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Wednesday, 10 August 2011

MENA stock markets close - August 10, 2011

Status 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’s Port & Free Zone Said to Be Raising $850 Million to Refinance Debt - Bloomberg

Port & Free Zone World FZE, the holding company for Dubai-based ports operator DP World Ltd. (DPW), is raising $850 million from a syndicated loan to refinance debt, three bankers familiar with the plan said.

The five-year loan has conventional and Islamic portions and pays a margin of 350 basis points, or 3.5 percentage points, over benchmark rates, one of the bankers said. The payment rises to about 375 basis points after including fees, he said. The loans are backed by shares of DP World, the world’s fourth- biggest port operator, the bankers said.

HSBC Holdings Plc (HSBA), Standard Chartered Plc (STAN), Deutsche Bank AG (DBK) and Citigroup Inc. (C) are managing the conventional loan, two of the three bankers said. Dubai Islamic Bank PJSC, the United Arab Emirates’ biggest bank complying with Shariah-compliant banking rules, is managing the Islamic portion, they said.

Abu Dhabi and Qatar prove debt havens -

Qatar and Abu Dhabi are proving to be havens amid turmoil in the US and European debt markets, credit-default swaps show.

The cost of insuring Qatar against default rose only 8.5 basis points in the week to Tuesday while Abu Dhabi rose 9.6 basis points. This is compared to Markit’s CEEMEA sovereign index, which covers a wider emerging markets universe and that rose 45.6 basis points, according to data displayed on Bloomberg. Dubai’s CDS rose 49.6 basis points.

Qatar, the world’s fastest growing economy, is rated AA by Standard & Poor’s, one notch below the US, while Abu Dhabi, holder of 7 per cent of the world’s proved oil reserves, is also rated AA. S&P downgraded the US one notch to AA+ last Friday, sending global equity markets tumbling.

Qatar cbank cuts key interest rates by up to 50 bps | Reuters

Qatar, which pegs its currency to the U.S. dollar, slashed key interest rates by up to 50 basis points for the second time since April on Wednesday, a day after the U.S. Federal Reserve pledged to keep U.S. rates low for at least two more years.

The cuts, which brought the main overnight deposit rate to 0.75 percent from 1 percent, followed an April policy measure aimed at stimulating banking activities and boosting lending to the private sector.

The overnight lending facility and the repo rate were both cut to 4.5 percent from 5 percent previously, the central bank website showed on Wednesday. (

Dubai Holding extends repayment on $1.16bn loan to 2016 | Alrroya

Dubai Holding LLC, a conglomerate owned by the emirate's ruler, has reached an agreement with lenders to extend a $1.16 billion syndicated loan due August 18, the company said on Wednesday.

'We already have full lender support to extend this loan until December 2016 and are currently in the documentation process', a Dubai Holding spokeswoman said in an email to Reuters.

The loan includes an $840 million conventional tranche and a $300m sharia-compliant tranche and was originally due to mature next week, Thomson Reuters data showed.

Uprisings put spring in entrepreneur’s step -

Images of dead bodies lying in the streets of Syrian towns and men in pick-up trucks firing anti-aircraft guns across the wastes of Libya’s deserts might be expected to damp the enthusiasm of even the most determined optimist.

However, on the other side of the Arab world, one Dubai-based entrepreneur discerns opportunity and hope in the unrest that is gripping the region.

“We are contrarians in a lot of ways. For us there is great opportunity in the fact that social media is increasingly being used by our youth,” says Rabea Ataya, chairman and chief executive of, a job-hunting website."

Dubai's Nakheel to issue sukuk by Aug 25 -chairman - Maktoob News

Developer Nakheel, Dubai World's property arm, will issue a $1.63 billion Islamic bond to trade creditors by August 25, its chairman was quoted as saying in a local newspaper reported on Wednesday.

Ali Rashid Lootah also said Deutsche Bank would manage the process, which will take place over two to three months in the remarks to Arabic language daily al-Khaleej.

The developer, which ran a parallel $10.9 billion restructuring process to parent Dubai World, has offered trade creditors repayment of 40 percent cash and the remaining 60 percent in the form of an Islamic bond, or sukuk.

Saudis pump most oil in 30 years, boosting OPEC output, says IEA -

Saudi Arabia pumped the most oil in three decades last month, reaching 9.8 million barrels a day and boosting OPEC production, the International Energy Agency said. Increased output in Angola helped replace lower supply in Libya.

Daily supply from the 11 Organization of Petroleum Exporting Countries members bound by quotas rose to 27.37 million barrels a day in July from 27.22 million in June, the Paris-based IEA said today in its monthly oil market report.

“Output has regained levels close to those seen before the Libyan crisis, although OPEC spare capacity now stands at only 3.3 million barrels per day,” the IEA said. Production by the 12-member group is still below what the market demands, even as Saudi Arabia ramps up output to the highest level since 1981.

Dragon blows hot for expansion - Upstream Online

London-listed Dragon Oil more than doubled its net profit on record revenue in the first half of the year as higher production on its acreage off Turkmenistan fuelled the bottom line.

The company, which is debt-free, also is now pursuing acquisition targets at it looks to diversify its asset portfolio, which is currently focused solely on the Central Asian country.

Aggressive development drilling this year at the company’s Cheleken block in the Caspian Sea spurred a 25% boost in oil output to 58,000 barrels per day compared with the same period last year.

MDM Bank seeks Arab, Asian sovereign wealth investors

MDM Bank, Russia's second largest private lender, is holding talks with some Asian and Arabic sovereign investment funds, including Abu Dhabi Investment Authority and Investment Corporation of Dubai.

MDM, whose shareholders include businessman Sergey Popov with a 56.3 percent stake and Igor Kim with 11 percent, may offer up to a blocking stake of 25 percent to the potential investor, according to Kommersant.

The bank merged with URSA merged with Siberian-based Ursa in December 2008.

Abu Dhabi's TAQA Q2 net profit surges, beats estimates, UAE Industries - Maktoob News

Abu Dhabi National Energy Co (TAQA) said on Wednesday its second-quarter net profit more than doubled helped by high oil prices and increased production in the U.K., significantly beating analyst's forecasts.

TAQA, which on Tuesday said its Dutch Bergermeer field will not be ready for use as planned in 2014, posted a net profit of 435 million dirhams ($ 118.5 million) in the three months to June 30, compared with a net profit of 171 million dirhams in the same period last year.

Analysts forecast an average net profit of 249 million dirhams, according to a Reuters poll.

gulfnews : Bailouts will not resolve debt mess

It is increasingly becoming clear to investors that government financial engineering and stimulus packages are only putting off the inevitable, which is why stock markets remain dangerously volatile.

The debt crises in Europe and the US — which led to Standard & Poor's downgrading the credit rating of the world's largest economy — cannot be resolved by increasingly expensive sovereign bailouts. The only real answer is for the debt of those countries to be restructured in an orderly manner — with financial institutions and other creditors taking the pain associated with the irresponsible loans they made during the boom years.

While the restructuring may result in losses for some institutions, an orderly default will avoid the wholesale destabilisation of the international financial system. And, while the outcome may be further economic slowdown and even another recession in some cases — not things easily contemplated — countries are more likely than not going to emerge on the other side with cleaner and stronger financial and economic systems.

Politicians, who are too scared and irresponsible to take the necessary hard decisions, must realise that they cannot buy their way out of this economic and financial crises.

Around the world, people act out economic anger - The National

If all politics is local, all economics is global: this week's panic on stock markets knows no bounds. Rage at economic systems that offer them little hope of a better life has driven millions of ordinary citizens onto city streets from London and Cairo to Santiago and Tel Aviv.

The faltering economies of the US and Europe have also changed the geopolitical rules, dimming the prospect for western military intervention in global trouble spots and hastening the end of existing expeditionary deployments in Iraq, Afghanistan and Libya.

The scale and social consequences of the emerging crisis became visible this week as share prices plunged, while the streets of one of the world's great financial capitals burnt. Sure, the events in London were triggered by police shooting a young black man, but the scale of the outrage - and its character, in the form of leaderless mobs of looters with no political demands - reflected the alienation of a whole generation of inner city youth, who have no stake in the system and nothing to lose by breaking its rules. (The rioters also showed the power of mobile phones and social networking in the hands of a self-conscious insurrection.)

Should the UAE keep the dirham tied to the dollar? - The National

The US and eurozone debt crises have ushered a new era of the improbable in currency and financial markets. This may be a good time to re-assess the UAE's policy of 'pegging' the dirham in a constant relationship of Dh3.67 per US dollar.

Historically, the UAE and most Gulf economies have anchored their domestic currencies to the US dollar. But new uncertainties surrounding the dollar lead many to ask if the UAE should either a) repeg the dirham to a basket of world currencies or b) float the dirham and pursue other monetary objectives.

Let's consider the alternatives.

Taqa pushes on with gas plan despite drill setback - The National

Abu Dhabi National Energy, the energy investment company known as Taqa, is pressing ahead with plans to build Europe's biggest underground gas storage facility despite an order to suspend drilling because of safety fears.

A Dutch council this week ordered Taqa to halt the €800 million (Dh4.18 billion) project after environmentalists and residents voiced concerns the plan to pump gas into a former natural gas chamber north of Amsterdam could destabilise an area that has felt earth tremors in recent years.

Taqa's shares on the Abu Dhabi Securities Exchange General Index slipped more than 3 per cent yesterday to close at Dh1.17 after reports of the suspension emerged.

Gulf's US assets in firing line - The National

Standard & Poor's downgrading of the US's credit rating has sparked questions about the wisdom of keeping a large portion of the Gulf's several trillion dollars of savings in US treasuries.

Yields on US Treasury bonds recovered during trading yesterday after tumbling to near record lows in recent days. But recent low yields mean holders receive smaller returns on their investment.

Continuing deadlock in resolving the country's budget deficit problems could have a further impact on bonds, say economists.

Dark clouds force Opec to cut back oil forecast - The National

Opec cut its forecast for oil demand this year, giving ammunition to member countries that have pushed to hold back supplies from the world market.

The group is split between price hawks and doves, but the recent 20 per cent drop in prices and a weaker demand outlook have already prompted some countries to express concern.

Yesterday, Opec lowered its estimate for crude oil consumption by 150,000 barrels per day (bpd) as Brent crude, the European benchmark, dipped below US$100 for the first time in eight months.

Temasek - a company that outdoes Buffett - The National

For Mubadala and ADIA in Abu Dhabi, in Singapore read Temasek Holdings and GIC.

Although the Government of Singapore Investment Corporation (GIC) is bigger, Temasek is arguably better known in the financial world.

The island state, used by the UAE as a model for economic development, has its own government-owned investment groups, which have become a vital part of its financial and economic life.

Oil Rises From 10-Month Low on Shrinking U.S. Stockpiles, Fed Statement - Bloomberg

Oil rebounded from a 10-month low in New York as investors bet fuel demand will increase amid shrinking stockpiles and comments by the Federal Reserve that it is prepared to use a range of tools to bolster the economy.

Futures gained for the first time in three days after the Fed said in a statement yesterday it will keep interest rates near zero until mid-2013 and use other tools “as appropriate.” Crude inventories fell the most since June, according to the industry-funded American Petroleum Institute. An Energy Department report today may show stockpiles rose a third week.

“The Fed’s announcement to keep the interest rate low reversed the appetite for risk asset classes,” said Serene Lim, a commodity strategist at Australia & New Zealand Banking Group Ltd. in Singapore, who predicts crude in New York will average $100 a barrel in the third quarter. “The other key factor is the surprise drop in U.S. crude inventories. That’s boosted some of the oil sentiment.”

Debt, downgrade and Saudi Arabia - Arab News

August has so far been a very volatile month for financial markets, with fears rising that the world will return to recession, a debt deal in the US proving insufficient to prevent a downgrade of the government's credit rating and an escalation of debt problems in the euro zone. The chances of a new recession have risen, though the more probable outcome is a period of low economic growth. It is likely that the Kingdom's stock market will remain volatile, but oil prices are still at a level that will support the high government spending that will drive the Saudi economy, according to a report prepared by Jadwa Investment Research Department.

Late on Friday credit ratings agency Standard and Poor's (S&P) cut the rating of the US government. Prior to this the US's credit rating had always been at the highest level available (a rating of AAA). A credit rating is a measure of the creditworthiness of a borrower; the lower the rating, the more likely that a borrower will default. S&P's move was triggered by disappointment about the recent deal to extend the ceiling on the amount of debt the US government could issue. Although the deal was concluded before the debt ceiling was hit, which meant that the US government was able to make all scheduled payments, S&P considered that the deal did not go far enough to tackle the debt problems the country faces. It also highlighted that the political climate in the US, which was the main barrier to extending the debt ceiling, complicated the prospects for a long-term debt deal, the report said.

Another factor contributing to the volatility is mounting concern about the spread of the debt problems in the euro zone. Specifically, Italy and Spain were forced to pay much higher rates to borrow through financial markets owing to weak economic growth, continuing budgetary stresses and political uncertainty. The Jadwa report said new framework established by EU institutions to deal with the debt problems in Greece, Ireland and Portugal in late-July would be overwhelmed if it were extended to cover Italy and Spain given the far greater size of these countries' debts (total financing needs for Italy and Spain over the final five months of 2011 are around 245 billion euros ($350 billion), greater than the value of Greek debt maturing over the next six years before it was restructured).