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Thursday, 30 September 2010

Dubai Shares Fall, Trimming Gains in Best Quarter in a Year; Kuwait Gains - Bloomberg

Dubai shares declined the most in a week on speculation gains this quarter are overdone given growth prospects and after Emaar Properties PJSC raised $450 million of convertible bonds. Kuwaiti shares advanced.

Emaar, the builder of the world’s tallest tower and the company with the heaviest weighting in the emirate’s benchmark index, retreated 1.8 percent. Aramex PJSC, the Middle East’s biggest courier company, fell the most since April. The DFM General Index slipped 1.1 percent, the most since Sept. 22, to 1,683.69 at the 2 p.m. close in Dubai. That trimmed the gain this quarter to 15 percent. Kuwait’s measure rose 0.8 percent today.

“Being the end of the best performing quarter year-to- date, it is only natural to expect some profit taking,” said Saad al-Chalabi, an institutional trader at Al Ramz Securities in Abu Dhabi. Dubai’s equity benchmark soared 23 percent in the third quarter of 2009.

Kuwait Shares Advances to 4-Month High as Zain Receives Bid from Etisalat - Bloomberg

Kuwait stocks rose to the highest in four months as Zain, the country’s largest mobile-phone company, got a purchase offer for a 46 percent stake, boosting investor sentiment. Emaar Properties PJSC fell in Dubai.

Gulf Cable and Electrical Industries Co., the Kuwaiti maker of electrical equipment, soared to the highest in a year and Kuwait Food Co. jumped 6.3 percent. Zain shares were suspended from trading pending clarification on the offer from Abu Dhabi- based Emirates Telecommunications Corp. The Kuwait SE Price Index increased 0.8 percent to 6,985, the highest since May 24, at the close in Kuwait City. The index rose 6.8 percent in the past three months, its biggest quarterly gain since the one ended March.

The gains are a “spillover from Zain’s news,” said Jasem Al Zeraei, head of institutional sales at NBK Capital in Kuwait.

Qatar Telecom Appoints Six Banks as Lead Managers for Sale of Dollar Bonds - Bloomberg

Qatar Telecom QSC hired six banks to help organize meetings with credit investors next month ahead of a planned dollar bond sale, according to an e-mailed statement from the company.

The meetings will run Oct. 4 to Oct. 6, with three teams covering Singapore, Hong Kong, Los Angeles, New York, Boston, Dubai and London, a person familiar with the matter said, asking not to be identified as he isn’t authorized to discuss the details.

A revival of investor confidence in the region has sparked a wave of sales this month, helping to push Gulf issuance to more than $9 billion in the third quarter, the most since the $16 billion raised in the final three months of 2009, according to data compiled by Bloomberg.

UPDATE 1-Major Zain shareholder says Etisalat offer suitable | Reuters

Emirates Telecommunications Corp's (ETEL.AD) offer to buy the Kharafi Group's stake in Zain (ZAIN.KW) is 'suitable and good for both parties,' the head of the Kharafi Group, said in a Kuwaiti newspaper on Thursday.

The UAE telco, known as Etisalat, said a day earlier that it had made a conditional offer for a 46-percent stake in Zain. [ID:nLDE68S0YC]

The offer of 1.7 dinars ($5.97) a share -- which values the stake at nearly $12 billion -- was made to the Kharafi Group, a major Zain shareholder keen to offload its position for more than a year."

Dubai's Emaar Properties Raises $450 Million From Convertible Notes Sale - Bloomberg

Emaar Properties PJSC, the biggest publicly traded real-estate developer in the United Arab Emirates, said it successfully placed a convertible bond issue of up to $500 million. The bond will pay an annual interest rate of 7.5 percent and has an initial conversion price of $1.293 a share, Emaar said in an e-mailed statement today.

The issue was increased to $450 million from $375 million and has an over-allotment option of $50 million. Settlement is expected to take place on or around Dec. 20.

MIDEAST MARKETS WEEKAHEAD-Debt issues, IPOs revive capital mkts | Reuters

Investors: breathe a sigh of relief. A spate of debt issues and initial public offerings is set to inject new life into Middle East capital markets in the final quarter of what has otherwise been a lacklustre year.

Debt and equity capital market activity suffered in the first half of 2010 as a waning global recovery and debt worries in the European Union kept skittish investors stuck to safe-haven assets like gold and U.S. treasury notes.

The traditional summer lull, coupled with the Muslim holy month of Ramadan, a period when business activity typically slows in the mostly-Muslim Middle East, did little to help."

Qatar's QIB bond price talk 262.5 bps midswaps- sources | Reuters

Qatar Islamic Bank's QISB.QA (QIB) benchmark five-year Islamic bond, is said to yield around 262.5 basis points over midswaps, or just over 4 percent, three sources, including a lead arranger, said on Wednesday.

QIB wants to raise a minimum of $500 million from the A-rated bond, but two sources said the Islamic lender could raise as much as $750 million.

HSBC, Credit Suisse and QInvest are joint lead managers and bookrunners on the deal. Roadshows conclude in Europe on Thursday."

Dubai bourse's new rules aimed at emerging mkt tag- CEO | Reuters

Bourse operator Dubai Financial Market DFM.DU will switch to a 'delivery versus payment' (DVP) system by the first-quarter of 2011, in a bid by the United Arab Emirates to get emerging market status from index compiler MSCI.

The DFM is working with the UAE regulator, the Securities and Commodities Authority (SCA), as well as the Abu Dhabi Securities Exchange (ADX) to bring in the new rules, Essa Kazim, DFM's chief executive, told Reuters on Wednesday.

'We are aiming for the first quarter of 2011, but if things go very smoothly it could be sooner than that,' said Kazim."

Wednesday, 29 September 2010

Arab Petroleum Investments Plans to Sell Saudi Arabia Riyal Benchmark Bond - Bloomberg

Arab Petroleum Investments Corp., an energy investment unit of the Organization of Arab Petroleum Exporting Countries, plans to sell a Saudi riyal-denominated benchmark-sized bond as the company expands in the kingdom.

The bond will be issued after an investors’ road-show starting in Saudi Arabia early next week, the Al-Khobar, Saudi Arabia-based company said today in an e-mailed statement. It didn’t provide the size and pricing of the bond.

Companies in Saudi Arabia, the largest Arab economy, are stepping up bond sales to finance expansion plans as the government invests to spur economic growth and build infrastructure. A five-year, $400 billion stimulus package was announced by the government in late 2008.

Dubai Shares Lead Gulf Higher on Government Bond Sale; Kuwait's Zain Soars - Bloomberg

Dubai shares rose for a second time this week, adding to this month’s gain in Gulf markets, as the emirate raised $1.25 billion in a bond sale and emerging-market stocks climbed to the highest level since June 2008.

Emaar Properties PJSC, the developer of the world’s tallest tower in Dubai, gained 0.8 percent. Drake & Scull International advanced for the first time in three days after the engineering company won a contract. In Kuwait, Mobile Telecommunications Co. soared the most in seven months after CNBC Arabiya reported Emirates Telecommunications Corp. offered to buy a stake in the company. The Dubai Financial Market General Index increased 0.7 percent to 1,702.43 at the 2 p.m. close in the emirate, bringing the surge so far this month to 15 percent.

Investors are “gaining confidence from reports of a positive reception for the Dubai government bond issue,” said Julian Bruce, director of equity sales at EFG-Hermes Holding SAE in Dubai. Gains in global markets are also helping to lift local stocks, he said.

FT.com - Dubai’s Emaar to launch $375m bond

Dubai’s Emaar Properties is set to launch a convertible bond of $375m with an option up to $500m, as the real estate company seeks to bolster its finances amid a continuing property slump in the emirate, people aware of the matter say.

The five-year bond, with indicative pricing of 7.25-8.25 per cent, has received strong interest, two people involved in the deal say. The conversion premium is 20-30 per cent.

The property giant, which drove the growth of the real estate market after the emirate opened to foreigners in 2003, has weathered the Dubai financial crisis better than other developers. But it remains affected by the real estate crash, which has seen valuations at least halved since 2008.

Etisalat bids to buy 46 pct in Kuwait's Zain - TV | Reuters

Emirates Telcommunications Corp (Etisalat) has offered to buy 46 percent of Kuwait's Zain, CNBC Arabiya said on Wednesday, in a deal that would be worth $11.8 billion.

Etisalat had offered 1.7 dinars per share for the stake, the Arabic language channel said. Zain shares rose to a four-month high after the report.

CNBC Arabia gave no further details and did not cite a source. It said National Bank of Kuwait was an advisor to Etisalat and BNP Paribas was advising Zain majority shareholder, Kharafi Group."

Shari’ah-compliant Australian equity fund approved by Bahrain authorities | Islamic Finance | CPI Financial

Investment manager for the fund is Hyperion Asset Management, a Brisbane-based, growth-style manager whose award-winning core investment team has worked together since 1997. Shari’ah advisors to the fund are Dr. Mohd Daud Bakar of Malaysia and Sheikh Nizam Yaquby of Bahrain.

The fund is available for “expert” investors, defined by Bahrain authorities as individuals and institutions that have at least $100,000 in financial assets, as well as governments and related organisations. The fund is managed in Australian dollars and reported in US dollars.

Hyperion uses a proprietary process to manage a high-conviction portfolio made up of a limited set of stocks that meet strict selection criteria, for Shari’ah-compliance and other business attributes. The firm has earned a host of recent recognition for outstanding performance. Accolades include being named Australian Equities (Small Cap) Fund Manager of the Year at the May 2010 Money Management/Lonsec Fund Awards and winning the Golden Calf Award for Best Emerging Fund Manager at the October 2009 Australian Fund Manager Awards.

Beltone to Receive Egyptian Exchange-Traded Fund License Before Year End - Bloomberg

Beltone Financial, an Egyptian investment bank, may receive an exchange-traded fund license before the end of the year, Khaled Seyam, chairman of the Egyptian Exchange, said.

“We are at the final stage, the stage of signing contracts,” he told reporters at an investment conference today in Cairo. “Beltone is the only applicant but other firms have started talking about getting in.”

Egypt’s benchmark EGX30 index has gained 7.7 percent this year, according to data compiled by Bloomberg. The exchange- traded funds, known as ETFs, trade like stocks and allow investors to track indexes and make bets on whether they will rise or fall. The bourse will begin listing funds based on the benchmark index, Seyam said.

UAE's Etisalat Looking for Mergers, Acquisitions in India Within Next Year - Bloomberg

Emirates Telecommunications Corp., the United Arab Emirates’ biggest phone company, is in talks for mergers and acquisitions with India’s Reliance Communications Ltd. to expand in the world’s second-largest wireless market.

Etisalat was “studying opportunities for M&A” with Reliance, India’s second-biggest cellular phone operator, Chairman Mohammed Omran told Bloomberg News in Sydney today, without elaborating. The company, based in Abu Dhabi, was also talking to other operators about deals, aiming to forge agreements within the next year, he said.

Purchasing a stake in an Indian cellular operator would give the Middle East carrier, also known as Etisalat, a foothold in a market set to approach 1 billion users, or more than three times the population of the U.S. Etisalat said earlier this month it’s considering investing in Idea Cellular Ltd., which also provides mobile phone services in India.

gulfnews : Dubai redraws strategy map

The Dubai government is reviewing its growth strategy to focus on traditional strengths, such as trade, retail and tourism, in the aftermath of the global financial crisis which hit the local real estate sector.

More than half the 980 projects registered with Dubai's Real Estate Regulatory Agency (Rera) have been either cancelled or are in the process of being cancelled, according to a supplementary prospectus — considered to be refreshingly transparent — filed by Dubai's Department of Finance to the London Stock Exchange for a new bond issue.

The prospectus says the 2007 set of principles that comprise the Dubai Strategic Plan 2015 (DSP 2015) is being re-assessed. The original focus of the plan was on the core areas of economic development; social development; security, justice and safety; infrastructure, land and development; and government excellence.

Morgan Stanley notes ‘positive’ economic signs for UAE - The National Newspaper

The US investment bank Morgan Stanley has joined the growing chorus of those seeing early signs of an economic recovery in the UAE.

In a research note, the bank described as “positive” recent UAE Central Bank data showing modest loan growth and higher government deposits.

“Overall we are seeing the growth in the right areas,” said Daniel Cowan, a Morgan Stanley analyst in Dubai. The Central Bank’s data showed that loans and advances increased 0.8 per cent last month, compared with the previous month, to more than Dh1 trillion (US$272 billion). In addition, government deposits rose more than 5 per cent.

Jurisdiction challenges cloud Dubai World court - The National Newspaper

The Dubai World tribunal hit a roadblock on its first hearings yesterday as lawyers argued over the jurisdiction of the court.

The tribunal was set up within the Dubai International Financial Centre (DIFC) to decide cases involving the conglomerate and its subsidiaries. The DIFC Courts are separate from the tribunal but the tribunal has adopted the same set of rules for adjudicating cases.

Ludmila Yamalova, a partner at Al Sayyah Advocates and Legal Consultants in Dubai, said that while the courts and the tribunal were in their infancy, too much time was still spent weighing minor legal issues. Ms Yamalova, who is representing a wealthy German investor in a case against the property developer Damac, said those proceedings had been held up for months while deciding where the case should be heard.

Dubai Still in the Doldrums | Emerging Markets Outlook

Last year I wrote a blog post about the financial collapse of Dubai World and its effects on Dubai’s own Roman-candle economy and on other emerging economies worldwide. I had previously written about the effects of the global financial crisis on Dubai’s prospects. I concluded that the Dubai World implosion, together with the economy-wide devastation resulting from the global recession, did not bode well, but that it was too early to write off Dubai’s future role in the world economy, given its ability to sell ever-more audacious and astonishing projects to eager investors.

Almost a year on, the prospect is, if anything, even murkier. On the one hand, the $25 billion restructuring of Dubai World has been agreed by 99 per cent of the company’s creditors. A new $1 billion bond issue, announced yesterday by Dubai’s government, seems timed to take advantage of the rising confidence that may result from the Dubai World restructuring, which was finalized earlier this month. At the same time, the bond prospectus notes that government regulators have withdrawn authorization for 495 property development projects, representing about half of all planned developments in the emirate. This in addition to the numerous projects that developers themselves have canceled for lack of financing.

This would be devastating for any economy, but it is doubly so for Dubai, which depends on property and finance for over 40% of its GDP (against less than 2.5% for oil). According to an article in today’s Financial Times, government revenue fell by 13% in 2009, but the drop would have been much greater were it not for a sharp rise on other revenues such as police fines and revenues from airport and toll road user fees. Nevertheless, Dubai expects a 2010 fiscal deficit of $1.6 billion. The bond issue prospectus also shows a rise in the overall debt of the government and state-owned companies at about $28.5 billion, up from $19 billion a year ago. These numbers exclude many state-affiliated entities such as companies owned by the ruling Al-Makhtoum family rather than by the government itself. The emirate’s total debt is estimated at around $110 billion.

Dubai’s Corporate Matchmaking Continues - The Source - WSJ

In these straitened days Dubai’s government likes to play matchmaker and marriage bureau to troubled companies. It delights in finding secure, local spouses for unloved ventures left on the shelf by a financial crisis that hit this emirate especially hard.

Dubai’s property firms and banks were caught by a bust in which real-estate prices collapsed 50% from 2008’s boom-time peaks. Firms such as Emaar, Dubai Holding, Union Properties, Deyaar Development and Nakheel have been left with massive projects, rolled out at the top of the market but now largely unwanted.

And the lenders who part-funded this development orgy, Dubai Islamic Bank, Tamweel and Amlak, now carry significant asset quality risk, according to many analysts.

How is Dubai fixing its finances? Speeding tickets | beyondbrics | FT.com

What is the relationship between government debt and local traffic fines? In Dubai, a lot. This morning yours truly received a text message from Dubai police: the family car has incurred yet another $165 traffic fine. And of course those breaking traffic regulations should pay up.

But the authorities aren’t just concerned with reducing road accidents. In a twist familiar to disciples of Jeremy Clarkson, it seems that the traffic fines are a roundabout route to trimming Dubai’s budget deficit.

Dubai’s government revenues fell 13 per cent in 2009 compared to 2008, but they are now being bolstered by an almost 50-per-cent increase in police fines, according to a prospectus issued by the government, as it drums up interest in a $1bn sovereign bond that is expected to be priced by Wednesday.

FT.com - Dubai bond sale set to raise up to $1.25bn

The Dubai government was set to raise as much as $1.25bn as its sovereign bond issue moved to price on Wednesday, people aware of the issue said.

It was four times subscribed as the book closed in Europe on Tuesday, they said, having elicited interest of $4bn: $2bn for the five-year tranche and another $2bn on the 10-year tranche.

The lead managers, Deutsche, HSBC and Standard Chartered, have narrowed pricing to about 6.75 per cent for the five-year and 7.875 per cent for the 10-year tranche from initial soundings of 6.875 per cent and 8 per cent respectively.

Tuesday, 28 September 2010

Dubai Shares Fall a 2nd Day on Concern September Gains Overdone; Oil Drops - Bloomberg

Dubai shares declined for a second day on speculation gains this month are overdone and as global markets fell on concern that economic growth may slow. Crude oil dropped, ending a four-day rally.

Emaar Properties PJSC retreated 0.8 percent after the builder of the world’s tallest tower postponed a board meeting. Gulf News reported Indian officials blamed Emaar’s local unit for poor facilities at the Commonwealth Games village. The share have surged 16 percent this month. Dubai Islamic Bank PJSC, the biggest shariah-compliant lender in the United Arab Emirates, decreased for the first time in four days. The DFM General Index slipped 0.5 percent to 1,690.19 at the 2 p.m. close in Dubai, trimming the gain for September to 14 percent.

“Keeping in mind September’s strong performance for the market, it is natural to see profit-taking,” said Marwan Shurrab, assistant fund manager and chief trader at Gulfmena Alternative Investments Ltd. in Dubai. “We follow international markets, so if they sell off, we sell off. Nevertheless the bullish sentiment is still intact.”

Khorafis appeal court ruling in fraud case - The National Newspaper

A Dubai International Financial Centre (DIFC) court heard appeals yesterday from three members of a prominent Kuwaiti family who say they lost US$75 million (Dh275.4m) due to fraud and the misrepresentation of “safe” investments.

Rafed Khorafi and his wife and mother are seeking triple damages, or $225m, under DIFC laws covering improper financial advice.

The family are trying to have an earlier decision by the court to strike out their claims reversed."

Fiscal stimulus, prudent policies help Saudi banks weather crisis - Arab News

Despite the continued challenging operating conditions, the outlook for the Saudi banking system is stable, reflecting its resilience and strong financial fundamentals, Moody's Investors Service said Monday. The stable outlook expresses Moody's expectations for the fundamental credit conditions in the Saudi banking system over the next 12 to 18 months.

The Saudi banking sector remains sound due to the government's fiscal stimulus, which has sustained macroeconomic growth, the banks' robust financial fundamentals, including strong liquidity and adequate profitability and capitalization, and a prudent regulatory environment, said Moody's in its annual Banking System Outlook on Saudi Arabia.

Catalysts for potentially greater lending activity could include banks' strong liquidity and expectations of a peak in provisioning levels in conjunction with banks' efforts to maintain market share and margins in the current low-interest/low-growth environment. Indications already point to a pick-up in loans to the private sector, with a healthy pipeline of projects expected over the next 18 months, which — coupled with banks' growing emphasis on retail banking — is conducive to stronger private sector growth.

FT.com / Middle East / Economy - Half of Dubai’s property projects scrapped

Dubai’s government has cancelled almost half the emirate’s property projects as it grapples with mounting oversupply and a debt crisis, according to a new bond prospectus.

The document, released on Monday as Dubai seeks to raise $1bn this week, provides a window on the emirate’s state finances.

The prospectus said the real estate regulator has cancelled, or is cancelling, 495 projects – about half of all developments planned in the emirate – amid fears that market demand would have been unable to cope."

Monday, 27 September 2010

Dubai Property Transactions Amount to $2.62 Billion in First Half 2010 - Bloomberg

Dubai real-estate transactions totaled 9.63 billion dirhams ($2.62 billion) in the first six months of the year, about half the amount for all of 2009, according to government data.

Dubai’s Land Department recorded 1,188 sales in the first half compared with a 2009 total of 2,327, the government said in a bond prospectus published on the London Stock Exchange today. The document didn’t provide figures for the first half of 2009.

The deepest global financial crisis since the 1930s led Dubai property prices to slump more than 50 percent from their peak in August 2008 as frozen credit markets force the country’s largest mortgage providers, Tamweel PJSC and Amlak Finance PJSC, to stop lending.

FT.com - Moderation earns Markaz a healthy return

There is no Arab version of Aesop’s fable of the tortoise and the hare, but Manaf Alhajeri, chief executive of Kuwaiti investment bank Markaz, is a fan of the morality of the tale.

While much of Kuwait’s investment company sector went on a debt-fuelled spree, swelling balance sheets dramatically over the past decade, Markaz followed a more moderate course, and stuck largely to traditional strengths in asset management and advisory work.

When the financial crisis engulfed the region towards the end of 2008, the bank swiftly recognised its losses – the majority mark-to-market losses on money kept in funds it manages on behalf of investors. As a result, Markaz has emerged as one of the very few relatively healthy investment companies in Kuwait.

FT.com / Technology / Science - Saudi Arabia takes westward academic turn

Saudi Arabia has for several years used the proceeds of bumper oil production to build new universities, upgrade existing institutions and send thousands of students abroad on generous scholarships.

Many of its peers in the Gulf, meanwhile, have chosen to open branches of western universities, such as Georgetown in Qatar and the Sorbonne in Abu Dhabi. In contrast, Saudi Arabia has invested in the King Abdullah University of Science and Technology, a research-orientated graduate school backed by an endowment of $10bn.

Now the kingdom looks set to emulate its neighbours. Last week, the country’s General Investment Authority (Sagia) signed a letter of intent with Georgia Institute of Technology of the US to build a centre to provide applied research degrees. The institute aims to be the first to offer foreign-accredited, postgraduate research degrees inside the kingdom.

FT.com - Dubai confirms plan for bond issue

Dubai has confirmed that it plans to launch a dollar-denominated sovereign bond, the first since the scale of the regional business hub’s debt problems dramatically surfaced last November.

The government said in a statement on Monday that it would launch the bond “shortly”, adding that the proceeds would be used for general budgetary purposes. It did not say how big the bond would be, but bankers say the emirate is looking to raise around $1bn with maturities of up to seven years.

The planned launch comes amid improving sentiment following a recent agreement with creditors to restructure $23.5bn of debts of Dubai World, the government-owned conglomerate.

Kuwait interested in strategic stake in IOC | Reuters

Crude oil prices are likely to be between $75 and $80 per barrel in the first quarter of 2011, Kuwaiti Oil Minister Sheikh Ahmad al-Abdullah al-Sabah said on Monday.

Sheikh Ahmad also said Kuwait was interested in acquiring a strategic stake in state-run Indian Oil Corp, subject to economic feasibility.

On Sept. 6, India's Oil Secretary S. Sundareshan said the Indian government planned to sell a 10 percent stake in IOC, the country's biggest state-run refiner.

Sheikh Ahmed also said Kuwait was keen to keep its stake in BP (BP.N) at current levels."

Dubai Shares Drop on Concern 15% Gain This Month Is Overdone; Emaar Falls - Bloomberg

Dubai shares declined for the first time in three days on speculation recent gains are overdone given growth prospects in the emirate.

Emaar Properties PJSC, builder of the world’s tallest tower, retreated 1.8 percent after Standard & Poor’s affirmed its negative rating on the stock. Emirates NBD PJSC, the United Arab Emirates’ biggest bank by assets, lost the most in more than two months. The DFM General Index slid 1 percent to 1,699.12 at the 2 p.m. close in Dubai. The Bloomberg GCC 200 Index slipped 0.2 percent at 2:51 p.m.

Dubai’s measure jumped 15 percent this month including a 6.7 percent gain since Dubai World, one of three main holding companies, said Sept. 10 that 99 percent of creditors agreed to alter the terms on $24.9 billion of debt. Twenty-one shares including Emaar were added to the FTSE’s Global Equity Index after the close on Sept. 17 as the U.A.E. was classified as a secondary emerging market, also helping push up local stocks this month.

S&P cuts Dubai free zone's credit rating | Reuters

Standard & Poor's downgraded Dubai's Jebel Ali Free Zone's (JAFZ) credit rating on Monday, citing uncertainty over its role in the debt restructuring of parent Dubai World. [ID:nWLA3880]

State-owned Dubai World [DBWLD.UL] this month obtained near-unanimous agreement from its bank creditors to restructure almost $25 billion in debt, which analysts said eased market uncertainty. [ID:nLDE6890IT]

The agency downgraded JAFZ's debt rating to B from B+ after placing it under "negative implications" in November last year. S&P also cited the "challenge" arising from the refinancing of JAFZ's 7.5 billion UAE dirham ($2.04 billion) Islamic bond in November 2012.

Dubai Steps Up Effort to Spur Economy With Tamweel Takeover - Bloomberg

Dubai’s government has stepped up efforts to spur the emirate’s economy, allowing Dubai Islamic Bank PJSC to purchase a majority stake in mortgage company Tamweel PJSC with the aim of reviving lending.

The decision follows the announcement on Sept. 10 by Dubai World, one of the emirate’s three main state-controlled holding companies, of a deal with more than 99 percent of its creditors to alter the terms on $24.9 billion of debt. Dubai International Capital LLC, which is part of Dubai Holding LLC, another of the three holding companies, has proposed to sell assets over five years to repay $2.6 billion, two people familiar with the plan said Sept. 15.

The deepest global financial crisis since the 1930s led to a 50 percent slump in Dubai property prices from their peak in August 2008, according to estimates from Colliers International. Frozen credit markets blocked Tamweel’s and Amlak Finance PJSC’s access to funds and forced what were once the two biggest mortgage lenders in Dubai to stop lending.

Emaar Is Well-Positioned to Face Challenging Real-Estate Market, S&P Says - Bloomberg

Emaar Properties PJSC, the United Arab Emirates’ biggest developer, is relatively well positioned to face the challenging domestic real-estate market, Standard & Poor’s said.

Emaar is helped by the “high quality of its rental and hospitality assets and the relatively low remaining exposure to development and cash collection risk,” the rating company said in a research note today. S&P kept the rating on Emaar BB/Negative.

“The negative outlook reflects our view of the challenging property market conditions in Dubai, together with Emaar’s weak liquidity and short debt maturity profile,” S&P said. “Failure to lengthen debt maturities could lead to a downgrade.”

Money laundering claims prompt US investigation - The National Newspaper

US authorities are to begin an inquiry into allegations of large-scale money laundering involving Middle East and US financial institutions.

The House of Representatives, the lower house of the US Congress, will hold its first hearing on global money laundering tomorrow under the heading “A review of current and evolving trends in terrorism financing”, according to the House website.

The House Committee on Financial Services will hear evidence from witnesses concerning the movement of US$1 trillion (Dh3.67tn) of funds between Middle East financial institutions and US banks over a six-year period up to early last year."

Dubai, Qatar Islamic Revive Gulf Debt Sales to Year High: Islamic Finance - Bloomberg

The Dubai government and Qatar Islamic Bank SAQ are among issuers leading the biggest Persian Gulf borrowing push since the fourth quarter, a sign Dubai World’s debt restructuring is reviving confidence in the region.

Dubai may sell $1 billion next week in its first bond sale in a year, two bankers familiar with the plan said Sept. 23. Qatar Islamic Bank plans to offer its first dollar sukuk and will start meeting investors in the Middle East, Asia and Europe, it said last week. Chief Executive Officer Salah Mohammed Jaidah said May 19 the bank may issue as much as $750 million of notes that comply with the religion’s ban on interest.

The sales would push Gulf issuance to more than $9 billion in the third quarter, the most since the $16 billion raised in the final three months of 2009, according to data compiled by Bloomberg. The extra yield investors demand to hold Dubai’s sovereign dollar sukuk rather than Malaysia’s has narrowed 46 basis points to 371 this quarter as the region recovered from the worst financial crisis since the 1930s.

Sunday, 26 September 2010

Abu Dhabi sees no bond in 2010, Dubai says no comment | Reuters

Abu Dhabi will not issue sovereign bonds this year, while fellow United Arab Emirate member Dubai is determined to get a credit rating in the future, top government officials said on Sunday.

Both Gulf Arab emirates have been testing investor interest in potential debt issues during recent months, with sources indicating debt-crisis hit Dubai may be first to tap the market.

Last week, two sources told Reuters that Dubai was readying to issue up to $1 billion in bonds as early as this week, the first sovereign placement from the emirate since its debt crisis rattled the markets in November 2009.

GCC Market Analytics: Price Projections Using Pattern Matching (Week 40)

Below are this week's index price projections based on the pattern matching approach presented in thisprevious post.

Here's a summary table which provides a 5-day outlook based on the price projections for each GCC index:


The price projections on the charts below extend for twenty trading days into the future. However, in the table above we're only looking at what the price projections are telling us about the next five days.

For each index there are three 5-day price projections based on the three best historical price matches. For example, the best historical match for the DFM General Index was higher five trading days later (Best Match 1 = "Up"), as was the second best match. However, the thrid best match was lower five trading days later (Best Match 3 = "Down").

The "5-Day Outlook" column provides the average 5-day price change of the three best historical matches. For the DFM General Index the average 5-day outlook is 0.65%.

As you can see, the price projection based outlooks broadly confirm what we're seeing in the other weekly analysis reports (Trend Analysis, Index Analysis & Market Breadth). That is, most projections are pointing to higher index levels this week.

Exclusive interview: Shehab Gargash - Banking & Finance - ArabianBusiness.com

Daman Investment chief Shehab Gargash on errors and excess in the emirate, and why Dubai must evolve to survive.

Shehab Gargash's Sheikh Zayed Road office hasn't changed much since he last invited Arabian Business in to talk, two years ago. The tan leather sofas are as comfortable as ever, the overstuffed bookshelves still look fit to buckle, and Gargash's lifelong passion for art is reflected in the striking pieces that adorn his walls.

Outside, of course, everything is different. Gulf bourses are down an average of 50 percent since their 2008 peaks, and Dubai's bubble has burst to reveal a $25bn debt pile."

Nasdaq Dubai a 'failed experiment' – Gargash - Banking & Finance - ArabianBusiness.com

Daman Investments CEO Shehab Gargash has dismissed the Nasdaq Dubai as a “failed experiment”, as the bourse prepares to integrate fully with the Dubai Financial Market (DFM).

“The NASDAQ Dubai was a failed experiment. I would have liked to see it succeed and we invested effort in helping it to succeed, but that didn’t happen,” Gargash, who is also a director of the Dubai Chamber of Commerce and Industry, told Arabian Business in an interview.

The Nasdaq Dubai, which is down 3.5 percent year-to-date but 46 percent since September 2008, announced in July that trading of its listed securities would be routed through the DFM trading platform.

Dubai Stocks Rise to Four-Month High on Global Growth Prosepects, Oil Gain - Bloomberg

Dubai shares climbed to the highest level in four months, leading a Middle East rally, after a U.S. durable goods report and German consumer confidence eased concern about growth prospects. Oil rose the most in two weeks.

Emaar Properties PJSC, the developer of the world’s tallest skyscraper, increased 1.6 percent and Dubai Islamic Bank PJSC, the United Arab Emirates’ biggest Islamic lender, advanced the most since Sept. 21. The DFM General Index gained as much as 1.8 percent to 1,719.72, the highest intraday level since May 18. The index was at 1,709.37 at 11:46 a.m. in Dubai. The Bloomberg GCC 200 Index added 0.2 percent and Egypt’s EGX 30 Index rose for a sixth day, climbing 0.9 percent.

“The strong performance of U.S. and European markets last week helped boost investor sentiment in the region,” said Ziad Dabbas, a financial analyst at National Bank of Abu Dhabi PJSC, the U.A.E.’s second-largest lender by assets. “We expect foreign investments to increase as the overall situation improves.”

GCC Market Analytics: Weekly Market Breadth Analysis (Week 40)

Good news. All GCC markets are now displaying positive market breadth. Historically, this has provided a bullish outlook for the GCC markets.

To find out exactly how bullish each individual GCC market has performed during positive market breadth periods please see this previous post.

Enjoy.

Dubai Islamic Raises Tamweel Stake as Dubai Seeks Mortgage Lending Revival - Bloomberg

Dubai Islamic Bank PJSC, the biggest Shariah-compliant lender in the United Arab Emirates, will raise its stake in Tamweel PJSC as Dubai seeks to restart mortgage lending after property prices slumped.

Dubai Islamic Bank received approval from the government to increase its stake in the mortgage lender to 57.33 percent from 21 percent. Tamweel’s shareholders include Dubai World Group and HSBC Holdings Plc, according to Bloomberg data.

“The move will give new momentum to the local mortgage market which has entered a recovery phase after a series of decisive measures taken by the government in the wake of the recent global financial crisis,” the Dubai government’s Media Office said today in an e-mailed statement. It didn’t give financial terms of the transaction.

Abu Dhabi May Not Sell Bonds This Year Due to `Difficult' Market Condition - Bloomberg

Abu Dhabi, the richest member of the United Arab Emirates federation, may not sell bonds this year because market conditions are difficult, Mohammed Ahmed al- Bowardi, secretary general of Abu Dhabi’s executive council, said today in the emirate.

Was the Google ‘flash crash’ on Friday significant? � ArabianMoney

Posted on 26 September 2010 with no comments from readers

Google stock dropped more than 90 per cent in a spectacular mini ‘flash crash’ on Friday that may just turn out to be a technical error or something far more significant. The video below tells the story (which we cannot confirm as true although it looks solid).

The May 6th ‘flash crash’ when the Dow lost almost 1,000 points in a matter of minutes comes instantly to mind (graph above). The US stock market has staged a long rally from its March 2009 low but the head-and-shoulders pattern over the summer is consistent with a major top and trend reversal.

Market warning?

Market observers have been looking for a signal since the May ‘flash crash’ that the market is rolling over. We have had warnings from financial astrologers and three confirmations of the Hindenburg Omen in the charts.

Perhaps the Google ‘flash crash’ is that final warning. Something probably caused it, and that something probably had to do with market makers repositioning for a correction. Conspiracy theorists will love this but it might just be too late already to short the market if this warning is validated.

Posted on 26 September 2010

Saudi Gazette - Kingdom set for strong growth in 2010 despite hiccups in developed markets

The Saudi Arabian economy should register a healthy growth rate of 3.9 percent in 2010 and post a budget surplus of SR40 billion “against a budgeted deficit of SR70 billion,” Al Rajhi Capital said in its “Economics Monthly” report for September released Saturday.

It also expects inflation in the Kingdom to decline moderately to 5.5 percent at the end of the year from the current 6 percent.

The report noted that robust economic growth from the developing markets is expected to continue, albeit at “slightly moderating levels in the months ahead.”
It underscored that with the strong economic fundamentals in Saudi Arabia, the impact of a global slowdown is likely to be limited."

Islamic finance can thrive in Dubai - The National Newspaper

Excess risk, excess reward, excess concern with short term results. More than any other word, excess gets to the root of the last financial crisis. Islamic law has long cautioned against excesses in the marketplace. Sharia-compliant finance prohibits "riba", translated into English as usury, and also attempts to keep financial transactions and markets in balance. The application of these principles helped to give birth to a thriving market economy in the Arab world that predated western capitalism and modern banking by centuries. The lessons of Islamic finance have a particular poignancy today.

A working paper from the International Monetary Fund released last week reported that Islamic financial institutions were more stable than their counterparts in the West. "Islamic banks performed better, given the large losses incurred by conventional banks in Europe and the US as a result of the crisis," researchers wrote. Both bankers and students are keen to know why: at branches of business schools in Dubai and in the West, classes on the subject are oversubscribed.

The Islamic finance industry already has nearly $1 trillion under management. Demand for Islamic financial products and institutions is expected to grow to $2.8 trillion by 2015, according to the Islamic Financial Services Board based in Malaysia, the country that is the global hub for Islamic banking. The growth in the industry presents an opportunity for this region, and for Dubai in particular.

Saturday, 25 September 2010

Savola Agrees to Purchase Al Hokair's 7% Stake in Panda for $79.4 million - Bloomberg

Savola Azizia United Co., a Saudi food producer, agreed to buy Al-Hokair Group’s 7 percent stake in Azizia Panda United Co. in a stock transaction valued at 297.6 million riyals ($79.4 million).

Savola Azizia plans to issue 8.7 million shares to pay for the holding, the company said in a statement on the Saudi bourse today. The amount represents 1.6 percent of Savola Azizia’s capital and is based on its share price at 34.2 riyals, according to the statement.

Jeddah-based Savola Azizia, which has 113 outlets in Saudi Arabia, is expanding its businesses to meet rising demand from a growing population in the Arab world’s biggest economy. In August, the company agreed to buy Al-Muhaidib Holding’s 18.6 percent stake in Azizia Panda and a 10 percent stake in Savola Foods Co., in return for raising Al-Muhaidib’s stake in Savola Azizia to 15 percent.

Saudi Shares Climb to Four-Month High as U.S., Oil Gain; Riyad Bank Rises - Bloomberg

Saudi Arabian shares rose to the highest in four months after global markets rallied on reports indicating the U.S. and German economies are growing.

The Tadawul All Share Index gauge added 0.8 percent to 6,485.68 as of 12:15 p.m. in Riyadh, the highest level since May 19. Saudi Basic Industries Corp., the world’s largest petrochemicals maker, known as Sabic, and Al Rajhi Bank, the kingdom’s largest publicly-traded lender by market value, led the advance. Tadawul has gained 6 percent this month.

“Investor sentiment continues to improve in Saudi Arabia,” said Anas Kassem, an investment analyst at Ajeej Capital in Riyadh. “This can be seen through increased activity in the market over the past couple of weeks ahead of third- quarter earnings, and this was further buoyed by a strong close yesterday of U.S. markets and oil.”

GCC Market Analytics: Weekly GCC Index Analysis (Week 40)

The only notable change from last week's Index Analysis is that the outlook for the Muscat 30 Index has now turned Bullish. The outlook for all other GCC indices remains the same which is good news because apart from the ADX Index all have a Bullish outlook.

Enjoy.

Shuaa lowers its growth forecast for the Emirates - Published 23/9/10

Shuaa Capital has downgraded its growth forecast for the UAE economy due to a weaker rebound from the global financial crisis than expected.

Smaller fiscal stimulus than expected from Abu Dhabi and surprisingly slowcredit growth in the first half of the year prompted the investment bank to revise its GDP forecast to 1.8 per cent from 2.5 per cent.

“Although we believe the UAE economy has emerged from recession in 2010, the recovery has probably not been as strong as we had anticipated at the start of the year,” Khatija Haque, the chief economist at Shuaa, wrote in a research paper."

Credit rating key to Dubai's $1bn bond issue - Arab News

Dubai's plan to issue up to $1 billion in sovereign bonds could help to revive bond market activity in the emirate, but investors say securing a credit rating remains crucial for wider investor appeal.

Expected as early as next week, the emirate's first government debt sale since the bursting of its real estate bubble and subsequent debt crisis last year could be a step towards rehabilitating its image in the eyes of international investors.

"It has to be at a decent price. But it will find an audience, that's for sure," said Haissam Arabi, chief executive of Dubai-based Gulfmena Alternative Investments.

Friday, 24 September 2010

Qatar, Greece Signs $5 Billion Memorandum of Understanding on Investment - Bloomberg

Qatar signed a memorandum with Greece expressing interest in investing as much as $5 billion in areas of the Greek economy such as tourism and real estate.

Greece and Qatar will look at cooperating on promoting investment projects and opportunities between the Qatar Investment Authority and its affiliates and the Hellenic Republic, according to a copy of the memorandum e-mailed today by Greek Prime Minister George Papandreou’s office.

The countries will focus on investments in real estate, tourism, transport, port or airport facilities, banking and finance, joint ventures, energy and other industries, when and as agreed by the two states, according to the memorandum.

GCC Market Analytics: Weekly GCC Trend Analysis (Week 40)

No changes in the trend conditions from last week. Most markets remain in either a Bullish or Very Bullish state.

Enjoy.
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Notes:
1. In the "Current Trend Conditions" section the short-term, medium-term and long-term trend values are determined by dual moving averages. The trend value is "Up" when the the shorter length moving average is greater the longer length moving average. The trend value is "Down" when the the shorter length moving average is less then the longer length moving average. For more information on dual moving averages see previous post here.
2. Dual moving average parameters are specific to each index and time-frame (short, medium and long)
3. The "Outlook" value can be "Very Bullish," "Bullish," "Neutral," "Bearish" or "Very Bearish." The value is determined by the historical performance of the index when the same short, medium and long-term trend conditions were in evidence in the past.
4. The top chart shows a plot of the historical price performance of the index. Highlighted on the chart are the past periods when the current trend conditions were in evidence in the past
5. The bottom chart shows the non-compounded percentage returns of the index when the current trend condition were in evidence in the past.

Pipeline Bypassing Hormuz to Be Finished This Year, U.A.E. Says - BusinessWeek

A pipeline to send oil from the United Arab Emirates directly to the Indian Ocean, instead of being shipped by tanker through the Strait of Hormuz, is likely to be finished this year, said Mohamed Al-Hamli, oil minister of the United Arab Emirates.

The $3.3 billion pipeline to the U.A.E.’s easternmost emirate, Fujairah, aims to “bypass” the Strait and it will carry about 1.5 million barrels of oil a day, Al-Hamli said in an interview in Washington.

The waterway is a chokepoint at the mouth of the Persian Gulf for a fifth of the world’s oil supplies. Iran has threatened to block the waterway if attacked because of its nuclear program.

FT.com - Dubai plans to sell $1bn in bonds

Dubai plans to tap the international capital markets as early as next week with its first bond issue since the debt standstill in the Gulf emirate shook financial markets last November.

Its government plans to issue about $1bn (€750m) in bonds with maturities of up to seven years amid improving sentiment following an agreement between its flagship group and creditors this month, according to people familiar with the situation.

One banker said: “This is a big test for Dubai. But the fact they are preparing to go is a very good sign. It shows that Dubai is back as far as many investors are concerned. The restructuring has paved the way for this deal.”

Qatar reaps rewards from rise in London office rents - The National Newspaper

Qatar’s property market may be suffering the same malaise as the rest of the region but the country’s sovereign wealth fund is reaping the benefits of rebounding commercial property values in London’s financial heartland.

Songbird Estates, which controls 70 per cent of the Canary Wharf business hub and in which Qatar Investment Authority (QIA) is the major shareholder, yesterday posted a return to profit of US$5.5 million (Dh20.2m) for the first half of the year, compared with a loss of Dh465m in the same period last year.

More importantly, the value of its Docklands property portfolio, where it counts some of the biggest names in international finance among its tenants, is rising."

FT.com - Athens seeks $7bn investment from Qatar

Greece is trying to secure more than $7bn of investment from the Gulf state of Qatar in real estate, energy and tourism to help turn around its recession-hit economy.

A memorandum of understanding signed in New York on Thursday by George Papandreou, the prime minister, and Sheikh Hamad bin Khalifa al Thani, emir of Qatar, “shows that Greece is a place that can attract credible investors” An Athens official said.

“We don’t want to raise expectations, there’s still a lot of work to be done…But this agreement boosts our confidence,” the official said.

Thursday, 23 September 2010

India rejects Etisalat share transfer plan

India has rejected a proposal to transfer shares from resident to non-resident in the India telecoms venture of UAE's Etisalat, a finance ministry statement said on Thursday, without citing a reason.

But Shahid Balwa, the vice chairman of the Indian unit, Etisalat DB Telecom Pvt Ltd, told Reuters the application was rejected due to "technical reasons" and the firm would re-apply with required documents.

"We are now submitting a fresh application, say within seven days," Balwa said.

Dubai Shares Advance as Axiom Telecom Said to Sell Shares in Initial Offer - Bloomberg

Dubai’s shares gained the most in a week as a proposed initial public offering from mobile-phone retailer Axiom Telecom LLC, the first such sale from the United Arab Emirates in more than a year, boosted investor confidence. Emaar Properties PJSC, developer of the world’s tallest skyscraper, rose 1.1 percent and Emirates NBD PJSC, the U.A.E.’s biggest bank by assets, advanced to the highest since May 18. The DFM General Index increased 0.9 percent to 1,689.45 at the 2 p.m. close in Dubai, bringing its gain for the week to 2.6 percent.

The IPO news “is positive for the market” and has helped improve investor sentiment, said Mohammed Ali Yasin, chief investment officer at financial services company CAPM Investment PJSC. “The market endured a lousy period where volumes were reaching a low point, there was over-pessimism. IPOs are important for us to recover.”

Companies from the Middle East had delayed share sales because of the global credit crisis. Dubai-based Axiom may sell shares next month and plans to offer 35 percent of its shares, a person familiar with the plan said yesterday. Shuaa Capital PSC, the U.A.E.’s biggest investment bank, is the book-runner for the transaction, said the person, who declined to be identified.

Mubadala Posts $1.2 Billion First-Half Comprehensive Loss on Investments - Bloomberg

Mubadala Development Co., an Abu Dhabi government investor with stakes in Carlyle Group and Ferrari SpA, reported a first-half comprehensive loss as its investments lost value because of the decline in global markets.

The loss was 4.5 billion dirhams ($1.2 billion) compared with a profit of 2.7 billion dirhams in the year-earlier period. Mubadala had an unrealized loss of 4.4 billion dirhams from public market investments in the first half, the company said in an e-mailed statement today.

“The numbers reflect the movements in shares for Aldar Properties, Du, AMD and General Electric,” Chief Operating Officer Waleed Al Mokarrab Al Muhairi said in a phone interview today. “They are non cash, mark to market. That is the source of all losses -- it is not the operating businesses and it is not the underlying health of Mubadala.”

Qatar Islamic Said to be Planning First Sale of Dollar-Denominated Sukuk - Bloomberg

Qatar Islamic Bank SAQ plans to sell its first dollar sukuk and will start meeting investors in the Middle East, Asia and Europe from tomorrow, according to a statement from the Gulf state’s biggest Shariah-compliant lender.

“The sukuk is expected to be launched, subject to market conditions” and Credit Suisse Group AG, HSBC Holdings Plc and Qatari investment bank QInvest have been hired to manage the issuance, said the statement posted on the Qatar Exchange website today. Chief Executive Officer Salah Mohammed Jaidah said on May 19 the company may issue up to $750 million of the notes that comply with the religion’s ban on interest.

Sales of Islamic bonds are picking up in the Persian Gulf after Dubai World reached an agreement with 99 percent of its creditors this month to change terms on $24.9 billion of debt. Banks and companies in the Middle East may sell $5.5 billion of sukuk in the fourth quarter, the most since the three months ended September 2007, according to data compiled by Bloomberg.

UPDATE 1-Kuwait's Burgan Bank raises $400 mln from bond sale | Reuters

Kuwait's Burgan Bank (BURG.KW) raised $400 million in a 10-year bond sale on Thursday, at a coupon rate of 7.875 percent.

The dollar-denominated bond sale attracted a final book size of $1.5 billion, one source with a lead bank said, signalling the issue was oversubscribed nearly four times by investors.

Burgan Bank is the commercial banking arm of Kuwait Projects Co (KIPCO) (KPRO.KW), the country's largest investment company by assets, which priced a $500 million 10-year bond in July at 9.5 percent.

gulfnews : flydubai secures $750 million in aircraft financing

Flydubai said Wednesday it signed aircraft finance deals worth more than $750 million (Dh2.7 billion) — through General Electric Capital Aviation Services and Babcock and Brown Aircraft Management — which analysts say could lead to Dubai's budget airline flying far ahead of the region's competitors.

The UK's FBE Aerospace chief analyst Saj Ahmad told Gulf News: "Rivals will be worried that during the downturn they are not expanding and flydubai is. Flydubai will use the 737-800s on routes which rivals like Air Arabia [using the A320s] cannot match."

Sharjah's Air Arabia and Kuwait's Jazeera Airways share some of the most popular routes with flydubai. However, flydubai flies to destinations that the others don't, such as Erbil in the Kurdistan region of northern Iraq, Djibouti and Azerbaijan's Baku.

Abu Dhabi's Invest AD May Acquire 10% of Russia's 2014 Olympic Ski Resort - Bloomberg

Invest AD, an Abu Dhabi government- owned money manager, may acquire 10 percent of the Mountain Carousel ski resort being built for the 2014 Winter Olympics in Sochi on Russia’s Black Sea coast.

Invest AD bought 3.5 percent and has an option to buy 6.5 percent more of the 40 billion-ruble ($1.3 billion) project, Magomed Bilalov, the deputy chairman of the board of OAO Krasnaya Polyana, which is developing Mountain Carousel, told reporters today in Moscow.

OAO Sberbank, Russia’s largest lender, holds 25 percent of the project and shareholders affiliated with the National Business Development Bank, or NBB, own 60 percent, Stanislav Kuznetsov, a senior vice president at Sberbank, said today.

Wednesday, 22 September 2010

Credit slows as economy hits Dh1tn milestone - The National Newspaper

Dubai is moving from being the driving force behind credit growth in the Gulf to becoming the regional laggard as projects that previously attracted investment dry up, says the chairman of the Union of Arab Banks.

But despite the slowdown in lending growth in the emirate, the wider UAE economy is set to pass Dh1 trillion mark for the first time, Ahmed Humaid al Tayer, the governor of the Dubai International Financial Centre, said at banking conference in Dubai yesterday.

Lending expansion in the emirate was likely to reach 8 per cent next year, behind credit growth of up to 10 per cent across the GCC, said Adnan Yousif, who is also the chief executive of Al Baraka Banking Group in Bahrain."

FT.com - Bellwether shares take toll in Egypt

Given the state of Middle Eastern markets, a return of over 7 per cent in the year to date is not bad. Only Qatar and Morocco have performed better.

Yet despite a recovery in shares from the lows of July, the mood among investors in the Cairo stock exchange is subdued.

Angus Blair, head of research at Beltone Financial, says that with real gross domestic product growth of more than 5 per cent and earnings growth of 18 per cent in core companies, the stock market should do better. “It’s pedestrian,” he says.

Nakheel to restart all 'short-term projects'

Dubai developer Nakheel has restarted work at its Al Furjan residential project and expects to start building again on all short-term projects by the end of next month, it said on Wednesday.

'Al Shafar Transport and Contracting Co is the first contractor to recommence construction work on Al Furjan, one of our-short term projects,' Nakheel said in a statement.

'We expect that all short-term projects will be fully mobilised by October 2010,' it added."

FT.com - Supply stymies UAE property recovery

Like many residents of the United Arab Emirates, Richard Bath, a structural engineer for Aecom, a US contracting group, works in Abu Dhabi but lives in Dubai, where rents are cheaper and there are more lifestyle options.

After a property crash last year, rental declines have slowed in Dubai, but accommodation costs in Abu Dhabi have dropped more than 25 per cent this year, says CB Richard Ellis, the consultancy. This is tempting Mr Bath to move to the UAE capital, where he is working on the Cleveland Clinic project on Sowwa Island.

“It’s still not as cheap as Dubai, but a lot of property is coming on to the market, which has brought prices down,” he says. “And it would be nice not to have to do the commute.”

Dubai Shares Drop Most in 3 Months on Concern Gains Overdone; Emaar Falls - Bloomberg

Dubai shares declined the most in almost three months on speculation recent gains may be overdone and after U.S. and European stocks retreated on concern the global economic recovery is faltering. Abu Dhabi shares fell.

Emaar Properties PJSC, builder of the world’s tallest tower, decreased the most since July and Dubai Investments PJSC dropped 3.5 percent. The DFM General Index lost 1.6 percent, the most since June 29, to 1,673.69 at the 2 p.m. close in Dubai. Abu Dhabi’s gauge slipped 0.3 percent. Dubai’s index has surged 13 percent this month and Abu Dhabi’s has jumped 5.3 percent.

“It’s inevitable that we would see some profit-taking after the recent gains,” said Paul Cooper, managing director at Sarasin-Alpen & Partners Ltd. in Dubai, which oversees more than $500 million in the Middle East. “Dubai had a strong run on the back of the Dubai Worldannouncement and the FTSE Group inclusion.”

M&A in Kuwait: Minority who? � Alpha Dinar- talking GCC finance

KIPCO announced earlier this week that they are selling 39.2% of Gulf Insurance Company to Fairfax Financial Holdings for KD 0.900 per share, or a total of KD 59.89 million. The price of the stock before the proposed acquisition was announced was at KD 0.570. Now the stock is trading at KD 0.620, a 45% discount to the offering price. Why hasn’t the stock price surged to match the acquisition price? Simply, our stock market doesn’t protect minority holders, and allows majority owners to sell their stake at a huge premium without benefiting other shareholders. This issue isn’t unique and occurs everytime an acquisition is announced on the Kuwait Stock Exchange.

To better understand the issue, I offer cases around the world:

- In the US, IBM announced on Monday the acquisition of Netezza, a data warehouse company, for $27.00 per share. The stock was trading at $24.60, and closed the at $28.48 the day the announcement was made, surpassing the acquisition price after gaining 15%. In this case every shareholder benefits.

- In India, Vedenta (a Britsh metals company) offered to buy a 60% stake of Cairn India (an oil company) from its parent company. The price of the stock up to almost match the offering price as soon as the announcement was made even though Vedenta is not acquiring the whole company. Also, to please regulators, Vedenta offered to buy at most 20% from minority shareholders and the remainder will be bought from the parent company.

I hope that the recently created Capital Market Authority puts a stop to this disparity.