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Sunday, 20 February 2011

Zain Drops Most Since June on Concern Purchase by Etisalat May Not Occur - Bloomberg

Mobile Telecommunications Co., the phone operator known as Zain, fell the most in eight months after its board rejected purchase offers for its 25 percent stake in Zain Saudi Arabia and three executives resigned.

Zain, Kuwait’s biggest phone company, also received commitments from banks for a $1.2 billion loan, Chief Financial Officer Ossama Matta said in Kuwait City today. The shares lost 7.3 percent, the most since June 9, to 1,280 fils at the 12:30 p.m. close in Kuwait City.

Etisalat, as Emirates Telecommunications is known, is in talks with Zain shareholders to buy a majority in the Kuwaiti company and has said Zain needs to sell its stake in the Saudi unit in a “timely fashion” for the deal to proceed. Etisalat’s due diligence process to buy 46 percent of Zain will not be extended beyond the end of the month, said National Investments Co. The company is arranging the transaction for Al-Khair National for Stocks & Real Estate, which holds a stake in Zain.

UAE lender FGB to convert bonds into shares Feb 21 | Reuters

Abu-Dhabi based First Gulf Bank FGB.AD (FGB) is to convert bonds worth 3.6 billion dirhams ($980.4 million) into shares earlier than scheduled, at a valuation significantly higher than the current share price. FGB, the United Arab Emirates' second biggest bank by market value, will list 125 million new shares on the Abu Dhabi bourse .ADI on Feb 21 after converting bonds issued in July 2008 at a price of 28.80 dirhams per share, a statement said.

Shares in FGB ended 3.6 percent lower on Sunday, at 17.10 dirhams.

The bank's share capital will be adjusted to 1.5 billion dirhams from 1.38 billion dirhams, the statement said.

ANALYSIS-Global bourse mergers a wake-up call to UAE exchanges

A wave of mega-mergers between the world's major stock exchanges might persuade policymakers in the United Arab Emirates to push ahead with consolidation of the UAE's fragmented bourses, where volumes have slumped since the financial crisis.

The UAE's exchanges are fighting each other to attract liquidity from foreign investors that have yet to return in meaningful numbers since the crisis.

A potential merger of the two main bourses would boost volumes and remove inefficiencies associated with trading in the UAE markets.

FT Tilt - Mideast contagion-avoidance watch: UAE edition(Registration)

There is no country in the Arab world looking as safe and stable as the UAE right now, and its ruling families like it that way.

But that does not mean the country is immune to the wave of unrest that has washed across the Arab world in the last two months, with citizens from Morocco to Yemen asking forceful questions of their rulers like never before.

In the UAE, the most pressing political question facing the country's rulers is the broad inequality in development between the commercial and political hubs of Dubai and Abu Dhabi, and the far less-developed "Northern Emirates" of Ras al-Khaimah, Fujairah, Ajman and Umm al-Quwain. Quiet tension has long been building over the gap between the have and have-not emirates of the UAE, and tensions have grown since Abu Dhabi began its turbo-charged development drive in the last decade.

MENA stock markets close 20 February, 2011

Status 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)

Dubai Shares Drop as Mideast Unrest Sparks Risk Aversion; Emaar, Zain Fall - Bloomberg

Middle East shares slumped, sending Dubai’s benchmark stock index down the most this month, on concern political unrest in the region may spread.

Emaar Properties PJSC, builder of the world’s tallest skyscraper, dropped 4.7 percent. Dubai Islamic Bank PJSC, the United Arab Emirates’ biggest Shariah-compliant lender, fell the most since November. The DFM General Index retreated 3.7 percent, the most since Jan. 30, to 1,536.45 at the 2 p.m. close in Dubai. Kuwait’s gauge tumbled 2.5 percent, led by Mobile Telecommunications Co. as the company’s board rejected all purchase offers for its 25 percent stake in Zain Saudi Arabia. Israel’s benchmark index lost 0.1 percent.

Arab governments are cracking down on pro-democracy activists as uprisings that toppled leaders in Tunisia and Egypt spread to Libya, Algeria, Yemen and Bahrain. Prince Talal Bin Abdul Aziz, a member of Saudi Arabia’s royal family, said on Feb. 17 that the kingdom may see protests unless King Abdullah Bin Abdul Aziz introduces reforms, according to BBC Arabic TV.

Bahrain unrest may hit state's finance ambitions -

Bahrain may be tiny, and fairly insignificant as an oil producer, but nearly $10bn parked in mutual funds in the kingdom mean plenty is at stake if protests inspired by Egypt and Tunisia spiral out of control.

It is the Gulf Arab state seen as most vulnerable to unrest because of deep-rooted discontent among its majority Shi'ite population against the ruling Sunni dynasty, the Al Khalifas. The populace complains of economic hardships, lack of political freedoms and discrimination in jobs in favour of Sunnis.

This has always sat awkwardly with its status as a regional banking, trading and Islamic finance hub, but its advantages, as a diversified economy and relatively liberal society, have outweighed the risks - thus far.

Kuwait telco Zain to cut 40 pct of staff - CEO | Reuters

Telecoms operator Zain (ZAIN.KW) plans to cut 40 percent of its staff and reorganize its senior management structure, its chief executive said on Sunday.

Nabil Bin Salama said the reductions would only apply to the parent group and not to its subsidiaries.

"My strategy is to restructure and decrease the number in the Group as much as possible in order to receive the preferred benefits," he said at press conference.

Egypt pound edges weaker as banks reopen | Reuters

The Egyptian pound edged weaker in slow trade on Sunday after the nation's banks reopened from a three-day closure caused by worker strikes and protests.

The pound was trading at 5.883 to the U.S. dollar, down from 5.877 when banks were last open on Sunday of last week, a dealer said.

"It is very quiet and slow. There are a few trades at 5.883," a trader working in a bank treasury room said

MENA stock markets midday 20 February, 2011 - Up from opening reactions to #Bahrain.

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)
Market quotes delayed by 20 min.

Zain rejects all bids for Saudi ops; Kharafi ups ante | Reuters

Kuwait telecoms operator Zain (ZAIN.KW) rejected all offers to buy its stake in Zain Saudi on Sunday, throwing its planned $12 billion deal with Etisalat into jeopardy.

Zain had to sell the Saudi stake for regulatory reasons to allow the UAE's Etisalat (ETEL.AD) to buy a controlling 46-percent stake in the Kuwait firm.

"The board of directors has unanimously rejected all offers to purchase the share of group Zain Saudi Arabia, amounting to 25 percent," Zain said in a statement.

gulfnews : Bourses brace for further correction

Developments in Bahrain are starting to affect market sentiment in the Gulf and the UAE will not be immune.

Price charts for the UAE stock markets have been poised recently for a retracement to the downside and civil unrest in the region may only serve to amplify a normal correction. Abu Dhabi began its slide on Wednesday with Dubai likely to follow.

Further profit taking at this stage is natural after the strong rallies off the bottoms hit several weeks ago. The fact that the Abu Dhabi Securities Exchange General Index (ADI) and Dubai Financial Market General Index (DFMGI) were able to hold strong for a majority of last week is a testament to their underlying short term strength.

gulfnews : Bourse merger will benefit all

The regulator of the UAE capital markets will support the merger of the Abu Dhabi Securities Exchange and the Dubai Financial Market, according to Abdullah Al Turaifi, chief executive of the Securities and Commodities Authority (SCA).

The executives of the two bourses have been meeting to discuss if a merger would be good for the companies and the UAE. On balance, it should be.

Internationally, the companies that own stock markets have been merging to reduce costs and offer clients platforms with a greater range of listed stocks and financial products. These reasons apply to the UAE financial markets as well.

Investors keep wary eye on markets - The National

Investors are likely to rethink their equity strategy this week as tensions in parts of the Mena region push oil prices higher.

Protests in Bahrain, Yemen and Iran have raised concern about instability in an area that holds about 60 per cent of global oil reserves. Confusion also surrounds the reopening of Egypt's stock exchange.

London crude prices extended gains last week to hold at two-and-a-half-year highs of more than US$104 a barrel, as fresh Israel-Iran tension stoked fears of a disruption to oil flows in the region.

A threat to Saudi Arabia? | gideon rachman's blog –

Saudi Arabia seems to be one of the few Arab states not to have been caught up, so far, in the wave of popular unrest across the Middle East. But it is still profoundly threatened by what is going on. The unrest in Bahrain – just 15km from Saudi Arabia – poses very serious questions for the Saudi royal family. Bahrain’s royal family are Sunnis, threatened by an uprising by a majority Shia population. The Saudi royal family are also ruling over a large (minority) Shia population, concentrated in the oil-rich eastern provinces. Most of the experts I have read or spoken to reckon that the Saudis simply will not let the Bahraini royal family fall. This piece from the New York Times openly raises the prospect of Saudi military intevention.

What could the Americans say or do about that? It would all be uncomfortably reminiscent of the Iraqi invasion of Kuwait in 1991 – you remember, the one that “would not stand”.

In fact, the Saudis must be feeling pretty surrounded by now. The government in Yemen to the south is wobbling. Its allies in Bahrain are on the ropes. Hosni Mubarak has gone. Jordan is clearly unstable.

Zain rejects all three offers for Zain Saudi - The Times of India

Kuwait's Zain, which is trying to sell its Saudi operations worth $750 million as part of a proposed buyout to Etisalat, rejected all three offers for Zain Saudi on Saturday, a source told Reuters.

A proposed $12 billion takeover of Zain by Etisalat depends on the sale of the assets in Zain Saudi, because of regulatory requirements.

"The board met today and declined all three offers," the source, familiar with the discussions, told Reuters.

Frontier investors ride out turmoil in Mideast |

Low correlations between the worlds most esoteric stock markets are enabling many investors in frontier market indices to escape, or at least absorb, the turmoil in the Middle East relatively unscathed.

International debt securities in these countries are proving more prone to contagion, but equity investors are reaping some of the diversification benefits that frontiers promise.

As protests have spread across the Middle East and North Africa, causing the downfall of presidents in Tunisia and Egypt, investors have withdrawn money from the emerging markets universe at large. But they have continued to put more money to work in frontier equity funds in particular.

Egypt stock exchange closure to reach 3 weeks - Maktoob News

The Egyptian stock exchange will not reopen Sunday as had been expected, marking three weeks of closure due to upheaval surrounding the ouster of President Hosni Mubarak.

The 18 days of mass street protests that forced Mubarak to step down on Feb. 11 struck a heavy blow to the Egyptian economy. While banks have reopened, the stock market's closure could raise investor doubts in the Egyptian economy's ability to recover.

The stock exchange said in a statement Saturday that it would announce an opening date later and that it was putting procedures in place prevent "market troubles" and allow for the market's "gradual return to normal operation."