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Tuesday, 7 December 2010

Dubai Needs 2.5 Million More Tourists to Match Hotel Growth, Deloitte Says - Bloomberg

Dubai will need to attract an additional 2.5 million tourists annually to absorb an estimated 60 percent increase in hotel rooms over the next five years, Deloitte LLP said.

Dubai, which has around 50,000 rooms, may struggle to maintain occupancy and rates as a further 30,000 rooms are likely to be added, said Alex Kyriakidis, the New York-based consulting company’s global managing director of Tourism, Hospitality & Leisure.

The sheikhdom has spent billions of dollars to transform itself into an international tourist destination. It built the sail-shaped Burj Al Arab hotel and opened a 160-room hotel designed by Giorgio Armani in the Burj Khalifa, the world’s tallest tower. Horserace complex Meydan and Dubai Mall are also among the attractions that have been built.

Sainsbury shares rise on renewed Qatari bid talk | Reuters

Shares in British grocer J Sainsbury (SBRY.L) jumped as much as 5.5 percent on Tuesday, with traders citing renewed speculation that top shareholder Qatar Holding might look at a takeover bid.

'Hearing talk of Qataris bidding 450 pence (per share) for Sainsbury,' said one trader.

Sainsbury and Qatar Holding, which owns about 26 percent of Britain's third-biggest supermarket group following a failed takeover attempt in 2007, said they never comment on rumor and speculation.

Gulf Stocks Movers: Commercial Bank of Qatar and Qatar National - Bloomberg

Qatar’s QE Index rose 1.1 percent to 8,625.42, the highest level since October 2008, at the 12:30 p.m. close in Doha. The Dubai Financial Market General Index increased 0.6 percent.

Dubai to cancel many property projects in 2011-report, UAE Industries - Maktoob News

Dubai will cancel next year several projects that look unlikely to ever be finished, the head of the emirate's real estate watchdog was quoted as saying on Tuesday.

"You will see a lot of cancellations (in 2011) for projects that have no benefit for Dubai or for the investor," Marwan bin Ghalaita, chief exeutive of the Real Estate Regulatory Authority (RERA), told Arabian Business.

Ghalaita said RERA had cancelled 115 projects that existed only as architects' drawings since the financial downturn, but "less than ten" projects upon which construction had started.

Axiom axes $1bn Dubai IPO as market outlook poor « ArabianMoney

The first IPO scheduled in Dubai since the financial crisis two years ago was cancelled on Monday due to worries about ‘market conditions and liquidity’, in other words investors might have lost money.
A statement from Axiom said: ‘While there were sufficient orders to fully cover the IPO book at the price range, primarily due to demand from high quality international investors in Europe and the US, there were widespread concerns about market conditions and liquidity’.
This is probably the right decision. With storm clouds brewing in European financial markets and concern over a bubble forming in China, the immediate outlook for the Nasdaq Dubai bourse is most likely a correction from its post-Ramadan rally.
That would have left the new shareholders will a loss and have endangered future Dubai IPOs. But the cancellation of a $1billion IPO is hardly a bullish signal in any financial market.
It is not as though the fault is down to Axiom which presented a credible business model for selling mobile handsets, and was planning to pay down $354 in debt with the proceeds. The fault is with a lack confidence about the future direction of local stocks.

GCC Market Analytics: Qatar Stocks: Relative Strength Rankings

Qatar is where it's all happening at the moment so I thought I'd do a couple of posts looking into what stocks are leading the way in that market.

This post focuses on relative strength. The table below ranks each Qatar stock by the relative strength of its price action over three time periods: 20, 50 and 100 days.

For each stock there are three colour spectrums corresponding to each time period. When the black diamond is at the green end of the spectrum this indicates that the current price of the stock is towards the upper end of its trading range over a particular time period. When the black diamond is at the red end of the spectrum this indicates that the stock is towards the lower end of its trading range.

As you would expect from a market that has performed so strongly over the past six months there are a number of stocks that are displaying very strong relative strength over the all three time periods (the highest ranked stocks in the table below).

That said, there are also a number of stocks that are displaying quite week relative strength. So, even in a hot market such as Qatar there are still leaders and laggards.

In the next post I'll take a quick look at what stocks have performed best on a absolute basis, i.e. which Qatar stocks have risen the most so far this year.

GCC Market Analytics: A Quick Look at the US Employment Situation

Below is a chart (via Calculated Risk blog) comparing all post WWII employment recessions in the US.

The current employment recession (red line) stands out in both its severity and duration. The number of jobs lost (about -6% from the peak employment rate at the lowest point) is greater than any post WWII employment decline. And if that wasn't bad enough the current employment recession has already lasted longer than all but one other post WWII employment decline (and is on track to be longer than that one as well).

US employment recessions
[ click to enlarge ]
And all of this is despite the truly massive amounts of money the Fed has been throwing at the US economy over the past two years (in an interview this weekend Ben Bernake said unemployment could have reached 25% withouut the US Central Bank's intervention).

The point here is that the current employment situation in the US and, for that matter, the wider economic situation doesn't conform to a typical post WWII slowdown. Beware of analysis and economic predictions that assumes we are. / Companies / Banks - Dubai boost for boutique bankers

The restructurings of Dubai’s state conglomerates have been painful for many banks but have provided a seam of work for independent advice-focused banks and boutiques .

Several have opened full offices in the Gulf even as big US and European investment banks, which swamped the region with bankers in the years preceding the financial crisis, struggle to find enough work.

Dubai World , the largest and most troubled of the emirate’s conglomerates, has been advised by Rothschild while the government has been advised by Moelis & Company, a firm set up by Ken Moelis, a former UBS veteran, in 2007.

gulfnews : Emirates NBD settles bonds

Emirates NBD, the UAE's largest bank by assets, yesterday announced full settlement of $750 million (Dh2.76 billion) tier 1 notes (bonds) that are due to mature this year.

The full payment to the bondholders means that the bank has met most of its Dh3.017 billion debt obligations maturing this year.

Following the announcement of the third quarter results, Rick Pudner, chief executive of Emirates NBD told reporters that the bank's debt maturity profile is well within its funding capacity.

Analysts query state of Zain's Saudi unit

Etisalat's pursuit of a 46 per cent stake in Zain has raised questions over the future of Zain's Saudi unit, analysts say.

Etisalat and Zain have units in the kingdom and compete for market share.

'The question that remains is what happens to Zain Saudi if this deal goes through,' said Farouk Miah, an analyst at NCB Capital in Riyadh.

Al Gosaibi vs Maan al Sanea: this one will run and run

It began in May last year but shows no sign of reaching any imminent conclusion. A resolution often appears further away than ever.

I refer, of course, to one of the Middle East's longest-running and most convoluted business disputes, the confrontation between the al Gosaibi family of Saudi Arabia and their erstwhile favourite son-in-law, Maan al Sanea.

It is becoming a saga worthy of a Tolstoyan treatment, with sub-plots and minor characters appearing briefly, flickering for a few weeks and then falling back within the main drama. It certainly requires one of those lists of dramatis personae the Russian novelist went in for, with a cast running into the hundreds. War and Peace, except there is no sign of peace on the horizon.

Saudi business conditions improve - Arab News

The Saudi British Bank (SABB) has published the results of the headline SABB HSBC Saudi Arabia Purchasing Managers' Index (PMI) for November 2010 — a monthly report issued by the bank and HSBC.

It reflects the economic performance of Saudi Arabian nonoil producing private sector companies and firms through the monitoring of a number of variables, including output, new orders, exports, input prices, output prices, quantity of purchases, stocks and employment.

The headline index climbed to 62.2 in November — its highest level to date — up from 59.9 in October. The reading signaled another sharp improvement in the health of Saudi Arabia's nonoil private sector economy.

Qatar 2022 Soccer World Cup Plan to Boost Banks, Moody’s Says - Bloomberg

Qatar will spend about $57 billion over the next decade on infrastructure including stadiums to support the soccer World Cup in 2022, which will boost lending at the country’s banks, Moody’s Investors Service said.

“We expect all Qatari banks to benefit from stronger economic activity and higher credit demand over the next 12 years,” Moody’s analyst Elena Panayiotou said in a report e- mailed today. The spending will create long-term business growth opportunities for the banks and “enhance franchise development in their domestic market,” she said.

The country plans to spend $4 billion on the stadium construction and refurbishment program. A new 200,000-population city called Lusail, north of the capital, is scheduled to be built over the next decade and will feature the stadium that hosts the World Cup final. Qatar expects to construct a rail and metro network, costing more than $25 billion, in Doha and extending to cities outside the capital.

Factbox: Qatar's construction plan for the World Cup | Reuters

Qatar on Thursday won the right to host the World Cup finals in 2022, the first time the world's largest soccer tournament will be held in an Arab country.

Doubts linger over whether Qatar will be able to handle an influx of about 400,000 fans, plus the 32 competing teams and a huge media presence.

To ease concerns about a lack of infrastructure, Qatar is looking to spend some $100 billion over the next five years, according to some estimates.

Axiom cancels IPO, Nasdaq Dubai listing -statement | Reuters

Axiom has cancelled its initial public offering and its plans to list on NASDAQ Dubai, the company said on Monday, citing market conditions.

'While there were sufficient orders to fully cover the IPO book at the price range, primarily due to demand from high quality international investors in Europe and the U.S., there were widespread concerns about market conditions and liquidity,' a company statement said.

'The board has therefore decided to withdraw the offer at this juncture to protect current and future shareholders of Axiom,' it said, adding that plans to list on NASDAQ Dubai were also cancelled. / Middle East - Saudi changes attract drug companies

A confluence of strengthened patent protection and increased healthcare spending means that international drug companies are moving to expand in Saudi Arabia to tap what is the Gulf’s biggest pharmaceutical market.

But, with a lengthy and complicated drug licensing process and foreign ownership restrictions, overseas companies are forced to form partnerships with local drugmakers to guarantee that their products are legal and marketed, experts say.

For example Merck, the pharmaceutical company now known as MSD outside the US and Canada, signed a five-year licence agreement in October with Spimaco, a leading Saudi pharmaceuticals company, to commercialise and manufacture its products.

SWFs set their sights on Brazil | beyondbrics: News and views on emerging markets |

Like everyone else, sovereign wealth funds are turning their eyes - and their considerable capital - to emerging markets. Today brought news that a consortium of funds is investing$1.8bn in fresh capital into BTG Pactual, the independent Brazilian investment bank.

The deal “a sign of a new financial order”, according to Pactual chief Andre Esteves, and is the funds’ first big move into Brazil in particular and Latin America in general. The FT’s Patrick Jenkins and Jonathan Wheatley report:

The investment – by nine funds, including Singapore’s GIC, China’s CIC and the Abu Dhabi Investment Council – marks the biggest ever sovereign wealth fund commitment in Brazil and underlines the shift in the funds’ focus away from western economies and towards emerging markets. / Comment - Qatar faces long road to 2022 in media glare

“Today we celebrate, but tomorrow, the work begins,” Sheikh Mohammed bin Hamad Al-Thani, the chairman of Qatar’s bid team, said as thousands of his countrymen danced in Doha’s packed streets.

In that one short sentence Sheikh Mohammed succinctly caught the mood after Fifa, football’s global governing body, shocked many by awarding his nation the right to host the 2022 World Cup.

The celebrations went on through the weekend as cables of congratulations arrived in Doha from across the globe.