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Monday, 2 May 2011

FT.com - Buillish Saudi petrochemicals eye acquisitions

Saudi Arabia’s petrochemical industry churned out $7.8bn of profits last year, and is now likely to resume an overseas acquisition and expansion drive interrupted by the financial crisis.

After the local industry’s net profits fell by almost two-thirds to $2.8bn in 2009, Saudi chemical companies – led by Saudi Basic Materials Corporation, or Sabic, the state-controlled group with operations from the US to China – roared back to life last year.

“There’s a very bullish tone at the moment, as the current petrochemical up-cycle is very strong,” says Sebastian Pollems, a managing director and petrochemical specialist at Morgan Stanley in Frankfurt.

Emirates airline had 'tough' 2010, hurt by unrest | Reuters

Emirates airline [EMIRA.UL], the Arab world's largest carrier, had a 'tough' year in 2010 and has been hurt by political unrest in the Middle East and North Africa, its president said on Monday.

Tim Clark said that Emirates, which reports its results for the second half of 2010 on May 10, still managed to stay 'on course.'

The airline was affected by last year's Icelandic volcano eruption and bad weather conditions in Europe last December which closed airports and disrupted travel.

[snap] Musharraf weighs in | beyondbrics – FT.com

The complications begin. According to Reuters, Pakistan’s former president, Pervez Musharraf, says the US raid to kill Osama bin Laden was a “violation” of Pakistan’s borders but it was “avery positive step”.

Oil prices, which fall sharply on news of bin Laden’s death, dropping from $125.60 a barrel for Brent crude to $121.67, surged back after trading opening in New York and crossed the $126 mark for Brent. Later Brent stood at $126.12.


MENA stock markets close - May 2, 2011

ExchangeStatus IndexChange
TASI (Saudi Stock Market)
6719.530.53%
DFM (Dubai Financial Market)
1627.86-0.04%
ADX (Abudhabi Securities Exchange)
2692.020.04%
KSE (Kuwait Stock Exchange)
6516.60.13%
BSE (Bahrain Stock Exchange)
1406.020.08%
MSM (Muscat Securities Market)
6372.320.60%
QE (Qatar Exchange)
8514.11-0.31%
LSE (Beirut Stock Exchange)
1389.010.18%
EGX 30 (Egypt Exchange)
5052.810.98%
ASE (Amman Stock Exchange)
2213.720.71%
TUNINDEX (Tunisia Stock Exchange)
4247.2-0.01%
CB (Casablanca Stock Exchange)
11671.21.04%
PSE (Palestine Securities Exchange)
491.9-0.88%

Egypt Stocks Gain, Lead Mideast Rally, After Osama Bin Laden is Killed - Bloomberg

Middle East shares rose, with Egypt’s benchmark stock index gaining the most in almost two weeks, as global markets advanced after President Barack Obama said al- Qaeda leader Osama bin Laden was killed.

EFG-Hermes Holding SAE, Egypt’s biggest publicly traded investment bank, climbed as much as 5.8 percent and Commercial International Bank Egypt SAE rose for a second day. In Saudi Arabia, Rabigh Refining and Petrochemicals Co. increased the most in a week. Egypt’s EGX 30 stock index climbed 1 percent, the most since April 19, to 5,051.49 at 1:15 p.m. in Cairo. Saudi Arabia’s Tadawul All Share Index added 0.4 percent and the Bloomberg GCC 200 Index of companies in the six countries of Gulf Corporation Council added 0.3 percent.

“News of Bin Laden’s death is giving international markets a good feeling, which in turn is trickling down into our region,” said Amro Halwani, a senior trader at Shuaa Capital PSC in Riyadh. “The euphoria will most probably be short lived as investors realize this was more of a political stunt that will have little effect on international or regional political stability.”

UAE jeweller Damas inks repayment agreement with founders - Maktoob News

Jeweller Damas International said on Monday it has signed a repayment agreement with its founding Abdullah brothers and creditors that clears the way for selling certain assets of the founders.

On Sunday, the jeweller extended the payment date for 600 million dirhams ($163.4 million) owed by the Abdullah brothers by another month to May 31.

'The Cascade Agreement provides the legal framework for an orderly liquidation of, and realisation of cash proceeds from the sale of, the assets of the Abdullah Brothers Group,' Damas said in a statement on Monday.

Egypt sees 2011-12 budget deficit at 9.38% of GDP | Reuters

Egypt's state budget deficit is likely to grow to 9.38 percent in the 2011-12 fiscal year from around 8.5 percent now as it spends more to boost a sagging economy, the country's finance minister said on Monday.

Samir Radwan told Reuters the draft budget due to be presented to cabinet foresees state income of 342.6 billion Egyptian pounds and spending of 500.7 billion pounds.

Planning and International Cooperation Minister Faiza Abu el-Naga announced a development plan worth 230 billion pounds on Monday to kick start the economy after a popular revolt ousted Egypt's president.

Kuwait’s Capital Market Authority Tightens Rules for Companies - Bloomberg

Kuwait’s Capital Markets Authority is requiring companies to get approval before asking shareholders to back measures such as capital increases and reductions or sales of bonds and other securities, according to a statement to the Kuwait Stock Exchange today.

The authority began operating after bylaws for Kuwait’s capital markets legislation were published March 13 in the official Gazette.

Parliament approved a bill to create the authority, the country’s first stock-market regulator, in February 2010. Lawmakers said at the time that the bill would bring more transparency to the exchange, which has lacked regulation.

Qatar Airways to buy Cargolux stake; eyes more deals | Reuters

Qatar Airways, one of the Arab world's largest carrier, expects to sign a deal for a 33-percent stake in European all-cargo airline Cargolux in a few weeks, its chief executive said on Monday.

Cargolux, Europe's largest all-cargo airline, has previously said it was in talks to sell stake to a strategic investor. [ID:nLDE73H0MC]

'We are soon going to sign an agreement with them (Cargolux) ... in a few weeks. We see there are synergies and Qatar Airways would like to expand,' Chief Executive Akbar Al Baker told reporters in Dubai. He did not give a value for the deal.

Brent below $123 in volatile trading | beyondbrics – FT.com

Oil prices have been swinging about as traders have tried to make sense of the impact of Osama bin Laden’s assassination by US special forces.
Brent crude fell by more than 1 per cent on Barack Obama’s announcement from $125.60 to $124.65 a barrel and then slipped further before recovering the $125 level only to fall sharply again after 0915 BST to as low as $121.67. At 1045 it stood at $122.73.

Kuwait's Global Investment Q1 loss widens | Reuters

Kuwait's Global Investment House said on Monday its first-quarter net loss widened to 22 million dinars ($80.20 million) hurt by a drop in the value of its financial assets.

Global made a net loss of 14.2 million dinars in the year-earlier period, it said in a bourse statement.

The firm did not give a specific reason for the losses but the company posted a net loss of 10.6 million dinars from a drop in the fair value of its financial assets.

UAE bourses have 'bigger issues' than Osama bin Laden's death - The National

Local bourses were little changed this morning as news emerged that Osama bin Laden was killed by US forces.

"Osama's death to regional markets is immaterial," said Mohammed Ali Yasin, chief investment officer at CAMP Investments in Abu Dhabi. "We have bigger issues that are dampening sentiment such as the civil war in Libya," he said.

President Barack Obama said Bin Laden was killed in Pakistan on Sunday. The US is in custody of his body.

Mena social unrest effects uneven across GCC corporate: S&P | Alrroya

The effects of the recent social unrest and political upheaval in the Middle East and North Africa are uneven across the corporate and infrastructure sectors in the Gulf Cooperation Council states, said Standard & Poor's Ratings Services in a report published April 28, 2011, titled "Despite unrest GCC credit quality outlook in infrastructure is broadly stable and corporate prospects are mixed."

"Across the corporate spectrum, we anticipate generally stable credit quality for companies in the telecommunications and commodities sectors, whereas we foresee continued negative creditworthiness trends in real estate and construction," said Standard & Poor's credit analyst Tommy Trask, "and our overall outlook on the credit quality of GCC infrastructure companies and transactions is stable."

Of Standard & Poor's 29 public corporate and infrastructure ratings across the GCC, five are currently on CreditWatch with negative implications or carry a negative outlook, with the remainder on stable outlook. The real estate sector accounts for three negative outlooks: Emaar Properties PJSC (Emaar; BB/Negative/--), DIFC Investments LLC (DIFC; B+/Negative/B), and Jebel Ali Free Zone (FZE) (JAFZ; B/Negative/B). Although these three property companies are all headquartered in the Emirate of Dubai (not rated), Emaar and DIFC bear some exposure to markets currently undergoing social unrest and political transition, while JAFZ is exposed to risks related to its parent company Dubai World (not rated). We recently downgraded Bahraini sovereign wealth fund Bahrain Mumtalakat Holding Co (BBB/Watch Neg/--) and placed it along with one utility, Oman Power and Water Procurement Co SAOC (OPWP; A/Watch Neg/--), on CreditWatch negative following our similar respective actions on the sovereign ratings on the Kingdom of Bahrain (BBB/Watch Neg/--) and Sultanate of Oman (A/Watch Neg/--).

Dubai Investments First-Quarter Profit Falls 64% as Property Gains Decline - Bloomberg

Dubai Investments PJSC (DIC), which owns stakes in more than 40 companies, reported a 64 percent drop in first-quarter profit as gains from property investments fell.

Net income declined to 101 million dirhams ($27 million) from 277.7 million dirhams a year earlier, the company said in a statement to the Dubai bourse today. Gains from investment properties fell to 33 million dirhams from 168 million dirhams.

Real-estate prices in Dubai have slumped 62 percent from their peak in mid-2008 after the global credit crisis caused mortgage lending to dry up and speculation-driven demand to wane, Deutsche Bank AG said in February. House prices in the United Arab Emirates may drop another 30 percent as population growth stagnates and more new properties are put onto the market, Dubai Investment bank Rasmala said in March.

Non-performing loans likely to rise - Zawya

Dubai Leading bankers expect a significant increase in non-performing loans (NPLs) in the UAE this year with an expected increase in corporate restructuring.

Peter Baltussen, chief executive officer of Commercial Bank of Dubai, said: “Since we are still in the process of getting out of the economic crisis, NPLs will peak this year and might be doubled.”

He said that once the NPLs have peaked, the banking sector will witness a decline in bad loan provisions.

Why the Bin Laden death likely marks a stock market top « ArabianMoney

The euphoria in the United States about the killing of Al Qaeda chief Osama bin Laden in Pakistan earlier today is likely to be followed by a final surge in the stock market, but that could well be the top of this rally.

As the sensational news broke just before by a late-night statement from President Obama, Americans celebrated in the streets outside the White House. Stock futures indicated that Wall Street would celebrate too by opening higher, with a flight from safe haven assets like gold, silver, oil and bonds.

Abu Dhabi, hedge funds to back Glencore IPO -source, UAE Industries - Maktoob News

An Abu Dhabi vehicle, big hedge fund managers and Swiss private banks are set to serve as "cornerstone" investors backing commodity trader Glencore's $12 billion flotation, a person familiar with the matter said.

The listing, which could be London's biggest ever, will be aided by strong support from cornerstones, who could buy nearly 30 percent of the shares sold -- or some $3.6 billion worth, if the listing raises its maximum target of $12.1 billion.

Such investors back many Asian listings, committing to take large, guaranteed stakes and hold them for at least six months.

Higher oil brightens Qatar Fuel's prospects - The National

Higher oil prices are expected to buoy shares in Qatar Fuel, a distributor and retailer, as it expands its petrol station network and work on cross-country pipelines goes ahead.

The company, also known as Woqod, yesterday reported an 8.9 per cent rise in net profit in this year's first quarter compared with the same period last year, and announced plans to build an additional 12 petrol stations in Qatar. Woqod currently has nine petrol stations around the country.

Woqod also said it would build pipelines to transport oil products from a refinery in southern Qatar to the capital, Doha, and the new airport.

Emirates NBD CEO sees fragility in UAE economy - ArabianBusiness.com

A key player in the UAE's banking sector on Sunday said "a sense of fragility" still threatened a full recovery of the country's economy.

Rick Pudner, CEO of Emirates NBD, said the first quarter of 2011 had seen signs of improvement in some of the UAE's non-oil sectors but added that the country was "not entirely out of the woods yet".

Speaking at a seminar on the banking sector in the post crisis era in Dubai, Pudner said: "The first quarter of 2011 has seen signs of improvement in the UAE and Dubai particularly in the traditional sectors of the economy, such as trade, logistics, services and hospitality."

gulfnews : Call for attention to fiscal management in Gulf

Governments across the Middle East are responding to political developments — and higher commodity prices — with expansion of fuel and food subsidies, civil service wage and pension increases and additional cash transfers, tax reductions, and other spending increases.

According to the latest regional economic outlook published by the International Monetary Fund (IMF), the size of the national fiscal packages in 2011 in countries across the region ranges from less than 0.5 per cent of gross domestic product (GDP) in some of the oil importing countries to about 22 per cent in Saudi Arabia.

For most Gulf countries, the expected increase in oil prices from $79 (Dh290) per barrel to $107 per barrel and production volumes will lead to higher growth in 2011 and stronger fiscal and external balances, notwithstanding recent increases in government spending. Despite being in such a fiscal comfort zone, the GCC must pay close attention to long-term fiscal policy objectives, Masoud Ahmad, Director of the IMF's Middle East and Central Asia Department, told Gulf News in a recent interview.

DIFC unit cuts losses and defers $1bn loans - The National

Dubai International Financial Centre Investments, the commercial arm of the financial free zone, posted losses of US$247.7 million last year compared with a loss of $561.4m in 2009, as it wrote down the value of property.

The company has been trying to lower debts and sell off assets this year, it said, adding it had renegotiated $1 billion (Dh3.67bn) worth of loans with the Government of Dubai as it looked to sell assets and lower its debts.

The Government has deferred principal and interest payments on the two loans, which are worth $500m each. One was due in total in 2013, but repayment has been postponed until April 2014. The other was due in two payments - this month and in May 2013, but interest payments have been changed to later this year.

Dubai's E-Trade Securities closes accounts after DFSA fine - The National

The Dubai unit of a global online trading company is closing nearly 1,200 customer accounts after it was fined Dh1.1 million (US$299,470) by a financial regulator for deficiencies in its anti-money-laundering controls.

E-Trade Securities entered into an enforceable undertaking with the Dubai Financial Services Authority (DFSA), which regulates the Dubai International Financial Centre, that requires the company to pay Dh734,580 within 30 days.

The remainder of the fine will be suspended pending its "taking all steps to remediate the DFSA's concerns", according to an announcement yesterday.