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Tuesday, 14 September 2010

Dubai Credit-Default Swaps Decline for Fifth Day to Lowest Level Since May - Bloomberg

The cost of insuring against default on debt sold by Dubai’s government declined for a fifth day, dropping to the lowest level since May 13.

Credit-default swaps on Dubai fell 13.5 basis points to 435.5 in London today, according to data provider CMA. That means it costs $435,500 annually to insure $10 million of the government’s debt for five years.

Abu Dhabi Shares Climb to June High on Dubai World Debt Deal, Oil Prices - Bloomberg

Abu Dhabi shares rose to the highest in more than three months, leading gains in Gulf markets, as the Dubai World settlement bolstered investor confidence and oil traded near a one-month high.

National Bank of Abu Dhabi PJSC, the United Arab Emirates’ second-largest bank, climbed to the highest since May. First Gulf Bank PJSC, the lender controlled by Abu Dhabi’s ruling family, rose 4.2 percent. Abu Dhabi’s ADX General Index gained 1 percent to 2,593.24, the highest close since May 31. Saudi Arabia’s Tadawul All Share Index advanced 1.1 percent as the bourse opened for the first time since Sept. 6.

Dubai World, one of three main state-owned holding companies, said Sept. 10 it received approval from creditors to alter the terms on $24.9 billion of debt. The cost of insuring against default on debt sold by Dubai’s government declined for a fifth day, dropping to 435.5, the lowest level since May 13. Dubai’s DFM General Index fell 0.7 percent, trimming the gain for the month to 9.2 percent.

Burgan Bank Said to Hold Investor Meetings in Europe, Asia for Bond Sale - Bloomberg

Burgan Bank SAK, part-owned by Kuwait Projects Co., is holding investor meetings that may lead to a bond sale, two bankers familiar with the plan said.

The lender hired JPMorgan Chase & Co., Morgan Stanley and Standard Chartered Plc to manage the meetings in Asia, Europe and the Middle East, said the bankers, who declined to be identified because the talks are private. The meetings started Sept. 9.

Burgan Bank’s shareholders approved the sale of as much as 140 million dinars ($478 million) of bonds, according to a June 7 statement. Burgan is rated A2 by Moody’s Investors Service, its sixth-highest investment-grade score, and two steps lower at BBB+ by Standard & Poor’s.

THE IRANIAN ECONOMY, Part I Iran's slide to the bottom

To get some perspective on the state of the Iranian economy, it may be useful to begin by providing a few benchmarks.

In 1970, Iran's gross domestic product (GDP) was US$10.6 billion (ranking 27 among all countries), while the commensurate figure for South Korea was $8.9 billion (32nd). Ten years on, Iran's GDP was $90 billion (19th) and Korea's $63 billion (28th); and in 2005, Iran had sunk to 31st in GDP ranking at $190 billion and Korea had climbed to 13th, with $791 billion.

Moreover, for Iran, real per capita income growth in the period 1980-2005 was about zero; and although it increased after 2005 because of rapidly rising oil prices, over the long haul there has been insignificant growth in real per capita incomes over the past 30 years since the Revolution.

Egypt's EGX30 Index May Rally 4.3% in Coming Weeks: Technical Analysis - Bloomberg

Egypt’s EGX30 stock index may rally as much as 4.3 percent in the coming weeks after it rose above the average close of the past 200 days for the first time since May, according to Beltone Financial.

The measure of 30 stocks gained 1.8 percent to 6,617.76 in Cairo yesterday, surpassing its 200-day moving average. The gauge had closed below that average since May 19, falling as much as 9.8 percent to an 11-month low on July 5. It has climbed 13 percent since and may rally to 6,900 in the next few weeks, said Mohab Agena, head of technical analysis at Beltone, a Cairo-based investment bank.

“The 200-day moving average acts as a psychological resistance for investors, but I think we can stay above it in the coming weeks,” Agena said in a telephone interview. “We’re forming higher lows on a daily basis, which indicates there’s momentum on the buy side.”

Kuwait Central Bank Issues $707 Million of Three-Months, One-Year Bills - Bloomberg

Kuwait’s central bank sold 128 million dinars ($446 million) of three-month bills with a yield of 1 percent. The bonds mature on Dec. 14.

The central bank also issued 75 million dinars of one-year treasury bonds with a coupon of 1.25 percent, the central bank said on its website today. The bonds, which received bids of 367 million dinars, mature on Sept. 14, 2011.

Abu Dhabi Government Said to Hold Investor Meetings in Europe on Economy - Bloomberg

The Abu Dhabi government started meetings with investors in Europe this week to brief them on the emirate’s budget and economy, two people familiar with the meetings said.

Meetings were held in Switzerland yesterday and will be held in Germany today and London tomorrow, one of the people said. The sit-downs aren’t tied to immediate plans to sell bonds, they said.

Marc Faber says UAE market only in a bottoming phase � ArabianMoney

"Celebrated analyst Dr Marc Faber told ArabianMoney he thought that the UAE stock market is ‘probably in a bottoming phase’ rather than at the start of a major rally as some market participants clearly hope.

The 2.4 per cent rise in the Dubai Financial Market on the first day of trading after Ramadan was fairly subdued considering that the Dubai $23.5 billion debt deal had been finally announced at the weekend. Trading volumes doubled, but then they have been very low. Abu Dhabi stocks also gained but by even less than Dubai."

Developer pay-back surprises market - The National Newspaper

RAK Properties surprised markets yesterday, announcing it would repay US$45 million (Dh165.2m) of a government loan it received a year ago.

In a statement to the Abu Dhabi Securities Exchange, the developer said its board of directors had approved the early loan instalment. It did not elaborate.

RAK Properties closed up 5.13 per cent at Dh0.41, its highest share price since August 4."

AFP: Dubai World debt plan positive, but doubts remain

United Arab Emirates stock markets rose Monday, after Dubai World announced a debt restructuring deal with creditor banks that analysts say is positive although uncertainty over Dubai's debt remains.

Dubai World announced on Friday that 99 percent of its creditor banks have agreed to its proposal to restructure some 24.9 billion dollars of debt.

The Dubai Financial Market rose 2.43 percent to close at 1,630.85 points, while the Abu Dhabi Securities Exchange gained 1.38 percent to close at 2,566.56 points on Monday, the first day of trading since the announcement.

Dubai Sukuk Beating Malaysia as `Massive' Rally Ruled Out: Islamic Finance - Bloomberg

Dubai’s Islamic bonds, after beating sukuk from Malaysia this quarter, may face limited gains because the restructuring of Dubai World’s $24.9 billion in debt requires asset sales over eight years.

“I don’t think there will be a run-away rally here,” Abdul Kadir Hussain, chief executive officer in Dubai at Mashreq Capital DIFC Ltd., which manages $2 billion of mainly Persian Gulf assets, said in an interview yesterday. “Refinancing risk will occur in five and eight years obviously and the market will continue to see this.”

The yield on the Dubai Department of Finance’s 6.396 percent Islamic debt due in 2014 dropped 15 basis points to 6.42 percent yesterday, after falling by six on Sept. 10. The notes returned 5.9 percent this quarter, compared with 3.8 percent for Malaysia’s 3.928 percent sukuk due June 2015, according to data compiled by Bloomberg. - Saudi reveals large unconventional gas reserves

Saudi Arabia has large reserves of unconventional gas that could help the kingdom to meet soaring domestic energy needs and leave more crude oil available for export, the head of its national oil company has said.

Khalid al-Falih, chief executive of Saudi Aramco, the world’s biggest oil company, told the Financial Times that the kingdom could hold hundreds of trillions of cubic feet of unconventional resources such as shale gas, more than doubling its proved reserves of 280,000bn cubic feet.

The announcement signals a potential opportunity for Saudi Arabia, but also confirms that Riyadh has not found as much conventional gas as it had hoped.