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Tuesday, 27 April 2010

UAE stock exchanges merger seen imminent - sources | Reuters

A merger of the United Arab Emirates' two main bourses is imminent, two people familiar with the matter said on Tuesday, with the exchanges seeking to create a single market as trading revenue slumps.

The Abu Dhabi Securities Exchange (ADX) is seen as the driver of a merger with its domestic rival, the Dubai Financial Market (DFM), the sources said.

"The merger is being discussed at the highest level and the outcome is awaited imminently," an ADX official told Reuters, declining to be identified because the deal has yet to be finalised. "It would be good for both markets, instead of them competing against each other. This is a sign of consolidation in the UAE."

Dubai Shares Drop to Week Low on Global Slump, Declining Oil -

Dubai shares declined to the lowest level in almost a week, leading a drop in the United Arab Emirates, as oil fell for a second day and concern deepened that Europe’s debt crisis is spreading.

Emaar Properties PJSC, the developer of the world’s tallest skyscraper in Dubai, declined for a second day. Dubai Islamic Bank PJSC, the U.A.E.’s biggest Islamic lender, lost the most since April 19. The DFM General Index slid 0.6 percent to 1,747.06, bringing the drop this month to 5.2 percent. Abu Dhabi’s ADX General Index retreated 0.3 percent to 2,803.16, the lowest in seven weeks.

European stocks fell after German Chancellor Angela Merkel said yesterday she won’t release funds to help Greece shore up its finances until the nation has a “sustainable” plan to reduce its budget deficit. The MSCI Asia Pacific Index declined for the third time in four days, as concern deepened China’s steps to cool its property market will curb growth in the world’s third- largest economy. The MSCI World Index lost 0.6 percent at 5:10 p.m. in Dubai.

Rents drop in Dubai's popular areas.

Rents dropped up to nearly eight percent in several key areas of Dubai in April due to increased supply of residential units and are likely to fall further, property services firm Landmark Advisory on Tuesday.

"Lease rates in most areas, in both the residential and commercial markets, will fall in the coming months, especially for lower quality buildings in the least developed and integrated communities," said Jesse Downs, director of research.

Rents for one-bed room apartments on the Palm Jumeirah dropped 4.2 percent, while the decline was 2.9 percent in Dubai Marina, 4.7 percent in the Downturn Dubai, 5 percent in International City, 6.6 percent in Jumeriah Lake Towers and 7.7 percent in Motor City.

Taqa set for period of retrenchment

Abu Dhabi National Energy Company, better known as Taqa, may be one of the lesser-known vehicles of Abu Dhabi, but it was one of the emirate's most aggressive overseas investors in the years preceding the financial crisis.

Supported by the steady cash flows of its utilities operations - it owns six power and water plants in Abu Dhabi, and is building another one in Fujairah - Taqa borrowed heavily from banks and capital markets, and went on an energy asset buying spree .

Total assets nearly trebled between 2005 and 2008 to $23bn, while its net debt to equity ratio jumped from 2.8 times to 7.1 times in the same period, as the company aimed to become a large international investor in energy with $60bn of assets by 2012.

U.S. and Kuwait's Agility near deal on fraud case

The U.S. government says it is close to a deal with Kuwaiti logistics company Agility (AGLT.KW), which is accused of defrauding the U.S. military in the Middle East on multibillion-dollar supply contracts.

There was no word on Monday on the timing or terms of a possible deal between prosecutors and Agility, the main supplier to the U.S. Army in the Gulf.

But for the first time, the government has acknowledged negotiations toward a settlement.

Dubai Shares to Slide 6% in Next 3 Weeks: Technical Analysis

Dubai stocks may fall 6 percent in the next three weeks as the earnings season ends and after concern about Dubai World’s restructuring pushed the gauge below a technical resistance level in March, Rasmala Investment Holdings said.

The DFM General Index is down 4 percent this month, closing at 1,769.34 yesterday. The measure first fell below 1,870 at the end of March. It may drop to 1,670 by May 15, “where the market will find strong support,” Nabil al Rantisi, senior vice president at Rasmala, said. “Now that the market has reacted to first-quarter earnings, investors will be waiting for clarity on the debt issue and second-quarter earnings.”

Dubai said March 25 it will support Dubai World’s debt restructuring with $9.5 billion as one of the three main state- owned holding companies asks creditors to wait up to eight years to get all their money back. The company is seeking to renegotiate terms on $24.8 billion of debt.

Gulf War battle reignites as Kuwait tries to freeze Iraqi Airways assets

A bitter legal battle between Iraq and Kuwait dating back to the Gulf War has resurfaced in the British courts.

On Sunday evening the first scheduled commercial flight from Baghdad to London for 20 years touched down at Gatwick airport.

Waiting for the plane were lawyers acting for Kuwait Airways. They carried a High Court order issued the same day, freezing the global assets of Iraq’s national airline, Iraqi Airways.

Nakheel signs agreements with trade creditors

Dubai’s troubled real estate developer Nakheel said on Monday it had started to sign agreements with trade creditors as it seeks to forge movement on its parent Dubai World’s $25bn restructuring proposal.

The developer said in a statement that it would pay 40 per cent of trade creditors’ bills in cash with the remaining 60 per cent transferred to a tradable Islamic bond that would pay 10 per cent annual return if 65 per cent of contractors agree.

Government-owned Nakheel declined to comment on the number of agreements signed or the size of its outstanding payments owed to trade creditors but insiders estimate that hundreds of companies still have unpaid invoices that could amount to billions of dirhams in total.

Saudi oil chief fears domestic risk to exports

Saudi Arabia needs to improve the efficiency of its energy use or the kingdom’s oil available for export could fall by as much as 3m barrels per day by 2028, the head of the state oil company has warned.

Khalid al-Falih, chief executive of Saudi Aramco, said domestic energy demand was expected to rise from about 3.4m b/d of oil equivalent last year to about 8.3m b/d of oil equivalent by 2028 – growth of almost 250 per cent.

“We estimate that, through improved efficiency, while maintaining the same economic growth, the increase in energy demand can be cut in half,” Mr Falih said in a recent speech released by Aramco on Monday. “If no efficiency improvements are achieved, and the business is as usual, the oil availability for exports is likely to decline to less than 7m barrels per day by 2028, a fall of 3m barrels per day, while the global demand for our oil will continue to rise.”