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Tuesday, 30 March 2010

MENA DAILY MARKET BULLETIN - ARQAAM CAPITAL, DIFC



Shuaa Capital Seeks Exit From Proprietary Investments



Shuaa Capital PSC is looking to exit from proprietary investments as the biggest investment bank in the United Arab Emirates focuses on fee-generating business to achieve profit, its chief executive officer said.

Shuaa plans to sell stakes in Kuwait’s Alkout Industrial Projects Co., Qatar’s Amwal, and U.A.E.-based Septech Holdings Ltd. in the next 12 to 18 months, Sameer Al-Ansari said today in Dubai. Shuaa had 1.2 billion dirhams ($326.7 million) worth of investments at the end of last year, down from 2.4 billion dirhams the previous year after exits and provisions, he said.

“I don’t have sleepless nights for what’s left from these investments,” he said at a press conference. “We are in negotiations to sell some of these investments.”

Nakheel replaces chairman, names new board



Dubai Tuesday replaced Sultan Ahmed bin Sulayem as chairman of struggling property developer Nakheel as it tries to manage the $10.5 billion debt pile made under his leadership.

The government appointed a new board and named Ali Rashid Ahmed Lootah as the new chairman, replacing bin Sulayem, who is also chairman of government-owned conglomerate Dubai World.

"The new board will work on strengthening Nakheel's capabilities in line with the proposed restructuring plan that was announced," a statement from the media office of Dubai's ruler said.

Saudi cenbank head named new Gulf monetary chief



Muhammad Al-Jasser of the Saudi Arabian Monetary Agency will be the first chairman of the Gulf monetary council, expected to be the precursor to a common central bank, Jasser said on Tuesday.

CURRENCIES | BONDS | GLOBAL MARKETS

The deputy will be Rasheed al-Maraj, the central bank governor of Bahrain, according to a statement read out by Jasser at a meeting of the four Gulf states taking part in the common currency project, Saudi Arabia, Bahrain, Qatar and Kuwait.

Central bankers from four Gulf oil producing states launched on Tuesday the joint monetary council, which is expected to lay the foundations for a regional central bank and prepare the launch of a single currency in a nearly decade-old plan.END

Emirates NBD Interested in RBS’ U.A.E. Retail Assets, CFO Says



Emirates NBD PJSC, the United Arab Emirates biggest lender by assets, is considering plans to buy the retail banking assets of Royal Bank of Scotland Group Plc in the country, Chief Financial Officer Sanjay Uppal said.

RBS branches, its automated teller machine network and wealth management clients complement Emirates NBD’s retail banking system, Uppal said in a phone interview in Dubai today. “We are interested in looking at that asset,” he said.

RBS, the U.K.’s largest government-owned lender, expects to announce a buyer for its consumer banking unit in the U.A.E. by April or May, Simon Penney, chief executive officer for the Middle East and Africa, said March 4. The Edinburgh-based lender is selling assets as part of a global plan announced in February last year to exit some businesses including in Asia.

UAE exchanges should consolidate - DFM head



Bourses within the United Arab Emirates should consolidate, the head of Dubai Financial Market (DFM.DU) said on Tuesday, adding DFM's planned takeover of Nasdaq Dubai will be completed within two weeks.
"It is in the interest of everybody to consolidate. There have been discussions at the top level, meaning the owners of the exchanges," executive chairman Essa Kazim told reporters.
Dubai's two exchanges are already moving towards a single trading platform and synchronized trading hours. In December, Borse Dubai, the majority owner of the DFM and Nasdaq Dubai, agreed to buy Nasdaq OMX's (NDAQ.O) remaining stake in Nasdaq Dubai. [ID:nLDE5BL01C]
Profit at DFM, Dubai's top stock exchange which is itself listed, fell by almost half in 2009 as trading commissions slumped. [ID:nLDE62123W]
Pressure on the United Arab Emirate's three stock exchanges, which include the Abu Dhabi exchange ADX, to consolidate, has increased in the wake of the financial crisis and speculation has centered on Dubai's two competing markets.END

Dubai and creditors exchange blows - The Majlis

Dubai and creditors exchange blows - The Majlis




When Dubai World, the huge emirate-owned investment company, announced a plan to restructure some $26 billion in debt on Wednesday, markets welcomed the news.

Now, less than a week later, disagreements between Dubai World and some of its 97 creditor banks are becoming public. A handful of banks on the committee that's coordinating Dubai World's debt restructuring are angry that other creditors look set to receive preferential repayment.

Some of the biggest lenders to Dubai World believe that they are going to be given a worse deal than creditors for Nakheel, a real-estate development subsidiary of the company that is responsible for most of Dubai World's losses.

Profit-taking trims Dubai shares



Shares in Dubai posted the steepest losses among the regional markets, as investors in the emirate yesterday booked profits from the rally triggered by Dubai World’s restructuring news last week.

The Dubai Financial Market General Index retreated 2.5 per cent to 1,832.94 after rising by 19 per cent since the beginning of this month.

The index heavyweight Emaar Properties led the slide with a loss of 3.6 per cent, while the shares of the Dubai bourse, traded as DFM, lost 4.6 per cent. Emirates NBD dropped 3.8 per cent.

Saudi Arabia’s Al-Naimi Awaits Recovery Before Boosting Output



Saudi Arabian oil Minister Ali Al- Naimi said the nation could boost output by as much as 4.5 million barrels-a day once demand recovers from recession.

The world’s largest oil producer is “waiting” for usage to rise after increasing capacity to 12 million barrels a day, Al-Naimi told reporters today in Cancun, Mexico, where he’s attending an oil conference. Prices in the $70-a-barrel to $80- a-barrel range are “as close to perfect as possible,” he said.

Oil surged last year as the Organization of Petroleum Exporting Countries implemented cuts to production quotas of 4.2 million barrels a day and the global economy emerged from its worst slump since World War II.

Gulf Central Banks Hold First Monetary Council Meet in Riyadh



Saudi Arabia, Kuwait, Qatar and Bahrain will take a step toward setting up a single currency today when their central bank governors hold the first meeting of the Monetary Council, a precursor to a united central bank.

The inaugural session in the Saudi capital, Riyadh, marks the first official meeting of the four governors without their colleagues from Oman and the United Arab Emirates since the U.A.E. pulled out of the planned currency in May. The council is scheduled to work on a road-map for a plan that Kuwait says will take a decade to complete.

Gulf countries agreed on the currency in 2001, saying it would help integrate their economies, and the original timetable would have seen the new monetary unit in place this year. The deadline was missed after the U.A.E. and Oman pulled out. Saudi Arabia, the Arab world’s largest economy, has indicated that the participants may avoid setting a new deadline.

Abu Dhabi learns from neighbour



Abu Dhabi has established a new committee to provide greater oversight of its state-owned companies in a move that appears partly designed to avoid some of the mistakes made by neighbouring Dubai.

The body will be charged with ensuring that the companies have a uniform financial reporting culture and produce acceptable returns. It will examine how board directors are appointed and how the government exercises control.

It is understood the committee, due to be headed by Hamad al-Hurr al-Suwaidi, a senior official at the emirate’s finance department, will not affect Abu Dhabi’s sovereign investment vehicles. Instead, it will focus on companies such as Etihad Airways, the General Holding Corporation, an industrial conglomerate, and the Tourism Development and Investment Company , responsible for projects such as the $29bn (€21.5bn, £19.3bn) development of Saadiyat Island.

SABB sees brighter outlook on lending



SABB, HSBC’s Saudi Arabian affiliate previously known as Saudi British Bank, has had an uneasy time of it of late. Last year the bank reported net profits of SR2.2bn ($585m), its lowest in five years.

And, in the fourth quarter of last year, the lender’s profits nearly halved after booking increased provisions and lending slowed.

This year, the bank says, is likely to be substantially better as a result of stronger fundamentals in the Saudi economy.

Nakheel plan for relaunch takes shape



The somewhat clunky advertising slogan that used to accompany Nakheel’s marketing read: “Where the vision of Dubai gets built”.

The property developer’s Palm Jumeirah project certainly captured the global imagination as celebrity residents burnished the emirate’s allure through the years of stellar growth.

But the projects became increasingly outlandish: reclaimed islands depicting the universe alongside others created to depict the Earth, two extra Palms and a reclaimed city twice the size of Hong Kong island. The height of the hubris came at the end of 2008 – just as the global economy was sliding into recession – when Nakheel unveiled plans for the world’s tallest tower.

Comment: Dubai restructuring just a start



When a significant announcement is made, a phrase often leaps to the fore that embodies a consensus response to what has been said.

After Dubai World unveiled its much anticipated restructuring proposal for its debts last week, the overwhelming reaction seemed to be that of “a step in the right direction”. Yet the phrase was swiftly followed by a “but”.

Some of the caution is linked to details that have still to be thrashed out – significantly, whether bank creditors of Dubai World will receive interest and, if so, at what level. That will help decide just how much pain the creditors will be asked to endure. But the other reason for some caution is more symptomatic of the hammering Dubai’s credibility has suffered.