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Tuesday, 13 October 2009

UAE strongest Arab stock market in September

The UAE market was the strongest Arab market in September as it gained 12.6% bringing its year to date gains to 53.6% and overtaking Egypt as the leading Arab market year to date.

The UAE market rally was driven by the real estate and telecom sectors; with key players such as Emaar Properties gaining 16.7% and Etisalat and du gaining 12.0% and 14.4% respectively.

Concerns over Saudi banks' exposure to the troubled Saudi firms had a negative impact on banks' share price performance in August as most listed Saudi banks experienced a decrease in their share price during the month.

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Dow Jones GCC Titans 50 to underlie first exchange traded fund in UAE

Dow Jones Indexes, a leading global index provider, today announced that it licensed the Dow Jones GCC Titans 50 Total Return Index with Saudi Local UAE Index (Dow Jones GCC Titans 50), the first index authorised by Tadawul to include Saudi Arabian stocks, to National Bank of Abu Dhabi (NBAD).

The index will serve as the basis for an exchange-traded fund (ETF), to be listed at the Abu Dhabi Securities Exchange.

This ETF based on the GCC blue-chip index will be the first one available to market participants in the United Arab Emirates (UAE) market. NBAD intends to launch the ETF soon, pending regulatory approval.

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UAE banks in $11 bln liquidity shortfall-StanChart

Banks in the United Arab Emirates are facing a liquidity shortfall of up to $11 billion and are suffering from bad debt due to unsecured lending, a Standard Chartered (STAN.L) executive said on Tuesday.

Shayne Nelson, the bank's chief executive in the Middle East, told a conference the country's lenders were coping with a liquidity shortfall of 30-40 billion dirhams ($8.2-$10.9 billion).

"Liquidity is still short. It's 30-40 billion dirhams short. (This is) the difference between advances and deposits. Straight math," Nelson said, adding access to capital was improving for the larger banks.

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For Dubai, Is the Worst of the Recession Over?

On the surface, Dubai doesn't seem as hard hit by the global recession as one might think. At 11 o'clock on a recent evening, the emirate's gigantic airport was crowded with travelers facing 15-minute waits at passport controls. Restaurants and nightclubs are filled with a cosmopolitan mix of visitors and locals.
And Dubai hasn't completely lost its old pizazz. On a recent evening, Mohamed Alabbar, the tireless chairman of Emaar Properties, the emirate's largest real estate developer, proudly walked with visitors on the newly opened promenade around the spectacular artificial lake that lies at the foot of the nearly completed Burj Dubai, the world's tallest building. As the voice of Andrea Bocelli sang Time to Say Goodbye, colored sprays of water danced high in the air like a fireworks display. Alabbar said the fountains, which are meant to outclass a similar waterworks at Las Vegas' Bellagio hotel and casino, had cost more than $250 million. "If it makes people happy, it's O.K.," he said.

But scratch a little deeper, and there are signs of malaise. Real estate prices are down by as much as 50 percent, and, because the authorities are pressuring developers to finish projects they have begun, empty space is piling up. According to a recently released survey from London real estate consultancy Knight Frank, over the past year Dubai has suffered by far the steepest drop in residential property prices among 32 developed economies surveyed worldwide, down 47.3 percent on average. (The second-worst market, Singapore, saw prices fall 27.7 percent over the same period, from June 30, 2008, to June 30, 2009.)

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Damas CEO denies making unauthorised transactions

The former head of Dubai jewellery group Damas International Ltd (DAMAS.DI) denied his involvement in any unauthorised transactions after a company statement said he had resigned after disclosing unauthorised deals to the company's board.

"I did not do it," Tawhid Abdulla, who resigned on Monday, told Reuters in a phone interview on Tuesday. "The news about me making unauthorised transactions is not true," he added, declining to give any details on why he had stepped down.

Dubai Nasdaq-listed Damas had said on Monday it appointed Hisham Ashour, formerly deputy CEO, to take over Abdulla's post. It said Tawfique Abdulla, Tawhid's brother, had become managing director on a day-to-day basis. [ID:nLC467286]

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Bahrain chases rivals with bourse launch

T o some, the idea of another financial exchange in the Gulf will be unwelcome. Another small market alongside already competing exchanges in small-ish economies is not what is needed, argue sceptics. But Bahrain is preparing for another sally against rival financial centres with an overhaul of its capital market and the launch of the Bahrain Financial Exchange.

The BFX will help lure investors away from the likes of Qatar and Dubai, say officials, by offering a broader range of products. The government has also drawn up plans to overhaul local market regulation and privatise the existing Bahrain Stock Exchange.

“There is scope for further development and higher levels of maturity,” says Rasheed al-Maraaj, governor of the central bank . “Attracting foreign investors is key in maintaining the position of Bahrain as a leading financial centre and venue for raising capital.”

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EXCLUSIVE: Police 'not involved' in $165m Damas probe - Retail - ArabianBusiness.com

EXCLUSIVE: Police 'not involved' in $165m Damas probe - Retail - ArabianBusiness.com

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Brokers predict glut of Dubai office space

Landlords in Dubai may miss out on an estimated Dh7 billion (US$1.9bn) in rental revenue within two years because half of all office buildings are expected to be empty.
Analysts predict that supply in the commercial sector will almost double by 2011, as companies are trimming costs and cutting jobs, leading to further falls in commercial rents.

“Office speculators will be hit and lose money. This is good for occupiers,” said Matthew Hammond, the head of agency at Jones Lang LaSalle MENA (JLL).
Landmark Advisory, the consulting branch of the property broker Landmark Properties, estimates that about 2.97 million square metres of new space will hit the market by 2011, versus 3.25 million sq metres today.

Mr Hammond said the figure was in line with JLL estimates. “While the new stock is likely to double the size of the office market, it is substantially smaller than what was planned initially.”

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Private equity faces shake-out

Gulf private-equity firms could be forced out of business as investment deals dry up after the global financial crisis.

Fund managers say a shortage of available credit means it may not be until the first quarter of next year before there is a significant pickup in acquisition activity.

“The situation that exists today is nothing short of a crisis for the private-equity industry,” said Zulfi Hydari, the co-founder and managing director of HBG Holdings, based in Dubai and Jeddah.

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Mideast risk big concern for int'l investors

Attracting foreign investors to the Middle East private equity sector requires a higher return than what they can expect from their own markets as the region’s political risk remains an overriding concern despite strong economic growth forecasts.

“I personally met 120 global investors,” Karim el-Solh, chief executive officer of Gulf Capital, said at the Super Return Middle East 2009 conference. “And they were saying, ‘we are not going to come to the Gulf with our cash with risks (such as) Lebanon, Iran, Iraq for less than 25 percent’.”

Solh added: “Ideally they would like 30 to 35 percent. These are the kind of returns that will attract investors to this market.”

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IMF urges region to cut cloth to fit straitened times

The International Monetary Fund delivered a sombre message in its just-released Middle East outlook: the region is heading for renewed growth but it will take a long time before it feels like a recovery.

The business community in oil-producing countries will have taken heart from the projection of 4 per cent economic growth in 2010 following this year’s expected 2 per cent contraction.

For oil importers, the picture is somewhat better, with real growth dropping this year to 3.5 per cent from 5 per cent in 2008 and remaining flat in 2010.

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Dubai jeweller Damas replaces CEO over disclosures

Dubai jewellery group Damas International Ltd DAMAS.DI said chief executive officer and managing director Tawhid Abdulla had resigned after disclosing "unauthorised transactions".

Nasdaq-listed Damas said it had appointed Hisham Ashour, formerly deputy CEO, to take over Abdulla's post. It said Tawfique Abdulla, Tawhid's brother, was now managing director on a "day-to-day" basis.

"The company today announces that it has accepted Tawhid Abdulla's resignation as managing director and CEO due to his disclosure to the board of what is understood to be unauthorized transactions conducted by him," it said.

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Dubai, cash-crunched and scandal-hit

What exactly is going on in Dubai?

Comments by an analyst at Standard & Poor’s - which has warned before about Dubai’s finances - suggest the emirate is running out of cash, and fast. As Dow Jones reported on Sunday:

Dubai needs to raise another $10 billion for its economic support fund as it has insufficient capital to prop up its struggling government-related companies, according to a leading analyst at Standard & Poor’s.

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