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Monday, 21 March 2011

UAE should merge bourses to boost trade, CFA survey says - Banking & Finance -

The UAE should merge its three stock exchanges to boost trading volumes and improve visibility for foreign investors, a survey of investment professionals said Monday.

Ninety-three percent of nearly 200 professionals from CFA charters in nine Middle Eastern countries said a single UAE bourse would improve liquidity levels, the poll found.

The UAE’s three exchanges have been dogged by low liquidity and declining turnover in recent years. The country’s first IPO in two years was completed in March.

Why do oil markets care about Libya? | Energy Source –

Over the past week, the oil price appears to have moved in sync with events in Libya. When Gaddafi looked close to quashing the revolution, prices dropped with the expectation that Libyan oil would start flowing again. Every time the rebels have been given a boost, oil prices have gone back up.

So last Tuesday, as pro-Gaddafi forces neared Benghazi, oil dropped 3.9 per cent. But when UN Resolution 1973 was passed on Thursday, it went up 3.5 per cent. It fell again after Gaddafi announced a ceasfire, but rose as evidence came in of his attacks on rebel-held towns. Today, asmarkets react to the concerted bombing campaign over the weekend, oil has continued to rise, taking Brent back over $115 a barrel.

Amid this turmoil, the question remains, why is oil moving at all? Of course, Libya is in the top dozen oil exporting countries, but it still only exports about 2 per cent of world oil supply, and what has been lost in the last few weeks has largely been accounted for by increased Opec production.

MENA stock markets close - March 21, 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)

Gulf markets muted as Saudi feelgood factor fades | Reuters

Most Gulf Arab markets rose on Monday, but gains prompted by Saudi Arabia's latest $93 billion social spending plan were tempered by doubts over how this would be implemented.

Saudi Arabia's index .TASI, the largest Gulf Arab market, rose 0.2 percent, having surged 4.5 percent on Sunday, with regional markets rallying after the kingdom offered $93 billion in social handouts in a bid to neuter dissent. [ID:nLDE72H0ZC]

"I think we will have a day or two more to go, but then questions will start to come about the time frame for the Saudi stimulus and the costs associated to waste at the bureaucratic level," said Robert McKinnon, ASAS Capital chief investment officer. "Much of the stimulus is going to the people that are happy and have jobs, or own companies and land. I don't see any intent at actual reform. So it seems to me this is a PR stunt."

Jurisdiction of the DIFC Courts - Recent developments -

When a dispute arises in Dubai, which Court has jurisdiction? Is it the Dubai Courts? Or can the case be heard by the Courts of the Dubai International Financial Centre?

In this article, we look at statutory basis for the jurisdiction of the DIFC Courts and discuss some recent DIFC Court cases that have considered the extent of that jurisdiction.

Egypt bourse to reopen Wednesday: cabinet spokesman | Reuters

Egypt's stock exchange will reopen on Wednesday, the state MENA news agency quoted Cabinet Spokesman Magdy Rady as saying.

The exchange has been closed for more than seven weeks because of the unrest that ousted Hosni Mubarak.

MSCI has warned Egypt it risked exclusion from its emerging markets index if the exchange it did not reopen by March 24.

FT Alphaville » Oil and the cash battle in Libya

Coalition forces over Libya are not trying to kill Gaddafi, or to co-ordinate air strikes with the rebels, the Pentagon said on Sunday.

Assuming that’s true…

We could get a long war. In that case, FT Alphaville will go back to something weasked before. Between Gaddafi and the rebel forces, who could get enough cash to build a military advantage and retain loyalty — and where could they get it from?

Right now, we reckon the question could be about to affect the oil market’s view of Libya’s lost production even more.

Dubai firm sells stake in manufacturer to Tyco - Maktoob News

An investment firm owned by Dubai's ruler says it has agreed to sell its stake in steel product manufacturer KEF Holdings to Tyco International for $178 million.

Dubai International Capital said Monday it paid $126 million for the 45 percent stake when it acquired it in September 2008.

KEF makes valves and steel castings for the oil and gas sector and other industries.

“Vodafone of the east” a step nearer | beyondbrics –

Russian oligarch Mikhail Fridman (pictured) has come a step closer to creating his vision of a “Vodafone of the east”, after his phone company VimpelCom agreed to take over Wind Telecom from Egyptian tycoon Naguib Sawiris.

The $6bn deal ends an acrimonious, nine-month boardroom battle between Fridman and VimpelCom’s other controlling shareholder, Telenor of Norway – marking the latest in a string of defeats for those that have stood in the way of Fridman’s vision.

Telenor said 60.2 per cent of the unaffiliated VimpelCom shareholders voted against the merger deal, but Altimo – the Fridman vehicle which controls the telecom assets of his Alfa Group – managed to win a narrow majority of voting shares. Despite its defeat Telenor said it would soldier on inside VimpelCom.

Lower price for sale sign hangs over Kuwait's Zain | Reuters

Kuwait's Zain (ZAIN.KW) should remain for sale following Etisalat's failed $12 billion takeover, but buyers will be wary, with nearby Bahrain under martial law and borrowing costs and risk both rising.

Any buyer will also miss telecoms operator Zain's $3.1 billion dividend payout, so would likely bid below Etisalat's (ETEL.AD) 1.7 dinars-per-share offer for a 46 percent controlling stake, which the UAE firm withdrew on Saturday.

Zain shareholder, the Kharafi group, was the architect of the Etisalat deal, but rival shareholders were unhappy Kharafi would net all brokerage fees and exclude them from the sale.

Saudi Arabia and China: more oil deals to come? | beyondbrics –

Saudi Aramco, one of the world’s largest producers of oil, sought to reassure Chinese customers about oil supplies on Monday in Beijing, as global oil prices rose above $115 a barrel for Brent crude.
This has been the standard line from Aramco of late amid recent turbulence in the oil markets, but Aramco had a particularly attentive audience this time. China’s is the world’s second-largest consumer of crude, and Saudi Arabia is China’s largest supplier.
Speaking in Beijing, Aramco president Khalid A. Al-Falih said:
The kingdom has been and will continue to be a calming influence on global oil markets particularly at times of high turbulence. We have substantial spare capacity to make sure… oil supply goes forward.

Oil up on Libya strikes, Japan hope lifts stocks | Reuters

Oil prices rose $2 a barrel on Monday after Western forces launched a second wave of air strikes on Libya, while in other markets glimmers of hope about Japan's nuclear crisis shaped sentiment.

The yen extended losses, with speculators wary of more coordinated action by the Group of Seven countries after their first joint intervention in over a decade last week.

Brent crude for May was up $2.02 at $115.95 a barrel by 1115 GMT, while U.S. crude for April gained $1.91 to $102.98 after the U.N.-mandated attacks on Libya to protect civilians caught up in a one-month-old revolt against Muammar Gaddafi's forces.

Zain eyes South Sudan growth with caution | Reuters

Sudan's biggest mobile phone operator Zain is treading cautiously in the country's poor south, as it weighs up the prospect of a relatively untapped market with high costs and instability, a senior executive told Reuters.

Despite being weighed down by U.S. sanctions and conflict that have deterred investment in other sectors, Sudan's mobile phone market has boomed in recent years and the country has emerged as a lucrative African market for telecoms players.

But South Sudan, which is expected to become Africa's newest nation in July after voting to secede earlier this year, is expected to prove a tougher market to tap.

Will the financial market aftershocks now start? « ArabianMoney

Higher oil prices have been the most immediate impact on financial markets from the shock waves coming from the Japanese earthquake, Bahrain state of emergency and UN attack on Libya. Gold and silver prices have also bounced back quickly after an initial sell off.

This week we will find out what else is to come, although who knows who is holed below the waterline.

After the much discussed Kobe earthquake of 1995 it took some months for Nick Leeson’s scandal to emerge which collapsed the venerable of Barings Bank. Losses after the Kobe earthquake turned his trading position from serious to fatal for the bank.

Taking stock of Mena's year ahead - The National

Market traders have been caught off-guard since the beginning of last month.

Political turmoil in the Middle East and rising commodity prices have brought unwelcome memories from the end of 2008 when equities slumped and liquidity started to dry up.

Since the start of this year Saudi Arabia's market, the biggest in the Arab world, has shed 8.3 per cent of its value, while Dubai has lost 9.7 per cent and Kuwait has fallen almost 10 per cent. There have been losses in all regional markets.

Ipic emerges as the sole winner - The National

The Abu Dhabi Government-owned International Petroleum Investment Company (Ipic) has emerged as the sole foreign winner of an Algerian oil and gas licence in that country's latest bidding round, through its nearly completed takeover of the Spanish petroleum company Cepsa.

Last week Cepsa won a contract in the Rhourde Rouni area of eastern Algeria's Berkine basin in the Sahara, in which Russia's Gazprom last year discovered oil and gas.

The Rhourde Rouni contract was the only one in the licensing round to attract multiple bids, according to Al Naft, the Algerian national hydrocarbon resources agency. Cepsa beat rival offers from Oman's Petrogas and the Malaysian state-owned Petronas to find and develop oil and gas resources in the licence area.

Priority for GCC is to create jobs - The National

Labour markets across the GCC will have to accommodate twice as many national workers in the next seven years, according to the consultant McKinsey & Co.

How to create sufficient jobs for the millions of young nationals joining the workforce was among the most taxing issues on the agenda yesterday for business leaders and politicians who gathered for the first day of the Jeddah Economic Forum.

The event at the Red Sea resort takes place against heightened international focus on the Mena region as tensions persist from Tripoli to Manama.

Libya Strikes Raise Risks of Oilfield Shutdowns, Reprisals - Bloomberg

The international military intervention in Libya risks prolonging the shutdown of North Africa’s most productive oil fields as well as reprisals by Muammar Qaddafi’s regime against foreign energy assets.

Oil rose to a two-year high during the month-long conflict between government forces and rebels. Brent crude in London gained as much as 2 percent today after the U.S., U.K. and France launched missiles and airstrikes at targets in Libya.

Libyan oil output has fallen to less than 400,000 barrels a day, about a quarter of the production before the crisis, and may stop, Shokri Ghanem, chairman of Libya’s National Oil Co., said on March 19. Italy’s Eni SpA (ENI), the biggest foreign oil company in Libya, evacuated the last of its expatriate staff after the United Nations authorized military action against Qaddafi.

Investment Dar of Kuwait, Creditors Agree to Details of Restructuring Plan - Bloomberg

Investment Dar Co., the owner of half of Aston Martin Lagonda Ltd., said its management and the coordinating committee that represents its creditors agreed to the final details of a restructuring plan.

The details of the "long form term-sheet, which sets out the mechanics of the proposed restructuring plan, were agreed" in meeting on March 16, Kuwait-based Investment Dar said in an e-mailed statement today. The plan is under review by a Kuwaiti court, which holds its next hearing on April 7, it said.

Investment Dar said last month it agreed with creditors to a revised plan to pay 1 billion dinars ($3.6 billion) of Islamic bonds and loans over as long as eight years. The company’s creditors include more than 100 banks and investors. - Unrest unlikely to hit Saudi Arabia: Mobius

The £16.3bn manager said he was still looking “cautiously” for opportunities in oversold companies in the region.

Mr Mobius said: “It is very unlikely that a Libyan-style uprising would take place in Saudi Arabia.

“However, I do see a high likelihood for smaller protests, as well as an increased level of negative news streaming out of Saudi Arabia and the greater Mena region over the coming weeks and months.”

Qatar’s Dohaland to Seek $2.5 Billion for Project in Capital - Businessweek

Dohaland, the state-owned company redeveloping part of Qatar’s capital, plans to raise as much as 9 billion riyals ($2.5 billion) by the end of 2013 to complete the project, its chief executive officer said.

The 20 billion-riyal Musheireb project includes the construction of four government buildings in one of the oldest parts of Doha as well as shops, a hospital and a heritage center. It will be built in six phases, with the first completed in 2012 and the last in 2016.

“We are looking at providing our own financing” after the first two phases are finished, CEO Issa Al Mohannadi said in an interview. “There are many options we are considering now and it could be a combination of a number of things,” such as bonds or loans, he said.

Gulf Times – Qatar plans huge LNG investment

Qatar’s LNG output will reach 170,000 barrels a day this year and petrochemicals will be looking at 19 metric tonnes a day, HE the Minister of Energy and Industry Mohamed Saleh al-Sada.

In an interview with Qatar News Agency, the minister said: “We are always looking for optimum ways and markets that satisfy our goals and conditions, investing in heavy industries such as LNG (liquefied natural gas) receiving stations or in petrochemicals and fertilizers”.

Argentina and Jordan have announced that they have constructed LNG receiving facilities and al-Sada said Qatar would consider investing in LNG receiving stations in targeted markets to increase the country’s LNG exports.

Failure of bid leaves Zain to go it alone - The National

Zain is back on the market, but investors are not exactly thrilled about its prospects for finding another suitor.

The telecommunications company, listed in Kuwait, closed at 1.3 dinars yesterday, down 4.4 per cent, on the first day of trading after the collapse of a proposed US$12 billion bid by Etisalat.

In a statement to the Abu Dhabi Securities Exchange (ADX) on Saturday, Etisalat said the offer of 1.7 Kuwaiti dinars per Zain share was "no longer viable", citing several reasons for ending the talks. These included regional unrest and disagreement among Zain shareholders.

Kuwait's Global narrows losses, pays $178m of debts - Banking & Finance -

Kuwait's Global Investment House narrowed its fourth-quarter net loss by almost 40 percent to KD27m ($97.4m), Reuters calculated, as the firm cut operating and interest costs in 2010.

Global, one of Kuwait's biggest investment firms, reported a full-year net loss of KD73.2m in 2010, compared with a net loss of KD148.8m in 2009, it said in a statement.

The fourth-quarter figure compares with a net loss of KD44.6m in the same period in 2009, according to Reuters data.

Dubai's economy seen growing 2.2% in 2010 - Politics & Economics -

Dubai's economy is expected to have grown by around 2.2 percent in real terms last year, emerging from a similar contraction in the previous year, the Arab emirate's statistics office said on Sunday.

The global financial crisis shelved projects worth billions of dollars in Dubai, a trade-focused member of the United Arab Emirates known for artificial palm-shaped islands. Its economy was further hit by debt troubles in state-owned firms last year.

But recovery in trade flows and tourism was seen helping lift 2010 growth of the oil-wealth lacking emirate, which accounts for almost a third of the UAE's gross domestic product.

Outflows add pressure to Bahrain woes - The National

Capital outflows from Bahrain have begun to put pressure on the smallest economy in the Gulf and could lead the kingdom's central bank to step in to support the currency.

Staff from international banks, law firms and other companies have relocated to Dubai and parts of Europe as a blockade prevented access to the financial centre, which is estimated to account for a quarter of Bahrain's economy.

This has put pressure on the dinar as office workers convert cash to their home currencies and withdraw it from local accounts.

Oil Rises After U.S., U.K., France Begin Military Strikes Against Qaddafi - Bloomberg

Oil climbed in New York after the U.S., U.K. and France launched cruise missiles and airstrikes at targets in Libya and as continuing unrest in the region renewed concerns the turmoil may spread and disrupt supplies.

Futures advanced as much as 2.3 percent after Libyan leader Muammar Qaddafi vowed to repel allied forces pounding military installations. Ninety percent of Bahrain Petroleum Co.’s employees went on strike last week in response to a police crackdown on anti-government demonstrations, while Yemen declared a state of emergency on March 18.

“Bahrain is more of the hotspot rather than Libya,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney. “The focus will have to be on Saudi Arabia and Iran, that is where the powder keg is at the moment and it’s based on Bahrain.”