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Sunday, 11 October 2009

BBC NEWS | Business | Kuwait wants Gulf currency delay

BBC NEWS | Business | Kuwait wants Gulf currency delay

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Monthly IPO Insight - Middle East IPO round up...

Monthly IPO Insight - Middle East IPO round up...
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Global Weekly Market Report - Egypt (PDF)

Pvt sector interest in Dubai bond unlikely

The most likely buyers for Dubai’s second $10 billion bond will be the UAE’s central bank again or the government of Abu Dhabi as the offering will not be attractive enough for private investors, a leading ratings analyst said on Sunday.

“We expect that a large part if not all of that bond will be purchased by (the central bank or government of Abu Dhabi),” Farouk Soussa, head of Middle East government ratings for Standard & Poor’s, told journalists at the sidelines of a conference.

“The pricing that the government of Dubai is likely to be able to get in the market will look much less attractive than the pricing it will be able to get from the UAE,” Soussa said, adding that "there is no commitment by anybody so far that we are aware of" for the second tranche.

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INTERVIEW - Unicorn eyes Dubai's Bank Islam stake | Business News | Reuters

INTERVIEW - Unicorn eyes Dubai's Bank Islam stake | Business News | Reuters

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Middle East fares better than other regions by spending banked oil profits, IMF says --

Middle East fares better than other regions by spending banked oil profits, IMF says --

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IMF sees Gulf recovery next year

The Arab states of the Persian GulfImage via Wikipedia
The Arab Gulf states are heading for a sharp economic slowdown but next year some are likely to bounce back to growth levels approaching the pre-crisis era, the IMF said on Sunday.

Saudi Arabia, the region’s largest economy, is likely to see its economy contract 0.9 per cent this year, before rebounding back to positive growth of 4 per cent in 2010 on rising oil prices. Growth rates in Qatar, the tiny gas-rich peninsula, are likely to decline from 16.4 per cent last year to 11.5 per cent this year, before roaring back to 18.5 per cent in 2010 as swelling gas exports kick in, the Fund said.

But some Gulf Cooperation Council states, notably Kuwait and the United Arab Emirates, are likely to benefit from only modest economic recovery next year.

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UAE banks' bad loans to soar 5 pct by 2010

United Arab Emirates banks are expected to see non-performing loans, or NPLs, rise this year and are projected to reach between 4.5% and 5% of gross loans by mid-2010, investment bank Shuaa Capital's chief economist said Sunday.

"We still haven't seen the peak," Mahdi Mattar said, adding that Shuaa forecasts a rise in NPLs to 3.5% by the end of 2009.

While the U.A.E. government has proactively supported the banking sector to shield it from the impact of a global financial crisis, credit growth and the recovery of the real-estate sector are still lagging, Mattar said.

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Istithmar CEO Jackson to leave this year

Istithmar World’s CEO David Jackson will leave the struggling Dubai-owned investment company this year amid restructuring, an industry source said on Sunday.

“David Jackson is leaving by the end of the year. They have not been able to find another job for him within Dubai World,” the source told Maktoob Business.

The company declined to comment.

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Dubai Shares Rise to November High on Bond Issue; Oman Gains

Dubai shares soared to the highest since November after Emaar Properties PJSC’s chairman said the sheikhdom may raise a further $10 billion next month to help state-related companies through the credit crisis.

Mohammed Alabbar, who also heads the government committee evaluating the impact of the global credit crisis on Dubai, told CNN in an interview on Oct. 9 the emirate may borrow the second tranche of a $20 billion fund in November. Emaar, the emirate’s biggest developer, rose to the highest intraday level since Nov. 10. Arabtec Holding PJSC rose to the highest in a year. The DFM General Index added 1.2 percent to 2,323.88 at 11:34 a.m. in Dubai, heading for the highest close since Nov. 11.

“Alabbar’s disclosure is definitely helping the credit- worthiness of Dubai as well as furthering the cash-flow situation,” said Yazan Abdeen, a fund manager at ING Investment Management Dubai Ltd. “The real-estate problem will be solved with cash.”

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Mobily Reschedules 1.5 Billion Riyals in Islamic Debt (Update1)

Etihad Etisalat Co., the second- largest mobile-phone company in Saudi Arabia, rescheduled a 1.5 billion-riyal ($400 million) Islamic loan with four Saudi banks.

The short-term financing will be repaid over four years, the Riyadh-based telecommunications provider said in a statement to the Saudi bourse today. Samba Financial Group, Riyad Bank, Saudi British Bank and National Commercial Bank were the lenders involved in the transaction.

Etihad Etisalat, also known as Mobily, received regulatory approval in 2008 to finance the purchase of Bayanat al-Oula for Network Services with a one-year loan. Mobily started operations in 2004 and is a unit of Emirates Telecommunications Corp. of the United Arab Emirates.

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UAE's Aabar buys $328 million Santander Brasil stake

Abu Dhabi's Aabar Investments (AABAR.AD) invested $328 million in depositary shares issued by Banco Santander's Brazilian unit (SANB11.SA) in the unit's initial public offering, Aabar said in a statement on Sunday.

Aabar is a listed investment company controlled by Abu Dhabi's state-owned investor International Petroleum Investment Company, or IPIC.

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Saudi regulator examines options for realty funds

Saudi Arabia's Capital Market Authority (CMA) is currently examining 20 requests to set up real estate investment funds in various regions of the kingdom.

"Getting a green signal from the market regulator would further boost the buoyant real estate sector in the Eastern Province and other regions of the Kingdom," said Khalid Al Dossary, a prominent economic expert.

Al Dossary said the funds could play a vital role in accelerating the ongoing economic boom if they were established in a way protecting the rights of shareholders.

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GCC needs post-crisis bank plan

Gulf oil producers need to co-ordinate their efforts to devise a new common banking policy to enable national banks to face any fresh crisis in the global financial system, according to a semi-official report.

Banks in the GCC should learn lessons from the latest global economic turmoil and stick to known investment standards and shun derivatives and other high risk instruments, said the report by the state-controlled Emirates Industrial Bank (EIB).

In its monthly economic bulletin, the EIB said the GCC banks are on their way to recovery after they were jolted by the global crisis in the fourth quarter, adding that this was reflected in their performance in the second quarter of 2009.

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Kuwait leads region in deal-making

Kuwait led the way in regional mergers and acquisition deal-making by volume and value in the third quarter of 2009, according to the latest Zephyr report published by Bureau Van Dijk.

Deal numbers in the region were up by a fifth quarter-on-quarter from 10 to 12 but the largest gain was in monetary terms, with transaction value surging from $272 million (Dh998.24m) to $14.29bn in three months.

The total value of deals targeting Kuwait was 27 times that of the nearest rival, Bahrain, and was more than the combined total of all other Middle East transactions.

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Emirates finds ways to expand

As other airlines cut capacity to cope with a global travel slump and banks shy away, Emirates Airline appears to have found a way to keep expanding by tapping the updraft in demand among global investors for corporate bonds.

Last week, Emirates announced plans to sell US$413.7 million (Dh1.51 billion) in bonds to finance the purchase of three Boeing 777 aeroplanes, marking the first time it has used bonds to borrow money to buy aircraft.

Analysts say the deal could help the largest Arab airline vault several new hurdles in its path to building a 450-aircraft fleet by 2020 that will turn Dubai into the world’s largest hub for international passenger traffic. While Emirates and other airlines have traditionally turned to banks to finance aircraft purchases, the global financial crisis has left banks reticent to make new loans, particularly to an industry projected to lose $11bn this year.

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Al Sanea discovers the pitfalls of wealth

When F Scott Fitzerald said: “The rich are different from us”, his fellow American novelist Ernest Hemingway replied: “Yes, they have more money.”

Nowhere was the truth of this observation more apparent than in London’s High Court last week when Maan al Sanea, the Kuwait-born billionaire, applied to have a freezing order lifted on his estimated US$9.2 billion (Dh33.8bn) of assets worldwide.

Mr al Sanea had been given US$10,000 a week to cover his personal expenses, but this was clearly not enough. The court heard that he needed US$800,000 a month to pay his electricity, water and mobile bills – the kind of necessities to which we can all relate, even if of a different magnitude.

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Highly rated? No, but agencies are here to stay

Things have come around full circle. Not too long ago, much of the blame for the financial market meltdown was placed squarely at the feet of lax rating agency evaluation.

Having learned their lessons, and to avoid future criticism and possible legal action by investors, today’s rating agencies are leaning too much towards the cautious side. If in doubt, go for a lower rating seems to be their motto.

This is not to denigrate their work, for in the final analysis we need independent financial analysts to guide the layman through financial reports and doublespeak – to see the accounting wood from the trees.

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The weak threat of Iran sanctions (Re-post)

Iran plans to increase its oil refining capacity by 57 percent over the next three years. That would bring it close to producing enough refined gasoline to meet its domestic needs.

So, just to recap: In the short term, a gasoline embargo will drive Iran further into China's orbit; in the long term, it will impel Iran to become self-sufficient. Very effective policy!

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Saudi Arabia Shares Advance, Led by Almarai, Savola Al Azizia

Saudi Arabian shares gained, led by the kingdom’s two biggest food companies, Almarai Co. and Savola Al Azizia United Co.

Almarai rose for the fourth day after reporting record quarterly profit today. Savola, the second-largest food producer in the kingdom, gained after getting regulatory approval to buy supermarket assets in the kingdom. Etihad Etisalat Co. climbed to highest level this year.

The Tadawul All-Share Index rose 0.9 percent to 6370.74 in Riyadh. The Arab world’s biggest bourse has advanced 33 percent this year after losing more than half its value in 2008 as oil prices dropped.

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Iran banks have $38 bln in debt arrears

The Iranian banking system has loans in arrears of almost twice its amount of capital, a senior official said in remarks published on Saturday, describing it as a "serious problem".

Mostafa Pourmohammadi, head of the National Inspectorate Organization, blamed "defective" legislation as well as "lack of adequate attention" by the banks themselves for the situation.

In comments carried by the Hayat-e No daily as well as other Iranian media, he did not single out any individual banks.

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Qatar Holding Increases Songbird Estates Stake to 24% (Update1)

Qatar Holding LLC has taken up its rights to 24 percent of the ordinary shares issued by Songbird Estates Plc as the Persian Gulf country seeks international investment opportunities.

Songbird controls more than half the buildings in London’s Canary Wharf financial district. Qatar Holding, part of the country’s sovereign wealth fund, is now the largest investor in Songbird with a total investment of more than 350 million pounds ($555.4 million), the Middle East company said in an e-mailed statement today. The investment includes subscription to preference shares and participation in debt, the company said.

“We believe the very positive response to the offering shows the improving sentiment toward U.K. commercial property in recent weeks as well as the attractiveness of this transaction,” Ahmad al-Sayed, chief executive office of Qatar Holding, said in the statement.

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