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Saturday, 27 November 2010

Saudi Shares Gain Most in Three Weeks on U.S. Jobless Data - Bloomberg

Saudi Arabian shares rose the most in almost three weeks as investors bet a larger-than-forecast decline in U.S. jobless claims signaled economic growth is gathering speed in the biggest crude-consuming nation.

The Tadawul All Share Index advanced 0.1 percent, the most since Nov. 9, to 6,298.89 at the 3:30 p.m. close in Riyadh. Leading the advance were Banque Saudi Fransi, the fourth-largest publicly traded lender in the kingdom, Etihad Etisalat Co., the second-biggest mobile-phone operator and Samba Financial Group, the No. 2 Saudi bank. Tadawul has gained 9.4 percent from this year’s low in May.

“Upbeat news on improving consumer sentiment and declining initial jobless claims out of the U.S. are lifting the Saudi market,” said Asim Bukhtiar, an equity analyst at Riyad Capital. “Employment numbers beat market expectations and point to encouraging ‘Black Friday’ sales, which should lift retail stocks.”

Saudi Aramco Renews $4 Billion Revolving Credit Line - Bloomberg

Saudi Aramco, the world’s largest state-owned oil company, said it renewed a $4 billion revolving credit facility with international and Saudi banks.

The five-year facility replaces a credit line from 2006, the Dhahran, Saudi Arabia-based company said in a statement on its website today. The facility includes a $2.5 billion tranche, of which $1 billion is a 364-day facility, and a $1.5 billion equivalent in riyals, according to the statement.

Saudi Aramco and Saudi Basic Industries Corp., the world’s largest petrochemical maker, are seeking financing as they expand their refining capacity and petrochemical production to diversify their economies away from exports of raw crude and to manufacture higher-margin products. Riyadh-based Saudi Basic sold $1 billion of five-year bonds last month.

Al Murjan's bankruptcy to blaze new UAE legal ground

Developer Al Murjan’s unprecedented move to file for bankruptcy will likely blaze new legal ground for the UAE, in a case that will be closely watched by thousands of investors in uncompleted projects.

Although there are federal laws covering bankruptcy, they have almost never been tested, legal experts say.

“A lot of it is cultural,” said James Farn, head of banking and finance in the Abu Dhabi office of UAE law firm Hadef & Partners. “There is a perceived stigma.”"

Wagon hitched to a runaway train

Abu Dhabi Commercial Bank's (ADCB) moves in structured investment products during 2006 and 2007 were part of a strategy that made the lender, owned by the Government, one of the region's most sophisticated investors and a key Middle Eastern partner for some of Wall Street's biggest firms.

But while buying into structured investment vehicles (SIVs) such as Cheyne Finance and Stanfield Victoria gave ADCB a portal into some of the most high-flying and hard-to-understand investments in the world, fallout from the credit crunch and sub-prime mortgage crisis in the US has turned the bank from one of the Gulf's most sophisticated investors into one of its most aggrieved.

In addition to SIVs, ADCB was exposed to the US mortgage crisis through collateralised debt obligations (CDOs), which packaged home loans and sold them to investors as securities. It also has one of the largest exposures among local banks to Dubai World, the Government conglomerate that recently reached a pact to restructure US$24.9 billion (Dh91.45bn) of debt.

grapeshisha: Dubai - this time last year...

It's been a year since the Dubai buckled, announced that they were in trouble and that there was way too much debt that they couldn't repay. In the words of who want's to be a millionaire - It needed a lifeline. In the end, Dubai phoned a friend - and the rest is history. But here we are one year on, and Dubai continues to feel pain. Last year, we talked about the Dubai Debt Damage and the Double Dip. That double dip didn't transpire, but let's face facts. The world is in trouble. Dublin got a bailout, and more European countries will follow.

The Dubai headlines of the tail end of 2009 were as notorious as the Lehman crash - and indeed stockmarkets plunged - but it is now etched in history as the end of excess. Dubai, today, is a different place to 10 years ago. For years, people couldn't understand how Dubai was sustaining itself. There were talks of bubbles, and then the bubble burst.

But Dubai continues to run. It may be a city without the occupancy, but the heart still beats, but may just a little fainter. Dubai didn't quite get where it wanted to be. It sprinted as hard as it could, and ultimately didn't reach the finish line. And all the time, in the background chugged Abu Dhabi. And, as with the fable - slow and steady wins the race. Dubai was not all conquering, but it still is an amazing achievement - a modern metropolis, built out of sand.