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Tuesday, 5 July 2011

MENA stock markets close - July 5, 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)

Middle East Oil Trades at Discount; Abu Dhabi Cuts Export Prices - Bloomberg

Middle East crude oil for sale to Asia remained at discounts to official selling levels even after Abu Dhabi National Oil Co. cut export prices yesterday.

Abu Dhabi’s Murban for August loading was unchanged at a discount of 33 cents a barrel below its official selling price, according to data compiled by Bloomberg. Qatar Land was 41 cents below, Bloomberg data showed.

The state oil producer reduced the June official selling price of its flagship Murban grade by 1.3 percent to $112.15 a barrel, it said yesterday in an e-mail to refiners. That leaves the grade at a premium of $4.38 barrel to benchmark Dubai, less than last month’s $5.22 difference.

Abu Dhabi’s Shares Rise Most in 3 Weeks Before Earnings Reports - Bloomberg

Abu Dhabi’s stock index rose the most in almost three weeks, pacing gains in the United Arab Emirates, before companies start reporting second-quarter earnings.

Abu Dhabi Commercial Bank PJSC (ADCB), the U.A.E.’s third-largest bank by assets, gained 2.2 percent. Emirates Telecommunications Corp., the Persian Gulf nation’s biggest phone company, advanced for the first time this week. Abu Dhabi’s ADX General Index (ADSMI)jumped 0.5 percent, the most since June 16, to 2,729.28 at the 2 p.m. close in the emirate. Dubai’s DFM General Index (DFMGI) advanced 0.2 percent. The Bloomberg GCC 200 Index (BGCC200) increased 0.3 percent at 1:17 p.m. in Riyadh.

“The majority of institutional investors are sitting on their hands awaiting evidence of earnings growth in second- quarter numbers,” said Julian Bruce, equity sales head at EFG- Hermes Holding SAE in Dubai.

UAE business activity at 3-month low in June - Emirates 24/7

Private sector business activity in the UAE hit a 3-month low in June as input cost pressures remained elevated, a purchasing managers’ survey showed on Tuesday.

The HSBC UAE Purchasing Managers’ Index (PMI), which measures the performance of the OPEC member’s manufacturing and services sectors, fell from 56 in May to 55.2 in June (its lowest reading for three months), but the PMI remained above its long-run trend. A reading above 50 indicates economic expansion.

“The headline number has softened for a second consecutive month, suggesting that the lift the UAE received from unrest elsewhere may be fading,” said Simon Williams, chief economist for Middle East & North Africa at HSBC.

Dubai’s Majid Al Futtaim Delays Plan to Sell Bonds, Seeks Better Pricing - Bloomberg

Majid Al Futtaim Holding LLC, the Dubai-based owner of the City Center shopping malls, delayed plans to sell bonds until it can secure a better price.

“The interest in the company is great, but at the moment the price isn’t matching what we had in mind,” Daniele Vecchi, group treasurer for the company, said in a phone interview today. “We will always be open to a transaction at the right price.” The company planned to sell five-year bonds to help refinance borrowings and fund expansion, Vecchi said last month.

Majid Al Futtaim announced a $2 billion medium-term note program on June 14, filing a prospectus with the London Stock Exchange. Standard & Poor’s assigned the company a rating of BBB, the second-lowest investment grade ranking. Five-year U.S. interest rate swaps rose 29 basis points to 2.038 percent on July 4 from the year’s low on June 24 on concern about a Greek debt default. The rate eased to 2.02 percent today.

Dubai office-space supply forecast lowered by 30% - Emirates 24/7

A global real estate consultancy has lowered its three year forecast for future office supply in Dubai by 30 per cent, Emirates 24/7 can reveal.

“Beginning of this year, we were expecting 2.6 million square metres to be delivered between 2011 and 2013. With many developers experiencing cash flow problems and the failure of master developers to provide infrastructure in many areas, we have decreased our estimate of future office supply to around 1.8 million square metres,” Craig Plumb, head of research, Jones Lang LaSalle (JLL) told Emirates 24/7.

Total office stock was about 5.6 million square metres at the end of second quarter. Around 600,000 sqm of office space was expected to be completed over the second half of the year, bringing total stock to around 6.2 million sqm.

Arab Spring still clouds Gulf markets - Zawya

Middle East unrest has been predictably messy for Gulf investors. Despite improving fundamentals, the region's stock markets continue to trade well below their peak
Gulf capital markets must confront a stark dichotomy in 2011. Robust fundamentals, underpinned by reviving post-crisis economies and buoyant hydrocarbons prices, have generally failed to lift investor sentiment as political turmoil afflicts much of the region.

The Jasmine revolution that wafted across from Tunisia late in 2010, swiftly bringing political change in Cairo in its wake, has mutated into a series of violent conflicts that have pitted state security forces against protest movements in countries from Libya to Syria and Yemen.

A deadly stalemate has descended, bringing to an end the hopes that the tide of unrest could swiftly usher in democratic change.

GCC banks face hurdles on path to recovery |

In the wake of the biggest global financial crisis in living memory, came the Arab Spring and six months of violence across the Middle East and North Africa (MENA) region. It has been a tough two years for the banking behemoths of the Gulf, and a report published this month by ratings agency Standard & Poor's (S&P) suggested that while Gulf banks were relatively stable and could look forward to improved prospects, sluggish loan growth and difficult funding conditions would ensure a slow, painful recovery from the financial crisis.

The ongoing political troubles across the MENA region pose only a minor risk to Gulf banking institutions, S&P said, as the majority of GCC banks covered by the agency have limited operations and exposures to those "underbanked" economies. Nevertheless the ratings agency could not rule out a further real estate correction, and noted that nonperforming loans (NPLs) have risen in Bahrain and theUAE.

Flynt Leverett and Hillary Mann Leverett, "Oil and the Iranian-Saudi 'Cold War'"

One of last month's most interesting developments in Persian Gulf power politics played out not in the Middle East, but in Vienna, Paris, and Washington. For these Western cities were the venues for an important series of exchanges that revealed much about the changing balance of power among the Middle East's major oil producers, including the Islamic Republic of Iran and the Kingdom of Saudi Arabia. In particular, these exchanges underscored how Saudi Arabia's current regional strategy -- which we have previously described as"counter-revolutionary" -- is weakening the Kingdom's position.

Saudi Arabia came to last month's OPEC ministerial meeting in Vienna determined to get the oil producers' group to raise production quotas for member states, in order to lower oil prices around the world. The Saudis have long had a more conservative view of the price elasticity of demand for crude oil than their OPEC brethren. Under current circumstances, however, the Kingdom had a number of other reasons for wanting to engineer a reduction in oil prices -- something that the United States and other Western countries were eager to see.

Among other considerations, lowering oil prices is seen in Riyadh as a way of increasing economic pressure on the Islamic Republic. In this regard, it is useful to review the speech given last month by Prince Turki al-Faisal (Saudi Arabia's former intelligence chief and Ambassador to the United States, whom we know and regard as a highly capable diplomat, strategist, and defender of the Kingdom's interests and regional position) to a closed-door gathering of U.S. and British military officers at a NATO air base in the United Kingdom. According to the Wall Street Journal, which obtained a copy of Turki's remarks, the Prince told his audience that "Iran is very vulnerable in the oil sector, and it is there that more could be done to squeeze the current government." More pointedly, Turki said that "Saudi Arabia has so much [spare] production capacity -- nearly 4 million barrels per day -- that we could almost instantly replace all of Iran's oil production."

S&P report analyzes ‘above-average profitability of Saudi banks’ - Arab News

Standard & Poor’s discussed, among other issues, the above-average profitability of Saudi banks in a report published on Monday.

In a series of questions and answers, Standard & Poor’s analysts Goeksenin Karagoez, Emmanuel Volland, Paul-Henri Pruvost and Nicolas Hardy also addressed issues such as debt restructuring and provisioning for banks in the GCC, especially Dubai, Bahrain and Kuwait.

Here are extracts of some of the questions and answers, from the report titled “Q&A: Trends And Events Affecting Banks In The Gulf In 2011.”

gulfnews : DGCX trading volumes climb 52% in first half

The Dubai Gold and Commodities Exchange (DGCX) on Monday reported that its trading volumes in the first half of 2011 hit an all-time high of 1,417,223 contracts, valued at $69.1 billion, a 52 per cent increase over the same period last year.

June witnessed the highest ever monthly volume of 268,390 contracts, valued at $12.96 billion, an increase of 40 per cent over last year.

June volumes were driven largely by a surge in currency trading. During the first six months of the year currency volumes rose 80 per cent to 1,105,673 contracts while June currency volumes grew 119 per cent to 231,064 contracts.

Dubai's outstanding debt put at $31.4 billion - Maktoob News

The government of Dubai's outstanding direct debt is currently put at $31.4 billion equivalent to 38 percent of the GDP (gross domestic product).

Over half of this ($18.5 billion) is debt taken on to finance the Dubai Financial Support Fund (DFSF) which has used the money to provide finance to Dubai's struggling government enterprises (GREs), specifically Dubai World & Nakheel. In theory these GRE's have until 2014 to repay the DFSF through asset sales and their own revenues.

This should allow the government to meet the $20 billion spike in debt repayments in 2014 when its borrowings to fund the DFSF mature, according to Samba Financial Group's Dubai Government Debt Update Note issued on Monday.