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Monday, 15 August 2011

Qatar May Cut Rates More to Expand Infrastructure: Arab Credit - Bloomberg

Qatar, host of the 2022 soccer World Cup, may lower its benchmark interest rate by at least another half percentage point as the emirate seeks to spur credit growth to finance economic development, analysts said.

Qatar’s central bank this month reduced its overnight lending rate and repurchase rate to 4.5 percent from 5 percent. The overnight deposit rate was cut a quarter point to 0.75 percent. The move aims to boost credit for spending on infrastructure and real-estate projects, the central bank said.

Lower commodity costs and concern that U.S. and European growth is faltering may keep inflation in check globally, allowing Qatar to lower borrowing costs even as the government projects economic growth of 16 percent this year. As part of its bid to host the World Cup, Qatar says it will build nine stadiums and refurbish three more.

Gulf states get the forecast axe | beyondbrics –

Nomura’s Ann Wyman is probably the first economist to clip her economic growth forecasts for the Gulf states since Standard & Poor’s downgrade of the US lowered expectations for global growth and impacted future oil prices.

It doesn’t look great – growth forecasts have been cut across the Middle East board. Should this be a cause for concern for investors?

Not necessarily, at least not just yet.

Saudi banks net SR15.7 bn in first half - Emirates 24/7

Saudi Arabia’s banks earned nearly SR15.72 billion in the first half of 2011 and the annual profits are expected to be higher than in 2010 because of credit recovery and lower provisions, according to official data.

The Gulf kingdom’s 12 commercial banks netted nearly SR2.6 billion in June alone and around SR2.9 billion in May, bring their total second quarter net income to about SR8.1 billion, higher than their first quarter profits of SR7.6 billion, the Saudi Arabian Monetary Agency (WAMA) said in its monthly report.

The report covered all banks in the world’s top oil supplier, including the non-listed National Commercial Bank (NCB), the country’s largest bank.

Abu Dhabi edges out Saudi as least risky sovereign -

Abu Dhabi has improved on its position as the least risky sovereign in the MENA region, although Saudi Arabia and Qatar are close behind, according to new research undertaken in the second quarter.

Credit market data provider CMA put the UAE capital’s chances of defaulting on its debts in the next five years at just 6.5 percent, making it the sixteenth least risky sovereign in the world.

Saudi Arabia lies one place behind Abu Dhabi, with a 6.6 percent chance of default. The least risky sovereign is Norway, with a 1.9 percent chance of default, with Scandinavian and European countries packing out the top six.

MENA stock markets close - August 15, 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)

Oman's Renaissance uncovers fraud at Topaz unit, H1 profit falls | Reuters

Oman's Renaissance Services RSC.OM said it uncovered 'serious' issues at its Topaz unit, including financial misconduct and fraud, as the diversified firm posted a 77 percent plunge in its first-half net profit.

Topaz, which pulled a $500 million IPO earlier in the year, did not disclose information to the board of directors and breached the company's code of business conduct, Renaissance's Chairman Samir Fancy said in a statement published on the bourse on Monday.

The company -- one of the biggest oil services companies in the Middle East -- discovered evidence of fraud and ethical misconduct at one of the Topaz subsidiaries abroad, centered around the use of $2.9 million of cash in the business, the statement said.

MIDEAST STOCKS-Renaissance hits 2-yr low; most Gulf mkts down | Reuters

Oman's Renaissance Services slumped to a two-year low on Thursday after saying it discovered 'serious' financial issues with unit Topaz while most Gulf bourses ended in the red.

Renaissance -- one of the biggest oil services companies in the Middle East -- discovered evidence of fraud and ethical misconduct at one of the Topaz subsidiaries abroad, centred around the use of $2.9 million of cash in the business, it said on Monday. It also reported a 77-percent plunge in first-half net profit.

The stock plunged 10 percent to its lowest close since July 2009.

Credit Agricole won't be last bank to exit Bahrain -

The consequences of Bahrain's turbulent spring are mounting. First the Formula 1 Grand Prix was cancelled, now Credit Agricole has decided to shift its regional headquarters to Dubai. The French lender's move is a blow for the one-time regional financial hub of the oil-rich Gulf.

But the Shi'ite led protests earlier this year and subsequent crackdown by Bahrain's Sunni-ruling minority - with the help of troops from its Arab neighbours - is only one reason why financial institutions are saying bye-bye to Bahrain.

International banks are rushing to cut costs as revenue falls and risk grows. That makes it harder for them to maintain their previous practice of keeping multiple bases in the Middle East - a region that still generates relatively little revenue.

Bubble In Tehran - Zawya

The Iranian bourse is in the midst of a fantastic rally on the back of high oil prices, new initial public offerings and lack of other investment opportunities for Iranians.

With a number of sectors represented on the index, Iranians are benefiting from investing in a deep, liquid environment, trading around 200 million shares per day in a market that is capitalised at $100-billion - roughly the size of UAE and Kuwaiti bourses and much bigger than the Egypt Stock Exchange.

The TSE 'miracle' has mirrored the rest of the economy, which has benefited from liberal policies that have focused on reducing the public sector and offloading nationalised companies on to the exchange, with healthy participation from average Iranians.

Egypt Bets on Local Banks at $839 Million Bond-Sale: Arab Credit - Businessweek

The Egyptian government, seeking to raise 5 billion pounds ($839 million) by selling bonds today, may see demand from Egyptian banks limit a European debt crisis- driven increase in borrowing costs.

The government may pay an average 13.26 percent on 2.5 billion pounds of two-year bonds, seven basis points higher than last month, according to the mean estimate of six analysts surveyed by Bloomberg. The average yield on a similar amount of three-year notes may advance three basis points to 13.47 percent. Yields on sovereign bonds from Hungary, Croatia and Ukraine surged as much as 50 basis points in the last two weeks, data compiled by JPMorgan Chase & Co. show.

“I would expect the pickup to be less than what we see in the rest of the world,” Gabriel Stern, a senior economist at Exotix Holdings Ltd in London, said in an e-mailed response to questions Aug. 11. “Domestic demand will be sufficient to stop yields from going up more.”

Oman budget in deficit in first quarter - Emirates 24/7

A surge in public expenditure plunged Oman back into a fiscal deficit in the first quarter of 2011 despite a sharp increase in revenue because of higher oil prices and production, according to Omani government data.

The shortfall was in contrast with a large surplus recorded in the first quarter of 2010 although the balance is projected to end this year in a surplus on expectations crude prices would remain high.

Figures by the Omani ministry of economy showed the budget suffered from an actual surplus of RO253.4 million ($659 million) in the first quarter against a real surplus of RO421.2 million ($1.09 billion) in the first quarter of 2010.

gulfnews : Refinery expansion goes on despite low margins

The refining industry is under pressure due to the decline in its profitability margins.

Margins are a function of delivered crude and products prices and operating costs and therefore are as volatile as these components.

Refineries historically have learned to live with often low margins or even negative ones. However, margins have demonstrated a cyclical behaviour.

gulfnews : Gulf funds resilient to turmoil

The euro's appreciation against the dollar aided in reducing the losses of GCC domestic funds to less than one per cent in the first six months of the year.

However, most funds experienced increased money outflows, which are expected to stabilise in the last quarter.

The overall decline of 0.63 per cent of GCC-domiciled funds, according to Lipper, was despite all regional markets closing negatively at the end of June amid unprecedented political unrest in the Mena region, doubts about global recovery, inflationary pressures from emerging countries and difficulties related to sovereign debt in Europe and United States.

gulfnews : Gulf investors seek safe haven in UK property sector despite volatility

Global economic events have exerted an undeniable pressure on the world's financial markets in recent months and investor confidence levels have been impacted worldwide.

Yet despite this wider market volatility, much is being done to preserve the UK's reputation as a safe haven for business. The UK has already weathered its own economic storm and relative to other markets it provides respite, with secure and viable investment opportunities for foreign investors seeking long-term wealth preservation.

According to the latest figures from the Office for National Statistics, UK GDP grew by 0.2 per cent in the second quarter of the year and Government policy remains committed to reducing the national deficit and creating a sustainable measure of economic growth.

gulfnews : ADIA ‘not accused of any wrongdoing'

A $300 million (Dh1.1 billion) lawsuit against the Abu Dhabi Investment Authority (ADIA) is one of more than 1,000 filed by Irving Picard, the trustee authorised to recover money for victims of Bernard Madoff's Ponzi scheme, industry sources told Gulf News yesterday.

They said it is virtually identical to a lawsuit filed against ADIA, one of the world's largest sovereign wealth funds, in April by Fairfield Sentry, which was one of many so-called 'feeder funds' that invested in Madoff.

'Both are seeking return of the same $300 million that ADIA is alleged to have withdrawn from Fairfield in 2005 and 2006, years before the Madoff fraud was discovered. Neither claim alleges any wrongdoing on ADIA's part,' a source said.

gulfnews : Oil dependence worries Kuwait

Kuwait's government spending boost made the economy more vulnerable to a fall in oil prices due to the Opec member's significant dependence on crude revenue, a senior central bank official was quoted as saying by a daily newspaper yesterday.

'Kuwait's economy is the most vulnerable... among GCC countries,' Mohammad Al Kadi, a member of the central bank's board, told Arabic daily Al Qabas in an interview.

'They [other GCC states] are able to deal with any emergency crisis because spending in these countries on salaries, wages and subsidies did not reach the level of Kuwait's budget,' he said.