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Saturday, 11 December 2010

AFP: Kuwait's Global completes first year debt repayment

Kuwait's Global Investment House said on Saturday it has completed repayment of first year commitments under a restructuring plan for a 1.725-billion-dollar debt.

The agreement, signed by Global a year ago, requires the company to repay 10 percent of the principal debt, or 172.5 million dollars, in the first year, besides interest.

'The company has now repaid a total of 178.3 million dollars which is 5.8 million dollars in excess of the agreed repayments due in the first year,' Global said in a statement.

R10bn Waterfront sale denied - Western Cape - IOL | Breaking News | South Africa News | World News | Sport | Business | Entertainment | IOL.co.za

The companies said to be involved in the purchase for R10 billion of one of the country’s most sought-after properties, the V&A Waterfront, have denied any involvement.

Yesterday the Mail & Guardian website reported that a consortium including property manager Growthpoint, banking giant Absa and the Public Investment Corporation had bought the tourist destination.

The site quoted two people who had apparently been briefed on the transaction. One of the two said: “The deal has been under discussion for ages, but it was signed off today (Friday)”.

Saudi Arabian Shares Rise After Naimi Says OPEC Doesn't Need Output Boost - Bloomberg

Saudi Arabian shares rose to the highest level in a month as the world’s largest oil producer said there is no need for an output increase at an OPEC meeting later in the day.

Saudi Basic Industries Corp., the largest petrochemical maker, Sahara Petrochemical Co. and Saudi Kayan Petrochemical Co. paced the rally. The 146-company Tadawul All Share Index rose 0.2 percent to 6,467.8, the highest since Nov. 10, at 12:46 p.m. in Riyadh.

“Investors are feeling good about the performance of the oil markets lately, with seemingly no desire by OPEC and the Saudis to raise current output levels,” said Amro Halwani, a trader at Shuaa Capital PSC in Riyadh.

Saudi Arabian Oil Minister Al-Naimi Says No Need for OPEC Output Increase - Bloomberg

Saudi Arabian Oil Minister Ali al- Naimi said there is no need for an oil production increase at a meeting of the Organization of Petroleum Exporting Countries later today.

OPEC, which supplies about 40 percent of the world’s oil, hasn’t changed quotas since late 2008, when it announced the biggest-ever reduction in output as global demand collapsed.

Crude oil rose 3.3 percent last month on the New York Mercantile Exchange and exceeded $90 a barrel on Dec. 7 for the first time in more than two years.

Is the Saudi Stock Market Winding Up for a Big Move? — Saudi Analysis — GCC Market Analytics

Over the past six or seven months the Saudi Tadawul Index has been trading in an ever narrowing range (see chart below). This type of price action is what's called a consolidation pattern.

A consolidation pattern can be likened to a tightly coiled spring. When prices eventually breakout from a consolidation pattern they tend to make extended and often explosive directional moves.

As you can see, index levels for the Saudi market have been coiling for several months now. So is a price breakout imminent?


Saudi Stock Market Consolidation Pattern

When evaluating the validity of a consolidation pattern traders look for declining volume as prices contract. As the chart below shows, this is exactly what has happened in the Saudi market during the period prices have been consolidating.

Saudi Stock Market Volume

Of course, even if we expect a breakout is just around the corner this doesn't tell us if prices are going to breakout to the upside or downside. Currently, prices are at the top of their trading range so there's is an immediate possibility of an upside breakout. The latest weekly market analysis for Saudi is quite bullish for the week ahead which also supports an upside price move.

However, as has happened continually over the past several months prices could easily reverse and quickly move to the lower end of the trading range. In doing so that would raise the likelihood of a downside breakout. Either way, I'll be keeping a close eye on the Saudi market over the coming days and weeks to see what unfolds. Expect updates.

Enjoy.

P.S. A warning. We have to be very careful when interpreting price patterns. The way the human brain is wired we have a strong tendency to see patterns and order in just about any data set. This is particularly true in the complex world of financial markets. As traders and analysts we have to be mindful of pareidolia orseeing faces in clouds.

Markets must learn lessons from Axiom's embarrassment

The cancellation of Axiom Telecom's IPO this week leaves a bitter taste.

To withdraw a market flotation just 48 hours before listing, after months of preparation, raises fundamental questions about markets in the UAE and the regulatory regime that oversees them. With Dubai considering a multibillion-dollar privatisation programme, some urgent concerns have to be addressed.

The official reason given for the cancellation was concern on the part of the company for the state of market sentiment in the region, especially the issue of liquidity. The finger was pointed at NASDAQ Dubai, the market where the stock would have been listed, and which has been bedevilled by liquidity and volume issues since it was launched in 2005.

FT.com - French state in U-turn on Areva listing

The French government is aiming to bring Areva to a full market listing before June next year in a U-turn on the future of the strategic and politically sensitive nuclear group.

The first stage of Areva’s fundraising was launched by finance minister Christine Lagarde on Friday, with the Kuwait Investment Authority and the French state offering to back the company’s €6bn ($8bn) investment programme with a €900m capital injection. The deal values Areva at €11.5bn, above most recent expectations but still lower than valuations put on the group more than a year ago.

In a surprise announcement, the government has also pledged to “make its best efforts” to ensure the shares to be issued in the capital increase would be quoted before the end of the first half of 2011.

Bridgepoint, DIC Lose Out On Alliance Medical Restructuring - WSJ.com

Diagnostics company Alliance Medical Friday said it has agreed a restructuring deal that will see the stake of owners Dubai International Capital slashed to just 2.5% from 60%, while minority investor Bridgepoint is squeezed out totally.

Control will instead pass to the senior lenders, led by Lloyds Banking Group PLC (LLOY.LN), Commerzbank AG (CBK.XE) and M&G Investments, part of Prudential PLC (PRU.LN), which will take an 85% stake as part of a debt-for-equity swap. The company's mezzanine lenders will get a 2.5% stake and management will hold the remaining 10%.

Under the agreement, Alliance Medical's debt is narrowed to approximately GBP250 million from more than GBP570 million. In addition, the senior lenders have committed to inject GBP60 million into the company, which will be used for management's planned expansion of the business.

Emirates smell India link in surge in bank deposits - The Economic Times

Someone following the money in a season of scams can rummage through dry data on the website of the United Arab Emirates' central bank. In the past few months, there has been an unusual surge in deposits in many high-street banks in Dubai, Abu Dhabi and financial centres in the UAE. Where the money came from is a subject of speculation in the Gulf with the regulator yet to spell out the sources.

But amid the buzz that much of it could be government money taken from reserves to help state-owned firms pay off debts next year, senior bankers and finance professionals have spotted an India angle to the fund flow.

The rush of deposits began weeks after India and Switzerland signed a revised treaty on August 30 to exchange information on tax-evaders. The pact was perceived as the first step to obtain details on money stashed away in Swiss banks. India struck a similar agreement with Bermuda, a tax haven.

Dubai puts StandardAero up for sale: sources | Reuters

Dubai Aerospace Enterprise (DAE) has put aviation services company StandardAero on the auction block and retained Deutsche Bank (DBKGn.DE) to advise on the sale, people familiar with the matter said on Friday.

State-owned DAE has opted to entertain offers for part or all of StandardAero -- which it bought from private equity firm Carlyle Group CYL.UL in 2007 -- after several potential strategic and financial buyers expressed interest, two sources said.

The auction, which started several months ago, represents part of the Gulf Arab emirate's effort to dig itself out of a $100 billion-plus debt pile by selling its tightly-controlled companies.

Gulf bond issuers see opportunity in Malaysia

Gulf-based banks and companies, struggling to overcome a lack of investor confidence after the Dubai debt crisis, are increasingly looking towards Malaysia, the world's biggest Islamic bond market with a vast pool of cash.

After the burst of the Gulf real estate and asset bubble, institutions are keen to issue bonds in order to restructure debt and rebuild their balance sheets and Malaysia has an estimated US$79bil in excess liquidity, according to Kuwait Finance House.

The liquidity pool has definitely shifted from West to East, said Nida Raza, senior vice-president at Unicorn Capital. Malaysia is an isolated, internal market that has been relatively unaffected by the global liquidity crunch.

Ireland could sell banks to Middle Eastern wealth funds - Telegraph

Former Irish prime minister John Bruton has travelled to the Gulf states, including Saudi Arabia, Bahrain and Qatar, to sound out their interest in buying one of Ireland's troubled banks.

According to The National, an Abu Dhabi-based newspaper, Mr Bruton has met with sovereign wealth funds in the Gulf in an attempt to attract billions of pounds of badly-needed outside investment.

"The message was 'our banks are for sale to any investors, foreign or local'," said a Gulf-based executive quoted by The National.

Bravo Kuwait SE « Alpha Dinar- talking GCC finance


As 2010 comes to close, a look back at the Kuwait SE weighted index performance reveals a stellar run. The Kuwait SE has risen 22.46% since the beginning of 2010. Compare this with the 12.84% and 10.57% returns registered by emerging markets and the U.S. respectively.
In the midst of the political abyss, I tried to find a shining point that could lift us up. Next year should be even better for the Kuwait SE as the development plan gets rolling, the Zain saga will be over, oil potentially will spikes to above $100, and the long-awaited Capital Markets Authority rolls-up its sleeves!

Bravo Kuwait SE « Alpha Dinar- talking GCC finance

As 2010 comes to close, a look back at the Kuwait SE weighted index performance reveals a stellar run. The Kuwait SE has risen 22.46% since the beginning of 2010. Compare this with the 12.84% and 10.57% returns registered by emerging markets and the U.S. respectively.

In the midst of the political abyss, I tried to find a shining point that could lift us up. Next year should be even better for the Kuwait SE as the development plan gets rolling, the Zain saga will be over, oil potentially will spikes to above $100, and the long-awaited Capital Markets Authority rolls-up its sleeves!