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Tuesday, 12 October 2010

UAE's ADIB mandates banks for Islamic bond -sources | Reuters

Abu Dhabi Islamic Bank (ADIB.AD) is planning to issue an Islamic bond, or sukuk, in the coming weeks, and has mandated three banks to arrange the sale, with a roadshow planned as early as next week, two market sources said.

ADIB, the second largest Islamic lender in the United Arab Emirates, has mandated Barclay's Capital (BARC.L), HSBC (HSBA.L) and Standard Chartered (STAN.L), for the sukuk, the sources said, declining to be identified.

The bank is eyeing a U.S.-dollar denominated Reg S only Islamic bond, a report by IFR, a Thomson Reuters unit, said on Monday."

Abu Dhabi's IPIC plans benchmark bond

Abu Dhabi government-owned International Petroleum Investment Company ( IPIC) plans to launch a benchmark bond to fund its growing portfolio of investments, a senior banker with a lead arranger said on Tuesday.

IPIC, which has stakes in Daimler and Virgin Galactic through its majority owned Aabar Investments, has mandated six banks for the benchmark issue, typically at least US$500 million.

"It is part of their MTN programme, a normal exercise for their funding," the banker told Reuters, speaking on condition of anonymity. "The global roadshows start next week."

Voluntary Delisting of Unigold Shares From the NASDAQ Dubai Exchange - MarketWatch

TORONTO, ONTARIO, Oct 12, 2010 (MARKETWIRE via COMTEX) -- Unigold Inc. ("Unigold" or the "Company") (CA:UGD 0.23, 0.00, 0.00%) (nasdaq-dubai:UGD) wishes to announce that it has applied to voluntarily withdraw its common shares from the Official List of Securities of NASDAQ Dubai (the "Official List") pursuant to section 40.3 of the Dubai International Financial Exchange Listing Rules (the "Rules").

The Company has decided to delist its common shares from the Nasdaq DUBAI Exchange as the Company does not have any current intention to conduct business in the United Arab Emirates.

India plans foray into Saudi railway business: Minister - The Times of India

India is planning to enter Saudi Arabia, starting with the operation of a major mineral railway that will link the country's northern Jalamid region with Ras Azzour, near the industrial port city of Jubail, E Ahamed, India's minister of state for railways has said.

Ahamed, who was speaking on the sidelines of a community reception in Riyadh, said that some projects were "being identified, while some are in the pipeline".

The minister said that while it was too early to talk about the projects in which Indian Railways would be involved in, India's state-owned Rites Company would be involved in the operation of the new 1,486-kilometre North-South railway.

Read more: India plans foray into Saudi railway business: Minister - The Times of India

Dubai Shares Fall on Bets Gains Overdone Given Global Growth; Kuwait Rises - Bloomberg

Dubai shares declined the most this month on speculation recent gains are overdone after global markets and crude oil retreated on concern about the pace of the economic recovery. Qatar stocks also fell.

Emaar Properties PJSC, the builder of the world’s tallest tower and the company with the heaviest weighting in the emirate’s benchmark index, slipped 0.8 percent. Dubai Islamic Bank, the biggest shariah-compliant lender in the United Arab Emirates, dropped for the first time in eight days. The DFM General Index fell 0.7 percent, the most since Sept. 30, to 1,742.63 at the 2 p.m. close in Dubai. Qatar’s QE Index fell the most since July 4 to 7,756.27.

“The market is taking profits today” as Asian and European markets dropped, said Saad al-Chalabi, an institutional trader at Al Ramz Securities in Abu Dhabi. “This is happening although the outlook on the U.A.E. is still positive for the medium-term.”

Saudi Banks, Led by Al-Rajhi, Report Lower Quarterly Profit on Provisions - Bloomberg

Al-Rajhi Bank, Saudi Arabia’s biggest lender by market value, said third-quarter profit declined 8.6 percent as six of the kingdom’s 11 publicly traded lenders reported lower quarterly profits on higher provisions.

Net income fell to 1.64 billion riyals ($440 million) from 1.8 billion riyals in the year-earlier period, the Riyadh-based bank said in a statement on the Saudi bourse website today. The median of three analyst estimates was for a profit of 1.84 billion riyals, according to data compiled by Bloomberg.

Saudi banks’ earnings have been hurt since the onset of the global credit crisis as provisions for bad loans rose and lending slowed after the Saad and Algosaibi business groups defaulted on at least $15.7 billion of loans. Saudi British Bank, the lender 40 percent owned by HSBC Holdings Plc, Arab National Bank and Saudi Investment Bank reported lower quarterly profit.

UPDATE 1-Nawras IPO extended by one week, retail gets 5 pct bid | Reuters

Oman telco Nawras, a subsidiary of Qatar Telecommunications QTEL.QA, extended the offer period for its initial public offering (IPO) by one week after retail portion of the offer was only covered by 5 percent, two sources familiar with the matter said on Tuesday.

Nawras, which broke the monopoly of state-controlled Omantel OTL.OM in 2006, is aiming to raise as much as $608 million and has put up 260 million shares priced between 702 to 902 baisas in the Gulf Arab state's first IPO sale through a book building route. [ID:nLDE686015]

The company has so far received bids of 9 million shares from retail investors, while the institutional part of the offering has been oversubscribed with an indication of around 320 million shares being bid by investors, sources said. - Iraq jostles for power in Opec

When Opec’s 12 oil ministers meet in Vienna on Thursday, the veiled rivalry between two of the men at the table promises to alter the club’s balance of power in the years ahead.

Hussain Al-Shahristani, the Iraqi minister, and Masoud Mir-Kazemi, his Iranian counterpart, are playing a unique game of one-upmanship. On October 4, Iraq upgraded the size of its proven oil reserves to 143bn barrels, a 24 per cent rise that placed the country third in the global league after Saudi Arabia and Venezuela. Most sensitively, Iraq also overtook Iran to become, on paper at least, the second most richly endowed country in the Middle East.

But Iraq’s lead lasted only a week. On Monday, Mr Mir-Kazemi responded by upgrading Iran’s reserves to 150.3bn barrels, seizing back his country’s supremacy over Iraq. In practice, the different methods used to calculate and define oil reserves allow considerable leeway to massage the figures.

West best advised not to get into a trade war over Gulf airlines � ArabianMoney

The not entirely impartial CEO of Air France-KLM has joined in the recent public criticism of allegedly unfair export subsidies to Gulf airlines, while the UAE has just declared its frustration with the failure of five years of negotiations for landing rights in Canada and kicked the Canadian military out.

The Western nations should watch their step. This summer Abu Dhabi awarded its $20 billion nuclear contract, the largest energy contract in the history of the Gulf States, to Korea, snubbing France and the United States who long assumed they were the only contenders (and the Korean Government was happy to put up $10 billion in subsidized loans to clinch this deal).

Standard Chartered Saadiq Sees U.A.E. Central Bank Murabahah Issue in 2010 - Bloomberg

The United Arab Emirates central bank will issue its first Murabahah-based Islamic certificate of deposit this year, providing banks with more investment options, said the chief executive officer of Standard Chartered Saadiq.

The debt market needs short-term notes to help “increase the liquidity pool” for Islamic banks, Afaq Khan said today at an Islamic banking conference in Abu Dhabi. Standard Chartered sits on the U.A.E. central bank’s Islamic liquidity management committee, he said.

Short-term liquidity management at Islamic banks and other financial institutions is a challenge, central bank Governor Sultan bin Nasser al-Suwaidi said at an Islamic banking conference in Singapore in June. Banks that adhere to Shariah principles “are facing a maturity mismatch,” said Ahmed Talhaoui, Abu Dhabi-based head of investment at Royal Capital, in an interview that month.

Changes of DIFC rules stirs fund-manager interest

Several investment funds are close to being launched in the Dubai International Financial Centre (DIFC) as an overhaul of the regulatory regime spurs interest in the free zone's asset management industry.

The Dubai Financial Services Authority (DFSA) in July amended rules controlling funds established in the DIFC to make the free zone's regime more flexible and business-friendly. Since then, four or five funds were known to be in the pipeline, with the first possibly launching within weeks, Kevin Birkett, the head of wealth management and capital markets at the DIFC Authority, said yesterday while attending a DIFC seminar about the regulatory changes.

"These have been waiting on the sidelines and are a sign of the first wave of interest in the new funds regime," Mr Birkett said. "Since Ramadan, the whole industry has picked up and we've had a lot of inquiries from firms about launching funds. European and US markets are hurting badly and a lot of firms are looking at other places internationally." The DFSA decided to change the rules as it stepped up its effort to establish the DIFC as a regional centre for fund management. The first regulatory framework, established in 2006, led to only limited success in achieving this goal, with five funds set up, fewer than officials had hoped for.

GFH seeks aid on $3bn plan

Bahrain's Gulf Finance House (GFH) is tapping international investors for help in financing the centrepiece of a US$3 billion (Dh11.01bn) financial centre in Tunisia. The Tunis Financial Harbour was one of several multibillion-dollar property projects, including the huge Energy City developments in Qatar and Libya and commercial centres in Mumbai and Bahrain, that GFH started during the global boom.

Some investors pulled out of those projects after the financial crisis hit in 2008 and GFH has since revised its business model to focus on investments in financial institutions instead of property.

The company is honouring commitments to build projects it has already announced before seeking an exit. Following its launch in 2007, work started on the Tunis Financial Harbour late last year, a company spokeswoman said. The plan now is to complete infrastructure and drum up support for an offshore financial centre that is to form the backbone of the waterfront development, she said. "It is an old project, so there is already work in progress and they have to finalise this thing," said an analyst in Bahrain, who asked not to be named. "They financed this not only through themselves but they have partners and clients and they have to honour those commitments. But they have plenty of projects, so it will be difficult."

Bad loans expected to weigh on banks

Bad loans are expected to be a drag on earnings in the third quarter for the UAE's banks, a sector widely viewed as a bellwether for the country's recovery from the global financial crisis.

While analysts expect better third-quarter profits at many of the country's banks, including Abu Dhabi Commercial Bank and National Bank of Abu Dhabi, they foresee declines for some of the biggest lenders, including Emirates NBD and First Gulf Bank. Emirates NBD, the biggest bank in the UAE, is expected to post a profit of about Dh804.3 million (US$238.2m) for the quarter, down from about Dh1 billion last year. Shuaa Capital in Dubai projects a 14.7 per cent increase in profit for the four banks it covers, while EFG-Hermes is projecting a 1.5 per cent overall decline in profits for the seven banks it covers.

"To ensure banks' levels of return, growth in lending in the fourth quarter is essential," said Sofia el Boury, an analyst at Shuaa. "This has to be combined with improvement in liquidity, control of funding costs and a slowdown in asset quality deterioration." Bad loans remain a central source of uncertainty. Banks are expected to book heavy provisions, or profits set aside as a buffer against bad loans, during the quarter to account for Dubai World's debt restructuring deal.

Shariah Money Markets Expand With Global Bills: Islamic Finance - BusinessWeek

The first global Shariah-compliant money-market securities may be sold early next year, providing Islamic banks with more opportunities to invest reserves and boost profits.

The bills to be issued by Kuala Lumpur-based International Islamic Liquidity Management Corp. will help improve investment across borders, according to an Oct. 7 statement from the Islamic Financial Services Board, a standard-setting body. The new organization will start selling the notes on a regular basis from “early next year,” Zeti Akhtar Aziz, Malaysia’s central bank governor, said in an interview in Washington on Oct. 10.

IFSB is stepping up its efforts to bolster money markets after Lehman Brothers Holdings Inc. went bankrupt in September 2008, causing a global credit crunch. Dubai World roiled markets last November seeking to delay payments on $24.9 billion of debt. The Shariah-compliant products will fill a hole in the $1 trillion industry, Shehzad Janab, head of asset management at Daman Investments PSC, said in an interview yesterday.

M&A reaches $15bn in Middle East - Arab News

The third quarter was the busiest period on record for Middle Eastern targeted merger and acquisition activity. According to Thomson Reuters Q3 Middle East Investment Banking Analysis, released on Sunday, Middle Eastern targeted M&A for Q3 reached $15 billion, 10 times the activity seen in the same quarter last year, and the busiest quarter on record.

Figures year to date reached $27 billion, the most active first nine months of the year on record. Telecommunications is the most targeted industry in the Middle East with $12 billion, 44 percent of the activity.

The Thomson Reuters report said Kuwait was the most acquired Middle Eastern country with $12.5 billion, 46 percent of the activity. United Arab Emirates is the most acquisitive Middle Eastern country for the first nine months of 2010 with 57.8 percent. Kuwaiti companies are the most attractive to Middle Eastern acquirers, with 37 percent of the activity.

Enter the emerging market goldfingers | beyondbrics |

Recent all-time highs have left investors wondering if the price of gold can keep on climbing. While concerns about the falling dollar and euro are big factors driving the price upwards, something more profound is also afoot.

Demand for gold is expanding in emerging markets such as India and China, and if that becomes permanent some are asking if this could shift prices into a higher trading range for good.

Earlier this year when China’s central bank move to liberalise the local gold market, allowing Chinese banks to trade the metal on the global market and advertise gold-related investment products for local individual investors, gold prices rose on the news.