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Wednesday, 6 July 2011

FUNDVIEW-Oil will hit $150 in U.S. despite IEA -Guild | Reuters

The price of physical crude oil will hit $150 a barrel this year in the United States due to unrest in North Africa and the Middle East, despite the emergency oil stock release coordinated by the International Energy Agency (IEA), a U.S. fund manager said.

Monty Guild, the chief executive of Guild Investment Management, said the IEA's move did not change oil's fundamentals.

'Our opinion continues to be oil prices will reach $150 barrels this year due to the fighting near Saudi Arabia,' Guild told Reuters in a telephone interview.

Hedge funds in Mena: bigger than thought | beyondbrics –

As much as $10bn was invested in hedge funds focused on the Middle East and north Africa before the 2008 financial crash, says a report by, a US-based research house.

The downturn caused a dramatic outflow as investors took fright. Assets under management reached a low of under $4bn in the first quarter of 2009 and are now only slightly greater. Yet $4bn is much more than most estimates of hedge fund assets in the region.

Peter Laurelli of says his database contains 26 unique and active Mena-focused funds. Average asset size is roughly $100m, he says. The preferred strategy is long-short equity.

Nakheel Gets Restructuring Approval From All Bank Lenders - Bloomberg

Nakheel PJSC, the builder of man-made islands off Dubai’s coast, said the company got the approval of all its bank creditors to restructure debt.

Nakheel “received acceptance from 100 percent of the banks and the required majority of its trade creditors giving their consent to the Nakheel restructuring plan,” it said today in an e-mailed statement.

Nakheel also signed agreements on its operational and financial separation from Dubai World, it said. The legal separation will happen upon completion of Nakheel’s restructuring, the real-estate company said.

Fitch downgrades HSBC ME - Emirates 24/7

Fitch Ratings on Wednesday downgraded HSBC Bank Middle East's (HBME) due to weakening asset quality.

The bank is a subsidiary of HSBC Holdings.

It was Individual Rating was downgraded to 'C' and removed it from Rating Watch Negative (RWN). The agency has also affirmed the bank's Long-term Issuer Default Rating (IDR) at 'AA-', Short-term IDR at 'F1+' and Support Rating at '1' as well as the senior unsecured notes at 'AA-'. The Outlook on the Long-term IDR is Stable.

MENA stock markets close - July 6, 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)

Dubai bourse makes a loss as traders sell - The National

Dubai's market clocked up its first loss in over a week as investors sold positions ahead of second quarter results due to be released in a matter of weeks.

The Dubai Financial Market General Index slipped 0.4 per cent to 1,552.11 points this morning, after a four-day rally, as traders await market-moving updates on company earnings. Volumes of traded shares on the market also struggled to breach 65 million, compared to volumes at least double this at the height of the property boom in 2007.

Increased trading volumes, the majority excercised by day traders that buy and sell on a regular basis, fuels increased liquidity and higher prices on the market.

Middle East Oil Gains After Producers Cut Official Crude Prices - Bloomberg

Middle East crude for sale to Asia rose against their benchmarks as producers reduced their official prices, prompting expectations by refiners that demand may increase as costs decline.

Abu Dhabi’s Murban for August loading climbed 25 cents to a discount of 8 cents a barrel below its official selling price, according to data compiled by Bloomberg. Qatar Land remained at a discount of 41 cents, Bloomberg data showed.

Saudi Arabian Oil Co., the world’s largest crude exporter, cut official selling prices for August shipments of light crudes to customers in Asia and raised prices for medium and heavy grades. The state-owned producer, known as Saudi Aramco, reduced the formula price for Arab Super Light crude the most, by $1 a barrel to $3.85 above the benchmark, the company said yesterday in an e-mailed statement.

Ownership for Nakheel, Limitless transferred to Dubai govt - Emirates 24/7

Conglomerate Dubai World shifted ownership of its property units Nakheel and Limitless to the government, concluding a restructuring process, it said on Wednesday.

The state-owned flagship firm also named Andy Watson as managing director and Junaid Rahimullah as chief financial officer.

The two property divisions have operationally and financially been separated from Dubai World, according to a statement. Shifting Nakheel to the Dubai government was part of Dubai World's restructuring proposal.

Qatar National Bank posts 29 pct jump in Q2 profit | Reuters

Qatar National Bank , the Gulf Arab state's largest lender, posted a 29-percent jump in quarterly profit on Wednesday buoyed by increased lending and customer deposits.

The bank had second-quarter net profit of 1.8 billion riyals ($494.3 million), according to Reuters calculations, compared to 1.4 billion riyals in the same period last year.

QNB reported first-half profit of 3.5 billion riyals in a statement. Reuters calculated the quarterly results based on figures previously given by the bank.

FEATURE-Abu Dhabi cuts expat jobs to trim costs, boost locals | Reuters

Wealthy Gulf Arab emirate Abu Dhabi has laid off large numbers of foreign workers as it looks to lower costs and promote jobs for citizens, several people familiar with the matter said.

Hundreds more expatriate jobs could be on the line in the near future at Abu Dhabi government departments, two sources at the offices said, adding exact numbers are not available.

The capital of the United Arab Emirates, the emirate is home to most of its oil wealth.

Credit Suisse raises Etihad Etisalat price target - Maktoob News

Credit Suisse raised its price target on Saudi Arabia's Etihad Etisalat (Mobily) citing another strong year for the company as rising popularity of smart phones continues to fuel the telcom carrier's double digit revenue growth.

The brokerage sees 'outperform'-rated Mobily as the 'most geared to the data growth investment theme in Eastern Europe, Middle East, and Africa mobile market,' and forecast a 19 percent revenue growth over last year.

'There is still little sign of competition affecting Mobily adversely, with first-quarter data from the regulator suggesting Mobily has over 75 percent share of mobile broadband subscriptions,' it added.

Aeromorning - HH Sheikh Mohammed Bin Rashid Al Maktoum Endorses $7.8 Billion Expansion of Dubai International

Dubai Airports today announced that His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the United Arab Emirates and the Ruler of Dubai, has endorsed its US$7.8 billion (28.8 billion AED) airport and airspace expansion programme which will boost capacity at Dubai International from 60 million to 90 million passengers per year by 2018.

The plan, which was presented to HH Sheikh Mohammed at a high-level meeting held at Dubai International earlier this week, is designed to deliver aviation infrastructure which will support the continuation of the sector’s impressive growth, facilitate Dubai’s economic expansion and generate 22% of total employment and 32% of the emirate’s GDP by 2020. It responds to a ten year traffic forecast for Dubai International (DXB) and Dubai World Central (DWC) that projects international passenger and cargo traffic will increase at an average annual growth rate of 7.2% and 6.7% respectively.

“The combination of rallying tourism, Dubai’s proximity to the emerging economies of India and China, and the emirates’ established role as a trading hub, is together expected to drive traffic growth and further elevate Dubai’s status as a global centre for aviation,” said HH Sheikh Ahmed Bin Saeed Al Maktoum, Chairman of Dubai Airports and President of Dubai Civil Aviation Authority. “By 2020, 98.5 million passengers and over four million tonnes of air freight will pass through our airports. The fleets and networks of Emirates and flydubai will grow considerably to accommodate traffic and capture market share. Similarly, our infrastructure must expand to enable this growth and facilitate the trade, tourism and commerce that in turn will support the prosperity of Dubai.”

Wisest destiny for the LSE surely lies on eastern horizons - The National

The London Stock Exchange (LSE) is at a crossroads in its 210-year history. Dubai, which has a 20 per cent holding in the venerable institution, has just as much at stake at this critical juncture.

The LSE's failure to clinch the so-called merger with TMX of Canada has effectively put up a "for sale" sign, and how Dubai reacts now will be crucial in determining the future of the London market, indeed global markets. Qatar, which has a 15 per cent stake, will also play a decisive role.

Xavier Rolet, the French chief executive of the LSE, finds himself potentially in the middle of an international auction. If he looks west, he sees Nasdaq OMX as a potential buyer. If he looks east, he sees SGX, the stock exchange of Singapore.

Abu Dhabi, Dubai slash fiscal gap in 2010 - Emirates 24/7

A surge in oil export earnings allied with spending cuts depressed Abu Dhabi’s fiscal deficit by more than half in 2010 while Dubai slashed the shortfall to just a third of its 2009 level, according to the IMF
Abu Dhabi’s total revenue swelled to around Dh188.4 billion in 2010 from Dh143.9 billion in 2009 after oil export earnings soared to nearly Dh169.2 billion from Dh121.7 billion because of higher prices and output by the emirate.
Investment income, which is usually not included in the announced budget, dipped to nearly Dh13.1 billion from Dh16.5 billion, the Washington-based International Monetary Fund said in a study.

gulfnews : Dubai leads list of global hotel projects under construction

Dubai powered the UAE to the top of a list ranking the 11 global markets with the largest number of hotel projects in the latest report released by, a database for hotel projects.

With a massive 97 upscale hotel projects under way, the study — which analysed facts and data of over 4,300 projects worldwide — reveals that Dubai is taking the lead in the construction of hotel projects in the UAE.

The emirate is closely followed by Abu Dhabi with 66 projects and Ras Al Khaimah with 14, bringing the total to 177 under construction in the UAE.

UAE boost from regional unrest slows down - The National

UAE business activity dropped for a second consecutive month in the latest sign that the positive effects from unrest in the Middle East may be waning.

The rate of increase in output levels rose at its slowest pace last month since September, according to HSBC's purchasing managers' index (PMI).

"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, the chief economist for the Middle East and North Africa at HSBC.

Sipchem raises 480m from sukuk sale |

Saudi International Petrochemical Co. (Sipchem) raised SR1.8 billion ($480 million) from the sale of Islamic bonds.

The five-year, floating-rate sukuk was priced 175 basis points over the Saudi Interbank Offered Rate, and the offer received orders of about SR4.5 billion, the company said in a statement to the Saudi bourse Monday. Sipchems initial plan was to raise SR1.5 billion from the sale.

The bonds are the second local-currency debt to be sold by a borrower in Saudi Arabia this year, bringing total sales in the six-nation Gulf Cooperation Council to $2.3 billion in 2011 so far, compared with $2.5 billion in the year-earlier period from Jan. 1 to July 4, according to data compiled by Bloomberg.

Saudi Arabia Lending Expands at Fastest Pace in Persian Gulf: Arab Credit - Bloomberg

Saudi Arabian bank lending is climbing the most among the six Gulf Cooperation Council nations this year as growth in the biggest Arab economy accelerates.

Bank credit to the private sector expanded 4.6 percent in the five months through May, according to data from the Saudi Arabian Monetary Agency this week. The rate ranged from a 4 percent drop in Bahrain to a 2.7 percent increase in the other five GCC countries.

Higher oil production to compensate for a drop in output from Libya and increased government spending to counter the political unrest in the region are boosting the economy of the world’s largest exporter of crude, according to John Sfakianakis, the Riyadh-based chief economist atBanque Saudi Fransi (BSFR), a lender part-owned by Credit Agricole SA.

EU Okays Acquisition Of CEPSA By Abu Dhabi's IPIC

The European Commission has cleared under the EU Merger Regulation the proposed acquisition of a controlling stake in Compañía Española de Petróleos S.A (“CEPSA”), a Spanish integrated oil and energy company, by International Petroleum Investment Company (“IPIC”) of Abu Dhabi. After examining the operation, the Commission concluded that the merged entity would face effective competitors and that the transaction would have no effect on the merged entities’ incentives to coordinate their behaviour.

The Commission’s examination showed that the proposed transaction gives rise to horizontal overlaps in the markets for phenol and acetone. Phenol is used for producing (a) bisphenol-A (“BPA”), which in turn is used to produce polycarbonate used for different applications in optical media, electrical and electronics and in construction; (b) phenolic resin, which can be used, among other things, as a wood-binding adhesive in the construction sector, as a bonding agent for foundry, and as sand moulds in the industrial sector; (c) caprolactam, which is used to make 6-nylon fibres, engineering resins and film; and (d) slimicide, a disinfectant and an anaesthetic. Acetone is used in the production of (a) polycarbonate from bisphenol-A (“BPA”) (to produce bisphenol-A, one needs both phenol and acetone); (b) methyl methacrylate (“MMA”); and (c) solvents.

The Commission’s investigation revealed that IPIC’s and CEPSA’s combined market shares are moderate and that a number of credible competitors will remain active in the markets for phenol and acetone.

More property floods Dubai, Abu Dhabi rents drop 9% - Arab News

Oversupply continues to hurt the UAE's property market with 18,000 new homes expected to hit Dubai's market by year end and rents in Abu Dhabi dropping 9 percent in the second quarter, reports showed.

Some 2,000 homes were completed in Dubai in the second quarter and another 18,000 will be ready for occupancy by the fourth quarter, a report from property consultancy Jones Lang LaSalle said, adding that total current residential stock will rise to around 322,000 homes.

Office supply in Dubai is expected to grow by more than 30 percent over the next three years, it said.

Egypt's Bold Move - Zawya

Even as the Egyptian Government looks to revive the country's economy, it has turned down the International Monetary Fund (IMF)'s stand-by agreement. A bold move no doubt, but was it a populist decision or purely a financial one? And if the Egyptian Government's decision to turn down the IMF a move to spurn Mubarak-praising entities, why is it borrowing from the Gulf?
Egypt's decision to turn down International Monetary Fund (IMF) and the World Bank is a bold move, given that the country's fiscal situation remains fragile.

In April and May this year, the Egyptian government had estimated that the country had a financing gap in the range of $9-11 billion during 2011/12, and reached out to their bilateral and multilateral partners, including the IMF, for financial assistance.

The IMF's 12-month stand by agreement amounting to $3 billion.
"This arrangement would have supported the government's homegrown economic plan, which aimed at promoting social justice through higher social spending, preserving macroeconomic stability, and designing a road map for reforms after the elections," says Ratna Sahay, Deputy Director of the Middle East and Central Asia Department at the IMF.