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Monday, 26 April 2010

Alwaleed Plans Rotana Share Sale Within Two Years (Update1) - BusinessWeek

Saudi Prince Alwaleed bin Talal plans to sell a stake in media company Rotana Holding to the public within two years as the billionaire prince expands his entertainment, music and news business in the Middle East.

“An IPO will be happening in the coming two years,” Alwaleed said in an interview with Bloomberg TV in Riyadh. He added that “we need to brand the company very well before going into an IPO.”

Rotana, which produces Arabic and English television programs and publishes an entertainment magazine, is expanding to meet rising demand for entertainment and news in Saudi Arabia, the Arab world’s biggest economy, and the Middle East. Rotana in February agreed to sell a 9.1 percent stake to Rupert Murdoch’s News Corp. for $70 million as the company seeks television, movie, production and technology expertise.

Nakheel in Starts to Sign Agreement to Pay Creditors

Nakheel PJSC, the unit of Dubai World that is restructuring $10.5 billion of debt, said it started signing settlement agreements to pay trade creditors.

Nakheel will pay 40 percent of the amount owed in cash and an annual return of 10 percent on the recovered claims, the company said in an e-mailed statement today. The remaining 60 percent will be paid in publicly traded securities and creditors will get the cash payment “as soon as an agreement on 65 percent of the total agreed claims” is reached, Nakheel said.

“This is expected to be achieved in the very near future,” the company said. “All indications suggest that this will be a prompt process.”

Islamic Finance Faces Hurdle, Lacks Expertise, U.K. Body Says

A shortage of skilled Islamic scholars and banking officials versed in Shariah-compliant finance is hampering the industry’s ability to develop global standards, said an official at the Islamic Finance Council U.K.

“People from conventional banks need to understand Islamic finance, but Shariah scholars also need to learn more about conventional finance,” Omar Shaikh, a board member of the Glasgow-based Islamic Finance Council, said in a telephone interview in Dubai. “The industry is growing fast globally and this creates challenges associated with standardization.”

Regulators around the world, including Bahrain and Malaysia, are looking for ways to better evaluate risks of the Islamic banking industry and make products suitable for investors globally. Malaysia’s central bank in March said it plans to standardize so-called Shariah-compliant contracts such as those used in real-estate and project financing.

Dubai Shares Retreat as Dubai World Restructuring Hurts Demand

Dubai’s benchmark index fell for the first time in three days as Dubai World’s talks to restructure $24.8 billion of debt dampened foreign investors’ interest in local stocks.

Emaar Properties PJSC, the developer of the world’s tallest skyscraper in Dubai, lost the most since April 19. Emirates Integrated Telecommunications Co. dropped 2 percent. The DFM General Index slid 0.7 percent to 1,757.19, bringing the decline this month to 4.7 percent. Abu Dhabi’s ADX General Index retreated 0.4 percent.

“Foreign investors are still reluctant to pull the trigger until the Dubai World issue is resolved,” said Julian Bruce, director of equity sales at EFG-Hermes Holding SAE, the biggest publicly traded Arab investment bank. “Retail investors were expecting at least some buying momentum on the back of good numbers thus far, but as it failed to materialize they see no reason to hold on to stock and are therefore offloading.”

U.A.E. Minister Lowers Growth Forecast -

The economy minister of the United Arab Emirates on Monday lowered his 2010 economic growth forecast for the country to 2.5% from 3.2%.

"Depending on oil prices, the U.A.E will see up to 2.5% GDP [gross domestic product] growth," Sultan Al Mansouri told reporters on the sidelines of a conference. Mr. Mansouri didn't say why the GDP forecast was lower than the 3.2% economic growth forecast given to reporters earlier this year.

"I'm very positive oil prices will give the U.A.E. a push to utilize these revenues to inject into infrastructure and revitalize the economy," Mr. Mansouri said when asked about oil prices.

Cinven, Dubai World Lead Rebound in Loans for Leveraged Buyouts - BusinessWeek

Cinven Ltd. and Dubai World are leading a surge in loans to finance buyouts, as private equity firms capitalize on rising asset values to quadruple the amount they raise from banks.

Cinven started seeking about 350 million euros ($470 million) of loans to finance its purchase of medical-equipment maker Sebia SA, France’s biggest leveraged buyout in more than two years. Dubai World’s investment unit Istithmar World PJSC is arranging as much as $350 million of staple financing to attract bidders to its Inchcape Shipping Services.

“The combination of lower default rates and the dramatic revaluation in asset prices should pave the way for LBO-related loan and bond volumes to come back from the lows of the past two years,” said Peter Aspbury, London-based head of high-yield research at European Credit Management Ltd., which oversees 12 billion euros.

Emirates NBD Quarterly Net Drops 12%, Tops Estimates (Update1) -

Emirates NBD PJSC, the United Arab Emirates’ biggest bank by assets, reported a 12 percent decline in first-quarter profit, beating estimates.

Net income dropped to 1.11 billion dirhams ($302 million) from 1.26 billion dirhams a year earlier, the state-controlled bank said in a statement to Nasdaq Dubai today. That beat the median estimate of 711 million dirhams of three analysts surveyed by Bloomberg.

“We have maintained revenues at similar levels to the same period in 2009 and have continued to reduce operating expenses from ongoing rationalization,” Chief Executive Officer Rick Pudner said in the statement. “Credit metrics remain in line with our expectations and our focus on balance sheet optimization has yielded a significant improvement in our funding profile while maintaining strong capitalization levels.”

Shell says Middle East needs to solve gas puzzle | Reuters

The Middle East needs to solve the conundrum which sees it sitting on 40 percent of the world's gas reserves and yet suffering from a supply shortage, a senior executive from Royal Dutch Shell (RDSa.L) said on Monday.

Natural gas demand in the region was growing at such a rate that by 2015, total consumption in the Middle East would be close to that in major European economies, Malcolm Brinded, Shell's executive director for international upstream said in a speech at an industry event.

Middle East gas demand was rising at around 5 percent per year, a similar rate to growth in China, he said.

FEATURE-Oil groups turn focus back to traditional fields | Reuters

The six-metre high red, blue and gold ball recently painted on the side of the Alwyn alpha rig is the largest Total logo in the world -- a sign of Big Oil's growing focus on its heartlands.

Across a 73-metre steel bridge, the Alwyn bravo platform, its blastwalls glistening in the Spring sunshine, processes 100,000 barrels equivalent of oil and gas a day.

Even though it is well past its peak, the North Sea accounts for 25 percent of Total's (TOTF.PA) production and the French oil major's investment in the area is growing.

Mazaya & First Dubai: A Trade Revisited « Alpha Dinar- talking GCC finance

Last week, I wrote about a Merger Arbitrage trade opportunity. The trade involved Mazaya and First Dubai as they are planning on merging together. The trade was simple, short Mazaya, and go long First Dubai, as the spread between the actual prices and the merger price was high.

On the day I wrote the article, Tuesday April 20th, Mazaya’s stock was trading at 118 fils, and First Dubai was trading at 37 fils, making the spread between the market prices and the trade ratio (1 Mazaya share for every 2.75 First Dubai shares) 16%. As of Sunday 25th of April closing prices, Mazaya was trading at 108 fils, and First Dubai trading at 37.5 fils, bringing down the spread to less than 5%. At the beginning of trade today, Monday the 26th April, Mazaya is down 6 fils to 102 fils, making the spread negative. This is a great time to unwind the trade (sell First Dubai and buy back Mazaya and return the “barrowed” Mazaya stock) and take in your profit, which totals to 17.25% in just one week.

Emirates ‘ready’ for IPO
if govt gives go ahead

Emirates airlines, the Middle East’s largest carrier, is ready to launch an initial public offering once it gets go ahead from the Dubai government, its chairman said on Sunday.

Shaikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive of Emirates Airline, said the final decision on an IPO would have to be taken by the Government of Dubai. “We will always be ready, whenever the government takes such a decision,” he said.

However, Shaikh Ahmed added it would take one year to float the IPO once the decision is taken.

Dubai watchdog wants bigger bite

The regulator of the Dubai International Financial Centre (DIFC) has proposed a fourfold increase in its fines for companies that breach its rules, as well as expanding its powers to sanction minor infractions.

The Dubai Financial Services Authority (DFSA) issued a “consultation paper” yesterday inviting comments on the proposals, which would increase the maximum fine for companies to US$100,000 (Dh367,300) from $25,000. The largest administrative fine for an individual would jump to $20,000 from $5,000.

The proposal was in line with a “worldwide trend to look at penalties”, said Paul Koster, the chief executive of the DFSA. The limits had not been changed since they were implemented in September 2004.

IMF backs Dubai shift to caution

The IMF is supporting Dubai’s shift to a more conservative investment strategy, steering clear of debt-led finance models.

After an “overextension” in the UAE’s property market, a pillar of the country’s rapid expansion for many years, the fund expects the sector to take a reduced role in future growth, said Masood Ahmed, the director of the IMF’s Middle East and Central Asia department.

“Government-related entities were investing with a certain amount of debt, [but] the [Dubai] Government has since signalled it will look to rationalise its future investments,” Mr Ahmed said. “For us, that’s the right approach to take.”

The unassuming oil giant

The shelves in John Watson’s office in San Ramon, California, are filled with mementoes ranging from statuettes from Angola to a dagger from Saudi Arabia and a jar of yellow solid sulphur pellets from a field in Tengiz, Kazakhstan. “I do like putting up trinkets,’’ admits the recently appointed chief executive of Chevron.

Interspersed among them are photographs of his wife of 30 years and two college-aged sons. There is also a picture of him at the opening bell at the New York Stock Exchange. In the corner stands an eclectic assortment of Standard Oil kerosene and oil drums, collected by his wife.

His decorations, he says, are chosen for the memories they evoke of places and times, not their monetary value. Indeed, he jokes that his front room at home is a “low-priced museum”.

2010: Active year for Islamic finance in Kingdom

Judging by the number of deals closed, funds launched and the presence of new institutions, 2010 is turning out to be a very active year for the Islamic finance market in Saudi Arabia.

The Kingdom, in terms of pool of funds, is the largest player in the global Islamic finance market, although its industry, like elsewhere, is subject to traditional bottlenecks, scarcity of human capital resources and underdeveloped market awareness.

There is no doubt that the Saudi market is underpinned by its economic fundamentals - that the Kingdom is the world's largest oil producer and exporter. In addition, while the official foreign reserves held by the Saudi Arabian Monetary Agency (SAMA) are just under half a trillion US dollars, private liquidity in the Kingdom is estimated at $1.2 trillion.

Gulf Islamic banks eye conversion of conventional peers

More banks in the Gulf Arab region may convert to Islamic finance in a bid to tap rising demand for sharia-compliant products and to avoid the heavy investment required to launch new banks.

A source told Reuters this month that Qatari investors are planning to buy a 25 percent stake in Ahli United Bank AUBB.BH (AUBK.KW) from Kuwaiti investors and have plans to convert Bahrain's largest retail bank, which itself plans to take its Kuwaiti unit Islamic.

"Converting to Islamic is compelling in the region. In Kuwait Islamic banks have rapidly won market share from conventional ones," said Sayd Farook, senior consultant at Dar Al Istithmar.