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Tuesday, 14 December 2010

MIDEAST STOCKS-Qatar hits new 26-mth high; Saudi banks rally | Reuters

Qatar's index .QSI shrugged off early declines to hit a 26-month high on Tuesday as lower stock prices drew investors, helping extend a World Cup rally.

Masraf Al Rayan (MARK.QA) climbed 2.7 percent, Vodafone Qatar (VFQS.QA) added 1.8 percent and Commercial Bank of Qatar COMB.QA rose 2 percent.

'Qatar volumes have picked up dramatically and new money is coming in to position for the long term,' said a Kuwait-based analyst who asked not to be identified. 'There is some selling for investors who had been holding Qatar stocks for a long, long time as they waited for Qatar to recover from the 2008 crash, but others are buying into any weakness.'

Gulf Stocks Movers: Commercial Bank and National Investments - Bloomberg

Qatar’s QE Index rose 0.9 percent to 8,816.38, the highest level since September 2008, at the 12:30 p.m. close in Doha. The Dubai Financial Market General Index and Abu Dhabi’s benchmark stock index retreated 0.6 percent.

Singer Says UAE Bourses Merger Would Help Toward Upgrade - Video - Bloomberg

Singer Says UAE Bourses Merger Would Help Toward Upgrade

Dec. 14 (Bloomberg) -- Jeffrey Singer, chief executive officer of Nasdaq Dubai, talks about the possible merger of Abu Dhabi and Dubai’s bourses to secure an upgrade to MSCI Inc.’s emerging market status. He talks in Dubai with Maryam Nemazee on Bloomberg Television's "Countdown."

Discount Dubai: banking hub cuts rents | beyondbrics: News and views on emerging markets |

Dubai’s financial district has top-class regulation, and restaurants with waitresses imported from Las Vegas. It’s sometimes hard to tell which is more alluring for bankers.

However, Dubai International Financial Centre knows that neither factor will guarantee its place at the cutting edge. So it has slashed rents by up to two-thirds from their 2008 peak to make the centre more competitive. That addresses a situation where - even after the emirate’s recession and debt debacle - the DIFC’s rents remained the second highest in Europe, Middle East and Africa, trailing only London’s West End.

A hush descended on the DIFC during the economic slowdown, amid a dearth of merger activity and somnolent markets. As the crisis deepened, dozens of licensees folded and deluxe retail outlets shut. The boarded-up shop fronts have prompted jokes that DIFC stands for Dubai International Foreclosure Centre.

Qatar: A centre for 'quality' international dispute resolution?| Neil Rose | Law |

Amid the huge surge in activity triggered by Qatar winning the bid for the 2022 World Cup – 900 construction contracts were activated the day after the decision – today will see prime minister Sheikh Hamad bin Jassim al-Thani officially open a heavily British-influenced landmark in the nation's legal infrastructure: the civil and commercial court and the regulatory tribunal for the Qatar financial c entre (QFC).

The court is the final piece of Qatar's plan to build a world-class international financial centre, following on from the QFC authority and the QFC regulatory authority. During five years of gestation, the court's ambition has grown from resolving disputes within the QFC to wider disputes within the Qatari business community and now to be an international commercial dispute resolution centre open to parties from all over the globe (it is a "multi-door" court offering both litigation and alternative dispute resolution).

It is headed by the former lord chief justice Lord Woolf. Qatar is one of the more liberal nations in the Gulf, and one of the few to have had ties with Israel over the years, so it was undoubtedly a smart move to persuade such an eminent Jewish jurist to preside over the court.

Dubai Government `Likely' to Sell Bonds in 2011 to Fund Budget, Saleh Says - Bloomberg

Dubai’s government is “likely” to sell bonds next year with the size of the sales depending on its spending needs, and a Malaysian offering is a possibility, the director general of the emirate’s Department of Finance said.

“The outcome of the budget will really tell us how much we need to raise,” said Abdulrahman Al Saleh, who was also named to holding company Dubai World’s new board on Dec. 12, in an interview at his office in Dubai today. “We don’t need to raise funds for refinancing” government debt, he said.

The Dubai government’s debt repayments due next year and in 2012 are not “significant,” Al Saleh said. In October it paid an 800 million-dirham ($218 million) installment on a 2.3- billion Islamic ijara loan that was due next year, he said.

Colleges Add Shariah Courses to Plug Shortage: Islamic Finance - Bloomberg

Universities are expanding Islamic finance courses as demand for professionals qualified in Shariah law outstrips supply in the $1 trillion industry.

The International Islamic University of Malaysia plans to start postgraduate courses specializing in Shariah-compliant capital markets, banking and insurance after enrollment for its general program in finance complying with Muslim tenets tripled in the past year, said Professor Mohd Azmi Omar, the dean of the institute. La Trobe University in Melbourne, which started classes this year, is working with officials in Malaysia to offer industry-recognized qualifications.

A lack of skills is among the biggest challenges for the expansion of global Islamic banking, said Washington-based Patrick Imam, an economist at the International Monetary Fund. About 50,000 professionals will be needed over the next five to seven years to meet demand, according to Ishaq Bhatti, the director of La Trobe’s Islamic banking and finance program.

Dubai to be far more competitive in 2011 « ArabianMoney

Like any commercial city in a crisis Dubai is becoming more and more competitive in the drive to exit its long recession. The cost of doing business is coming down. Dubai International Financial Centre this week belatedly slashed its rental rates by up to 50 per cent. The cost of housing for staff is also tumbling.

Many salaries are also being cut for 2011 as firms take advantage of the lower cost of housing and the fact that the market for employment after being laid off remains weak. At the same time local hotels are having to slash the cost of restaurants, bars and nightclubs to keep the punters from staying at home. / Reports - Investment banks: Nascent sector looks for new model

Islamic investment banks and companies mushroomed across the Middle East in the years preceding the financial crisis, buoyed by increasing religious sensibilities and the flow of billions of petrodollars into the region.

Companies such as The Investment Dar in Kuwait and Bahrain’s Arcapita and Gulf Finance House were among the most profitable institutions in the region and broadened the Islamic finance industry’s geographical footprint and sophistication.

But while most Islamic commercial banks have fared relatively well, the financial crisis caused billions of dollars of losses and exposed severe problems in the business models of many Islamic investment banks. / Reports - United Arab Emirates: Shadow of $26bn upset starts to fade

It has been a year since Dubai shocked financial markets with a request from the state-owned conglomerate Dubai World for a standstill agreement with creditors over claims of about $26bn.

The market turmoil that ensued cut would-be borrowers off from the capital markets. There was no debt capital market issuance from UAE-based borrowers between November 2009 and March 2010, according to Dealogic, the data provider.

But by early this year, Dubai World’s restructuring talks with creditors had made significant headway, allowing borrowers to return to capital markets.

The Future of Islamic Finance report from the Financial Times

Click through headline to access full report.

Kuwait SE Weighted Index Should be the Main Index « Alpha Dinar- talking GCC finance

Over a year ago, Saud wrote a very informative post explaining the differences between a weighted index and a price index. A weighted index places value on shares based on their respective market capitilizations relative to the overall market capitalization of the the stock market. For example, Zain (KD 1.460 ) would have a bigger weight in the index and affects it more than Wataniya Telecom (KD 1.860). Why? Because Zain’s market capitalization stands at KD 5.7 billion vs Wataniya’s market capitalization of KD 0.9 billion. Do you know what a price index would do? It would simplistically place more value on the higher priced share. Although Zain is 6 times bigger than Wataniya, Wataniya would affect a price index more than Zain!

Yesterday something unacceptable occurred at the Kuwait SE as Tas’heelat, which is a small company that last traded a month ago, fell more than 50% yesterday from 345 fils to 160 fils. Blue chips in the Kuwait SE were trading up and the weighted index continued to reflect a positive bias even after the massive decline in Tas’heelat’s share price because the company’s market capitalization is minuscule. However, the price index instantly declined and closed down for the day. Talk about wrong signals and a failed index!

Most developed nations adopt a weighted index and the Kuwait SE must do the same for the aforementioned reasons. Some people may argue that the famous Dow Jones Industrial Index is an example of a price index that works well in the U.S., however, one has to realize that the reason it works is because it is comprised of only the 30 largest companies in the US. It doesn’t include any small companies! The Kuwait SE has to adopt the weighted index as its main index because it is very reliable, more representative of the market, and is adopted by most developed markets.

Dow Jones to merge Middle East operations

Dow Jones Newswires and The Wall Street Journal have combined their Middle East editorial operations, with two senior executives appointed to oversee news output in the region.

Marcus Wright, previously a senior editor for the Europe, Middle East and Africa (EMEA) region at Dow Jones Newswires in London, has been named the new venture's Middle East editor.

He will oversee the editorial teams at several bureaus in the region, as well as managing Dow Jones Newswires' regional partnership with the Zawya news service. Bill Spindle has been named as the Middle East bureau chief. Mr Spindle previously worked at The Wall Street Journal before moving to Abu Dhabi three years ago to help launch The National.

Qatar Gathers CEOs to Mark LNG Capacity Milestone, Expects Further Gains - Bloomberg

Qatar gathered chief executives from the biggest energy companies to celebrate reaching an annual production capacity of 77 million tons of liquefied natural gas, underscoring its rank as the world’s biggest LNG exporter.

The Persian Gulf state may further increase its capacity by as much as 10 million tons a year if it can improve efficiency at its production units, Energy Minister Abdullah al-Attiyah told reporters. Exxon Mobil Corp.’s Rex Tillerson, Royal Dutch Shell Plc’s Peter Voser and ConocoPhillips’ Jim Mulva were among the chief executives attending the ceremony at the industrial city of Ras Laffan yesterday.

“If in the future we want to expand, we will expand as a revamp and de-bottlenecking,” al-Attiyah said yesterday, adding that constructing new LNG units would be a costlier option. / Iraq - Calls for bank reform to unlock Iraq’s potential

Being a banker in Iraq can be a challenging and dangerous occupation.

In the first place, there are the obvious security threats. This year alone, the central bank and the government-owned Trade Bank of Iraq have been targeted by suicide bombers. A single movement of cash in Baghdad can cost $5,000 to $6,000 because of security requirements. “I would say [security] probably costs $1m to $2m, in terms of our cost base per annum,” says one banker.

Then the banks find themselves working in a predominantly cash-based economy with little transparency and outdated infrastructure. The first ATM was only introduced in 2005 and the machines remain scarce. Credit cards are an alien concept. - Bin Sulayem exit ends tumultuous era

The removal of Sultan bin Sulayem late on Sunday as chairman of Dubai World draws down the curtain on the era of debt-fuelled, real estate speculation that plunged the emirate into a recession from which it is now only just emerging.

It was only a year ago on Tuesday that Dubai warded off the threat of default through a $10bn bail-out loan from neighbouring Abu Dhabi, kicking off a restructuring process that ended with September’s $25bn restructuring agreement with creditors.

Given the size of the debt hole dug by the sprawling state-owned conglomerate, local observers had questioned how long Mr bin Sulayem could continue to remain at the helm of Dubai World’s 1,300 legal entities, even if it was widely acknowledged that he lost his executive powers at least a year ago.