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Thursday, 4 February 2010

Abu Dhabi Shares Drop, End 6-Day Winning Streak; NBAD Falls

Abu Dhabi shares declined, ending the longest winning streak since September, as Asian stocks fell and before economic reports in the U.S.

National Bank of Abu Dhabi PJSC fell the most since Jan. 14 as HC Securities cut the price estimate of the United Arab Emirates’ second-biggest bank. First Gulf Bank PJSC ended a three-day winning streak. In Dubai, Arabtec fell the most in more than a week as the country’s largest construction company had its price projection cut at Deutsche Bank AG. The ADX General Index lost 0.7 percent, ending six days of gains, to 2,706.16 at 1:29 p.m. in the emirate. The measure has still gained 3 percent this week. Dubai’s benchmark index lost 0.3 percent.

“Stocks are drifting lower on low volumes, taking their cues from weakness in Asian trading,” said Mark Friedenthal, a fund manager at Abu Dhabi Commercial Bank PJSC. “There’s some hesitation leading into a weekend with a full calendar of pending U.S. economic data.”

EFG-Hermes Holding May Seek to Acquire RBS Pakistan

EFG-Hermes Holding SAE, the biggest publicly traded Arab investment bank, has expressed an interest in acquiring a majority stake in the Pakistan unit of Royal Bank of Scotland Group Plc, according to the nation’s central bank.

“They have applied for the permission from the central bank to conduct due diligence,” Syed Wasimuddin, a spokesman for the State Bank of Pakistan, said by telephone from Karachi today.

RBS is renewing attempts to sell a stake in its local unit after MCB Bank Ltd., Pakistan’s biggest lender by market value, canceled a proposed takeover because of a dispute over depositing shares as security. MCB had agreed in August to acquire 99.4 percent of RBS Pakistan for about $87 million.

Hard-knocks life did us plenty of good: Al Fahim

The economic boom that transformed Abu Dhabi from a barren land with barely any infrastructure to a vibrant global metropolis was the result of the vision and determination of late President Sheikh Zayed bin Sultan Al Nahyan, according to a leading businessman.

Mohammed Abdul Jalil Al Fahim, the former CEO and Honorary Chairman of Al Fahim Group, paid tribute to the UAE's late president during a lecture at the American University of Sharjah.

"He was a Bedouin who was proud of his roots," said Al Fahim.

Group to sell Pakistan stake

The Abu Dhabi Group, an investment company led by members of the Royal Family, is in talks with several Pakistani telecommunications groups to sell a controlling stake in Warid Telecom in a deal that would create the largest mobile phone operator in the country.

The company would not reveal the size of the stake or the value of the prospective deal, but said it was looking to offload a sizeable shareholding along with management control. In July 2007, the Abu Dhabi Group sold a 30 per cent stake in Warid Telecom’s Pakistani network for US$758 million (Dh2.78 billion) in a deal that valued the whole company at $2.9bn.

Sources close to the investment group suggested Warid’s value had shrunk by between 30 and 40 per cent, meaning the company is worth about $1.8bn. It has also recently sold a 51 per cent stake in its two largest African networks to India’s Essar, and 70 per cent of its Bangladeshi network to Bharti Airtel. The Abu Dhabi Group, the largest shareholder of Warid Telecom, is shifting its investment strategy from managing telecoms assets to acting as a passive investor.

Mubadala lends to airlines

Air Berlin and Etihad Airways have signed up for US$130 million (Dh477.4m) worth of financing provided by a new company controlled by Mubadala Development, the Abu Dhabi Government investment arm.

The new entity, called Sanad Aero Solutions, will provide financing and logistical support with a focus on aircraft engines and components.

Sanad – Arabic for “support” – adds another layer to Mubadala’s aerospace strategy, which includes plans to manufacture composite aircraft parts for Boeing and Airbus in Al Ain, and to build an aircraft in Abu Dhabi by 2018.

No word yet for investors in National Bonds

National Bonds holders are still waiting to learn whether their investments made a profit last year amid fears that returns could have been hit by falling asset values.

On January 24 last year, the government-backed savings scheme announced profits of 7.07 per cent for 2008. Returns for last year, however, have not yet been published.

“I am sure that there will not be a profit like last year,” said US Sachidanandan, an investor. “Last year the profit was declared by the third week of January.”

Leave managing to the wise old owls – like me

Once upon a time it was all about leisure; now it’s about work. Maybe it is because work is so hard to come by that it’s back in fashion. Those of us of a supine persuasion could hardly be heartened by the news that Felix Rohatyn, a former titan of Wall Street, is returning to be a special adviser at Lazard, an investment bank.

He was already considered to be on his last legs when I first started in financial journalism nearly 20 years ago, best known for his role in saving New York City from bankruptcy in the 1970s. Since then he has been the US ambassador in Paris. He first joined Lazard soon after the Second World War, at the age of 20.

But now, at 81, back in the office? Perhaps my father, equally sprightly but pushing 85, should abandon his efforts to master golf and return to London Bridge where he worked many years before. Rather than spraying Titleists about the course he could be adding to the family fortune, thus freeing me to saunter about the links, where at least I stand a chance of making the occasional birdie.

Kuwait paves the way for bourse watchdog

It has been a long time coming, but this week Kuwait finally passed a law to establish a Capital Markets Authority to regulate its turbulent stock exchange, the last country in the Gulf to do so.

For decades local and foreign investors have called for a fresh rulebook and regulator for the Kuwait Stock Exchange, the oldest in the region. Market manipulation and insider trading is said to be rife, and minority shareholders have little protection.

Many Kuwaiti investors blame the absence of a regulator for crashes that have wiped out savings several times since the bourse was established in 1962, most notably in the 1982 Soukh Al Manakh stock market collapse.

Syria frets over drought’s harsh harvest

A farmer balances  skilfully on a  plank of wood that a horse is drawing across a small patch of earth to cover freshly planted garlic, and as he works other men stand nearby chatting animatedly about the weather.

It is a scene that has been replicated for centuries in the semi-arid hills and valleys of Syria, where farmers harvest crops, tend fruit trees, and herd sheep and goats. But recently, the conversation, punctuated by glances and gestures towards the heavens, has taken on additional urgency as the nation grapples with a three-year drought that experts describe as the worst in four decades.

“It’s getting harder and harder every year,” says Turki Hussein Yezbak, one of the farmers.

Lebanon aims to build on banking success

Before Lebanon self-destructed amid civil war in the mid-1970s, Beirut was the regional financial and services centre of the Arab world. Now, after more than 18 months of relative stability and having shown resilience during the global financial crisis, the country is considering how to recapture some of its former glory.

Raya Haffar El Hassan, the new finance minister, says recent international economic upheaval has caused the new government “to try to see whether this evolving situation has given us room to reposition ourselves in the region”.

Ms Haffar El Hassan is one of two women in the cabinet of Saad Hariri, the prime minister, who came to power just three months ago. She began working in government under Rafik Hariri, Mr Hariri’s father, a five-time prime minister who was assassinated in 2005. She has been close to the financial policy-making nucleus of the country for almost two decades.


The Golden Arches are a little less golden, at least in the United Arab Emirates: McDonalds sales grew by just 4 percent in the UAE last year, compared to 14 percent in 2008. Growth is expected to pick up a bit in 2010.

The McArabia is better than anything you'll find in a stateside McDonalds, by the way.