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Monday, 14 March 2011

DFM 2010 profit plunges 77% to Dh78.9m - Emirates 24/7

Dubai Financial Market reported a 93 per cent drop in fourth-quarter net profit on Monday as trading volumes slumped to a six-year low in 2010.

DFM, the Arab world's only listed bourse, had quarterly profit of Dh5.9 million ($1.61 million), according to Reuters calculations. This compares to a profit of Dh88.6 million in the year-earlier period.

Two analysts polled by Reuters forecast DFM would make a fourth-quarter profit of between Dh3 million and Dh23 million.

RLPC-Saudi Oger raising $2 billion syndicated loan | Reuters

Construction company Saudi Oger is raising a $2 billion syndicated loan to finance the construction of police training facilities in Saudi Arabia, banking sources said on Monday.

Deutsche Bank has been talking to banks about forming a lead group on a club-style syndication where a loan is provided by a small group of banks and lenders have been asked to contribute $200 million each, the sources said.

Saudi Oger could not be reached for comment.

MENA stock markets close - March 14, 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)

Alwaleed Proposal May Pave Way for Etisalat’s $12 Billion Offer for Zain - Bloomberg

Prince Alwaleed bin Talal’s bid to join with a partner to buy Zain’s holding in its Saudi unit may clear the way for Etisalat’s $12 billion offer for a majority stake in Kuwait’s biggest phone operator.

Kingdom Holding Co. (KINGDOM), controlled by Saudi Prince Alwaleed, and Bahrain Telecommunications Co. offered $950 million for the 25 percent stake held by Zain, as Mobile Telecommunication Co. is known, in Zain Saudi Arabia, the partners said today in a statement. The non-binding offer doesn’t include the $3.8 billion of Zain Saudi’s debt and has received preliminary acceptance by the board of Zain Kuwait, the statement said.

“The bid will lead to increased optimism of a deal finally happening between Etisalat and Zain,” said Julian Bruce, director of equity sales at EFG-Hermes Holding SAE in Dubai.

Qatargas says ready to meet Japan's LNG needs | Energy & Oil | Reuters

Qatar is ready to meet its Japanese customers' increased needs for liquefied natural gas (LNG) as a result of Friday's earthquake and ensuing tsunami, Qatargas said on Monday.

The two state-controlled Qatari LNG giants -- Qatargas and Rasgas -- can make up for the quake-hit country's nuclear power loss which will mean relying more on gas-fired plants. "Qatargas stands ready to provide all the support to its long-term partners and foundation customers in Japan to meet any increased requirements for LNG at this time," a spokeswoman for the company said in a statement.

"Qatargas can also rely on our sister company RasGas to support Qatargas' efforts to meet our Japanese buyers and partners needs."

As Property Slump Persists, Future Points to a More Modest UAE - The Media Line

Dubai and its neighbors are getting back to basics as the property market struggles to regain its footing.

Gone are seven-star hotels, near-mile-high skyscrapers and artificial islands shaped like palm trees and the countries of the world. The new real estate hotspots are facilities for light industry and logistics, budget hotels and malls that serve neighborhoods rather than the region – dull by pre-crisis standards but profitable and in demand.

Once obscured in the wave of hyper-speculation, location and quality construction have re-emerged as critical factors in the residential and office segments, Saeed Hashmi, head of valuation and advisory at Landmark Advisory in Dubai, told The Media Line.

Libya's NOC asks oil workers to return | Reuters

Libya's National Oil Corporation (NOC) has called on employees to return to work at oil installations and is hopeful oil production can soon increase, the head of NOC said on Monday.

An uprising against the rule of Libyan leader Muammar Gaddafi has sharply reduced oil production in Libya, usually Africa's third largest producer with output of 1.6 million barrels per day, or almost 2 percent of world supply.

"The oil companies in Libya made a call for the return of all the employees to their work," NOC Chairman Shokri Ghanem told Reuters by telephone.

UPDATE 2-Qatar paying 2.2 bln euros for 6.2 pct of Iberdrola | Reuters

Qatar will buy 6.16 percent of Iberdrola SA (IBE.MC) for 2.2 billion euros ($3 billion), helping the Spanish utility finance its Brazil operations and further diluting unwanted suitor ACS (ACS.MC).

Iberdrola, saddled with 24 billion euros of net debt, said on Monday it would issue 338 million new shares and sell them plus treasury stock at 5.63 euros each to Qatar Holding, the Gulf state's sovereign wealth fund.

"We believe the market will look upon this capital increase as a defensive move of ... Iberdrola against the entrance of ACS in its shareholding structure," broker Mirabaud said in a note to investors.

Middle East Crudes Fall the Most in Two Weeks After Japan Quake - Bloomberg

Middle East crude oils for sale to Asia fell the most in more than two weeks after an earthquake in Japan shut as much as a third of the country’s refining capacity.

Oman oil for immediate loading dropped $1.86, or 1.7 percent, to $107.15 a barrel at 4:07 p.m. in Singapore, according to data compiled by Bloomberg. Dubai for loading in May declined 1.7 percent to $106.92 a barrel and Murban crude fell 1.5 percent to $110.94. Prices of the three grades dropped the most since Feb. 25.

Japan was struck by an 8.9-magnitude temblor on March 11 that unleashed a 7-meter (23-foot) tsunami and may have killed 10,000 people in the north of the country. The disaster shut about 1.3 million barrels a day of capacity, or 29 percent of the country’s total of 4.516 million, based on data from the Petroleum Association of Japan.

Dubai may launch secondary IPO market | Alrroya

Dubai may consider launching a secondary initial public offering (IPO) market and a bourse dedicated to trading of shares of small and medium-sized enterprises, a top government official said on Monday.

"The Dubai SME 100 will serve as the foundation of other initiatives such as possible development of a SME secondary IPO market listing, and the building of an equity market dedicated to SMEs," Sheikh Ahmed bin Saeed al-Maktoum, chairman of Supreme Fiscal Committee and an uncle of the emirate's ruler, told reporters at a conference in Dubai.

Dubai SME, an agency under the Dubai Department of Economic Development (DED), launched the "Dubai SME 100" on Monday, a ranking of top-performing small and medium enterprises in Dubai.

Bahrain sovereign debt insurance costs jump-Markit | News by Country | Reuters

The cost of insuring Bahraini sovereign debt for five years rose 12 basis points on Monday following violent protests over the weekend that prompted the island kingdom to call on neighbouring Gulf Arab countries for help to maintain order and security.

Five-year credit default swaps rose to 305 bps, data from Markit showed, defying a broader easing seen for other regional sovereign credits.

The cost of insuring Bahraini debt hit 19-month highs of 318 bps late February when anti-government protests killed seven demonstrators. Demonstrations on Sunday saw protestors overwhelm police and cut off roads.

S Korea: what price nuclear exports? | beyondbrics | News and views on emerging markets from the Financial Times –

Kepco headquarters, SeoulSouth Korea is whooping with delight that it has signed a preliminary contract to develop 1bn barrels of oil reserves in the United Arab Emirates, winning the deal by using the leverage of its $20bn project to build nuclear reactorsthere. But is it really all good news?

It’s certainly a big step for Seoul, which insists the final contract – due for conclusion next year – will lift its oil sufficiency to 15 per cent from 10 per cent now. The Korea National Oil Corporation has never won a project of this scale so it represents a huge vote of political confidence from the UAE.

So far, KNOC’s moves to acquire greater reserves and know-how have generally taken the form of mergers and acquisitions, buying Britain’s Dana Petroleum last year and Canada’s Harvest Energy in 2009. Korea’s diplomats and oil men have to be saluted for convincing the Emiratis that they are ready for such a big upstream concession. Korea is the world’s fifth-biggest crude importer and its relationship with the world’s third-biggest exporter seems to be going from strength to strength. So far, so good.

MENA stock markets 1220 p.m. GMT+4 - March 14, 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)

Business : What’s in store for the DFM?

It is ironic that the DFMindex lost more than 15 per cent in post-Libya panic selling even though the UAE is a bastion of political stability that has not witnessed the social unrest that has swept the Arab world from Morocco to Oman.

While some UAE listed banks, property developers, insurers and telecoms have exposure to Egypt or the Maghreb economies, there is no justification for the liquidation trade that has gutted valuations on the DFMand the ADSM.

The DFMwas in a savage bear market even before the overthrow of the Tunisian and Egyptian regimes. Dubai’s property crash and banking/external debt restructuring had accelerated a sell-off in the DFM, with a two-third plunge in trading volumes, the closure of dozens of stock brokerages and bank margin calls that forced investors to sell shares in a desperate scramble to raise cash. I truly believe that, below 1,400, we just witnessed a capitulation trade in the DFM, Lord Rothschild blood on the street inflection point. Why?

Kuwaiti bourse halts trading in Agility shares | Reuters

Kuwaiti bourse halted trading in logistics firm Agility (AGLT.KW) shares on Monday, pending an announcement.

Earlier on Monday, France Telecom (FTE.PA) and Agility are to acquire a 44 percent stake in Iraqi mobile operator Korek Telecom, the firms said in a joint statement on Monday. [ID:nWEA8194]

gulfnews : Banks detect an increase in the number of suspicious transactions

The number of suspicious transactions detected by the UAE increased to 2,711 in the past year from 1,750 in 2009, data provided by the UAE Central Bank showed yesterday.

The numbers are based on suspicious transactions reported by banks, financial and non-financial institutions. In 2008, the number of suspicious transactions that were detected by the UAE stood at 1,170.

"The number of suspicious transactions continues to rise. But it's not worrisome. There's going to be a lot more money on the move — good money as well as bad money," Bryan Stirewalt, Managing Director of Supervision at the Dubai Financial Services Authority, told reporters on the sidelines of a workshop at the Central Bank.

Dubai Islamic Bank results fail to excite - The National

Dubai Islamic Bank's earnings, announced over the weekend, did little to convince analysts the lender is back to full speed.

The bank reported net income last year of Dh806 million, a 33 per cent decline on 2009, triggered by a drop in operating income and an increase in provisioning. Fourth-quarter net income reached Dh35m, which was almost 36 per cent below the consensus of analysts at Dh55m.

Jaap Meijer, a banking analyst at Alembic HC Securities, said the fourth-quarter numbers were an improvement over several flat quarters previously but not enough to warrant a re-rating on the shares. He holds a "neutral" rating on the stock.

Egypt’s Stock Market Regulator Eases Rules on Margin Calls by Brokerages - Bloomberg

Egypt’s stock market regulator eased rules on margin calls by brokerages in an attempt to limit volatility when the North African nation’s bourse opens after more than a month-long closure.

Brokerages now will require investors pay margins or present more collateral when the client’s debt reaches 70 percent of the shares’ value at the end of trading each day, the Egyptian Financial Supervisory Authority said in a statement on its website. Brokerages were allowed to make the margin calls at 60 percent earlier.

The bourse has been shut since the end of trading on Jan. 27 amid a popular revolt that ousted President Hosni Mubarak two weeks later. The benchmark EGX 30 Index plunged 16 percent in the last two trading days.

Gulf Times – Qatar, Kuwait lead banks’ robust growth in Mideast

Qatar and Kuwait led from the forefront as Middle East banks reported robust growth in total shareholders’ return (TSR).

TSR rose to 15.2% in 2010 against 3.6% in the previous year, according to the Boston Consulting Group (BCG), a global management consulting firm and the world’s leading advisor on business strategy.

The results were released in a new study by BCG titled ‘Creating Value in Banking 2011: Settling into the New Post-Crisis Equilibrium’, based on the analysis of about 550 global banks and financial service companies listed on international stock markets.

UAE's NBAD exposure to Egypt and Libya over $400 mln | News by Country | Reuters

National Bank of Abu Dhabi (NBAD.AD: Quote) has a $377 million exposure to Egypt and $51 million to Libya, but the lender's CEO said this was not cause for concern.

The exposure to Egypt is mainly to international companies and some UAE companies while the Libyan exposure is to banks there, Michael Tomalin said on Sunday.

"The exposures are well covered and our Egypt operations are self-funding. Whatever happens to Egypt, we are confident things will work out," Tomalin said on the sidelines of the bank's annual general meeting.

"We have no problem exposure to Egypt," he added.

Zain board approves Kingdom, Batelco offer -sources | Reuters

A majority of the board of Zain (ZAIN.KW) approved on Sunday an offer by Kingdom Holding (4280.SE) and Bahrain Telecom BTEL.BH (Batelco) for the Kuwait telecom firm's Saudi assets, sources familiar with the matter said.

The board approved the offer with a vote of five to two, one source, who declined to be identified, told Reuters on Sunday.

Kingdom and Batelco offered to buy the assets at 10 Saudi riyals ($2.67) per share, paying $1.2 billion in total, and agreeing to take over $3.8 billion of debt, another source said.

Protests force Bahrain bourse move - The National

Bahrain's stock market was forced to move to emergency premises at dawn yesterday as hundreds of protesters blocked access to its Financial Harbour office.

Share trading continued, but with volumes only 20 to 30 per cent of normal levels. Ali al Mansori, an exchange spokesman, said it was too early to say if business would resume in the Financial Harbour today.

Demonstrators seriously disrupted normal business in Bahrain with a targeted move against Manama's Financial Harbour district, the heart of the country's investment and banking industry.

Is China More Exposed to Middle East Unrest? | Arabianomics

China’s new role as the world’s second largest economy and its increasing thirst for oil leaves it more exposed to unrest in the Middle East, argues the Wall Street Journal’s Andrew Critchlow in this fascinating piece.


“The newly crowned world’s second-largest economy surpassed the U.S. as the biggest importer of oil from Saudi Arabia in 2009, and the kingdom’s crude is an increasingly important factor in powering the nation’s growth. Considering the economic importance of the Middle East for Asia as a whole, Beijing and its neighbors remain unable to influence the course of events in the Arab world, while being arguably the most exposed to the changes under way.”