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Sunday, 5 December 2010

Areva capital raising likely within days-minister | Reuters

French Industry Minister Eric Besson said on Sunday that the first phase of a capital raising for French nuclear reactor builder Areva (CEPFi.PA) was 'imminent' and likely to take place within hours or days.

The Journal du Dimanche newspaper reported on Saturday that the first phase of the capital raising, involving the Kuwait Investment Authority, could be announced as early as this weekend as a delay could complicate the deal.

'As for the first phase of the deal, it is imminent,' Besson said on Europe 1 radio. 'I am unable to tell you whether that means in the coming hours or the coming days.'

GCC Market Analytics: GCC Indices: Year-to-Date Performances

As the chart below shows, the Qatar market is way out front with just one month of the year remaining. With a current year-to-date return of 17% the QE Index is outperforming the other GCC markets by some margin.

Now that Qatar has won the bid to host the 2022 World Cup it will be interesting to see how that market finishes the year.

After its recent surge the Dubai market fell back during November and will have to put in a strong performance in December to having any chance of achieving a positive return for 2010. For the other markets it will be a photo finish to see who finishes in the black or red this year.

Zambia urges Gulf investment in farm sector | Reuters

Zambia does not regard leasing farmland to foreign investors as a form of 'colonialism' and is encouraging Gulf countries to invest in its agricultural sector, its finance minister said on Saturday.

Foreign acquisitions of agricultural land in developing nations have provoked opposition among indigenous farmers and led the United Nations to voice concern over the lack of agreed guidelines to protect farmers rights.

But investors and governments in developing countries say that such deals usher in a 'win-win' situation by boosting food security for all parties involved.

UAE hopes to rejoin Gulf single currency, UAE Economy - Maktoob News

The United Arab Emirates hopes it and Oman will rejoin a planned Gulf single currency project one day, UAE economy minister was quoted as saying by a Saudi newspaper on Sunday, ahead of a Gulf rulers summit this week.

Rulers from Gulf Arab countries will meet in UAE capital Abu Dhabi on Dec. 6-7 to discuss political, security and financial issues affecting the world's top oil exporting region.

'The Emirates still hope that there will be a single currency for the countries of the (Gulf Cooperation) Council one day,' Sultan bin Saeed al-Mansouri told Saudi newspaper Al-Eqtisadiah.

Qatar Shares Surge to Two-Year High on Winning World Cup Bid; Barwa Jumps - Bloomberg

Qatar’s shares rose to the highest in two years, after the country won rights to host soccer’s 2022 World Cup, becoming the first Arab nation to hold the world’s most-watched sporting event.

Qatar National Bank, the emirate’s biggest lender by assets, climbed to the highest in more than five years. Barwa Real Estate Co., Qatar’s largest publicly traded property developer by assets, gained 6.2 percent. The QE Index rose 3.6 percent to 8477.32 at the 12:30 p.m. close in Doha, the highest since October 2008, after 19 shares advanced and one declined.

“Sentiment is understandably flying extremely high,” said Akber Khan, a director at Al Rayan Investment in Doha. “There will be a material impact on some companies as the government fast-tracks billions of dollars of spending. Banks, real estate and construction-related names would be among the key beneficiaries.”

Bid win may prod firms to go public

Qatar’s win in the 2022 bid is likely to inspire many family and private shareholding companies here to go public in a bid to mobilise capital since more liquidity is expected to flow into the national bourse.

According to sources in the private sector, some companies have already begun thinking in terms of seeking listing on Qatar Exchange (QE), the local bourse.

Sources indicate that the bourse management and the representative body of the private sector (the Qatar Chamber of Commerce and Industry) already have a tie-up to encourage and assist private firms keen on tapping public funds for expansion and growth, to go public.

gulfnews : Emirates counters subsidy allegations

Emirates airline has fired back at critics who claim its rise to become the world's largest carrier of international passengers is underpinned by unfair government subsidies for its fast-growing fleet of aircraft.

The Dubai-based carrier last week accused the Air Transport Association of America of making "misleading and false" statements about the benefits of export credit support, which is provided to support sales of aircraft from companies such as Airbus and Boeing.

"We believe airlines should have open access to financing," Tim Clark, Emirates president, said in a letter to James May, head of the ATA.

MSCI Barra ends its listing of UNB

Flagging investor interest in local markets has led to Union National Bank (UNB) being dropped from MSCI Barra's UAE index, a move that could spell trouble for the Emirates's attempts to be listed as an emerging market.

From this month, the bank will cease to be included on the MSCI indexes used as a benchmark by regional and international asset managers when allocating funds.

'At the time of the November 2010 Semi-Annual Index Review, Union National Bank of Abu Dhabi did not meet the necessary liquidity requirements and consequently was deleted from the MSCI Global Standard Indices,' a spokesman for MSCI said.

Hamad bin Khalifa Al-Thani: Ambitious emir's World Cup win| Ian Black | From the Observer | The Observer

Hamad bin Khalifa Al-Thani is a big man, whether wearing a business suit or the flowing robes of a traditional Gulf ruler, and he wore his very broadest smile in Zurich on Thursday when Qatar won its quest for the 2022 World Cup – a crowning achievement for one of the world's smallest, richest and hottest countries.

TV footage of the big moment captured the emir's delight – and his warm hug with his son Sheikh Mohammed, who headed the Qatari bid. On hand too, equally pleased, was his consort Sheikha Mozah, elegant and stylish in purple silk, who embraced her son and husband before mounting the podium with them to accept the golden trophy.

Qatar, it is widely agreed, tackled its two-year campaign to persuade Fifa of its merits with the same flair and determination it has shown in translating its enormous wealth into a unique brand – an Arab statelet in one of the world's most volatile regions but one with global ambitions and a hard-headed sense of political and economic realities.

Insolvency laws 'need overhaul'

When the company Gary Bell worked for in Dubai faltered last year, he came face to face with the legal system's endemic uncertainties.

Recovering lost wages was a drawn-out battle and it was not immediately clear whether he and his colleagues could force the company to pay back suppliers and employees through bankruptcy proceedings.

'The bankruptcy laws need to be reviewed and the existing ones enforced,' he said. 'Directors, staff, suppliers, consultants should be aware that if they get into financial difficulty … the laws will not be used to protect them no matter whether they owe or are owed monies. This is the reality of Dubai.'"

GCC Market Analytics: December Seasonality

October and November, historically the weakest two months of the year for GCC equity markets, are now behind us. October managed to buck the seasonal headwinds with all markets apart from Saudi rising in value. November, however, conformed to historical tendencies with most markets falling in value.

Going into December there doesn't appear to be any prominent seasonal tendencies. Apart from the Qatar market that is. As can be seen in the chart below, the average daily change for the QE Index in December is nearly 0.40%. That's the largest historical average daily return of any market for any month.

[ Click to enlarge ]
In fact, as the chart below shows, if you had only invested in the Qatar market during the month of December from 2004 to 2009 and sat out the other eleven months of the year, you would have made a cumulative return of 47%. That's pretty good given that a buy and hold strategy would have returned just 29% over the same time period.

So, the historical tendency for the Qatar market to rise in value during December has been pretty strong. However, a word of caution. We're dealing with a very small data sample when it comes to testing seasonality (my data goes back to the beginning of 2004). So, these results should be taken with more than a pinch of salt.

That said, with the Qatar market displaying such strong performance over the last six months, plus the recent 2022 World Cup announcement, it'll be interesting to see if the bullish December tendencies materialise this year.

GCC Market Analytics: November Large Cap Monitor

The big large cap winners in November were Industries Qatar (+10.61%), Taqa (+7.80%) and Bank Muscat (+6.90%).

The biggest fallers were both in the Dubai market with DFM losing 12.64% and Dubai Islamic Bank declining by 8.33%.

GCC Market Analytics: November GCC Index Review

Historically, November has been a poor month for GCC equity markets and this year was no different. Five of the seven GCC indices fell during November with Dubai and Abu Dhabi posting the biggest losses. The Muscat 30 Index managed to eek out a small gain for the month but the only significant gainer was the QE Index, rising 4.44%.

The Qatar market has been the stand out performer in 2010 with the QE Index now up 17% for the year. With Thursday's announcement that Qatar will host the 2022 World Cup it will be interesting to see how that market finishes 2010. Will it rally into the year end on the back of this news? Or is it a a case of "buy the rumour, sell the news" for the Qatar market?

Volume across the GCC markets in November was generally lower than in October. However, the low volume can be attributed to the Eid holiday which kept markets closed for a week during the middle of November.

[ Click to enlarge ]

GCC Market Analytics: Weekly Market Analysis (Week 49)

The weekly market analysis pages have been updated for trading week 49 (December 5th - December 9th). Use the links below to view the individual market analysis pages:

The table below shows the market outlook based on each study.

Visit the links above to view the full analysis reports for all GCC markets.