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Monday, 11 October 2010 - Burst of bond sales as loan deadlines loom

After a lacklustre start to the year, at least compared with the deluge of issuance in 2009, regional governments and companies are again rushing to tap international debt markets for finance, bankers say.

Last month Dubai sold a $1.25bn bond, while Emaar, the property developer, issued $500m of convertible bonds. This month Qatar Islamic Bank sold $750m of Islamic paper, or sukuk, while Qtel, the Qatari telecommunications operator, issued a $1.5bn bond.

More issuance is expected by the end of the year. Dewa, Dubai’s utility, the Islamic Development Bank and Apicorp, an investment company jointly owned by the Arab oil exporters, are all in the process of selling large bonds. Bankers speculate that Abu Dhabi may also sell a sovereign or sovereign-linked bond soon.

Abu Dhabi Shares Rise to 5-Month High on Earnings Expectation; ADCB Gains - Bloomberg

Abu Dhabi shares advanced to the highest in almost five months on speculation third-quarter earnings in the United Arab Emirates will beat expectations and after global markets and oil rallied. Qatar’s index rose.

Abu Dhabi Commercial Bank PJSC, the third-largest lender in the U.A.E. by assets, and Abu Dhabi National Energy Co., the state-run utility known as Taqa, soared to their highest levels in a year. The ADX General Index increased 0.7 percent to 2,721.68, the highest since May 24, at the 2 p.m. close in Abu Dhabi. Qatar’s QE Index climbed to the highest in two years, rising 0.8 percent.

“The third-quarter earnings season has started reasonably well in the region,” said Paul Cooper, managing director at Sarasin-Alpen & Partners Ltd. in Dubai, which oversees more than $500 million in the Middle East. “The international backdrop is positive.”

Abu Dhabi Islamic Bank Said to Plan Sukuk Sale, Hire Managers - Bloomberg

Abu Dhabi Islamic Bank PJSC, the United Arab Emirates’ second-biggest lender complying with Shariah, hired three banks to help sell bonds, according to two bankers familiar with the plan.

HSBC Holdings Plc, the second-biggest underwriter of sukuk this year, Standard Chartered Plc and Barclays Plc will manage the sale, said the bankers, who declined to be identified because the terms haven’t been made public. ADIB may start meeting investors this month, one of the bankers said.

Bond sales from the Gulf region have picked up since state- controlled Dubai World in September reached an agreement with 99 percent of its creditors to alter the terms on $24.9 billion of debt. Dubai Electricity & Water Authority plans to meet fixed- income investors starting today, a banker said last week. The Dubai government last month raised $1.25 billion in its first bond sale since the Dubai World debt crisis.

Securities Group Won't Block Zain Stake Sale to Etisalat, Chairman Says - Bloomberg

Securities Group Co., a Kuwait-based investment management firm, said it will not seek to block a bid by Emirates Telecommunications Corp. to buy 46 percent of Mobile Telecommunications Co., Chairman Ali al-Mousa said today to Al Arabiya television.

Securities Group said investors holding 22 percent of Mobile Telecommunications, known as Zain, were left out of the planned deal.

Al-Mousa said Emirates Telecommunications, known as Etisalat, should safeguard the interests of all Zain shareholders, adding that Etisalat was not in talks with his company. Al-Mousa said the offer by Etisalat is fair and declined to identify the shareholders he represents.

UAE to launch Islamic certificates of deposit - Maktoob Business

The United Arab Emirates' central bank will launch Islamic certificates of deposit by the end of the year to help the Gulf state's Islamic banks manage cash, a senior banker at Standard Chartered Saadiq said on Monday.

Afaq Khan, chief executive of StanChart's Islamic banking unit, said test transactions could take place as early November.

"It will be a tool to absorb the excess liquidity in the Islamic money market," Khan said on the sidelines of an Islamic finance conference in the UAE capital.

gulfnews : World Bank, IDB launch $1b Mena development fund

The World Bank said Sunday that it is setting up a regional initiative in cooperation with the Islamic Development Bank (IDB) that could raise up to $1 billion to close the infrastructure gap in the Middle East and North Africa (Mena), which will undermine the region’s growth if not urgently addressed.
The Middle East and North Africa region needs to invest between $75 billion and $100 billion a year to sustain the growth rates that have been achieved in recent years and to boost economic competitiveness, the World Bank said. It added that private sector investment in infrastructure in Mena countries is limited, especially outside the Gulf countries despite huge unmet demand for infrastructure services.

Sunday’s announcement aims at addressing this shortfall and brings together the World Bank Group with the Islamic Development Bank as potential anchor investors in a regional investment vehicle to support both conventional and Shariah-compliant investment in infrastructure.

Four companies sue The World

Four companies have filed lawsuits against The World, a subsidiary of Nakheel, claiming breach of contract. The World, located 4km off Dubai's coast, is made up of reclaimed islands resembling a map of the globe. It was one of the most expensive and ambitious projects from Nakheel during the property boom but it has since stalled because of a decline in prices and transactions during the global downturn.

Three of the claims are from developers related to the same Sharjah-based holding company, Gulf Global Group. The companies, Global Realty Partners, Gulf Developers and Frontline Developers, filed claims worth a combined total of US$15.3 million (Dh56.19m). All three list the same phone number and address in the Sharjah Airport Freezone. A fourth suit was filed by Gulf Heights Holding Investments but no damages claims are mentioned in documents currently available to the public. The claimants declined to comment yesterday.

Nakheel declined to comment on the lawsuits but a spokeswoman said construction had begun on the projects for Josef Kleindienst, who owns Sweden, Austria, Monte Carlo and Germany, as well as on projects by other developers on Lebanon, Spain and France. Deepak Arora, the managing director of City Diamond Contracting in Dubai, which is working on the Kleindienst projects, said his team had already set up on site at The World and construction would begin within a few weeks.

Egypt to Issue Sukuk Rules in 2011 to Compete With Gulf: Islamic Finance - Bloomberg

Egypt, home to the Arab world’s largest Muslim population, will issue its first Islamic debt guidelines in 2011 to catch up with the Persian Gulf and Southeast Asia and help spur sales.

“The target of issuing these regulations is to help companies that want to issue sukuk,” Ziad Bahaa El-Din, chairman of the Cairo-based Egyptian Financial Supervisory Authority, said in a telephone interview in Cairo Oct. 7. “Right now, we don’t have a framework to help anybody who wants to issue sukuk.”

Al Baraka Bank Egypt ESC, a Cairo unit of Bahrain-based Islamic lender Albaraka Banking Group, may sell dollar- denominated Islamic bonds, known as sukuk, in the second half of 2011, the bank’s chairman, Adnan Ahmed Yousif, said in an interview on Sept. 29. Al Baraka, Faisal Islamic Bank of Egypt and National Bank for Development are the nation’s only Shariah- compliant financial institutions, May El Haggar, banking analyst at Cairo-based Naeem Holding, said yesterday.

Iran Automaker Khodro Turns to Turkey as Proton Quits `Muslim Car' Venture - Bloomberg

Iran Khodro, the country’s largest carmaker, plans to discuss joint venture plans with Turkey after Malaysia pulled out of a project to build a car focused on Islamic buyers.

“An economic and industrial delegation will come within two weeks to Iran to start initial negotiations,” Mir Javad Soleimani, the company’s deputy chief executive officer for quality and product development, said in an interview today. “If we reach an understanding we will begin producing an Islamic car.”

The possibility for cooperation was brought up by Turkey’s industry minister during a recent visit by Iran’s first vice- president, said Soleimani.

Stronger Indian banking presence in UAE urged to boost trade ties

Indian banking industry’s presence in the UAE is inadequate given the fact that India is the largest trading partner of the Emirates, Sanjay Verma, Indian Consul General in Dubai, said on Sunday.

“India has remained as the number one trading partner of the UAE for the past two years, and the bilateral trade now exceeds $43 billion. But we need a stronger Indian banking presence here to enable faster bilateral trade and investment growth,” Verma said. With just one bank — Bank of Baroda — now offering full-fledged commercial banking operations in the UAE, the representation of the Indian banking industry is not proportionate with the strongly growing two-way trade and investment ties.

“There is a disconnect between the vibrant bilateral trade ties and the not so strong presence of the Indian banking here,” the senior Indian diplomat said at the unveiling of an innovative cash management and transfer system for Dubai Gold and Commodities Exchange by JRG International and UAE Exchange. However, there are around 12 Indian financial institutions conducting limited operations from the Dubai International Financial Centre. Verma said the $1.3 trillion Indian economy is poised to grow two-fold in five years. “By 2018, India will overtake China as the fastest growing global economy,” he said.

Persian Gulf Companies Seek Funds in IPOs as Markets Recover - Bloomberg

Persian Gulf companies are joining a surge in emerging market share sales to raise funds as regional stock markets rebound and companies restructure their debt.

Aluminium Bahrain BSC, operator of an 850,000 metric-tons- a-year smelter, and Nawras, the Omani mobile phone company controlled by Qatar Telecom QSC, announced plans to sell shares in the coming months. Axiom Telecom LLC, a Dubai-based mobile- phone retailer, is also planning to sell shares, according to a person familiar with the matter.

“Markets in the region are less volatile than they were six months ago, which allows a fair valuation for companies planning to list,” said Fadi Al Said, head of equities at ING Investment Management (Dubai) Ltd. “There are a lot of companies in the region that need to restructure or increase their capital so they can grow their businesses.”