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Thursday, 1 October 2009

Abu Dhabi's TDIC Sukuk trust certificates issuance program assigned 'AA' preliminary rating

Standard & Poor's Ratings Services today said it had assigned its preliminary 'AA' rating to TDIC Sukuk Ltd.'s certificates issuance program, under which it can issue up to US$1.45 billion certificates (sukuk al-ijara).

The rating is equal to, and is fully reliant on, the rating on Tourism Development and Investment Company (TDIC; AA/Stable/A-1+). The preliminary rating is based on information as of October 1, 2009. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings.

TDIC Sukuk Ltd. is a Cayman-based special-purpose vehicle (SPV) established for this transaction. The equalization of the program rating with the rating on TDIC is based on the obligation of TDIC to make rental and repurchase payments to TDIC Sukuk Ltd. that in our view should at all times enable the issuer to make full and timely periodic distribution and principal redemption payments on the certificates.

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Gulf Shares Climb as IMF Boosts Growth Forecast; Taqa Rises

Gulf markets rose, with Abu Dhabi’s index climbing to the highest level in a week, as the International Monetary Fund raised its growth estimate for the Middle East and oil traded around $70 a barrel.

Abu Dhabi National Energy Co., the company known as Taqa, gained the most in seven weeks after completing the 285 million- euro ($415.8 million) acquisition of DSM Energie Holding BV. Aabar Investments PJSC soared to its highest in a month. Abu Dhabi’s benchmark index increased 0.4 percent to 3,137.99, after closing out the third quarter with a 19 percent gain yesterday.

“We are seeing cautionary behavior ahead of third-quarter results, especially considering the markets had rallied recently,” said Ali Taqi, director of asset management at AT Capital Management in Dubai. “Oil has remained in the expected band which is positive for our markets.”

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Iraq Bars Sinopec Group From Oil License on Addax Buy (Update2)

Iraq will bar China Petrochemical Corp. from bidding for contracts to develop oil fields after the state-owned company agreed to buy Addax Petroleum Corp., which operates in its northern, semi-autonomous Kurdish region.

The Chinese company, known as Sinopec Group, won’t be allowed to take part in the second round of bidding for development licenses this year, Abdul Mahdy al-Ameedi, deputy director general of the department at the Iraq Oil Ministry that handles the bidding, said by telephone today. Zhang Zheng, head of foreign affairs at Sinopec Group, couldn’t be reached at his office today, as offices were closed for China’s National Day.

“We consider any company that signs contracts in the Kurdish region as disqualified,” al-Ameedi said. The decision to disallow Sinopec Group is final “unless they withdraw from the Kurdish contract. It depends on them.”

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Dubai Group Is Reviewing Options for Bank Islam Malaysia Stake -

Dubai Group Is Reviewing Options for Bank Islam Malaysia Stake -

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U.A.E. Interbank Rates Ease as Central Bank Takes Over Setting

United Arab Emirates’ interbank interest rates eased as the central bank took over the process of estimating benchmark rates from a group of lenders.

The one-month rate eased the most, losing 8 basis points to 1.62143 percent from 1.7 percent yesterday, central bank data provided to Bloomberg showed. The one-week rate eased 0.1 basis point to 0.74286 percent, while the three-month rate fell 7.1 basis points to 1.97857 percent, the data showed.

The central bank used lending rates from 11 banks to compute the new Emirates Interbank Offered Rate, or Eibor, according to the data. The interbank rate, used as a benchmark by banks to price loans to customers, is an average after excluding the two lowest and the highest lending rates of the 11 banks.

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NBQ Discloses Exposure to Units of Saad Group, Algosaibi -

NBQ Discloses Exposure to Units of Saad Group, Algosaibi -

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GCC Stock Market Indices - Monthly Summary Oct 01, 2009

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Zawya Announces Q2 ranking results for Middle East Funds

Dubai, UAE; September 30th 2009: Zawya has announced the results of its independent Funds Ranking system for Q2 2009 [].

The funds' criteria and their four components (Returns 30% Volatility 20% Fees 20% Compliance 30%) remain largely the same. However, given the emphasis on fund compliance & disclosure, and overall transparency in the Middle East funds industry, ZawyaZawya's methodological approach has evolved to encompass the important feedback received from fund managers and investors focusing on the region. For the Q2 results, enhancements were made to the Fees component; its structure is based on the expense ratio only. Subscriptions and redemptions fees will no longer be included when attributing a score to this section of the ranking system due to the varying nature of these fees.

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ADCB's bond may be priced at 260 bps over 5-year Treasury

Deutsche Bank, Standard Chartered Bank and Bank of America are said to be lead-managing ADCB's bond issue under global medium term note (GMTN) programme, according to banking sources in Abu Dhabi.

According to institutional representatives, who were present in the roadshow on September 28 in Abu Dhabi, the pricing would be in the vicinity of 260 basis points (bps) above five-year US Treasury, which could work out a pricing of about five per cent.

Sources also told Emirates Business that there will be one more roadshow in the US and that will draw to close such exercises before a price discovery is possible. "Since ADCB's credit default swap (CDS) is about 40-50 bps wider than that of National Bank of Abu Dhabi (NBAD), the pricing of ADCB's GMTN should logically be around a margin of 260 bps," said the financial controller of a foreign bank.

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Saudi banks have absorbed economic crisis impact: Moody's

The Saudi banking sector has shown resilience and absorbed the impact of the economic crisis even as it stands exposed to challenges of possible deterioration in operating conditions and asset quality apart from a high concentration in lending and deposits, said rating agency Moody's Investors Service.

The sector will benefit from the Saudi Government's continued commitment to supporting the economy with an expansionary budget and numerous infrastructure projects, the agency said in a report. It said the Saudi Government had prudently invested its oil revenue windfalls of recent years and has historically been the main driver of economic activity.

"The impact of the financial crisis has been contained, as Saudi banks are not significantly dependent on market funding. Moreover, any losses from structured products and other risky investments have been comfortably absorbed," said Constantinos Kypreos, Vice-President in Moody's Financial Institutions Group based in Limassol.

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UAE lenders own up to troubled debts

Banks across the UAE on Wednesday moved to reveal their exposure to the financially troubled Saad and Al Gosaibi groups after the market regulator demanded a greater level of disclosure.

The UAE’s two main stock exchanges asked listed banks to reveal their exposure to the Saudi conglomerates in response to a request from the Emirates Securities and Commodities Authority (ESCA).

The Abu Dhabi Securities Exchange (ADX) “can confirm a communication was issued to some listed companies as part of a routine process”, an ADX spokesman said. “It should be appreciated that companies disclose information on a regular basis and will continue to do this as the need arises.”

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Emaar prepares for Indian IPO

Emaar’s Indian property unit plans to raise US$800 million (Dh2.93 billion) through a share sale that it was forced to shelve last year because of tumbling global stock markets.

Emaar MGF, the Indian subsidiary of Emaar Properties, has filed the initial documents required for its planned initial public offering (IPO) to the Securities and Exchange Board of India, the company said in a statement to the Dubai Financial Market.

Emaar, which is building the world’s tallest tower in Dubai, had originally hoped to raise more than $1.6bn in February last year.

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Etihad lands highest credit rating

Etihad Airways has received the highest rating from export credit agencies in the US, UK, France and Germany, and also signed US$1 billion (Dh3.67bn) in loan guarantees that will substantially lower its borrowing costs for aircraft deliveries scheduled this year and next.

The guarantees, from the governments of the Organisation for Economic Co-operation and Development, will help the airline gain access to credit markets at competitive rates at a time when the credit crunch has closed down many avenues for airlines to raise cash.

“What this gives is the banks confidence,” said James Hogan, the chief executive of Etihad. “More importantly, it recognises our status as a commercial entity on the global stage.”

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Rail network could cost Dh30bn

The planned 1,200km UAE-wide railway system could cost between Dh25 billion (US$6.8bn) and Dh30bn, according to early estimates by the new chairman of Union Railways.

Hussain al Nowais, who was appointed on Wednesday by Presidential Decree, said rail links would be a key driver in the country’s economic development, cutting transport costs, reducing road transport emissions and creating stronger economic links among the emirates.

“The development we are envisaging in the UAE will be accelerated through this logistical network,” Mr al Nowais said on Wednesday. “It will be faster and safer, less polluting and more efficient.”

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Sanctions would trap west as much as Tehran

Western officials arrive at Thursday’s meeting with Saeed Jalili, Iran’s top nuclear negotiator, waving what they consider to be a big stick: come clean over what your regime has been up to and co-operate or we will hit you with new sanctions.

As many of the participants know, Mr Jalili is a man who is hard to pin down, prone to the grandiose rhetoric Iran is well known for. No one can be sure what instructions he is carrying to Geneva but, when it comes to sanctions, he can be expected to repeat the line we have heard often from Mahmoud Ahmadi-Nejad: “Bring them on.”

Sanctions, of course, are not to be dismissed. Ask any businessman in Tehran and you will find that doing business with the outside world has been extremely difficult over the past two years.

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Iran businesses set for higher evasion costs

Iran’s small private sector has spent a lot of time and money over the past few years on finding ways to evade international sanctions imposed over the country’s nuclear programme.

That activity could become even more costly than before if further sanctions are imposed against the Islamic regime following the make-or-break talks in Geneva on Thursday.

While western leaders seem more reluctant than before to go for petrol sanctions as the next step, the possibility of further fin­ancial limitations is on the rise.

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Tadawul starts to worry investors

Saudi Arabia’s Tadawul stock market has long been a favourite of fund managers and analysts, and so far this year its performance seems to have rewarded their faith.

The exchange has consistently outperformed MSCI’s Arabian Markets and Gulf indices over the past 12 months, falling less far during the slump and also enjoying the benefit of the global equity rally since March.

“Saudi Arabia is often seen as a more resilient market because its government finances are strong and it has been less affected than other regional economies,” says Tarek Fadlallah, an executive director at Nomura who predicted Saudi Arabia’s 2006 stock market crash.

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