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Wednesday, 8 June 2011

FT.com - Banks ponder Bahrain exodus

The 1970s civil war in Lebanon prompted an exodus of bankers from Beirut to Bahrain.

Then, Dubai rose to prominence as a competing business hub and the global financial crisis further tarnished the island kingdom’s lustre as a financial services centre.

The chaotic unrest in February, combined with March’s security crackdown, could deal the island’s global ambitions a fatal blow – in spite of a call by King Hamad bin Isa al-Khalifa for a national dialogue and the lifting of effective martial law earlier this month.

MIDEAST STOCKS-Saudi index at 7-week low, most Gulf markets fall | Reuters

Saudi Arabia's index .TASI slumped to a seven-week low, with investors reducing positions ahead of end-of-year school holidays, and Oman's market slipped over fears of downbeat second-quarter corporate earnings. The kingdom's all-share Tadawul index .TASI fell 1.1 percent to its lowest close since April 19.

"Most of the technical indicators are giving diversion, some are negative and some are giving reversals - this means the market is weak," said Youssef Kassantini, a Saudi-based financial analyst.

"Market is trading in a very tight range. Traders cannot see the direction of the market."

MENA stock markets close - June 8, 2011

ExchangeStatus IndexChange
TASI (Saudi Stock Market)
6540.65-1.11%
DFM (Dubai Financial Market)
1552.74-0.78%
ADX (Abudhabi Securities Exchange)
2696.360.23%
KSE (Kuwait Stock Exchange)
6308.1-0.10%
BSE (Bahrain Stock Exchange)
1347.340.61%
MSM (Muscat Securities Market)
5999.38-0.89%
QE (Qatar Exchange)
8183.41-0.00%
LSE (Beirut Stock Exchange)
1357.52-0.03%
EGX 30 (Egypt Exchange)
5436.50.28%
ASE (Amman Stock Exchange)
2137.72-0.79%
TUNINDEX (Tunisia Stock Exchange)
4152.190.51%
CB (Casablanca Stock Exchange)
12018.2-0.29%
PSE (Palestine Securities Exchange)
501.990.21%

Kuwait's KIPCO eyes acquisitions in banking, insurance | Reuters

Kuwait Projects Co. (KPRO.KW) (KIPCO), the largest investment company in the Gulf state, is eyeing acquisition opportunities in the banking and insurance sectors, its chief financial officer said on Wednesday.

The firm was evaluating new deal opportunities, Pinak Maitra told Reuters on the sidelines of a conference, but had no imminent plans for a new investment.

"The primary sectors where we will like to carry out an acquisition if the price and fit are right are in the commercial banking and insurance sectors," he said.

Oman to add $6bn in Islamic assets, says Ernst and Young | AMEinfo.com

A successful roll-out of Islamic banking system could easily see the industry in Oman gaining up to $6bn in Islamic assets over next few years, according to estimates by Ernst and Young's Islamic Financial Services Group (IFSG).

Total banking assets in Oman in 2010 were estimated to be $42bn. Shari'a-compliant financial institutions, which are expected to commence operation in the country within a short period, are expected to capture a substantial share of this market and of total banking assets within a few years.

Speaking at Ernst & Young's Islamic Banking session at the Muscat Holiday Hotel, Ashar Nazim, Executive Director and Head of Islamic Financial Services, Ernst & Young MENA, said, "The Islamic banking opportunity could be substantial as we expect the industry to reflect its performance in other GCC markets. As an indication of how Islamic banking would evolve in Oman, we can look at the neighboring UAE market, where it has captured a significant share in a short period of time. New Islamic banks and Islamic banking windows in conventional banks are set to capture a significant share of the market over the coming months."

Saudi economy may grow by 6 pct in 2011 - cbank - Maktoob News

Saudi Arabia's economy may grow by around 6 percent this year following a recently unveiled social spending package, up from an estimated 4.3 percent, its central bank governor was quoted as saying on Wednesday.

Worried by unrest sweeping the Arab world, the world's top oil exporter has pledged to spend an estimated $130 billion, or around 30 percent of its annual economic output, on new houses, creating jobs, unemployment benefit and other measures.

"The economic outlook for the kingdom of Saudi Arabia in 2011 is encouraging and very positive," Central Bank Governor Muhammad al-Jasser said in a speech posted on the central bank's website www.sama.gov.sa.

Sovereign Wealth Fund Transaction Database is Now Online | Sovereign Wealth Fund Institute

Top 10 SWF Direct Deal Transactions of 2010 | Sovereign Wealth Fund Institute

Top 10 SWF Direct Deal Transactions of 2010 | Sovereign Wealth Fund Institute

Dubai’s Abraaj Said to Be in Talks to Buy a Stake in Egypt’s Citadel Capital - Bloomberg

Abraaj Capital Ltd., the Dubai-based private equity company managing about $6.2 billion, is in talks with Citadel Capital SAE to buy a stake in the Egyptian firm, two people with knowledge of the talks said.

The shares of Citadel Capital headed for the biggest gain this month, climbing 4.2 percent to 5.90 Egyptian pounds at 12:26 p.m. in Cairo. They surged as much as 8.8 percent earlier.

Abraaj hasn’t made an official offer to Cairo-based Citadel Capital yet, according to the people, who asked not to be identified because the talks are private. Citadel Capital Chairman Ahmed Heikal declined to comment when contacted by Bloomberg News today. A spokesman for Abraaj Capital, speaking on condition of anonymity in line with company policy, said the firm had no comment.

Morgan Stanley favors UAE corporate bonds as Mideast picks | Alrroya

Morgan Stanley is betting on United Arab Emirates' corporates which are of strategic importance to the Gulf state among its top bond picks in the Middle East, an analyst at the US bank said.

The bank's fixed income analyst Lenka Polackova prefers utility Dubai Electricity and Water Authority's 2015 bond, energy investment firms Abu Dhabi Energy Co's (Taqa) 2012 maturity, and International Petroleum Investment Co's (Ipic) 2016 bonds, she said in an interview with Reuters.

Investment firm Kuwait Projects Co (Kipco) bond maturing 2020 and Bahrain's sovereign wealth fund Mumtalakat's 2015 issue also feature on the list of five names Morgan Stanley selected as its top corporate bonds for value.

AFP: UAE central bank orders freeze of Ben Ali assets: report

The United Arab Emirates central bank has ordered banks to freeze all assets of ousted Tunisian president Zine el Abidine Ben Ali, his wife, and 120 other Tunisians, a newspaper said on Wednesday.

Alrroya al-Iqtissadia daily cited a central bank circular as telling banks to "search for and freeze accounts, deposits and investments" of the former autocrat who is sheltered in Saudi Arabia, and those of his wife Leila Trabelsi and the others.

The bank said it was acting following a request, transmitted through the foreign ministry from the Tunisian public prosecutor, to freeze those assets worldwide, the paper added.

Union Properties Plans $545 Million Debt Repayment to Aid Loan Revamp - Bloomberg

Union Properties PJSC (UPP), Dubai’s second-biggest developer by assets, plans to repay 2 billion dirhams ($545 million) of debt this year to cut interest costs and win bank support to restructure other loans.

The builder of Dubai’s Index Tower is seeking to convince banks including Emirates NBD PJSC (EMIRATES) to delay repayment on an additional 3.5 billion dirhams to 4 billion dirhams for five years, Chairman Khalid Bin Kalban said in a telephone interview from Frankfurt yesterday. Union Properties also repaid 2 billion dirhams in 2010, he said.

“We are pre-paying so we can sit and negotiate with the banks on restructuring some of the debt that will be left,” Bin Kalban said. The company is seeking to pay interest only and delay the principle repayment until 2016.

Dubai's Emaar denies change in board of EHTPL - The Economic Times

The board of Emaar Hills Township Private Limited, a joint venture between Dubai-based Emaar and Andhra Pradesh Industrial Infrastructure Corporation (APPIC), has not been changed in a bid to end the stalemate with the Andhra Pradesh government, Emaar Properties has said.

"There are no changes to the board of directors of Emaar Hills Township Pvt Ltd (EHTPL), and as a matter of policy, we do not respond to market rumours or speculation," an Emaar spokesperson told Emirates 24/7.

EHTPL is to develop an integrated golf course and township in Manikonda, a commercial suburb in Hyderabad.

Jordan: Worth a punt? | beyondbrics – FT.com

Putting aside Jordan’s fiscal problems, simmering political tensions, significant unemployment, and need to import energy, the small monarchy’s debt might actually be a pretty good bet.

So says Exotix, the frontier markets specialists, who recently initiated a buy on Jordanian debt — even as other analysts worry that fall-out from the Arab spring has put the nation on a dangerous long-term trajectory.

Jordan, argues Exotix’s analysts, has a manageable level of external debt after buy-backs last decade, and the Gulf Cooperation Council’s decision to extend a “welcome wealthy hand of friendship” to the small monarchy could give a boost to Jordan’s less-promising fiscal situation.

OPEC split over increasing oil production - Maktoob News

Mideast turmoil, a faltering world economy and divisions on whether to raise crude production promise to make Wednesday's OPEC meeting one of the more volatile in recent history.

In the end, the 12-nation group will probably opt to increase output levels to reduce international concerns about the high price of oil. But some influential members are looking to raise the cost of crude.

Indirectly endorsing lower prices, Angolan Oil Minister Jose Maria Bothelo de Vasconselos told reporters Tuesday his country could accept an OPEC decision to raise output targets, "if the market needs more oil." Iraqi oil minister Abdul-Karim Elaibi differed, saying a price of between $100 and $120 a barrel is "reasonable."

Property slump takes its toll - The National

Several large Dubai companies are expected to face debt repayment challenges until the end of next year because of weakness in the property market, according to Moody's Investors Services.

Jebel Ali Free Zone, DIFC Investments and Dubai Holding Commercial Operations Group (DHCOG) would have to meet large maturing debt repayments over the next 18 months, the ratings agency said in a report released yesterday.

"The critical question here is whether Dubai's desire or willingness to support these entities will be matched by an ability to provide support," the report said.

Banks keep lending in check - The National

Banks remained reluctant to increase lending significantly in April as loan growth trailed a rise in deposits.

Central Bank data released yesterday showed deposits reached Dh1.12 trillion (US$305 billion), a rise of 2.1 per cent from March, but loans and advances edged up only 0.6 per cent, to Dh1.05tn over the same period.

The latest evidence of slow credit growth comes a week after Sultan al Suwaidi, the Central Bank Governor, asked banks to step up lending to businesses to reflect improving liquidity.

Sovereign funds change tack - The National

Sovereign wealth funds are making smaller investments in larger numbers and continue to shift focus from developed markets to the emerging world, according to a new report on fund activity last year.

Overall, publicly reported investments by sovereign funds were worth US$52.7 billion (Dh193.56bn) last year, a decline of 23 per cent compared with 2009, according to the third annual report by the Monitor Group in London on state-owned investment vehicles. At the same time, the number of reported investments almost doubled to 172.

The trend reflected that funds were developing more in-house investing expertise and were being pushed by governments to deliver better returns, said Victoria Barbary, a senior analyst at the Monitor Group who edited the report with Bernardo Bortolotti, a professor of economics in Italy. That trend is continuing this year, she said.

Mubarak’s Legacy Clouds Future of Egypt’s Property Boom as Deals Unravel - Bloomberg

The Egyptian revolution that swept Hosni Mubarak from power threatens to hobble the real-estate developers that profited from their ties to the former president.

Talaat Moustafa Group (TMGH) and Palm Hills Developments SAE, the biggest publicly traded builders by assets, have already suffered legal defeats that may force them to give up land they bought cheaply from the old regime. Now the caretaker government, under pressure from the public to clean up the industry, is trying to settle disputed transactions without scaring off investors.

“The main challenge is to avoid putting off private investors, who make up 90 percent of the Egyptian property market,” said Ahmed Badr, head of Middle East property research at Credit Suisse Group AG in Dubai.

Why Saudis want oil in check | Financial Post

As members of the Organization of Petroleum Exporting Countries meet in Vienna Wednesday to discuss oil output policy, leader Saudi Arabia is expected to try hard to push oil prices below US$100.

The kingdom has talked about raising its output sharply starting this month by more than 500,000 barrels a day, regardless of what the rest of OPEC decides. It is also expected to favour a formal output increase after members informally exceeded their targets.

Saudi Arabia isn’t just being nice to consumers. It wants to soften prices to protect its market — the higher the prices, the more consumers shift away from oil, either by cutting energy use or moving to other energy sources. It’s also worried that high oil prices are standing in the way of a robust global recovery.

Race quickens for Asia's fast-growing LNG market | Reuters

The race to meet Asia's rising liquefied natural gas (LNG) demand is hotting up as North American and Russian producers compete with Qatar and Australia for a share of the lucrative market. 
Fuel consumption in the world's fastest-growing major economies China and India is surging as industries and cities expand, leaving producers struggling to meet demand.  
"A city of 1 million people is going to be created every week," Dick Benschop, vice president for strategy at Royal Dutch Shell (RDSa.L), told reporters at and industry event in Malaysia. "You have to run to be able to stand still." 

Warning signals from Europe for the GCC - The National

The euro-zone sovereign debt crisis, and in particular the tortured negotiations going on between Greece and international financial institutions, has been followed closely in the Middle East, for several reasons.

First, the trials in European finances coincided almost exactly with this region's very own debt crisis, sparked by the restructuring announcement by Dubai World in November 2009.

There was no cause and effect here. Dubai's problems were linked to a property bubble rather than to excessive government spending; and it was less "sovereign" in nature. (Dubai has no sovereign rating.) But for a while the financial world was thinking simultaneously about debt in Dubai as well as in Europe.

A curious thing is happening to DP World on the LSE - The National

This was not how things were supposed to go for DP World.

Dubai's ports operator has had six days of trading since being listed on the London Stock Exchange (LSE). The move, we have been told for many months, would encourage new shareholders on to the register, liberate the shares from the shackles of Nasdaq Dubai, inject liquidity and volume into the stock and ultimately lift its market value to truly reflect its world-class status.

Instead, the shares have lost nearly 4 per cent since they began trading in London. This cannot be described as a crash, but a downwards move was not what the company, or most market analysts, expected in the run-up to the listing.

FT.com - Too much aid will hobble Arab spring

Within months of toppling their dictatorships, Egyptians and Tunisians have been promised significant financial help from the international community, with the Group of Eight leading economies most recently pledging £12bn in aid, loans and debt relief. The wisdom of heaping cash upon these countries has been taken for granted. In fact, it may do more harm than good.

The record of development assistance leaves much to be desired. In the past six decades donors have often sought to bring about growth by funding infrastructure, agriculture and social services, with little success. Development organisations too often follow a discredited central planning model when history is testament to the way in which the grand plans of the few rarely work, while the freedom of the many succeeds in lifting one society after another from poverty to prosperity.

The billions already pledged to help Egypt and Tunisia will again see well-connected officials dictate spending. They will doubtless embark on large investments, such as the plan presented to the G8 by a group of Tunisian technocrats aiming to spend $20-$30bn on transport, infrastructure and industrial zones to “open up and connect the regions of the country”. Yet it is not clear why Egyptians and Tunisians would want go down this road again, given the miserable record of similar initiatives, not least in Egypt and Tunisia themselves.

» Coding and Decoding The Message of Islamic Finance alifarabia

Mass Media is the medium that carries the message to the masses and is responsible for controlling our conclusions.

I’d like to dissect the above quote and see how the “transmission of message” is being coded and decoded by the Western Media with respect to the Halal industry and Islamic finance.

Neither the Halal industry nor Islamic finance is time sensitive, hence, western/conventional media business editors often ‘bump’ Halal/Islamic stories for another day, regard them as insignificant or used only during “dry” periods – as they call it.