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Tuesday, 23 November 2010

Korean conflict and Euro crisis hits Dubai stocks

Dubai stocks ended lower today as renewed hostilities between North and South Korea and concerns that the euro-crisis will spread beyond Ireland put pressure on stocks.

In a reverse of yesterday's positive gains, the Dubai Financial Market (DFM) fell 1.16 per cent to 1,691.48 points.

Meanwhile, the Abu Dhabi Securities Exchange Index gained 0.07 per cent to 2,755.81 points."

Prince Walid bin Talal Says He Owns 1% of G.M. - NYTimes.com

Prince Walid bin Talal of Saudi Arabia is known for his big bets on companies like Citigroup. Now it seems he is swinging for the fences with General Motors.

The prince said on Tuesday that his investment vehicle, Kingdom Holding, took a $500 million piece of the car maker’s initial public offering, representing a 1 percent stake of the company. He was one of several big investors G.M. and its advisers courted during the months-long I.P.O. process.

“We are confident that the current management of G.M. is able to deliver growth and profits over the coming years,” Ahmed Reda Halawani, Kingdom Holding’s executive director of private equity, said in a statement. “We will be able to achieve the expected return on this investment.”

Areva capital hike by year end on track-finmin official | Reuters

French nuclear reactor maker Areva (CEPFi.PA) is on track to raise capital by the end of the year, said an offical from the French Finance Ministry official.

The program will be rolled out in two phases with the sovereign funds of Qatar and Kuwait making the first investment and industrial players participating in a second round.

'We are in negotiations ...we are sticking to the timeline set out by the nuclear policy board, to have the deal tied up by the end of the year,' said Alexandre de Jugniac, chief of staff to French finance minister Christine Lagardere."

Gulf Stocks Movers: Industries Qatar and Saudi Basic Industries - Bloomberg

Qatar’s QE Index slumped 1.8 percent, the most since May 25, to 8,121.64 at the 12:30 p.m. close in Doha. Kuwait’s gauge dropped 0.7 percent and Dubai’s measure retreated 1.2 percent. Saudi Arabia’s Tadawul All Share Index lost 1.1 percent.

The following stocks gained or fell in the Gulf. Symbols are in parentheses.

Industries Qatar (IQCD QD) dropped the most since May 25, tumbling 3.3 percent to 126.7 riyals. Crude for January delivery retreated as much as 1.7 percent to $80.35 a barrel on the New York Mercantile Exchange. Industries Qatar is the second-biggest petrochemicals maker in the Middle East. Saudi Basic Industries Corp. (SABIC AB), the region’s biggest petrochemicals maker, declined 2 percent to 98.75 riyals, the lowest level since Nov. 3.

Dubai International Said to Offer Creditors 2% Rate on Loans - Bloomberg

Dubai International Capital LLC, a buyout company owned by the Emirate, is offering banks interest of about 2 percent on new loans as part of a $2.6 billion debt restructuring, two people with knowledge of the talks said.

The company is also asking its 26 creditor banks to extend loan maturities to five to six years to allow asset prices to recover, said the people, who declined to be identified as the discussions are private. Lenders are in turn seeking a guarantee from the government to make up any losses if money raised from the sale of Dubai International’s assets isn’t sufficient to repay the loan principal, the people said. An official at Dubai International Capital declined to comment.

Dubai International parent Dubai Holding LLC’s 4.75 percent bond due 2014 yields 11.9 percent today, according to data compiled by Bloomberg. Dubai International’s assets include stakes in budget hotel chain Travelodge Hotels Ltd., U.K.-based medical imaging company Alliance Medical Ltd. and Mauser AG, a German industrial packaging company.

FT.com / In depth - ‘It was right to call for a standstill’

Mohammed al-Shaibani, director of the court of Dubai’s ruler, Sheikh Mohammed bin Rashid al-Maktoum, speaks to the Financial Times. The interview was conducted by FT Editor Lionel Barber with Roula Khalaf, Middle East editor, and Simeon Kerr, the FT’s Dubai correspondent. Following and headline link above are exerpts from the interview.

Financial Times: Let’s start with what you think you’ve done a year on since the announcement that the government was requesting a standstill on debt repayment at Dubai World and what you think there’s still to do.

MS: We have to realise, we have to accept there are a lot of challenges in the whole process and there are still a lot of challenges on the way. So definitely, this is not a so called a cakewalk. The whole world is going through a lot of crisis. Each time we say things are, it’s over something comes up whether it’s government issues or company related issues. But looking back almost a year now we are more than, how can I say, confident that it was the right decision to call for a standstill and look at the situation of that company and come up with a more comprehensive specific plan that can meet all the requirements and also analyse all the complexities of that company.

Investing in the Gulf’s BlackBerry habit | beyondbrics: News and views on emerging markets | FT.com

In the Arab Gulf, it’s not just harassed businessmen who depend on BlackBerrys. Young people see the smartphones, and their social networking potential, as a way round conservative strictures. And the phone revolution doesn’t stop there: between 2007 and 2009, telecoms usage grew more in the Middle East (31.8-per-cent growth) than it did in Asia Pacific (23.6 per cent), according to independent research for the Middle East’s largest handset distributor, Axiom Telecom.

Axiom is hoping that all this can power its own initial public offering next month - the first new listing in the United Arab Emirates for two years. The company can point to a lucrative deal with BlackBerry-maker RIM. But even in the BlackBerry-loving Gulf, the margins are very tight.

Axiom Telecom will list 35 per cent of its shares on the Nasdaq Dubai in December. According to the prospectus, the group - owned by two family companies and troubled conglomerate Dubai Holding - has an agreement with RIM UK to source BlackBerry handsets direct from the manufacturer. The companies hopes that will double margins on smartphone sales, which are forecast to grow across the region by 41 per cent through 2014.

Qatar's QInvest named 'Sharia Fund of the Year' - bi-me.com

QInvest, Qatar’s leading investment bank, has won the prestigious ‘Sharia Fund of the Year’ award at the Global Investor Future of Capital Markets forum in Dubai.

Demonstrating its strong focus on product innovation, QInvest and joint venture partner ABN AMRO, (previously Fortis Bank Nederland) , won the ‘Sharia Fund of the Year’ award by successfully closing the US$75million financing for the first ever Sharia’a compliant Mezzanine Shipping Fund.

“The award expresses our commitment to contributing to the development of the Islamic financial services industry by offering innovative Sharia’a compliant investment solutions to our investors in the GCC region,” says QInvest’s CEO Shahzad Shahbaz.

Middle East telecoms: consolidating fast | beyondbrics: News and views on emerging markets | FT.com

Egyptian billionaire Naguib Sawiris and Qatar Telecom have agreed a neat $1.2bn telecoms deal in Tunisia that offers something to everybody involved, not least the Tunisian authorities who get to see foreign investors putting a chunky price tag on one of the country’s key assets.

Sawiris-controlled Orascom Telecom is selling its 50 per cent stake in Tunisiana, Tunisia’s biggest telecoms company, to QTel and a local partner, Princesse Holding, a conglomerate run by Mohamed Sakher El Materi, the son-in-law of Zine El Abidine Ben Ali, the Tunisian president.

Robin Wigglesworth and Andrew England report on ft.com that the deal is the latest move in the consolidation of the Middle East and North African telecoms market as larger groups - mainly state-owned Gulf operators - buy up smaller companies. For example, Etisalat, dominant United Arab Emirates operator, has recently conditionally agreed to buy a controlling stake in Kuwait’s Zain for $11.7bn.

Dubai’s debt crisis, one year later Mark Hulbert - MarketWatch

Sovereign debt crises are the Lord’s way of teaching geography to U.S. investors.

So goes the joke that has made the rounds in some circles. And, like most jokes, it has an element of truth.

After all, prior to Dubai’s debt crisis that erupted one year ago this week, how many investors in the United States would have been able to find Dubai on a map? And of those few who would have been able to, how many had an inkling that the financial woes at a previously unknown company called Dubai World would soon spread to Greece and then to other countries throughout Europe — in the process nearly bringing down the European Monetary Union and the financial markets in general?

Dubai readies for first IPO in two years | Business | The Guardian

Dubai is preparing the first initial public offering in the United Arab Emirates in two years, amid pressure from creditors to bolster its finances by selling assets.

A year after the kingdom shook the world's financial markets by saying that it might not be able to pay its debts, Dubai Holding, the state-owned conglomerate, will receive up to $110m (£69m) of much-needed cash from the flotation of Axiom Telecom. The mobile phone retailer has about 750 outlets in the Middle East and India – and one in the UK, in Knightsbridge.

Dubai Holding, which is ultimately controlled by the kingdom's ruler, Sheikh Mohammed bin Rashid al Maktoum, owns 40% of Axiom, which today announced plans to float next month at a value of up to $1.1bn.

Shariah Scholar on More Than 50 Boards Opposes Limit Plan: Islamic Finance - Bloomberg

Restricting the number of boards religious scholars are involved in would curb growth in the $1 trillion Islamic finance market, says a Bahraini scholar who advises Citigroup Inc. and HSBC Holdings Plc.

The Accounting & Auditing Organization for Islamic Financial Institutions, a Manama-based agency, said in August it’s considering guidelines on scholars owning shares in the institutions they serve and the number of advisory boards they can join, to reduce the risk of conflicts of interest. The top 20 scholars serve on 621 boards globally, said Zawya and Funds@Work AG, a Dubai-based research company.

“Capping the number of boards will be devastating to the industry’s growth,” Sheikh Nizam Yaquby, who was born in 1959, said in an interview in Beirut on Nov. 4. “Sometimes people ask me, are you Superman? How can you sit on so many boards? I tell them it’s hard work.”

FT.com / Middle East - Saudi labour reform runs into resistance

When, in August, L.T. Ariyawathi, a Sri Lankan maid, accused her Saudi employer of hammering nails and needles into her body, many ordinary Saudis as well as government officials were quick to question her account.

In spite of photographic evidence, some even accused Ms Ariyawathi of fabrication and blackmail.

This month, when reports surfaced of the alleged torture of Sumiati Binti Salan Mustapa, 23, in Medina, and the death of Kikim Komalasari, 36, in Abha, both Indonesian domestic workers, the reaction was slightly different.

Iran announces major oil find in Gulf, Iran Industries - Maktoob News

An Iranian state energy firm has announced a major discovery of around 34 billion barrels in associated oil reserves at an offshore gas field in the Gulf, official media reported on Monday.

A huge oil layer has been found in coastal waters near the southern port city of Bushehr, said Ali Vakili, managing director of Pars Oil and Gas Co, quoted by Iran's state-run television website.

"This is one of the biggest layers of oil in the country and it is under the reservoir of the Ferdowsi offshore gas field. We are currently drilling a well to accurately assess the volume of oil," he said.

MTV bets on growing Middle East audience | beyondbrics: News and views on emerging markets | FT.com

The Arab world has long embraced television with gusto, and international media conglomerates are now increasingly starting to eye the potential of a youthful and increasingly well-to-do market with more than 250m often sedentary inhabitants.

Viacom’s MTV Networks and MBC Group, the largest pan-Arab broadcaster, Sunday signed an agreement to distribute the former’s Nickelodeon content through the latter’s regional network.

Shows such as SpongeBob SquarePants, Dora the Explorer and My Life as a Teenage Robot will be “localised” - in other words translated into Arabic - and MBC will also gain the rights to develop local consumer products and programmes based on some of Nickolodeon’s shows. Bhavneet Singh, MTV’s emerging markets chief, said:

FT.com - Comment: the debate the UAE cannot ignore

It remains taboo to talk about granting citizenship to foreigners living in the United Arab Emirates.

Yet, given the small size of the national population – and its shrinking share compared with the total number of residents – the issue of giving foreigners a stake in the future of the country is bound to move up the agenda.

Ask officials today about the biggest dilemma they face as the government spends billions of dollars on a bold economic and social transformation of the country, and the likely answer is talent. The pool of talent is so shallow that virtually all top officials have to wear multiple hats, overseeing all sorts of unrelated companies and projects.