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Thursday, 26 May 2011

MENA stock markets close - May 26, 2011

MIDEAST STOCKS- Egypt extends rise; Oman slumps to 17-month low | News by Country | Reuters

Egypt's main index .EGX30 hit a seven-week high on Thursday as concerns eased that demonstrations planned for Cairo the following day could turn violent and wreak further damage on fragile investor sentiment.

The EGX30 rose 1.1 percent to its highest close since April 7.

Youth and democracy movements plan a big demonstration in Tahrir Square on Friday to call for a faster move to democracy following the end of former president Hosni Mubarak's 30-year rule in February.

Niger signs off on Libyan deal for state telecom firm | Reuters

Niger has confirmed a deal with Libya's LAP Green Network for a ten-year majority share in state telecommunications firm Sonitel and its mobile arm, Sahel Com, according to a government statement.

Under the deal, Green Network -- part of the Libyan African Investment Portfolio (LAP) -- will pay 31 billion CFA francs for a 51 percent share in a ten year licence for the communications firms, which will be fused into one.

The investment comes despite Green Network being hit by United Nations sanctions targeting Libyan leader Muammar Gaddafi, with Zambia in March saying it was freezing Green's assets there.

FT Alphaville » Backstop Bahrain

Thursday’s political risk datapoint:

DIFC – Dubai, May 26, 2011 – Moody’s Investors Service has today downgraded Bahrain’s government bond ratings by one notch to Baa1 from A3, and assigned a negative outlook to the rating. Today’s rating action concludes the review for possible downgrade that Moody’s initiated on 23 February 2011…

The main driver underlying Moody’s decision to downgrade is the significant deterioration in Bahrain’s political environment since February. The government of Bahrain has forcibly suppressed an uprising by the Shi’ah-led opposition with the backing of an intervention of armed forces from other member states of the Gulf Cooperation Council (GCC), most importantly from its neighbour Saudi Arabia. Political tensions in the country remain high and there seems little prospect of the underlying causes of the unrest being peaceably resolved, at least over the short term. The political outlook is therefore highly uncertain.

UAE to fix food prices as global commodities rise | Reuters

The United Arab Emirates plans to combat rising global commodity prices by fixing the cost of about 400 foodstuffs and household products at 70 outlets in the Gulf Arab state, an economy ministry official said on Thursday.

This is the latest of several moves by the UAE, which has so far avoided the unrest that is spreading across the region, to cut prices and subsidise basic items. Rising food prices have become hugely sensitive around the world, helping fuel protests that toppled the rulers of Tunisia and Egypt earlier this year, with unrest spreading across North Africa and the Middle East.

The measure, starting on June 1 and so far set until the end of the year, is expected to help retailers including France's Carrefour (CARR.PA) and be easily absorbed by the oil-rich country that imports most of its food and already subsidises other consumer goods.

Kuwait’s Kharafi Group Sees Growth Potential in Middle East - Bloomberg

Kuwait’s Kharafi Group sees potential for expansion in Saudi Arabia, Egypt, Qatar and the United Arab Emirates, Vice President Marzouk Nasser Al-Kharafi said.

“There are a lot of opportunities and we will select what’s the appropriate investment in light of current developments in the region that are suitable,” Al-Kharafi said in an interview in Beirut today. “There are opportunities in the hundreds of millions” of dollars, he said.

The Kharafi Group has holdings in a number of companies listed on the Kuwait Stock Exchange, including Mobile Telecommunications Co., Kuwait’s biggest mobile-phone company, and Kuwait Food Co.

ADCB converts bond, raises capital | Alrroya

Abu Dhabi Commercial Bank said on Thursday it converted Dh4.8 billion ($1.31bn) bonds issued in 2008 into 785.6 million shares, raising its capital level.

The lender, one of the region's most exposed banks to indebted conglomerate Dubai World, issued mandatory convertible bonds worth Dh4.8bn to four strategic shareholders including the government of Abu Dhabi in April 2008.

The bonds, which carried a coupon of EIBOR plus 1.5 per cent, were due to be converted before April 2011.

City duo win roles on Middle East jeweller’s debt restructuring- Legalweek

Ashurst and Clifford Chance (CC) have picked up key roles on the AED3bn (£505m) debt restructuring of Middle Eastern jewellery manufacturer and retailer Damas International.

Ashurst won a first-time appointment to advise Damas on the restructuring, fielding a team led by City finance partner Martyn Rogers (pictured), who headed a team of associates across London and the Middle East including Dubai senior associates Aaron Lee and Chris Young and City senior associate Adair Gordon-Orr.

CC acted for around 25 banks involved in the restructuring including Standard Chartered, Royal Bank of Scotland, HSBC and the Emirates National Bank of Dubai.

Saudi developer Emaar says gets $1.3 bln govt loan - Maktoob News

Saudi developer Emaar Economic City has received a 5 billion riyal loan ($1.33 billion) from the kingdom's finance ministry to speed up construction of a project, it said on Wednesday.

Two sources familiar with the deal told Reuters last year that the Saudi developer would receive the loan.

Emaar Economic City, affiliated to Dubai developer Emaar Properties , is spearheading the development of King Abdullah Economic City, a project aimed at diversifying the kingdom's oil-based economy.

Auditor: Turkmen gas field is world's 2nd largest - Maktoob News

The isolated former Soviet nation of Turkmenistan is likely sitting on top of the world's second-largest gas field, British energy auditor Gaffney, Cline & Associates said Wednesday.

Peter Holding, the company's senior manager for Russia and the Caspian region, told an energy conference at a seaside resort in Turkmenistan that the vast South Yolotan field covers an area of about 3,000 square kilometers (1,160 square miles) — bigger than the country of Luxembourg.

"The South Yolotan field is so big that it can sustain several developments in parallel," Holding said. "We now need to concentrate on producing and delivering results."

FT Alphaville » What horrors lie inside the Gaddafi fund

You’ve read the FT story – now see the document unearthed by Global Witness:

We’ll go through it later but needless to say, it confirms FT Alphaville’s worst fearsabout how badly the LIA mismanaged the Libyan people’s oil wealth…

Qatar Banks May See Growth Slowed by Islamic, Consumer Loan Regulations - Bloomberg

Qatar’s decision to restrict Islamic banking and introduce limits on consumer borrowing may reduce profit by as much as 22 percent for banks in the world’s fastest-growing economy.

Net income estimates for Commercial Bank of Qatar QSC, the nation’s second-largest bank, were cut 22 percent, or 478 million riyals ($131 million) on the rule changes by analysts at Credit Suisse Group AG (CSGN) last month. They also cut their estimates for Doha Bank QSC (DHBK), the fourth-biggest lender, by 10 percent, according to a report to clients. Qatar National Bank SAQ (QNBK), the country’s biggest lender by assets, will be hurt by slower loan growth and a disruption to its strategy from the decision, Nomura International Plc analysts said last month.

The central bank in February told all conventional lenders to wind down their Islamic banking divisions and to stop taking Islamic deposits immediately on concern they may be using funds from the conventional bank for Islamic loans. The regulator last month also reduced the amount banks can lend to Qataris to 2 million riyals from 2.5 million and to foreigners to 400,000 riyals and limited the interest lenders can charge on the loans to 1.5 percentage points over the bank rate, at 5 percent today.

gulfnews : Noor Islamic posts Dh58m four-month net profit

Noor Islamic Bank, which is in its fourth year of operation, is poised to break even this year, CEO Hussain Al Qemzi told Gulf News in an interview Wednesday.

"Going by our performance during the first four months of this year we are confident that we will have a positive net income to report during the current year," Al Qemzi said.

The Noor Islamic chief executive said yesterday that the bank, year to date, has posted a net profit of Dh58 million as its operating income grew Dh113 million. Its capital adequacy ratio was 18 per cent year to date.

What would you do with 90 superjumbos? - The National

By 2015 Emirates will have 60 A380s in operation. Robyn Beck / AFP

    One of the unusual things about Emirates Airline is that while it is one of the largest companies in the Middle East, it is also one of the least studied.

    Few analysts follow the airline because it is government owned and unavailable to equity investors. So it was somewhat of a rarity when the Royal Bank of Scotland (RBS) published a report called "What would you do with 90 A380s?".

    The title encapsulates much of the awe and incredulity surrounding the Dubai airline's success, the largest customer of the Airbus superjumbo and the world's largest airline based on international capacity.

    Aabar's car plants in Algeria due to start production - The National

    Production of up to 10,000 vehicles a year in Algeria is expected to start this year as the UAE seeks closer ties with the North African country.

    Aabar Investments , owned by the Abu Dhabi Government, signed a deal in August 2009 with the Algerian government and five German companies to construct three manufacturing plants in the country to build cars, lorries, coaches and engines.

    The deal is at the forefront of the Government's aim to boost trade and investment with Algeria as the country's economy diverges from the troubles entangling its near neighbours. Production should start this year, Karim Joudi, the Algerian minister of finance, said in Abu Dhabi yesterday.

    Jordanian court rules Kuwait can seize Iraq Air assets - The National

    Kuwait Airways has been cleared by a Jordanian court to seize money in accounts owned by Iraqi Airways thought to contain tens of millions of dollars.

    The seizure follows a series of judgments in English courts that froze US$1.2 billion (Dh4.4bn) of the Iraqi airline's global assets. In a case that lasted two decades in the UK courts, Kuwait Airways won the compensation of 10 aeroplanes and spare parts as a result of Iraq's invasion of Kuwait in 1990.

    Christopher Gooding, a partner at the Fasken Martineau law firm in London who has represented the Kuwaiti airline since 1990, said that after all attempts at negotiation had faltered, the only option was to locate and seize assets belonging to the state-owned Iraqi Airways and for the Iraqi state to satisfy the UK courts' judgments.

    Damas says Abdullahs' repayment to fall short by two thirds - The National

    Damas International, the Middle East's largest jeweller, expects to recover just one third of the hundreds of millions of dirhams the company is owed by its previous owners.

    Tawhid, Tawfiq and Tamjid Abdullah were the subject of the strictest disciplinary action in the history of the Dubai International Financial Centre in March last year for improperly withdrawing Dh365 million (US$99.3m) of cash and almost two tonnes of gold worth Dh250m from Damas without shareholder approval.

    Given the current depressed market valuation of the brothers' wide-ranging assets, Damas expects to receive just Dh204m of the money owed, the company said in a statement to Nasdaq Dubai yesterday.

    Gulf Times – Vodafone Qatar says turns the corner in H2

    Vodafone Qatar has reported a cash profit of QR5mn in the second half ended March 31 and said it will spend QR392mn in the current financial year besides extending mobile money transfer to India and other countries in the sub-continent.

    Qatar’s second mobile service provider earned about QR5mn Ebitda (earnings before interest taxes depreciation and amortisation) profitability in the second half, according to John Tombleson, acting CEO of the company.

    Vodafone Qatar’s financial year begins in April and runs up to March, unlike other listed companies which follow January-December format. It has otherwise reported a loss of QR601mn for the year ended March 31, 2011, according to a Reuters report.

    Emaar MGF to sell apartment project to US co for R1,200 cr

    In the first real estate bulk deal in the National Capital Region, New Delhi-based realty major Emaar MGF is learnt to be in an advanced stage of selling its under-construction 550-flat residential complex Palm Drive in Gurgaon for Rs 1,000-1,200 crore to New York-based marquee realtor Tishman Speyer.

    For the beleaguered Emaar MGF, a joint-venture between Dubai-based Emaar and Shravan Gupta-led MGF Land Ltd, this is a fire sale, as the company is unable to sell the flats by itself owing to the current slump in the housing market and desperrately needs money to retire part of its R4,689-crore debt and improve its cash flows.

    When contacted, Emaar MGF CFO and executive president Sanjeev Saddy said: “Talks with Tishman Speyer are in preliminary stages. It’s a good move for us if we realise the optimum value of the flats. But nothing concrete has materialised as yet.” Tishman declined to comment on the development. The American realtor currently manages the iconic Rockefeller Center building in Manhattan. Tishman currently has three properties in India, one in Chennai and two in Hyderabad. - Libya sovereign fund suffers big losses

    Libya lost billions of dollars on sophisticated financial products sold to Muammer Gaddafi’s sovereign wealth fund by some of the world’s leading financial institutions, according to a confidential Libyan government document.

    Banks and hedge funds led by France’s Société Générale are named in about $5bn (£3bn) of deals involving the oil-rich nation, some of which had resulted in heavy losses by the middle of last year.

    One of the most striking losses, outlined in an internal report for the Libyan Investment Authority, was a 98.5 per cent fall in the value of the sovereign wealth fund’s $1.2bn equity and currency derivatives portfolio. - Brief tryst ends in cold storage

    Muammer Gaddafi’s Libya put its people’s oil wealth in ventures ranging from chicken farms to volatile currency plays, according to a confidential document that shows how fully the much criticised regime had shed its pariah status before civil war broke out.

    The internal report on the investments of the country’s sovereign wealth fund, the Libyan Investment Authority, is peppered with the names of big banks and hedge funds, which critics say should have been more cautious given the Libyan government’s longstanding reputation as a venal and ruthless family fiefdom.

    While some of the institutions named in the document might now regret being so publicly linked to the LIA, they might also point out that they were breaking no laws and were merely part of broader international rush to a rehabilitated regime. - Files give detail on $2bn stake in hedge funds

    Libyan Investment Authority
    New documents reveal the extent of Libya’s investments with some of London and New York’s biggest hedge funds.

    The files, obtained by Global Witness, the campaign group, and passed to the Financial Times, detail more than $2bn in hedge fund and hedge fund-linked investments made by the Libyan Investment Authority since international sanctions were lifted in 2003 but before the recent freeze on Libyan investments.

    They show the extent to which the LIA became one of the biggest sovereign investors in the hedge fund industry, courting interest from its star figures and allocating to some of its highest-profile names.