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Sunday, 10 October 2010

Arabtec Holding Shares Jumps to Five-Month High on Russia Project Report - Bloomberg

Arabtec Holding Co. rose to the highest since May after Kommersant reported OAO Gazprom Neft won approval from the Russian government to build what may become Europe’s tallest skyscraper. Arabtec has the building contract.

Arabtec increased 3.7 percent to 2.26 dirhams, the highest intraday level since May 24, at 11:11 a.m. in Dubai.

Gazprom, the oil unit of Russia’s state natural-gas producer, was given permission to proceed with the construction of the 403-meter high (1,300-foot) Okhta Center project in the center of St. Petersburg, the Moscow-based newspaper said. Arabtec won the contract in 2008.

UPDATE 1-Current oil price not harmful to economies-Qatar | Energy & Oil | Reuters

The global economy is not being harmed by oil prices at current levels, Qatar's oil minister said on Sunday, adding that a price of between $70 a barrel and $85 was fair to producers and consumers.

"The current price is not harmful to the global economies," Abdullah bin Hamad al-Attiyah told Reuters on the sidelines of a meeting of Gulf Arab oil ministers.

U.S. crude for November CLc1 settled at $82.66 a barrel on Friday, having gained 1.32 percent on the week.

Dubai Stocks Rise to 5-Month High on Earnings Expectations; Tel Aviv Gains - Bloomberg

Dubai shares rose to the highest in almost six months, leading gains in the Middle East, on speculation third-quarter earnings in the United Arab Emirates will beat expectations and after global markets rallied.

Emaar Properties PJSC increased for a fourth day as it exercised the over-allotment option of as much as $50 million on its convertible note sale. Arabtec Holding Co. jumped 5.1 percent after Kommersant reported that OAO Gazprom Neft won final approval from the Russian government to build what may become Europe’s tallest skyscraper. The DFM General Index advanced 1.6 percent to 1,749.63, the highest since April 26, at the 2 p.m. close in Dubai. The Bloomberg GCC 200 Index rose 0.3 percent at 2:18 p.m. and Israel’s TA-25 climbed 1.2 percent.

“Investors are hoping that certain stocks will follow through” with third-quarter earnings expectations, said Vyas Jayabhanu, head of Al Dhafra Financial Brokerage LLC in Abu Dhabi. “The performance of global markets is a positive factor.”

Kuwait Energy Plans Initial Share Sale in Nine Months After Rights Offer - Bloomberg

Kuwait Energy Co., an oil and gas company that operates in the Middle East and Eastern Europe, plans to sell shares in an initial public offering within nine months.

The shares may be listed in London and Kuwait, subject to market conditions, the company said in an e-mailed statement today. Kuwait Energy’s shareholders approved a plan to raise its authorized share capital to 127 million dinars from 103.6 million dinars in a rights share offering, the company said.

“The rights issue will enable Kuwait Energy to pursue organic growth in our expansion plans, to develop recent discoveries and explore additional wells in our assets in the region, especially in Egypt,” Chairman and Managing Director Manssour Aboukhamseen said in the statement.

GCC Market Analytics: Weekly GCC Trend Analysis (Week 42)

The DFM General Index moves back to a Bullish outlook this week and Saudi moves from Bearish to Neutral.

All other indices have a Very Bullish outlook, particularly Kuwait, Qatar, Bahrain and Muscat where the all three trend lengths are rising.

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Big three lead the way as they reach for the sky

The Gulf is home to what is likely to be the greatest concentration of globally ambitious airlines in the world, rivalling the boom in South East Asian airlines in the 1970s and 1980s. The big three of Emirates Airline, Qatar Airways and Etihad Airways are the most well known and established, but there are other large airlines with extensive networks such as Gulf Air, Oman Air, Saudi Arabian Airlines, and Kuwait Airways, along with a growing number of budget airlines.

Most are thought to be unprofitable, either hampered by the heavy competition because of ageing fleets and business models, or because of heavy investments in building up young brands, say analysts. "There are so many airlines with global aspirations in this region, which does not seem to have the passengers to sustain all of them," said Perry Flint of Air Transport World. Among the big three, only Emirates reported its financial results. Last year it was one of the most profitable airlines in the world, with net income of $963.5m after traffic rose by 24 per cent. The airline's results are for its year ending in March, and they include the performances of more than 25 associated companies in fields such as hospitality and retail. A key to its success has been the growth of its transcontinental traffic, taking market share from European and Asian airlines, while the Dubai Government simultaneously developed the emirate into a destination in its own right.

"Emirates has done amazingly well," Mr Flint said. "They are making Dubai a wonderful stopping point between Europe and Asia." The airlines acknowledging the heaviest losses last year - the worst year in aviation history, according to industry associations - were Kuwait Airways and Oman Air, with write-downs of US$189.6 million (Dh696.1m) and $167.3.m, respectively. Last year, Kuwait's traffic grew by 3 per cent, measured by revenue passenger kilometres, a key industry metric. The number of passengers it carried was up 2 per cent to 2.6 million.

Palm Deira sued over townhouse registration

An investor in Dubai's Palm Deira island project is suing for more than US$300,000 (Dh1.1 million) because the developer allegedly failed to register his townhouse with the authorities. Futtain al Baddad, a US citizen living in Sharjah, lodged the complaint with the Dubai World Tribunal, a special court set up to weigh claims against the Dubai World conglomerate. As one of the first cases before the tribunal, Mr al Baddad's claim could set precedents for how other claims by individual investors are treated.

Mr al Baddad is asking Palm Deira to return Dh760,000 he invested in 2005, plus 9 per cent interest and fees and expenses. He is seeking a total of US$302,966, according to a tribunal claim form. The tribunal is a central cog in Dubai's long-running effort to settle disputes, repay debts and shore up its finances. Dubai World, which owns Nakheel, the developer behind the Palm Deira, recently reached an agreement with about 99 per cent of its bank creditors on restructuring $24.9 billion of debt. In a separate deal, investors in delayed Nakheel projects are being offered the option of moving their investments to projects that are closer to completion or waiting five years for repayment.

Mr al Baddad bought a 3,500 square foot townhouse off-plan for a total of Dh3.8 million, according to a contract included in tribunal records. He says he and his brothers, Zayed and Fares, paid Dh380,000 to Nakheel as an instalment and Dh380,000 to the original buyer, an Emirati. Acting for Palm Deira, lawyers at Dalmook Mohammed Dalmook in Dubai countered in a defence filed last week that the case should not be accepted because Mr al Baddad was acting as a representative of his brothers, even though the contract was solely between him and the company.

Kuwait Sovereign Wealth Fund Plans to Invest $1 Billion in AIA, Saad Says - Bloomberg

Kuwait’s sovereign wealth fund offered to invest $1 billion during the initial public of AIA Group Ltd., Bader al-Saad, the managing director of the Kuwait Investment Authority, said on Al Arabiya televsion today.

The Asian insurance industry is “promising,” al-Saad said.

Algeria Rejects VimpelCom's Djezzy Price of $7.8 Billion, El Watan Reports - Bloomberg

The government of Algeria rejected VimpelCom Ltd.’s proposed $7.8 billion price for Orascom Telecom Holding SAE’s Djezzy unit, and won’t negotiate with the Russian company, El Watan reported, citing a government source.

The government values the unit at $2 billion to $3 billion, and will deal only with Orascom, the Algiers-based newspaper reported today.

Plans by VimpelCom, owner of Russia’s second-largest mobile operator, to combine assets with Orascom have involved it in a dispute with Algeria over taxes and ownership of Orascom’s Algerian operations.

Saudi Shares Decline on Concern About Bank Earnings, Led by Rajhi, Fransi - Bloomberg

Saudi Arabian shares declined on uncertainty about financial results for Saudi banks during the third quarter in the Arab world’s biggest economy.

The Tadawul All Share Index gauge shed 0.4 percent to 6,392.02, while the Tadawul All Share Bank Index fell 1 percent in Riyadh. Al-Rajhi Bank, the kingdom’s largest lender by market value, and Banque Saudi Fransi were among nine of 11 Saudi banks that declined in trading today.

“To a certain extent there is some concern about bank earnings,” Murad Ansari, Head of Research at EFG Hermes SA, said by phone from Riyadh. “We aren’t seeing any key changes in indicators for the banks in the third quarter of 2010. There was a run up in stock prices through September, and we are seeing a slight correction before the results.”

Dubai firm plans bad-debt fund

Distressed-asset investors are beginning to look at the burgeoning number of defaulting loans at regional banks as a potential future windfall.

Essdar Capital, a Dubai investment and advisory company controlled by two members of the Abu Dhabi Royal Family, is planning a US$500 million (Dh1.83 billion) fund that would buy such loans at a severe discount. The fund would then restructure them or sell the underlying assets to turn a profit.

While the Central Bank puts the total amount of non-performing loans at banks at Dh37.2bn, Essdar predicts the amount will more than double in the near future when the full impact of the property downturn and global financial crisis on banks' balance sheets becomes clear. Suketu Sanghvi, a senior managing director at Essdar, pointed to the rising number of loans that are being restructured at UAE and Kuwaiti banks as a clear indication that things were going to get worse.

U.S. judge dismisses case against Agility subsidiary | Reuters

A U.S. magistrate judge has recommended the dismissal of a case against a U.S. subsidiary of Kuwait's Agility, which is accused by prosecutors of fraud over multibillion dollar contracts with the U.S. Army.

The decision to drop the case against Agility DGS Holdings Inc was expected and is unlikely to stop prosecutors from pursuing a main case against the parent company, Agility, formerly the Public Warehousing Co KSC, according to observers who have followed the case.

'The undersigned recommends that the Government's motion to dismiss the indictment without prejudice as to Holdings be granted,' said Judge Alan Baverman in a recommendation signed"