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Tuesday, 19 April 2011

MIDEAST STOCKS-Egypt's index rebounds; Oman down on Renaissance | News by Country | Reuters

Egypt's main index ended higher on Tuesday as investor interest in battered bluechips returned after a widening graft crackdown, while most Gulf Arab markets corrected after recent rally.

Egypt's index .EGX30 gained 2.5 percent with EFG-Hermes (HRHO.CA: Quote) and Egyptian Resorts (EGTS.CA: Quote) up 8.8 and 7.5 percent respectively.

"This is a natural market reaction after sharp losses in the past period," said Mohamed Swefy of Osool Brokerage. - Shockwaves from Saudi’s crude statistics

Saudi Arabia is seriously trying to talk down the oil market. But in doing so, it is setting the stage for another oil price rally. Ali Naimi, the kingdom’s oil minister, has revealed that Saudi Arabia sharply reduced sharply its oil production last month – by a hefty 800,000 barrels a day – because of lack of demand.

“Our production in February was 9,125,100 barrels per day,” Mr Naimi said. “In March, it was 8,292,100 b/d. It will probably go a little higher in April. The reason I mention these numbers is to show you the market is oversupplied,” he said in Kuwait City ahead of an industry conference.

The disclosure – extremely rare because of its level of detail – has been largely overshadowed by other events, notably Standard & Poor’s announcement that it was cutting its outlook on US sovereign debt for the first time. But it matters, because it suggests that the Opec oil cartel is producing at its lowest level since two years ago, when the global economy was still emerging from its worst economic recession since the 1930s.

Moody's puts Egypt banks on negative outlook | Reuters

Moody's on Tuesday revised its outlook on Egypt's banking system to negative from stable, citing growing exposure to lower-rated Egyptian sovereign debt and the effect of political turmoil on the economy.

The ratings agency said it expected a decline in tourism, foreign direct investment, incoming fund flows and private consumption in the wake of political unrest would reduce Egypt's economic growth to around 2 percent in the next 12 to 18 months.

"These adverse economic conditions are likely to challenge the banking system's asset quality and business prospects as well as its profitability and internal capital-generation capacity," Moody's wrote.

Mubadala-backed Oman power firm to launch IPO in 2011 | Reuters

SMN Power Holding, Oman's largest electricity producer part-owned by Abu Dhabi fund Mubadala, is planning a 35 percent initial public offering (IPO) on the Muscat bourse this year, a company official said.

SMN Power is a joint venture between Mubadala, UAE firm Kahrabel FZE and Oman's National Trading Co. The firm owns two major power projects and has a combined output of 1,343 megawatts (MW).

Kahrabel and Mubadala each have 47.5 percent of SMN Power Holding with the rest held by National Trading Company. They are required to dispose of their shareholding via an IPO, the IPO prospectus said.

MENA stock markets close - April 19, 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's Mashreq Bank retail NPLs peaked in 2010 - exec | Reuters

Mashreq Bank MASB.DU expects its retail non-performing loans (NPLs) to improve in 2011 after bad loans peaked last year, the head of Dubai lender's retail bank said on Tuesday.

While the overall retail banking sector may continue to face challenges in 2011, Mashreq's non-performing loans ratio is set to improve, Douglas Beckett told reporters at an event to launch a new loyalty rewards programme in Dubai.

"The retail banking sector will remain extremely difficult," said Beckett, adding that some signs of improvement, such as increased credit card spending, were visible.

Dubai's Abraaj Eyes Real Estate Investments In The Region -Exec - Zawya

-Abraaj Capital continues to seek real estate investments in the region, where it sees the United Arab Emirates and Turkey offering good returns, while Egypt remains an attractive market, a principal at the company said Tuesday.

"We continue to look to invest in this region," Faisal Khan said on a panel at the Cityscape conference in Abu Dhabi. "We've been looking to invest since the beginning of last year."

Abraaj late last year bought a commercial office building in Cairo, Egypt, through its Shariah-compliant real estate fund Asas. The investment was the fund's first deal. It invests in long-term, income-generating assets in the real estate market in the Gulf and the Middle East and North Africa region.

Zain Saudi First-Quarter Loss Narrows to 532 Million Riyals - Bloomberg

Zain Saudi Arabia, a unit of Kuwait’s Mobile Telecommunications Co., said its first-quarter loss narrowed as the kingdom’s third-largest phone company by market value attracted customers with new services.

The loss fell to 532 million riyals ($141.9 million), or 0.38 riyal per share, from 662 million riyals, or 0.47 riyal, a year earlier, the Riyadh-based company said in a statement on the Saudi bourse website today. First-quarter revenue rose 36 percent to 1.48 billion riyals.

Saudi telecom companies, including Saudi Telecom Co. (STC), are competing for mobile-phone and Internet customers with advertising campaigns and pricing promotions. Mobile-phone users rose 15 percent to 51.6 million by the end of 2010 from a year earlier and Internet users increased 11 percent to 11.4 million, the Saudi Communication and Information Technology Commission said on its Web site.

Dubai's Jebel Ali Free Zone reports 51% fall in profit for last year - The National

Dubai's oldest free zone yesterday said profits more than halved last year because of write-downs on property investments.

The Jebel Ali Free Zone, which was founded in 1985 and operates the commercial hub around the emirate's main Jebel Ali port, said it made Dh139.7 million (US$38m) last year, down 51 per cent from the Dh286.7m of profit it reported in 2009.

The decline, revealed in documents posted on the website of Nasdaq Dubai, came as impairments on investment properties last year rose to Dh198.3m from just Dh28.4m the year before.

Egypt stocks extend decline amid corruption probe |

Egypts benchmark stock index tumbled over 3 percent on Monday, pulling the market lower for a second consecutive day as investor worries mounted that an investigation into the head of a leading Mideast private equity firm signaled a major widening in anti-corruption probes.

The Egyptian Exchanges benchmark EGX30 was off 3.2 percent by 1:15 PM. Cairo time, building on the previous days 3.43 percent decline.

The drop pushed the indexs year to date losses to over 30 percent – a clear reflection of the crisis of investor confidence confronting the Arab worlds most populous nation in the wake of the uprising that ousted former President Hosni Mubarak.

Kuwait report from the Financial Times


Regional turmoil concentrates minds

Revolt has reinforced a sense of malaise and a feeling the country should be doing better, says Michael Peel

The ruling family: A determination to hold on to power

While other Gulf thrones may totter, Kuwait’s has lasted for 259 years, says David Blair

Economy: A need to make up for missed opportunities

Simeon Kerr reports on the rollercoaster ride that comes with dependence on oil

Energy: Politics gets in way of target

David Blair reports on a deep-seated suspicion of outside help with reserves

Politics: Inertia punctuated by the odd outburst

Michael Peel on the strengths and weaknesses of the Kuwaiti model

Protest: Cordial calls for transparency

The atmosphere on the corniche is a sign of a protest movement that has not yet caught fire, but has begun to gather interest, writes Michael Peel

Banking: A slow and uncertain recovery

Robin Wigglesworth reports on a sector that may be over the worst, but is still not back to its pre-crisis health

Profile: NBK passes test as haven amid the storm

The bank’s robust profits are mainly thanks to the relatively healthy loan portfolio, writes Robin Wigglesworth

Capital markets: Regulator hopes to tame ‘anything goes’ market

Kuwaitis are pinning hopes on enforcement of new rules, writes Robin Wigglesworth

Immigration: An odd life for workers in a class of their own

Michael Peel talks to foreigners who are making a living outside the system

Merchant families: Power brokers with fingers in many pies

Foreign affairs: A deep mistrust of difficult neighbours

KIA: State’s revenues from oil put into safe hands

Sunni-Shia relations: Bahrain dilemma exposes tensions

Washington: Steadfast partner in US war on terror

gulfnews : Emal's Taweelah smelter is UAE's landmark non-oil project

Emirates Aluminium's (Emal) Taweelah-based smelter, which is on track to produce 750,000 tonnes of aluminium this year, was formally opened on Monday by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, in the presence of Shaikh Mohammad Bin Zayed Al Nahyan, Abu Dhabi Crown Prince and Deputy Supreme Commander of the UAE Armed Forces.

A colourful reception marked the opening of the smelter, which was attended among others by senior Emal representatives and dignitaries. Emal's phase 1 commenced operation on December 2, 2009.

Addressing guests at the event, Saeed Fadl Al Mazroui, Emal's president and chief executive, said: "As the UAE's largest industrial mega-project outside of oil and gas, Emal is leading the way in diversification. Emal is producing reliable, high quality aluminium for customers around the globe from one of the world's largest, most sustainable and technologically advanced smelters."

Nakheel scores tribunal victory - The National

A judge at the Dubai World Tribunal has cleared the way for Nakheel to cash up to Dh192 million (US$52.2m) of advance payment guarantees posted by a pair of contractors.

The ruling on Sunday was one of the Tribunal's most significant so far in favour of Nakheel, Dubai's biggest government-owned developer.

Nakheel had previously suffered a series of setbacks in the Tribunal, a judicial body set up to handle claims against its parent, Dubai World, as the larger company underwent a sweeping restructuring.

Tamweel seeks new funding option - The National

Tamweel, the Islamic home finance company, is weighing a return to the securitisation market as it hunts for longer-term capital to lend to buyers.

Varun Sood, the acting chief executive of Tamweel, said the company's mandate was "to get long-term funding" to avoid the problems the company had in the wake of the global financial crisis.

Dubai Islamic Bank (DIB) revived Tamweel last year when it acquired a 58.3 per cent stake in the company and provided new funds so it could begin issuing mortgages again. The bank paid almost Dh375 million (US$1.2m) for the stake, according to financial statements.

Profits for Saudi Arabia's Mobily up 40 per cent - The National

The latest earnings from Saudi Arabia's Mobily reinforced analysts' bullish take on the Middle East's telecommunications industry, which is still regarded as having huge growth potential.

The kingdom's second-largest mobile operator reported a first-quarter net profit of 998 million Saudi riyals in the three months to the end of last month, up 40 per cent from 714m riyals in the same period last year, it said.

The company's shares have gained almost 23 per cent since hitting a 15-month low last month and yesterday the stock closed up 0.5 per cent to 52.75 riyals on the Saudi Tadawul All-Share Index.

Gulf Times – Optimism in Qatar Inc slips

Political tensions in the Arab world, the recent earthquake and the resultant tsunami in Japan besides concerns over European sovereign debt have weakened the optimism in the Qatar Inc in the second quarter, according to the Business Optimism Index (BOI).

The composite index for the hydrocarbon sector retreated due to the expected fall in net profits and employment and that for the non-hydrocarbon segment declined mainly due to a pulldown by uncertainty in the region, said the BOI, a joint product of Qatar Financial Centre Authority (QFCA) and Dun and Bradstreet (D&B).

The report was released yesterday by Yousef al-Jaida, head of asset management and banking, QFCA.

Mobius downplays benefits of upgrade - The National

A possible upgrade for the UAE to emerging market status may not be the good news most investors have been expecting, says the veteran emerging markets investor Mark Mobius.

Stock exchanges in the country have been working towards inclusion in MSCI's emerging markets index to try to raise the profile of locally traded stocks.

"In reality it won't increase investments. It might actually decrease investments because you become a small fish in a big pond," said Mr Mobius, who oversees more than US$54 billion (Dh198.33bn) as the executive chairman of Templeton Emerging Markets Group.

Etisalat results fall short on back of expenditure and more competition - The National

Etisalat has reported an 8.5 per cent decline in first-quarter profit, amid high capital expenditure and greater competition in the UAE market.

Net income for the period was well short of analysts' expectations, falling to Dh1.82 billion (US$495.5 million) from Dh1.99bn during the same period last year.

The group had Dh1.11bn of capital expenditure during the quarter, and said net earnings had been hit by its investment in new networks in the UAE.

Dubai Group in talks to restructure $10bn debt - The National

Dubai Group is in talks with creditors to restructure US$10 billion (Dh36.72bn) of debt.

Sources close to Dubai Group said the company, a unit of Dubai Holding, aimed to restructure $6bn of bank debt alongside $4bn owed to other investors. That is $4bn more than previously announced.

Dubai Group declined to comment.

COMMENT: OPEC’s (and Russia’s) Nightmare

Saudi Arabia’s Oil Minister and the OPEC Secretary-General have both said that the oil market is now very well supplied and that they believe the current price of oil (Brent) is $15-$20 p/bbl in excess of where it should be.

That was one of the factors that undermined the price of crude today, albeit by no means the only one. The cut in the US credit rating outlook and further tightening in China also contributed. By the close of trade in Moscow the price of one-month Brent was off $2.1 p/bbl at $121.3 p/bbl (WTI at $107.1 p/bbl). OPEC producers are very well aware of the danger that a rising oil price may lead to slower global economic growth and then to oil demand destruction. The nightmare how quickly oil collapsed in the 2nd half of 2008 is still very fresh.

On the other hand, Saudi Arabia, in particular, now needs a higher oil price having pushed up domestic social spending as a result of the civil unrest across North Africa and the Middle East. With one of the fastest growing populations in the world and approximately 5-% youth unemployment, the ruling royals are desperate to try and buy off any trouble. Several estimates shows that the Kingdom now needs oil (Brent) to average approximately $100 p/bbl to balance its budget. That is also approximately where Russia’s federal budget balances.