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Thursday, 17 March 2011

MENA stock markets close - March 17, 2011

ExchangeStatus IndexChange
TASI (Saudi Stock Market)
6069.940.97%
DFM (Dubai Financial Market)
1471.631.16%
ADX (Abudhabi Securities Exchange)
2584.89-0.59%
KSE (Kuwait Stock Exchange)
6263.80.21%
BSE (Bahrain Stock Exchange)
1414.440.10%
MSM (Muscat Securities Market)
6270.220.37%
QE (Qatar Exchange)
8185.720.78%
LSE (Beirut Stock Exchange)
1418.440.34%
EGX 30 (Egypt Exchange)
5646.5-10.52%
ASE (Amman Stock Exchange)
2205.211.04%
TUNINDEX (Tunisia Stock Exchange)
4332.990.18%
CB (Casablanca Stock Exchange)
12658.40.12%
PSE (Palestine Securities Exchange)
496.450.99%

Bahrain: refinery cuts output, prompting oil market fears | beyondbrics – FT.com

Oil prices are steaming ahead again, after their brief pause earlier this week, boosting revenues for Russia and other oil-exporters among emerging markets and squeezing the big oil-importers headed by China and India.

Reuters, quoting traders, reported on Thursday that Bahrain Petroleum Co (BAPCO) reduced production on Thursday due to staff shortages caused by political unrest. The news helped push Brent crude up $2.38 a barrel to $112.97.

Reuters said BAPCO officials were not immediately available for comment But the agency quoted a Bahrain-based trader saying: “There has been a partial shutdown at BAPCO because of a shortage in staff due to the protests going on.”


Fare Well Wataniya Airways « Alpha Dinar- talking Gulf finance

Wataniya Airways announced yesterday that it has stopped its flights and will not fly anymore due to their financial circumstances. Late last year, the airline tried a last ditch effort of cutting some of its flights, however, their efforts were fruitless. (Please click here to read our article in Decmber 2010 discussing Wataniya Airways’ sitiuation and how we predicted the carrier’s eventual demise).

Wataniya started operations in the worst of times, just before the global crisis. It attempted to brand itself as a luixury carrier, but the consumers wouldn’t budge. Their strategy of targeting Europe didn’t pay off as these routes are not as much demanded as other routes in the region. Many people would argue that the company was established to become the holding company that would eventually buy Kuwait Airways after its privitization, which may explain their weak strategies. The company called for a Shareholders’ meeting to discuss their options, and the company requested that the Kuwait Stock Exchange stop trading its stock

Omani Oil Production Unaffected by Strike, Gulf News Reports - Bloomberg

Oman’s oil production wasn’t affected by a strike staged yesterday by workers of Petroleum Development Oman, Gulf News reported, without saying where it obtained the information.

People employed at PDO’s Yibal, Marmul and Fahud oil fields halted work yesterday, demanding better pay, said the Dubai- based newspaper, citing an unidentified employee.

Demonstrations were also organized yesterday by employees of the Port Services Corp. and guards of Security and Safety Services who blocked the traffic to airport for a time, the newspaper said.

Dubai's DIFC creating new mortgage bond market to boost UAE real estate - The National

The Dubai International Financial Centre has laid the groundwork for establishing a new UAE mortgage bond market, based on Denmark's property market, which investors say could revitalise the Emirates' real estate sector.

The DIFC, in conjunction with Absalon Project, a joint venture between Denmark's VP Securities and Soros Fund Management, is launching a feasibility study for private residential mortgages funded by the issuance of standardised bonds.

The DIFC hopes that the proposals will create a large and liquid mortgage bond market in the UAE, jolting the country's property sector back into life after a prolonged slump, while avoiding the excesses related to mortgage-backed securities in the US subprime mortgage sector.

FT Alphaville » The unintended consequences of the nuclear scare

This is just the start of it, and one tiny aspect of the rapidly widening impact of Japan’s worsening nuclear crisis.

Not only did the failed attempts by Tepco, operator of Japan’s cripplied Fukushima nuclear power plants, to cool down over-heating fuel rods spark a selloff in global stock markets. Investor fears of the widening impact of a potential disaster at the plants is hitting demand for new equity.

That, in turn, caused French publishing group Lagardere to delay the initial public offering of its Canal Plus France stake and, according to Bloomberg. is now weighing onplans by commodities trader Glencore for an IPO.


MENA stock markets midday GMT+4 - March 17, 2011

ExchangeStatus IndexChange
TASI (Saudi Stock Market)
6069.940.97%
DFM (Dubai Financial Market)
1450.98-0.26%
ADX (Abudhabi Securities Exchange)
2578.53-0.84%
KSE (Kuwait Stock Exchange)
6263.80.21%
BSE (Bahrain Stock Exchange)
-
1413.090.00%
MSM (Muscat Securities Market)
6273.380.42%
QE (Qatar Exchange)
8145.450.28%
LSE (Beirut Stock Exchange)
1412.36-0.09%
EGX 30 (Egypt Exchange)
5646.5-10.52%
ASE (Amman Stock Exchange)
2184.490.09%
TUNINDEX (Tunisia Stock Exchange)
4325.04-0.31%
CB (Casablanca Stock Exchange)
12643-0.20%
PSE (Palestine Securities Exchange)
491.90.06%

Taqa Canada reserves more than estimated - The National

The Abu Dhabi National Energy Company, also known as Taqa, has revised its profit for last year upwards to more than Dh1 billion as it revealed it had more Canadian oil and gas than previously estimated.

The oil, gas and power group controlled by the Government of Abu Dhabi said yesterday its net earnings last year were Dh1.02bn (US$277.6 million), a sharp improvement from Dh182m in 2009. In unaudited financial results released this year, it had posted Dh937m of earnings.

Carl Sheldon, the general manager of Taqa, attributed the revision to the completion of a review of the company's oil and gas reserves at the end of last year. The assessment led to an upgraded estimate of the company's western Canadian reserves - the result of a successful development programme in the region.

Gulf states eye Spanish lenders - The National

Sovereign wealth funds from Gulf states are laying the groundwork for acquisitions of "significant minority stakes" in Spain's troubled savings banks.

Initial talks have begun with state investment firms in Dubai, Abu Dhabi, Kuwait and Qatar to take equity stakes in the Spanish cajas de ahorros, or savings banks, according to an industry trade body that concluded a tour of Gulf states yesterday. "We're confident that we're going to see finalised investments in specific opportunities," said Jorge Gil, the managing director of Ceca, the Spanish Confederation of Savings Banks. He declined to offer further details, citing client confidentiality.

He said the current recapitalisation process would result in "cajas that are stronger, significantly bigger, much better capitalised … and which are welcoming to private investors, with increased levels of corporate governance".

MIDEAST DAYBOOK: Egypt, Tunisia Ratings Lowered; Bahrain Risk - Bloomberg

Egypt, the North African nation whose president was ousted after popular protests last month, had its bond ratings cut one level at Moody’s Investors Service on political instability and the impact on the economy.

Tunisia’s credit rating was cut one notch to BBB- at Standard & Poor’s, which said the country’s political turmoil this year has hurt its economic prospects.

Moody’s Investors Service sees “a substantial risk that the medium-term credit fundamentals of Bahrain will be impaired by the present crisis,” the agency said.

Kuwaiti Wataniya Air halts flights, cites finances | Reuters

Kuwaiti luxury carrier Wataniya Airways (KNAK.KW) said on Wednesday it was stopping its operations due to its financial situation and regional unrest.

"Given the current financial situation of the company ..., as well as the difficult political and security situation in the region, the board has decided to cease all Wataniya Airways operations," a company statement said.

The statement also blamed a "lack of fair trade requirements in the local market" for its decision, without elaborating.

Le Figaro : Affaire Renault : l'argent extorqué en Suisse et à Dubaï

Le montage financier qui aurait été mis en place par le numéro deux de la sécurité du groupe mis en examen pour escroquerie a été mis au jour par les enquêteurs. Il laisse les experts perplexes.

Si Renault a fait preuve «d'amateurisme» dans la pseudo affaire d'espionnage dont il a été victime, selon le porte-parole du gouvernement François Baroin, le présumé escroc n'aurait pas montré la plus grande adresse pour camoufler les fonds extorqués au constructeur. Les enquêteursauraient déjà mis la main sur environ 100.000 euros en Suisse et 140.000 euros à Dubaï.

Dominique Gevrey, numéro deux de la sécurité du groupe, a été mis en examen pour «escroquerie en bande organisée» et placé en détention dimanche. Il est soupçonné d'avoir fourni de fausses informations ayant conduit au licenciement de trois hauts dirigeants pour espionnage. Le responsable à la sécurité affirmait au groupe qu'il était en contact avec une source anonyme qui lui fournissait des informations moyennant finance.


ANALYSIS - Capital flight threatens Bahrain, FX peg safe for now | Reuters

Capital flight from Bahrain is starting to pressure its currency and threaten its position as a Gulf financial centre, though it looks likely to avoid a full-blown currency crisis for now.

The small non-OPEC oil producer, where nearly $10 billion in mutual funds was parked last year, is the first Arab banking hub to be hit directly by the political instability sweeping across the Middle East and North Africa.

It is struggling to contain its worst unrest since the 1990s after majority Shi'ite protesters took to the streets, prompting Saudi Arabia to send in troops in an effort to restore order. As many as six people were killed on Wednesday.

Exodus in Bahrain as bank staff take flight - The National

An exodus of office workers from Bahrain was under way yesterday as international banks evacuated staff to Dubai and further afield.

Dozens of workers at international companies left as blockades on the kingdom's financial centre forced the stock market to shut down.

Most financial firms with offices in Bahrain, including Citigroup, HSBC, BNP Paribas and Standard Chartered, have temporarily closed or scaled back operations in recent days. Employees not leaving the country are being told to stay at home.

FT.com - Strong trade recovery lifts Dubai

Dubai’s trade sector is surging back to health as it captures rising global trade flows and consolidates its position as the primary re-export hub for Iran, despite US sanctions seeking to isolate the Islamic republic.

Illustrating the entrepôt port city’s core strengths, non-oil trade in 2010 rose 19 per cent to reach Dh905bn ($246bn), posting a strong recovery after a slowdown in growth in 2009 as the financial crisis hit. The recovery brings trade almost back to its peak level in 2008.

“Trade in Dubai hasn’t been affected, the moving of goods has not been affected,” says Ahmed Butti Ahmed, director-general of Dubai Customs.

Egypt downgraded by Moody’s, again | beyondbrics – FT.com


Moody’s Investors Service had downgraded Egyptian bonds to Ba3, three levels below investment grade, as protests and violence continue and the country comes no closer to making the transition to civilian government.
It’s the second time Moody’s has downgraded Egyptian debt since protests began in late January, forcing former president Hosni Mubarak to sand down on February 11.
Egypt’s foreign and local currency government bonds were downgraded to Ba3 from Ba2, to which they were previously downgraded on January 31. The outlook on the ratings remained negative. Moody’s said in a statement:
Today’s rating action was prompted by:
1) The prolonged political uncertainty in Egypt since our last rating action on 31 January, and our concerns about whether a transition to an effective and stable government will be achieved.
2) The adverse impact this political uncertainty is having on the country’s fiscal position and broader economic performance.
3) The deterioration of the political situation in Libya, which has negative implications for Egypt’s economy and security.
In Moody’s opinion, these developments have caused a further erosion of Egypt’s credit fundamentals relative to rating peers.

FT Alphaville » Bahrain: Saudis in, violence up and capital out

Further crackdowns took place in Bahrain on Wednesday with the army calling a curfew in parts of Manama and banning gatherings until the situation was “back to normal”, reports the FT on Wednesday. Other Gulf monarchies have, as you know, provided military, financial and political support to the ruling Khalifa family.

The violence has picked up; Al-Jazeera reported at least six deaths on the island on Wednesday and the FT included reports of shootings in Sitra, amongst other places:

Later, gunfire erupted in the Shia stronghold of Sitra, where a witness said security forces, who had surrounded the village, were opening fire with live ammunition at protesters, who had fled into buildings.

The witness told the Financial Times that military helicopters were also firing down into the village.

Meanwhile, from Reuters’ Martin Dokoupil on Wednesday:

Prolonged unrest in Bahrain could threaten its status as a Gulf Arab financial hub, triggering capital flight as the instability disrupts the banking system and puts its currency under pressure.

A banking source speaking on the condition of anonymity said 15 to 20 percent of deposits and investments of high-level Bahraini citizens in private banks have been withdrawn over the past few days as the clashes with security forces unfolded.

“A lot of clients are pulling out their money, they’re moving it to London, Europe, wherever. It’s not a question of taxes, but of access to their money,” another banker from the region said.

“One client pulled out $30 million in a matter of days. With banks closed, movements are limited, we will see the rush when they reopen,” he said.

Banks were closed Wednesday in Manama’s financial district, the stock market was closed and the central bank resisted pressure on the Dinar-USD peg from a location outside the capital.

These facts prompt the following questions about the reported withdrawals: (1) how much? (2) by whom? (3) how? (4) where are they now? (5) where are they going? And (6) what role are regional SWFs playing?

In its rationale for downgrading a series of Bahrain’s ratings on Tuesday, Fitch reflected that financial services make up 25% of the kingdom’s output. The Reuters report cites estimates that Bahraini banks hold $200bn in assets, including $10bn in mutual funds, and with foreign claims on banks amounting 92 per cent of GDP.

The GCC would surely act to prop up Bahrain’s financial sector if it came under continued threat, but a precedent has been set and if protests continue this will increase pressure to find a resolution to the standoff — which could of course lead to a further crackdown and a violent, vicious cycle.