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Wednesday, 31 August 2011

Fitch affirms IPIC at 'AA'; Outlook Stable | Energy & Oil | Reuters

Fitch Ratings has affirmed the International Petroleum Investment Company PJSC (IPIC) of Abu Dhabi's Long-term local and foreign currency Issuer Default Ratings (IDR) at 'AA' and Short-term IDR at 'F1+'. IPIC GMTN Limited's foreign currency senior unsecured rating has also been affirmed at 'AA'. The Outlook for the Long-term IDRs is Stable, in line with the Outlook for the Emirate of Abu Dhabi ('AA'/Stable/'F1+').

IPIC's ratings are aligned with Abu Dhabi's sovereign ratings under Fitch's parent and subsidiary rating linkage methodology. Fitch considers IPIC to be a strategic asset to the government in its role as an investment vehicle for the state in the domestic and foreign hydrocarbon and petrochemical sectors.

Qatari Greek bank bailout looks like strategic bet - Emirates 24/7

Qatar's Greek bailout could pay strategic dividends too. The decision by one of the Gulf state's many investment vehicles to inject 500 million euros into newly formed lender EFG Eurobank, via a mandatory convertible bond, came as a surprise.

But the investment looks characteristically opportune, and Qatar's support for troubled banks in the euro zone may not end there.

Paramount is relatively unknown - simply described as representing the interests of Qatar's royal family. It looks like just another one of the many entities used by the country to channel its investments.

Oil and gas industries springing back to life - The National

Oil and gas contractors across the Emirates are adding thousands of jobs as producers demand safer and more advanced drilling platforms and restart stalled investment projects.

Lamprell, the UAE oil and gas engineering specialist, said it had a bid pipeline of almost US$5 billion (Dh18.36bn), refitting existing rigs and building new platforms with additional capabilities.

The company has increased its staff to 13,000 to cope, and it may add a further 1,000 by the end of the year.

Has Peak Oil Come To The Non-Opec World? Maybe. - Forbes

The world’s biggest oil companies put in a pretty pathetic performance in the second quarter of 2011. Not in terms of earnings — those were great, with Exxon posting $10.7 billion and Royal Dutch Shell doing $8 billion. Just what you’d expect with Brent crude at a lofty $120 a barrel.

Where the results were disappointing was in the barrels. Of the 16 big U.S. and European oil companies studied by Deutsche Bank analyst Paul Sankey, 14 of them saw their production of petroleum decline in the quarter. Collectively, the drop amounted to 12% of total liquids volumes, or 1.2 million bpd. Their average output for the quarter totalled, 14.67 million bpd. Even excluding the effect of Libya’s issues, the decline was 8%.

Only Exxon and Shell managed 1% volume gains in liquids.

Kerzner weighs Atlantis Dubai sale

Kerzner International Holdings Ltd., the owner of several luxury getaways, is exploring selling its 50% stake in the Atlantis resort in Dubai to raise money to restructure $2.6 billion in mortgage debt coming due next week, said people familiar with the matter.
The proceeds would go toward paying down a portion of the mortgage debt on a separate Atlantis resort in the Bahamas, Kerzner's flagship property and one of the most popular resorts in North America, the people said. The debt matures Sept. 9.
Kerzner is in talks to sell the stake in the Dubai Atlantis to Istithmar World, Dubai's investment arm, the people said. Istithmar already owns the other half of the Dubai resort as Kerzner's partner and largest shareholder. Some people familiar with the discussions said the sale, if consummated, could reap as much as $250 million to $350 million.

Dispute over control of $65bn Libya fund -

A dispute has erupted over control of Libya’s $65bn sovereign wealth fund, as the national transitional council attempts to maintain stability in the oil-rich nation.

Several NTC members have contested the authority of Mahmoud Badi, who is probing corruption at the Libyan Investment Authority.

Albudery Shariha, who was appointed senior director in the LIA’s legal department in July 2009, told the FT that Mohamed Layas would remain in charge of the fund. Mr Layas was chairman of the LIA before the revolution when it was controlled by Seif al-Islam, one of Colonel Muammer Gaddafi’s sons.

Do not count on EMs coming to the rescue in a double dip -

Will the emerging markets keep the global economy afloat if the developed world is hit by a double dip? Since the financial crisis, the shift in economic power from the developed to the developing world has been palpable. Such is the dynamism of the larger emerging market economies that many people appear to think that they could indeed come to the rescue. Yet this optimism is sadly misplaced.

That is not to say the dynamism is illusory. The story of the recovery from the recent recession is a remarkable one. While the developed world has been struggling to return to pre-crisis output levels, the International Monetary Fund estimated earlier this year that the output of developing Asia and Latin America was 7 per cent and 2 per cent above 1997-2006 trends respectively.

The emerging markets are expected to account for 38 per cent of global output by 2016 compared with just 25 per cent in 2007. We also know that the developing world’s productivity growth will outstrip the developed world beyond 2016 as high levels of public sector debt in the west crowd out private investment.

Islamic finance, women, sukuk, Shariah investing, ethical investing | alifarabia

If Islamic finance is about inclusion, where are the sisters?

Someone once said, ‘50% of the world’s population is women, and the other half, have mothers.’ Recently, two major articles were widely carried on women in Islamic finance, and highlighted the often heard issues: underrepresentation, interaction with male bankers, travel for meetings in conservative countries, from women scholars to women’s branches, and so on.

If Islamic finance (IF) is about inclusion, where are the sisters?

Tuesday, 30 August 2011

Crude Oil Falls From Two-Week High in New York on U.S. Supply Forecasts - Bloomberg

Oil fell from its highest in almost two weeks in New York on speculation that crude stockpiles are increasing in the U.S., the biggest consumer of the commodity.

Futures reversed earlier gains as the dollar strengthened, diminishing the appeal for assets used to protect against inflation, such as crude. An Energy Department report tomorrow may show U.S. crude inventories climbed 875,000 barrels last week. The industry-funded American Petroleum Institute will release its own data later today.

“I don’t see a lasting rally, given the ongoing risks for the world economy,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. The bank was the third most- accurate forecaster of oil prices in the second quarter. “It’s only soft factors like rising stock markets and returning risk appetite that’s supporting prices.”

Saudi Arabia: $500bn and counting | beyondbrics –

The foreign assets of Saudi Arabia’s central bank have crossed $500bn for the first time.

Measured on a per capita basis or as a percentage of gross domestic product the kingdom’s foreign asset holdings are substantially higher than China’s, according to research from HSBC in Dubai.

Of that vast wealth around $360bn are holdings in foreign securities, the majority of which, analysts say, are US treasury bills. The central bank doesn’t give a full break down of its holdings and doesn’t say whether its data is mark-to-market.

Saudi’s economic problems « The Gulf blog

While in Carrefour this week standing at the checkout there was a burkad up woman in front of me with her 10-ish year old child. For seemingly no reason other than boredom (the queue was taking ages) the girl started to cry those pathetic, ‘I can’t really be bothered to put my all into it, I just want some attention’ type of crocodile tears. Any parents, those with experience of younger siblings or ten year old children will know what I’m on about.

In response, the mother thrust a Galaxy chocolate bar into the little girl’s hand: she continued to cry. A second Galaxy bar was offered: no dice. Then a king size Lion bar and a Galaxy chocolate drink carton were offered. A moment of indecision swept across the little girl’s face: should she relinquish here clearly superior bargaining position for just two Galazy bars, one king sized Lion bar and a Galaxy drink, or ought she push straight onwards and upwards…a kilogram or two of Cadbury’s, a gallon of Coke, a hectare of Choco-Choco Puffs or a Porsche Cayenne…clearly it was all within her reach. But, magnanimous in her humiliation victory, she accepted her bounty, the non existent tears stopped welling and a brooding scowl resumed its place.

This atrocious parenting (yes, I said it) is a mirror image of Saudi Arabia’s recent policies. In its desperate desire to appease the youth (in particular) in the Kingdom, the government has given out all the Galaxy and Lion bars in the land. Hunger sated for the moment and the restlesness in the Kingdom subsided.

US companies in Iraq: touting for business | beyondbrics –

As the US starts the withdrawl of its remaining 40,000 troops in Iraq, with December 31st as the deadline, US officials are trying to shore up the position of the American business community.

With US economic growth slowing fast, US companies are increasingly keen to exploit the potential of Iraq’s post-war recovery – despite the considerable risks involved. One example is 360 Architecture, a Kansas City-based design company, which is building a glitzy sports complex in the southern oil centre of Basra.

With the 2013 Gulf Games scheduled to be held in Iraq, the public relations-conscious government was looking to build a stadium and facilities for athletes.

gulfnews : Gulf banks can handle slowdown

Banks in the GCC and wider Middle East are adequately capitalised to meet the fallout from a global economic slowdown or a double-dip recession, according to analysts.

Christine Lagarde, the new managing director of the International Monetary Fund (IMF) on Sunday warned that the world economy is in a dangerous phase and that officials should take new steps to strengthen growth. She called on European authorities to boost capitalization levels of European banks to prevent the sovereign debt crises of some countries from infecting more countries.

While calling on European banks to fortify their capital bases, Legarde said that decoupling between emerging economies and developed economies is a myth and warned that if the advanced countries succumb to recession, the emerging, markets will not escape.

Renaissance back in favour with investors - The National

Investors are showing renewed confidence in the long-term growth prospects of Renaissance Services, the oil services company based in Oman.

The company is projected to earn a profit of about 30.5 million rials next year. That forecast is up significantly from a previous estimate of 16.7 million rials, according to data compiled by Bloomberg News.

The company's share price increased more than 6 per cent on the Muscat Securities Market yesterday, closing at 0.698 rials.

Monday, 29 August 2011

Exclusive: Big oil companies may have to give up Iraq gas - Maktoob News

Many of the world's biggest energy companies may have to surrender most of the gas from Iraq's vast southern oilfields to a processing and export project led by Shell, a final draft contract between Baghdad and Europe's biggest company, obtained by Reuters, shows.

Oil giants including Royal Dutch Shell , BP , U.S.-based Exxon , China's CNPC, and Italy's Eni signed technical service contracts to develop three oilfields in southern Iraq in 2009-2010.

But the oil deals to develop the Zubair, Rumaila and West Qurna 1 fields near Basra oblige the big oil contractors to surrender the gas they do not use for reinjection or power generation to Iraq's state-run South Gas Co (SGC).

gulfnews : Nakheel delays listing of sukuk on Nasdaq Dubai

Property developer Nakheel has yet to list the first tranche of its Dh4.8 billion Islamic bond, or sukuk, on the Nasdaq Dubai after issuing it to trade creditors late last week

"The sukuk will be listed once it is practical," a Nakheel spokesperson said Monday, without providing any further information or a date on when it would be listed.

Nakheel said on Thursday that it had started issuing the first tranche worth Dh3.8 billion under its sukuk to trade creditors, a day after the property developer announced that it had completed its Dh59 billion debt restructuring plan.

Qatar National Bank plans $7.5 bln bond programme

Qatar National Bank , the Gulf Arab state's largest lender, set up a $7.5 billion euro medium term note (EMTN) programme to fund its banking operations, the company said in a statement on Monday.

QNB said it has appointed Barclays , HSBC and QNB Capital as arrangers for the bond programme but did not indicate if the lender had any plans to issue debt in the near future. QNB last issued a five-year $1.5 billion with a coupon of 3.125 percent in November.

The lender is 50-percent owned by sovereign wealth fund Qatar Investment Authority and has been expanding abroad, with operations in Syria, Jordan, the United Arab Emirates and Switzerland.

Eid mubarak to all readers

MENA stock markets close - August 29, 2011

ExchangeStatus IndexChange
TASI (Saudi Stock Market)
DFM (Dubai Financial Market)
ADX (Abudhabi Securities Exchange)
KSE (Kuwait Stock Exchange)
BSE (Bahrain Stock Exchange)
MSM (Muscat Securities Market)
QE (Qatar Exchange)
LSE (Beirut Stock Exchange)
EGX 30 (Egypt Exchange)
ASE (Amman Stock Exchange)
TUNINDEX (Tunisia Stock Exchange)
CB (Casablanca Stock Exchange)
PSE (Palestine Securities Exchange)

Turkish Airlines Stock Falls After Second-Quarter Loss Is Double Estimates - Bloomberg

Turk Hava Yollari (THYAO) AO, the carrier known as Turkish Airlines, declined in Istanbul after losses in the second quarter, driven by higher leasing costs, were more than double estimates.

Turkish Airlines fell as much as 2.5 percent to 2.35 liras, the lowest intraday level in a week. The share dropped 2 kurus, or 0.8 percent, to 2.39 liras at the 12:30 p.m. close of trading, extending losses this year to 47 percent.

“The bottom line remained significantly below expectations as a result of massive foreign exchange losses from financial leases,” Is Invest, Turkey’s biggest broker, said in an e- mailed report today.

gulfnews : Nasdaq Dubai to migrate Dubai Gold Securities trading to DFM

NASDAQ Dubai said Monday that it intends to migrate the trading of Dubai Gold Securities (DGS) to the DFM X-Stream Trading Platform.

“Clearing, Settlement and Custody of Dubai Gold Securities is not a part of this migration. Gold trades will continue to be cleared and settled on NASDAQ Dubai through the TCS Bancs system,” the exchange said in a statement posted on its website yesterday

NASDAQ Dubai statement said it has received no-objection from its regulator for the migration and intends to go-Live with the changeover to DFM’s trading platform around mid-September 2011. The bourse urged its members to prepare for this migration.

Dubai, Abu Dhabi markets go into Eid break on a high - Emirates 24/7

Dubai's index gained 1.2 percent, its highest close since Aug. 4. but volumes remained low.

Retail-driven stocks were among the most active, with Emaar Properties rising 1.8 percent, Drake & Scull advancing 1.3 percent and low-cost carrier Air Arabia adding 1.3 percent.

Meanwhile Abu Dhabi's benchmark ended on a near four-week high, closing 0.5 percent up. Dana Gas and Aldar Properties accounted for half of the total shares traded on the index, gaining 1.8 and 2.5 percent respectively.

Why Islamic bonds don’t sukuk | beyondbrics –

Islamic financial products may not be an obvious first port of call for investors in troubled times. But sukuk – or ‘Islamic bonds’ – are witnessing sustained demand despite the political upheavals of the Arab Spring-turned-summer and the recent volatility that has hit the global markets.

“We’ve seen a good pick up in activity in the past months and notably, at the height of market volatility”, Mohammed Dawood, head of Islamic capital markets at HSBC, told beyondbrics.

Last month, Malaysia, the world’s largest issuer of sukuk, announced a $2bn global sukuk offering – the largest Islamic bond offering since December 2007 – while the First Gulf Bank in Abu Dhabi saw the $650m sukuk it issued earlier this month oversubscribed six times.

Guest post: re-inventing Libya’s economy | beyondbrics –

As the search for Brother Leader continues, acquisitive minds have turned to the potential of post-Qaddafi Libya.

Learning from the mistakes of previous conflicts, and with significant resources and a clean bureaucratic slate, the stage is set for what is likely to be an intriguing experiment in hydrocarbon-fuelled capitalism. This will create significant opportunities for foreign investors, particularly those who exercise caution.

The immediate necessity in Libya is a stabilisation of the security situation. While it is uncertain how long this might take, the decision not to pursue an Iraqi-style “de-Baathification” should speed up a resolution.

Satrop to issue Islamic Bond for new refinery in Saudi Arabia - Energy Business Review

Saudi Aramco Total Refining and Petrochemical (Satrop) has selected three banks to arrange for its Islamic bond, that will help to finance the construction of a large refinery complex at Jubail on the Persian Gulf coast, Saudi Arabia.

The company has selected Deutsche Securities Saudi Arabia, Samba Capital and Saudi Fransi Capital as joint lead managers and joint book runners for the bond and has secured an approval for the offering.

The company proposes to construct a refinery worth $10bn and is capable or refining about 400,000 barrel-a-day export refinery.

What to do with $550bn? Just keep investing - The National

Once the oil started gushing on Christmas Eve 1969, the money started rolling in. Rather than just handing out cigars and Cadillacs to the population, subsequent governments decided to put in place a pension fund that would save the country's oil wealth for future generations. Mr Grande is one of those charged with making the money work.

The fund invests all revenues from petroleum-related activities and reinvests all the dividends. It is now worth US$550 billion (Dh2.02 trillion), close to one year's GDP and projected to grow to $1tn over the next 10 years. The fund owns 1 per cent of the world's listed companies, and has offices in London, New York, Singapore and Shanghai.

The National caught up with Mr Grande in his offices in the country's central bank, in a quiet but pleasant part of Oslo.

Bold vision shown as others run blindly - The National

It takes courage to stake millions of dollars on a broken economy.

In Egypt and Tunisia, revolutions have cut growth forecasts to near 1 per cent this year. Executives and foreign investors connected to former regimes are being hauled into court.

Interim governments are scrambling to unravel decades of corruption and struggling to contend with rotten bureaucracies.

Mena IPOs down 51.67% in Q2 this year - Emirates 24/7

According to Ernst & Young's quarter two 2011 Mena IPO Update, regional capital markets raised $374.77 million in the second quarter of 2011, down 51.67 per cent from the $775.40m raised during the same period in 2010.

However, this is still an improvement from the lows of $24.14m raised in the previous quarter, Q1 2011.

A total of $398.91m has been raised in the regional capital markets in the first six months this year compared to $1,203m in the first half of 2010, a decline of 66.84 per cent.

Sunday, 28 August 2011

Painful lessons learnt, brighter days ahead - The National

A dhow sails on Dubai creek as it passes the QE2 docked at Port Rashid in Dubai in 2009. AP Photo

    It was around this time in 2008 that I was gazing out of my top-storey office window at the bustling, vibrant streets and towers of Dubai below. The majestic QE2 was anchored in the shining Arabian Gulf, business was good and the whole country seemed to give off a sense of invincibility; an oasis of everlasting good times awash with opportunity.

    But storm clouds were gathering in the West. The boom was turning to bust and the global media was doing its best to make light of just what was happening to the financial system. We all heard about it, but the general consensus was that we were somehow insulated in the GCC from the brunt of the global financial downturn by the pedestal of petrodollars that formed the base of this "economic miracle".

    How wrong we were. The regional stock markets started to tumble, but it took a while before liquidity in the banks dried up, and with it the engine of Dubai's growth: property. The growth capital being injected into nascent industries in the region was rapidly withdrawn and people were losing their jobs everywhere. The confidence that was once a hallmark of UAE executives disappeared overnight, and the wheels of this vibrant economy stopped turning.

    Al Hilal Bank plans to issue $1bn of sukuk - The National

    Al Hilal Bank is preparing for its first foray into credit markets, courting international investors with an Islamic bond sale.

    The Islamic bank, which is fully owned by the Abu Dhabi Investment Council, seeks to issue at least US$1 billion (Dh3.67bn) of sukuk before the end of the year.

    Al Hilal is hoping the bond issue will help it to build a track record among international credit markets for future bond sales, said Sarie Arar, the head of wholesale banking at Al Hilal.

    Luxury Istanbul homes attract Mideast buyers - Hurriyet Daily News

    Inside of the Zeki Paşa Mansion is seen in this photo. Sotheby’s is in talks with tourism investors who want to buy the asset.
    Inside of the Zeki Paşa Mansion is seen in this photo. Sotheby’s is in talks with tourism investors who want to buy the asset.
    Rich Arab buyers are getting more interested in the waterside mansions and expensive houses by Istanbul’s Boshporus, according to the head of Sotheby’s Turkey. The recent political unrest in the Middle East and North Africa is also playing a role in drawing investors to safe havens such a Turkey, the executive says

    Due to ongoing conflicts and clashes sweeping through Middle Eastern and North African countries, Arab investors are flocking to the Turkish real estate market to invest in luxurious residences and waterfront villas by Istanbul’s Bosporus Strait, according to the top executive of Sotheby’s local branch.
    “In recent years, Arab investors started monitoring the Turkish market, but now this has accelerated,” Arman Özver, general manager of Sotheby’s Turkey, told the Hürriyet Daily News during a recent interview. Extremely rich Arabs generally pay from $2 million to $30 million for houses on the shore of the Bosphorus Strait, which divides the Asian and European parts of Istanbul, Özver said, adding that the remaining Arab investors look for luxury residence projects in central Istanbul for around $250,000.

    Qatar in talks to lease Silverstone F1 circuit -

    Qatar's sovereign wealth fund is in exclusive talks with the British Racing Drivers' Club (BRDC) to lease the Silverstone Formula One circuit, The Independent newspaper reported on Sunday.

    The BRDC, which owns the circuit, is in talks with the Qatar Investment Authority (QIA) to lease the 850-acre Silverstone site for 150 years, in a deal expected to be worth up to £250 million (US$405.7 million), the paper said.

    The Independent added that QIA was selected from a shortlist drawn up by PricewaterhouseCoopers .

    Saudi Arabia, EU, European Union, Standard & Poor's, Saudi economy, United States | alifarabia

    Saudi Arabia is not immune to the debt crisis in the European Union.

    “A default that involved Spain and Italy would almost certainly lead to a seizing up of eurozone — and quite possibly global — interbank markets,” says Saudi-based Samba bank.

    “Even if the financial shock was confined to the zone itself, European demand for raw materials and manufactured products (mainly from emerging markets) and services (mainly from North America) would shrink dramatically and this would be enough to imperil the global economic recovery.”

    Saudi foreign reserves top $500bn for first time -

    Saudi Arabia’s foreign reserves surpassed $500 billion for the first time in July, giving the biggest Arab economy scope to carry out its spending plans to foment growth and weather any potential drop in oil prices.

    Total reserves assets increased to SR1.90 trillion ($506 billion) from SR1.86 trillion in the previous month, according to data posted on the Saudi Arabian Monetary Agency’s website.

    Foreign currency and deposits abroad rose 1.3 percent to SR493 million, while investments in foreign securities climbed 1.9 percent to SR1.3 billion.

    Markaz - GCC Asset Management - 2011 (PDF)

    MENA stock markets close - August 28, 2011

    ExchangeStatus IndexChange
    TASI (Saudi Stock Market)
    DFM (Dubai Financial Market)
    ADX (Abudhabi Securities Exchange)
    KSE (Kuwait Stock Exchange)
    BSE (Bahrain Stock Exchange)
    MSM (Muscat Securities Market)
    QE (Qatar Exchange)
    LSE (Beirut Stock Exchange)
    EGX 30 (Egypt Exchange)
    ASE (Amman Stock Exchange)
    TUNINDEX (Tunisia Stock Exchange)
    CB (Casablanca Stock Exchange)
    PSE (Palestine Securities Exchange)