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Saturday, 15 January 2011

VimpelCom Board to Vote Jan. 16 on Paying Less for Wind, Orascom Telecom - Bloomberg

VimpelCom Ltd.’s board will vote on a revised deal with a potentially lower price for Egyptian billionaire Naguib Sawiris’ phone assets on Jan. 16, according to two people familiar with the matter.

The main shareholders, Telenor ASA and Alfa Group’s Altimo, will meet in Amsterdam to discuss final terms, the people said, declining to be identified because the talks are confidential. The revised deal could still fall apart, the people said.

VimpelCom, Russia’s second-biggest mobile-phone operator, had sought to find a new agreement after its biggest shareholder, Telenor, in December rejected a $6.8 billion proposal, saying the transaction wouldn’t help the business or shareholders. VimpelCom Chief Executive Officer Alexander Izosimov was asked to revise the deal.

Saudi Shares Advance Most in Four Weeks as Banks Beat Analysts' Estimates - Bloomberg

Saudi Arabian shares, led by banks, gained the most in four weeks as fourth-quarter earnings beat analysts’ estimates and after U.S. stocks rose and crude oil prices advanced.

Al Rajhi Bank, the kingdom’s largest lender by market value, Samba Financial Group and Banque Saudi Fransi paced the advance. Saudi Basic Industries Corp., the world’s largest petrochemical maker, climbed 1.2 percent to its highest price in more than two years.

The 146-company Tadawul All Share Index advanced 0.9 percent to 6,766.72 at 1:19 p.m. in Riyadh, the gauge’s largest gain in four weeks, as more than two stocks increased for every one that dropped.

Qatar Market in Overbought Territory — Qatar Analysis , Relative Strength — GCC Market Analytics

The Qatar market continues to advance higher. The QE Index is up 9% since the 2022 World Cup announcement on December 2nd. Clearly there's a lot of optimism surrounding Qatar at the moment.

However, the Relative Strength Index (RSI) is signaling that the Qatar market is in overbought territory. For those not familiar with the RSI see here. In short, the RSI is a momentum measure that oscillates between zero and 100. When the RSI is below 30 this signals that the stock or index is oversold. When the RSI is above 70 this signals an overbought stock or index.

That chart below shows the QE Index (top chart) along with the 14-day RSI indicator (bottom chart). The green shaded area represents oversold RSI levels and the red shaded area overbought levels.


Qatar Stock Market Relative Strength Index
As you can see, the RSI for the QE Index is currently above 80, well into overbought territory. Does this mean a big sell-off is imminent? Not necessarily. When a stock or market does get this overbought it is certainly vulnerable to a sizable sell-off. For example, the first two overbought occurrences highlighted on the chart above resulted +10% market falls.

But more recent overbought levels have just been met with a pause or mild pullback prices. So, on its own, a high RSI level isn't a reason to sell (especially when the weekly market analysis of the Qatar market is so bullish). However, entering the market at such overbought levels probably isn't a good idea either and certainly wouldn't provide a good risk-to-reward trade.

At the very least when the RSI level for a stock or index is above 70 this should be taken as a "proceed with caution" signal. With that in mind below are the Qatar stocks with the highest current RSI levels.

Qatar Insurance Relative Strength Index


Qatar International Islamic Bank Relative Strength Index


Qatar Islamic Bank Relative Strength Index


Masraf Al Rayan Relative Strength Index


United Development Co. Relative Strength Index

SEC Is Said to Probe Financial Firms Over Possible Bribes to Wealth Funds - Bloomberg

The U.S. Securities and Exchange Commission started a broad investigation involving several financial firms to determine whether they made improper payments to secure investments from sovereign wealth funds, according to four people with direct knowledge of the matter.

The sweep in part focuses on whether banks, hedge funds and private-equity firms paid placement agents to win access to the state-owned money, said the people, who declined to be identified because the investigation isn’t public. An agent working with a sovereign wealth fund may be considered a government official, making interactions with that person subject to the Foreign Corrupt Practices Act.

Companies including Bank of America Corp., Morgan Stanley and Citigroup Inc. received letters of inquiry from the SEC, one of the people said. James Griffiths, a spokesman for Citigroup, and Mark Lake, a Morgan Stanley spokesman, declined to comment. Bill Halldin, a spokesman for Charlotte, North Carolina-based Bank of America didn’t immediately return a call for comment after normal business hours.

CityCenter prices $1.5 billion notes offering - Bloomberg

CityCenter Holdings LLC, a joint venture between MGM Resorts International and Dubai World's Infinity World Development Corp., has priced a $1.5 billion senior secured notes offering.

The offering includes $900 million 7.625 percent senior secured first lien notes due 2016 and $600 million 10.75 percent senior secured second lien notes due 2017.

CityCenter said Friday that it expects to use the offering's proceeds, combined with about $77 million in equity contributions from its owners, to lower the balance of its existing senior secured credit agreement to $500 million from $1.85 billion, to create an interest escrow for first lien debt and to pay fees and expenses.