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Friday, 31 December 2010

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Dubai’s Emaar Financial Services Suspends Broking Activity - Bloomberg

Emaar Financial Services LLC received the approval of the United Arab Emirates’ Securities and Commodities Authority to “temporarily suspend its brokerage license,” according to a statement published on its website.

Dubai-based Emaar Financial, a unit of Emaar Properties PJSC and Amlak Finance PJSC, will stop trading activities on Jan. 6, according to the statement, which didn’t indicate when the company expects to start up again.

Trading volumes in the U.A.E. have tumbled in 2010 to the lowest in four years, forcing some brokerages to close. Dubai amassed more than $100 billion of debt as it transformed itself into a financial hub, and a real-estate slump triggered a credit crisis in 2009.

Foreign investors target big rewards with bonds - The National

Once relatively scarce in oil-rich Gulf countries, bonds with high rates of interest are becoming an increasingly common feature of the region's investment landscape as foreign investors chase better returns in emerging markets.

Numerous issuances of high-yield debt, or bonds that come with high annual interest rates and below-investment-grade credit ratings, have taken place in the GCC this year.

They include a US$450 million (Dh1.65 billion) Islamic bond sold in February by Dar Al Arkan, a major Saudi developer, that came with a 10.75 per cent profit rate and a $500m bond from the investment firm Kuwait Projects Company at 9.4 per cent interest.

Gulf bond sales are bright economic sign - The National

A brightening global economic outlook and a shift in investor appetite towards emerging market debt helped to spur US$32.6 billion (Dh119.74bn) of bond sales in the Gulf this year.

That was down from the $42.9bn borrowed by companies and governments from investors last year, according to Bloomberg data. But it was still more than double the $15bn of bond sales in 2008 during the worst stretch of the financial crisis.

The top sellers of debt in the region this year were the Qatar Investment Authority, which sold $3.5bn of bonds in July, and the Dubai Electricity and Water Authority, which issued $3bn in April and October. Qatar Telecom and Abu Dhabi's International Petroleum Investment Company followed with $2.75bn and $2.5bn of bonds, respectively.

Bahrain overhauls its 2030 economic blueprint - The National

Bahrain is revising its economic growth strategy to reflect a decline in the importance of financial services and construction.

Both sectors acted as valuable drivers of growth in recent years as the kingdom sought to accelerate its economic diversification away from oil.

Adjustments to the strategy will also take account of a slowdown in the rate of growth of government spending.

Abu Dhabi economy to accelerate next year - The National

Abu Dhabi's economic growth will accelerate next year with the expansion of non-oil sectors expected to drive the creation of wealth in the capital, says the Abu Dhabi Chamber of Commerce and Industry.

Growth will be propelled by a more expansive private sector and a rising population, according to a report by the chamber.

Development in non-oil industries such as manufacturing, construction, trade and services will eclipse growth in the oil sector, the biggest component of the emirate's economy.

Etisalat DB faces India hurdles - The National

Etisalat's Indian subsidiary has paid an Dh8.1 million (US$2.2m) penalty to the Indian Government for failing to launch second-generation mobile services on time but faces further charges relating to spectrum licences the operator was awarded in 2008.

Last month, Etisalat DB was named among the companies in a government report that found the prices paid for companies were "unbelievably low" and forced Andimuthu Raja, India's telecommunications minister, to resign from his post.

The Indian government is now determining whether it should rescind some or all of the 122 spectrum licences it awarded in 2008 to nine companies for 123.9 billion rupees (Dh10.12bn). The auditor general alleged that as much as $40bn of revenue was potentially lost by the government.

UAE’s Stock Market Merger Ensnared by Politics, Technical Problems

Trading volumes are a fraction of what they were just two years ago, and broker-dealers are closing up shop for lack of business. But a merger of the three stock exchanges of the United Arab Emirates (UAE), a move that could solve many of these woes in one stroke, remains entangled in politics and technical problems.

While stock market trading across the Middle East has dropped off sharply with the onset of the global financial crisis, figures from the Arab Monetary Fund (AMF) released Thursday show that two of the UAE’s bourses shrunk the most last year: Volume on the Dubai Financial Market (DFM) plunged 61% this year and on the Abu Dhabi Securities Exchange (ADX) by 51% through December 29.

Only Nasdaq Dubai, which isn’t included the AMF figures, showed some improvement this year, with the value of securities traded reaching $1.2 billion in the first 11 months, compared with $1.08 billion for all of 2009.

Dubai Holding Agrees With Lenders To Refinance $555M Loan

Dubai Holding Commercial Operations Group LLC said Thursday it has agreed with Citibank, Royal Bank of Scotland Group PLC (RBS) and Standard Chartered PLC (STAN.LN) to refinance a $555 million loan.

"A consensual agreement has been reached to refinance the existing $555 million revolving credit facility by converting it into a five-year term loan at commercial terms, with effect from Dec. 30, 2010," Dubai Holding said in an emailed statement.
This comes after Dubai's other flagship state-owned conglomerate, Dubai World, agreed with lenders to restructure $26 billion worth of debt.

And The Winner Is...... — GCC Index Analysis — GCC Market Analytics

Today was the final trading session on the year for GCC markets. The Qatar market was the big winner this year, rising by almost 25%. Saudi and Muscat managed to eek out modest gains whilst Kuwait, Abu Dhabi and Bahrain finished slightly in the red for the year.

The big under-performer in 2010 was the Dubai market which fell 9.60%.

2010 Stock Market Performance: Dubai, Abu Dhabi, Saudi, Kuwait, Qatar, Bahrain, Muscat

2010 Stock Market Performance: Dubai, Abu Dhabi, Saudi, Kuwait, Qatar, Bahrain, Muscat
[ Click to enlarge ]

11 for 2011: Will the Bangladesh bubble burst? | beyondbrics –

Bangladesh remains a paradox among frontier markets: its GDP growth trend is one of the most stable in the region, but it has high levels of asset price volatility. It proved to be one of the economies least affected by the global financial crisis, with GDP growth only slowing from 6.3 per cent in 2008 to 5.9 per cent in 2009 as the country benefited from the so-called “Walmart Effect” of increased demand for cut price garments in recession-hit economies.

While this was a source of some comfort and relief to policymakers, it also helped to inflate an asset price bubble. Managing this may be the biggest macro challenge for the country in 2011.

Underscoring the rush of enthusiasm for Bangladeshi equities, the DGEN, the Dhaka Stock Exchange’s benchmark index, has been up over 95 per cent in the year to date. Although it then fell almost 9 per cent in two weeks earlier this month, it remains comfortably one of the best performing stock markets in the world since 2007, outpacing both the Bric countries and the MSCI Frontier Markets Index.

End of Year Performance Report «Alpha Dinar-talking GCC finance

The trading year has ended, and we offer you below the performances of the different GCC equity markets for the year 2010:

Kuwait's Weighted index outperformed the region (given that it significantly underperformed the region in 2009), and Dubai lagged the region (Dubai debt probelms).

The best and worst performers of 2010 on the Kuwait Stock Exchange are:

Thursday, 30 December 2010

Dubai Shares Gain as Nakheel Gets State Funds to Repay Bonds; Emaar Rises - Bloomberg

Dubai shares advanced for a second day as Nakheel PJSC, the developer of palm-shaped islands off the city’s coast, said it received funds from the Dubai government to repay Islamic bonds maturing in January.

Emaar Properties PJSC, the United Arab Emirates biggest property developer, rose to the highest in more than a week. Drake & Scull International, the Dubai-based engineering contractor for the real-estate industry, gained for a fourth day. The DFM General Index advanced 0.5 percent to 1,630.53 at 12:41 p.m. in the emirate. The measure retreated 9.7 percent this year and is headed for its worst annual performance since 2008.

“We are seeing support from the government side, and that gives confidence to investors,” said Abdel-Rahman Kharma, senior equity trader at Naeem Brokerage in Dubai. “That added to the positive sentiment towards the Nakheel situation.”

Nakheel gets Dubai funding to repay $750 mln sukuk - Maktoob News

Troubled property developer Nakheel said on Thursday that it would repay its $750 million Islamic bond that matures next month, following funds being made available by Dubai.

The company said in a statement to emirate's bourse that sufficient funds has been made available by the Dubai Financial Support Fund for repayment of the Islamic bond that is due on Jan 16, 2011.

The builder of man-made islands off the coast of Dubai, said with this sukuk payment it would have repaid all previously issued sukuk and would request the Nasdaq Dubai bourse to delist them.

ANALYSIS - Dubai's global bourse hopes end but options remain | Reuters

Dubai's ambition to become an international equity hub may have been put on ice by its need to repay debts, but the Gulf Arab state could still become a magnet for global equity funds if the UAE consolidates its bourses and earns MSCI emerging market status.

In 2007, Dubai agreed to pay $4 billion for stakes in Nasdaq OMX and the London Stock Exchange, saying the buys would help the emirate draw in international liquidity and become the bridge between markets in the United States, Europe and Asia.

But, mired in debt and faced with looming repayment deadlines, Dubai has been forced to scale back those plans.

UPDATE 1-DP World, Abu Dhabi terminals not to renew contract | Reuters

Port operator DP World's DPW.DI contract to manage the Mina Zayed port for Abu Dhabi Terminals (ADT) will not be renewed after it expires on Dec. 31, the two companies said in a statement on Thursday.

Following the expiry of the five-year management contract, ADT will resume management of the terminal. DP World said the earnings before interest, tax, dividend and amortisation (EBITDA) contribution from the agreement was 'not material' to the company.

ADT, which is a subsidiary of Abu Dhabi Port Company (ADPC), added that discussions surrounding operations for the new Khalifa Port in Abu Dhabi have not resulted in any binding agreement.

gulfnews : Hochtief surrenders in ACS fight

German builder Hochtief was preparing to lose its fight for independence from Spanish predator ACS yesterday, revealing a deal with its creditors to allow for the change of control.

Hochtief's lenders have waived their right to cancel credit lines should any shareholder hold more than 30 per cent, Hochtief's chief financial officer said in a newspaper interview, smoothing the way for the much more heavily indebted ACS to build a controlling stake.

He said lenders were happy that the company was well capitalised enough, thanks in part to its sale of a 9.1 per cent stake to the government of Qatar in December.

Wednesday, 29 December 2010

MIDEAST STOCKS-Egypt gains on stimulus plan; Nakheel lifts Dubai | Reuters

Egypt's bourse climbed to a new seven-month high on Wednesday on optimism following upbeat government forecasts for the economy, while news of progress on Nahkeel's [NAKHD.UL] debt restructuring lifted Dubai stocks.

Egypt's announcement of an off-budget economic stimulus worth up to $3.4 billion and forecasts of accelerating growth have bolstered prospects for corporate earnings.

Stocks benefiting the most from renewed investor interest included Ezz Steel ESRS.CA, Commercial International Bank COMI.CA and Orascom Construction (OCIC.CA), which gained 2.2 percent, 2.3 percent and 0.4 percent respectively.

Dubai's finances: Debt forgetfulness | The Economist

THERE was plenty of Schadenfreude when, in late 2009, Dubai was forced to admit it had trouble paying its debts. The brash emirate’s Gulf neighbours quietly hoped to tempt bankers and business people to their rival financial hubs. Now, irritatingly for many, Dubai is showing signs of recovery. A $10 billion bail-out by Abu Dhabi staved off the threat of a big default. The emirate returned to the bond markets in September. Although the issue was unrated, it was heavily oversubscribed.

Certainly, the property market is still suffering. New apartment blocks and office buildings appear with few new occupiers to pay for them. The Burj Khalifa, the world’s tallest building—formerly known as Burj Dubai but renamed in honour of Sheikh Khalifa, Abu Dhabi’s ruler, after the bail-out—is reported to be largely empty. Rents in the Dubai International Financial Centre (DIFC), a glitzy zone for offshore banks, were slashed in December.

But the real economy is not doing badly. Tourists are returning. Trade is apparently growing, particularly with India and China, although sanctions have made it trickier to export to Iran. The expatriate executives who manage most of the private sector are defensive about Dubai. They focus on the positives: thinning traffic jams, lower rents. Local media provide a stream of good news. So what’s the worry?

Difference in Weights of the Price and Weighted Kuwait SE Indices « Alpha Dinar- talking GCC finance

We have talked about the Price Index and the Weighted Index of the Kuwait Stock Exchange many times. The difference between these two is that one (Price Index) takes into account the price of the stock to determine the weight of the stock on the index, and the other (Weighted) take into account the market value of the company. We have said that we always prefer the Weighted index as it is a better indicator of the market, since it gives bigger companies more share within the index. Most of the indices around the world are weighted indicies.
The graph above shows the weights of the different companies listed on the Kuwait Stock Exchange and their weights within the two indices and the difference in weights. (Click on the graph for a better view)

Dubai's Emaar Counting on Saudi Arabian Mega Projects in 2011

As operations in Dubai have slowed, Emaar is counting on its master-planned communities in Saudi Arabia to take up some of the earnings slack. Earlier this month, Emaar Middle East showcased Jeddah Gate and Al Khobar Lakes, two of its integrated communities, at a Cityscape exhibition in the Saudi Arabian capital Riyadh.

Dr Dia Malaeb, Regional Chief Executive, Emaar Middle East, said, "Emaar Middle East is one of the pioneers in master-planned community development in the Kingdom." He estimated that Riyadh "would need over one million new homes by 2014 while overall demand is set to grow at an average 3.3 percent."

Jeddah Gate is a mixed-use project featuring residential units, commercial space, and 75,000 square meters of leasable area for retailers. Top-end retailers and food and beverage outlets will open near the residential towers. Abraj Al Hilal is a cluster of three high rise residential towers within Jeddah Gate.

Qatar surplus to rise to 10.5% of GDP for 2010-2011 -

Rising gas revenues will see Qatar’s fiscal surplus for 2010-2011 rise to a record 10.5 percent of gross domestic product (GDP), according to official estimates.

"Qatar's budget is expected to record a surplus of around 10.5 percent in the current fiscal year,” the Abu Dhabi-based Arab Monetary Fund (AMF) is quoted as saying in a report by Emirates 24/7 on Wednesday.

However, the AMF added that the surplus “will remain lower than the surplus recorded in the previous fiscal year...this is because of high spending as part of the country's counter-crisis fiscal expansion measures."

Watinaya notches up Palestine's biggest IPO in a decade - The National

Wataniya's successful initial public offering offers a fillip to Palestine Exchange despite difficult market conditions elsewhere in the GCC.

It is the Palestinian Territories second mobile operator behind PALTEL and raised $78 million in its initial public offering, one and half times more than the $50.3m it needed to raise.

It was the largest IPO in Palestine for 10 years, based on a fixed price of $1.30 per share.

Nakheel Reaches Accord With 91% Creditors as It Restructures $10.5 Billion - Bloomberg

Nakheel PJSC, the developer building palm tree-shaped islands off Dubai’s coast, reached an agreement with 91 percent of its trade creditors as the company seeks to delay payments on at least $10.5 billion of loans and bills.

“Ninety-one percent by value of trade creditor accounts payable has been finalized in signed restructuring undertakings,” the Dubai government-owned company said in an e- mailed statement today. “We continue to work to achieve the required 95 percent restructuring threshold.”

Nakheel is renegotiating debt terms after the deepest financial crisis since the 1930s roiled Dubai’s real-estate market and left companies unable to raise money. The company had aimed to get approval from 95 percent of its creditors before year-end. Dubai World, the parent of Nakheel and one of Dubai’s three main holding companies, in October gained approval from all its creditors to change terms on $24.9 billion of loans.

Malaysia's cbank still reviewing Islamic mega bank bids - Maktoob News

Malaysia's central bank said on Wednesday it was still reviewing offers to set up mega Islamic banks, suggesting it could miss its target of awarding a licence this year as the industry struggles to create a well-capitalised sharia lender.

Bank Negara Malaysia is offering up to two new Islamic banking licences to foreign firms to set up banks with at least $1 billion of paid-up capital, a move that the industry hopes will spur more lending and create bigger Islamic banks that can compete with global lenders.

Malaysian central bank chief Zeti Akhtar Aziz had said the authority hoped to announce in 2010 at least one licence for a big Islamic bank.

gulfnews : Apicorp sells ACBC stake to Indian firm

The Arab Petroleum Investments Corporation (Apicorp), the multilateral development bank of the Organisation of Arab Petroleum Exporting Countries (Oapec), said it has signed an agreement to sell its 12 per cent stake in the Egypt-based Alexandria Carbon Black Company (ACBC) to the Aditya Birla Group, the majority shareholder of the company.

By doing so, Apicorp has set in motion a divestment plan aimed at mobilising funds for a new phase of investments, the firm said in a statement yesterday.

The divestment, Apicorp's first, was approved by its board on December 26. The UAE Government owns a 17 per cent stake in Apicorp.

Dh700 million acquisition strategy for Dubai's Masharie - The National

The private equity arm of Dubai Investments, one of the emirate's largest publicly listed investment firms, is looking to invest up to Dh700 million (US$190.5m) to acquire up to seven regional companies over the next year.

Abdulaziz al Serkal, the chief executive of Masharie, expects to close three of those deals this month for companies in the health care, education and oil and gas sectors.

Masharie's investment strategy comes on the heels of a recent surge of buyout activity among the region's private equity firms.

Abu Dhabi firm increases stake in microchip giant - The National

The Abu Dhabi-based Advanced Technology Investment Company (ATIC) has increased its investment in Globalfoundries, one of the biggest customised microchip makers in the world, through its US counterpart Advanced Micro Devices (AMD), according to a company filing.

ATIC now owns 86 per cent of Globalfoundries with AMD, the chipmaker's former owner, holding the remaining stake in the firm.

ATIC, an investment firm owned by the Abu Dhabi Government, purchased 65.8 per cent stake in Globalfoundries last year for $2.1billion (Dh 7.7bn)in a deal that placed the UAE as a leading player in the global microchip industry.

gulfnews : UAE may issue debt in late 2011 or 2012

The UAE might issue bonds by the end of 2011 or the beginning of 2012, Obaid Humaid Al Tayer, Minister of State for Financial Affairs, told reporters after the Federal National Council (FNC) approved the proposal to cap national debt.

The UAE at present has no public debt, as defined in the law, Al Tayer said.

In the debate over the law, FNC members rejected a proposed article allowing the government to act as a guarantor of banks in the UAE to safeguard the banking system if necessary.

Tuesday, 28 December 2010

MIDEAST STOCKS-Egypt index crosses 7,000 mark, Kuwait banks up | Reuters

Egypt's bourse crossed the critical 7,000 points mark on Tuesday, buoyed by optimism that a government stimulus plan will boost economic growth in 2011, while other regional markets were largely muted.

The benchmark .EGX30 rose 0.9 percent to close at 7,027 points, its highest close since May 6.

'The index is at critical levels and a lot of people are buying after it broke the 7,000 point level,' said Karim Hosny of Pharos Securities, adding that the next resistance level is at 7,400 points.

What is So Special About Marakez? « Alpha Dinar- talking GCC finance

Marakez is a newly listed Real Estate company in Kuwait. They own properties and projects in Kuwait, Qatar, and Syria. Today (Tuesday 28th of December) was the first day the company traded on the Kuwait Stock Exchange. The intial price the stock was allocated to was 500 fils. The stock went up to to 550 fils (the maximum allowed), but later in the day came back down to 500 fils.
Digging into the company’s financials, I found that, in terms of market multiples, the price the stock was allocated was unjustifiable. Based on the Sept 2010 financials, the stock book value is at 172 fils, meaning that the stock’s P/BV is 2.9x versus the industry average 0.57x (after taking out some outliers). The next most expensive stock, in P/BV terms, is Al Modn with 1.4x, less than half of Marakez’s ratio. If we look at the P/E, Markez’s is valued at 43.74x earings vs. the industry average of 20.65x (again after taking out some outliers).

Yesterday, Alqabas newspaper quoted the Company’s CEO, Abdulhameed Dashti, as saying “Those who own Marakez’s stock are lucky, lucky, lucky.” I guess he has a point given the very rich valuation attached to the stock.

Damas Says Bank Lenders Agree to Extend Debt Standstill Till January 31 - Bloomberg

Damas International Ltd., a Dubai- based jewelry maker and retailer, said its bank lenders agreed to extend the standstill period for its banking facilities to Jan. 31.

The company is in final negotiations with lenders on restructuring plan over its bank facilities, Damas said in a statement to Nasdaq Dubai today.

Middle East Crude Falls; Abu Dhabi Keeps Murban Supply Steady - Bloomberg

Middle East crude for sale to Asia fell from the highest in 27 months as Abu Dhabi maintained the supply of its flagship Murban grade.

Oman oil for immediate loading fell 69 cents, or 0.8 percent, to $91.20 a barrel, according to data compiled by Bloomberg. The high-sulfur grade was previously at the highest since September 2008. Dubai crude for loading in February dropped 69 cents to $90.92. Abu Dhabi’s light Murban crude was down 69 cents at $93.58.

Abu Dhabi National Oil Co. kept a reduction on Murban supplies at 10 percent from agreed volumes in February, unchanged from January’s cuts, the state-run producer in the United Arab Emirates capital said in an e-mailed statement. The U.A.E. is a member of the Organization of Petroleum Exporting Countries, which pledged at a Dec. 11 meeting to maintain production targets. Half of the group’s 12 members are from the Middle East.

UAE debt law paves way for sovereign bond - The National

The United Arab Emirates has taken a step towards its first sovereign bond after the Federal National Council passed a new public debt law today.

The legislation, which needs presidential approval to become law, limits government debt to 25 per cent of the country's gross domestic product, or Dh 200 billion ($54.45 bn).

An earlier version of the legislation discussed last year had said public debt should not exceed 45 per cent of GDP, or Dh300 billion.

Gulf Stocks Movers: Aldar, Ithmaar Bank, Jabal Omar, NBK - Bloomberg

Qatar’s QE Index lost 0.9 percent, the biggest drop in more than a week, to 8,645.65 at the 12:30 p.m. close in Doha. Abu Dhabi’s benchmark stock index advanced 0.3 percent and Saudi Arabia’s Tadawul All Share Index rose 0.5 percent at 1:29 p.m. in Riyadh.

Bahrain’s Ithmaar Jumps Most in Month After Raising $167 Million - Bloomberg

Ithmaar Bank BSC, the retail-focused Islamic bank based in Bahrain, advanced the most in more than a month after it received a $167 million Shariah-compliant loan.

The shares gained 4.2 percent, the biggest intraday increase since Nov. 21, to 12.5 cents at 12:10 p.m. in Manama. Ithmaar has declined 48 percent this year.

The bank raised the Islamic murabaha loan from Bahrain’s Ahli United Bank BSC. Ahli United Bank was unchanged at 72 cents.

Kuwait rejects Islamic banks' liquidity request

Kuwait's central bank denied a request by Islamic lenders to grant them exceptions from liquidity ratio requirements and allow for the withdrawal of excess liquidity, a newspaper reported on Tuesday.

Kuwaiti Arabic daily Al-Rai said this was the second time the country's central bank rejected such a proposal - a move some banks say put them at a disadvantage to conventional banks.

The central bank intervenes in the money market to withdraw excess liquidity at banks through bonds issued by and received from the banks on demand.

Arab Banking Corp buys stake in Libya's MeditBank | Reuters

Libya-based Mediterranean Bank on Tuesday said it has raised its capital to sell a 49 percent stake to Bahrain-based Arab Banking Corporation for 74 million Libyan dinars.

'Mediterranean Bank informs that it signed on December 12 a partnership agreement whereby Arab Banking Corporation becomes its international partner,' Mediterranean Bank said in a statement to the Libyan stock exchange.

Mediterranean Bank, founded in 1997, raised its capital to around 94 million Libyan dinars, it added without giving more details. - UAE asks for action over Saudi loans

United Arab Emirates’ central bank has asked banks to raise provisions against loans to the Saudi family owned groups Ahmad Hamad Algosaibi and Brothers (Ahab) and Saad Group from 50 per cent to 80 per cent.

The demand, in a circular to UAE-based lenders, comes as the regulator takes an increasingly conservative approach to the exposure of financial institutions to the troubled Saudi groups, which are locked in a series of legal disputes. The furore has rocked Gulf financial institutions, raising questions about lax credit practices where “name lending”, or issuance of loans on reputation alone, have come under scrutiny.

The UAE central bank called on domestic and international banks based in the country to set aside money for bad loans by the end of 2010.

Monday, 27 December 2010

11 for 2011: Are investors too bullish on emerging markets? | beyondbrics

We are pretty optimistic that emerging market equity returns will be positive over 2011, but we expect them to underperform developed market equities. The attractions of global equity markets next year are underpinned by a relatively high risk premium against fixed income instruments and by the improving prospects for the US economy, driven by QE2 and by the ongoing improvements in productivity.

Look specifically at emerging markets and they are also cheap against fixed income, but they are valued at close to parity with their developed market peers, having traded at a discount for much of the previous decade. We feel that they should trade at a discount again, for three reasons.

First, whilst corporate governance has improved over recent years, minority shareholders still lack any real influence in most emerging markets, albeit with some exceptions such as South Africa.

How Did Kuwait SE Perfrom in 2010? « Alpha Dinar- talking GCC finance

Well there is no one answer to the question above, as it depends on the index you are looking at. By looking at the price index (the most popular index in Kuwait), you will find that the returns for the year, including dividends is a mere 0.2%. But if you look at the weighted index (my preference), you would find that the mark returned a hefty 25.7%, including dividends, beating global markets (US 12.7% , UK 11%, France -2.3%, Germany 16.7%, Japan -1.8%, and Hong Kong 4.4% among others) as well as regional peers (Saudi Arabia 7.5%, Qatar 25.3%, Dubai -11%, and Abu Dhabi -1.8%).
Again the difference between the two indices is that the price index gives smaller companies a bigger weight in the index versus the weighted index, which takes into account the market cap of the company. I also included the MSCI Kuwait, which returned 33.4% so far this year. This index takes into account the stock’s market cap as well as liquidity (i.e. what percentage of the share is free floating and not held by cornerstone investors).
The key lesson here is that this year, the price index was dragged down by small cap companies that have been hit badly by the financial crisis and haven’t recovered yet. If you had invested in blue chip stocks (NBK, KFH, Zain, etc.) would would have been better off.

Dubai's Emaar, Saudi's Jadawel settle dispute - Bloomberg

The Dubai developer of the world's tallest tower Emaar Properties and Saudi real estate firm Jadawel International say they have agreed to settle their long-running legal dispute.

The companies said in a joint statement posted on Monday by Emaar on the Dubai Financial Market stock exchange that neither firm had any outstanding claims against the other following what they say was an "amicable settlement."

The statement did not provide details.

Iraq's Oil Production Reaches Highest in 20 Years to 2.6 Million Barrels - Bloomberg

Iraq’s oil production exceeded 2.6 million barrels a day for the first time in 20 years, newly appointed Oil Minister Abdul Kareem al-Luaibi said at a press conference in Baghdad.

The rising output will boost Iraq’s oil exports by 5 percent to 2 million barrels a day next month,Falah al-Amri, head of the country’s State Oil Marketing Organization, said today in an interview in Baghdad. The nation sells about 60 percent of supplies to India, China and other Asian countries where demand is increasing, he said

Iraq, holder of the world’s fifth-largest crude reserves, is seeking foreign investors to help boost oil and gas production, which was affected by insurgent attacks and a lack of spending. Oil output hovered around 2.4 million barrels a day since the 2003 U.S.-led attack that ousted the regime of President Saddam Hussein. The government awarded 12 oil and three gas development contracts to since the invasion.

Dubai Shares Drop to 3-Month Low on Saudi Provisioning Concern, DIB Falls - Bloomberg

Dubai shares fell to the lowest in more than three months, led by Emirates NBD PJSC, as Al Khaleej said the United Arab Emirates Central Bank asked lenders to increase provisions toward Saad and Algosaibi groups.

Emirates NBD, the country’s biggest bank, slid the most in more than seven months and Dubai Islamic Bank PJSC lost for a second day. Dubai’s DFM General Index retreated 1 percent to 1,603.38, the lowest since Sept. 13, at 1:07 p.m. in the emirate. The measure has lost 11 percent this year, headed for its worst performance since 2008. The Bloomberg GCC 200 Index of companies in the region dropped 0.3 percent.

"The interesting topic today is the increase in provisions to 80 percent for Saad debt. This impacts all the banks negatively," said Ahmed Talhaoui, Abu Dhabi-based head of investment at Royal Capital. “It is almost a total write-off.”

Bombay Exchange Hopes to Score With Shariah Index - India Real Time - WSJ

The Bombay Stock Exchange, Asia’s oldest trading floor, along with the Mumbai-based Taqwaa Advisory and Shariah Investment Solutions on Monday launched an index comprising shares, of India’s top 50 companies that meet the legal code of Islam.

The BSE TASIS Shariah 50 index was formed using the guidelines of an Indian Shariah advisory board. The barometer consists of the 50 largest and most liquid Shariah-compliant stocks within the BSE 500 Index. The new index was last trading up 0.5% at 1,233.49 outpacing the benchmark Sensex’s 0.4% rise this morning.

Islamic law doesn’t permit Muslims to invest in companies that derive significant benefits from interest, since usury is considered sinful.
50 largest and most liquid Shariah-compliant stocks within the BSE 500 Index. The new index was last trading up 0.5% at 1,233.49 outpacing the benchmark Sensex’s 0.4% rise this morning.

Islamic law doesn’t permit Muslims to invest in companies that derive significant benefits from interest, since usury is considered sinful in the Islamic faith, or from the sale of goods and services that are deemed sinful within the Islamic faith, like alcohol, tobacco and weapons.

gulfnews : Doha Bank to issue $500m bonds as profit rises despite recession

The third largest bank in Qatar, Doha Bank, yesterday said it plans to issue senior debt bonds of $500 million (Dh1.83 billion) through its fully-owned Bermuda-based subsidiary in the first quarter of 2011.

In a statement following an ordinary general meeting (OGM) held recently, the bank said despite the uncertain economic climate following the global financial crisis, it has been able to make headway in profits and increased returns on assets and equity in the first nine months of 2010.

The OGM was held to discuss the issue of the senior debt bonds, among others.

Libya cementing ties with UAE - The National

Libya, one of the UAE's oldest Arab investment partners, wants to build on a 40-year relationship, as was shown only last week when the two nations signed a US$11 billion (Dh40.4bn) joint investment deal.

Libya is seeking investment from the UAE and other Arab countries as it works to position itself as an economic hub linking African resources to European markets.

To further its goal, two years ago the North African country embarked on a multi-year, $240bn infrastructure development programme, to include the construction of roads, airports, seaports, railways, schools and hospitals, Jamal Ellamushe, the Libyan minister of privatisation and investment, told a forum in Abu Dhabi yesterday.

Al Maskari Holding in $3bn Libya energy plan - The National

Abu Dhabi's Al Maskari Holding is behind a US$3 billion (Dh11.01bn) project to build an integrated "energy hub" in Libya and to develop an undersea cable for exporting electricity to Europe.

The project will include solar power and conventional electricity generation from fuels such as natural gas, and a high-voltage undersea transmission line from Libya to southern Italy.

An agreement for the project was signed in Tripoli on December 12, said Sirajeldean Elbadri, an official with the chairman's office of the Libyan general board of privatisation and investment.

An eventful year for Dubai - The National

Multibillion-dollar debt restructurings, loan defaults and woe for the country's lenders dominated an eventful year for the UAE's financial and banking sectors.

But there were at least a few hints of a nascent recovery. The completion of Dubai World's US$24.9 billion (Dh91.45bn) restructuring in September gave a much-needed boost to stagnant local markets, and numerous companies and governments successfully sold bonds to international investors to help refinance their borrowings.

Sunday, 26 December 2010

Qatar Index Rises Most in Two Weeks on Oil, Growth Prospects; Israel Gains - Bloomberg

Qatar’s benchmark stock index rose the most in more than two weeks as oil prices boosted Industries Qatar QSC and on speculation spending for the 2022 World Cup will spur economic growth.

Industries Qatar, the second-biggest petrochemicals maker in the Middle East, climbed the most in almost four months. Masraf Al Rayan, the country’s second-largest lender complying with Islamic law, advanced 2.1 percent. The QE Index rose 1.3 percent, the most since Dec. 8, to 8,737.39 at the 12:30 p.m. close in Doha. The gauge has rallied 26 percent in 2010, headed for the biggest yearly gain since 2007. Teva Pharmaceutical Industries Ltd. led Israeli shares higher.

Crude oil increased to the highest level in more than two years as confidence among U.S. consumers advanced to a six-month high, signaling that fuel demand will increase in the biggest oil-consuming country. Oil rose $1.03 to $91.51 a barrel on the New York Mercantile Exchange on Dec. 23, the highest settlement since October 2008. Prices are up 15 percent this year.

New claims may add to Nakheel's legal woes - sources, UAE Industries - Maktoob News

Property developer Nakheel's restructuring plan is being complicated by new claims from trade creditors that could lead to more legal headaches, two sources familiar with the matter said.

Unlike parent firm Dubai World, which secured unanimous support from lenders within a year for its $25 billion debt restructuring plan, Nakheel is struggling to negotiate terms with a mass of contractors that hold the keys to its many delayed projects.

"Nakheel is a much more complicated restructuring than even Dubai World," said one source with direct knowledge of Nakheel's restructuring plans.

DFM Sets Up Unified Fluctuation Band; Cuts Maximum Share Weight in Index - Bloomberg

Dubai Financial Market PJSC, the only Gulf Arab stock market to sell shares to the public, introduced unified fluctuation limits and cut the maximum weighting of a company in the benchmark index to 20 percent.

Listed securities can rise as much as 15 percent daily and fall as much as 10 percent from Jan. 2, the Dubai government- controlled bourse said in an e-mailed statement today. Currently this band applies only to the most active stocks, while non- active stocks can gain or decline as much as 5 percent.

“The new rules will enhance trading activity on the current non-active stocks” which includes some “major” companies, the bourse’s Chief Executive Officer Essa Kazim said in the statement. He refered, among others, to Emirates NBD PJSC, the country’s biggest bank, and Shuaa Capital PSC, the largest investment bank, as non-active stocks.

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Iraq gives go-ahead to Kurdish oil contracts - The National

Iraq's new central government plans to recognise contracts for oil and gas production in Iraqi Kurdistan, a step towards healing an extended rift that has delayed development of some of the world's largest oilfields.

Several UAE companies stand to benefit if the dispute is resolved.

Abdul Luaiby, two days into his new job as the Iraqi oil minister, said yesterday that there was an agreement between Baghdad and the regional government of Kurdistan.

Abu Dhabi stands tall enough for three bourses - The National

The new headquarters of the Abu Dhabi Securities Exchange (ADX) is nearing completion on Sowwah Island, and a recent visit to the site showed the structure would almost certainly make it on to any list of the capital's most visually arresting structures.

Although it is still encased in scaffolding, the four-storey glass structure is suspended more than 25 metres above ground, supported by four granite columns, and will eventually be surrounded by water features that architects say will give the building the appearance of floating.

All told, it boasts more than 21,367 square metres office space, including a trading floor of almost 1,000 sq metres.

Safco Climbs to 26-Month High, Samba Falls as Saudi Shares Little Changed - Bloomberg

Saudi Arabian shares were little changed on the first day of the week as international markets started extended holidays and investors prepare for the release of fourth-quarter results in the kingdom.

The Tadawul All Share Index swung between gains and losses during the day’s trading, ending down less than 0.1 percent at the 3:30 p.m. close in Riyadh to 6609.14, the lowest since Dec. 21. Banks, led by Samba Financial Group, Saudi Arabia’s second- largest lender by market value, drove declining stocks, while petrochemicals led by Saudi Arabian Fertilizer Co., a unit of Saudi Basic Industries Corp., the world’s largest petrochemicals maker, paced gaining shares. The 146-company gauge has climbed 8 percent this year.

“The market is flat on extended holidays and light trading in international markets until the new year,” Asim Bukhtiar, an equity analyst at Riyad Capital, said in Riyadh. “Holiday shopping has encouraged an optimistic outlook for 2011.”

Traders in UAE take cover as West goes quiet - The National

End-of-year tactics will dictate the movement of the markets this week as traders either play safe and close positions or buy into heavyweight stocks, analysts say.

As investors around the world take a break for Christmas and New Year, liquidity in the UAE is likely to be minimal as limited quantities of international money will flow into the already underperforming equity market.

"No one will be concentrating on the markets," said Alfred Fayek, the head of MENA equity sales at EFG-Hermes.

Weekly Market Analysis (Week 52) — Weekly Index Review — GCC Market Analytics

The weekly market analysis pages have been updated for trading week 52 (December 25th - December 30th). Use the links below to view the individual market analysis pages:

The table below shows the market outlook based on each study.
Visit the links above to view the full analysis reports for all GCC markets.

World economy can withstand $100 oil price: Kuwait | Reuters

The global economy can withstand an oil price of $100 a barrel, Kuwait's oil minister said on Saturday, as other exporters indicated OPEC may decide against increasing output through 2011 as the market was well supplied.

Analysts have said oil producing countries are likely to raise output after crude rallied more than 30 percent from a low in May because they fear prices could damage economic growth in fuel importing countries.

European benchmark ICE Brent crude for February closed at $93.46 on Friday after hitting $94.74 a barrel, its highest level since October 2008.

Saturday, 25 December 2010

Christmas with China: Jintao Bells | beyondbrics –

After another triumphant year, China invites the global glitterati around for a Christmas party. The guests arrive, and Chinese prime minister Wen Jiabao calls them to attention.

Ladies and gentlemen, I see you’ve all brought stockings. The problem is that we Chinese have already given you so much over the years: gunpowder, pandas, a visionary economic model…
a stray boat captain
…the threat of invasion…
Would non-Bric countries please be quiet? We have places for dissenters, and they don’t serve mulled wine. That reminds me, we’ve heard that it’s customary to do a Christmas crib. Any guests wishing to contribute, please leave your intellectual property by the photocopier.
Multinational companies:
Yes please!
Oh, you are kind. Anyway, as I was saying. This year we have decided that the only thing we have left to give you is money. The waiters are distributing red envelopes, which, as all watchers of HSBC ads will know, contain good, solid cash. There are 100 dollars in each envelope. North Korea and Burma, you’ve both been exceedingly naughty this year, so you get double.
North Korea
: The Dear Leader looks your gift horse in the mouth, and deems it lame.
That’s teenagers for you… I hope the rest of you at least are satisfied with your presents?
: You bet. And in return we’d like to present you with…
Oh no, Mr Cameron, there’s nothing of yours we could possibly want… Something in your throat, my Indian friend?
This money’s all Chinese! And I must say, Indian envelopes are rather fatter.
Your envelopes are as brown as the Yellow River after New Year. Count yourself lucky – a few months ago those notes would only have been worth a mere 98 dollars. It’s time you started to appreciate the yuan.
: Mr Wen, Norway’s envelope seems to be empty.
Congratulations, Viking peaceniks, you have won the inaugural Wen-not-if Prize. Awarded to make clear who’ll be in charge.
But for now, we’re in charge, and our envelope is also empty.
Yes, we thought you owed us enough already. Can’t you print your own this time?
You are forcing us to cable Washington bad things.
Really? Please do let me know what exactly, so I can – how do you say? – refudiate. It’s amazing what a Baidu search doesn’t throw up.
Vladimir Putin (Russia) enters.

Sorry, I’m late. I was felling this beautiful Siberian Christmas tree. I’d have brought it sooner, but I was attacked by three tigers, two bears and one human-rights organisation. Anyway, where do you want it?
Thank you, Mr Putin, over there will be fine. Would you mind slipping on a T-shirt? We struggle to get the staff these days, but I’m sure Vietnam can sort you out.
When will people understand – we don’t only make clothes! We are moving to a knowledge economy.
Exactly, knowledge of your place in the global economy. Are you doing a Christmas jumper range this year? I’ve rather outgrown last year’s. Where isdinner anyway? I do hope everybody likes South American food – half the pampas’bulls are in the oven.
We were expecting turkey.
Come on! Not even the Europeans want Turkey, and they accepted Ireland… Oh, forgive me, Mr Erdogan, I couldn’t resist. I mean, if I got a penny every time someone made fun of my name…
You’d be slightly poorer than President Hu?
Indeed. We had to pass one potential leader over for that very reason; frightfully good chap too, Mr Wot Wiehao. Right, who’s for a quick carol before dinner? Any requests, or shall we stick with Good King Wen Jiabao? You’ll get the hang of it soon enough.

Friday, 24 December 2010

Emaar is set to appeal Delhi court order - The National

Emaar-MGF plans to appeal against an Indian court order this week that effectively rejected its plea to stop the Delhi Development Authority (DDA) from cashing in the remainder of a 1.83 billion rupee (Dh148.9 million) bank guarantee.

'We will go for an appeal against this order,' said Anupama Chopra, a spokeswoman in New Delhi for Emaar-MGF. She declined to comment further. Emaar-MGF, a joint venture between Emaar Properties of Dubai and MGF Development of India, paid the deposit after it won a contract in 2007 to build the Commonwealth Games village in New Delhi. But it has faced criticism from Indian authorities for alleged deficiencies in construction and missed completion deadlines.

In October, soon after the games were over, the DDA said it planned to seize at least a portion of the bank guarantee as damages. The developers went to court, arguing that they had met all deadlines and rectified construction defects that were pointed out to them.

TODAYonline | Business | Business in Brief | Sime Darby sues former CEO, others for $141.8m

Sime Darby yesterday filed a civil suit against its previous president and chief executive, Mr Ahmad Zubir Murshid, and four other former company officials, in an attempt to recoup some of the losses incurred in its troubled energy and utilities division.

In a stock exchange filing, the Malaysian-based multinational said the suit was in connection with the Qatar Petroleum Project, the Maersk Oil Qatar Project and a marine vessel construction project.

It is claiming a total of RM338.5 million ($141.8 million) in specific costs relating to the projects, as well as other damages and costs.

Sukuk Beats Emerging-Market Debt for 2nd Month: Islamic Finance - Bloomberg

Islamic bonds are outperforming emerging-market debt for a second month as new note sales rebound, Malaysia boosts spending on roads and power plants and confidence returns to the Persian Gulf.

Global Shariah-compliant notes returned 1.45 percent in December, the HSBC/NASDAQ Dubai US Dollar Sukuk Index shows, while bonds in developing regions fell 0.7 percent, according toJPMorgan Chase & Co.’s EMBI Global Diversified Index. Emerging- market returns have dropped as rising yields on U.S. Treasuries gave dollar-based investors less incentive to buy riskier fixed- income assets.

Islamic debt sales increased 34 percent in the second half compared with the first six months as investor confidence was boosted by Dubai World’s September agreement with most of its creditors to restructure $24.9 billion of debt. Developing nation bond funds suffered net outflows for three consecutive weeks until Dec. 8, the longest stretch since the first quarter of 2009, according to Cambridge, Massachusetts-based research firm EPFR Global.