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Wednesday, 10 February 2010

Bahrain's GFH says lenders accept loan refinancing

Bahrain's Gulf Finance House GFHB.BH (GFHK.KW) (GFH) said on Wednesday that lenders of a $300 million loan have accepted its proposal to delay repayment of some funds by six months.


GFH said it would replace the $300 million murabaha loan maturing on Wednesday with a new $100 million facility with a tenure of six months, having repaid the other $200 million.

Lead arrangers for the loan were WestLB and Raiffeisen.

GFH has been hit hard by a property market crash in the Gulf Arab region and said on Feb.2 it would ask lenders of the loan to defer payment of a portion.END

Saudi Arabia, Angola, Iran Remain Top 3 Oil Suppliers to China

Saudi Arabia, Angola and Iran remained the three largest oil sources for China in 2009, with the three supplying 47.7 percent of China's total imports, according data released Wednesday by the General Administration of Customs (GAC).

GAC figures showed that China's oil imports from the three nations last year stood at 41.86 million tonnes, 32.17 million tonnes and 23.15 million tonnes, respectively. They represented a year-on-year increase of 15.1 percent, 7.6 percent and 8.6 percent, respectively.

China imported 204 million tonnes of crude oil last year, up 13.9 percent from a year earlier, at an average price of 438 U.S. dollars per tonne. That cost the world's third largest economy 89.26 billion U.S. dollars, down 31 percent year on year due to lower oil prices.

Still downside to Dubai property (Re-post)

Despite the Dubai debt crisis of last December and much lower property sales there is still a downside risk to Dubai real estate in 2010, according to a panel of experts convened for a breakfast conference by Cityscape Dubai today.

This downbeat assessment of the outlook for local real estate also provided an insight into the opportunities that await patient investors.

Infrastructure built

Asteco Property Management CEO Elaine Jones told the seminar that business infrastructure now marked Dubai well ahead of its regional rivals, and that lower office and residential rentals meant that the city was unlikely to lose another major financial relocation to Singapore like Credit Suisse.

ING Investment Management’s head of equities, Fadi Al Said thought Dubai property prices still had some way to fall but that a bottom might be reached towards the end of the year. He pointed out that in many market corrections the bottom occurs below the cost of construction but that equities touch bottom six months ahead of real estate and might be close to the bottom right now.

Al Tamimi lawyers’ property head Lisa Dale cited a series of ongoing legal reforms that should gradually strengthen the real estate sector in 2010 – from regulations to protect property investors to strata law regulations and a trust law for real estate.

However, she noted that there is no concept of trading while insolvent within UAE law and that this is inhibiting the liquidation of insolvent companies, and making it ‘easy to stick your head in the sand’.

Coming bankruptcies

In response to a question from ArabianMoney about possible insolvencies and liquidations ahead in the Dubai property sector the panel was evasive, although the precedent of most real estate cycles is for substantial bankruptcies at this stage.

The general feeling was that Dubai is working through its real estate crash and the aftermath, and that Abu Dhabi is both somewhat protected and just later in this cycle. Clearly for those investors who get their timing right there are opportunities, and the major downturn in the UAE is already over.

So while downturn risk remains in Dubai property, the greater risk is now probably excessive pessimism and missing out on the upturn which cannot be far away.END

Kingdom Holding Shareholders Approve 41% Share-Capital Reduction

Kingdom Holding Co. shareholders approved a decision to reduce the company’s share capital by 41 percent to 37.1 billion riyals from 63 billion riyals, the Riyadh-based company said in a statement on the Saudi bourse Web site today.END

Oman Leads Gulf Gains as Omantel Net Tops Estimate; Qatar Rises

Oman shares rose to a month-high, among the Gulf’s best performers, as Oman Telecommunications Co.’s profit beat expectations and global stocks advanced after Germany signaled it may help support Greece’s finances.

Omantel, the sultanate’s biggest telephone company, jumped the most in more than a month. Bank Muscat SAOG, the country’s largest bank, increased the most in a week. Oman’s Muscat Securities Market 30 Index advanced 0.8 percent to 6,561.66, the highest since Jan. 13. The measure has climbed 3 percent this year, while the MSCI Emerging Market Index has lost 7.7 percent. Qatar’s Doha Securities Market Index advanced 0.9 percent.

“U.S. markets yesterday and Asia today were higher, reflecting a better global backdrop, which is pushing local markets up,” said Ali Khan, head of cash-equity trading at Dubai-based Arqaam Capital Ltd.

Emaar hires DBS to sell Singapore's RSH: sources

Dubai-based Emaar Properties (EMAR.DU) has hired DBS (DBSM.SI) to advice on the sale of Singapore-listed sports retailer RSH Holdings (RSHL.SI), which is currently valued at $164 million, two sources told Reuters on Wednesday.


Emaar Properties took full control of the firm in July last year after taking over the debt of its Indian joint venture partner.

"DBS is advising Emaar," one of the sources with direct knowledge of the deal told Reuters, who declined to be identified because the talks were not public.

A DBS spokeswoman declined to comment. Emaar was not immediately available to comment.

RSH, whose shares are currently suspended, last traded at S$0.66 a share on Jan 28.END

Dubai World seeks $22 bln debt freeze in Feb

State-linked indebted conglomerate Dubai World intends to officially ask creditors for a standstill on $22 billion in debt this month, until it completes restructuring, an Arabic-language daily said on Wednesday.

Citing banking sources in creditor banks, UAE's Al Ittihad said restructuring might require a period of six months.

"This important step by Dubai World this month will represent the most significant transitional phase in the group's negotiations with creditors," sources told the paper.

Kuwait: The Wave of Privatization

The government has proposed a law to privatize most of Kuwait’s industries, except for the Army, Police, and the Oil industry. The law would entitle the government to a 20% stake in the newly established companies, while a strategic partner would own 35%, employees own 5%, and the public would retain the remaining 40% stake. The law is being discussed in the parliamentary Financial Committee.

This law, if it passes and sees the light of day, is a huge step for Kuwait in the right direction, in our opinion. The new entities will be more efficient, specialized, lacking corruption, with clear goals, and accountable for their actions. Let us look at the Ministry of Electricity and Water Power as an example. If they privatize electricity, people will start to own up to their responsibilities and pay their bills. If they don’t, then the company will cut their electricity, unlike what is happening nowadays. This change will make people more accountable for the responsibilities and will improve people’s morality and ethical standards.

When Kuwait’s industries are put for sale, it will lead to a huge influx of foreign capital into Kuwait because 35% of these companies will be owned by specialized partners. A foreign electricity company might collaborate with a Kuwaiti partner to establish a Kuwaiti electricity company. The foreign companies will bring their expertise in that area, as well as their capital.

The government clearance of these industries that require routine work and constant Parliamentary headaches will lead the government to focus on more meaningful ventures, and work on establishing long-term plans and actually implementing them.

'DIFC firms cannot operate from outside'

Companies with the Dubai International Financial Centre (DIFC) licence are no longer allowed to practice or operate outside the centre, its Governor told Emirates Business.

Firms that are currently occupying office spaces outside the financial free zone would, therefore, have to come back and DIFC can now accommodate them.

"Why practice outside the centre? It can accommodate everybody," said Ahmed Humaid Al Tayer. "Before there was shortage of space, now investors are putting more space there."

Damas appoints interim chief executive as part of restructure

Damas, the region’s largest gold and jewellery retailer, has appointed an interim chief executive in the latest step of a restructuring after the discovery of US$165 million (Dh606m) in unauthorised transactions.

The changes come three months after Tawhid Abdullah, a member of the company’s founding family, resigned as the managing director and chief executive after disclosing the company’s unapproved deals.

The deals almost pushed the company out of business. Damas is soon expected to sign a debt standstill while it undergoes a restructuring with asset sales.

Kuwait Projects $22.4 Billion Deficit in Draft Budget

Kuwait plans to increase spending by about 34 percent in the fiscal year starting April 1 and is projecting a budget deficit of 6.46 billion dinars ($22.4 billion), according to a copy of the draft sent to parliament.

Spending is forecast at 16.16 billion dinars and revenue at 9.7 billion dinars in the proposal. Oil revenue is projected at 8.62 billion dinars and non-oil revenue at 1.1 billion dinars. The 2010/2011 budget will be based on a price of $43 a barrel for oil, which now trades at about $72 a barrel.

Parliament’s budget committee is discussing the draft and the legislature is expected to vote on it in March.

Dubai oil find unlikely to help Dubai debt

Dubai's newly discovered oil field is unlikely to generate the big cash needed to get the debt-ridden emirate out of the doldrums, analysts say, challenging the government's claim that it could inject new life into its ailing economy.

"Foreign companies have explored and developed the area over a long period and any large finds should already have been made," says Middle East energy analyst Samuel Ciszuk at IHS Global Insight in London.

The announcement by Dubai’s ruler Sheikh Mohammad bin Rashed al-Maktoum of a sizeable offshore discovery on February 4 has attracted considerable attention.

U.A.E. Shares Gain on Speculation of Improved Banking Earnings

United Arab Emirates share rose for a second day as investors speculated Dubai’s biggest lenders may report improved earnings later this month and as the country’s central bank governor said economic growth will accelerate.

Dubai Islamic Bank PJSC, the U.A.E.’s biggest Islamic lender, jumped the most in almost two months. Abu Dhabi Islamic Bank PJSC climbed to the highest level since December as the Islamic bank said it may buy back shares. Economic growth in the U.A.E. will quicken from last year’s 0.7 percent and improve “significantly” in 2011, central bank Governor Sultan bin Nasser al-Suwaidi said. The DFM General Index added 0.9 percent to 1,660.97 at the close, bringing the two-day increase to 1.9 percent. The ADX General Index rose 0.6 percent.

“Some people are expecting improved performance” in the earnings of Dubai’s big banks and Emaar Properties PJSC, said Vyas Jayabhanu, head of Al Dhafra Financial Brokerage LLC in Abu Dhabi. The results are “the only light in the tunnel.”