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Tuesday, 17 May 2011

MIDEAST STOCKS-Developers lift Egypt, UAE up on bargain-hunting | Reuters

Egypt's bourse rose on Tuesday for a seventh day as property shares rose on a possible easing of payments, while bargain hunters lifted UAE markets and Kuwait's Jazeera Airways (JAZK.KW) hit a year high. Egyptian newspapers said on Sunday that the housing ministry would allow clients dealing with its New Urban Communities Authority to defer payment of loans and interest until mid-year.

"I think this would be a very good step, we needed this two months ago," said Hashem Ghoneim of Pyramids Capital.

Egypt's three biggest listed developers led gainers on the index .EGX30, which rose 1.5 percent. Talaat Moustafa Group (TMGH.CA) jumped 9.8 percent, SODIC (OCDI.CA) 10 percent, and Palm Hills Developments (PHDC.CA) 9.8 percent.

UAE federal SWF eyes financial, healthcare investments | Alrroya

The Emirates Investment Authority (EIA), the UAE's only federal sovereign wealth fund, plans to shift the focus of future investments from telecoms into financial services, healthcare and education, its treasury director said.

Set up in 2007, the EIA manages the federal government's stakes in a number of key firms including United Arab Emirates' telecom operators Etisalat and du.

Paul Oliver also said the EIA - which has kept a lower profile than peers like the Abu Dhabi Investment Authority (ADIA), among the world's largest sovereign wealth funds - may issue bonds in the future with any move linked to an investment.

FT.com - Egypt seeks $4bn IMF loan to fill budget gap

Egypt is seeking up to $4bn from the International Monetary Fund to help plug the huge hole in its public finances that opened up as a result of the economic disarray following the overthrow of Hosni Mubarak, the former president ousted in February.

Samir Radwan, the minister of finance, told the Financial Times his country needed up to $12bn in budget support until the end of the next fiscal year in June 2012. The deficit, he said, will be “anywhere between 9 and 10 per cent of gross domestic product” in the next fiscal year.

He said the shortfall in public finances was the result of a sharp decline in tourism, exports and remittances from Egyptians abroad, coupled with rising demands for wage increases coming mainly from the state sector, which employs around 6m people.

Morgan Stanley Doubles Assets Under Management in Saudi Arabia - Bloomberg

Morgan Stanley (MS) has doubled assets under its management in Saudi Arabia this year as it seeks to gain from economic growth in the world’s biggest oil exporter.

Morgan Stanley Investment Management is targeting 1 percent market share of the kingdom’s investment funds valued at $85 billion, excluding sovereign wealth funds, Navtej Nandra, head of international operations, said in an interview in Riyadh. The regulator is opening up the market to attract foreign investment and expand capital markets, he said.

Morgan Stanley Saudi Arabia, which was set up four years ago in a joint venture with the Capital Group, began executing swap transactions in August 2008 for non-resident foreign investors. Saudi Arabia’s economy is the Arab world’s biggest and its stock market is the largest in the Middle East by market value. Saudi Arabia restricts direct foreign investments in its capital markets.

Cost of property down again in UAE but food rises - The National

Further deflation within the country's housing market pulled down the rate of inflation for the fourth consecutive month last month.

The inflation rate rose 1.1 per cent compared to the same month last year, data from the National Bureau of Statistics showed today. The rate of increase slowed from a 1.2 per cent rise in March.

Heaping downward pressure on the index was the housing and utility component, which dropped 1.4 per cent on an annual basis. Housing and utility costs are the biggest contributors to the index.

Gulf Syndicated Loan Issuance Slows as Borrowers Opt for Bilateral Deals - Bloomberg

Borrowers from the Persian Gulf aren’t tapping the syndicated loan market, preferring to rely on financing from individual banks, according to Standard Chartered Plc. (STAN)

“I don’t see lots of companies coming to the market for new money,” Steve Perry, a Dubai-based managing director at Standard Chartered, said during a conference in the emirate today. “The borrowers that are able to raise new money are looking at bilaterals.”

Demand for loans has slowed amid the political turmoil in North Africa and the Middle East that drove borrowings costs higher. Syndicated loans declined 71 percent to $5.36 billion this year for the Middle East and North Africa from the same period in 2010, according to data compiled by Bloomberg.

MENA stock markets close - May 17, 2011

ExchangeStatus IndexChange
TASI (Saudi Stock Market)
6651.370.26%
DFM (Dubai Financial Market)
1578.080.99%
ADX (Abudhabi Securities Exchange)
2650.880.37%
KSE (Kuwait Stock Exchange)
6495.60.42%
BSE (Bahrain Stock Exchange)
1377.890.03%
MSM (Muscat Securities Market)
6120.75-0.22%
QE (Qatar Exchange)
8626.02-0.63%
LSE (Beirut Stock Exchange)
1383.98-0.18%
EGX 30 (Egypt Exchange)
5203.281.49%
ASE (Amman Stock Exchange)
2195.43-0.26%
TUNINDEX (Tunisia Stock Exchange)
4134.03-0.26%
CB (Casablanca Stock Exchange)
11962.8-0.02%
PSE (Palestine Securities Exchange)
485.6-1.12%

UAE developer Damac files international claim against Egypt - bi-me.com

The Chairman of Damac, one of the largest real estate development companies in the Middle East, through international law firm King & Spalding, has filed an international arbitration case against Egypt.

Damac’s Chairman, Hussain Sajwani, has brought the ICSID claim against Egypt under the bilateral investment treaty between the United Arab Emirates and Egypt, which protects investments made by UAE nationals in Egypt.

Mr. Sajwani, a national of the UAE, states that Egypt’s recent criminal prosecution and conviction in absentia violate the treaty on investment protection and have caused significant damage to his investments in Egypt and the wider Gulf area. Damac’s Egyptian investments include a 30 million square meter development project at Gamsha Bay, near Hurghada, as well as four major real estate projects in the greater Cairo area.

Sharjah Islamic Bank plans $400m five-year sukuk | Alrroya

Sharjah Islamic Bank (SIB) plans to issue a $400 million Islamic bond, which will price on Wednesday, according to a document by the arranging banks.

Order books are above $2 billion with pricing on the five-year, dollar-denominated issue expected to be 287.5 basis points above midswaps, according to the document seen by Reuters.

The lender said in March it planned to issue an Islamic bond, or sukuk, of between $300m to $500m in a letter to the central bank.

gulfnews : Emirates to reduce fuel hedging

With fuel accounting for 34.4 per cent of Emirates' operating costs in financial year 2010-11, the airline is planning to focus less on fuel hedging because of volatility in oil prices, according to the airline's president Tim Clark.

Asked if the airline is still hedged, Clark told Gulf News: "I am not saying we are not hedged, but it is not to the levels that we did in the past. Nobody can predict what fuel is going to do. So we are not spending so much time on managing the risk forward as perhaps we did a few years ago, because the volatility is just too much stuff to get our mind around."

Market experts seem to agree. "If oil prices start to ease [as they are already doing], it pays to not be locked into too much going forward," said Addison Schonland, US-based aviation analyst and president of Innovation Analysis Group (IAG).

Nakheel offers rent free periods to entice tenants | ConstructionWeekOnline.com

Nakheel, the Dubai developer restructuring $10.8bn in debt, is offering up to two months rent-free in units in lower-priced developments in a bid to attract tenants.

The government-owned company is offering new tenants free periods on leases in Discovery Gardens and International City, where rents start from AED25,650 and AED17,100 a year.

A spokesperson for Nakheel said the offer had been “well-received” but declined to specify how many apartments have been leased under the scheme.

Dubai Shares Advance Most in a Week After Dubai Bank Rescue; Emaar Climbs - Bloomberg

Dubai shares rose the most in almost a week after the emirate’s government rescued Dubai Bank PJSC, a lender part-owned by Emaar Properties PJSC (EMAAR), the company with the heaviest weighting in the benchmark index.

Emaar, which held a 30 percent stake in the Islamic lender, rallied 1.6 percent. Dubai Financial Market (DFM) PJSC, the only Gulf Arab stock market to sell shares to the public, gained the most in a week. The DFM General Index (DFMGI) advanced 0.6 percent, the most since May 11, to 1,572.56 at 11:29 p.m. in Dubai. The Bloomberg GCC 200 Index (BGCC200) was little changed.

Dubai’s government will inject capital “to ensure that Dubai Bank’s business continues uninterrupted,” its media office said yesterday. Dubai Holding LLC, a company owned by the emirate’s ruler, held a 70 percent stake in Dubai Bank. The takeover, aimed at protecting depositors’ interests, will “effectively dilute the complete” stake of Dubai Holding and Emaar, the statement said.

EFG-Hermes to cut bonuses, appoints Gulf executive | Reuters

Egyptian investment bank EFG Hermes said it was cutting back bonuses to reduce costs by more than 20 percent this year.

"As part of a strategy to make the organisation leaner and with a target of cutting costs in 2011 by over 20 percent, the firm has elected to be aggressive with cuts to its bonuses in 2010," it said.

EFG Hermes also said it had appointed Seif Fikry, who has worked for the Cairo-based investment bank for 14 years, as chief executive for the Gulf Arab states excluding Saudi Arabia.

Ipic profits down as assets hit $50bn - The National

The International Petroleum Investment Company, an Abu Dhabi Government-controlled conglomerate, yesterday reported US$1.35 billion of profit for last year, a decline of 67.5 per cent from 2009.

The drop in profit was due mainly to huge one-time gains made in 2009 on an investment in Barclays, the British banking giant.

Ipic had thrown the bank a lifeline in the worst stretch of the financial crisis and made $2.2bn (Dh8.08bn) when it exited. Rising expenses last year also contributed to the decline in profits.

Action over exposed lender is a positive step, not tip of an iceberg

The world has grown accustomed to radical intervention by governments in the banking sector.

Since the financial crisis in 2008, some of the biggest names in global banking, such as Royal Bank of Scotland, Lloyds, Citicorp and many others, have found themselves with the state on their share registers.

Against this backdrop, the action by the Dubai Government in taking over Dubai Bank is not that surprising. It already had strong sovereign connections, being majority owned by a subsidiary of Dubai Holding, itself owned by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai.

Minister: Egypt nearing deal with World Bank - Maktoob News

Egypt is near to securing a $2.2 billion loan from the World Bank, the finance minister announced, as the country's military rulers said Monday the unrest of the past few months has battered economic growth rates and is costing the nation $40 million per day in lost tourism revenues.

Finance Minister Samir Radwan also said an International Monetary Fund team was expected in Cairo within days to look at ways of supporting the government's efforts to boost the economy. His comments came in a statement released by the ministry and did not make clear when the deal may be completed.

Separately, Brig. Mahmoud Nasr, the deputy defense minister for financial affairs, said the unrest led to an 80 percent decline in revenues from tourism, a vital sector.

gulfnews : Cash injection to help Dubai Bank grow

The Dubai Government yesterday took over Dubai Bank, an Islamic bank owned by Dubai Holding and Emaar Properties, ending several months of speculation on the future and financial strength of the bank.

"The Government of Dubai emphasised that it has decided to act swiftly to ensure the preservation of all of Dubai Bank's depositors' interests," said a statement issued through the Dubai Government Media Office.

"The Government of Dubai will immediately make adequate capital injection into Dubai Bank, thereby taking over the bank. The injection will effectively dilute the complete holding of Dubai Bank's current shareholders, and consequently allow the 100 per cent takeover of the bank by the Government of Dubai," the statement said.

Big opportunities with lower interest rates - The National

After remaining stubbornly high over the past two years, interest rates in the UAE are finally beginning to come down and the lower cost of borrowing should ultimately contribute to strengthening growth in the economy.

The financial system has notably received substantial inflows of liquidity in the first part of this year, which have served to push interest rates and credit spreads down.

One of the most visible signs of this has been the easing in Emirates interbank offered rates (Eibor), which serve as an important benchmark for pricing many corporate loans, funding operations and other borrowings.

Gulf investors return to Big Apple - The National

When the global financial crisis hit, New York City property was said to be "bulletproof". But prices began dipping and then plummeting, leaving the city with hundreds of stalled projects.

Investors were stuck with investments made at the peak of the market. Now, nearly three years since the fall of Lehman Brothers in September 2008, Gulf investors are quietly returning to the Big Apple.

The former Morgan Stanley building at 750 Seventh Avenue in Manhattan was sold this month for US$485 million (Dh1.78 billion) to Fosterlane Management Corporation, an arm of the Kuwait Investment Authority.

RAK oil and gas company profits decline but outlook is positive - The National

RAK Petroleum has reported an 80 per cent drop in first-quarter net profit, in part reflecting a loss by its Norwegian affiliate DNO International.

The privately held Ras al Khaimah oil and gas producer posted net income of Dh5.9 million (US$1.6m) on Dh63m of revenue for the first three months of this year, down from Dh30.5m net profit for the same period a year ago.

Without a share of the 65.4m Norwegian krone (Dh43.1m) first-quarter net loss by DNO, in which it holds a 30 per cent interest, RAK Petroleum's first-quarter profit would have fallen 38 per cent to Dh19m.

Citigroup Readies Expansion in Iraq, Hires Former U.S. Diplomat - Bloomberg

Citigroup Inc. (C), the U.S. bank which earns about a $1 billion in revenue from the Middle East, hired a former U.S. diplomat to oversee its team in Iraq as the holder of the world’s fourth-biggest oil reserves rebuilds its economy.

“We are very optimistic about Iraq over the next three to five years,” Dennis Flannery, who will run the division, said in an interview from Amman, Jordan yesterday. The country will have “considerable wealth” from its oil exports and is poised to invest in the oil and gas industry, power generation and housing to boost growth, he said.

Flannery, 64, was the financial attache at the U.S. embassy in Baghdad for a year before joining Citigroup in March. He has worked at the Inter-American Development Bank, the U.S. Treasury and the World Bank, and will oversee Citigroup’s plan to provide services to banks, international and state-owned companies in Iraq, the bank said in a statement. He will be based in Amman.