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Tuesday, 29 March 2011

Dubai Bank waives loan charges for delay period - Emirates 24/7

Dubai Bank has agreed to waive or fully refund advanced rental charges for the period beyond the “expected date of delivery” of a project, Emirates 24|7 can reveal.

In a letter emailed to its customers, the Shariah-complaint bank said: “In those specific situations where the delivery of the property under construction has been delayed beyond the ‘expected date of delivery’ [i.e. the completion date plus the contractually defined extension period], advanced rental charges for the period following the ‘expected date of delivery’ will be waived and/or fully refunded for all eligible customers.”

The move is likely to bring respite to many who are under burden to pay large sums of money at handover time to the bank.

Qatar: The Rising Sun of the Middle East? | Arabianomics

Qatar’s tiny geographical size belies its recent rise to stardom on the international stage. In a region ripe with civil unrest, Qatar, along with neighboring Saudi Arabia, has been mostly immune to the turmoil that has engulfed the region. Sitting atop massive oil and gas reserves and an unemployment rate of below 5%, it is currently one of the most prosperous countries in the Middle East, with a real GDP growth rate of 19.4% in 2010, second in the world. It is first in the world in GDP per capita, at a staggering 145,300 in 2010.

Qatar’s ascendance has been a long time coming, but it was thrust into the international spotlight at the end of 2010 when it was handed the prestigious honor of hosting the soccer World Cup in 2022, beating out heavyweight contenders like Australia. It will be the first country in the Middle East to host the World Cup in history.Images that have emerged of planned stadiums in the Gulf country are impressive, to say the least, an indication that Qatar is seizing the opportunity to leave a positive impression on the world.

In a further bid toward global recognition, Qatar is stepping up its geopolitical role on the world stage. When the conflict in Libya reached a critical point in which a no-fly zone was deemed necessary by many countries in the West, Qatar followed suit. Now it is following those actions with words. “In Libya’s skies, Qatar is punching above its weight,” the Associated Press writes, in this article. “From an air base in Crete, the tiny Persian Gulf nation has started its biggest, farthest combat deployment — including a third of its fighter-jet fleet — and given the first Arab face to the Western-led coalition hoping to protect Libyan civilians from Moammar Gadhafi’s firepower.”

Guest column: Gulf states should cut foreign labour and promote local employment | beyondbrics –

Farouk Soussa, CitigroupBy Farouk Soussa of Citigroup

Gulf countries need to wean themselves off cheap foreign labour for greater social stability.

The goals of those protesting across the Middle East vary greatly from country to country but one thing that most have in common is a sense of frustration with their economic situation, at the heart of which is a lack of suitable jobs. And one step that the authorities in Gulf countries could take is to limit the inflow of foreign workers to promote greater local employment.

The role that unemployment has played in sparking the events that ultimately led to regime change in Tunisia and Egypt has been widely discussed in the media and elsewhere. Protesting Jordanians and Omanis have not called for regime change but for a better standard of living, complaining first and foremost about a lack of employment. Even in Bahrain, unequal job opportunities between the Shia and Sunni populations are at the core of what is otherwise seen as a sectarian crisis. Countries with high unemployment rates are widely regarded in the market as possible candidates for future unrest.

MENA stock markets close - March 29, 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)

Dubai World is in 'a new phase of growth,' says Chairman -

Dubai World, the state-owned holding company that’s restructuring about US$25 billion of debt, is in “a new phase of growth,” Chairman Sheikh Ahmed Bin Saeed Al Maktoum said.

“We look forward to a brighter future based on solid financials,” Sheikh Ahmed told a meeting of 600 managers from its business units in Dubai yesterday, according to a company statement.

Dubai World’s units include DP World Ltd. (DPW), the world’s fourth-biggest port operator, ship repair company Drydocks World LLC and private-equity investor Istithmar World PJSC. Sheikh Ahmed replaced Sultan Ahmed bin Sulayem as Dubai World chairman in December.

Saudi nears six week high; property stocks gain - Stocks -

Saudi Arabia's benchmark edged higher, rising for a seventh session in nine, but investors are cautious ahead of first-quarter earnings.

The benchmark climbed 0.2 percent to 6,519 points, nearing Sunday's six-week high.

Bluechips are mixed. Saudi Telecom Co fell 1.8 percent, but Saudi Electricity Co rose 1.5 percent.

Nakheel trade creditors have received Dh4.6bn to date - Emirates 24/7

Nakheel, the Dubai-based master developer, has paid Dh4.6 billion to its trade creditors till date.

The company, in a statement, said: “Nakheel has to date made payments of Dh4.6 billion to its trade creditors. Today’s [Tuesday] announcement marks significant progress in our recapitalisation plan, following on from the initial payments to trade creditors of Dh500,000 or less, which commenced in March 2010.”

In January, the company had said it had paid Dh3.9 billion.

Egypt stock market climbs for 3rd day - Maktoob News

Egypt's benchmark stock index closed moderately higher on Tuesday, the third consecutive day of gains, while the trading of shares of several major blue chip companies was temporarily halted after they triggered safeguards aimed at cooling the market.

The Egyptian Exchange's benchmark EGX30 index closed 3 percent higher. The index had closed up 0.75 percent on Monday, giving back much of its the gains it recorded earlier in the day as buyers stepped back to reassess the market. The gains over the week have pared down its year-to-date losses to around 24 percent.

The exchange's acting chairman, Mohammed Abdel-Salam, said the market has been performing well since it was relaunched on March 23, nearly two months after trading was halted amid protests that ousted former President Hosni Mubarak.

Gadhafi may tap $7 bln in gold reserves for war - Hurriyet Daily

Libyan dictator Moammar Gadhafi can tap gold reserves worth $7 billion, equivalent to a 10th of the size of his country’s economy, as he fights a civil war and resists air strikes from a western-led coalition.

Libya holds more bullion as a proportion of gross domestic product than any country except Lebanon, according to the London-based World Gold Council using January data from the International Monetary Fund. The value of gold is based on the March 25 close of $1,429.74 an ounce.

“He has all that gold? It’s probably in the central bank of Libya,” said Faraj Najem, a London-based Libyan writer and historian. “He has plenty of cash and if he’s got gold, it’s even better since he can pay mercenaries in a commodity that is easily exchangeable.”

UAE says steps in to fill Libya oil supply gap, UAE Industries - Maktoob News

The United Arab Emirates is stepping in to fill the gap from a drop in Libyan oil supply by pumping more oil, the country's OPEC governor said on Monday.

Since the start of disruptions in Libya's oil supplies, OPEC members have taken unilateral action to boost production. Saudi Arabia, the world's largest oil exporter, has produced just under 9 million barrels per day (bpd) so far in March.

"As oil exports from Libya were affected, other OPEC members stepped in including Saudi, Kuwait, Angola and the UAE," Ali Obaid al-Yabhouni told a conference in Abu Dhabi. "There is no damage report of infrastructure of Libya's oil production, so once the problems are resolved, (exports) will go back to normal."

Qatar's Masraf Al Rayan to issue up to US$1 billion Sukuk - Business Intelligence Middle East - - News, analysis, reports

Masraf Al Rayan (MARK), a Qatari Islamic lender, plans to sell up to US$1 billion in sukuk in the fourth quarter after its board received shareholders approval for the plan, Chairman Hussain Ali Al-Abdalla said.

Masraf Al Rayan is also seeking to buy a stake in a Saudi bank, he told the general meeting of shareholders late yesterday in Doha, without naming the lender.

“The aim from issuing the sukuk is to manage the balance sheet more efficiently,” he said.


Interesting findings from Goldman Sachs with regards to oil prices. This comes from a recent research report from their Commodities Research Team. In July of 2008 Goldman Sachs famously said the price of oil was not being distorted by speculators. After a 75% decline in prices they changed their tune and said speculators had in fact distorted prices. Their retraction said:

“Conversely, speculators bring fundamental views and information to the market, impacting physical supply management and facilitating price discovery. As a result, speculators have a loose relationship with price. In other words, as speculators buy, prices generally tend to rise, and vice versa. Accordingly, speculators also contributed to the extreme price movements over the last two years. For example, new data suggests that speculators increased the price of oil by $9.50/bbl on average during the 2008 run-up. Thus, speculators exacerbated the volatility that was nonetheless rooted in the fundamental imbalance.” (emphasis added)

As I’ve previously stated, I find it hard to believe that there is not a speculative element involved in the price of commodities today. This is perhaps best seen in “commercial” participants who are now speculating in the markets by hoarding or using various commodities as collateral for financing operations. Given their 2009 retraction, it’s not surprising to find that Goldman says there is a speculative premium in oil prices currently. Perhaps more surprising, is their statement that the speculative premium is too small:

Deyaar, Damas latest Dubai companies to recapitalize « ArabianMoney

Deyaar and Damas are the latest in a long line of Dubai quoted companies to agree debt rearrangements with their bankers, putting the trauma of the two-year recession that followed the global financial crisis behind them.

Yesterday it was revealed that Deyaar, Dubai’s second largest property developer had sold property and land worth $600 million to a ‘related party’ thought to be the Dubai Islamic Bank which has a 40 per cent stake in Deyaar. Dubai Government has a 30 per cent controlling stake in the DIB.

gulfnews : Emaar holds dividend at 10% despite protests

Emaar Properties, developer of the world's tallest tower Burj Khalifa, proposed a 10 per cent cash dividend, worth Dh600 million, to shareholders during a chaotic annual general meeting (AGM) in Dubai on Monday.

Although the shareholders sought a 20 to 30 per cent dividend, the management argued against it, citing a Dh4 billion short-term loan repayment this year.

"We can't distribute more than 10 per cent to the shareholders as we have financial obligations that we need to meet, which I'm not sure if we will reschedule. We cannot default on loan payments," Chairman Mohammad Al Abbar said.

Deyaar in big land and property sale - The National

Deyaar Development, Dubai's second-largest publicly traded property developer, has sold more than Dh2.2 billion (US$598.9 million) worth of property and land as it switches focus from developer to landlord. Deyaar sold the property to an unnamed "related party".

Financial statements show that Deyaar entered into an agreement to sell Dh1.33bn of property held for future development and land stakes worth Dh899.58 million as of December 30.

The previously undisclosed sale boosted revenuefor the year but still left the company with a Dh2.3bn loss after a major write-down of the value of its assets.

Bahrain exchange considers a tie-up - The National

Bahrain's stock exchange is considering a tie-up with another bourse to halt a decline in liquidity, the market's director says.

Low levels of trading have long afflicted the Bahraini market, the second-smallest in the Gulf after Muscat, but volumes have declined further recently with the unrest that has closed most of Manama's financial district and dampened investor confidence across the region.

"It will be important to bring in a strategic partner but all the options are open right now," said Fouad Rahman Rashid, the director of the Bahrain Bourse. "We have to find ways to see an improvement in liquidity [and] we are addressing this."

GCC confidence index falls - The National

Business confidence in the GCC fell in the first quarter to its lowest in nearly a year as regional unrest threatened local export markets, HSBC says.

The global banking group's GCC business confidence index fell by two points from the previous quarter to 85.5 points, its lowest since last April's reading of 85.3 points.

Expectations for future regional trade dipped as more companies geared up to export to Asia, the index showed. About 40 per cent of surveyed respondents forecast higher trade with China over the next six months.

Clear heads prevail at summit in Oman - The National

Muscat yesterday morning was calm, the topiary beautifully clipped, the sunshine glinting on the waves of the Indian Ocean.

That's not unusual, but events of the past few months should give the locals enough to chat about for the next 20 years.

Talking points include the protests in Sohar, dissent in the public and private sectors, with even a walkout by employees in hotels such as the Shangri-La, InterContinental and Crowne Plaza.

Stalled Dubai project given funding - The National

A Jumeirah Lakes Towers project is the first development to receive financing through a programme established last year by the Dubai Government to aid stalled projects.

Al Manal Development will receive Dh65 million (US$17.6m) from Mashreq to finance completion of Lakeside Residence, a partially built 35-storey tower, the Dubai Land Department announced yesterday. The financing from the bank was arranged through the department's Tayseer programme, which is aimed at boosting investment in stalled projects.

Such developments need to be registered with the department and have to meet certain requirements, including an escrow account for buyer payments, the government agency said. The projects must also be "moving forward" on their construction schedules. - Comment: Kuwait shows revolution’s nuances

On Kuwait City’s seafront close to midnight, half a dozen young men are seated on rugs as part of a tiny and almost genteel political protest.

They are calling for wide-ranging political reforms – but without the intensity or single-minded intent of their Egyptian counterparts who forced President Hosni Mubarak from power only last month.

“Don’t think it’s like [Cairo’s] Tahrir Square – it’s 180-degrees different,” warns one of the Kuwaiti six. “We don’t want to change our president, because we love him.” - Corporate recovery gathers pace

Many Gulf companies are still struggling with the aftermath of the financial crisis, the regional property slump, and now increased political uncertainty after the wave of Arab revolts. Corporate earnings, however, continued to recover last year.

Listed companies representing about 90 per cent of the six main Gulf states’ market capitalisation have reported that aggregate net profits rose 25 per cent to $43.1bn last year, according to Markaz, a Kuwaiti investment company.

In 2008, overall net profits tumbled by nearly half to $33.1bn, from a record $64.7bn in 2007, and recovered only a miserly 4 per cent to $34.5bn in 2009. This year, the recovery looks far healthier and more broad-based, say analysts.

Shorting Oil Makes Sense « Alpha Dinar- talking Gulf finance

Oil prices have surged over 25% since the onset of the Libyan crisis on February 15th. The geopolitical risks in Middle East region warranted a risk premium to oil prices as protests from Bahrain to Libya increased oil supply uncertainty. Libyan rebels have been marching towards Tripoli with support of the Allied forces. They recently captured the oil port of Ras Lanuf and a resolution of the crisis seems closer.
Also, the risk of unrest spreading to Saudi has been diminished as King Abdullah proposed several economic reforms and Bahrain has stabilized. Couple these factors with a huge surplus of oil in the U.S. and a well-supplied oil market and the logicial conclusion would be an immenint sell-off in oil prices. Thus, I think oil prices will go down to around $90. What do you guys think?