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Tuesday, 15 February 2011

Global Arab Network | Withdrawn at Company's Request - Kuwait-based Gulf Investment Corporation Ratings Affirmed

Standard & Poor's Ratings Services said today that it has affirmed its 'BB-/B' long- and short-term counterparty credit ratings on Kuwait-based investment holding company Gulf Investment Corporation G.S.C. (GIC). Subsequently, the ratings were withdrawn at the company request. The outlook was stable at the time of withdrawal, Global Arab Network reports according to a press statement.

"The ratings affirmation reflects our conclusion that the assumptions factored into the ratings still hold," said Standard & Poor's credit analyst Emmanuel Volland.

S&P anticipates that GIC's business and financial profile will not change materially in the foreseeable future. At the same time, S&P expects the links between GIC and its shareholders to remain unchanged. While S&P does not foresee a material improvement in the company's funding structure, which S&P expects to remain skewed toward short-dated sources, S&P acknowledges GIC's improving financial performance.

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Commercial Bank of Dubai to Extend $400 Million Loan to 2014 - Bloomberg

Commercial Bank of Dubai PSC, in which Dubai’s government owns a 20 percent stake, has begun talks with banks to extend a $400 million loan that matures in September, Chief Executive Officer Peter Baltussen said.

The firm’s nine relationship banks “are very happy with the risk,” Baltussen said in an interview in Dubai yesterday. The loan will be rolled over for three years with an interest margin “slightly higher” than the previous financing, he said.

Commercial Bank of Dubai borrowed $400 million in September 2008 at 75 basis points more than the London interbank offered rate for general corporate purposes, according to data compiled by Bloomberg. The bank reported on Jan. 30 a 2.2 percent rise in net income for 2010 to 821 million dirhams ($223 million).

Bahrain Protests Swell With Second Death, Tear Gas at Funeral - Bloomberg

Bahrain Deploys Police as Demonstrators Demand Freedom, Jobs

Police fired tear gas into a crowd of protesters in the Diraz area today. Photographer: -/AFP/Getty Images

Protests against Bahrain’s government escalated today as a second demonstrator was killed and in Yemen anti-government marchers clashed with police as unrest spreads through the Middle East.

Thousands of Bahrainis joined a procession near the capital, Manama, carrying the coffin of Ali Abdul Hadi Mushaima in the biggest demonstration so far in the Persian Gulf kingdom. Mushaima was killed during clashes yesterday with police, who fired bird-shot and rubber bullets and used tear gas. A second protester died today in fighting at the funeral, the official Bahrain News Agency said. The Shiite Muslim Al-Wefaq group suspended participation in parliament to protest the violence.

In Yemen, stone-throwing protesters clashed with police as they marched toward the presidential palace, the fifth day of demonstrations calling for an end to President Ali Abdullah Saleh’s rule. Iranian security forces yesterday used tear gas to break up the biggest anti-government protests since the aftermath of the disputed presidential election in June 2009.

Qatar banks may pool Islamic funds in one bank-paper - Finance News

Qatar's central bank will meet with conventional banks to discuss options for their Islamic operations, including pooling Islamic assets into a newly created Islamic bank, a Qatari newspaper said on Tuesday.

Under the proposal, conventional banks, which were told by the central bank to close their Islamic operations by the end of the year, would move their Islamic assets to a new Islamic bank and stakes in the bank would be set by deposits and funds transferred, the daily Al Sharq said, citing banking sources.

The unnamed sources told Al Sharq that the banks would ask for an extension of the Dec. 31 deadline to liquidate and close their Islamic operations.

UAE's du 2010 profits seen doubling on royalty change | Reuters

Profits of Telecoms company du DU.DU could double after the federal government slashed its annual royalty fee, analysts said as the shares soared on Tuesday.

The operator, which reports results on March 3, said it would only pay 15 percent of net profits to the government in 2010.

This is far below the 50 percent analysts had expected and which is paid by its main rival, Etisalat (ETEL.AD), fuelling talk that Etisalat may see a similar reduction. Du, which broke Etisalat's monopoly in 2007, has been setting aside funds since 2008 to provision for the royalty fee. It was not required to pay the fee until it became profitable.

Turkish banks: easy 2010, tricky 2011 | beyondbrics –

Shares in Isbank, Turkey’s biggest listed lender by assets, are up more than 1 per cent on Tuesday (see graph after the break) after the group announced a 2010 unconsolidated net profit increase of 26 percent to 2.98bn – comfortably ahead of expectations.

With lenders making hay from a combination of strong economic growth and wide margins, it was a record year for Isbank and the rest of the sector. But with growth now slowing and the central bank trying to limit credit expansion, 2011 could be more difficult for Turkey’s banks.

“Isbank is determined to accelerate its healthy and profitable growth domestically and in the nearby region based on the strength of its healthy financial structure in the coming
period,” chief executive Ersin Ozince said when the bank announced its resultsafter local markets closed on Monday.

FT Tilt - Abu Dhabi banks help keep EM wealth in the family(Registration)

Abu Dhabi is by some estimates the wealthiest city on Earth, and its 300,000 citizens sit atop almost ten per cent of global oil reserves. That makes the emirate a major source of outward investment, not just through its sovereign funds and government develoment companies, but also through the wealth of its private citizens.

While property in London, stocks in America and the safe funds offered by overseas wealth managers have long been a favourite, two new products launched by local banks in the last week show domestic demand is growing for exposure to emerging markets.

Abu Dhabi Islamic Bank launched a BRIC currencies note, which lets investors buy into the four BRIC currencies, which appreciated by 16 per cent in 2010. The notes, which include a guarantee that restricts any possible loss to 3 per cent, will return a fixed rate of 8 per cent if the currencies appreciate by anywhere from 0-8 per cent against the US dollar, and will return at the same rate of growth as the currencies if they appreciate by more than 8 per cent, up to limit of 22 per cent at maturity.

Manchester United's Bonds Soar Amid Speculation About Takeover by Qatar - Bloomberg

Bonds of Manchester United rose to a record amid speculation the 18-time English soccer champion may be sold to the Qatari royal family.

Manchester United’s 250 million pounds ($400 million) of 8.75 percent notes due 2017 were at 111.44 pence in the pound, taking their gain since Feb. 8 to 5.59 pence, or 5.28 percent, according to generic prices on Bloomberg. Newspapers including the London-based Daily Mail reported that Qatar Holding LLC is interested in buying the team.

“A lot of investors expect the Qatar deal to happen now,” said Jonathan Moore, an analyst at Evolution Securities Ltd. in London. “As a result, you would have a stronger owner financially with no real concerns about them taking cash out of the club. Plus, a new owner might decide to take out the bonds, which would mean paying a premium.”

Dubai Shares Advance for Third Day as Du's Royalty Payment Reduced to 15% - Bloomberg

Dubai shares climbed for a third day led by gains in telecommunications companies after Emirates Integrated Telecommunications Co. said it will pay lower than expected royalties to the government.

Emirates Integrated, the United Arab Emirates’ second- biggest phone company known as Du, increased to the highest since November 2009. Emirates Telecommunications Corp. climbed as much as 1.4 percent in Abu Dhabi. Dubai Islamic Bank PJSC, the U.A.E.’s biggest Shariah-compliant lender, advanced 1.8 percent. The Dubai Financial Market General Index rose 0.5 percent to 1,614.97 at 12:21 p.m. in the emirate. The ADX General Index gained 0.4 percent to 2,721.11.

“Telecoms are buoying the U.A.E. markets with the lead being set by Du in Dubai and Etisalat in Abu Dhabi,” said Shehzad Janab, asset management head at Dubai-based Daman Investments PSC, which manages more than 5.5 billion dirhams ($1.5 billion). The government cutting of the Du royalty fee implies a release of anywhere between 400 million and 500 dirhams, which is leading positive momentum as sell-side analysts factor in the earnings impact, he said.

MENA stock markets - midday +4GMT 15 February, 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)

Egypt still no positive for emerging market risk « ArabianMoney

When President Mubarak finally stood down last weekend the world and Egyptian mob celebrated. But the appointment of a military junta to replace him and suspension of civil rights has already left some wondering whether much has been achieved.

Certainly for investors the present indefinite closure of the Egyptian stock market is a reminder of the perils of investment in emerging stocks.

Orascom's Naguib Sawiris Says He's Concerned About Egypt Capital Outflows - Bloomberg

Naguib Sawiris, chairman of Orascom Telecom Holding SAE, said he is concerned about capital outflows from Egypt following the unrest that led to the resignation of President Hosni Mubarak.

“I am concerned about the outflow of capital, yes you are right, but it will be temporary until people see a real democratic regime and see a return of normality,” Sawiris said in a phone interview on Bloomberg Television.

Egypt’s benchmark stock index tumbled 16 percent in the week before trading was suspended on Jan. 30. The stock market delayed reopening until Feb. 16 to give companies a chance to disclose information on the impact of the protests on their operations, the Cairo-based exchange said Feb. 12. Tomorrow is a public holiday.

Real Estate rout –

If we’ve said if once, we’ve said it at least a hundred times before, the property market in the UAE is, to put it lightly, troubled (though phrases like ‘massively oversupplied’ and ‘in severe debt’ also come to mind). Anyway, with the fourth quarter results out from a few of the usual favourites of the sector, Kipp gives you a quick round up:

Sorrow at Sorouh:

There was somewhat shocking news this week, when Abu Dhabi’s second largest developer Sorouh Real Estate posted a Dh199 million loss for Q4 2010, a significant drop from the Dh28.1million profit it report in its Q4 2009 report. Failure to deliver key projects is a part of the reason for the loss. In particular the Sun and Sky Towers on Reem Island, which were meant to be delivered nine months ago, are now expected to be delivered by the end of the first quarter of 2011.”I think the most significant thing now is delivery,” said Richard Amos, the chief financial officer of Sorouh. “We are moving into a phase of delivery and can bear the fruit of all the investment we have put into the business.” So thinks will be okay, they hope.

Emaar: This quarter, Emaar reported a thundering 62 percent drop in its profits. Part of the problem, the report shows, is the rising cost of doing business for the developer. In its annual report, Emaar showed that its cost of revenues rose by 69 percent to Dh2.6 billion. But then again, as The National rightly pointed out, Emaar is still considered to be quite healthy because of its strong revenues from hotels and malls: In 2010 Emaar’s mall, retail and hospitality subsidiaries counted for 24 percent of total revenues.

Aldar: In arguably one of the bigger shock of the year, Aldar, the biggest property developer in Abu Dhabi, which had already stunned everyone late last year when it revealed its billion dirham debt, has also just released its full year results for 2010. What is the damage? Aldar reported a loss (after recognizing the impairment and fair value losses) of $3.46 billion, which is a far cry away from its $228 million profit reported in 2009. Depressing as the news is, it comes as no surprise. After all, Aldar has reported losses for five straight quarters and its shares have fallen 55 percent over the past 12 months.

So there you have it. Bad news but no death knells yet – just some more stormy weather. We’ll try and bring you more cheery news next time, but if it’s a real estate story, we’re not making any promises.

Istithmar's Cape Town share sale - The National

Istithmar World is selling its share in the Victoria and Alfred Waterfront shopping and entertainment development in Cape Town as part of an almost Dh5 billion (US$1.36bn) deal.

Growthpoint Properties and the Public Investment Corporation, a state pension-fund management company, have agreed to acquire 100 per cent of the development for 9.17bn rand (Dh4.62bn), it was announced yesterday.

Growthpoint is South Africa's largest publicly traded property investment company.

Damas debt deal paves way for jeweller to focus on jewels - The National

The retailer Damas may soon be able to focus on making the gold jewellery it is best known for rather than dealing with the restructuring of its finances.

The publicly listed retailer has signed a "facility agreement" to restructure its more than Dh3 billion (US$817 million) of debt, with 93 per cent of the outstanding amount owed to banks, it announced on the Nasdaq Dubai website yesterday.

The agreement was signed yesterday morning, said Anan Fakhreddin, Damas's chief executive. More than 20 banks are on board, but about four lenders have yet to sign on, said a source familiar with the matter.

Dubai mulls selling down stake in LSE over merger - The National

Borse Dubai is willing to consider selling some of its 20 per cent stake in the London Stock Exchange in the face of mounting opposition to the UK bourse's US$3.2 billion (Dh11.75bn) proposed merger with the Toronto exchange operator TMX.

Under the proposals to merge the London Stock Exchange (LSE) and TMX, Borse Dubai's stake would be watered down to 11.3 per cent, still above the 10 per cent threshold that triggers the involvement of Canadian regulators.

Any stake over 10 per cent has to be approved by state and federal authorities.

gulfnews : Union National Bank posts 16.6% profit rise to Dh1.35b

Union National Bank (UNB) yesterday reported a net profit of Dh1.35 billion last year, up 16.6 per cent compared to Dh1.15 billion reported in 2009.

The bank's operating profit last year was up 25.2 per cent to Dh1.8 billion compared to 1.46 billion in 2009.

Despite the prolonged vulnerability in the market due to the global economic downturn, the bank has been able to deliver good results, the bank said in a statement.

Bahrain: ‘day of rage’ simmers | beyondbrics –

Bahraini protesters wave their flags and hold pro-democracy signs as they gather in the village of Sanabis near Manama on February 14, 2011 during a demonstration called for on Facebook and inspired by similar initiatives which led to the ouster of the regimes in Tunisia and EgyptJasmine may be the scent sweeping across parts of the Arab world, but tear gas was the smell that permeated parts of Bahrain today.

A “day of rage” planned by Bahraini youths has resulted in clashes between demonstrators and security forces. As the day went on, the confrontations grew increasingly frequent and violent, with groups of as many as hundreds seen challenging lines of riot police. Despite a government promise to allow peaceful protests, riot police have used rubber bullets and tear gas to break up demonstrators.

It is the first significant public protest in the oil-rich Gulf since Tunisia and Egyptousted their presidents through widespread revolt.