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Sunday, 17 July 2011

Dubai recovering and regaining confidence - Emirates 24/7

Dubai’s outstanding debt is estimated at around $34.1 billion but it remains manageable as it accounts for only around 38 per cent of the GDP and the emirate’s economy appears to be rebounding, a key Saudi bank has said.

Over half of that debt, or around $18.5 billion, is taken on to finance the Dubai Financial Support Fund which has used the money to provide finance to Dubai’s government enterprises (GREs), specifically Dubai World & Nakheel, the Saudi American Banking Group (SAMBA) said in a five-page study on Dubai.

In theory these GRE’s have until 2014 to repay the DFSF through asset sales and their own revenues, the report said, adding that this should allow the government to meet the $20 billion spike in debt repayments in 2014 when its borrowings to fund the DFSF mature.

MENA stock markets close - July 17, 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)

Egypt Shares Rise on Cabinet Reshuffle - Bloomberg

Egypt’s shares rose, heading for the highest close in a week, as the Arab country reshuffles its cabinet to placate protesters demanding faster change five months after a revolt ousted the president.

Commercial International Bank, the country’s biggest publicly-traded lender, jumped 2.8 percent. Pioneers Holding (PIOH), a financial services firm, climbed to the highest intraday level in a week. The benchmark EGX 30 Index (EGX30) advanced 2.1 percent to 5,206.55 at 1:55 p.m. in Cairo, poised for the highest close since July 10. Dubai’s benchmark measure fell for a second day and Israel’s TA-25 Index lost 0.2 percent.

“Investors are anticipating the cabinet reshuffle will calm the protests down,” said Tamer Nigm, head of sales and trading at Cairo-based Watheeqa Securities Brokerage. “But the market is trading at very low volumes, so the situation remains volatile.” About 50 million shares traded on the Egyptian Exchange today compared with a daily average of 99 million shares since trading resumed on March 23 after a near two-month suspension amid the unrest.

UAE delays final draft on fund regulations - sources | Reuters

The United Arab Emirates has postponed a final draft ruling on new guidelines to regulate its nascent asset management industry after concerns were raised by industry players, two sources familiar with the matter said on Sunday.

UAE market regulator Securities and Commodities Authority (SCA) issued an initial draft for regulating investment funds earlier in the year and a final circular was expected by mid-July after consultations with market participants.

But the regulator has now delayed the process with one industry source saying it may get pushed to next year. Another asset management source said the final draft has been postponed to September.

Subsiding Risk - Money - Zawya ht

Gulf states saw their default risks subside considerably during the second quarter as investors shrugged off the Arab Spring and focused on the troubled EU states. Still, Dubai remained among the list of sovereigns most likely to default.

Dubai, which was ranked as the 7th most risky sovereign in the first quarter, is now at the edge of the list of 10 countries most likely to default, according to data from the second quarter of 2011.

CMA Datavision's quarterly Global Sovereign Credit Risk calculates independent credit default swap (CDS) pricing sourced directly from some of the largest and most active credit investors globally.

An economic awakening to match a season of change - The National

For many Arabs across the Middle East and North Africa, the so-called 'Arab Spring' will bring a cold bout of economic uncertainty and decline. This is the grim truth of revolutions: they do not yield economic benefit in the short-run.

Rather, they usually make things worse.

Signs abound that a spring of uprisings could usher in economic discontent. Al Hayat reports that some $30 billion (Dh110.1billion) in capital fled the region in the first quarter of 2011. Unemployment has ticked up in both Egypt and Tunisia. Yemen's economy is teetering on the brink of disaster and Syria's own president, Bashar Al Assad, warned of 'the collapse of the Syrian economy' in a speech in June.

Traders set for fraught season of earnings - The National

Traders are preparing for a tense earnings season, with many expecting to spend the week ahead with half an eye fixed on political bargaining in the US.

Many of the UAE's biggest companies, including National Bank of Abu Dhabi, Emaar Properties and Tamweel, are expected to report earnings this week.

However, negotiations as the US approaches its federal debt limit will probably remain in the background throughout the week. An agreement on the US debt ceiling needs to be reached by Friday so any necessary legislation can be passed in time, Bloomberg News reported this month.

Saudi Basic Industries Second-Quarter Profit Surges 61%, Beating Estimates - Bloomberg

Saudi Basic Industries Corp. (SABIC), the world’s biggest petrochemicals maker, said second-quarter profit surged 61 percent because of higher prices for its products, beating analysts’ estimates.

Net income jumped to 8.1 billion riyals ($2.16 billion) from 5.02 billion riyals a year earlier, the Riyadh-based company known as Sabic said in a statement to the Saudi bourse today. The median estimate of four analysts was for 7.72 billion riyals, according to data compiled by Bloomberg. Sabic will pay a dividend of 2 riyals for the first half.

Saudi petrochemical companies have started to recover from the global financial crisis as oil prices surged and as demand from fast-growing Asian economies including China and India increased. Saudi Arabia’s annual petrochemical exports climbed 39 percent to 4.8 billion riyals in May, according to data posted on the Saudi Ports Authority website.

Oman on brink of mega gas project - The National

Need has compelled the sultanate to try to exploit its hard-to-reach tight gas in a project with BP. Freeing tight gas from the deep rock where it is locked away is a costly and complex task made worse by the presence of toxic gases, but Oman has little choice, writes The National staff

A seven-year appraisal of geologically complex natural gas deposits in Oman has been declared 'very encouraging' by BP, raising the prospect of a big new boost for industrial development in the sultanate.

The gas found in the Khazzan and Makarem fields is known as tight gas, meaning it is trapped in rock with low permeability. This makes the process of extraction technically demanding and requires a large number of wells. In the case of Oman, the gas is also up to 5,000 metres deep.

UPDATE 1-Saudi Electricity Q2 net up 25% on higher rates | Reuters

Saudi Electricity Co (SEC) reported a 25 percent rise in second-quarter net profit on higher tariffs and increased sales, slightly beating forecasts.

SEC made a net profit of 1.335 billion riyals ($356 million) in the three months to end-June, compared with 1.068 billion riyals in the same period last year, it said in a statement posted on the bourse website.

Analysts surveyed by Reuters had expected on average a net profit of 1.321 billion riyals for the quarter.

KSE falters as investors await H1 results » Kuwait Times Website

Kuwait Stock Exchange (KSE) ended last week in the red zone, as both its main indices recorded losses. The price index ended last week with a decrease amounted to 0.71%, while the weighted index declined by 0.54% compared to the closings of the week before. Furthermore, last week's average daily turnover decreased by 6.29%, compared to the preceding week, reaching KD 12.57 million, whereas trading volume average was 64.43 million shares, recording decrease of 29.42%.

KSE general performance marked with hesitation, as a result of the prevailed speculation behavior by the traders. The speculation included wide variety of stocks; in addition, profit-taking operations were notable in the market. On the Other hand, the trading activities were limited, as the market was affected by the cautious state of the traders whilst waiting for the first half 2011 results.

Moreover, as nearly two weeks ended from the announcement period, only three companies announced their semi-annual financial results. By the end of the week, the price index closed at 6,168.8 points, down by 0.71% from the week before closing, whereas the weighted index registered a 0.54% weekly loss after closing at 431.44 points.

Jordan Dubai Capital completes the sale of its 51% stake in Kingdom Electricity Company |

Jordan Dubai Capital (JD Capital), an investment company based in Amman, has announced the sale of its 51% stake in Kingdom Electricity Company (KEC) for a total consideration of JD50.0m (approximately $71m). KEC owns 100% of the Electricity Distribution Company (EDCO) and 55.4% of Irbid District Electricity Company (IDECO) both Jordanian Public Shareholding Companies that were privatized by the Government of Jordan in 2008.

The purchaser is the Social Security Investment Fund of Jordan 'SSIF' who along with Dubai International Capital are the largest shareholders in JD Capital.

Commenting on the sale David Smoot, Chairman of Jordan Dubai Capital said: "This transaction is another example of JD Capital's strategy for realizing value for its shareholders and for the Jordanian economy. A number of international companies had indicated their interest in KEC recognizing the strong growth prospects for Jordan's power sector. However, the transaction was concluded with SSIF because we believe that SSIF shares our vision for the development of the Jordanian economy. The decision was reinforced by SSIF being a major shareholder in JD Capital."

gulfnews : Dubai downtrend to continue

The Dubai Financial Market General Index (DFMGI) declined 9.99 or 0.64 per cent last week to close at 1,547.86 while volume was lower. Declining issues beat advancing by 21 to eight, respectively.

Until proven otherwise the DFMGI continues to develop a downtrending channel since hitting a high of 1,691.64 on April 24, 2011. This trend has retraced approximately 50 per cent of the uptrend measured from the early March 2011 low as of June 28. The 200 period exponential moving average (ema) on both the daily and weekly chart of the DFMGI continues to slope downward.

Going forward it's possible that the DFMGI holds support of 1,503.57, the low of June 28 and moves into a longer consolidation period than we've seen the past couple weeks. This could include moving above the downtrend line which identifies the parameter (resistance) of the 12 week downtrend and the 200 ema on the daily chart (seen in accompanying chart) which is now at 1,489.81. The significance of a move above these two indicators would be muted if it happens over the next couple weeks given the price pattern structure that may now be developing.

Business : Dubai gold trade shines in 2010, deals up at $41.3b

Dubai gold trade witnessed a healthy trend last year as the yellow metal traded through the “City of Gold” rose by 18 per cent to $41.3 billion, according to a study by the Dubai Chamber of Commerce and Industry.

Last week bullion prices touched an all-time high of $1,580.70 an ounce on concern over eurozone debt crisis. Gold price has risen an 11 per cent so far this year.

Despite rising prices gold continues its attraction during 2011 in Dubai. A recent Dubai Chamber study based on the Dubai Multi-Commodities Centre (DMCC) report indicates healthy trend continues in 2011.