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Monday, 4 July 2011

Bahrain to retain financial hub standing, says S&P -

Bahrain will remain an important financial centre in the Middle East despite the impact of the recent uprisings, Standard & Poor's said on Monday.

S&P credit analyst Emmanuel Volland said that despite competition from Qatar and Dubai, authorities should be able to convince investors to do business in Bahrain.

'We think if the political situation remains stable, the authorities should be able to convince investors that Bahrain remains a key financial centre for the region,' Volland said as part of a Q&A on the future of banks in the GCC.

Saudi debt restructuring sets precedent -

A restructuring of billions of dollars of debt at a leading Saudi Arabian steel manufacturer has set a new precedent for complex financial restructurings in the kingdom, lawyers say.

Last week, Al-Ittefaq Steel Products Company and 18 banks reached an out-of-court agreement to refinance about SR7.5bn ($2bn). Under the arrangements, none of the banks will take write-offs and the company will be able to continue some of its expansion plans.

"This is a landmark transaction in proving that a financial restructuring can actually be done in Saudi Arabia,” says Christopher Langdon, a partner with Latham & Watkins, which represented banks involved in the deal.

MENA stock markets close - July 4, 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 Pledges on Supply Ahead of New Pricing: Persian Gulf Oil - Bloomberg

Saudi Arabia will try to ensure global oil markets have enough supply even as the International Energy Agency coordinates an emergency release of crude reserves from member countries.

State producers including Saudi Arabian Oil Co. are set to announce monthly selling prices for crude as traders wait to see if lower costs encourage sales. Abu Dhabi plans to ship more Murban crude in August, while reducing supplies of other grades.

Saudi market slips, banks push UAE indexes up

Saudi shares end lower as investors book profits ahead of second-quarter earnings.

Yet banks and petrochemicals are seen posting strong results to boost the kingdom's index.

“For banks, we are expecting good results,” says Youssef Kassantini, a Saudi-based financial analyst. “Most of the provisions were allocated in 2009 and 2010. The political fear is not there anymore, so investors are more encouraged.”

Emaar MGF records Rs 206 cr loss in FY11, sells hotel project - The Times of India

Real estate developer Emaar MGF on Monday said it has posted a net loss of Rs 205.94 crore for the year ended March 31, 2011, mainly on account of selling its hospitality project in Kolkata at discount.

The company had posted a net profit of Rs 73.81 crore in the previous financial year, Emaar MGF said in a filing to the Bombay Stock Exchange(BSE).

The total income of the firm also declined by 1.25 per cent to Rs 1,053.70 crore in 2010-11 from Rs 1,067.07 crore in 2009-10, it added.

Investors flock to Air Arabia - The National

Investors flocked to shares in Aramex and Air Arabia as traders looked to diversify their portfolio away from banking and property companies.

Aramex, the logistics company, added 0.6 per cent to Dh1.81 as more than 13 million shares changed hands and Air Arabia, the low-cost carrier based in Sharjah climbed almost 1 per cent to 68 fils. Almost 4 million shares were traded on this stock today.

These companies were among the most heavily traded stocks in Dubai in afternoon trading.

RAK Petroleum to merge with Norwegian oil and gas company - The National

The UAE's RAK Petroleum and DNO, the Norwegian oil and gas company in which it owns a stake, are to merge.

Yesterday the companies agreed to bring the Ras al Khaimah company's operations, which span Oman and the UAE, into the Oslo-based company. Under the agreement DNO is to issue shares to RAK Petroleum equivalent to the value of the Gulf company's assets, estimated between US$250 million (Dh918m) and $300m.

"There is a compelling logic in combining the DNO and RAK Petroleum operating assets to build a first rank independent MENA upstream operator," said Bijan Mossavar-Rahmani, the chairman of RAK Petroleum, in a company statement. Earlier this month Mr Mossavar-Rahmani was also made chairman of DNO.

Egypt says to fund budget gap via local market, Arab help | Reuters

Egypt plans to fund its 134 billion Egyptian pound budget deficit through a combination of local market issuance and with aid from Arab states, Finance Minister Samir Radwan said on Monday.

"Egypt can go at least a year without World Bank or IMF (support) but only with the help of Arab countries," Radwan told reporters in the United Arab Emirates' capital.

"We plan to cover 120 billion pounds from the local market and 14 billion pounds of the deficit we are looking for from Arab countries."

South Sudan: seeking Arab funds | beyondbrics –

South Sudan posterAs crisis-torn South Sudan approaches its birth on Saturday, it is appealing to potential Arab partners for support for a post-independence state development plan.

Dubai, already an increasingly important trade hub for Africa, is a natural place to start drumming up support.

Months after a vote to secede from Muslim Arab Sudan, South Sudan will celebrate its new found nationhood after a 2005 peace deal ended decades of violent civil war with Khartoum.

Is it best to buy UAE stocks or property as an investment? « ArabianMoney

Now the presumption behind this headline is that the UAE economy is now in a recovery phase after the recession that followed the global financial crisis that was considerably amplified by a local property crash at the same time.

Other articles on this website have demonstrated that it is, particularly when you consider the additional oil revenues from the chaos of the Arab Spring and the influx of wealthy new residents and tourists as a consequence.

Frontrunner Qatar out of Bank Muamalat stake sale - sources | Reuters

Attempts by Gulf shareholders to sell a majority stake sale in Indonesian Islamic lender PT Bank Muamalat have hit a snag after frontrunner Qatar Islamic Bank pulled out of the bidding process, banking sources said. Top shareholders of Indonesia's second-biggest sharia lender are aiming to sell at least 51 percent of the unlisted Islamic lender in a deal that may be worth about $300 million, sources have told Reuters. But the deal, which initially attracted interest from several parties, has seen bidders pull back due to high pricing expectations from the sellers, sources familiar with the deal said.

Qatar Islamic Bank (QIB) was seen as a front-runner for the stake, two bankers familiar with the stake sale process told Reuters. QIB was concerned about the price they would have to pay for the stake, one of the sources said. A QIB official declined to comment. The sources declined to be identified because the deal is not public. That has left Standard Chartered Plc as the only bidder left in the race and the top contender for the stake. StanChart's Indonesian affiliate PT Bank Permata pulled out earlier, sources said. Bank Mandiri and Singapore's second-biggest lender Oversea-Chinese Banking Corp have also withdrawn from the bidding process, according to the sources. Both OCBC and Mandiri have declined to comment.

Muamalat's top three shareholders -- Islamic Development Bank, Boubyan Bank Kuwait , and Saudi Arabia's Atwill Holdings Ltd -- collectively control 75.7 percent of the lender and are trying to offload some or all of their holdings. Morgan Stanley is advising the shareholders on the sale. Muamalat's total assets are 21.4 trillion rupiah ($2.5 billion). A sale may value the lender at between $750 million to $1 billion, sources have said previously. Indonesia, the world's most populous Muslim nation, has a huge untapped market for Islamic banking, which local and international investors are trying to capture. Qatar National Bank last year bought an 82 percent stake in small local lender Bank Kesawan for $82 million.

Bahrain faces long road to recovery |

Flick through the passport of any regular visitor to Bahrain, and you'll come across a familiar slogan stamped onto its pages: 'Welcome to business friendly Bahrain'. The campaign, which ran until recently, was a key part of the Gulf state's efforts to consolidate its position as a regional centre for financial services.

Only now, amid the wreckage of six months of violence and brutal government repression, those passport stamps serve as a grim reminder of what Bahrain has lost, and may never recover.
At least 30 Bahrainis were killed and thousands injured in clashes with the army during anti-government protests in February and March.

The violence led to the imposition of emergency law, which was revoked on June 1. However, opposition groups have since claimed that as many as 400 people, most of them from the country's majority Shi'a population, are on trial on charges stemming from the protests.

UAE banks forced to relax debtor's repayment plans -

UAE banks are being forced to relax debt repayment plans in a bid to recoup outstanding loans from debtors who have skipped the country.

Heavily exposed lenders are accepting more realistic payment plans and using threats of jail less frequently for debtors still residing in the country, the founder and author of Detained in Dubai has told Arabian Business.

“The banks are more approachable to the payment plans that they weren’t approachable for in 2009-2010, said Radha Stirling.

Decriminalise bouncing a cheque, say lawyers - The National

A recent lawsuit questioning the constitutionality of the bounced-cheque law illustrated some of the tricky questions surrounding a contentious issue, experts say.

The case, filed by the Emirati businessman, AQ, last month, asked the Dubai Court of Misdemeanours to put the question to the Federal Constitutional Court, saying there was a need to clarify Federal Law Number 401 on bounced cheques.

He is serving three years and six months for several bounced-cheque cases. His lawsuit is not the first to question Law Number 401, according to Dubai Courts sources. All previous cases, including his, were dismissed.

Iran sanctions leave Dubai out in the cold - The National

Traders and economists say the actions being taken against Iran, a key UAE market, are hitting business hard in Dubai. Antonie Robertson/The National)

    Tightening global sanctions against Iran are threatening the UAE's links with one of its biggest export markets and risk choking its economic growth.

    "This is a serious issue. Any negative impact [on trade] will have an impact on the economy of Dubai," says Mohamed Lahouel, the chief economist of the Dubai Department of Economic Development.

    Traders say they are struggling to secure finance for even the most basic exports such as timber and foodstuffs that are not listed as sanctioned goods.

    Egypt seeks help after peaceful revolt - The National

    "Welcome to the land of peaceful revolution," declares the new tourism slogan.

    In the context of a worsening economy, it can almost be read as an imperative to the world: help to save our country from ruin.

    With unemployment inching upwards and the deficit widening, Egypt has become a regional case study of the economic challenges facing a country in the aftermath of a popular revolution.

    Middle East Turmoil Beaten by Argentine Inflation in Yields: Arab Credit - Bloomberg

    Middle Eastern bonds have been offering a lower yield premium than Latin American debt for the longest stretch in six years, as Argentine and Venezuelan inflation concerns investors more than Arab uprisings.

    The spread over U.S. Treasury bonds has been narrower for Middle East debt than for securities issued in Latin America since Nov. 12, JPMorgan Chase & Co. data show. Corporate bonds in the Middle East are also returning more this year.

    While many Latin American economies are transparent and well managed, “growth is the next hurdle for some countries there because of inflation,” Stuart Culverhouse, chief economist at Exotix Ltd. in London, said in a telephone interview. Middle Eastern borrowers, meanwhile, have enjoyed renewed investor confidence after Dubai last year avoided default by renegotiating almost $25 billion in debt, he said.

    Saudi foreign asset growth set to slow - Emirates 24/7

    Saudi Arabia’s foreign assets surged by a whopping SR134 billion ($35.7 billion) in the first five months of 2011 to swell to their highest ever level but growth could slow down in the next months as oil prices are expected to stabilize at lower levels, a key bank in the Gulf Kingdom said on Monday.
    The assets controlled by the Saudi Arabian Monetary Agency (WAMA), central bank, peaked at an all time high of SR1,802 billion ($480.5 billion) at the end of May because of strong crude prices and possibly higher return on SAMA’s investments, Banque Saudi Fransi (BSF) said in a study sent to Emirates 24/7.
    Oil prices (WTI) averaged around $101.3 a barrel in May compared to $110.3 a barrel in April. SAMA’s deposits with foreign banks grew 23.9 per cent in May YoY, while investments in foreign securities rose 12 per cent and foreign currency assets (excluding gold reserves) soared by 25.5 per cent.

    Credit growth trails Saudi, Qatari advance - The National

    Lending slowed in May, with UAE credit growth lagging Qatar and Saudi Arabia, new data show.

    Loans and advances fell by 0.5 per cent to Dh1.049 trillion (US$287 billion), down from Dh1.054tn the month before, according to the data.

    Credit growth has continued to be sluggish this year as many lenders remain preoccupied with provisioning to safeguard against non-performing loans.

    BBC News - Kuwait hands out cash to bridge small business gulf

    After struggling to find wedding invitations she liked for her own big day, Latifa Esbaitah designed her own instead.

    And after getting plenty of compliments from guests, she decided to launch a business offering the same service for others.

    With a stylish but small shop tucked away on the mezzanine level of a shopping centre, there is not much passing trade at Royal Wedding Cards.

    Fair result for UAE after roller-coaster first half - The National

    It has been a roller coaster first half of the year for investors.

    Stock markets here were initially buffeted by the economic implications of the unrest in some parts of the region and then, more recently, seen as an attractive haven for investment. At the end of the first half, the Dubai Financial Market General Index was down 8.6 per cent to 1,518.33 points, from the start of the year, and the Abu Dhabi Securities Market General Index was down 1.6 per cent to 2,704.19 points.

    Today, the UAE is among the most attractively valued stock markets in the GCC, while Kuwait is the most expensive, as we head in to the second half of the year, according to data.

    Third Malaysian sovereign sukuk sends clear message to IDB states - Arab News

    Last Thursday was a good day for the sukuk market and Malaysia government global sovereign papers. The closing of the dual tranche $2 billion Wakala (agency) sukuk issued by the Wakala Global Sukuk Berhad on behalf of the Malaysian government, who is also the obligor, not only set new milestones but also confirmed yields below the guidance price.

    Thus augurs well for the Malaysian market where a yield curve for sovereign sukuk is fast emerging given that the $2 billion offering is the third Malaysian sovereign global sukuk offering in the last 11 years.

    More importantly, it sends a clear and present message to other member countries of the Islamic Development Bank that sovereign Malaysia is serious about developing critical mass in the Islamic capital market especially the sukuk market, and unlike countries such as Saudi Arabia, Kuwait, the UAE, Turkey, Egypt, Jordan and so on, it is putting its money where its mouth is. All the above countries have yet to issue a sovereign sukuk, and only Saudi Arabia, Jordan and Turkey sort of have the minimum required trust and sukuk laws in place to facilitate such offerings.

    gulfnews : Islamic banks hit right note with Emirati, Saudi youth

    Preference of Islamic vs. Conventional banks
    • Image Credit: Gulf News

    Dubai: All those messages local and international banks have been plastering on billboards and streaming over the net and mobile phones are having an impact on their intended audience.

    Emirati teens and their counterparts in Saudi Arabia are pretty clued in on what they expect from their banks and how they intend to go about getting it, according to a new regional survey.

    Not just that, Islamic banking services and products are much preferred by this demographic, with UAE teens more inclined than those in Saudi Arabia, said the survey conducted by AMRB in association with TRU, both part of the Kantar Group.

    Big day for Tamweel as it rejoins main Dubai index - The National

    Tamweel, the home finance company majority-owned by Dubai Islamic Bank, yesterday marked a key transformation from its indebted days after it was included on Dubai's main index.

    Shares in the mortgage company climbed the most in a month as its stock met the requirements for inclusion on the Dubai Financial Market (DFM) General Index and the banking sub-index, according to a statement on the Dubai bourse.

    Analysts last month acknowledged the re-listing as an important step towards the company getting back on track.