Tuesday, 10 May 2011
The central bank has been urging banks to quote lower rates at daily fixings of interbank benchmarks as liquidity in the system improved following Dubai’s $25 billion debt restructuring deal last September.
“Banks have no liquidity issue,” Saif Hadef al-Shamsi, senior executive director at the central bank’s treasury department, told reporters on the sidelines of a financial conference in the UAE capital.
The long-awaited law, regulating issuance and the amount of debt the world's No3 crude exporter may accumulate, awaits a presidential nod after the UAE's top advisory council passed the bill in December.
"The public debt law is now in final stages for approval and as for the ministry of finance it has already started taking measures after the cabinet's resolution to establish a public debt bureau," Nadia Sultan told a conference in the UAE capital.
Arabic daily Al Khaleej quoted a source from the company as saying that the company has an accumulated debt of an estimated Dh1.2 billion. However, it has large assets which can be liquidated anytime.
The source said that the company, which operates around 170 fuel stations, has managed to stay afloat despite a huge gap between the cost of gasoline and the sale price.
Investors in two existing $500 million facilities due in 2016 have been invited to exchange the subordinated notes for new senior notes maturing in 2018, allowing the bank to extend its debt maturity profile.
"They are doing an exchange of their Tier 2 into senior (notes). HSBC and UBS are on it," said a banking source on condition of anonymity.
|TASI (Saudi Stock Market)||6712.97||0.60%|
|DFM (Dubai Financial Market)||1606.78||1.18%|
|ADX (Abudhabi Securities Exchange)||2670.82||-0.18%|
|KSE (Kuwait Stock Exchange)||6522.9||0.22%|
|BSE (Bahrain Stock Exchange)||1381.61||-0.24%|
|MSM (Muscat Securities Market)||6233.34||-0.50%|
|QE (Qatar Exchange)||8665.42||1.42%|
|LSE (Beirut Stock Exchange)||1385.26||0.22%|
|EGX 30 (Egypt Exchange)||4957.68||0.48%|
|ASE (Amman Stock Exchange)||2192.75||-0.08%|
|TUNINDEX (Tunisia Stock Exchange)||4137.73||-0.37%|
|CB (Casablanca Stock Exchange)||11928.9||-0.14%|
|PSE (Palestine Securities Exchange)||492.99||-0.23%|
"There is a report from HSBC dated May 10 that gives EFG-Hermes an 'overweight' rating and a target price of 24 Egyptian pounds. This is what is causing the rise in the stock," said Omar Ascar, head of trading at Cairo Capital Securities.
Another trader said the stock maybe reacting to comments by the stock exchange chairman who said he expected a number of initial public offerings this year.
Qatar National Bank climbed to the highest since January as its 12.7 billion-riyal ($3.5 billion) rights offer was fully subscribed. Doha Bank, the country’s fourth-biggest lender by assets, advanced 3 percent. The QE Index (DSM) surged 1.4 percent, the most since March 20, to 8,665.42, at the 1:15 p.m. close in Doha. The DFM General Index (DFMGI) advanced 1.2 percent. Tamweel PJSC, the Dubai-based home finance company plunged 10 percent on its first trading day in more than two years.
“MSCI upgrade speculation is beginning,” said Akram Annous, Middle East and North Africa strategist at Al Mal Capital PSC in Dubai. “There was some chatter going around today about a possible foreign ownership free-float raise to the 30 to 49 percent range from the current 25 percent level.”
The Dubai-listed firm, also known as the National Cooling Company, posted profit of 31.9 million dirhams ($8.69 million) for the quarter, compared with net profit of 40.4 million dirhams in the year-ago period. Revenue for the first quarter came in at 246.6 million dirhams, Tabreed said in a bourse statement.
The company said current liabilities exceeded its current assets by Dh2.6 billion, while accumulated losses of Dh972 million amounted to 400 per cent of its issued share capital as of March 31.
"We have put Zain behind us. It's over," Jamal al Jarwan said at a telecoms conference.
Etisalat scrapped its offer to buy a controlling stake in Zain citing Zain's divided board, extended due diligence and regional unrest.
The unrest across the Arab world is beginning to impact on top Dubai based companies with disappointing financial results. Emirates Airline’s full-year profits came in at a record $1.5 billion compared with an expected $2 billion while Arabtec posted an 80 per cent slump in first quarter profits to just $7.2 million.
Emirates has suffered from the higher fuel prices that have come in the wake of unrest, revolutions and civil war in the region this year. There have also been many disruptions to flight schedules due to the unrest and the Japanese earthquake and nuclear disaster.
Most of the set back probably occured in the first three months of 2011, leaving a questionmark over the rest of the year. That said few global airlines could match this profit performance, if any.
Arabtec has recently made much of its strategy to diversify away from dependence on the UAE, and into Saudi Arabia, Pakistan and Egypt. But regional unrest is now most probably delaying the roll out of these plans. The company provided no explanation for its plunging profits in the first quarter.
But it said arbitration continues over a cancelled contract to build the Meydan racecourse in Dubai. Its joint venture partnership is seeking $780 million in compensation for the cancellation of the project in January 2009.
Many projects in Dubai have stalled since the credit crisis just over two years ago and local contractors have lost income as a result, although Arabtec is regarded as a strong group and has won notable projects in Abu Dhabi.
Both Emirates and Arabtec are local blue chips and the results today are a reminder that as a regional hub city Dubai is not immune from the recession in non-Oil States which is a direct and inevitable consequence of the Arab uprisings and disorder in many countries.
How long this will last and what the ‘new normal’ for Dubai business might be is what most concerns business leaders in the city.
The government-owned group said on Tuesday that, despite “another challenging year”, including losing $250m over the past four months on higher oil prices, the airline increased its seat factor to 80 per cent, the highest in its history.
Passengers carried rose 14.5 per cent to 31.4m in the 2010-2011 financial year, which ends March 31. Cargo revenues grew 27.6 per cent to $2.4bn.
Saudi Aramco, as the company is known, will provide 100 percent of cargoes sold under long-term contracts for a 19th month, according to refiners in Thailand, Malaysia, China and Japan who requested anonymity, citing confidentiality agreements with the Middle East’s biggest producer.
Saudi Aramco’s full export allocation comes before a June 8 meeting of the Organization of Petroleum Exporting Countries in Vienna. The group, which produces about 40 percent of the world’s crude, decided on Dec. 11 to leave output quotas unchanged for the seventh time since 2008.
Apicorp's profit surged to $95 million from $58.5 million in 2009, it said in an email statement on Monday.
Its total shareholders' equity also rose by 13 percent to reach $1.1 billion.
Tebyan’s launch closely follows QFIB’s strategic partnership with Gulfmena — announced in late 2010 — to form a total solutions platform which meets the emerging needs of the Islamic investment community under one roof. Tebyan aims to tap into the growing Shariah asset management space and to cater to international and regional investors seeking traditional and alternative strategies. Its unique proposition of combining asset management with wealth management will bridge the gaps in today’s Islamic investment offering.
“The launch of Tebyan is the result of a strong, significant partnership between QFIB & Gulfmena,” said Emad Mansour, CEO of QFIB. “Our intention with Tebyan is to assume leadership of the Islamic asset management sector by constantly employing and combining the best in corporate practice, innovative investment tools and exceptional market knowledge, with the purity of Islamic Shariah rulings,” Mansour added.
The three financial investors have teamed up and are discussing the acquisition of at least a 20 percent stake in Gassled, a Norwegian gas pipeline network, three people familiar with the matter said on Monday.
Statoil has said it was exploring reducing its 28.5 percent stake in Gassled, valued by industry sources at more than $3 billion. A spokesman said the company would not comment on details of that process.
Abdulrazaq Aljassim had been involved in talks with bank lenders who are owed $6bn by the company, the financial services arm of Dubai Holding.
The remaining $4bn relates to other debt, such as direct shareholder loans to the firm. Interest payments have been suspended pending an agreement.
Although the gains are significant at the Middle East's largest carrier, they are far smaller than last year's nearly 250 percent net profit jump at the Emirates group, which includes the airline, a cargo unit and other services.
Sheik Ahmed bin Saeed Al Maktoum told reporters Tuesday that net profit at the Dubai-based carrier rose to $1.6 billion, up just shy of 43 percent.
The largest builder in the United Arab Emirates by market value made a net profit after minority interest of 26.6 million dirhams ($7.24 million) in the three months to Mar 31, compared with a net profit of 134.5 million dirhams in the same period last year.
Analysts polled by Reuters on average expected the company to post a net profit of 58.2 million dirhams for the period.
"Part [of the debt] will be paid in cash and part will be refinanced," Osman Sultan told Zawya Dow Jones.
Du has tagged about Dh1.7 billion for capital expenditure this year, Sultan said. Since its launch in 2007, infrastructure spending and network upgrades have been the main focus for the telco.
Not all of the 2,000 megawatts of electricity and 130 million gallons a day of drinking water the Fujairah F2 facility can produce at peak capacity will be for local consumption.
"Through this power plant, we can send electricity to anywhere on the UAE national grid," said Abdullah al Naimi, the director general of Abu Dhabi Water and Electricity Authority (Adwea) and the chief executive of Abu Dhabi National Energy, or Taqa.
The mortgage provider majority owned by Dubai Islamic Bank, the country's biggest Islamic lender, said last week its stock would start trading on Dubai's stock market today after a hiatus of more than two years.
But market commentators expect the mortgage lender's share price to fall sharply at the open as investors dump their positions in the stock.
But this has led to some jealousy from the European airline industry, which has accused some Gulf carriers of competing unfairly.
The region's airlines have hit back, saying European carriers need to stand up to competition because those in the Gulf are not going to go away any time soon.
“More bank branches than grocery stores!” reads a headline in Tabnak, a conservative news website.
The new banks include Ansar and Mehr, both affiliated to the Basij militia, the voluntary arm of the elite Revolutionary Guards, according to a conservative newspaper. It says that Shahr, another new bank, is linked to the municipality of Tehran, while Hekmat Iranian has ties to the army and shareholders of Day are family members of martyrs in the Iran-Iraq war.
Khalid al-Falih, the head of Saudi Aramco, the kingdom’s state-owned oil group, said last year that domestic energy demand was expected to rise from 3.4m barrels a day of oil equivalent last year to about 8.3m b/d of oil equivalent by 2028.
That could mean that the kingdom will not be able to export more than 7m barrels of oil a day by 2028, if no additional investment is made, says John Sfakianakis, chief economist at Banque Saudi Fransi in Riyadh. Output capacity stands at 12.5m b/d today, he says.
The same people can believe both things simultaneously because this is a clash between long-term and short-term views. Look at the great sweep of history, and the maintenance of the status quo in the Arab world was neither possible nor desirable. This was a region mired in dictatorship and poverty. It was the only part of the world that has seen no significant advance for democracy over the past 30 years. It has spawned backward-looking and violent ideologies. Who could want to preserve that? And yet the collapse of the old Arab order threatens, in the here and now, to produce wars, the break-up of states and new opportunities for militant Islamists.
This is not a case of that famous glass that can be regarded as half full or half empty. It is more like looking at two glasses side-by-side. The first contains a fine wine that promises to be marvellous to drink in 20 years’ time – but that is not yet ready to consume. The second glass has to be consumed now – its contents look murky and could even prove to be poisonous.
This hopeful mood prevailed in Cairo and Tunis in the days of the revolution, when businessmen who wanted change reassured those who preferred the status quo that democracy, accountability and transparency were good for business. That same outlook would apply to chaotic, impoverished Yemen and dysfunctional Libya once rulers finally relented in the face of popular will, as they surely will.
The optimism may yet prove justified. But the present is gloomy, and talk of economic progress clashes, day by day, with reality. The post-revolutionary period has been testy, with security trouble erupting regularly – weekend violence in Cairo between Christians and Muslims left 12 people dead, and a renewed curfew was imposed in Tunis after days of clashes between protesters and riot police.