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Saturday, 17 July 2010

Saudi Shares Decline for a Fourth Day, Led by Saudi Basic, Samba Financial - Bloomberg

Saudi shares dropped for a fourth day, led by Saudi Basic Industries Corp., after U.S. and European stocks and crude oil prices declined.

The Tadawul All Share Index fell 64.6 points, or 1.1 percent, to 6,110.2 at 2:01 p.m. in Riyadh, the lowest since July 7. Saudi Basic, the world’s largest petrochemical maker, fell 1.3 percent, knocking about 11 points off the index. Samba Financial Group and Al Rajhi Bank also declined.

“Profit taking that priced in the earning seasons and jittery international markets led to today’s decline,” said John Sfakianakis, chief economist at Banque Saudi Fransi in Riyadh.

The Saudi succession: When kings and princes grow old | The Economist

IMAGINE that the United Kingdom was an absolute monarchy known as Windsor Britain. Imagine that Prince Charles, heir to the British throne, had dozens of brothers, scores of sons and hundreds of cousins, and that the broader House of Windsor numbered thousands of lesser princes and princesses. Imagine further that all these royals pocketed fat state stipends, with many holding lifelong fiefs as government ministers, department heads, regimental commanders or provincial governors, with no parliament to hold them in check. Now imagine how sporting these princely chaps would be when the throne fell vacant, if the only written rule was a vague stipulation that the next in line should be the “best qualified” among all the Windsor princes.

This is roughly how things look in Saudi Arabia, a family enterprise run the old-fashioned way. Here the king is not only prime minister. He also appoints the members of parliament and designates a successor to the throne. Yet the actual workings of this system are not so simple. The size of the ruling al-Saud family (at least 5,000 hold princely rank), and the accumulated privileges of its leading princes are such that kings must take care to balance rival interests. They must also accommodate Wahhabist clerics who expect rewards for sanctioning absolute monarchy, technocrats who actually manage the country and even, sometimes, those of their subjects who grow restive, and demand a voice beyond presenting personal petitions at royal receptions.

In a smaller country this all might be dismissed as quaintly droll. But the Saudi kingdom has nearly 30m people, sits on 20% of global oil reserves, houses the holiest sites in Islam and is situated in a particularly turbulent region. At a delicate time for the world economy, and an equally delicate juncture for regional affairs, the choices that the immensely rich kingdom makes are especially relevant. And just now it happens to be on the cusp of changes in leadership that may prove as wrenching as any in its history. Not only its king but many of its powerful princes have grown old and must soon be gone.

Arab autocracy: Thank you and goodbye | The Economist

THE fate of the Arab world’s two most important states lies in the hands of ageing autocrats. Hosni Mubarak, an 82-year-old air-force general who has ruled Egypt since 1981, is widely reported to be grievously ill. King Abdullah of Saudi Arabia, who assumed the throne of the Arabs’ richest country five years ago but has run the show for longer, is reckoned to be 86. The grim reaper will bring change in both places soon.

Maybe the old men will manage to control their succession. President Mubarak has been preparing the ground for his son, Gamal, to take over (see special report). King Abdullah’s anointed successor, Crown Prince Sultan, one of his 18 surviving brothers, has long been poorly, but there are plenty more where he came from (see article). Decades of repression have ensured that the opposition is quiescent in Egypt and virtually inaudible in Saudi Arabia. But they have also made these countries vulnerable to violent disruption. Transition in autocracies often means instability.

The fate of these two countries matters to the West for two big reasons: energy and security. Egypt and Saudi Arabia have been reliable, if flawed, allies. Should they stumble, the West’s interests in the region will be imperilled. That is why those regimes need to be encouraged to liberalise their countries’ economic and political systems further and turn them into places where change brings hope not fear.

Get that gas! - Blog - The Arabist

If anything positive is to come from rumored Saudi-Qatari reconciliation, I would love it to be a fast-track project to set up a rig on Lebanon's shore to get this gas out before the Israelis suck it all up. After all the Gulf states have a stake in Lebanon and the money and expertise to pull it off.

Trouble is brewing in the waters off the coast of Lebanon and Israel about the future of one of the largest discoveries of natural gas in the eastern Mediterranean.

A field known as Leviathan might contain 16 trillion cubic feet of gas – enough to serve Israel’s domestic needs and make the country a substantial exporter.

Abdullahs roll in recovery for Damas - The National Newspaper

The three Abdullah brothers, whose family founded Damas jewellers and were held responsible for unauthorised transactions including about 50 property deals and two tonnes of gold borrowed from the company, are back at the firm – in charge of recovering money owed to the company.

The brothers were banned from executive roles at any Dubai International Financial Centre (DIFC) company for between five and 10 years. But last month, the brothers were appointed as senior advisers at Damas. Anan Fakhreddin, the jeweller’s chief executive, who was appointed to lead the company in May, said the Abdullahs were helping to recover receivables.

“Not everything was well documented, which was very normal in the jewellery business. Most of the business was done on the basis of a handshake and based on the personal relationship between the management and the business partners … One of the three brothers was in charge of that file. Without his assistance, any progress on the recoveries front would have been impossible.”

Waha Aerospace Plans $1.5 Billion Bond; Gets AA Rating on State Guarantee - Bloomberg

Waha Aerospace BV plans to raise $1.5 billion in bonds guaranteed by the United Arab Emirates government, according to Moody’s Investors Service and Fitch Ratings, which gave the debt their third-highest ratings.

Moody’s assigned the proposed bonds an Aa2 debt rating while Fitch and Standard & Poor’s granted AA debt rankings, the same level as held by the United Arab Emirates’ largest and richest emirate. All three credit-rating companies cited the state’s guarantee of the 2020 bonds as justification for the ranking.

The proposed debt, to finance purchases of military equipment, “benefits from an unconditional and irrevocable guarantee by the Emirate of Abu Dhabi,” S&P said in a statement. The guarantee runs to the end of the bond’s maturity, it said.

Stock-taking at Kuwait Finance House

KUWAIT Finance House (M) Bhd (KFH Malaysia) has been thrust into the limelight in the past few months after news broke that a due diligence status audit was being conducted at the bank at the request of its new boss.

Accordingly, the status audit was to take stock of the bank’s affairs and to help with the implementation of a five-year plan.

It did not help that the bank’s financial year ending Dec 31, 2009 results revealed a net loss of RM20mil compared with a net profit of RM44.4mil a year earlier.