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Sunday, 1 November 2009

Gulf International Bank to issue Saudi bonds

Bahrain-based Gulf International Bank (GIB) plans to issue riyal-denominated bonds in a private placement, it said on Sunday.

State-owned GIB said in a statement on its website it has mandated GIB Financial Services and HSBC lead managers and book runners for the bond, the amount of which it did not provide.

It said investor meetings would be held in Riyadh, Jeddah and Al-Khobar.

Kuwait Expects Growth in 2010, Central Bank Governor Says

Kuwait expects the economy to return to growth in 2010, while in 2009 there will be a contraction of up to 2 percent, Central Bank Governor Sheikh Salem AbdulAziz al-Sabah said today at a conference in Kuwait City.END

Exit Strategies Need to Be ‘Gradual,’ Al-Jasser Says

The global economy is still in a recession “despite positive signs” in markets and exit strategies need to be gradual, Saudi Arabia’s central bank Governor Muhammad al-Jasser said.

Al-Jasser also cautioned against “harmful” accommodative monetary and fiscal actions and said that conservative policies gave his country a “vital” tool during the financial crisis.

“The activation of stimulus exit strategies is still early as it needs good timing and gradualism during the next few months,” he said.

Dubai Shares Tumble Most in Almost 3 Months; Shuaa, Emaar Slide

Dubai shares tumbled the most since mid-August, leading indexes in the region lower, as Shuaa Capital PSC reported a loss and Emaar Properties PJSC retreated to its lowest level in almost three months.

Shuaa, the U.A.E.’s biggest investment bank, tumbled the most in more than four months after posting a third-quarter loss. Emaar, the country’s biggest developer, fell to the lowest since Aug. 17 after the chairman of Dubai Properties LLC, a company which Emaar plans to merge with, was arrested on suspicion of embezzlement. Dubai’s index dropped 4.8 percent to 2,091.83 at 12:21 p.m. in the emirate. Abu Dhabi’s measure fell 2.9 percent, poised for its biggest one-day loss since June 23.

Gulf markets are struggling to recoup last year’s losses as the global financial crisis prompted investors to pull out of the region following the delay and cancellation of projects. A U.S. consumer-spending report released last week sparked concern a global recovery may be protracted. Dubai’s index is up 28 percent after falling 72 percent last year. Abu Dhabi’s index, which slid 47 percent in 2008, has gained 23 percent this year.

Bahrain told banks to raise Q3 provisions -cbank gov

Bahrain's central bank advised lenders to raise their third-quarter provisions for exposure to two local banks owned by a pair of debt-laden Saudi firms to 75 percent, the central bank governor said on Sunday.

Maraj also said he expected Bahrain's economy to grow by 2-3 percent this year.

"We have upped the provisions ... to 75 percent in the third quarter", Rasheed al-Maraj said on the sidelines of a meeting in Kuwait.

Shuaa Capital Posts Third-Quarter Loss of 269.3 Million Dirhams

Shuaa Capital PSC, the United Arab Emirates’ biggest investment bank, posted a loss of 269.3 million dirhams in the third quarter, according to a company statement to the Dubai bourse today.END

Islamic banks' assets soar 66% to $580bn in 2008

The combined assets of Islamic banks jumped by nearly 66 per cent at the end of 2008 despite massive losses suffered by the global banking sector because of the economic crisis, according to a an Arab banking group.

From around $350 billion (Dh1.2 trillion) at the end of 2007, the total assets of the world's largest full fledged Islamic banks surged to around $580bn at the end of 2008, an increase of nearly 66 per cent, the Beirut-based Union of Arab Banks (UAB) said in its monthly magazine, the Arab Banker.

"Despite the financial turmoil that crippled so many Western conventional financial institutions, Islamic bank have continued to grow in prominence and size," the magazine said, citing estimates by the Asian Banker Research.

Time for UAE to rethink dollar peg

The UAE should consider a fresh monetary policy, reducing its link with the US currency that has been declining in value.

As a result, the UAE and other Gulf currencies that are pegged to the dollar are losing value.

The UAE, the Arab world's second biggest economy, is part of the six-member Gulf Cooperation Council. It was also part of a planned monetary union till May this year when it walked away over a dispute. The move frees up its monetary policy from certain obligations.

DIFC 'must reform' to attract funds

The Dubai International Financial Centre (DIFC) must reduce its fees, allow fund managers to locate their funds outside its jurisdiction and remove excessive regulatory layers in order to attract the funds industry, according to a report from a panel of industry players.

The candid but constructive 10-point report was commissioned by the Dubai International Financial Services Authority (DFSA) to jump-start the DIFC's nascent collective investment funds industry, which hasn't gained traction since it was launched three years ago.

The centre currently boasts nine fund operators, four private funds and one public fund.

InvestAD eyes African mining rights

Invest AD may buy mining rights in Africa to tap future demand for commodities generated by the expansion of China’s economy.

The investment fund, owned by the Abu Dhabi Government, has been looking at concessions in central Africa among other potential opportunities overseas as it seeks to transform itself into a viable commercial company, the firm’s chief executive said.

Africa is to be a major focus for Invest AD in the future and an African stock fund was among four equities funds the firm launched this year.

More job cuts feared

A second wave of job cuts could continue into next year as companies feel the pinch of the economic downturn, a senior banker has warned despite renewed confidence in a recovery.

The global slump has seen thousands of jobs lost in the financial and property sectors in the UAE during the past 12 months as credit lines have dried up and commercial and residential property sales have stalled.

Concern about further redundancies could put even more strain on the consumer business of banks, which have already been forced to set aside billions of dirhams since the beginning of the year to cover potential defaults.

Iran says EU firms in talks to join Nabucco

An Iranian official said on Saturday that European firms are in talks for Iran to join the EU's flagship Nabucco gas pipeline project, which aims to reduce the bloc's reliance on Russia, Mehr news agency reported.

"At the moment some European companies have started unofficial talks for Iran to join this pipeline," Mehr quoted Reza Kasaizadeh, managing director of National Iranian Gas Exports Company, as saying.

He gave no details.

The European Union is planning to build the 3,300-kilometre (2,050-mile) Nabucco pipeline to transport gas from the Middle East and Central Asia to its energy-hungry consumers in Europe while bypassing Russia.

Bahrain: A surprising oasis of openness

There is a story that top bureaucrats in the tiny Gulf state of Bahrain like to tell to illustrate its struggle for economic relevance.

An international accounting firm had initially been based in Bahrain but decided to move the regional office to Riyadh, the capital of neighbouring Saudi Arabia.

After a few years of operating there, the firm closed the Riyadh office and moved back to Bahrain. And it was the unwritten reasons for doing so that were the most interesting.

“The head of the firm apparently said that he could not stand his wife calling him at 2pm every day, badgering him to come home,” says Mahmood Hashim Al-Kooheji, the deputy chief executive officer of state investment holding company Mumtalakat.

E.ON eyes investment opportunities in Oman

E.ON, one of the world’s biggest gas and power companies, is keenly exploring investment and business opportunities in the Sultanate. A team of top executives led by the boss of the Düsseldorf, Germany-headquartered international energy conglomerate was in Muscat late last week for discussions focusing on a number of energy-related areas, spanning LNG processing and supply, gas exploration and production, natural gas and coal-fired power generation, and renewable energy development.

The visit headed by Dr Wulf H Bernotat, Chairman of the Board of Management and CEO of E.ON AG, further underscores Oman’s growing international appeal as an investment destination. E.ON is by far the largest privately owned utility company in the world, generating annual sales of just under EUR 87 billion in 2008. With operations in more than 30 countries, the company boasts a global workforce of roughly 93,500 employees. Its business interests span the spectrum of the energy chain, encompassing gas exploration, production, transportation, storage and distribution; LNG supply; natural gas, coal, nuclear and hydro power generation; power transmission, distribution and retail sales; and renewables and carbon sourcing.

Speaking exclusively to the Observer, Dr Bernotat said his three-day visit was aimed at assessing opportunities for business and investment in areas linked primarily to the company’s core power and gas business. Talks with high-ranking government officials focused on, among other areas, prospects for sourcing liquefied natural gas (LNG) from the Sultanate, as well as potential partnership opportunities in LNG processing schemes. “We are trying to establish opportunities to buy LNG from Oman on a spot or medium term basis.

Saudi Arabian Shares Drop Most in 4 Months on Oil, U.S. Data

Saudi shares dropped the most in four months, led by Saudi Basic Industries Corp. and Al Rajhi Bank, after oil declined yesterday and U.S. consumer data raised concern the global recovery may be protracted.

Saudi Basic Industries, the world’s largest petrochemicals maker, known as Sabic, and Al Rajhi, the largest lender in Saudi Arabia by market value, fell the most since August. The country’s Tadawul All Share Index retreated for a third trading session, falling 2.7 percent, the biggest drop since June 21, to 6,268.55. The market was closed Oct. 29 and yesterday for the local weekend.

The U.S. Commerce Department said consumer spending slipped 0.5 percent in September, while another report showed a gauge of confidence weakened in October, helping end a streak of seven straight monthly gains for the Standard & Poor’s 500 Index. Crude fell the most in a month on the consumer-spending report, which increased skepticism that the economy will strengthen.