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Thursday, 7 April 2011

MENA stock markets close - April 7, 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)

$120 Crude: The Sum of All Fears

The price of one-month Brent is trading close to $121 p/bbl (WTI at $108 p/bbl) this morning and that is making investors in the oil importing economies very nervous. Nervous that the higher energy costs – plus rising interest rates - will soon start to slow global growth. Over the short-term, there is one clear way to play that move; buy Russian oil producers, buy the gas companies, buy the ruble. That’s what investors are likely to do today and we should see that reflected in ETF buying of Russia again this week.

The momentum remains very strongly in support of stocks in the oil and gas sector and with the oil price expected to remain strong, that is not likely to change for now. Our strategic market position is clear; overweight the domestic sectors that benefit from the higher-for-longer oil revenues in the 2nd half of the year and to migrate from the oil and gas sector during the current quarter – more the latter part than today.

But, the more important question is how investors in oil importing economies will react to what is a growing threat to global growth. US investor uncertainty was reflected in a flat session for the S&P yesterday. Asia’s markets are also, on average, not far off neutral today, albeit the headlines are much more about the interest rate threat than about $120 oil. But, if oil continues to climb then we will soon find out the answer – and it will not be good for any market.

Dubai Hires Banks to Raise $800 Million From Road Toll Bills - Businessweek

Dubai hired four banks including Citigroup Inc. to raise $800 million by selling road toll receipts as the Persian Gulf emirate seeks financing for its transport projects.

The Department of Finance appointed Citigroup, Dubai Islamic Bank PJSC, Emirates NBD PJSC and Commercial Bank of Dubai PSC to arrange the dual-currency, six-year financing, the Dubai government’s Media Office said in an e-mailed statement today. The transaction is expected to be syndicated further to a group of banks and includes both conventional and Islamic parts.

Dubai, which was on the brink of a debt default in 2009, is recovering from the impact of the global credit crisis that battered its property industry and slowed trade and tourism. Economic growth in the emirate will accelerate to 4 percent in 2011 from 2.2 percent in 2010, according to Citigroup.

What’s Up With Zain?! « Alpha Dinar- talking Gulf finance

Zain followed an ambitious gorwth strategy in the last decade to become on the ten biggest telcom companies in the world. They acquired contracts and companies throughout the Middle East and Africa. Then came the global financial crisis. Debt started to be a big problem, and certain shareholders needed some cash. These conditions altered Zain’s strategy, and the company become a recurring subject in the news with regards to either sale of assets or sales of a stake in the company. Zain Africa was first sold, shrinking the company’s size by a half. Then Etisalat proposed buying 46% of Zain, and now Zain Saudi might be sold.
The question I have is why is Zain selling its Saudi associate? Intially, when Etislat offered to buy Zain, the company had to dump its Saudi operations due to Etisalat’s presence in Saudi through Mobily. But the Etisalat deal didn’t go through. They issued a statement stating that under the next CMA rules, such an acquisition is not feasable. So why sell Zain Saudi? Where will future growth come from? The remaining operations of Zain are in (barring Saudi) Kuwait, Bahrain, Lebanon, Jordan, Iraq, and Sudan. The first four countries are small markets with high mobile penetration rates, yielding low growth rates. Although the last two countries offer large telecom markets and promising growth, the political instability in both countries create many uncertainties. Saudi Arabia is a very promising market that will create lucrative growth opportunities for Zain.

It seems that Zain are liquidating its assets and paying out dividends to its investors, rather than paying out dividends from its operations. I would be seller of the stock in the longterm, as the concerns of lack of growth overweight the dividend payouts.

Gulf banks Q1 provisions to fall, loan growth muted - Maktoob News

Banks in the Gulf Arab region are expected to show signs of recovery on their balance sheets when they report first-quarter results, though lending is likely to remain muted.

The regional banking sector was badly hit by the onset of the global financial crisis at the end of 2008, with lenders in the United Arab Emirates (UAE) hit by the country's battered real estate sector and loose lending policies.

The result was tightening lending conditions and rising provisions for bad and doubtful debts, all of which dented profitability. But analysts say banks will book lower provisions in 2011.

Dubai may get new financial aid from Abu Dhabi: Barclays

Abu Dhabi, the capital of the United Arab Emirates and home to 90 percent of the country’s oil reserves, might offer more fiscal aid to sister state Dubai to help refinance maturing debt, Barclays Capital said.

“As higher oil prices and production replenishes the coffers in Saudi, Kuwait and UAE on improving fiscal and external balances, we would not rule out oil-rich Abu Dhabi supporting Dubai in meeting some of its refinancing needs to avoid negative headlines and confirm its solidarity with other emirates,” Alia Moubayed, London-based senior economist for the firm, said in a research report Wednesday.

Abu Dhabi agreed a $20bn deal with Dubai after Dubai World, the state-owned holding company, roiled global markets by seeking to alter terms on about $25bn of debt following the 2008 property crash.

Kuwait fund eyes $1 bln firm to buy Egyptian stocks: paper | Reuters

Kuwait Investment Authority (KIA), the Gulf state's sovereign fund, will set up a company with $1 billion capital to invest in Egypt's stock market, a local newspaper said citing the head of the chamber of commerce.

"The head of the Kuwaiti delegation visiting Cairo revealed a decision by Kuwait Investment Authority to establish a company with a capital of $1 billion to invest in the Egyptian stock market," Kuwaiti daily al-Rai cited Ali al-Ghanim as saying.

"We affirm of Kuwait's positive position towards Egypt, and we are confident about investing in Egypt," he said.

Kuwaiti bourse halts trading in Zain on Saudi report | Reuters

The Kuwaiti bourse on Thursday halted trading in shares of telecoms firm Zain (ZAIN.KW) pending clarification of reports in local newspapers.

Kuwaiti newspapers carried reports on Thursday about developments on the sale of Zain's Saudi assets.

The reports said Zain had signed a term sheet agreement to sell its 25-percent stake in Zain Saudi 7030.SE to Kingdom Holding 4280.SE and Bahrain Telecommunications BTEL.BH as part of a previously announced deal.

Safe Haven Dubai Advances as Middle East Turmoil Disrupts Lives, Commerce - Bloomberg

Safe Haven Dubai Gains as Middle East Turmoil Disrupts Lives

Dubai, on the brink of a debt default in 2009, is emerging as the closest thing to a safe haven in the Middle East and North Africa as violence erupts in countries such as Libya and Bahrain. Photographer: Charles Crowell/Bloomberg

Imad Awad, a 45-year-old financial controller for oil-field equipment-supplier Weatherford International Ltd. (WFT) in Libya packed his bags and moved with his family to Dubai after protests erupted there.

Awad, a Palestinian with Jordanian nationality, was one of almost 200 staff and family that Geneva-based Weatherford relocated from the Libyan capital of Tripoli in mid-February. About 15 executives moved to Dubai with their families and the rest to other locations in the Gulf or their home countries.

“Dubai is a lovely, peaceful city with great services,” Awad, who moved with his wife and three children, said in a telephone interview from his Dubai hotel. “My children are going to school here.”

Small, But Superior: Is Qatar the Next Dubai?  - CNBC

On this clear, spring day, the scene at the Waldorf Astoria hotel in New York City is a frenzied tableau of American business meeting its Middle-Eastern Qatari allies.

Fully armed with M4 guns, police surround the building as hundreds of CEOs, private equity investors, politicians and heads of state gather to greet the royal Qatari family, the Al-Thani.

The “Business and Investment In Qatar Forum” is a major production which puts cultural differences aside and focuses on energy and industry, with natural gas center stage. - Palestinian growth ‘unsustainable’

Economic growth in the Palestinian territories is overly dependent on donor money and will be “unsustainable” as long as Israeli restrictions on the Palestinian private sector continue, a report by the World Bank argues.

The report says real growth in the West Bank and Gaza stood at 9.3 per cent last year, similar to the fastest-growing economies in the world. It stresses, however, that the territories suffer from unemployment and poverty, and recent growth is fed by an influx of donor money, not a “stifled private sector”.

The report also points out that the rebound in Gaza, whose economy collapsed during and after the 2008-09 war with Israel but grew nearly 15 per cent last year, took place “from a very low base”.

gulfnews : Hundreds of building projects in Dubai face cancellation: Rera

Hundreds of construction projects in the city, totalling up to 90,000 units, are facing cancellation and government scrutiny to stop property prices from plummeting further, a top property regulator said.

In an exclusive interview with XPRESS, Marwan Ahmad Bin Galita, CEO of the Real Estate Regulatory Agency, Director of Customer Relations at the Dubai Land Department, said the review of real estate developments is currently underway, assessing the status of these Rera-approved projects.

Bin Galita said 257 projects are under Rera's review, many of which have yet to even start construction. The scrutiny is unprecedented in New Dubai, where the landscape is dotted by unfinished, delayed buildings.

Regional unrest creates opportunities for Gulf investors - The National

Regional political unrest that has sent investors scurrying from Gulf stock markets has also thrown up buying opportunities, according to a top official at Invest AD.

Sachin Mohindra, the head of GCC portfolio management at Invest AD, which is owned by the Abu Dhabi Government, said the recently launched GCC Focus fund would be "gradually deploying capital at the right valuation points" to take advantage of declines in prices caused by the unrest as well as by earthquakes in Japan and New Zealand this year.

"[Stocks] have been more negatively affected by this news flow than other asset classes," Mr Mohindra said. "In local markets, the effect has been significantly more than global markets … But in our opinion, the base case for equities is pretty much still intact, whether it is for global equities or regional equities."

Madoff feeder fund liquidators sue Adia over redemptions - The National

Lawyers overseeing the liquidation of one of Bernard Madoff's so-called "feeder funds" have filed suit against the Abu Dhabi Investment Authority (Adia), seeking to recover US$300 million (Dh1.1 billion) allegedly redeemed more than five years ago.

The suit is one of more than 200 cases filed by lawyers overseeing the liquidation of Fairfield Sentry, a fund that solicited investments across the globe that were then pumped into Madoff's Ponzi scheme.

Fairfield Sentry's liquidators are seeking money they allege ADIA withdrew in 2005 and 2006, plus interest and court expenses.

North Africa unrest delays Malta plans - The National

Companies that were planning to open offices in a US$300 million (Dh1.1 billion) business park development being built by Tecom in Malta are holding back because of the instability in Libya and the wider region.

SmartCity Malta, which is focused on attracting information and communication technology and media companies, is an office park development similar to Internet City and Media City in Dubai, also developed by Tecom Investments.

SmartCity is a conglomerate promoted by Tecom, part of Dubai Holding, to develop and manage a global network of self-sustained business townships to foster the knowledge economy.

Damas eyes millions in deals struck by brothers - The National

Damas International is trying to recover hundreds of millions of dirhams' of investments, loans and payments for merchandise that the three Abdullah brothers made without proper documentation, says the jewellery company's chairman.

"We had a lot of collections and deals that were not documented properly, so people were only willing to come forward to the people with whom they shook hands," said Ibrahim Belselah, the chairman of Damas, a public company. He added that the brothers - Tawfique, Tawhid and Tamjid - routinely sealed deals with handshakes or verbal agreements, rather than formal contracts. "There's quite a lot of money still out there. It's in the hundreds of millions," Mr Belselah said.

The Dubai Financial Services Authority (DFSA) fined the company and the Abdullah brothers in March last year, and banned the brothers from executive positions at any company overseen by the regulator after it emerged the three men had improperly withdrawn Dh365 million (US$99.3m) of cash and almost two tonnes of gold worth Dh250m from Damas without shareholder approval. The DFSA also dissolved the Damas board.

Saudi Arabia Pushes Ahead With Mortgage Law Amid Public Unrest - Bloomberg

Advisers to Saudi Arabia’s king approved a long-delayed overhaul of the country’s mortgage law after the monarch pledged more than $82 billion to fund homebuilding, as governments across the Middle East offer concessions to quell political unrest.

The Shura Council agreed on its final amendments to the law and passed it to King Abdullah Bin Abdulaziz for final approval, according to Saad Mariq, deputy chairman of the council’s finance committee.

“The law will propel the creation of private mortgage- finance companies and banks will infuse a lot of money into mortgages,” Mariq said in a telephone interview on April 5. “I expect to see the injection of tens of billions of riyals into the sector as a result.”

CNBC Global Economy: Qatari Prime Minister on Growth, Libya and Emerging Markets - CNBC

Qatar hosts its first Business & Investment Forum in New York. The country is planning to invest over $35 billion outside of Qatar this year. Sheikh Hamad bin Jassim bin Jabr Al-Thani, Prime Minister and Minister of Foreign Affairs of Qatar sat down with Maria Bartiromo in a CNBC Exclusive.

Qatari Prime Minister Sheikh Hamad
Getty Images
Qatari Prime Minister Sheikh Hamad

Here's the transcript of the interview.

MARIA BARTIROMO: You are conducting the Qatar Investment Forum in New York this week. This is the first time you're doing it in New York. What are you trying to accomplish?

SHEIKH HAMAD: We usually do it in London, Paris and in Europe. And a lot of business people from this part of the world, they say, "We need it to be done in New York." Actually, they say that Washington. And for me, Washington is a place where I like to go and work and live. So I said, "Okay, we do it in America, but we do it in New York." We have a lot of people attending this, as you know. There will be hundreds of people. And we stop receiving people, because there is no place to have everybody. I think this could be a good model to show them what we are trying to do, what is our interest. We know what we can have from the people here, any new ideas about business in this part of the world.

For us, it's a new opportunity. We know most of the people here, but it's good to have a dialogue with them. Also, we have over 250 businessmen from Qatar and from the region which, it's healthy to have both of these people talk to each other, because I'm sure they will come with the good ideas, which will help, you know, the two sides.

Qatar, UAE will fail to get emerging market status - Arab News

Qatar and the UAE have failed to meet key requirements to be upgraded to emerging market status, potentially denying the lackluster markets access to multibillion-dollar liquidity.

Influential index compiler MSCI will announce its verdict in June and may snub the two countries for a third time, with Qatar failing to raise foreign ownership limits and UAE bourses yet to say when they will switch to a new settlement system.

Low trading volumes and regional unrest are also dampening prospects for Qatar and the UAE to be raised from frontier markets.

Oman Offers Some Lessons to a Region Embroiled in Protest -

More than half of Oman’s 2.8 million people are under the age of 20, and 83 percent are under 35. It is not surprising then that a chief complaint of Omani citizens is a lack of jobs and training for the sultanate’s young population.

Yet when the wave of unrest sweeping the Arab world led to violent protests in late February in the port town of Sohar, they quickly fizzled out.

Sultan Qaboos bin Said, who has ruled Oman for 40 years, eventually replaced two-thirds of his government and gave pay increases to civil servants and government pensioners. He also raised the minimum wage to 200 Omani rials a month, or $520, from 150 rials; introduced unemployment allocations of 150 rials a month; and announced plans to create 50,000 jobs in various areas of the public sector.

Kuwait eyes LNG project Down Under - The National

The Kuwait Foreign Petroleum Exploration Company (Kufpec) expects D-Day in August for a final investment decision on its participation in a A$20 billion (Dh75.83bn) Australian liquefied natural gas (LNG) project.

Development of the Wheatstone LNG project off the coast of north-west Australia is slated to start next year, Ali al Shammari, the deputy managing director of Kufpec, told a conference in the Kuwaiti capital.

Kufpec, which is the Kuwaiti government's overseas oil and gas investment arm, has joined forces with the US oil and gas producer Apache to explore and develop gas prospects including the Julimar and Brunello fields off the north-west coast of Australia. The Kufpec-Apache partnership's licences are for areas close to the Wheatstone gasfield, operated by the US oil major Chevron, and the Gorgon and Pluto fields, where two other large LNG projects are under development.

ADCB to write back Dh1 billion Dubai World loan provisions

Abu Dhabi Commercial Bank, or ADCB, will start writing back the loan provisions amounting to Dh1 billion on Dubai World loans from the first quarter of this year, a top 
official said.
“The bank entered into the negotiations with Dubai World on its troubled loans last year. Now, under an agreement with the borrower its Dh1 billion credits will be paid in eight years with yearly instalment of Dh120 million each,” said ADCB’s Chief Executive Officer Ala’a Eraiqat.

Talking to reporters after the 26th annual general meeting of the bank in the capital, Eraiqat said there is no proposal to launch a bond issue this year.