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Sunday, 18 October 2009

Dubai Stocks Fall Most in 3 Weeks, Led by Emaar; Saudi Drops

Dubai’s benchmark index lost the most in almost three weeks, leading a drop in the region, after Emaar Properties PJSC said it wasn’t restructuring the debt of its Indian unit and Gulf companies reported declining earnings.

Emaar, the United Arab Emirates’ biggest developer, slid the most in two months after dismissing a report that it plans to restructure the debt. RAK Properties, the developer that built Ras Al Khaimah’s first man-made islands, declined the most since Oct. 4 after posting a 63 percent slump in third-quarter profit. National Bank of Oman SAOG had its biggest one-day retreat in five months after reporting a 44 percent drop in profit.

“There are still more hurdles to look at including earnings and also the deadline on payments of debt, the restructuring story in Dubai,” said Rabih Sultani, a fund manager at Duet Mena Ltd. in Dubai. “We’re seeing some profit- taking. Oil continues to be strong and that is holding up the markets a bit.” Crude closed at a 2009 high on Oct. 16.

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SABIC Q3 profit plunges 50 pct

Saudi Basic Industries Corp, the Middle East's largest listed company, said Sunday its net profit declined 50% to SAR3.6 billion (900 million) in the third quarter from SAR7.2 billion a year earlier on a sharp drop in commodities prices.

The results were largely above analyst expectations. EFG-Hermes had expected Sabic to post a net profit of SAR1.96 billion, while Credit Suisse had penciled in SAR3 billion.

"The decline in third-quarter net profit ... is because of a sharp fall in the prices of petrochemicals, plastics and minerals because of the global financial and economic crisis," the company, better known as Sabic, said in a statement on the Saudi bourse Web site.

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Etisalat Bids for Libya License as Part of Expansion

Emirates Telecommunications Corp. has offered 1 billion Libyan dinars ($825 million) for the right to operate Libya’s third mobile-telephone license as the United Arab Emirates’ biggest phone company seeks to expand outside its home market, a company official said.

The provider of mobile, fixed-line and Internet services aims to invest in Asia, the Middle East, and Africa where “the penetration rate is below 50 percent on average,” Jamal Al Jarwan, chief executive officer for Etisalat’s international investments, said in an interview today. The company hopes to hear whether the Libyan government will accept the bid before the end of the year, he said.

Middle Eastern telephone-service providers are expanding in Africa and Asia to seek clients in emerging markets with young and growing populations. Those countries often have penetration rates, or numbers of people owning and using mobile phones, lower than in more developed European or Persian Gulf markets.

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Dubai Civil Aviation May Issue Bond to Repay Debt, Bankers Say - Bloomberg.com

Dubai Civil Aviation May Issue Bond to Repay Debt, Bankers Say - Bloomberg.com

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Emaar Says Report on Indian Unit Debt Restructuring ‘Incorrect’ - Bloomberg.com

Emaar Says Report on Indian Unit Debt Restructuring ‘Incorrect’ - Bloomberg.com

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UAE set to witness flood of share offers in 2010

A slew of mothballed IPO plans are expected to be relaunched next year, as the level of activity and interest picks up in the UAE's equity markets, experts told Emirates Business.

The IPO market froze globally in the aftermath of the collapse of Lehman Brothers in September last year and, mirroring global inaction, IPO activity on the Emirates' exchanges ground to a halt.

There has not been one public stock offering on the UAE exchanges this year, with two listings – Drake and Scull International on Dubai Financial Market and Green Crescent Insurance Company on Abu Dhabi Securities Exchange – in March 2009, both of which raised capital in June/July 2008.

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Ithmaar in new rights, Sukkuk issue

Ithmaar Bank plans to raise up to $500 million through a rights issue and a five-year Mandatory Convertible Sukuk.

“We have received the Central Bank of Bahrain’s No Objection in respect of the Mandatory Convertible Sukuk,” said Khalid Abdulla Janahi, the chairman of the bank.

“As for the rights issue and equity line of credit, they will be subject to the approval of the regulatory authorities in the kingdom of Bahrain. The benchmark size of the capital raising plans is between $400 million and $D500 million. All the above will further strengthen our capital base and liquidity position.”

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Bad times over, Oman’s bank support fund could close

Oman has used $300 million (Dh1,1bn) out of its $2 billion support fund to help local banks and was unlikely to use the rest as the economy is recovering, its central bank governor said on Saturday.

Hamood Sangour al Zadjali made the remarks to reporters on the sidelines of the Gulf Cooperation Council meeting in Oman’s capital.

The central bank allocated about $2bn to local banks to provide dollar liquidity last November as the global credit crunch took a hold, freezing lending.

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Gulf states should stick with stimulus

The role of Gulf states in the global economy should be re-evaluated because their importance is underestimated, the managing director of the International Monetary Fund said yesterday.

As the global economy recovers, the GCC’s role is “very important” in helping to manage oil prices, which were a factor in determining the risk of a double-dip recession, said Dominique Strauss-Kahn at a meeting of GCC policy makers and the IMF.

His comments follow a recent agreement by the Group of 20 advanced and emerging economies to give underrepresented countries greater power at the IMF.

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Abu Dhabi looking to issue bonds

Abu Dhabi business leaders will gather in London today to gauge support among potential investors for infrastructure projects expected to reach more than US$100 billion (Dh367.29bn).

Bankers and analysts expect much of the finance needed to deliver future major projects to come from international bond markets, which have shown strong appetite for the emirate’s debt.

The meeting comes as corporations across the emirate prepare investor road shows and local credit markets start looking up.

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Saudi becoming a star attraction for foreign funds

After many years of languishing at the lower ends of Middle East foreign direct investment (FDI) league tables, Saudi Arabia is fast becoming the darling of Arab and non-Arab investors. The FDI by the UAE in the kingdom stood at nearly US$5.8 billion (Dh21.3bn) last year, the largest flow by an Arab country, figures released by the Inter-Arab Investment Guarantee Corporation (IAIGC) showed.

The figure was more than double the amount the UAE channelled into other Arab countries last year, and nearly 45 per cent of the $12.9bn total investment received by Saudi Arabia from other Arab League members.

This is good news for the kingdom, which had not seemed to match inward investments with its undoubted economic size and potential compared with other Arab and Islamic countries.

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