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Tuesday, 7 September 2010

Dubai World sweetens debt offer - The National Newspaper

Dubai World is seeking to fast-track agreement on a US$23.5 billion (Dh86.31bn) debt restructuring by offering sweeter terms to creditors.

A source familiar with the talks confirmed an earlier report that Dubai World, one of the emirate’s three main government holding companies, would offer improved terms to more than 90 creditors if they agreed by tomorrow – though the period for acceptance could be extended.

The Arabic-language daily Al Khaleej reported that Dubai World would add 0.2 percentage points to the yield of the restructured loans."

Dubai Stocks Advance to 3-Month High on Speculation of Post Holiday Rally - Bloomberg

Dubai shares rose to the highest in more than three months, leading gains in Gulf markets, as investors bought shares before this week’s Muslim holiday on speculation stocks will rally after Ramadan ends.

Emaar Properties PJSC, developer of the world’s tallest skyscraper in Dubai, increased 1.9 percent and Emirates NBD, the United Arab Emirates’ largest bank by assets, jumped to the highest since June. The DFM General Index rose 1.5 percent to 1,592.24, the highest since May 30, at the 2 p.m. close in Dubai. The Bloomberg GCC 200 Index gained 0.3 percent.

“It’s the last week of Ramadan effect, where you have investors picking up stocks in anticipation of a post-Ramadan rally,” said Hassan El Salah, deputy head of institutional equities at Al Ramz Securities LLC, an Abu Dhabi-based brokerage. “Historically, the market has rallied the last two weeks of Ramadan.”

Dubai Holding Delays Repayment of Part of $1.8 Billion Debt Due This Month - Bloomberg

Dubai Holding LLC, a company owned by the emirate’s ruler Sheikh Mohammed Bin Rashid Al Maktoum, is delaying repayment on part of $1.8 billion in loans due this month as state-owned companies seek to restructure liabilities.

Dubai Holding Commercial Operations Group LLC, a real estate and hospitality group owned by Dubai Holding, received a second extension on repayment of a $555 million credit line, the company said in a statement today. Dubai International Capital LLC, a unit of Dubai Holding, in May got a three-month extension on a $1.25 billion loan until Sept. 30.

Dubai racked up $109.3 billion of debt to transform the emirate into a tourism, trade and financial-services hub, according to International Monetary Fund estimates. Dubai World is in talks with about 70 lenders to alter terms on $23.5 billion of debt.

GCC Market Analytics: Market Breadth: Part III

In Part I and Part II of the series on market breadth I introduced the advance/decline indicator and showed how it could be applied to GCC markets to identify upcoming bullish and bearish price action.

In this post I want to introduce a new study based on the advance/decline indicator which I'll update on a weekly basis. Here's an example of the study for the Kuwait market:


The chart shows the last 100 days activity for the advance/decline indicator and corresponding market index. The solid green and red areas are the 10-day advance/decline indicator. Where the indicator is above the zero level (green area) a higher number of stocks are rising in price than falling. Where the indicator is below the zero level (red area) a higher number of stocks are falling in price than rising.

The dotted line highlights the current advance/decline indicator level which in the chart above is about -5%. Also overlayed on the chart (dark shaded line) is the last 100 days price activity for the market index, in this case the Kuwait Index. There is no price axis for the market index but I have highlighted the most recent closing value.

The last post showed that when the 10-day advance/decline indicator was positive this had a strong historical tendency to correspond with a rising market. On the other hand, when the indicator was negative this tended to correspond with a falling market. For the Kuwait market you can see the advance/decline indicator is currently negative (as of market close 5th Sept.) which, historically, has tended to be bearish for future market price activity.

Over the coming holiday weekend I'll post up-to-date advance/decline studies for all GCC markets.

FACTBOX-Dubai debt maturing through to 2012 | Reuters

Dubai Holding's [DUBAHC.UL] main unit will extend for the second time repayment on a $555 million loan until Nov. 30, the company said in a statement on the
bourse website on Tuesday.

Dubai is expected to sell some of its assets and tap international bond markets in the coming years to face a debt pile accumulated by its companies.

Following are details of Dubai's main syndicated loans and bonds maturing through to 2012:
ISSUER AMOUNT MATURITY DEBT DELAY
----------------------------------------------------------------

LOANS
Limitless $1.2 bln March 31 2010 Ongoing
Dubai World $2.1 bln June 2010 Ongoing
Dubai Intl Capital $1.25 bln June 2010 3 months
Dubai Holding COG $555 mln July 2010 Nov 30
2010
Emirates $635 mln Jan-Nov 2011
Borse Dubai $827 mln Feb 2011
Tamweel $235 mln April 2011
Dubai World $2.4 bln June 2011
Palm District Cooling $500 mln July 2011
Du 3 bln AED July 2011
Dubai Aerospace $800 mln July 2011
Dubai Holding $1.16 bln Aug 2011
Dubai Financial Group $1.5 bln Aug 2011
Port, Free Zone World $1 bln Sept 2011
DP World Callao $300 mln Oct 2011
Dubai Drydocks $1.7 bln Nov 2011
Inv Corp Dubai $4 bln Nov 2011
Emaar Properties $1 bln Feb 2012
DEWA $2.2 bln April 2012
Dept Civil Aviation $635 mln April 2012
Nakheel $1.85 bln Aug 2012
Dubai Intl Capital $542.5 mln Aug 2012
ENBD $1.5 bln Oct 2012
Dubai Ports World $3 bln Oct 2012 BONDS
ENBD $750 mln Dec 2010
Nakheel $750 mln Jan 2011
Emirates $500 mln Mar 2011
ENBD $640 mln June 2011
Emirates $185 mln June 2011
ENBD $220 mln July 2011
ENBD $500 mln Jan 2012
Emirates $550 mln Jun 2012
Sources: Thomson Reuters Loan Pricing Corp, Reuters fixed
income data. AED = dirhams, $1=3.673 UAE dirhams

FACTBOX-Dubai debt maturing through to 2012 | Reuters

Dubai Holding's [DUBAHC.UL] main unit
will extend for the second time repayment on a $555 million
loan until Nov. 30, the company said in a statement on the
bourse website on Tuesday.

Dubai is expected to sell some of its assets and tap
international bond markets in the coming years to face a debt
pile accumulated by its companies.

For more news on Dubai's debt problems, see [AE-DBT-M]

Following are details of Dubai's main syndicated loans and
bonds maturing through to 2012:
ISSUER AMOUNT MATURITY DEBT DELAY
----------------------------------------------------------------

LOANS
Limitless $1.2 bln March 31 2010 Ongoing
Dubai World $2.1 bln June 2010 Ongoing
Dubai Intl Capital $1.25 bln June 2010 3 months
Dubai Holding COG $555 mln July 2010 Nov 30
2010
Emirates $635 mln Jan-Nov 2011
Borse Dubai $827 mln Feb 2011
Tamweel $235 mln April 2011
Dubai World $2.4 bln June 2011
Palm District Cooling $500 mln July 2011
Du 3 bln AED July 2011
Dubai Aerospace $800 mln July 2011
Dubai Holding $1.16 bln Aug 2011
Dubai Financial Group $1.5 bln Aug 2011
Port, Free Zone World $1 bln Sept 2011
DP World Callao $300 mln Oct 2011
Dubai Drydocks $1.7 bln Nov 2011
Inv Corp Dubai $4 bln Nov 2011
Emaar Properties $1 bln Feb 2012
DEWA $2.2 bln April 2012
Dept Civil Aviation $635 mln April 2012
Nakheel $1.85 bln Aug 2012
Dubai Intl Capital $542.5 mln Aug 2012
ENBD $1.5 bln Oct 2012
Dubai Ports World $3 bln Oct 2012 BONDS
ENBD $750 mln Dec 2010
Nakheel $750 mln Jan 2011
Emirates $500 mln Mar 2011
ENBD $640 mln June 2011
Emirates $185 mln June 2011
ENBD $220 mln July 2011
ENBD $500 mln Jan 2012
Emirates $550 mln Jun 2012
Sources: Thomson Reuters Loan Pricing Corp, Reuters fixed
income data. AED = dirhams, $1=3.673 UAE dirhams

Etisalat refocuses on Idea Cellular as Indian target - Rethink Wireless

Emirates Telecom (Etisalat) is one of the richer overseas operators which is known to be chasing expansion now that India allows investment in its new 3G entities. This week its senior executives steered thinking away from any partnership with Reliance Communications, the only 3G operator without a major international stakeholder, and pointed it instead at a deal to acquire a major stake in second tier player Idea Cellular alongside existing investor there, Malaysia's Axiata Group.

The idea came out of an interview between Bloomberg and Jamal Al-Jarwan, CEO for international investments at Etisalat.

The UAE based Etisalat was one of three or four players thought to be in the running for a 25% stake in India's Reliance Communications along with other rivals such as AT&T or South Africa's MTN. Vodafone's Essar operation in India has gone on record saying that there needs to be a series of mergers or joint ventures as smaller rivals fail, despite India's mobile population growing faster in percentage terms than every territory in the world including China. The problem in India is the rising debt of its cellular players.

Gulf Cooperation Council States May Need Three Years for Customs Union - Bloomberg

The six-member Gulf Cooperation Council may need as many as three years for full implementation of a regional customs union agreement, Kuwait’s Finance Minister said.

“Not all countries are ready,” Mustafa al-Shimali told reporters late yesterday in Jeddah, Saudi Arabia. “We need more time to implement the remaining items.”

The region’s customs union has been hindered by differences over how to distribute revenue earned from tariffs, al-Shimali said. The group also needs to remove some tariffs on specific goods, he said.

Australia Unlikely to Rival Qatar ‘Soon’ on LNG, Macquarie Says - Bloomberg

Australia is unlikely to challenge Qatar as the biggest liquefied natural gas exporter “any time soon” and has too many proposed projects competing for customers, Macquarie Group Ltd. said.

Only a “fraction” of the projects planned in Australia may proceed, analysts Adrian Wood, Gavin Maher and Kirit Hira wrote in a report today. While LNG demand may double to 372 million tons a year by 2020 from current levels, supply is “more than up to the challenge,” their report shows.

“Beyond 2014, it continues to look like a buyer’s market, given the growing number of proposed projects competing for finite demand, suggesting many trains simply will not be needed,” the Sydney-based analysts said.

Nawras Seeks to Raise Up to $608 Million in Oman's First IPO in Two Years - Bloomberg

Nawras, the phone company controlled by Qatar Telecom QSC, is seeking to raise as much as $608 million in Oman’s first initial public offering in two years.

Nawras set a price range of 702 baisas to 902 baisas for a share and the book-building process for the sale starts Sept. 15 for a month, the Muscat-based company said in an e-mailed statement today. The sale will raise 182 million rials ($473 million) to 234 million rials, giving Nawras a market value of 456 million rials to 586 million rials, it said.

The company that competes with Oman Telecommunications Co., the largest phone operator in Oman, plans to sell 40 percent of its shares and will offer 260 million shares through the book- building process, it said Sept. 2. The IPO is the first in Oman this year and the seventh in Gulf Arab countries after six from Saudi Arabia, the biggest Arab economy.

Saudi Legal Paradox Deters Investors as Disputes Go Unresolved - Bloomberg

Turki AlBallaa wants to bring more foreign investment to Saudi Arabia, the world’s largest oil supplier. The judicial system stands in his way.

“The legal situation is complicated and must change,” AlBallaa, 32, general manager of the Saudi Investment Support Center, which helps companies set up in the country, said, smoking a Cuban cigar at one of Riyadh’s all-male lounges.

Saudi Arabia maintains some of the world’s strictest civil laws because of its brand of Islam, including sentences of public beheading for drug smugglers and lashings for sexual offenders. When it comes to commercial laws, few are enforced, hampering efforts to foster investment, curb unemployment and reduce dependency on energy revenue.

Dana Gas, Aldar Lead Convertible Sukuk Gain on Yield Hunt: Islamic Finance - Bloomberg

Convertible Islamic debt sold by Dana Gas PJSC and Aldar Properties PJSC are headed for the best quarter in a year, a sign the Persian Gulf market is reviving.

Dana Gas’s 7.5 percent bonds due October 2012 yielded 10.77 percent yesterday, down from 13.6 percent on June 30, according to data compiled by Bloomberg. The United Arab Emirates energy company has operations in Egypt and Iraq. The yield on the 5.767 percent sukuk due November 2011 issued by Aldar, Abu Dhabi’s biggest real-estate developer, was 7.30 percent, after falling below 10 percent on Aug. 17.

The combination of plunging yields in developed markets and a successful restructuring of state-owned Dubai World’s $14.4 billion of debt may spur more gains, said Holinger Asset Management and DWS Investments GmbH, which hold Dana Gas and Aldar sukuk respectively. Islamic debt is typically backed by assets because the religion bars payment of interest.