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Tuesday, 31 May 2011

The Gulf states: obstacles ahead | beyondbrics –

Mirror, mirror on the wall, who’s the fairest of them all? The small states of the Gulf are competing to make a name for themselves internationally. Recent news from Qatar and the United Arab Emirates shows how important burnishing their image still is for all nations in the region—but also how many of their coming out plans remain very much works-in-progress.

Qatar, most notably, faces the potentially damaging suggestion that bribery tainted its successful bid for the 2022 World Cup. The economics of hosting the Cup are debatable—it needs to increase hotel rooms in the country by 10-fold, plus those nine new air-conditioned stadiums—and the PR blow from losing the event or the release of more evidence that its bid wasn’t strictly halal would be significant.

Another test—perhaps slightly less high-profile than the World Cup—will come in late June when MSCI, the influential index provider, decides whether Qatar and the UAE have reformed their bourses enough to justify upgrading them from frontier to emerging market status.

MENA stock markets close - May 31, 2011

MENA stock markets
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)

Abu Dhabi investment fund IPIC aims to diversify - Maktoob News

Abu Dhabi's International Petroleum Investment Co (IPIC) will look at investments in agriculture and industry, it said on Tuesday, as the government fund looks to diversify its investment portfolio.

IPIC, whose current investments include major stakes in Austrian oil group OMV and Spain's Cepsa , has embarked on an aggressive acquisition drive in the hydrocarbons sector in recent years.

But Abu Dhabi, capital of the United Arab Emirates, is also investing billions of dollars in infrastructure, real estate and tourism to diversify its economy.

Dubai Shares Advance Most This Month on Greece Aid Optimism - Bloomberg

Dubai shares rose the most in more than a month, led by developer Emaar Properties PJSC (EMAAR), amid speculation European officials will sanction more assistance for Greece, boosting investor appetite for riskier assets.

Emaar, builder of the world’s tallest skyscraper, increased the most in three weeks. Dubai Islamic Bank PJSC (DIB), the United Arab Emirates’ biggest bank complying with Shariah rules, rallied 1 percent. The DFM General Index (DFMGI) advanced 1.6 percent, the most since April 27, to 1,559.92 at the 2 p.m. close in Dubai. The measure dropped 4.5 percent this month. The Bloomberg GCC 200 Index (BGCC200) rose 0.3 percent at 2:08 p.m. in Riyadh and the MSCI Emerging Markets Index jumped 1.4 percent.

“The gain in the Dubai Financial Market is clearly on the back of the tick-up in Europe,” said Anastasios Dalgiannakis, a Dubai-based trader at Mubasher Financial Services. “Our markets will follow Europe for now.”

Apicorp shareholders raise capital to $1.5 billion, UAE Industries - Maktoob News

Arab Petroleum Investments Corporation (APICORP) on Tuesday said its shareholders agreed to nearly triple the development bank's capital base to $1.5 billion, helping it move ahead with investment plans.

APICORP is owned by the 10 member states of the Organization of Arab Petroleum Exporting Countries (OAPEC), with the Saudi Arabian and the United Arab Emirates governments each holding 17 percent.

At an extraordinary shareholders meeting in Cairo on Sunday, the general assembly also resolved to double authorised capital to $2.4 billion. The paid-up capital was increased by converting $200 million of retained earnings into shares, the bank said in a statement.

Oman Official Crude Price Falls for First Time in 9 Months - Bloomberg

Oman crude’s official selling price will drop for the first time in nine months in July as refiners balked at paying more amid slumping processing profits.

The July official selling price for Oman oil will be $109.20 a barrel, based on the average of daily futures settlement prices on the Dubai Mercantile Exchange calculated by Bloomberg News. That’s 6.3 percent less than June’s level of $116.51 and the first decline since the September 2010 benchmark price was set. The price reached a record $133.08 in September 2008. Today’s settlement at 12:30 p.m. Dubai time was $109.16.

Premiums for similar Middle Eastern grades for July loading such as Qatar Marine fell from a high of 43 cents a barrel on May 20 to a discount of 48 cents today, according to data compiled by Bloomberg. Refiners are reluctant to pay as much for supplies as their profits narrowed over the month.

AFE working on Arab indices; one ETF likely

The Arab Federation of Exchanges (AFE) is creating two Arab indices, one of which has the potential to create exchange traded fund (ETF) as the body has proposed interconnectivity among Arab clearing houses.

“We discussed creating Arab indices, which will reflect the performance of the stock markets in the region. We may try to have two indices, one of which will be wider to cover almost all the Arab countries, and the other one will be limited to most liquid companies in order to build a trade-able ETF on that index,” AFE secretary general Fadi Khalaf told Gulf Times after the annual council meeting.

In the meeting, it was also decided that Qatar Exchange, represented by its acting chairman Hussain Ali al-Abdullah, will chair the federation for the next 12 months; taking the mantle from Sulaiman S Alshahoumy, chairman of Libyan Stock Exchange.

Abu Dhabi Ports Hires HSBC, Banks to Work on Khalifa Zone Debt - Businessweek

Abu Dhabi Ports Co., the state-run harbor operator, has hired banks including HSBC Holdings Plc and National Bank of Abu Dhabi PJSC to work on plans for refinancing debt taken out to build the Khalifa Industrial Zone.

The company intends to change short-term loans into longer- term financial instruments once construction is completed, Executive Vice President Khaled Salmeen Al Kawari said today in an interview in Seoul, where he is attending a forum. First Gulf Bank is also among the international lenders working on funding facilities, he said.

Construction of the 26.4 billion dirhams ($7.2 billion) first phase of the Khalifa Industrial Zone is 75 percent complete and on target to open in the fourth quarter of 2012, Al Kawari said. The 417 square-kilometer (161 square mile) development, designed to become a hub for manufacturing, logistics and trade, will account for 15 percent of the emirate’s non-oil economy within 20 years, he said.

GCC sukuk roar back - Zawya

May 2011 was marked by a comeback of sukuk that are international, USD denominated, listed and GCC originated - a trend expected to persist through June, writes Adnan Halawi, Zawya's fixed income analyst

As much as USD4.9 billion worth of sukuk were issued in May 2011, taking the total issued globally in the first five months of 2011 to an estimated USD37.8 billion, a 62% surge compared to USD14.2 billion during the same period last year, according to data compiled by Zawya Sukuk Monitor.

USD1.2 billion - or 25% of the total - of the sukuk issued in May were out of the GCC, marking a solid comeback for Gulf sukuk.

Tenth time lucky for Bahrain's Gulf Finance House as it posts a profit - The National

Bahrain's Gulf Finance House has reported a $11.9 million profit in the first quarter, reversing nine straight quarters of losses.

The rebound could mark a turning point for the Islamic investment bank, one of the hardest-hit companies in the Gulf by the global financial crisis.

GFH absorbed more than $1bn of losses before inching back to profitability in the first three months of this year.

Kuwaiti investment firms told to spin off lending - Maktoob News

Kuwaiti investment firms will need separate licences to operate their lending and investment businesses as the central bank eliminates regulatory overlap with the newly formed Capital Markets Authority.

The decision was in a central bank circular sent to investment firms last week and seen by Reuters.

The move is part of the Gulf Arab state's efforts to better regulate its financial markets and boost transparency and governance among investment firms.

gulfnews : Jabal Omar gets nod for 38.4% capital hike through rights issue

Saudi developer Jabal Omar will use part of the proceeds from a rights issue to pay back a 350 million riyals (Dh342.52 million) bridge loan from Al Rajhi Bank, it said in a prospectus.

Jabal Omar said on Sunday its shareholders approved a 38.4 per cent capital increase to 9.3 billion riyals ($2.48 billion) through a rights issue.

The prospectus, posted on the Capital Markets Authority website, said the proceeds would also be used to finish the first phase and start the second phase of building a project close to the Grand Mosque in Makkah.

No LSE 'pop' on cards for DP World - The National

Investment experts do not believe there will be a "pop" effect when shares in DP World, Dubai's global ports operator, begin trading on the London Stock Exchange tomorrow.

"Popping" is when a share soars to a big premium on its opening day of trading, and has been a feature of several global flotations recently. But analysts said it was unlikely DP World shares would rise significantly when trading begins.

"There may be some small upside on day one and some 'feel-good' factor, but I don't think anybody expects a 'big bang' for DP World," said Redwan Ahmed of EFG-Hermes.

Optimism builds in Egyptian property sector - The National

Shares in Egyptian property companies may have been down but they are not out.

The sector has borne the brunt of a string of corruption probes, placing many property companies under fire in the aftermath of the revolution that ousted Hosni Mubarak, the president. At the heart of legal wrangles are conflicting laws governing the sale of state land.

But a series of positive catalysts have prompted investors to return to the market and prop up share prices in what have been seen as underperforming stocks for much of this year.

Abu Dhabi index puts economy in focus - The National

Abu Dhabi's economic performance dipped in the first quarter of the year, the results of a newly launched business cycle indicator in the capital show.

Weakening business and household sentiment helped draw to the indicator down compared with the same period last year, according to the new index from the Abu Dhabi Department of Economic Development (DED).

"The recovery will be longer and more difficult than expected and restoring confidence is more important than ever," said Rashed al Zaabi, the deputy executive director of the planning and statistics sector at the DED.

Oman Tribune - Sultanate, Qatar to begin economic partnership

His Majesty Sultan Qaboos Bin Said held talks with HE Sheikh Hamad Bin Jassim Bin Jabir Al Thani, Prime Minister and Foreign Minister of Qatar, at Bait Al Barakah on Monday. Hamad Al Thani arrived in Muscat late on Sunday.

During the audience, the existing ties were reviewed and ways to boost the cooperation were explored.

Later, the Sultanate and Qatar agreed to initiate an economic partnership by forming two specialised committees, which will start functioning in two months.

THE DAILY STAR : Dubai bond most susceptible to Europe woes: Islamic finance

Dubai’s Islamic bonds tumbled the most in six months last week as investor concern over Europe’s growing debt crisis prompted a sell-off of the region’s riskier assets.

The yield on the 6.396 percent dollar sukuk maturing in November 2014 climbed 22 basis points, or 0.22 percentage point, the biggest weekly gain since November and the steepest among Arab Gulf issuers, to 4.83 percent Friday, Bloomberg prices show.

The rate fell to a record low of 4.6 percent on May 19. The average yield of Gulf sukuk was unchanged last week at 4.55 percent as yields on Bahrain’s government bond dropped, according to the HSBC/NASDAQ Dubai GCC U.S. Dollar Sukuk Index.