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Tuesday, 30 November 2010

UAE markets contract despite Abu Dhabi property rally

Rising property stocks in Abu Dhabi could not help lift its bourse into positive territory on a day which saw UAE markets contract before the close of trading.

In Abu Dhabi Aldar Properties rose 1.4 per cent to Dh2.21 and Sorouh Real Estate gained 1.2 per cent to Dh1.63 on the day the company's chief operating officer said the developer had started an aggressive 'default avoidance' programme after seeing up to eight per cent of buyers on its Reem Islands project pull out of contracts. RAK Properties, which rose 2.2 per cent during intraday trading, closed flat at Dh0.45. However the Abu Dhabi Securities General Index closed marginally down at 0.05 per cent to 2,729.87 points.

The Dubai Financial Market (DFM) General Index dropped 0.3 per cent to 1,668.82 points as Emaar Properties slipped 0.8 per cent to Dh3.62, after rising 1.4 per cent earlier in the week as its chairman said the property sector will pick up.

Saudi Arabia, Kuwait Seek Gas to Supplant Use of Oil for Power - BusinessWeek

Saudi Arabia, the world’s largest oil exporter, and neighbor Kuwait seek to add natural gas supply to avoid burning crude and refined products to generate power, officials from the two nations’ state oil companies said.

“We are picking up gas exploration,” Ahmad Al-Sa’adi, vice president of gas operations at Saudi Aramco, said today at a conference in Doha, Qatar. “Any liquid fuel we are burning comes at the expense of our exports.”

Middle East oil producers like Saudi Arabia, Kuwait and the United Arab Emirates are largely dependent on gas found together with crude oil. Output of the fuel is crimped because the Organization of Petroleum Exporting Countries limits the amount of gas that can be extracted.

Damas swings to profit, but only just - Emirates24|7

Damas International, the Dubai-based listed gold and jewellery group, recorded marginal profits for the six months period ended September 30, 2010, compared with a net loss during the corresponding period of last year, the company announced.

Damas’ six-months net profits stand at Dh4.25m compared with a net loss of Dh714.87m during the same period of 2009.

The company’s profits are largely on the basis of a reversal of impairment losses on equity accounted investments (based on settlement agreement entered with a related party), which boosted its bottom line by over Dh12m, compared with a net impairment provision of over Dh138m last year.

Gulf sovereign fund takes a punt on Russia

Mubadala Development Company, the Abu Dhabi-based sovereign wealth fund, is investing $100m with the Russian hedge fund Verno Capital.

The deal is being touted as the first time a heavyweight Gulf-based investor has taken the leap to invest in Russia.

Verno was founded by Dimitri Kryukov and a senior team who all previously worked at Kazimir Partners. Before establishing Verno about a year ago, Kryukov and his Kazimir colleagues delivered annualized returns to investors of 30% from inception in 2002 to 2008.

Dubai Received First LNG Cargo From Qatar Yesterday, Shell's Barry Says - Bloomberg

Dubai received its first cargo of liquefied natural gas from Qatar yesterday, said John Barry, vice president for technical and production in the Middle East and North Africa for Royal Dutch Shell Plc.

“Shell is not an equity investor in the project” and serves instead as a project and technical adviser, Barry said at a conference in Dubai today. “Shell is also involved in sourcing the LNG.”

Dubai began discharging the LNG at 1:00 am today, he said.

gulfnews : Emirates NBD raises $410m

Emirates NBD, the UAE's largest bank by assets, raised $410 million (Dh1.5 billion) through a multi-currency loan structured around its portfolio of syndicated loans to corporates, the bank said in a statement on Monday.

The loan, priced at a margin of 1.75 per cent above the applicable reference rates, was fully subscribed by JP Morgan.

"This successful transaction is a testament to the market's confidence in Emirates NBD as a premier financial institution in the Middle East, with an established track record, solid fundamentals and excellent future prospects," Emirates NBD chief executive Rick Pudner said in a the statement.

Debt restructuring of UAE companies is crucial: IMF

The successful restructuring of troubled UAE companies will help to determine the IMF's outlook for its economy, says a senior official at the fund.

"The issue of dealing with that will be important, as will other issues like the outlook for energy prices [and] global growth," said John Lipsky, the first deputy managing director of the IMF.

Mr Lipsky was speaking on the sidelines of the World Economic Forum Summit on the Global Agenda in Dubai yesterday.

UAE airlines want cheaper credit for rivals

Etihad Airways and Emirates Airline have backed rivals by lobbying for European and American carriers to be eligible for government support, or export credits, on Boeing and Airbus purchases.

The two UAE carriers are among 10 international airlines that have formed a group called Aviation Alliance, the primary goal of which is to end the "Home Country" rule, which was agreed to through the Organisation for Economic Co-operation and Development (OECD).

That rule prevents airlines based in the countries that produce Airbus and Boeing planes from receiving government-backed loans at attractive rates.

France rejects Qatar's Areva investment terms-paper | Reuters

French President Nicolas Sarkozy rejected conditions set by Qatar for its participation in a planned capital increase by French nuclear reactor maker Areva (CEPFi.PA), Les Echos said in a preview of its Monday edition.

Qatar is only prepared to take part in the capital hike if it can invest in Areva's mining activities, Les Echos newspaper said. The Financial Times has also reported that Qatar is seeking guarantees over the value of Areva, for example by having an option to take shares in its uranium mining division.

Areva, which is almost 90 percent owned by the French state, is planning a capital increase which it hopes will raise up to 3 billion euros ($3.94 billion) to finance future development projects."

Gaming Today : No bailout needed for Dubai World

It came as good news for MGM Resorts International (MGM) over the weekend when city-state Dubai announced that it won’t need another financial bailout this year.

Dubai World, a debt-ridden offshoot of the emirate, is a 50-percent partner with MGM in CityCenter, as well as a major holder of MGM stock.

Last year, much to the embarrassment of Dubai leader Sheik Mohammed bin Rashid Al Maktoum (a major player in the U.S. thoroughbred racing industry), Dubai needed a $10 billion bailout from its oil-rich neighbor, Abu Dhabi. That triggered reports that Dubai World would be forced to sell some of its holdings to address its major debt problems.

AFP: Dubai property sector fell by five percent in 2010: official

The construction and real estate sectors in Dubai have registered a near five percent fall in 2010, a top Dubai government official told AFP on Monday of the sector hit hard by the financial crisis.

"I believe that all the main sectors have registered varying proportions of growth (in 2010), except property and construction which saw a five percent drop," Sami al-Qamzi, director general of the Dubai department of economic development, told AFP.

Growth in the construction sector is based on supply and demand, thus "its recovery will take a longer time," added Qamzi, who was speaking on the sidelines of the Global Agenda Summit in Dubai.

Sukuk Snap Five-Month Rally on European Debt: Islamic Finance - Bloomberg

Islamic bonds slumped in November, snapping a five-month rally, as concern Europe’s debt crisis will spread reduced demand for higher-yielding assets in emerging markets.

Average yields on sukuk climbed 19 basis points, or 0.19 percentage point, in November to 5.04 percent, the highest level since September, according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index. Yields had dropped 194 basis points from May 31 until the end of October. The extra yield investors demand to hold non-Islamic emerging market debt instead of U.S. Treasuries rose 16 basis points in the month to 261 yesterday, according to JPMorgan Chase & Co.’s EMBI+ Index.

“The sukuk market doesn’t work in isolation,” Scott Lim, chief executive officer at Kuala Lumpur-based MIDF Amanah Asset Management Bhd., who oversees the equivalent of $670 million of assets, said in an interview Nov. 26. “Europe is having too many structural problems and this is only the beginning. It is going to be challenging for the bond market.”

A Proxy to the Saudi Residential Real Estate Market « Alpha Dinar- talking GCC finance

As I promised last week (click here), I will tell you how to best position yourself if you are betting on the Saudi Mortgage Law. When the supply finally catches up with the demand the whole economy will grow and all sectors will benefit. Banks will take their share by growing their loan portfolios and increasing their NIM’s (net interest margin). Real estate brokers, landlords and land developers will benefit from the increase in volume in sales.
An obvious investment would be real estate, however, if you don’t have enough capital or simply you cannot own land in Saudi, the best way to capture this growth is to long Dar Al Arkan stock. In my opinion this stock is a proxy to the Saudi residential real estate market.
Dar Al Arkan, incorporated in 1994, is the largest listed real estate developer in Saudi Arabia. It was established by six Saudi families, in which they control 70% of the equity and rest is free floating in the Tadawul exchange. Since inception the company has grown to be from a basic infrastructure constructor to become one of the leading real estate developers and homebuilders. Given its young aged demographics, Saudi Arabia is highly in demand for new infrastructure. Dar Al Arkan has positioned itself to be the leader in mid-income housing development.
Currently most of Dar Al Arkan’s revenues are generated through land sales. However, revenue is expected to be more diversified in the coming few years when the company is ready to sell its’ units and a stream of rental income is expected to come in. Moody’s expect the revenues to be around SAR11 billion in 2013 from SAR5 billion in 2009. Historically the company has been generating high gross income margin of around 50% backed by high margin land sales; nevertheless, this number is expected to decrease to around 30% as revenue diversifies more.
Debt and Liquidity
Due to the nature of the company and given it cannot sell off-plan properties it has to fund itself through other mediums. They have taking both short-term and long-term debt to fund their projects. As per the second half results, Dar Al Arkan has SAR7.6 billion in borrowings. Initially cash from land sales will settle a small portion of the debt, however the debt is expected to decrease when they start selling their unites in 2012. The company has high leverage ratios, however, it is justified due to the nature of the business. I expect the debt ratios to decrease in 2012 when they sell the projects they are working on. Moreover, I expect the profitability ratios to improve, as they will have more sources of revenues.
Below is the price chart of Dar Al Arkan. The stock is trading at all time lows, down 38% this year as compared to the Tadawul index, which is up 3%. Although I like the story of Dar Al Arkan the chart frightens me a bit as it indicate that the market anticipates further delay on the law. There is defiantly a big risk factor, however I would still take a bet on it. / Middle East - One year on and Dubai seeks to raise its game

 Emiratis walk past the Burj Dubai Tower

When it was announced that Dubai’s top three government officials were to provide an “economic update” at the weekend, it was telling that rumours quickly began to swirl. Investors braced for another big announcement from the emirate.

Some judged that the only reason for these officials to speak would be a statement on the emirate’s debts, estimated at $110bn by the International Monetary Fund.

The event harked back to a year ago on November 25, when the government asked to freeze debt payments on up to $25bn owed by Dubai World, a troubled conglomerate brought low by real estate speculation and leveraged foreign purchases.Some judged that the only reason for these officials to speak would be a statement on the emirate’s debts, estimated at $110bn by the International Monetary Fund.

Monday, 29 November 2010

Gulf Stocks Movers: Emaar Properties and Saudi Basic Industries - Bloomberg

The DFM General Index increased 0.9 percent, the most since Nov. 21, to 1,674.77 at the close in Dubai. Abu Dhabi’s measure retreated 0.7 percent, while Saudi Arabia’s Tadawul All Share Index rose 0.4 percent.

The following stocks gained or fell in the Gulf. Symbols are in parentheses.

Emaar Properties PJSC (EMAAR UH) advanced the most in more than a week, gaining 1.4 percent to 3.65 dirhams. Dubai’s property market, which fell more than 50 percent from its peak, has reached bottom and is moving toward recovery, according to Mohamed Alabbar, the chairman of the shiekhdom’s biggest developer.

Saudi Basic Industries Corp. (SABIC AB) climbed the most in more than three weeks, increasing 1 percent to 100.5 riyals. The world’s biggest petrochemical maker won’t be affected by India’s anti-dumping duty on Saudi polypropylene, Al-Watan said, citing Chief Executive Officer Mohamed al-Mady.

Dubai International Capital Said to Seek Extension on $1.25 Billion Loan - Bloomberg

Dubai International Capital LLC, an investment company owned by the emirate’s ruler, sought a two- month extension on a $1.25 billion loan maturing on Nov. 30, two people with knowledge of the discussions said.

The loan continues to pay the same interest as earlier and the extension will help Dubai International’s 26 creditor banks agree on new terms for $2.6 billion of debt that the company is seeking to alter, the people said, declining to be identified because the information is private. The loan, which was due to mature in June, was extended to Sept. 30 and then to Nov. 30.

A company spokeswoman could not immediately comment when contacted by Bloomberg News today.

Dubai Holding Said to Extend $555 Million Credit Line - Bloomberg

Dubai Holding Commercial Operations Group LLC, a real estate and hospitality group owned by the emirate’s ruler, is seeking a one-month extension on a $555 million revolving credit line to get more time to agree on new terms, two people with knowledge of the matter said.

The loan will be extended until Dec. 31 and then rolled over into a new medium-term facility, the terms for which are still under discussion, said the people, who declined to be identified because the talks are private. An official for Dubai Holding LLC, the company’s parent, declined to comment.

Dubai Holding Commercial received a two-month extension on the loan in July at “commercial terms,” the company said at the time, and then got the maturity lengthened again to Nov. 30. Citigroup Inc., Royal Bank of Scotland Group Plc and Standard Chartered Plc provided the loan.

Counting the Cost – Back to Dubai

One year after the Dubai World debt meltdown we go back to Dubai to see if things have improved.
Looking down on a city in crisis
The idea for this show came from, quite simply, a similar show we did last year.
It became apparent very quickly back in November 2009 that Dubai World’s request for a freeze on its debt repayments was more than just an economic story … instead, it was the sudden unravelling of a city, a dream and a way of life.
Dubai had become a haven for so many – be they Western expats attempting to climb the corporate ladder, or migrant workers looking for a means to support their family. They’d come here, and now their existence was being threatened.
Not just because of Dubai World to be entirely fair, but because the truth about Dubai’s ability to deal with the economic slowdown had never been fully told. In late 2009, that truth was being not only told but shouted and broadcasted all over the world. So we came down here last year to report on the crisis as it happened … and felt it only right to come back one year on, to see what (if anything) had really changed.

Dubai needs 20 months to cut property glut - Maktoob News

The chairman of Emaar Properties, the United Arab Emirates' largest listed property firm and builder of the world's tallest tower, said on Monday the company had no intention of tapping the bond market again in 2010 or selling new shares in the company.

Mohammed Alabbar also told a conference in Dubai there were no plans to reduce the Dubai government's 31.2 percent stake.

"We have just finished our bonds. We have no intention of doing that again," Alabbar told reporters on the sidelines of the conference.

Dubai's Malaysia Sukuk Sale Plan Hampered by Rating Doubt: Islamic Finance - Bloomberg

Dubai’s proposed sale of as much as $1.5 billion of Islamic bonds in Malaysia won’t appeal to most local funds unless the emirate obtains a rating, Mashreq Capital DIFC Ltd. and Nomura Asset Management Malaysia Sdn Bhd. said.

The government hired CIMB Investment Bank Bhd., a Kuala Lumpur-based unit of CIMB Group Holdings Bhd., the world’s top sukuk arranger this year, as a lead manager to sell between $1 billion and $1.5 billion of the securities, a person with knowledge of the plan said Nov. 24. Malaysian Prime Minister Najib Razak said Oct. 26 the Dubai Department of Finance is proposing a multi-currency sukuk program.

“I doubt they can get it done in any sort of size without a rating,” Abdul Kadir Hussain, who manages $2 billion of mainly Persian Gulf assets as chief executive officer of Mashreq Capital in Dubai, said in a response to e-mailed questions Nov. 25. “Normally Malaysian investors are relatively conservative and invest in very high grade type issuers.”

gulfnews : Profits fall sharply for Islamic banks

The Islamic finance sector had a mixed record of growth in assets and a steep decline in profits during the global credit crisis last year compared to 2008, according to a McKinsey and Company study issued last week in Bahrain.

Obtained exclusively by Gulf News, the authors of the report titled Global Competitiveness Landscape of Islamic Finance, showed that while profitability of all banks declined, the fall has been steeper for Islamic banks, largely due to higher provisions and lower investment income.

Higher investment losses are partly due to banks' greater exposure to risky assets such as real estate.

gulfnews : Dubai firmly in control of its finances (Editorial)

The Government of Dubai has set out the hard figures which show that the emirate has overcome the global economic crisis and is firmly in control of its financial situation.

The restructuring of the debt of Dubai World is complete and the conglomerate is now on a "sound financial footing" said Shaikh Ahmad Bin Saeed Al Maktoum, Chairman of the Supreme Fiscal Committee and Chairman and Chief Executive of Emirates Airline and Group.

Dubai's sovereign debt is $30 billion, according to Mohammad Al Shaibani, Director-General of the Ruler's Court. This is a small amount relative to earlier speculation and can easily be managed by the emirate. The operating debts of government entities should not be too much of a concern as most are known to have strong operations which generate revenue, such as the Dubai Electricity and Water Authority.

Dubai moves towards greater transparency

Dubai took an unprecedented step towards openness yesterday with its first quarterly update on the local economy and restructurings at some of its biggest business groups. In attendance were Sheikh Ahmed bin Saeed Al Maktoum, the chairman of Emirates Airline and president of the Dubai Department of Civil Aviation; Ahmed Humaid al Tayer, the governor of the Dubai International Financial Centre; Mohammed al Shaibani, the director general of the Dubai Ruler's Court; and other top government officials. Sheikh Mohammed bin Rashid, the Vice President of the UAE and Ruler of Dubai, also attended.

Officials plan to repeat the exercise every three months, increasing transparency after complaints from analysts and other observers that the Government was not sufficiently forthcoming about debt restructurings and the state of the local economy. 'We continue to work towards improving the level of disclosure and transparency,' Sheikh Ahmed said. 'We are holding open dialogue forums like this one.'

DIC seeks extension on loan

Dubai Holding's private equity arm is expected to seek a fresh extension on the repayment of a US$1.25 billion (Dh4.59bn) loan when a debt restructuring deadline expires tomorrow, according to a source close to the negotiations.

Dubai International Capital (DIC) had previously sought and received two extensions on the loan to buy time for restructuring talks to progress. The second, which delayed repayment until the end of this month, was agreed on in September. DIC is looking to restructure repayment on total debts of $2.6bn.

Those talks are part of a broader shake-up at Dubai Holding, which has total debts of more than $9bn and numerous divisions that are looking at repayment extensions."

Dubai shares fall ahead of state asset sell-off - Telegraph

Sheikh Ahmed bin Saeed Al Maktoum, uncle of the Ruler and chairman of Emirates airlines, told a press conference: 'We are working on opening the capital of some of our leading companies to the public.'

The sheikh, who is also chairman of the Dubai Supreme Fiscal Committee which in charge of financial affairs, added that the emirate needed to 'regroup, review and reconsider some of our investments and re-challenge our competitive edge'.

The comments, made on the anniversary of Dubai's first admission of its debt crisis, caused shares in the state-controlled companies to drop." / Companies / Financial Services - TID restructuring talks break down

Restructuring talks between The Investment Dar, a Kuwaiti finance house that owns Aston Martin, and its creditors have broken down over disagreements on how to resolve the company’s $3.8bn debt pile.

TID said it had accepted the resignation of the creditors’ coordinating committee after refusing to accept a proposal that would have seen creditors exchange KD475m ($1.7bn) of debt for a 90 per cent stake in the company, but leaving them still retaining a further KD600m of debt.

TID said the proposals were unfavourable. The company has “conservatively” valued its assets at about KD1.8bn. / Middle East - Dubai mulls sale of corporate champions

Dubai is mulling the privatisation of home-grown corporate champions as a means to start paying down its estimated $110bn in debts, senior officials said.

The emirate is “working on opening the capital of some of our leading companies to the public,” Sheikh Ahmed bin Saeed Al Maktoum, chairman of Emirates Airlines and a three-man committee charged with plotting the emirate’s economic recovery, told reporters.

Mohammed al-Shaibani, director general of the ruler’s court and another member of the committee, said Dubai is currently working on proposals to sell off stakes in strategic domestic companies.

Sunday, 28 November 2010

BBC News - Is confidence creeping back into Dubai's economy? (Video at this link)

28 November 2010 Last updated at 12:25 GMT Help
Dubai shocked markets around the world last November when one of its biggest companies asked for a 6-month standstill on its debt repayments.

One year on, and Dubai World has agreed a restructuring deal with its creditors. But its property arm Nakheel, the developer of Dubai's Palm Island, is yet to agree on its restructuring arrangements.

It has recently restarted some of its short-term projects but longer-term developments, which include two other Palm Island projects as well as the multi-island development The World, are still on hold.

So how is Dubai moving on from the events of the past year? Katy Watson's been finding out.

Dubai Considers Emirates Stake Sale -

In a bid to reduce its heavy debt burden, Dubai's government is considering selling some of its most prized assets, including a stake in flagship carrier Emirates Airline, the director general of the Dubai Ruler's Court said Sunday.

"The possibility of offering a stake in Emirates Airlines to the public is always there and is being studied and considered," Mohammed Ibrahim Al Shaibani told a Dubai press conference in an update on the emirate's economic situation. "But it is well known that offering stakes to the public in solid commercial companies like Emirates is not always useful."

Emirates Airline is widely considered one of Dubai's most precious and profitable assets. The Middle East's largest carrier last month said first-half net profit rose fourfold to 3.4 billion U.A.E. dirhams ($925.8 million), from 752 million dirhams a year earlier.

Plan for Dubai mortgage lender Amlak seen in Q1 2011 | Reuters

A resolution for troubled Islamic mortgage lender Amlak Finance AMLK.DU could be found during the first quarter of 2011, a senior Dubai official said on Sunday.

The United Arab Emirates government said in November 2008 it aimed to merge Amlak AMLK.DU with rival lender Tamweel TAML.DU but the plan was effectively scrapped after Dubai Islamic Bank DISB.DU raised its stake in Tamweel in September. [ID:nLDE6310AG]

'We are in intense negotiations with all creditors and shareholders of Amlak. I would like to see a solution for Amlak by Q1 2011,' said Mohammed Al Shaibani, deputy chairman of Dubai's supreme fiscal committee.

Dubai Shares Drop Most in Middle East on Share Sale Plans, European Debt - Bloomberg

Dubai shares fell to the lowest in more than two months, leading a drop in the Middle East, as the emirate said it plans to sell shares of large companies and on concern an Irish financial bailout won’t stem Europe’s crisis.

Emaar Properties PJSC, builder of the world’s tallest skyscraper, closed at the lowest in almost three months. Aramex PJSC, the United Arab Emirates-based courier company, decreased 4.3 percent. The DFM General Index fell 1.4 percent to 1,659.5, the lowest level since Sept. 16, at the 2 p.m. close in Dubai. The Bloomberg GCC 200 Index of Gulf stocks lost 0.2 percent at 1:11 p.m. in Riyadh. Egypt’s gauge declined.

Dubai plans to sell shares of some of the emirate’s large companies, Sheikh Ahmed Bin Saeed al Maktoum, chairman of the Dubai Supreme Fiscal Committee, said at a conference today. The emirate racked up $109.3 billion of debt to transform into a tourism, trade and financial-services hub, according to the International Monetary Fund. Last year Dubai World sought to alter terms on $24.9 billion of debt.

Dubai May Sell Shares in Some of Its Largest Companies, Sheikh Ahmed Says - Bloomberg

Dubai, which is restructuring debt at its state-owned holding companies, may sell shares in some of its large businesses, said the chairman of the Dubai Supreme Fiscal Committee.

“We are working on opening up the capital of leading companies to our public,” Sheikh Ahmed bin Saeed Al Maktoum told a conference in Dubai today. The emirate may now need to “regroup, review and reconsider some of our investments and re- challenge our competitive edge,” he said. The committee is the top body responsible for Dubai’s fiscal policy.

Dubai and its state-controlled companies are struggling to service debt that Barclays Capital estimated in September at about $112 billion. The second-largest sheikhdom in the United Arab Emirates accumulated the loans during years of rapid growth in its property industry and other businesses.

Kuwait Dar panel threatens to quit over debt plan

A committee representing most of the creditors of Kuwait's Investment Dar has threatened to quit if the company doesn't consider its new debt restructuring plan, Dar said on Sunday.

Investment Dar, the Islamic firm which owns half of British luxury carmaker Aston Martin, said in a statement that the plan was not acceptable to the firm and it will now go to court to resolve the dispute.

Dar has been trying to restructure about KD1 billion ($3.55 billion) in debt since last year after the investment firm was hard hit by financial crisis. It applied in March for support under a government facility set up for troubled companies as part of a debt restructuring.

gulfnews : Dubai plans to offload government-owned assets

Dubai Government said it is planning to open up leading Dubai-owned companies for public equity participation.

"Dubai will seek to diversify its funding sources though both debt and equity capital," Shaikh Ahmad Bin Saeed Al Maktoum, Chairman of Supreme Fiscal Committee and Chairman of Dubai Civil Aviation Authority and Chairman and Chief Executive of Emirates Airline and Group told a news gathering on Sunday.

Dubai Government also announced the successful restructuring of Dubai World - its largest conglomerate that sought a standstill to restructure part of its then $59 billion debt.

Kuwait Expects Faster Economic Growth, Lower Inflation, Sheikh Salem Says - Bloomberg

Kuwait’s central bank expects inflation to slow next year and foresees the economy returning to growth, Governor Sheikh Salem Abdul Aziz Al-Sabah said.

“For 2011 we expect between 3 and 4 percent and for this year I can say almost zero” growth, Sheikh Salem said in an interview in Beirut, Lebanon today. Inflation will be 4 percent by the end of this year and “slightly lower” in 2011, he said.

Sheikh Salem said in March that the economy of Kuwait, which produces about 2.3 million barrels of oil a day, may expand by as much as 5 percent this year as it recovers from a contraction caused by the global financial crisis.

UAE faces a challenging 2011, despite economic recovery: minister

United Arab Emirates (UAE) Economy Minister Sultan Bin Saeed Al-Mansouri said economic recovery is still very challenging, despite citing numbers suggesting the emirates' economy has picked up at a press conference on Saturday.

The UAE has been growing between three to 3.5 percent in 2010 after the 1.3 percent in 2009, the UAE minister said, noting "in 2008, we established a government committee to tackle the impact of the global financial crisis. Our measure to pump 33 billion U.S. dollars into the domestic banking was a key measure to stabilize the national economy."

During the third quarter of 2010, combined UAE bank profits jumped 46 percent year-on-year.

Alba embarks on a new era of progress and development - Arab News

Following the announcement of being converted into a joint stock company, Aluminium Bahrain (Alba), one of the largest aluminum smelters in the world, has embarked on a new era of progress and development by bolstering its sales in regional and international markets.

"The official announcement of converting Alba into a joint stock company has embarked the company into the new direction aimed at strengthening the economic growth in the Kingdom of Bahrain," the company said in a statement.

The Minister of Industry and Commerce Hassan Fakhro presented a certificate announcing Alba’s new status as a public joint stock company to Alba’s Chairman Mahmood Hashim Al-Kooheji and Alba’s Chief Executive Laurent Schmitt. The company’s new official title will now be Aluminium Bahrain.

GCC Market Analytics: Weekly Market Analysis (Week 49)

The weekly market analysis pages have been updated for trading week 49 (November 27th - December 2nd). 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.

Saturday, 27 November 2010

Saudi Shares Gain Most in Three Weeks on U.S. Jobless Data - Bloomberg

Saudi Arabian shares rose the most in almost three weeks as investors bet a larger-than-forecast decline in U.S. jobless claims signaled economic growth is gathering speed in the biggest crude-consuming nation.

The Tadawul All Share Index advanced 0.1 percent, the most since Nov. 9, to 6,298.89 at the 3:30 p.m. close in Riyadh. Leading the advance were Banque Saudi Fransi, the fourth-largest publicly traded lender in the kingdom, Etihad Etisalat Co., the second-biggest mobile-phone operator and Samba Financial Group, the No. 2 Saudi bank. Tadawul has gained 9.4 percent from this year’s low in May.

“Upbeat news on improving consumer sentiment and declining initial jobless claims out of the U.S. are lifting the Saudi market,” said Asim Bukhtiar, an equity analyst at Riyad Capital. “Employment numbers beat market expectations and point to encouraging ‘Black Friday’ sales, which should lift retail stocks.”

Saudi Aramco Renews $4 Billion Revolving Credit Line - Bloomberg

Saudi Aramco, the world’s largest state-owned oil company, said it renewed a $4 billion revolving credit facility with international and Saudi banks.

The five-year facility replaces a credit line from 2006, the Dhahran, Saudi Arabia-based company said in a statement on its website today. The facility includes a $2.5 billion tranche, of which $1 billion is a 364-day facility, and a $1.5 billion equivalent in riyals, according to the statement.

Saudi Aramco and Saudi Basic Industries Corp., the world’s largest petrochemical maker, are seeking financing as they expand their refining capacity and petrochemical production to diversify their economies away from exports of raw crude and to manufacture higher-margin products. Riyadh-based Saudi Basic sold $1 billion of five-year bonds last month.

Al Murjan's bankruptcy to blaze new UAE legal ground

Developer Al Murjan’s unprecedented move to file for bankruptcy will likely blaze new legal ground for the UAE, in a case that will be closely watched by thousands of investors in uncompleted projects.

Although there are federal laws covering bankruptcy, they have almost never been tested, legal experts say.

“A lot of it is cultural,” said James Farn, head of banking and finance in the Abu Dhabi office of UAE law firm Hadef & Partners. “There is a perceived stigma.”"

Wagon hitched to a runaway train

Abu Dhabi Commercial Bank's (ADCB) moves in structured investment products during 2006 and 2007 were part of a strategy that made the lender, owned by the Government, one of the region's most sophisticated investors and a key Middle Eastern partner for some of Wall Street's biggest firms.

But while buying into structured investment vehicles (SIVs) such as Cheyne Finance and Stanfield Victoria gave ADCB a portal into some of the most high-flying and hard-to-understand investments in the world, fallout from the credit crunch and sub-prime mortgage crisis in the US has turned the bank from one of the Gulf's most sophisticated investors into one of its most aggrieved.

In addition to SIVs, ADCB was exposed to the US mortgage crisis through collateralised debt obligations (CDOs), which packaged home loans and sold them to investors as securities. It also has one of the largest exposures among local banks to Dubai World, the Government conglomerate that recently reached a pact to restructure US$24.9 billion (Dh91.45bn) of debt.

grapeshisha: Dubai - this time last year...

It's been a year since the Dubai buckled, announced that they were in trouble and that there was way too much debt that they couldn't repay. In the words of who want's to be a millionaire - It needed a lifeline. In the end, Dubai phoned a friend - and the rest is history. But here we are one year on, and Dubai continues to feel pain. Last year, we talked about the Dubai Debt Damage and the Double Dip. That double dip didn't transpire, but let's face facts. The world is in trouble. Dublin got a bailout, and more European countries will follow.

The Dubai headlines of the tail end of 2009 were as notorious as the Lehman crash - and indeed stockmarkets plunged - but it is now etched in history as the end of excess. Dubai, today, is a different place to 10 years ago. For years, people couldn't understand how Dubai was sustaining itself. There were talks of bubbles, and then the bubble burst.

But Dubai continues to run. It may be a city without the occupancy, but the heart still beats, but may just a little fainter. Dubai didn't quite get where it wanted to be. It sprinted as hard as it could, and ultimately didn't reach the finish line. And all the time, in the background chugged Abu Dhabi. And, as with the fable - slow and steady wins the race. Dubai was not all conquering, but it still is an amazing achievement - a modern metropolis, built out of sand.

Friday, 26 November 2010

Qatar Govt. Fund Values Areva at EU8 Billion, Challenges Says - BusinessWeek

The Qatar Investment Authority values French nuclear reactor builder Areva at 8 billion euros, Challenges magazine said, citing a person familiar with the talks.

The valuation is below the French government’s estimate of 12 billion euros to 14 billion euros and may jeopardize Areva’s planned capital increase, the magazine said.

Separately, it said Mitsubishi Heavy Industries Ltd. and the Kuwait sovereign fund would limit their offers to 300 million euros for a 3 percent stake and 500 million euros for a 5 percent holding respectively.

Ryanair, Emirates Say Export-Credit Revamp Mustn’t Affect Costs - BusinessWeek

Ryanair Holdings Plc, Emirates and eight other airlines said they’ll support the extension of export-credit support to carriers barred from receiving it provided the guarantees aren’t curbed or made more costly.

The airlines, which include Korean Air Lines Co. and Abu Dhabi-based Etihad Airways, said in a statement there must be no increase in fees, no limit on the amount of credit extended to any one airline and no reduction in the proportion of the cost of an aircraft that can be financed.

Airlines from Airbus SAS’s home countries of France, Germany, Britain and Spain and from the U.S., where Boeing Co. is based, are currently excluded from receiving export credit to help fund plane purchases. Paris-based Air France-KLM Group Plc is among barred companies that say the distinction gives an unfair advantage to carriers including Dubai-based Emirates.

Dubai Properties says not undergoing restructuring - bi-me

Dubai Properties, a unit of troubled conglomerate Dubai Holding, said on Thursday it was not entering a restructuring after one of its partners had suggested that the builder may embark on one.

"Dubai Properties Group (DPG) is not restructuring. DPG honours all of its commitments. We continue to maintain a good relationship with all our partners, including Arabtec," the company said in a statement sent to Reuters. Its comment came after remarks by Tom Barry, chief executive of Dubai-based builder Arabtec , who said on Wednesday Dubai Properties may enter restructuring.

Barry clarified on Thursday his remarks "were with particular regard to payments which are, or about to become, due to Arabtec".

Total Said to Be Ready to Replace Exxon in Qatari Petrochems - Bloomberg

Total SA has designs ready for a new petrochemical project in Qatar if a $6 billion project announced by Exxon Mobil Corp. early this year is canceled, two people with knowledge of the matter said.

Total’s plans have existed since 2006, said one of the people, who declined to be named because the matter is confidential. The company is in talks to build a mixed-feed petrochemical cracker that will probably be located in the energy center of Ras Laffan, the other person said.

Qatar is using its natural gas reserves, the world’s third largest, to run petrochemical, aluminum and fertilizer plants as it diversifies its economy away from liquefied natural gas and oil exports. The country aims to raise its annual production of petrochemicals to 28 million metric tons by 2014, Energy Minister Abdullah bin Hamad al-Attiyah said in May.

Dubai Holding Unit Pushes for Bigger Debt Deal -

Dubai International Capital, the investment arm of Dubai Holding, is seeking to restructure as much as $2.6 billion worth of debt by Nov. 30, twice as much as the amount that matures next week, people familiar with the situation said.

The push for the larger amount comes after the emirate reached a deal with creditors in October for about $25 billion of outstanding debt owed by the government's other flagship conglomerate, Dubai World. Dubai World shocked investors a year ago Thursday when it announced that it would delay debt payments.

The Dubai World deal buoyed sentiment in the city-state, one of seven semi-autonomous emirates that make up the United Arab Emirates. Dubai's oil-rich neighbor, Abu Dhabi, the capital of the U.A.E., has provided billions of dollars of aid to Dubai after its property-market bubble burst, reinforcing among investors a sense of underlying government support for Dubai and its corporate entities.

Debt Clouds Recovery in Dubai -

A year after Dubai's debt crisis first roiled global financial markets, glimmers of confidence are returning to the city-state that became synonymous with skyscrapers and a man-made archipelago. But the threat of more debt-restructuring pain remains a dark cloud over the emirate, investors and officials say.

Dubai World, one of the government's flagship conglomerates, shocked the financial community a year ago when it announced it would ask creditors to delay repayments on its $23.8 billion debt pile, leading investor confidence in the emirate to plummet.

The conglomerate, like other Dubai government-owned groups, built up debts during years of frenzied spending that included some of the world's most extravagant real-estate projects developed by its Nakheel unit—seen to be at the center of Dubai's financial problems—and on the purchase of international properties by investment arm Istithmar World as prices peaked.

A year later, debt concerns linger for Dubai Emerging Markets Report - MarketWatch

A year later, Dubai’s debt crisis is no longer in the global spotlight. It was this time last November that Dubai World, the far-reaching conglomerate whose shareholder is the emirate’s government, startled global markets by delaying payments on its debt.

Dubai, until then known for its outsized ambition and mammoth construction projects such as artificial islands and sky-high hotels, started evoking other, less kind epithets.

Today, the market focus has shifted to the euro zone’s debt woes, even as Dubai continues to face serious challenges. Read related story on fears that Portugal or Spain will follow Ireland’s path toward bailout.

Thursday, 25 November 2010

UAE cbank calls for lower interbank rates -paper | Reuters

UAE banks need to raise deposit levels to reduce interbank lending rates and put them more in line with London Interbank Offered Rates (Libor), the central bank governor was quoted as saying on Thursday.

UAE interbank rates (EBOR) AEIBOR= have stayed high over past months, sparking criticism from the central bank, although debt restructuring and a flood of dollar liquidity on global markets have helped to ease some of the pressure. [ID:nRISKAE]

'The gap between the two prices (of EBOR and LIBOR) must be bridged,' Sultan Nasser al-Suweidi told local daily al-Ittihad."

American Chronicle | HBG investment fund set to boost trade between UK and UAE

HBG Holdings (HBG), a leading UK private equity investor and fund management business specialized in the Middle East, has today announced plans to invest $500m in small and medium sized enterprises in the United Kingdom. HBG will specifically target companies with potential to expand operations in the United Arab Emirates and the GCC states.

About HBG Holdings (HBG):

HBG is a leading UK private equity investor and fund management business specialized in facilitating the flow of investment capital from the GCC into high growth small and medium sized companies."

The First Thanksgiving courtesy WikiPedia

File:The First Thanksgiving cph.3g04961.jpg

Banks need to boost deposits by Dh40bn: Al Suwaidi - Emirates24|7

UAE banks need to attract nearly Dh40 billion in new deposits to expand their financial resources to cut rates and bridge a gap between loans and deposits, the Central Bank Governor was quoted on Thursday as saying.

Sultan bin Nasser Al Suwaidi said new provisioning regulations issued by the Central Bank for the country’s 23 national banks and 28 foreign units last week would not curb their lending potential, adding that a floor of 1.5 per cent on provisioning to total loans would have limited effects on the banks on the grounds the new rules gave banks a deadline of four years.

Quoted by the semi-official Arabic language daily Alittihad, Suwaidi said he believes UAE banks would be able to expand credit if they increase client deposits, excluding inter-bank deposits which account for about seven per cent."

Dubai Shares Rise, Pare Weekly Loss, on U.S. Jobs; Oil Above $83 - Bloomberg

Dubai shares rose for the first time in three days after reports showed U.S. employment and consumer sentiment improved, boosting investors confidence in the global economic recovery. Oil traded above $83 a barrel.

Emaar Properties PJSC, builder of the world’s tallest skyscraper in Dubai, climbed for the third time this week and Emirates NBD PJSC, the United Arab Emirates’ biggest bank by assets, advanced 1.6 percent. The DFM General Index increased 0.5 percent to 1,682.23, at the 2 p.m. close in in Dubai, trimming its loss this week to 0.3 percent. Emerging-markets shares climbed, with the MSCI EM Index increasing as much as 0.4 percent.

“Local investors are tracking the performance of markets around the world; we are part of the global economy,” said Humam Al-Shamaa, economic adviser at Al-Fajer Securities in Abu Dhabi. “The gain is not sustainable as there are pending concerns surrounding the debt situation in Europe, particularly in Ireland. Trading volumes are very low.”

Dubai Still Faces Challenges With Debt a Year After Dubai World's Workout - Bloomberg

A year after Dubai’s corporate flagship stunned markets with plans to freeze payments on $25 billion in loans, the emirate is still struggling to reduce a total debt load more than four times that amount.

The immediate crisis triggered by Dubai World’s announcement last Nov. 25 has passed. Lenders to the government- owned group have agreed to accept a delay in repayments of $14.4 billion, and access to credit in the Middle East’s once- flourishing financial services hub is starting to ease after the worst recession since the 1930s.

Dubai and its state-controlled companies are grappling now to service debt that Barclays Capital estimated in a September report to total about $112 billion -- equal to more than 140 percent of its gross domestic product. They amassed the loans during years of frenetic growth in the property and tourism industries. One of seven sheikhdoms comprising the United Arab Emirates, Dubai lacks the energy wealth of neighboring Abu Dhabi and must boost revenue from trade and other traditional businesses and by selling assets, analysts say.

AFP: Debt-laden Dubai leans on key sectors for recovery

A year after scaring global markets over its debt crisis, Dubai still has a huge legacy of debt to deal with over the medium term, and is leaning on its core economic sectors for recovery.

The focus in the city-state has shifted to the traditionally strong sectors of trade, logistics and tourism in order to recover slowly from a crisis caused primarily by a boom-to-bust real estate frenzy.

Financial markets woke up in the red last November 26 after Dubai signalled its need for a standstill on debt payments by its largest conglomerate, Dubai World.

Turkey Stocks Priciest Since 2003 as Worst Profits Imperil `Crowded Trade' - Bloomberg

The highest Turkish stock valuations in seven years and slowest profit growth in the emerging markets are signs the nation’s longest stretch of equity outperformance since 1997 is ending.

The MSCI Turkey Index trades for 2.2 times net assets, the highest since February 2003 relative to the MSCI Emerging Markets Index, data compiled by Bloomberg and MSCI Inc. show. Earnings in the 20-company Turkey gauge will rise 7.7 percent next year, the smallest gain of 19 major developing nations, according to analysts’ estimates.

Turkey’s fastest economic expansion since 2005 and record- low interest rates spurred mutual fund managers to make Turkey their largest “overweight” holding and sent price-to-book ratios to a 10 percent premium over emerging markets, from a 45 percent discount two years ago. Citigroup Inc. and Morgan Stanley say stock pickers are too optimistic and slower profit growth will limit gains after the MSCI Turkey index outperformed the emerging markets benchmark for six straight quarters.

Abu Dhabi Commercial Bank Sues Credit Suisse, S&P Over Farmington Sales - Bloomberg

Abu Dhabi Commercial Bank PJSC, the United Arab Emirates’ third-biggest bank by assets, sued Credit Suisse Group AG, Standard & Poor’s and others for allegedly providing misleading information on an investment product.

The lawsuit filed in New York alleged that Credit Suisse “failed to disclose conflicts of interest and other material information, and provided misleading information, when structuring, marketing and selling an investment, known as Farmington, to ADCB in 2007,” the bank said in an e-mailed statement today. The lender also alleged that Standard & Poor’s “provided inaccurate, investment-grade ratings to assets associated with the Farmington structure.”

Abu Dhabi Commercial made a 560 million-dirham ($153 million) provision in 2007 for losses from investments in the U.S. subprime mortgage market. The bank also sued Morgan Stanley & Co., Bank of New York Mellon Corp. and three securities ratings services for allegedly rating too highly a structured investment vehicle that collapsed in 2007.

Dubai Pearl mulls $6 bln assets sale, UAE Industries - Maktoob News

Dubai Pearl FZ LLC, which earlier this year revived its $4 billion Pearl project, is looking to sell $6 billion of its hospitality assets to raise financing for the mixed-use project, it chairman said on Wednesday.

'We do not want to sell as desperate asset sales but only to strategic buyers,' Abdul Majeed al-Fahim told reporters on the sidelines of an industry event in Dubai.

The company's project includes hotels from brands such as Bellagio, MGM Grand and Skylofts." / Comment - Middle East: Fear of the fast lane


Tyres screeched; high-powered engines roared. Off the track, tycoons and celebrities flitted between corporate boxes and champagne bars.

When the world Formula One carnival pulled into Abu Dhabi this month – bringing with it names such as entrepreneur Sir Richard Branson, actor Hugh Grant and footballer Patrick Vieira – the wealthy capital of the United Arab Emirates seized the opportunity to dazzle visitors with its showcase infrastructure. Latest additions include a Ferrari theme park boasting the world’s fastest rollercoaster and the futuristic Yas hotel, which loops over the grand prix track.

Beyond the glitz, however, the mood in Abu Dhabi is more sober. The buzz­words these days are “discipline” and “priorities” as the city-state tries to heed the lessons of the debt crisis encountered by Dubai, the sister emirate an hour and a half’s drive away. As one long-time observer says only half-jokingly, “Abu Dhabi is feeling poor.”

Dubai prepares for next debt challenge

A year after the trauma of Dubai World's announcement that it was to restructure US$24.9 billion (Dh91.45bn) of liabilities, the emirate can look back with some satisfaction that its most serious financial threat has been neutralised.

But it must also be aware there are still difficulties to overcome in other parts of the complex corporate infrastructure of Dubai Inc.

'Progress made but challenges remain', was how the situation was summed up by the US investment bank JP Morgan in a recent study of Dubai's debt situation."

Oil pipeline bypassing Hormuz is completed

Construction of a pipeline from Abu Dhabi's largest oilfields to Fujairah, allowing crude to bypass the Strait of Hormuz, has been completed.

The pipeline to the Arabian Sea promises greater security in the event that the narrow waterway is closed, and promises to help cut the costs of exporting oil from the UAE.

About 40 per cent of the world's international oil trade, including all of Abu Dhabi's exports of about 2 million barrels daily, passes through the strait."

Muslim Nations Plan Stock Index Next Year to Spur Trade: Islamic Finance - Bloomberg

The organization representing the world’s biggest grouping of Muslim-majority nations is seeking to attract more overseas investment by offering the first Shariah-compliant stock index from its 57 members.

The Organization of the Islamic Conference based in Jeddah hired Standard & Poor’s to start an index of about 50 of the most-traded stocks in the first quarter of 2011, Huseyin Erkan, the Istanbul Stock Exchange’s chief executive officer and coordinator of the initiative, said on Nov. 8. The index, which will track listed equities that comply with Islam’s ban on alcohol, gaming and tobacco, aims to target exchange-traded funds, he said.

“Governments of Islamic countries want us to cooperate in capital markets to facilitate cross-border trading,” Erkan said in an interview in Abu Dhabi. “One of the easiest and most efficient ways to improve trading is to build indexes and exchanged-traded funds.” - Opportunities in the region

Dubai is a thriving hub for the Middle East and its most glitzy attraction for would-be expatriates. It has also experienced swifter rises and falls in activity than other parts of the region.

But there are signs that hiring activity is reviving across the Gulf Co-operation Council area. GCC member countries include Saudi Arabia, Kuwait, Bahrain, Qatar, Oman, Yemen, and United Arab Emirates (Dubai, Abu Dhabi and Sharjah are the best known of the seven emirates, or states).

“We have had two very difficult years,” says Tariq Sadiq, markets, accounts and business development leader for Middle East and north Africa (Mena) for the professional services firm Ernst & Young. “Our profession follows our clients. And optimism has been creeping into the market.”

U.A.E. Bankruptcy Filing Worries Home Investors -

Property buyers scrambling to get money back from stalled real estate projects across the United Arab Emirates fear a ripple effect after a bankruptcy filing by a developer in Umm al-Quwain, the smallest of the seven emirates.

The developer, Al Murjan Real Estate, which has a $3 billion development project, White Bay, filed for liquidation in Sharjah, a neighboring emirate, according to court documents.

According to lawyers, it is the first bankruptcy filing of a property developer to have taken place in the U.A.E. since the onset of the financial crisis in 2008, a move that may prompt other developers to do the same. / Middle East - UK on the trail of more Gulf trade

As the Queen and Duke of Edinburgh arrive for their visits to the United Arab Emirates and Oman, British businesses are hoping that trade will receive a significant boost.

Ministers in the Conservative-led coalition have made it clear that they regard exports to the region as having been neglected under the previous Labour government.

In July, William Hague, UK foreign minister, said: “The real economic action in the world has been taking place in Brazil and India and China and the Gulf states, and that is where . . . we now have to connect ourselves much more strongly.” - Comment: Business links that must be aired

A widely held belief in the Arab world holds that some elements in the west secretly oppose democracy in the region because free and fair elections would produce anti-western governments. However, one overlooked aspect is the role that leading businesses in Arab countries play in stifling democracy.

The most glaring example of businesses in bed with authoritarian regimes became evident when anonymous posters appeared last summer in Cairo’s streets. They urged Gamal Mubarak, the influential son of Egypt’s president, to run for next year’s presidential elections to succeed his father.

Mustapha Kamal, a political science professor at Cairo University, commented that the “campaign began at the proposal of some businessmen who fear a deterioration in President Mubarak’s health and believe that it is better to quicken Gamal’s succession while his father is around”.

Wednesday, 24 November 2010

UPDATE 1-Arabtec CEO sees restructuring at Dubai Properties | Reuters

Dubai Properties, a unit of troubled conglomerate Dubai Holding, is expected to enter restructuring, according to the head of builder Arabtec (ARTC.DU), which is owed money by the firm.

Asked how he knew a restructuring was likely, Arabtec CEO Tom Barry said he was in discussion with the developer over the payment for four completed projects.

But Arabtec, the builder of the world's tallest tower in Dubai and Emirates' largest builder by market value, still expects to get paid. "I believe funds will be available to them because I trust in Dubai," Barry told reporters on the sidelines of an industry event in Dubai on Wednesday.

Saudi Arabian Mining Delays Plant on Financing - Bloomberg

Saudi Arabian Mining Co., the state- run producer known as Maaden, delayed production from its Ras al-Zour phosphate plant to the second quarter of 2011 from the fourth quarter of this year.

The company faced “financing difficulties” as it was building the 20.6 billion-riyal ($5.5 billion) facility, said outgoing Chief Executive Officer Abdullah al-Dabbagh in remarks to Al Arabiya television.

The delay will not incur additional costs and commercial production will start in the third quarter, the Riyadh-based miner said in a statement to the Saudi bourse today.

Florida Kangaroo Foreclosure Courts: More Evidence of Favoritism Towards Banks « naked capitalism

Lisa Epstein of Foreclosure Hamlet sent an eye-opening letter from Christopher Meister, who ran for the sheriff of Lee County, Florida as an independent and lost. As much as I’ve read plenty of reports of dubious judicial behavior in Florida, I still find myself appalled when new stories crop up.

The Meister letter provides specific examples of judicial misconduct. One involves a judge conferring openly with a bank lawyer on cases in which the lawyer had no involvement.

I urge you read this letter in its entirety.

Mobius Says Equities Will Drive Growth of Islamic Fund Industry - Bloomberg

Mark Mobius of Templeton Asset Management Ltd. comments on Islamic finance and Shariah- compliant funds. He spoke at a conference in Manama today.

“I’m personally a big fan of these Islamic funds because I think the idea of equity is very important. I think that the equity side is where we are going to see big growth going forward.

‘‘The potential is very, very great. We believe that the potential assets that are available to the Islamic asset management industry goes over $480 billion.

Gulf Stocks Movers: Al-Mal, Kingdom Holding, Maaden and Taqa - Bloomberg

The DFM General Index retreated 1 percent to 1,673.82, the lowest level since Sept. 22, at the 2 p.m. close in Dubai. Abu Dhabi’s measure was little changed and Saudi Arabia’s Tadawul All Share Index slipped 0.4 percent at 1:08 p.m. in Riyadh.

After crisis, Dubai refocuses to tackle debts, UAE Economy - Maktoob News

It was the celebrity endorsement marketers dream about.

Before harnessing up to film stunts for the next "Mission: Impossible" on the face of the world's tallest tower, Tom Cruise bounded onto stage in the skyscraper's plush new Armani Hotel to promote shooting in Dubai. With cameras rolling, he thanked the emirate's ruling sheik and praised the city as "very cinematic," deeming it "beautiful" four times in under a minute.

Publicity stunt it may have been. But the filmmakers' decision to set a large part of the movie here also reflects the headway Dubai has made on its own tough mission: to again charm investors and repair its reputation a year on from its market-rattling financial crisis. It's a task that could take years to complete.

The pint-sized Persian Gulf emirate sent tremors through the world economy a year ago this week when it effectively acknowledged it couldn't repay billions of dollars as promised. Lenders who had relied on government backing for conglomerate Dubai World and a web of other state-linked companies found no such guarantees, leaving them scrambling for details from a city-state as famously tightlipped as it was opaque about the health of its globe-trotting businesses.

Dubai eyes $1.5 bln Malaysian sukuk, UAE Economy - Maktoob News

Dubai plans to issue about $1.5 billion sovereign sukuk in Malaysia as the Gulf Arab emirate looks to tap the world's largest Islamic bond market to diversify its funding avenues, people with direct knowledge of the deal said on Wednesday.

Work on the $1.5 billion multi-currency programme was "more than 50 percent" under way but the plan was not final given the volatility in financial markets due to Ireland's debt troubles and tensions on the Korean peninsula, said one source not authorised to speak to the media.

"This will be the first foreign sovereign to issue ringgit (sukuk) in Malaysia," said the source who asked not to be identified as the plan has not been announced.

Dubai May Cede Control of Alliance Medical to Lenders in Debt-Equity Swap - Bloomberg

Dubai International Capital LLC, a buyout company owned by the Emirate, may lose control of medical imaging company Alliance Medical Ltd. to lenders in a debt-for-equity swap, three people familiar with the plan said.

Under a debt restructuring proposed by senior lenders, creditors including Lloyds TSB Bank Plc, Commerzbank AG and Prudential Plc’s M&G unit would seize the company in exchange for writing its debt down to 250 million pounds ($395 million) from 555 million pounds, said the people, who declined to be identified because the plan is private.

Dubai International may retain some shares in the company, the people said. Junior lenders, owed 140 million pounds, may also be allotted some shares rather than recouping their initial investment. Senior creditors may initiate legal proceedings at the U.K.’s High Court if the plan is opposed by junior lenders and Dubai International’s management, the people said.

TIBC's Bahrain Lawyers Can't Void U.S. Rulings in Lawsuits, Judge Rules - Bloomberg

The International Banking Corp.’s Bahrain-based bankruptcy lawyers can’t void U.S. rulings in lawsuits brought by Deutsche Bank AG and Mashreqbank PSC and force the turnover of about $29 million, a judge ruled.

TIBC, a provider of commercial loans winding down in Bahraini courts, is in Chapter 15 bankruptcy in the U.S., which foreign companies use to protect U.S. assets while they are liquidated or reorganized in a foreign court.

U.S. Bankruptcy Judge Stuart Bernstein, who is overseeing TIBC’s Chapter 15 case, today denied a motion by an administrator to the foreign bankruptcy to vacate attachment orders obtained by Deutsche Bank and Mashreqbank, saying a Bahraini court should decide the issue.

First UAE developer goes bankrupt, others will follow « ArabianMoney

Al Murjan Real Estate, the owner of the White Bay development in Umm al-Quwain has become the first UAE developer to file for bankruptcy, according to The Financial Times.

The bankruptcy filing is likely to set a precedent for hundreds of stalled real estate projects across the Emirates as this type of proceeding may take years and delay the processes allowing the many thousands of individual investors to get their money back.

Persian Gulf Investors Shun IPOs as Emerging Market Stocks Rise to Record - Bloomberg

Companies in the Persian Gulf aren’t benefiting from record demand for share sales in emerging markets as debt concern hurts investor confidence.

Omani mobile-phone operator Nawras and Aluminium Bahrain BSC, the operator of an 850,000-metric-ton-a-year smelter, sold shares this month at the bottom of the range used to canvas investor interest in the stocks. The six-member Gulf Cooperation Council region generated $1.91 billion of initial public offerings this year, compared with $2.27 billion in the same period a year earlier, data compiled by Bloomberg show.

The region’s benchmark Bloomberg GCC 200 Index has gained 9.1 percent this year, compared with a 9.9 percent increase for the MSCI Emerging Markets Index. The average number of shares traded daily in Dubai has dropped 65 percent from the year- earlier period. By contrast, the pace of IPOs in Asia has climbed to a record since the crisis.

gulfnews : Juma Al Majid: A life in service

Juma Al Majid is a patient man. Describing how he built his business empire, he says: "I deeply believe that small continuous growth is far better than rapid, random [expansion]. I rely on a two to five per cent growth strategy. I don't look for 100 per cent or even 50 per cent growth because this needs big management."

And he does not embark on any venture until he has completed thorough research and is convinced the business will succeed. Today, the Al Majid Group comprises more than 40 companies in engineering, retail, automotive and investment — to name but a few — across the world.

Al Majid says it's the sea that taught him to be patient. When he was eight, he used to accompany his father, who owned two boats, on pearl-diving trips. During the summer, he would serve refreshments on the boats for a few rupees.

Al Mazaya aims to raise capital for investments

Al Mazaya Holding, a Kuwaiti property developer, hopes to tap the markets for capital as it tries to increase its investments in Dubai. But should markets take this as a warning sign?

Until December 6, Mazaya will offer additional shares to existing shareholders to increase its capital by 30 per cent to 64.9 million Kuwaiti dinars. It has begun by offering equity to shareholders of First Dubai Real Estate and Waterfront Real Estate Development, two groups in which it currently holds majority stakes.

Mazaya said it would offer the new shares at a price of 127 fils each."

Banks seek investors who are in it for the long-haul

Banks are turning to institutions to generate fresh revenues as retail investors shy away from playing the local markets, says a top official at Abu Dhabi's biggest bank.

The volumes of traded shares on the Dubai Financial Market are scraping past 80 million, compared with highs that touched 900 million before the Dubai World crisis took hold. On the Abu Dhabi Securities Exchange, volumes have settled at about 50 million.

'What we want is long-term investors who recognise long-term opportunities here and are willing to back this market for the next five years,' Alan Durrant, the chief investment officer of National Bank of Abu Dhabi (NBAD) said yesterday. 'If people are largely trading between each other, that's a zero-sum game.'"

Dubai Islamic Bank in sharia-compliant REIT joint venture | Reuters

Dubai Islamic Bank (DISB.DU) (DIB) launched the emirate's first sharia-compliant real estate investment trust to aid in the recovery of the country's battered real estate sector, top executives said on Tuesday.

Emirates REIT, a joint venture between DIB and French property firm Eiffel Management, looks to attract sharia-compliant property such as office buildings, warehouses, schools and car parks and convert the rental income into dividends for investors, said Adnan Chilwan, chief of retail banking at DIB.

80 percent of the REIT's annual profit will be distributed to shareholders as a dividend."

New growth path for Islamic finance - Gulf Weekly

More than 1,200 delegates from over 50 countries are taking part in the 17th annual World Islamic Banking Conference (WIBC 2010) which ends today at the Gulf Hotel.

The three-day event has been convened under the patronage of His Royal Highness Prime Minister Prince Khalifa bin Salman Al Khalifa and held under the auspices of the Central Bank of Bahrain.

Under the theme 'Building a new growth paradigm - Islamic banking and the new global financial landscape', the event has featured a series of pragmatically-focused workshops and executive briefing sessions led by experienced and respected industry experts. - Emirates builder files for bankruptcy

The company behind a $3bn stalled project in a smaller United Arab Emirates member has filed for insolvency.

Lawyers say the move is the UAE’s first court-mandated bankruptcy of a distressed property project since the financial crisis struck.

The filing will raise fears among the thousands of investors in stalled real estate developments across the UAE, especially Dubai, where many projects have floundered since the crisis sent the market into decline.

Tuesday, 23 November 2010

Korean conflict and Euro crisis hits Dubai stocks

Dubai stocks ended lower today as renewed hostilities between North and South Korea and concerns that the euro-crisis will spread beyond Ireland put pressure on stocks.

In a reverse of yesterday's positive gains, the Dubai Financial Market (DFM) fell 1.16 per cent to 1,691.48 points.

Meanwhile, the Abu Dhabi Securities Exchange Index gained 0.07 per cent to 2,755.81 points."

Prince Walid bin Talal Says He Owns 1% of G.M. -

Prince Walid bin Talal of Saudi Arabia is known for his big bets on companies like Citigroup. Now it seems he is swinging for the fences with General Motors.

The prince said on Tuesday that his investment vehicle, Kingdom Holding, took a $500 million piece of the car maker’s initial public offering, representing a 1 percent stake of the company. He was one of several big investors G.M. and its advisers courted during the months-long I.P.O. process.

“We are confident that the current management of G.M. is able to deliver growth and profits over the coming years,” Ahmed Reda Halawani, Kingdom Holding’s executive director of private equity, said in a statement. “We will be able to achieve the expected return on this investment.”

Areva capital hike by year end on track-finmin official | Reuters

French nuclear reactor maker Areva (CEPFi.PA) is on track to raise capital by the end of the year, said an offical from the French Finance Ministry official.

The program will be rolled out in two phases with the sovereign funds of Qatar and Kuwait making the first investment and industrial players participating in a second round.

'We are in negotiations ...we are sticking to the timeline set out by the nuclear policy board, to have the deal tied up by the end of the year,' said Alexandre de Jugniac, chief of staff to French finance minister Christine Lagardere."

Gulf Stocks Movers: Industries Qatar and Saudi Basic Industries - Bloomberg

Qatar’s QE Index slumped 1.8 percent, the most since May 25, to 8,121.64 at the 12:30 p.m. close in Doha. Kuwait’s gauge dropped 0.7 percent and Dubai’s measure retreated 1.2 percent. Saudi Arabia’s Tadawul All Share Index lost 1.1 percent.

The following stocks gained or fell in the Gulf. Symbols are in parentheses.

Industries Qatar (IQCD QD) dropped the most since May 25, tumbling 3.3 percent to 126.7 riyals. Crude for January delivery retreated as much as 1.7 percent to $80.35 a barrel on the New York Mercantile Exchange. Industries Qatar is the second-biggest petrochemicals maker in the Middle East. Saudi Basic Industries Corp. (SABIC AB), the region’s biggest petrochemicals maker, declined 2 percent to 98.75 riyals, the lowest level since Nov. 3.

Dubai International Said to Offer Creditors 2% Rate on Loans - Bloomberg

Dubai International Capital LLC, a buyout company owned by the Emirate, is offering banks interest of about 2 percent on new loans as part of a $2.6 billion debt restructuring, two people with knowledge of the talks said.

The company is also asking its 26 creditor banks to extend loan maturities to five to six years to allow asset prices to recover, said the people, who declined to be identified as the discussions are private. Lenders are in turn seeking a guarantee from the government to make up any losses if money raised from the sale of Dubai International’s assets isn’t sufficient to repay the loan principal, the people said. An official at Dubai International Capital declined to comment.

Dubai International parent Dubai Holding LLC’s 4.75 percent bond due 2014 yields 11.9 percent today, according to data compiled by Bloomberg. Dubai International’s assets include stakes in budget hotel chain Travelodge Hotels Ltd., U.K.-based medical imaging company Alliance Medical Ltd. and Mauser AG, a German industrial packaging company. / In depth - ‘It was right to call for a standstill’

Mohammed al-Shaibani, director of the court of Dubai’s ruler, Sheikh Mohammed bin Rashid al-Maktoum, speaks to the Financial Times. The interview was conducted by FT Editor Lionel Barber with Roula Khalaf, Middle East editor, and Simeon Kerr, the FT’s Dubai correspondent. Following and headline link above are exerpts from the interview.

Financial Times: Let’s start with what you think you’ve done a year on since the announcement that the government was requesting a standstill on debt repayment at Dubai World and what you think there’s still to do.

MS: We have to realise, we have to accept there are a lot of challenges in the whole process and there are still a lot of challenges on the way. So definitely, this is not a so called a cakewalk. The whole world is going through a lot of crisis. Each time we say things are, it’s over something comes up whether it’s government issues or company related issues. But looking back almost a year now we are more than, how can I say, confident that it was the right decision to call for a standstill and look at the situation of that company and come up with a more comprehensive specific plan that can meet all the requirements and also analyse all the complexities of that company.

Investing in the Gulf’s BlackBerry habit | beyondbrics: News and views on emerging markets |

In the Arab Gulf, it’s not just harassed businessmen who depend on BlackBerrys. Young people see the smartphones, and their social networking potential, as a way round conservative strictures. And the phone revolution doesn’t stop there: between 2007 and 2009, telecoms usage grew more in the Middle East (31.8-per-cent growth) than it did in Asia Pacific (23.6 per cent), according to independent research for the Middle East’s largest handset distributor, Axiom Telecom.

Axiom is hoping that all this can power its own initial public offering next month - the first new listing in the United Arab Emirates for two years. The company can point to a lucrative deal with BlackBerry-maker RIM. But even in the BlackBerry-loving Gulf, the margins are very tight.

Axiom Telecom will list 35 per cent of its shares on the Nasdaq Dubai in December. According to the prospectus, the group - owned by two family companies and troubled conglomerate Dubai Holding - has an agreement with RIM UK to source BlackBerry handsets direct from the manufacturer. The companies hopes that will double margins on smartphone sales, which are forecast to grow across the region by 41 per cent through 2014.