Tuesday, 22 June 2010
National Bank of Abu Dhabi PJSC, the United Arab Emirates’ second-largest lender by assets, sold 500 million ringgit ($156 million) of Islamic bonds in its first offering of debt in Malaysia.
The five-year sukuk will pay a coupon rate of 4.75 percent, Mustafa Aziz, director of Global Capital Markets at HSBC Holdings Plc in Dubai, said in an e-mailed response to questions. HSBC and Kuala Lumpur-based Malayan Banking Bhd. are managing the sale.
Malaysia, the world’s largest market for Islamic bonds, has eased foreign ownership rules and encouraged new Shariah- compliant products as part of efforts to become a hub for Islamic financial services. National Bank of Abu Dhabi received a commercial banking license to operate in the Southeast Asian nation, its central bank said on June 17.
Dubai shares declined for the first time in four days, leading a drop in the Gulf, as index provider MSCI Inc. kept the United Arab Emirates and Qatar as frontier markets, citing the countries’ dual account structures.
The DFM General Index lost 1.4 percent, the most since June 6, to 1,542.07, led by Emaar Properties PJSC, builder of the world’s tallest skyscraper. Air Arabia PJSC retreated 1.6 percent. Dubai’s measure had gained 5.1 percent in the previous three days. Abu Dhabi’s gauge dropped 0.4 percent and the Bloomberg GCC 200 Index slid 1 percent.
The MSCI decision not to upgrade the U.A.E. and Qatar to emerging markets “was reflected negatively as most foreign buying over the previous three days was in anticipation of the announcement,” said Mohammed Ali Yasin, chief executive officer at Shuaa Securities in Abu Dhabi.
Bahrain Mumtalakat Holding Co., the Persian Gulf country’s sovereign wealth fund, may price its bonds to yield about 300 basis points above benchmark midswaps, three people familiar with the pricing range said.
The banker and two investors declined to be identified because terms of the deal aren’t set. The fund may sell $500 million of bonds maturing in five years as soon as this week in its first sale of debt overseas, a person familiar with the plan said last week.
Bahrain in March sold $1.25 billion bonds maturing in 2020 to yield 200 basis points more than similar maturity U.S. Treasuries. A basis point is 0.01 percentage point. The yield has declined 11 basis points this month to 5.552 percent as of 4:50 p.m. in Dubai, according to Bloomberg bond trader composite prices.
Aabar Investments takes a new turn with plan to de-list from securities exchange | Beyond Brics | FT.com
The transformation of Aabar Investments has been swift and spectacular.
It started life in 2005 as a small energy company, but over the past two years it sold its core oil and gas assets, was taken over by a government investment vehicle and has emerged as one of the more active of Abu Dhabi’s diverse stable of investment funds – notably hitting the headlines last year when it splashed out €1.95bn for a 9.1 per cent stake in Daimler.
Now it looks set to be heading for another transformational shift, with the announcement that its board plans to meet on Thursday to discuss the possibility of de-listing from the Abu Dhabi Securities Exchange.
As one shareholder told your correspondent it may offer some relief for those who bought into the original energy story only to see the company turn into an altogether different beast and watch as its share price has plummeted.
Since the introduction of Air Arabia seven years ago, economical airlines are taking flight in the Persian Gulf.
When the first flight of the newly established Air Arabia took off, in October 2003, from its home base in Sharjah, one of the seven Emirates making up the United Arab Emirates, not many predicted it would lead to the emergence of a novel and budding phenomenon in the Middle Eastern aviation industry.
Up until the establishment of Air Arabia, which today flies to over 70 destinations and operates secondary hubs in Morocco and as of June 2010 in Egypt as well, Middle Eastern airlines, especially those from the Gulf region, had been almost synonymous with luxury and elegance. But over the last few years, a new type of airline has taken off in the region, the low cost carrier.
News that Saudi Arabia has secretly doubled its official gold reserves over the past few years should come as no surprise to readers of ArabianMoney. But then it was just speculation. Now this is fact. Will it be the same story for silver?
We can only draw on the evidence and gossip that comes to our attention in Dubai. There has certainly been a big jump in interest in silver on the arabianmoney.net website over the past six months.
Syria is boosting relations with its former enemy Turkey to build on a decade of reform initiatives that have transformed the Arab state's economy.
After years of mistrust, overshadowed by the legacy of Ottoman rule and Turkey's military ties with Israel and Syria's support for the Kurdish PKK rebels, the two neighbors now seek an economic and political alliance.
Last year, the former foes agreed on lifting mutual visa requirements, boosting cross-border trade. Several joint initiatives in agriculture and tourism have been announced. Earlier this month, Turkey and Syria signed a free trade zone agreement with Jordan and Lebanon.
The Saudi regulator, CMA, has imposed fines of up to $27,000 on three firms for breaching disclosure rules, as it tries to polish the image of an opaque bourse gradually opening up to foreign investors.
It brought to 13 the number of companies fined for violating disclosure regulations since May 16.
Al Baha Investment and Development Co was fined 100,000 riyals ($27,000) for disclosing acquisition plans to the Capital Market Authority after they were leaked to a website, the CMA said.
Dubai International Capital (DIC) is in talks with lenders over an urgent cash injection for Alliance Medical to stop the business breaching its banking covenants, the Times reported in its Tuesday edition.
DIC, an investment unit of conglomerate Dubai Holding, is holding negotiations with its lending syndicate to inject up to 150 million pounds ($222.5 million) into the MRI and CT scan services provider, the paper said.
The private equity group has until a deadline next month to stump up the cash to stop Alliance Medical's banks potentially taking control of the business, which is at risk of breaching its banking covenants, the paper said.
Dubai credit default swaps (CDS), the cost to insure sovereign debt default, have declined by 30 per cent in the past four months, data shows.
Dubai CDS were trading around 458 basis points yesterday, according to CMA DataVision's Sov?ereign Risk Monitor, down 29.7 per cent from the 652bps in mid-February.
CDS are benchmarks for protecting debt against default and traders use them to speculate on credit quality. Despite the recent steady decline in the Dubai CDS rate, analysts believe the rate remains high in comparison with some of the other global sovereigns.
Since a correction last month when concerns over the euro zone were at their peak in the region, shares have risen in the ports operator DP World have risen 19 per cent.
Analysts say the stock is attractively valued and still could rise another 30 per cent.
Even in a difficult economic climate, the company generated US$1 billion in earnings for the year to the end of March.
The Central Bank Governor has called for new restrictions to manage flows of so-called hot money into Arab economies.
Greater supervision of the financial system could help to avoid the build up of such short-term speculative capital, said Sultan al Suwaidi.
“Such money is harmful to our economies and we should put mitigants in its way to stop it,” Mr al Suwaidi said during a speech in Abu Dhabi yesterday.
Just when local markets were rebounding after a dismal few weeks, Aabar Investments comes along and knocks them right back to the turf.
The company’s announcement that it is considering going private – and therefore de-listing from the Abu Dhabi Securities Exchange (ADX) – was posted to the bourse website after the close of trade yesterday. The news deflated the buoyant mood that pervaded the Abu Dhabi and Dubai exchanges the first two days of the week, when both markets moved higher in a sharp reversal of the recent trend.
There were conflicting theories about what sparked the surprising buying frenzy: some traders said it was related to climbing oil prices and China’s move to strengthen the yuan; others whispered about rumours that the long-delayed Dubai World debt restructuring was close to a final resolution.
Alongside the promise of the so-called BRIC countries to the U.S. and other global retailers, smaller emerging markets, including Kuwait and Dubai, are rising as the new crop of global expansion opportunities.
About 80% of retailers still consider Brazil, Russia, India and China as key to their short-term international growth plan, according to a survey of 60 global retail executives in the ninth annual Global Retail Development Index study by management consulting firm A.T. Kearney. The study uses 25 macroeconomic and retail-specific variables, including country risk and market saturation, to rank the top 30 emerging countries attractive for retail expansion.
However, the BRIC countries tell only part of the story.
Kuwait emerged as No. 2 on the list, while Chile, Saudi Arabia, United Arab Emirates, Uruguay and Peru also surfaced in the top 10 along with their BRIC counterparts. The top 10 list represents the most diverse mix of large and small markets in the index's nine-year history. Other countries including Albania and Macedonia, which weren't placed in last year's top 30 rankings, also surfaced on the chart.
South Korea and Taiwan are still not ready to join the ranks of developed countries in MSCI's equity indexes, the firm said on Monday.
The widely-followed index provider said both countries, currently part of its emerging markets index .MSCIEF, will remain under review for a possible upgrade in June 2011.
MSCI also decided to maintain Qatar and the United Arab Emirates in its frontier markets index. They also remain under review for a possible upgrade next year.
Agility, the Middle East’s largest storage and logistics company, is a “fugitive from American justice” that is trying to evade trial on charges of overbilling on military supplies, U.S. prosecutors said.
Agility, formerly known as Public Warehousing Co., was indicted in November on allegations it overcharged the U.S. government on a multibillion dollar contract to supply food for troops in Kuwait and Iraq. The Kuwait-based company said April 28 it was negotiating with the U.S. Justice Department on a possible settlement of the case.
Prosecutors said in a filing today in Atlanta federal court that Agility has “retreated to the safe haven of Kuwait” and contends it isn’t subject to U.S. laws or courts. They urged the judge not to even consider Agility’s motion to nullify the indictment on the grounds that it wasn’t properly served.
A Turk cannot live without an Arab,” Recep Tayyip Erdogan, Turkish prime minister, proclaimed this month at a regional summit, where ministers unveiled ambitions for a Middle East customs union stretching from the Black Sea to Morocco.
No one expects that vision to be realised overnight in spite of early steps to lower trade barriers with Lebanon, Syria and Jordan. But as Ankara’s stock rises in the Arab world, it is also seeking immediate economic benefits, in the form of Gulf capital.
Mehmet Simsek, finance minister, told the Financial Times of “concerted efforts” to boost ties with Gulf countries in particular, with the Arab world accounting for a growing share of foreign direct investment in Turkey.