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Monday, 12 July 2010

Rivals prosper in Qatar telecoms change


Qatar was the last country in the Gulf to break its telecommunications monopoly but it was the first to allow a big international operator to enter its small, wealthy market.

Vodafone Qatar, a joint venture between the UK telecoms group and the Qatar Foundation, switched on its mobile network in March 2009, and the resulting price war with incumbent Qatar Telecom (Qtel) has proved a boon for residents.

The average revenue per user (ARPU) – an industry measurement that indicates total revenue divided by the number of subscribers – slumped from $55 at the end of 2008 to $36 at the end of last year, says HSBC.

Turnround specialist scents revival in Gulf


The downturn may have damped expectations across the Gulf, but for some it is opening the doors of opportunity.

AlixPartners, a US-based turnround specialist that has managed eight of the world’s 12 largest Chapter 11 bankruptcy restructurings, including WorldCom, GM and Enron, is expanding in the region. Last year, the consultancy, which employs 1,000 people globally, took a high-profile role in the restructuring of Dubai World.

It says it scents similar opportunities as the Middle East adapts to a new era. Eric Benedict, managing director for the region, says the partnership will significantly boost the “handful” of advisers it has based in Dubai, where it has had a presence for three years.

Samba Financial Second-Quarter Profit Declines 1.6% - BusinessWeek


Samba Financial Group, the second largest bank in Saudi Arabia by market value, said second- quarter profit declined 1.6 percent on lower commission income.

Net income for the quarter ended June 30 dropped to 1.22 billion riyals ($325 million), from 1.24 billion riyals in the year-earlier period, the Riyadh-based bank said in a statement on the Saudi bourse website today. The average estimate of five analysts was for a profit of 1.17 billion riyals, according to Bloomberg data.

Increased provisions for bad loans and tightened lending hurt earnings at Saudi banks since the global credit crisis and an economic slowdown. Saudi British Bank, 40 percent owned by HSBC Holdings Plc, reported a 34 percent decline in second- quarter profit today. Riyad Bank, the third largest in the kingdom by market value, and Arab National Bank also posted declines in second-quarter profit.

Samba Financial Second-Quarter Profit Declines 1.6% - BusinessWeek


Samba Financial Group, the second largest bank in Saudi Arabia by market value, said second- quarter profit declined 1.6 percent on lower commission income.

Net income for the quarter ended June 30 dropped to 1.22 billion riyals ($325 million), from 1.24 billion riyals in the year-earlier period, the Riyadh-based bank said in a statement on the Saudi bourse website today. The average estimate of five analysts was for a profit of 1.17 billion riyals, according to Bloomberg data.

Increased provisions for bad loans and tightened lending hurt earnings at Saudi banks since the global credit crisis and an economic slowdown. Saudi British Bank, 40 percent owned by HSBC Holdings Plc, reported a 34 percent decline in second- quarter profit today. Riyad Bank, the third largest in the kingdom by market value, and Arab National Bank also posted declines in second-quarter profit.

Kuwait Kipco Raises $500 Million in 10-Year Bond Sale - BusinessWeek


Kuwait Projects Co. said it raised $500 million by selling 10-years bonds to gain access to long- term funds in the first global issue by a private company in the Middle East and North Africa this year.

The bonds received $1.8 billion in bids and were priced at 644.2 basis points over the U.S. dollar mid-swap rate and 647.3 basis points over similar-maturity U.S. Treasuries, Kuwait’s biggest privately-owned investment company known as Kipco said in an e-mailed statement today. The bonds were sold under Kipco’s $2 billion euro medium term note program and carry a fixed-rate coupon of 9.375 percent, it said.

The sale is “the first international bond issue by a private sector corporate from the Middle East and North Africa region in 2010, as well as the first US dollar denominated offering from a Kuwaiti institution since 2009,” Kipco said. The money will be “used to extend the company’s maturity profile and further diversify KIPCO’s investor base,” it said.

UAE's Shah gas project 40-50 percent cheaper than expected | Business | Reuters


Contracts for the UAE's $10 billion Shah gas project were 40-50 percent cheaper than expected, the chief executive of the Abu Dhabi Gas Development Company (ADGDC) said on Monday, after economic crisis made firms cut prices.

So far, contracts worth $5.6 billion have been awarded.

The plant would process about 1 billion cubic feet per day (cfd) of raw gas, of which around 540 million cfd of gas would flow into the UAE's grid.

French shipping giant rules out Qatar bid < French news | Expatica France


The debt-ridden French shipping giant CMA-CGM on Monday ruled the Gulf investment group Qatar Holding out of the running to help it recapitalise.

"Their conditions were too hard," said the chairman of CMA-CGM's board, Jacques Saade, referring to the bid by the Gulf royal family's investment arm Qatar Holding to buy a stake in the French company from his family.

Another investor, the US group Colony Capital, also dropped out of the bidding, added Saade, whose family controls the Marseille-based company, the third-biggest container shipping line in the world.

Provisions, lending weaken Saudi banks Q2 earnings | Reuters


HSBC's (HSBA.L) Saudi affiliate SABB bank (1060.SE) missed forecasts and two other banks in the kingdom reported sharp falls due to high provisions to counter exposure to troubled Saudi firms and a slowdown in lending.

The second quarter results for SABB, Arab National Bank 1080.SE (ANB), and Saudi Investment Bank 1030.SE (SAIB) on Monday reflect a challenging period for the region's banks as they struggle to cover loan losses in a flat market still reeling from the global financial crisis.

Saudi lenders had a difficult year in 2009 with profitability eroded by a doubling of provisions for non-performing loans to almost 11 billion riyals as a rising number of Saudi and regional firm ran into financial problems.

Saudi Arabia Shares Fall on Concern Gains Overdone, Earnings - BusinessWeek


Saudi Arabia shares retreated for the first time in three days on concern recent gains are overdone given growth prospects in the region and as companies posted declines in second-quarter profit.

The Tadawul All Share Index lost 0.4 percent to 6,215.67 at 1:06 p.m. in Riyadh. The index has advanced 2 percent this month. Saudi British Bank slid after reporting a 34 percent drop in second-quarter profit and Saudi Industrial Exports Co., the company that exports and imports products including fertilizers and chemicals, decreased 3.8 percent. The Bloomberg GCC 200 Index declined 0.04 percent to 53.47.

“We’re seeing a bit of a pullback” on a lack of positive local catalysts, said Haissam Arabi, chief executive officer of Gulfmena Alternative Investments in Dubai. Gulf shares are “still reacting to the direction of global markets.”

Trade Arabia - Middle East & GCC Business Information | Trade News Portal


Kuwait's government is ready to inject liquidity through its sovereign wealth fund the Kuwait Investment Authority (KIA) to support its stock market, a minister was quoted as saying on Monday.

The setup of the bourse authority will help improve the conditions of the Kuwaiti market, Kuwaiti daily al-Watan reported citing the Gulf state's Trade and Industry Minister Ahmad al-Haroun.

Last week, the country's prime minister said that eighteen candidates have so far turned down the offer to head Kuwait's new markets regulator, but the government hopes to fill the post soon.

Glitches mar merged Dubai bourse debut - The National Newspaper


Opening day on the newly merged Dubai bourse was marked by considerable confusion and, as a result, little trading.

Investors struggled to understand the unified trading platform and brokers said they were having difficulty getting trades processed.

“We haven’t had enough information about this,” said Zakariya Assar, who was trading on the floor of the Dubai Financial Market (DFM). “Nothing has been clear, not even from what we read in the newspapers … Plus the large screen that usually shows us what’s going on in world markets is off.”

ADIB battles New York suit related to Al Gosaibi-al Sanea dispute - The National Newspaper


Abu Dhabi Islamic Bank (ADIB) is mired in a New York court battle over a US$40 million (Dh146.9m) trade finance deal involving commodity shipments to Taiwan and Spain.

Fortis Bank, a Dutch lender that merged with ABN Amro this year, sued ADIB in New York in June last year claiming the Islamic lender defaulted on its obligations under the deal.

The case relates to a letter-of-credit transaction signed in 2008 involving ADIB, Fortis and Awal Bank in Bahrain. Fortis extended the $40m credit in June 2008 to finance shipments of soybeans and maize from Brazil to Taiwan and Spain, according to court documents. ADIB “confirmed” the deal, effectively agreeing to repay Fortis after one year, the documents say.

Khorafis vow to continue fight in $225m case against Swiss bank - The National Newspaper


Three members of Kuwait’s wealthy al Khorafi family have vowed to appeal against a decision last week by a Dubai court to strike down claims of negligence and misrepresentation in a US$225 million (Dh826.3m) case against a subsidiary of Switzerland’s Bank Sarasin.

Raed al Khorafi, along with his wife and mother, sued the DIFC-based Bank Sarasin-Alpen late last year over losses on investments they claim were sold as safe. The al Khorafis say they lost $75m, but are seeking triple damages under DIFC regulations covering contracts and fraud.

Justice Tan Sri Siti Norma Yaakob ruled last week that two of the al Khorafis’ four claims – those covering alleged misrepresentation and negligence – lacked adequate evidence for the court to make a ruling.

Sukuk Sales May Narrow Persian Gulf Yield Gap: Islamic Finance - BusinessWeek


The yield premium that Persian Gulf borrowers pay on sukuk compared to the rest of the Islamic finance industry may narrow as companies with higher credit ratings plan at least $1.75 billion of sales.

Islamic Development Bank, the Jeddah, Saudi Arabia financial group with Aaa ratings from Moody’s Investors Service, is planning a $1 billion sale of bonds based on the exchange of assets rather than interest. Doha-based Qatar Islamic Bank, the state’s biggest Shariah-compliant lender, plans to sell as much as $750 million, Chief Executive Officer Salah Mohammed Jaidah said in May. The bank is ranked A by Fitch Ratings.

Those sales may improve investor sentiment toward Persian Gulf borrowers after Dubai World, whose unit Nakheel PJSC is building palm-shaped islands off Dubai’s coast, reached an agreement with its main creditor group in May to restructure $23.5 billion of liabilities. The extra yield investors demand for the region’s securities compared with the broader Islamic debt market widened more than 100 basis points, or 1 percentage point, in the past eight months to 119 on July 9, according to HSBC Holdings Plc Islamic indexes.

Q+A - What can creditors expect from Dubai World meeting | Reuters


State conglomerate Dubai World will meet creditors for an all-bank meeting on July 22 to present the final details of a $23.5 billion restructuring plan, sources said.

Creditors will then ponder the plan but the vast majority are expected to approve the debt deal. Banks which are not supportive will be able to seek legal action under a special tribunal set up for Dubai World related cases.

Dubai World has already got support for the plan from the seven banks which together hold 60 percent of the bank debt. Technically, the company needs to secure agreement from banks for a total of 67 percent of debt, but has said it will aim to get unanimous support.

MLS MENA To Bring Online The Most Comprehensive Real Estate Data in the Arab World - ArabCrunch


While Aqara Estate a Jordanian startup founded by ex-Jeeran female employee Hanan Khader offers real estate agents in the Arab world and sellers the ability to list land, buildings or apartments for sales or rent. Aqaramap a Yamni startup that was launched last April came with emphasis on location by pin pointing the real estate address to the map.

MLS MENA an Egyptian startup that said will launch its alpha version next September wants to take the whole real estate market several steps ahead. Addressing that there is no standard integrated listing system similar to the MLS in USA and other developed markets.

The startup will work with governments and real estate companies to get the public records and use that data on its website :

Dubai World seeks creditors’ support


Dubai World has invited all its creditors to a July 22 meeting where the troubled conglomerate will seek to forge consensus behind backing for its multibillion-dollar restructuring proposal, people familiar with the matter say.

Creditors that hold about 60 per cent of the $14.8bn of the holding company’s debt – the seven banks on the co-ordinating committee of lenders – have already agreed initial terms on the restructuring proposal, which offers to pay back principle over five to eight years.

This all-bank meeting is an important milestone on the path to finalising a deal on the embattled company’s restructuring.

Oman encouraging pioneers and investors in emerging and existing projects | Economics


Activities of the Investor's Programme for 2010 themed "Establish Your Project with Confidence, Determination and Solidity," began today and lasts till July 14th.

The programme this year targets pioneering ideas of economic feasibility, emerging and existing projects.

The Investor's Programme comprised two stages; the first one represents in selecting participants of the programme after evaluating them throughout individual interview by authorities sponsoring development of small and medium enterprises (SMEs) that aims at familiarizing with the extension of their adherence and capability to manage the enterprise.

Bermuda gears up to have first Islamic bank by yearend - Arab News


Bermuda is likely to see the first Islamic financial institution to be up and running by the year-end, a development which will boost the chances for Bermuda becoming an emerging hub for Islamic banking and finance for the world's largest economy, the USA.

Deputy Premier and Minister of Finance Paula A. Cox, who was in Bahrain last week and held talks during her two-day visit to Bahrain with Minister of Finance Sheikh Ahmed bin Mohammed Al-Khalifa, said Bermuda was preparing to host the first Islamic financial institution by the year-end.

After talks with officials and bankers she was positive about the outcome of efforts aimed at establishing the first Islamic bank or Takaful company by the fourth quarter of the year.