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Tuesday, 2 August 2011

Second half of 2011 outlook for GCC largely ‘neutral’, says Markaz | Oman Observer

Kuwait Financial Centre (Markaz) has issued the semi-annual review of its “What to expect in 2011” report in which the authors have discussed the myriad triggers that negatively impacted the GCC markets in the first half of 2011 and how they altered Markaz’s outlook on the markets for the remainder of 2011.

In Markaz’s previous note, the authors had upgraded their outlook to a mostly Positive view on the region. This was due to many factors including; healthy economic growth, expected recovery in key sectors like Banking and Real Estate in addition to healthy valuations

The report had a Neutral stance on Dubai (due to persisting debt overhang and a struggling Real Estate sector), Bahrain (due to lesser corporate recovery), and Saudi Arabia (due to muted banking performance and investor sentiment).

MENA Bonds: Shy July - Financial Services - Zawya

Q3 kicked off with blushing faces in a timid atmosphere, rendering major bond players uncertain, writes Joey Geadah, Bonds Analyst at Zawya.

The third quarter witnessed minimal bond action in July, with nations such as Bahrain and Oman once again absent. Those who tried to break the monotony did so cursorily and failed to have much impact on the Middle East and North Africa bond panorama.


Capital Standards Rating Co. (CSR) gave a BBB+ bond rating for the up to KWD80 million proposed bond issuance of Kuwait Projects Company (Holding) 'KIPCO'. It would rank equally with any current or prospect unsecured issuances by the firm. The rating reflects KIPCO's strong ability to service its debt with convenient liquidity and a meticulous and active approach to managing its funding profile.

MENA stock markets close - August 2, 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)

Bank creeps back into the black thanks to asset sale - The National

A Dh1.3 billion asset sale helped Abu Dhabi Commercial Bank (ADCB) creep back into profit in the second quarter in the face of slender profits from the remainder of its business.

ADCB, the capital's second-biggest lender by assets, reported profit for the second quarter of Dh1.33bn (US$362 million) compared with a loss of Dh531m during the same period last year.

The profit was almost entirely accounted for by the one-off gain from the sale in June of a 25 per cent stake in RHB Capital, a Malaysian lender, to Aabar Investments for Dh1.31bn. The sale had helped the bank position itself for greater growth and resulted in a more stable capital base, said Ala'a Eraiqat, the bank's chief executive.

Tamweel's securities receive rating boost - The National

Fitch ratings lifted its outlook on Tamweel's Sharia-compliant residential mortgage-backed securities (RMBSs) as its underlying assets have performed well and the Dubai property market stabilises.

Tamweel Residential assets fund a portfolio of Sharia-compliant property leases due from mainly non-Dubai nationals working in the emirate.

Since inception, there have not been any reported defaults, the ratings agency said.

Saudi Shares Fall Second Day in Four on Faltering U.S. Recovery - Bloomberg

Saudi Arabia’s benchmark index fell the second day in four on concern a slowdown in the U.S. may derail global growth, and as crude oil prices fell.

Al Rajhi Bank (RJHI), Saudi Arabia’s second-largest publicly traded lender by assets, slipped a second day this week. Saudi Basic Industries Corp. (SABIC), the world’s biggest chemicals maker, decreased 1.4 percent. The Tadawul All Share Index (SASEIDX) declined 0.7 percent to 6,429.60, at 11:46 a.m. in Riyadh.

“U.S. economic indicators continued to show that the recovery may be stalling and global markets fell on that news,” said Fuad Aghabi, a director at Ajeej Capital in Riyadh. “The Saudi market is reacting to the uncertainty surrounding the world economy with lower volumes typical of Ramadan trading.”

Kuwait's Kipco first half profit rises fourfold to US$61 million -

Kuwait Projects Co., the country’s biggest privately owned investment company, said first-half profit rose fourfold on increased growth in commercial banking and insurance.

Net income rose to 16.6 million dinars (US$60.7 million), or 14.04 fils per share, from 4.2 million dinars, or 3.58 fils a share, a year earlier, the company known as Kipco said in an e- mailed statement today.

Second-quarter profit rose to 8.5 million dinars from 2.2 million dinars a year earlier, the company said.

Saudi Snaps Up Treasuries as China Debates Safety: Arab Credit

Saudi Arabia is pumping profits from this year's oil rally into U.S. bonds even as worsening public finances in the world's largest economy prompt China, the biggest holder of Treasuries, to slow purchases.

The Saudi Arabian Monetary Agency's holdings of foreign securities rose 12 percent this year to a record 1.32 trillion riyals ($350 billion) as of June 30, central bank data show. HSBC Holdings Plc estimates a 'large proportion' of those investments are in Treasuries. China's ownership of such debt was $1.16 trillion as of May 31, unchanged from the end of 2010, U.S. government data show.

'Where else would they put their money?' Jarmo Kotilaine, chief economist at Jeddah, Saudi Arabia-based National Commercial Bank, said in an interview. 'The only pool of truly liquid securities is the U.S.'

Total finalizes sale of Cepsa interest to Abu Dhabi's IPIC - Platts

Total said Monday it had finalized the Eur3.7 billion ($5.26 billion) sale of its 48.83% interest in Spanish refiner Cepsa to Abu Dhabi's International Petroleum Investment Company (IPIC) in line with an agreement made in February.

The French major said the sale enabled it 'to further reduce its exposure to European refining' and that it had already cut its European refining capacity by nearly 25%, or 550,000 b/d, since early 2007.

IPIC, wholly owned by the government of the UAE, held a 47.06% interest in Cepsa before it launched a takeover bid earlier this year.

Islamic megabank likely based in Bahrain -Al Baraka CEO | Reuters

A long-touted $3 billion Islamic megabank is more likely to be established in Bahrain although a final decision has not yet been made, the chief executive of Al Baraka Bank , who also serves as an advisor for the project, said on Tuesday.

Adnan Ahmed Yousif said discussions are still on about whether the bank will be domiciled in Bahrain or Qatar and no dates have been finalised to launch the entity.

'While the location of the bank is still under discussion, in all probability it will be based in Bahrain,' Yousif said in an email to Reuters on Tuesday.

NBAD & ADIB execute first islamic REPO | Al Bawaba

The National Bank of Abu Dhabi (NBAD), the Number One Bank in the UAE, and Abu Dhabi Islamic Bank (ADIB), a top-tier Islamic financial services group, TODAY executed the GCC’s first ever Islamic equivalent of the conventional Repo product, a collateralized Murabaha transaction, opening the gateway to an alternative method of liquidity management in the Islamic banking sector.

Together NBAD and ADIB concluded a one week maturity deal valued at US$20 million against Malaysian and Abu Dhabi Government-Related Entity Sukuk.

NBAD and ADIB jointly embarked on this initiative to formalise the Master Collateralised Murabaha Agreement (MCMA), thus enabling Islamic banks to utilise their holdings of sukuk.

Kuwait's Gulf Investment Corp sells 750 mln rgt sukuk-source | Reuters

Kuwait-based Gulf Investment Corporation (GIC) has raised 750 million ringgit ($255 million) by selling five-year Islamic bonds at 4.90 percent, a source with direct knowledge of the deal said on Tuesday.

The sukuk, which is part of a 3.5 billion ringgit funding programme set up earlier, will be issued on Wednesday to about a dozen investors, said the source who declined to be identified as the deal has not been announced.

The Islamic bond sale was arranged by Malaysia's AmBank and structured according to the concept of wakala bi istithmar, the source said.

Kuwait Air stake sale plan may see muted interest, Kuwait Industries - Maktoob News

State-owned Kuwait Airways , which is seeking investors for a $280 million stake sale to privatise the carrier, is unlikely to attract much interest from international or regional investors, analysts said.

The struggling airline will have to offer an attractive deal for investors and offer more control of operations to generate any interest.

'It (Kuwait Airways) does not bring much attractiveness to any partner unless it gives a good deal and more control in its functioning,' said John Strickland, director of UK-based JLS Consulting.

The kingdom of new opportunity - The National

The kingdom has US$220 billion (Dh808.09bn) of projects in the development pipeline, representing 36 per cent of all the constructions deals in the Middle East and North Africa (Mena), according to data compiled by Citi Investment Research & Analysis.

Saudi Arabia awarded $11.4bn in construction contracts in the first six months of this year, Citi reported.

But the GCC's biggest market remains difficult to break into for international players. Opportunity does not always translate into profits for many companies hoping to grow a business in the kingdom.

IMF’s ‘Harsh’ Legacy Blocks Middle East Loans After Egypt U-Turn - Bloomberg

Egypt turned down International Monetary Fund loans that would have helped the economy because the lender was seen as tainted by concessions demanded of past borrowers, former Finance Minister Samir Radwan said.

“People are still affected by the past, when the IMF used to impose harsh conditions,” said Radwan, who axed a $3 billion accord with the IMF in June within three weeks of negotiating it. He then lost his job in a July 17 reshuffle aimed at placating protesters demanding faster change after the toppling of former President Hosni Mubarak, who is due in court this week on corruption charges.

The IMF loan was offered with few strings attached and was vetoed by Egypt’s interim military rulers after a “damaging” media campaign, even though the North African country needed the cash, Radwan said in a telephone interview on July 27. The reversal shows how hard it may be for the IMF to shake off the legacy of past policies, even after admitting mistakes.

Gulf countries have big stake in US financial future - The National

The Gulf is unlikely to get a major boost from the compromise proposal to raise the US debt ceiling, but with its large oil reserves and pegs to the dollar the region has a major stake in the country's financial fate.

The region could benefit if perceptions of trouble in the US persist, prompting investors to liquidate their portfolios and buy assets in faster-growing emerging markets, according to analysts. Wadah Taha, the chief investment officer at Al Zarooni Group in Dubai, said the impending deal was good news for the UAE's exchanges.

'There is limited turnover from local and regional participants as it's the first day of Ramadan, but the reaction is generally positive,' he said yesterday.

Online share dealer closes office in Dubai, ending regional presence - The National

The US internet share dealing giant E*Trade is closing its Dubai branch, which serves the entire Middle East, three months after it was fined Dh1.1million for deficiencies in money-laundering controls.

Customers have been assured it will be business as usual and they will be able to trade despite the closure. But it is understood that, at least for now, investors in the region will not be able to open accounts.

The E*Trade Securities office at the Dubai International Financial Centre (DIFC) will close on Sunday, meaning the company will drop its presence in the region.

gulfnews : UAE's growth forecast revised as economic activity picks up

Institute of International Finance (IIF), the Washington-based association of global banking and financial institutions, has revised the gross domestic product forecast of the UAE to 4.4 per cent from its earlier forecast of 3.8 per cent.

'Most indicators of economic activity have registered a significant rise in real terms in the first half of this year. Crude oil production increased by 8 per cent as compared to the same period last year. With the exception of real estate, other sectors are also performing well. This has prompted us to revise our forecast,' said Garbis Iradian, Deputy Director of IIF's Africa/Middle East Department.

According to the IIF estimates, a surge in infrastructure spending in Abu Dhabi and Northern Emirates and increased activity led by tourism, retail trade, transport, and logistics in Dubai will support the nearly 1 per cent upward revision in UAE's GDP forecast.