers – it is also a testament to the UAE’s attempts to galvanise its economy through high-tech investment.

“Developing a core team of UAE scientists and experts was the most definite outcome of a strategy that is geared to support mature, knowledge-based development,” says Ahmed al-Mansouri, director-general of the Emirates Institute for Advanced Science & Technology, which developed the $50m satellite with the Seoul-based Satrec Initiative.

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Ramadan pause jeopardises rally

As is customary, Ramadan has meant sluggish trading on Gulf stock markets, but unusually, most have managed to carve out some gains.

Bahrain and Kuwait are down but the rest of the markets performed well in September, mostly thanks to international investors re-entering the market, attracted by relatively undervalued stocks. The markets of the United Arab Emirates have done particularly well.

“Ramadan has been better than expected, primarily because foreign investors have been net buyers,” says Fahd Iqbal, an equity strategist at EFG-Hermes, the regional investment bank.


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Bahrain bank set to tighten liquidity rules

Bahrain’s central bank is preparing to tighten its rules on liquidity, after troubles at two Saudi-owned banks forced the regulator to take control of both institutions in July.

Under the proposed changes, published on the Central Bank of Bahrain’s website, banks will have to increase the amount of liquid assets held, submit to more frequent checks by the CBB and ensure that their long-term lending obligations do not starve them of ready cash in a crisis.

Last month the CBB placed both Awal Bank and The International Banking Corporation (TIBC) in administration, citing a large shortfall in their assets compared with their liabilities.

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Dubai strains to restructure debt

Dubai World, the state owner of troubled developer Nakheel, is trying to persuade bank creditors to restructure up to $12bn of its loans, an indication that the emirate is starting to grapple with the challenge of unravelling its $80bn-plus debt pile.

Hit hard by the credit crisis, Dubai is showing signs of recovery on global economic optimism, yesterday launching the Arab Gulf states' first metro system.

However, restructuring the emirate's government-linked debts remains a top priority as the government seeks to assure a rebound for its trade, tourism and services-focused economy and recover from the precipitous property crash.

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Property crash weighs on state

Dubai is showing signs of economic recovery but a dramatic domestic property crash and rising debt servicing needs will continue to weigh on the emirate for years to come, report Simeon Kerr and Robin Wigglesworth.

An oversupply of residential and, especially commercial, property is set to bedevil the real estate market, despite project cancellations and construction slowdowns.

"We are only a year into the real estate bubble bursting, and that will take three to five years to clear up," Georges Makhoul, Morgan Stanley's outgoing president for the Middle East and north Africa, told the Financial Times.

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Morgan Stanley Mideast chief quits

George Makhoul, the Dubai-based president of the Middle East for Morgan Stanley, is resigning from the investment bank, officials said yesterday.

Mr Makhoul's departure comes as the region's importance as an exporter of capital is waning along with the decline in the oil price from last year's levels.

This has led to a debate - among executives at Morgan Stanley and other banks - over whether there will be enough business to justify the large numbers of dealmakers who have arrived in Dubai in recent years.

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Markets to Rally Before the End of Ramadan (Re-post)

A study done by Morgan Stanley shows how the local equity markets tend to rally just before the end of Ramadan. They have calculated the average weekly return of Tadawul before, during and after Ramadan from 1998 to present. The 4 to 8 weeks before Ramadan markets are a bit weak, never the less, they trough just before the end of the month and soar approximately 4% two months later. If this study is accurate, the markets should rally on 19th of September.

I guess we’ll have to wait and see what happens

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