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Wednesday, 4 August 2010

Gulf investors seek stake in top Russia bank

VTB, Russia's second biggest lender, said it was studying the potential demand for its shares from investors, including those in the Gulf, as the government plans a massive privatisation drive.

Russia will open its most ambitious privatisation programme since the 1990s to foreign investors as it plans to earn at least $29 billion through asset sales including a 25 percent stake in state-run VTB.

"VTB ... is working with a wide range of potential investors and studying a demand actively. As a part of our work with investors from the Persian Gulf we talked about possible options for investments into VTB but no direct agreements have been achieved," VTB's press-service said by email.

Dubai Shares Fall Most This Month on Global Growth Concern, Oil Declines - Bloomberg

Dubai shares retreated the most this month after weaker-than-estimated data on U.S. home sales, factory orders and consumer spending cast doubt on the global economic recovery and oil fell from a three-month high.

Emirates NBD PJSC, the United Arab Emirates’ biggest bank by assets, slid 2.8 percent and Emaar Properties PJSC, builder of the world’s tallest skyscraper, dropped for the first time this week. Dubai’s DFM General Index fell 1.1 percent, the most since July 25, to 1,510.57 at 1:42 p.m. in the emirate. The Bloomberg GCC 200 Index of Gulf stocks slipped 0.4 percent.

“The correlation with global markets is still there,” said Haissam Arabi, chief executive officer of Gulfmena Alternative Investments in Dubai. “It’s natural to see a bit of a pullback.”"

Investcorp of Bahrain Returns to Profit as Hedge Fund Investments Rebound - Bloomberg

Investcorp Bank BSC, the Bahrain- based investment firm, swung into profit in the fiscal full year as income from hedge fund investments rebounded and the decline in value of its private equity assets halted.

Net income was $102.2 million, or $64 a share, compared with a loss of $780.6 million, or $1,120 a share in the previous year, the Manama-based bank said in a statement to the Bahrain exchange today. Gains from its own private equity and hedge fund investments rebounded to $146.1 million from a loss of $218.4 million. Fees from overseeing funds rose 69 percent in the year to $218.9 million.

The worst financial crisis since the 1930s pushed Investcorp to write down the value of its private equity and real estate assets. Deals are now rebounding and appetite amongst Gulf investors for private equity and real estate investments is increasing, the company said today."

Twelve U.A.E. Brokerages Seek to Suspend Operations, Market Regulator Says - Bloomberg

Twelve brokerages in the United Arab Emirates have submitted requests to the market regulator, the Securities and Commodities Authority, to suspend operations this year after volumes and revenue declined.

Five companies received approval to shut and their licenses have been suspended for one year, Ibrahim Obeid Al-Zaabi, deputy chief executive officer for licensing, supervision and enforcement, said in an e-mailed response to questions today. The companies may be able to resume operations after meeting registration requirements, he said.

The volume of shares traded in Abu Dhabi has plummeted to a daily average of 63 million so far this year, the lowest since 2006. The ADX General Index of 66 stocks has slumped 59 percent since reaching a record of 6,237.98 in May 2005. The measure was little changed at 2,535.48 at the 2 p.m. close in Abu Dhabi today.

Oaktree ends fight with Dubai for Almatis - Business Intelligence Middle East - - News, analysis, reports

Oaktree Capital Management LP withdrew its opposition to Dubai International Capital's (DIC) plan to retain control over bankrupt aluminum company Almatis BV hours after a "confidential" settlement offer was leaked.

Oaktree notified the court late on Monday it was withdrawing its objections to plans by DIC that would allow it to retain control of Almatis.

A proposed settlement letter from Oaktree to Almatis, marked "highly confidential," appeared on the public docket earlier Monday as part of filing by junior lenders, followed soon after by a request to withdraw it.

Wall St. WTF: So I'm not sure what a "Cascade Agreement" is but I think it has something to do with a waterfall. Hey! Look! There goes a Damas shareholder!

The long suffering shareholders and creditors of Damas are now able to see the full extent of the damage that has been done by the Abdullah Brothers. The annual report puts a brave face on things. With justifiable pride they point out that the company earned 9.8 million AED not including extraordinary items. This grain of good news needs to be taken with a pinch of salt, or rather a pillar of salt because those extraordinary items weigh in at 1.9 billion AED. So if Damas can keep up the good work, they’ll have repaired the damage from these one off write downs in 200 years. Unfortunately for the creditors, and fatally for the shareholders, Damas’ auditor said the company has to come up with a restructuring plan by the end of the month or it may close its’ doors.

I have to admit that in continuing to write about The Great Damas Heist I feel a little bit like George Orwell in “Shooting an Elephant.” I’ve written so much about it that people seem to expect me to continue even though the story has its’ edge because it is obvious how it ends. Alas, my inbox is full of requests, and some of you are new to my writing through its recent syndication. So I’ll point out a few things and tell you how it’s going to end.

The first thing you have to do is get around the Dubai Newspeak that is used to describe what has gone on with regard to the “unauthorized transactions.” They are universally described in the Damas documents and in the press as monies “borrowed” or “owed” by the Abdullah Brothers. The documents in the DFSA undertaking demonstrate that the at the time of the transfers the Abdullah brothers were not obligated to pay the monies back nor were they charged interest. From my perspective an unauthorized interest free loan for an indefinite period is called “theft.” This makes it easy to interpret their actions through the simple expedient of lip reading. If their lips are moving, they’re lying. If their lips are not moving, they’re stealing

Report of Etisalat move boosts Zain - The National Newspaper

Shares of Zain soared yesterday as reports emerged that Etisalat has signed a non-disclosure agreement with the Kuwaiti telecommunications operator to study its assets.

Etisalat is said to be considering buying a 14 per cent stake in Zain worth about US$2.5 billion (Dh9.18bn) in a move that would expand its international presence into markets including Kuwait, Iraq and Bahrain.

“A Zain prospectus landed on my desk four weeks ago … but the process was quickly halted because one week later they signed a [non-disclosure agreement] with Etisalat,” a source told Reuters on condition of anonymity."

Barazi denies $4.8m DIFC embezzlement - The National Newspaper

Lawyers for Bisher Barazi, the former Dubai International Financial Centre (DIFC) executive accused of improperly awarding himself and two other officials US$4.8 million (Dh17.6m) of bonuses, denied the allegations in a filing with the DIFC Courts made available yesterday.

Mr Barazi engaged in no wrongdoing in awarding bonuses based on the 2007 financial performance of DIFC Investments (DIFCI), the financial arm he headed until his suspension last year pending an investigation into alleged irregularities, his lawyers argued in their first defence against the claims.

Responsibility for running DIFCI and distributing bonuses lay not with Mr Barazi but with the DIFC’s former governor, Dr Omar bin Sulaiman, Mr Barazi’s lawyers said in the response, filed on Sunday and released by the courts yesterday."

Court rulings put spotlight back on Saudi Arabia

Two court rulings last week, one in the Cayman Islands, the other in New York, have thrown the spotlight back on Saudi Arabia in the region’s longest-running corporate confrontation – the stand-off between the al Gosaibi family and one of its members by marriage, Maan al Sanea, the head of the Saad Group.

Last Friday, a New York court threw out lawsuits relating to the dispute following an order by a Cayman Islands court for a temporary stay of action.

It leaves Riyadh with a Gordian Knot of a problem but one it must untie if the kingdom is to advance its reputation as a place where the rest of the world can come to do business.

Asia to Dominate Sukuk Market Growth Over Next 18 Months: Islamic Finance - Bloomberg

Islamic bond offerings may accelerate in the next 18 months, led by first-time issuers in Asia after the region accounted for most sukuk sold this year, Standard & Poor’s said.

While issuance of securities that comply with Shariah law are down 17 percent globally this year, Asian borrowers issued $5.3 billion, about 68 percent of the total $7.8 billion worldwide, according to data compiled by Bloomberg. Sales from companies in the Persian Gulf dropped 24 percent to $2.5 billion so far in 2010, the lowest level since 2005, after Dubai World, one of the United Arab Emirates three main state-owned business groups, announced plans to restructure debt in November.

“Sovereigns, particularly from Asia, are pushing for the revival of the sukuk market,” Mohamed Damak, Paris-based credit analyst and co-chair of the Islamic finance working group at S&P, said in an interview. “We expect additional countries, or issuers domiciled in countries new to Islamic finance to tap the sukuk market in the near future, within the next 18 months.”

Dow's Liveris Predicts `Rising Tide' of Higher Gas Prices in Middle East - Bloomberg

Dow Chemical Co., the largest U.S. chemical maker, said its joint venture with Saudi Aramcomay be among the last projects of such a size to benefit from cheaper energy and raw materials because Middle-East prices will rise.

Regional hydrocarbon prices may climb following the “inevitable” sale of Iran’s state-owned National Petrochemical Co., Dow’s Chief Executive Officer Andrew Liveris said today on a conference call with analysts. That would end up hurting the competiveness of exports from the area, he said.

“Competitive priced gas, and therefore ethane, in the Middle East has a very short time frame,” Liveris said. “Everyone is going to start having a rising tide on gas and ethane price.”