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Wednesday, 29 September 2010

Arab Petroleum Investments Plans to Sell Saudi Arabia Riyal Benchmark Bond - Bloomberg

Arab Petroleum Investments Corp., an energy investment unit of the Organization of Arab Petroleum Exporting Countries, plans to sell a Saudi riyal-denominated benchmark-sized bond as the company expands in the kingdom.

The bond will be issued after an investors’ road-show starting in Saudi Arabia early next week, the Al-Khobar, Saudi Arabia-based company said today in an e-mailed statement. It didn’t provide the size and pricing of the bond.

Companies in Saudi Arabia, the largest Arab economy, are stepping up bond sales to finance expansion plans as the government invests to spur economic growth and build infrastructure. A five-year, $400 billion stimulus package was announced by the government in late 2008.

Dubai Shares Lead Gulf Higher on Government Bond Sale; Kuwait's Zain Soars - Bloomberg

Dubai shares rose for a second time this week, adding to this month’s gain in Gulf markets, as the emirate raised $1.25 billion in a bond sale and emerging-market stocks climbed to the highest level since June 2008.

Emaar Properties PJSC, the developer of the world’s tallest tower in Dubai, gained 0.8 percent. Drake & Scull International advanced for the first time in three days after the engineering company won a contract. In Kuwait, Mobile Telecommunications Co. soared the most in seven months after CNBC Arabiya reported Emirates Telecommunications Corp. offered to buy a stake in the company. The Dubai Financial Market General Index increased 0.7 percent to 1,702.43 at the 2 p.m. close in the emirate, bringing the surge so far this month to 15 percent.

Investors are “gaining confidence from reports of a positive reception for the Dubai government bond issue,” said Julian Bruce, director of equity sales at EFG-Hermes Holding SAE in Dubai. Gains in global markets are also helping to lift local stocks, he said. - Dubai’s Emaar to launch $375m bond

Dubai’s Emaar Properties is set to launch a convertible bond of $375m with an option up to $500m, as the real estate company seeks to bolster its finances amid a continuing property slump in the emirate, people aware of the matter say.

The five-year bond, with indicative pricing of 7.25-8.25 per cent, has received strong interest, two people involved in the deal say. The conversion premium is 20-30 per cent.

The property giant, which drove the growth of the real estate market after the emirate opened to foreigners in 2003, has weathered the Dubai financial crisis better than other developers. But it remains affected by the real estate crash, which has seen valuations at least halved since 2008.

Etisalat bids to buy 46 pct in Kuwait's Zain - TV | Reuters

Emirates Telcommunications Corp (Etisalat) has offered to buy 46 percent of Kuwait's Zain, CNBC Arabiya said on Wednesday, in a deal that would be worth $11.8 billion.

Etisalat had offered 1.7 dinars per share for the stake, the Arabic language channel said. Zain shares rose to a four-month high after the report.

CNBC Arabia gave no further details and did not cite a source. It said National Bank of Kuwait was an advisor to Etisalat and BNP Paribas was advising Zain majority shareholder, Kharafi Group."

Shari’ah-compliant Australian equity fund approved by Bahrain authorities | Islamic Finance | CPI Financial

Investment manager for the fund is Hyperion Asset Management, a Brisbane-based, growth-style manager whose award-winning core investment team has worked together since 1997. Shari’ah advisors to the fund are Dr. Mohd Daud Bakar of Malaysia and Sheikh Nizam Yaquby of Bahrain.

The fund is available for “expert” investors, defined by Bahrain authorities as individuals and institutions that have at least $100,000 in financial assets, as well as governments and related organisations. The fund is managed in Australian dollars and reported in US dollars.

Hyperion uses a proprietary process to manage a high-conviction portfolio made up of a limited set of stocks that meet strict selection criteria, for Shari’ah-compliance and other business attributes. The firm has earned a host of recent recognition for outstanding performance. Accolades include being named Australian Equities (Small Cap) Fund Manager of the Year at the May 2010 Money Management/Lonsec Fund Awards and winning the Golden Calf Award for Best Emerging Fund Manager at the October 2009 Australian Fund Manager Awards.

Beltone to Receive Egyptian Exchange-Traded Fund License Before Year End - Bloomberg

Beltone Financial, an Egyptian investment bank, may receive an exchange-traded fund license before the end of the year, Khaled Seyam, chairman of the Egyptian Exchange, said.

“We are at the final stage, the stage of signing contracts,” he told reporters at an investment conference today in Cairo. “Beltone is the only applicant but other firms have started talking about getting in.”

Egypt’s benchmark EGX30 index has gained 7.7 percent this year, according to data compiled by Bloomberg. The exchange- traded funds, known as ETFs, trade like stocks and allow investors to track indexes and make bets on whether they will rise or fall. The bourse will begin listing funds based on the benchmark index, Seyam said.

UAE's Etisalat Looking for Mergers, Acquisitions in India Within Next Year - Bloomberg

Emirates Telecommunications Corp., the United Arab Emirates’ biggest phone company, is in talks for mergers and acquisitions with India’s Reliance Communications Ltd. to expand in the world’s second-largest wireless market.

Etisalat was “studying opportunities for M&A” with Reliance, India’s second-biggest cellular phone operator, Chairman Mohammed Omran told Bloomberg News in Sydney today, without elaborating. The company, based in Abu Dhabi, was also talking to other operators about deals, aiming to forge agreements within the next year, he said.

Purchasing a stake in an Indian cellular operator would give the Middle East carrier, also known as Etisalat, a foothold in a market set to approach 1 billion users, or more than three times the population of the U.S. Etisalat said earlier this month it’s considering investing in Idea Cellular Ltd., which also provides mobile phone services in India.

gulfnews : Dubai redraws strategy map

The Dubai government is reviewing its growth strategy to focus on traditional strengths, such as trade, retail and tourism, in the aftermath of the global financial crisis which hit the local real estate sector.

More than half the 980 projects registered with Dubai's Real Estate Regulatory Agency (Rera) have been either cancelled or are in the process of being cancelled, according to a supplementary prospectus — considered to be refreshingly transparent — filed by Dubai's Department of Finance to the London Stock Exchange for a new bond issue.

The prospectus says the 2007 set of principles that comprise the Dubai Strategic Plan 2015 (DSP 2015) is being re-assessed. The original focus of the plan was on the core areas of economic development; social development; security, justice and safety; infrastructure, land and development; and government excellence.

Morgan Stanley notes ‘positive’ economic signs for UAE - The National Newspaper

The US investment bank Morgan Stanley has joined the growing chorus of those seeing early signs of an economic recovery in the UAE.

In a research note, the bank described as “positive” recent UAE Central Bank data showing modest loan growth and higher government deposits.

“Overall we are seeing the growth in the right areas,” said Daniel Cowan, a Morgan Stanley analyst in Dubai. The Central Bank’s data showed that loans and advances increased 0.8 per cent last month, compared with the previous month, to more than Dh1 trillion (US$272 billion). In addition, government deposits rose more than 5 per cent.

Jurisdiction challenges cloud Dubai World court - The National Newspaper

The Dubai World tribunal hit a roadblock on its first hearings yesterday as lawyers argued over the jurisdiction of the court.

The tribunal was set up within the Dubai International Financial Centre (DIFC) to decide cases involving the conglomerate and its subsidiaries. The DIFC Courts are separate from the tribunal but the tribunal has adopted the same set of rules for adjudicating cases.

Ludmila Yamalova, a partner at Al Sayyah Advocates and Legal Consultants in Dubai, said that while the courts and the tribunal were in their infancy, too much time was still spent weighing minor legal issues. Ms Yamalova, who is representing a wealthy German investor in a case against the property developer Damac, said those proceedings had been held up for months while deciding where the case should be heard.

Dubai Still in the Doldrums | Emerging Markets Outlook

Last year I wrote a blog post about the financial collapse of Dubai World and its effects on Dubai’s own Roman-candle economy and on other emerging economies worldwide. I had previously written about the effects of the global financial crisis on Dubai’s prospects. I concluded that the Dubai World implosion, together with the economy-wide devastation resulting from the global recession, did not bode well, but that it was too early to write off Dubai’s future role in the world economy, given its ability to sell ever-more audacious and astonishing projects to eager investors.

Almost a year on, the prospect is, if anything, even murkier. On the one hand, the $25 billion restructuring of Dubai World has been agreed by 99 per cent of the company’s creditors. A new $1 billion bond issue, announced yesterday by Dubai’s government, seems timed to take advantage of the rising confidence that may result from the Dubai World restructuring, which was finalized earlier this month. At the same time, the bond prospectus notes that government regulators have withdrawn authorization for 495 property development projects, representing about half of all planned developments in the emirate. This in addition to the numerous projects that developers themselves have canceled for lack of financing.

This would be devastating for any economy, but it is doubly so for Dubai, which depends on property and finance for over 40% of its GDP (against less than 2.5% for oil). According to an article in today’s Financial Times, government revenue fell by 13% in 2009, but the drop would have been much greater were it not for a sharp rise on other revenues such as police fines and revenues from airport and toll road user fees. Nevertheless, Dubai expects a 2010 fiscal deficit of $1.6 billion. The bond issue prospectus also shows a rise in the overall debt of the government and state-owned companies at about $28.5 billion, up from $19 billion a year ago. These numbers exclude many state-affiliated entities such as companies owned by the ruling Al-Makhtoum family rather than by the government itself. The emirate’s total debt is estimated at around $110 billion.

Dubai’s Corporate Matchmaking Continues - The Source - WSJ

In these straitened days Dubai’s government likes to play matchmaker and marriage bureau to troubled companies. It delights in finding secure, local spouses for unloved ventures left on the shelf by a financial crisis that hit this emirate especially hard.

Dubai’s property firms and banks were caught by a bust in which real-estate prices collapsed 50% from 2008’s boom-time peaks. Firms such as Emaar, Dubai Holding, Union Properties, Deyaar Development and Nakheel have been left with massive projects, rolled out at the top of the market but now largely unwanted.

And the lenders who part-funded this development orgy, Dubai Islamic Bank, Tamweel and Amlak, now carry significant asset quality risk, according to many analysts.

How is Dubai fixing its finances? Speeding tickets | beyondbrics |

What is the relationship between government debt and local traffic fines? In Dubai, a lot. This morning yours truly received a text message from Dubai police: the family car has incurred yet another $165 traffic fine. And of course those breaking traffic regulations should pay up.

But the authorities aren’t just concerned with reducing road accidents. In a twist familiar to disciples of Jeremy Clarkson, it seems that the traffic fines are a roundabout route to trimming Dubai’s budget deficit.

Dubai’s government revenues fell 13 per cent in 2009 compared to 2008, but they are now being bolstered by an almost 50-per-cent increase in police fines, according to a prospectus issued by the government, as it drums up interest in a $1bn sovereign bond that is expected to be priced by Wednesday. - Dubai bond sale set to raise up to $1.25bn

The Dubai government was set to raise as much as $1.25bn as its sovereign bond issue moved to price on Wednesday, people aware of the issue said.

It was four times subscribed as the book closed in Europe on Tuesday, they said, having elicited interest of $4bn: $2bn for the five-year tranche and another $2bn on the 10-year tranche.

The lead managers, Deutsche, HSBC and Standard Chartered, have narrowed pricing to about 6.75 per cent for the five-year and 7.875 per cent for the 10-year tranche from initial soundings of 6.875 per cent and 8 per cent respectively.