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Sunday, 15 May 2011

Saudi bourse in talks to join MSCI index

Saudi Arabia's stock exchange is in talks with several index providers, including influential index compiler MSCI, to become one of its component, the president of the Saudi Capital Market Authority (CMA) said.

"The kingdom is eligible to join emerging markets indicators like some of other markets in the region," Abdul Rahman Al-Tuwaijri was quoted saying by Saudi's state news agency SPA on Sunday.

No specific time-frame or details on the talks were offered in the statement.

MENA stock markets close - May 15, 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)

Saudi Arabia’s Economy Will Expand 5.3% on Oil Prices, NCB Says - Bloomberg

Saudi Arabia’s economy will expand 5.3 percent this year, powered by higher oil prices and more government spending in the Arab world’s largest economy, National Commercial Bank said.

The economy will grow 4.2 percent in 2012, the Jeddah, Saudi Arabia-based bank said in an e-mailed report today. The kingdom will “benefit from the recent positive oil price shock” as it raises output 6.2 percent to average 8.8 million barrels a day this year, compared with last, the bank said.

The kingdom, which depends on oil for 86 percent of its revenue, announced increases in government spending in March as protests calling for more job opportunities and democracy engulfed the Middle East. The package included $67 billion on housing and funds for the military and religious groups that backed the government’s ban on domestic protests, and followed a $36 billion handout announced on Feb. 23.

Dubai Shares Fall as Emaar Revenue on Apartment Delivery Plunges - Bloomberg

Dubai’s shares retreated for a second day as Middle East stocks fell after Emaar Properties PJSC (EMAAR) said first-quarter revenue from apartment deliveries plunged 81 percent amid weak property demand.

Emaar, the builder of the world’s tallest skyscraper with the heaviest weighting on Dubai’s index, declined the most in a week. Arabtec Holding PJSC, the biggest publicly traded construction company in the United Arab Emirates, slid as much as 2.2 percent. The DFM General Index (DFMGI) fell 0.2 percent to 1,593.37, the lowest intraday level since May 10, at 12:39 p.m. in Dubai. The Bloomberg GCC 200 Index (BGCC200) of Persian Gulf stocks slipped 0.3 percent. Israel’s benchmark stock index lost 1.3 percent.

“Investors are now starting to look closer at the Emaar balance sheet where potentially we could see some deterioration as deliveries wind down and overheads remain high,” said Majed Azzam, an Alembic HC Securities analyst in Dubai. “This is potentially the reason why there’s caution surrounding Emaar at these levels.”

Dubai Financial Market, Egyptian Exchange discuss framework to promote dual listing

Dubai Financial Market (DFM) announced it will collaborate with the Egyptian Exchange to set up a comprehensive framework that will pave the way for listed companies on both exchanges and specifically those with significant operations in the UAE and Egypt to dually list their shares.

This initial agreement between the two sides is the outcome of the Egyptian Exchange's delegation visit to DFM as part of a GCC roadshow. The delegation, headed by Mohammed Abdulsalam, Chairman of the Egyptian Exchange held discussions at DFM with Essa Kazim, Managing Director and CEO, DFM PJSC.

Commenting on this, Essa Kazim said: "The Egyptian Exchange is at the forefront of various regional and international exchanges DFM has kept close relations with since its inception in the year 2000. We are confident that this initial agreement to set up the required framework to promote dual listing constitutes a pivotal point that will further increase the cooperation between the two sides. We are considering a memorandum of understanding that will outline the areas of cooperation, the necessary mechanisms and the timeframe to achieve our goals in addition to sharing expertise in information technology and training."

Emaar First-Quarter Apartment Sales Drop 81%, Villas 50% Amid Dubai Slump - Bloomberg

Emaar Properties PJSC (EMAAR), the United Arab Emirates’ biggest developer by market value, said revenue from apartment sales declined 81 percent in the first quarter and from villa sales 50 percent amid weak property demand.

Income from apartment sales dropped to 375 million dirhams ($102 million) and from villas to 60 million dirhams, according to Emaar’s earnings statement posted on the Dubai Financial Market today. Overall revenue fell 31 percent to 1.98 billion dirhams in the first quarter, while profit slumped 45 percent. Emaar reported first-quarter earnings on April 24 and provided a breakdown of revenue today.

Emaar will need to "start relying more on international projects" to compensate for a decline in apartment deliveries in Dubai, said Majed Azzam, a Dubai-based analyst at AlembicHC Securities. Prices and margins are lower in international markets and Emaar’s earnings will be "hit this year, until the company resumes sales in Dubai," he said today.

gulfnews : Crude could fall below $100 in second half

Oil prices are expected to fall below $100 per barrel in the second half of 2011, according to a new report by Bank of America Merrill Lynch.

The bank believes that potential fiscal tightening in the US as well as Libyan supplies coming back on line will end the recent rally that has seen Brent crude rise to over $120 a barrel.

"With the first signs of demand destruction on the horizon and credit risks on the rise, we keep our view that Brent will average $94 a barrel in the fourth quarter of 2011. In particular, we believe that the downside risks to oil prices will grow as EM yield curves continue to invert, QE2 comes to an end in the United States, and issues such as debt restructuring in the European periphery start to materialise," the report said.

gulfnews : Economic integration doesn't come easy

The 13th Gulf Cooperation Council (GCC) consultative summit held in Riyadh last week paid only lip service to econ-omic issues facing the six-nation group. The leaders used the meeting to discuss emerging political and security matters engulfing the region, notably developments in Bahrain and Yemen.

Nevertheless, the final communique touched on the need to resolve outstanding issues related to implementation of the customs union project. For obvious reasons, GCC officials feel embarrassed about the lack of progress on this integration project many years after it came into effect. Conversely, real progress has occurred in subsequent integration schemes, notably the Gulf Common Market (GCM), which started in 2008.

In retrospect, the customs union project went into effect in 2003 with the original plan calling for its full implementation in a span of two years. Yet, the GCC's 26th summit held in Abu Dhabi in late 2005 pushed the deadline back by two more years, but that didn't help much. No fresh deadlines were placed until very recently or in the run-up to the 13th consultative summit.

Full: Even if MSCI says no, at least people are talking about us - The National

The Irish writer Oscar Wilde summed it up perfectly. "The only thing worse than being talked about is not being talked about," he said, referring to the double-edged nature of rumour and publicity.

The region's stock exchanges, particularly in the UAE and Qatar, might agree with that sentiment in the run-up to an event that many investors believe is crucial to the future financial health of the region.

In June, Morgan Stanley Capital International, part of the giant US investment bank, will decide on whether to include the two Gulf markets in its MSCI Emerging Markets index.

Renewed trend in hiring skips the banking sector - The National

Hiring is slowly picking up in the UAE, but try telling that to anyone in financial services.

The banking sector has experienced a wave of lay-offs in the past month, making even normally brash investment bankers twitchy.

HSBC has cut 370 jobs in its Middle East business, while Barclays recently moved the headquarters of its Barclays Africa division from Dubai to Johannesburg, leaving 123 employees with the option of relocating or leaving the bank.

UAE's market status in sharp focus ahead of MSCI decision - The National

Three words are likely to dictate the decision-making of fund managers and stock market brokers this week: emerging market status.

With just weeks to go before the index compiler MSCI revisits a decision on whether to include the UAE and Qatar on its emerging markets index, brokers and fund managers are also starting to position themselves for any announcements.

"[This] week, we are likely to see updates from local exchanges concerning measures to boost their eligibility for an upgrade," said David Verghese, a fund manager at Emirates NBD's asset management arm, which manages a total of US$1.6 billion in assets. He said with the majority of first-quarter numbers in, attention had now turned to the imminent decision on whether to upgrade both countries to "emerging market" status.

Results take too long, say fund chiefs - The National

Public companies across the Emirates should be given less time to report their earnings every quarter to reduce the potential for insider information leakage, fund managers say.

A shorter results reporting period could also help stimulate trading at times when investors prefer to stay on the sidelines ahead of an earnings announcement. The call comes as the country's two main stock exchanges try to boost trading volumes that have fallen sharply over the past two years.

The value of shares bought and sold on the Dubai Financial Market declined almost two thirds in the first quarter of this year to Dh10 billion (US$2.72bn) from Dh28bn last year.

A new economy is in the pipeline - The National

Along a slim stretch of Fujairah's southern coast, workers are building concrete tanks and berths for ships so big they cannot yet enter the port. Further up the freeway, a sign proclaims: "Fujairah is growing."

The optimism in the UAE's most isolated emirate is sparked by an initiative by Abu Dhabi: a pipeline to funnel crude from oilfields in the west to a port in the east.

The pipeline, a project of the Abu Dhabi-owned International Petroleum Investment Company (Ipic), is to provide the capital with a faster, more secure and cheaper route for its primary export.

Ahmadinejad Fires Iran Oil, Industry Ministers Amid Feud With Parliament - Bloomberg

Iranian President Mahmoud Ahmadinejad asked three government ministers, including Oil Minister Masoud Mir-Kazemi, to step down as part of plans to combine some ministries.

The responsibilities of Mir-Kazemi, as well as Industry and Mines Minister Ali Akbar Mehrabian and Welfare Minister Sadegh Mahsouli, have ended, Ahmadinejad said in separate letters published on the Tehran-based presidency website today.

Iran announced May 9 that the oil ministry will merge into the energy ministry to help reduce the number of departments to 17 from 21 and boost the administration’s efficiency. The Industries and Mines Ministry will be combined with the Commerce Ministry and the Welfare Ministry with the Labor Ministry.