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Thursday, 7 October 2010

KPMG sees Dubai debt talks dragging on | Reuters

Debt restructurings in Dubai are likely to drag on for at least another year, having been held back while conglomerate Dubai World reached a resolution on its loans, a senior advisor said on Thursday.

Philip Davidson, global head of restructuring at KPMG, which advised lenders to Dubai World, told the Reuters Restructuring Summit that other situations had been on hold in the emirate until more clarity emerged on that restructuring.

Other delayed debt negotiations were only now moving ahead, Davidson said."

Dubai Electricity Said to Hold Fixed Income Meetings Next Week - Bloomberg

Dubai Electricity & Water Authority, a state-owned utility, plans to hold meetings with fixed income investors starting Oct. 11, a banker familiar with the transaction said.

The meetings will be held in London, New York and Boston, said the banker, who declined to identified since the details of the meetings are not yet public. Citigroup Inc, Credit Agricole SA, National Bank of Abu Dhabi PJSC, Standard Chartered Plc and Royal Bank of Scotland Group Plc will be arranging meetings, the person said.

A spokeswoman at Dubai Electricity couldn’t be reached immediately for comment.

Qatar Telecom's $1.5 Billion Bond Offering Receives $15 Billion in Bids - Bloomberg

Qatar Telecom QSC raised $1.5 billion from a two-part bond sale after receiving investor orders for 10 times that amount.

The Doha-based company sold $1 billion of 4.75 percent notes due in 2021 priced to yield 245 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg. It also issued $500 million of six-year, 3.375 percent notes priced at a 235 basis-point spread, the data show.

Qatar Telecom’s sale benefitted from a “combination of market demand, long-term financing and attractive pricing levels” that attracted bids for $15 billion, the company said in an e-mailed statement.

Dubai Stocks Gain a Third Day on Third-Quarter Earnings Expectations, Oil - Bloomberg

Dubai shares rose a third day, leading gains in the Gulf, on investor speculation third-quarter earnings in the United Arab Emirates will beat expectations and as oil traded at a five-month high.

Emaar Properties PJSC, the developer of the world’s tallest skyscraper, increased 0.8 percent. Emirates NBD PJSC, the U.A.E.’s biggest bank by assets, advanced the most this month. Qatar National Bank SAQ was headed for the highest close in more than two years after third-quarter profit jumped 37 percent. The DFM General Index increased 0.2 percent to 1,708.85 at 1:04 p.m. in Dubai, bringing its gain for the week to 1.5 percent. The Bloomberg GCC 200 Index of Gulf stocks rose 0.3 percent.

“There are hopes that third-quarter results will be better than expected for selected names,” said Mohammed Ali Yasin, chief investment officer at CAPM Investments in Abu Dhabi. “Volumes are low as investors are in the wait-and-see mode.”

HSBC Plans Its First Persian Gulf Shariah ETFs This Year: Islamic Finance - Bloomberg

HSBC Holdings Plc, the second-largest underwriter of Islamic bonds, plans to start its first Shariah- compliant exchange traded funds in the Persian Gulf, a region that is struggling to lure international investors.

ETFs may help local markets attract some of the $49.4 billion that EPFR Global says poured into emerging market stock funds this year. Restrictions on foreign participation in Gulf markets range from bans to caps on ownership. Investors have sidestepped most countries in the Middle East and North Africa during a recent surge in capital inflows to emerging markets because of debt restructurings, the International Monetary Fund said in a report released yesterday.

The funds will give overseas investors greater access to the region’s markets, Razi Fakih, deputy chief executive officer of HSBC’s Islamic unit in Dubai, said in a telephone interview Oct. 5. National Bank of Abu Dhabi PJSC started the Gulf’s first non-Shariah compliant ETF in March, followed by Falcom Financial Services’ Islamic fund in Saudi Arabia that month.

U.A.E. Interbank Lending Rates Drop as Dubai Debt Accord Boosts Confidence - Bloomberg

United Arab Emirates interbank rates fell to an almost seven-month low after borrowing became cheaper for lenders as the Dubai World debt restructuring progresses.

The U.A.E.’s 3-month interbank offered rate dropped to 2.25375 today, the lowest since March 16, reflecting an easing of the shortage of deposits and willingness of banks to lend. The rate banks charge each other has fallen for eight days.

There is “improved confidence with the improved Dubai restructuring developments,” said Monica Malik, Dubai-based chief economist at EFG-Hermes Holding SAE. “The key issue for banks is medium- and long-term liquidity rather than short-term, this is where the tightness is most acute.”

Kuwait's Kharafi Unit Gets Shares for Zain Stake Sale to U.A.E.'s Etisalat - Bloomberg

National Investments Co., controlled by Kuwait’s Kharafi Group, is in the process of transferring shares it obtained for the sale of 46 percent of Mobile Telecommunications Co., known as Zain, to Etisalat.

“We have secured the shares and we are processing the documents for the transfer,” National Investments General Manager Hamad al-Ameeri said today in a phone interview. An “alliance” to transfer the shares has been made with Zain shareholders who each own less than 300,000 shares, he said.

Etisalat, as Emirates Telecommunications Corp. is known, offered 1.7 Kuwaiti dinars ($6) a share for a majority stake in Zain, Kuwait’s largest mobile-phone company. The Kharafi Group is the second-largest shareholder in Zain, with about 13 percent. Kuwait Investment Authority, the country’s sovereign wealth fund, is Zain’s largest shareholder with 24.6 percent.

Blue City may be reaching end of the road

Oman's Blue City project, which was due to play a major role in the country's diversification plans, could be liquidated within 12 months under plans being considered by some of its bondholders. The planned US$20 billion (Dh73.46bn) property development an hour from Muscat was to have included housing, offices, hotels and universities for some 200,000 people and be built over two decades.

The project was bogged down from the start, however, by an ownership dispute, design changes and slow sales. It issued an almost $1bn bond to finance construction of the first phase in 2006. Essdar Capital, an investment company based in Dubai, bought more than 99 per cent of the Class A bonds associated with the project this year and last year, giving it control of the project. Earlier, the company said it would attempt to help the Blue City Company 1 (BCC1), which was in charge of the first phase of Blue City, restructure so that it could move forward with the project, but a proposal put forward by BCC1 in August was rejected by bond holders.

A source involved with the Blue City project said Essdar was deciding "when, not if, it is going to enforce its rights". BCC1 described the "difficult times" the project was facing in a presentation made to bond holders obtained by The National. It described an "excessive and expensive debt burden" and "onerous debt covenants" together with an "inflexible construction contract" and "general negative publicity surrounding the project".

IMF forecast too low and fails to show true UAE recovery � ArabianMoney

The International Monetary Fund has got its forecasting model for the UAE in a bit of a fix. By understating the true extent of the downturn a year ago, the IMF is unable to show the true extent of the recovery in 2010.

Yesterday the IMF upgraded its forecast for GDP growth to 2.4 per cent rather than the 1.3 per cent it predicted before. The IMF also revized its forecast of the fall in GDP last year from one per cent to 2.5 per cent.

When Emerging Markets Emerge

Sometimes the best way for an investor to see ahead is to take a look and see what happened in the past. This is why Charlie Munger, the wise old vice chairman at Berkshire Hathaway, likes to say, "There are answers worth billions of dollars in a $30 history book."

The history books have a riveting story to tell about emerging markets. This story has clues that tell us what might happen in the big emerging markets of today - such as China, India and Brazil. And these clues, like a trail of breadcrumbs, lead to one great investment theme. It's so sweeping and powerful that it has even huge multinationals giddy at the opportunity.

First, a little of that history, beginning with postwar Japan and the "three electric treasures"...

Telecoms in the Gulf: the end of the Big Four? | beyondbrics | FT.com

The Gulf telecoms market has rarely been dull, with $33bn of acquisitions in the past four years alone. But the reign of the Big Four has remained intact - until now.

Etisalat, the UAE’s dominant player, is offering $10.5bn for a controlling stake in Kuwaiti operator Zain. It’s the first time one of the Big Four has bid for another, and shows just how far - and how quickly - Zain has fallen from grace.

As recently as 2007, Zain announced that its “vision” was to have 150m subscribers, annual earnings of $6bn and a place among the world’s largest ten telecoms companies by 2011.

gulfnews : DIFC says Moscow financial centre will be welcome in global network

Dubai has world-class financial regulation at the Dubai International Financial Centre (DIFC) and the experience and ability to put all components in place, a senior executive said Wednesday.

Offering to help Russia in its own efforts to set up an international financial centre based in Moscow, DIFC chief executive Abdullah Al Awar said such a centre based in Moscow will be a welcome addition to other major financial centres.

Al Awar was speaking at a session on Moscow International Financial Centre (MIFC) at the Russia Calling Forum organised by VTB Bank.

Qatar brings in new corporate tax regime

The Qatar Financial Centre Authority (QFCA) has enacted a corporate tax regime that aims to diversify the government's sources of revenue and help the country to attract insurance and asset management companies.

The 10 per cent tax on corporate profits enacted yesterday only applies to money earned within Qatar and exemptions are available for certain kinds of insurance businesses and investment funds.

The QFCA is not levying personal income taxes under the new regime, which goes into effect retroactively starting last January. "In terms of the Gulf, the financial centres tend to have no taxes but the difference is - and this goes to the heart of what the QFC [Qatar Financial Centre] is about - it was designed to be an onshore regime," said Ian Anderson, the director of finance and tax at the QFCA. "There are no zones or limitations."

Qatar Telecom to sell US$1.5 billion of debt - bi-me.com

Qatar Telecom plans to sell US$1.5 billion of senior unsecured U.S. dollar denominated debt in a two-part offering, according to a person familiar with the transaction.

A US$1 billion portion of 10.5-year debt may yield 245 basis points to 250 basis points more than similar-maturity U.S. Treasuries, and US$500 million of 6-year bonds may pay a spread of 235 basis points, said the person, who declined to be identified because terms aren’t set.

The telecommunications provider, which is based in Doha, may issue the debt as soon as today, the person said.

Qatar Telecom to sell US$1.5 billion of debt - bi-me.com

Qatar Telecom plans to sell US$1.5 billion of senior unsecured U.S. dollar denominated debt in a two-part offering, according to a person familiar with the transaction.

A US$1 billion portion of 10.5-year debt may yield 245 basis points to 250 basis points more than similar-maturity U.S. Treasuries, and US$500 million of 6-year bonds may pay a spread of 235 basis points, said the person, who declined to be identified because terms aren’t set.

The telecommunications provider, which is based in Doha, may issue the debt as soon as today, the person said.

Qatar leads the way in IMF growth forecasts

Qatar’s GDP growth is projected to be 16% in 2010 and 8.6% next year, well ahead of other countries in the region, the International Monetary Fund said yesterday.

In a six-monthly report on the global economy, the IMF predicted that the Middle East and North Africa would grow 4.1% this year and 5.1% in 2011 due to a rebound in oil prices. However, the outlook for the US and Europe is less certain as their economies continue to struggle following the fallout from the global financial crisis.

‘Bright future’ for fund management in Bahrain

The Gulf’s trillion dollar market provides outstanding and compelling opportunities for the fund management industry and Bahrain’s strengths make it the perfect gateway to access them, said an expert.

Shaikh Mohammed bin Essa Al Khalifa, chief executive of the Bahrain Economic Development Board (EDB), was speaking at the fourth annual Fund Forum Middle East 2010 conference, which concludes tomorrow (October 7) in Manama.

Shaikh Mohammed highlighted Bahrain’s long and impressive track record within financial services, particularly in fund management, and to the structural growth drivers of a rapidly expanding domestic population, and growing prosperity within the region, which is underpinning long term demand for financial products and services.

South Korea Plans to Lend $10 Billion for U.A.E. Nuclear Plants - Bloomberg

South Korea expects to lend about $10 billion for the United Arab Emirates’ first nuclear plants, more than doubling pledges it has already made this year to finance construction projects in the Middle East.

The Export-Import Bank of Korea expects to lend most of the money that Korea Electric Power Corp. and contractors will need to borrow to build four 1,400-megawatt atomic power stations in the U.A.E., said the bank’s chief representative in Dubai.

The state-owned bank, known also as Kexim, provides credit for Korean companies overseas and has already committed this year to lend $9.4 billion for energy projects and other infrastructure work in the Middle East. Loans for the construction in Saudi Arabia of the Yanbu oil refinery and two power plants may be among its next big deals.

FT.coml - Retailers counter tougher times

Emirates Mall, Dubai

A few years ago the scene would have been unimaginable in the Middle East’sunrivalled retail destination – boarded-up shopfronts.

But such is the toll that Dubai’s economic woes have had on a once-vibrant retail sector that outlets have closed in shopping centres, upmarket souk and in the emirate’s financial centre.

As the property market collapsed, jobs were axed, tourist spending declined and confidence nosedived. A sector that epitomised the extravagance of the growth years has been struggling to cope with an unprecedented lean period.

FT.com - Gulf urged to attract long-term investors

International capital has flooded into emerging market-focused funds this year as investors chase higher returns in faster-growing economies. Yet more exotic markets, such as the Gulf’s bourses, are largely being passed by and continue to languish.

Emerging market equity funds have seen inflows of $50bn in the first nine months of the year, says EPFR, a data provider. This has helped MSCI Barra’s emerging markets index to gain 21 per cent over the past 12 months.

While Egypt, an emerging market, has seen a net inflow of $876m this year, according to EFG-Hermes, the Gulf has seen net international capital outflows of $83m. As a result, the MSCI Gulf index, excluding Saudi Arabia, has shed 1 per cent over the same period.