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Thursday, 18 March 2010

UAE banks need $40 bln injection

UAE banks need a cash injection of $40 billion to fill their liquidity gap and boost lending to firms hungry to do deals, the head of one of Dubai's largest holding companies said on Wednesday.

"Bank lending has been at a standstill for two years and I don't think this will be different in 2010. Banks need $20 billion to close the gap in loans and deposits and another $20 billion in extra liquidity to start lending again," said Khalid bin Kalban, chief executive and managing director of Dubai Investments.

"When you buy, you have to borrow. No one will give you any money these days to leverage," he told reporters during a tour of Dubai Investments Park (DIP), the largest mixed-use real estate project developed by his company.

Qatari Porsche investors to gain VW board votes during merger

As sports car manufacturer Porsche transforms from an independent company into a brand name produced by the Volkswagen group, eyebrows in Germany have been raised at the increasingly important role the Arab emirate of Qatar, a part owner of VW, will likely play.

Qatar Holding LLC announced last year its intention to acquire some 17 percent of VW's voting shares, and the German newspaper Handelsblatt reported Tuesday the Arabian investors are likely to occupy two of 10 seats on VW's supervisory board. A first Qatar Holding board member, Hussain Ali Al-Abdulla, is expected to be voted in as a VW board member on April 22 to replace German Roland Oetker.

VW is also planning to deepen its research cooperation with Qatar and the German state of Lower Saxony, which owns 20 percent of VW shares, the company announced Monday. Those plans include the expansion of programs at Qatar University in Doha and at the AutoUni institution in Wolfsburg.

Limitless makes payment of $1.2 bln loan

Limitless, a property development unit of Dubai World, on Thursday paid creditors interest for a $1.2 billion loan due at the end of this month, bankers said.

"The interest has been paid off but the company has not said whether it will pay off the entire loan later" this month, said a banker with exposure to the loan on Thursday.

A spokesman for Dubai World declined to comment.

The payment comes as Dubai World lurches towards presenting creditors with a formal proposal to restructure a total of $26 billion worth of debt. The interest payment is the last before it's $1.2 billion loan matures at the end of March.

Dubai World told creditors last year that the company would pay off all interest on their loans until they agree with creditors on a debt standstill plan. The conglomerate, which is wholly-owned by Dubai government, asked for a standstill on its debts Nov. 25 but is expected to make a proposal on a standstill to creditors this month.

A standstill agreement is expected to involve Limitless.END

Qatar banks gain from trading move -analysts

Banks in Qatar will be able to diversify their revenue base and bolster trading income as the government relaxes curbs on buying listed securities and allows banks back into brokerage operations, analysts said on Wednesday.

On Tuesday, the Qatar Central Bank said banks will soon be allowed to buy shares of listed companies on the bourse. Qatar's index .QSI rose 3.8 percent Wednesday on the news as banks and other bluechip stocks rallied.

Analysts said banks will be allowed to invest a maximum of 150 million Qatari riyals ($41.23 million) in listed securities on the Qatar bourse. Banks had been banned from trading on Qatar's markets since the government bought their share portfolios last year in an emergency move to bolster capital.

Taqa ends buying spree and looks to trim its debts

The Abu Dhabi National Energy Company (Taqa), with assets as diverse as oilfields in the North Sea and a power station in New Jersey, has turned its focus to integrating investments after a 64 per cent decline in net profits.

The new strategy set by Carl Sheldon, the general manager, contrasts markedly with that of the former chief executive Peter Barker-Homek, who looked to buy energy assets whenever he saw a good deal.

The company’s profits rose greatly as oil prices increased in 2007 and 2008, but came back to earth with the crash last year.

Retailcorp sheds raft of brands

The retail arm of Dubai World is dropping a raft of brands as part of a radical overhaul of the company.

Retailcorp World, which used to be known as Nakheel Retail, has closed its Lamborghini branded cafes and has cancelled plans to bring the US gourmet grocery chain Balducci’s and the urban fashion brand Joe Bloggs to the region.

The company will instead focus on its more profitable and less risky sports stores, said Abdul Wahid al Ulama, the executive vice chairman of Retailcorp World.

Dow Jones Lists Top 20 Decision Makers in the UAE (19 below!)

Zawya Dow Jones on Tuesday released a list of highly placed non-royaldecision-makers in the UAE who have been integral to the progress of the country in various fields and disciplines and have employed their acumen, enterprise and leadership qualities in ensuring that their efforts have added tangibly to the success story.
The 20 names mentioned in the Emirati and non-Emirati categories are:

  1. Mohammed Al Shaibani, Chief executive of Investment Corporation of Dubai and Director of the Dubai Ruler’s Court; 
  2. Khaldoun Al Mubarak, Chairman of Abu Dhabi’s Executive Affairs Authority and Chief Executive of government-owned investment firm Mubadala Development; 
  3. Mohamed Alabbar, Chairman of Emaar Properties; 
  4. Yousef Al Omair Yousef, Chief Executive of Abu Dhabi National Oil Co.; 
  5. Sultan Nasser Al Suwaidi, Governor of the UAE Central Bank; 
  6. Dhahi Khalfan Tamim, Commander-in-Chief of Dubai Police; 
  7. Abdulaziz Al Ghurair, Chief Executive of Mashreq Bank; 
  8. Khalifa Mohammed Al Kindi, Chairman of Abu Dhabi Investment Co., board member of Abu Dhabi Investment Council and International Petroleum Investment Co.; 
  9. Ahmed Humaid Al Tayer, Chairman of Emirates NBD and the Governor of Dubai International Financial Centre; 
  10. Ahmad Ali Al Sayegh, Chairman of Aldar Properties and Chief Executive of Dolphin Energy; 
  11. Tim Clark, President of Emirates Airline; 
  12. Simon Pearce, Director of Strategic Affairs for the Executive Affairs Authority; 
  13. Khater Massad, Chief Executive of RAK Investment Authority; 
  14. Ziad Makhzoumi, Chief Financial Officer of Arabtec Construction LLC;  
  15. Michael Tomalin, Group Chief Executive of National Bank of Abu Dhabi; 
  16. Yusuffali M.A, Managing Director of Emke Group; 
  17. Aidan Birkett, Chief Restructuring Officer of Dubai World; 
  18. Frauke Heard-Bey, author of From Trucial States to United Arab Emirates, A Society in Transition;
  19. Zaki Anwar Nusseibeh, Vice-Chairman of the Abu Dhabi Authority for Culture and Heritage.

Aston Martin’s Kuwait Investor Buckles Under Debt

Kuwait’s Investment Dar, which owns half of British carmaker Aston Martin, applied and was accepted for support under a government facility set up for troubled companies as part of a debt restructuring, Reuters reported.

Problems at Kuwaiti investment firms, including Dar, led the government of the world’s fourth-largest oil exporter to approve a “Financial Stability Law” rescue package worth $5.2 billion last year, the news service said.

“Investment Dar announces today that it has started a process of legal protection under the terms of Kuwait’s Financial Stability Law (F.S.L.),” the Islamic investment firm said.END

Kuwait banks plan to sue tainted Saudi groups

A number of Kuwaiti banks have decided to launch legal proceedings against two troubled Saudi business groups for debt estimated at around 1.5 billion dollars, a newspaper reported on Wednesday.

The banks took the decision after months of negotiations with the Saad and Algosaibi groups ended in deadlock, Al-Qabas daily said, citing unnamed sources familiar with the issue.

The creditor banks including Gulf Bank, Commercial Bank and Burgan Bank, in addition to Kuwait Finance House, the largest Islamic lender, have formed a joint committee to pursue the issue, the report said.

Dubai World, Turnberry Might Keep Fontainebleau Miami

Lenders holding the $620 million construction loan on Miami Beach’s fabled Fontainebleau hotel are close to approving a restructuring proposal in which the hotel’s owners would contribute $100 million of new equity, according to people familiar with the matter.

Owners Dubai World and South Florida developer Turnberry Ltd. would pony up the additional equity and pay higher fees in exchange for the lenders forgiving previous defaults and extending the loan’s term by four years to 2016, these people said. The lenders, led by Bank of America, took an informal poll during a conference call on Tuesday that showed the proposal has enough support to pass.

Turnberry, led by Jeffrey Soffer, son of founder Donald Soffer, bought the 1,504-room hotel in 2005 and embarked on a sweeping, $500 million renovation. The company has been at odds with the hotel’s lenders for much of the past year. Dubai World joined the project in 2008 when it paid $375 million for half of the hotel’s equity.

Dubai Stocks Decline Most in World on Concern Gains Overdone

Dubai shares fell the most in the world, reversing an earlier increase, on investor concern recent gains have outpaced growth prospects in the sheikhdom.

Qatar’s measure jumped the most in the world and to the highest in more than four months. Dubai Financial Market, the only Gulf Arab stock market to sell shares to the public, declined the most in almost two months. Emaar Properties PJSC, the developer of the world’s tallest skyscraper in Dubai, retreated the most in a month. The DFM General Index lost 2.3 percent, the biggest drop since Feb. 14, to 1,717.97. The index, up 7.9 this month, had gained as much as 2.2 percent earlier today.

“The market went up aggressively so it’s no surprise that it takes profits the same way,” said Matthew Wakeman, Dubai- based managing director of cash and equity brokerage at Egyptian investment bank EFG-Hermes Holding SAE. “Huge volume is the main takeaway and that remains a very positive signal.”

Gulf Stocks to Chase Frontier-Market Rally, HSBC Says

Middle East stocks will likely start catching up with a world-beating rally by frontier markets after Dubai World announces a plan to restructure $26 billion in debt, said HSBC Holdings Plc’s Andrea Nannini.

“The trigger is going to be the announcement on the Dubai World restructuring,” Nannini, whose HSBC New Frontiers Fund has returned 71 percent in the past year, said in a telephone interview from London. “Whatever the plan is, that will probably be positive because it will give people clarity. That can really trigger the re-rating of the UAE market.”

Nannini predicted in October that frontier markets, which tend to be smaller or less developed than emerging markets, will outperform their larger peers this year. The MSCI Frontier Markets Index, tracking 25 countries from Argentina to Vietnam, has climbed 7.8 percent in 2010, outpacing a 1.6 percent gain in the MSCI Emerging Markets Index.

Bourse rides wave of Saudi recovery

Saudi Arabia’s stock market, the largest in the Middle East, has recovered more swiftly than most of its peers this year, justifying its position as the first choice in the region of almost every analyst and fund manager.

MSCI Barra’s Saudi index is up 8.8 per cent so far this year, trailing only Kuwait, and has gained 63.5 per cent over the past 12 months, almost 10 percentage points better than Qatar, the second-best bourse during that period.

Higher oil prices help. Saudi Arabia is the world’s largest exporter of crude, which currently costs about $80 a barrel, boosting the economy and government finances.

Sovereign wealth funds open up books

The Abu Dhabi Investment Authority, one of the world’s biggest but most secretive state-controlled investment funds, made a small but significant step towards better disclosure by publishing its first annual review this week.

The report was light on details, and revealed little that was not already known by outside observers. However, Adia’s report represents progress towards some transparency by the fund, and will be pored over by bankers hoping to manage some of its estimated $400bn-$450bn (€290bn-€328bn, £260bn-£294bn) of assets.

Adia has never disclosed its overall size or issued reports, and until May 2008 its website was rudimentary, listing only its name, address and switchboard number. Senior management have granted only four proper interviews since it was set up in 1976 and, apart from employees, the only people usually allowed in its headquarters are senior global bankers and money managers seeking its business.