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Tuesday, 9 November 2010

Deal of the day: Iranian company buys troubled Daewoo Electronics | beyondbrics: News and views on emerging markets |

Foreign acquisitions by Iranian companies are the rarest of M&A beasts. But Iranian white-goods distributor Entekhab Industrial is set to buy South Korea’s troubled Daewoo Electronics for $520m. The move is likely to raise eyebrows in the US, where Iran’s foreign trade is viewed with suspicion.

However, for Daewoo’s creditors, Entekhab’s arrival offers a welcome exit - eleven years, three failed purchase attempts and 1,500 employee redundancies after the Daewoo conglomerate collapsed under the weight of its debts. According to mergermarket data, the deal is the first since at least 2004 where a Middle Eastern company has bought a Korean counterpart.

Despite its domestic turmoil, Daewoo has remained a premium brand in Middle East, and Entekhab, the major distributor of its Daewoo products in the Middle East, hopes to increase sales in Turkey, north Africa, and eastern Europe.

Abraaj Capital to invest $28 mln in 5 start-ups | Reuters

Dubai-based private equity firm Abraaj Capital is to invest $28 million in five start-up companies as part of its $500 million investment fund for small and medium-sized enterprises, the company said on Tuesday.

The investments - the first for the Riyada Enterprise Development fund - covers sectors from healthcare to agricultural businesses, Managing Director Tom Speechley told Reuters on the sidelines of a conference on entrepreneurship.

The companies are based in Egypt, Kuwait and Jordan, Speechley said."

A quick fix won't do for Dubai property recovery: survey | My Sinchew

A holistic and coordinated approach is needed to enhance the opportunity for Dubai's real estate market recovery, according to a report.

"A quick fix is not likely to succeed and a targeted group of stimuli is required while a coordinated medium to long-term plan should be implemented across the market," leading United Arab Emirates' law firm, Hadef & Partners said in its report on the legal state of the real estate market in this Gulf emirate.

These were some of the key themes emerging from a survey conducted by the firm which had identified actions that could be considered to address key issues with the aim of assisting the market's recovery.

U.A.E. Stocks Rise as Aldar in Talks With Abu Dhabi Government for Funds - Bloomberg

United Arab Emirates shares rose, led by real-estate companies, as Abu Dhabi’s Aldar Properties PJSC said it is in talks with the government for funding. Dubai’s index climbed the most this month, while Kuwait stocks fell.

Aldar, the capital’s biggest developer, climbed 3.2 percent, lifting the ADX General Index 0.2 percent to 2,755.3. Emaar Properties PJSC, builder of the world’s tallest skyscraper, led the gain in Dubai after shareholders approved a $500 million convertible notes issue. The DFM General Index advanced 1.3 percent, the most since Oct. 28, to 1,715.68 at the 2 p.m. close in the emirate. Kuwait’s index lost 1 percent.

Investors are optimistic as “the market is now expecting that Aldar will get some non dilutive support given their announcement of explicit talks with the government,” said Shehzad Janab, head of asset management at Dubai-based Daman Investments PSC. “When Aldar moves up, it drags other real- estate names in the U.A.E.”

Qatar's Emir Says Government Putting Together Plan to Raise Credit Rating - Bloomberg

Qatari Emir Sheikh Hamad bin Khalifa Al Thani said the government is putting together a plan to raise the country’s credit rating. The government is working on “a comprehensive plan to raise the credit rating to the level of advanced industrial countries,” Sheikh Hamad said in remarks broadcast on Al-Jazeera television.

Aldar Gains Most in 6 Weeks in Abu Dhabi on Government Funding Speculation - Bloomberg

Aldar Properties PJSC climbed the most in six weeks on speculation that Abu Dhabi’s biggest developer will secure government funding after posting its biggest quarterly loss on record.

The shares rose 3.2 percent at 2.29 dirhams in Abu Dhabi, the most since Sept. 26. Aldar expects to reach a “framework” agreement with the state on “cash requirements” by the end of the year, it said in a statement today.

Abu Dhabi’s government aided Aldar earlier this year when it agreed to buy assets on the Yas Island leisure resort from the developer for 9.14 billion dirhams ($2.49 billion). The company, 19.2 percent-owned by state-backed investor Mubadala Development Co., has been hurt by slumping sales, falling asset values and about 26 billion dirhams of outstanding debt.

WAM | Sharjah to have national oil firm

H. H. Dr Sheikh Sultan bin Mohammed Al Qasimi, Supreme Council member and Ruler of Sharjah, has issued emiri decree no 52 of 2010 establishing the Sharjah National Oil Corporation (SNOC).

The new state-owned oil entity shall have a corporate character and full-fledged competence in discharging necessary legal actions to carry out its businesses towards realisation of the aspired goals for which it was set for. The corporation shall enjoy financial and administrative independence and practice its operations on commercial bases. With its headquarters in Sharjah, the company may open branches inside or outside the emirate of Sharjah.

The decree defines the functions of the corporation in the following specialistions of exploration, discovery, extraction, engineering operations and construction, maintenance, training, transportation , distribution, refining, storage, buying, selling, swapping, production, reception and delivery of hydrocarbon products. The company may also invest in firms and facilities having the similar objectives.

Jazeera Rises to 5-Month High in Kuwait as Quarterly Profit Surges Sixfold - Bloomberg

Jazeera Airways KSC rallied to the highest in almost five months after the Kuwaiti low-cost airline reported an almost sixfold increase in third-quarter profit.

The shares gained 8.8 percent to 124 fils, the highest intraday level since June 13, as of 10:27 a.m. in Kuwait City.

Net income increased to 4.4 million dinars ($15.7 million) from 762,745 dinars in the year-earlier period. The company is confident of sustaining profit in 2011 and beyond, Chairman Marwan Boodai said.


Clear Capital released their monthly Home Data Index Report today and it showed continued deterioration in national home prices. Prices are now off -6.8% from their August peak. It looks to me like the housing double dip is here and Ben Bernanke rolled out QE2 just in time to prepare for massive MBS purchases in 2011 when the banks hit another rough patch (via MarketWire):

UAE'S Aldar in Q3 loss, in talks to boost cash | Reuters

Abu Dhabi's Aldar Properties (ALDR.AD) reported a loss of 731 million dirhams ($199 million) for the June-September quarter, adding that it was in final talks with the Abu Dhabi government over a much-needed cash injection.

Net loss, according to Reuters calculations based on nine-month figures issued on Tuesday, was the fourth consecutive quarter in the red for the developer. It was worse than analysts had forecast for a loss of 231 million dirhams according to a Reuters poll.

Aldar said in a statement it was in the 'final stages of discussion with Abu Dhabi government regarding cash requirements.'"

Arabian investors have more faith in gold and silver than local stocks � ArabianMoney

Yesterday local Arabian stock markets sold off and overnight gold and silver prices rose sharply as investors appear to have concluded that after QE2, and more Fed money printing to come, precious metals are the no-brainer investment.

There could still be pull backs in precious metal prices, particularly if global markets continue to sell off as they did yesterday. As ArabianMoney forecast last week QE2 to some extent means that all the good news is now reflected in equity prices and there is a question mark over what might take them higher, or whether the Fed will want to drive them higher.

gulfnews : Most investors to stay put in Dubai

Just over 80 per cent of investors in Dubai are planning to either maintain or increase their investments in the emirate, according to a recent report by the Foreign Investment Office (FIO).

Of these, 26 per cent will increase their investments here, according to the report titled "Dubai: The Foreign Direct Investment destination of choice."

"The general rule that the current investor is essential to future investment flows appears to hold true in Dubai. This is especially important in times of global turbulence when many investors seek new opportunities," said Fahd Al Gergawi, CEO of FIO.

gulfnews : Emaar to allow foreigners as board members

Shareholders of Emaar Properties yesterday approved a resolution to allow foreigners to become board members — a shift in its corporate policy that analysts say reflects its readiness to strengthen corporate governance.

The new articles stipulate that a majority of board members will be Emiratis. It is, however, unclear how many foreigners will be inducted onto the board.

"Legally it was possible even earlier. However, with the resolution, it means that the company is ready to take corporate governance to the next level," said investment adviser Raju Menon, managing partner of Morison Menon Chartered Accountant.

French Government Said to Seek Areva Financing Accord This Week - Bloomberg

The French government is seeking commitments fromMitsubishi Heavy Industries Ltd. and the sovereign funds of Qatar and Kuwait to buy new shares in nuclear company Areva SA by the time the Areva board meets on Nov. 16, two people with direct knowledge of the talks said.

The state, owner of 91 percent of Areva, may sell shares in two stages to avoid a delay into 2011, said one of the people, who requested anonymity because talks are private. The sale to sovereign wealth funds may take place this year, while a deal with industrial partners may not happen until 2011 because talks about cooperation are more complex, the person said.

Areva Chief Executive Officer Anne Lauvergeon has been pushing for the capital increase to help fund spending on plants and uranium mines. The company, whose finances have been hurt by construction cost overruns at a reactor in Finland, is seeking to fend off competition and sell more reactors and fuel in Europe, China and India.

Commercial Bank of Dubai sees higher full-year profit - Arab News

Commercial Bank of Dubai will post an increase in full-year net profit, as the lender focuses on family-owned businesses in the UAE and growing its Islamic finance business, the firm’s chief executive said on Monday.

“Full-year profit will probably a bit better than last year,” Peter Baltussen told Reuters on the sidelines of a business conference.

Baltussen said wants to increase its Islamic finance operations - currently just above 10 percent of the bank’s deposits are in held in its Islamic finance business, a number the bank wants to increase to 30 percent after five years.

Global Arab Network | UAE: Fitch Rates Ras Al Khaimah's 15 Billion Yen bonds at A | Finance

Fitch Ratings has assigned the Emirate of Ras Al Khaimah's (RAK) ('A'/Stable/'F1') two recent yen bond issues a Long-term 'A' rating, reports Global Arab Network according to a press release.

The bonds - JPY10bn 3.77% maturing in 2040 and JPY5bn 3.58% maturing in 2030 - can be called by the issuer after 10 years.

The bond issues should be seen in the context of RAK's current debt reduction and debt management strategy. This new issuance will be partly used to replace more expensive debt, including debt of other public sector entities guaranteed by RAK.

Gulf Daily News � Local News � Business help for women...

BUSINESS incubators, specifically designed to help female entrepreneurs, are being set up in Bahrain. Officials hope to begin construction of the units next year and will have 39 up and running by 2012.

Details of the project were announced during the opening of the first national conference for Bahraini women at the Sheraton Hotel yesterday.

Al Khaleej Development Company (Tameer) chief executive officer and Labour Market Regulatory Authority board member Dr Khalid Mohammed Abdulla said the Bahrain Development Bank and Supreme Council for Women (SCW) were working on the scheme. / Middle East - Oman Air invests for tourism growth

Last month marked the 25th anniversary of the creation of Emirates airline, then a jumped-up operation founded by Dubai to compete with Gulf Air, the regional champion.

“It was a fantastic experience,” says Peter Hill, one of six original executives who worked at Emirates for more than a decade before moving on to head Sri Lankan airways for nine years.

Now the aviation veteran has returned to the Gulf as chief executive of Oman Air, and is responsible for nurturing one of the region’s more low-profile actors. / Middle East - Kuwait airlines feel heat of competition

Fly to Dubai for KD8 ($28) or spend another KD10 and holiday in Beirut. For the price of a dinner for two, Kuwait’s consumers can choose from a buffet of airline deals, steals and packages.

Although the choices and the prices are good news for consumers, the competition has had a devastating impact on Kuwait’s infant private aviation sector.

Until five years ago, state-owned Kuwait Airways held a domestic monopoly on air travel from the emirate of 3.5m people.