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Wednesday, 7 September 2011

Batelco Plans to Sell Up to 30% of India Venture -

Bahrain Telecommunications Co. plans to sell most of its stake in its Indian joint venture, two people familiar with the matter said Wednesday, as it seeks to unlock value from its investment in one of the country's smallest telecom operators.

Batelco is looking to sell up to 30% of S Tel Pvt. Ltd. and has hired an investment bank to approach potential buyers, the people said. Batelco holds 42.7% of S Tel.

The planned deal comes at a time when Indian telecom operators, especially small players such as S Tel, are bleeding because of intense competition that has kept call tariffs low and due to high debt costs for expansion and acquiring bandwidth. Any sale would also help Batelco scale back its exposure to India, where the government is likely to announce new rules on mergers and acquisitions later this year, which could drive consolidation in the sector.

MENA stock markets close - September 7, 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 sees billions in aid from Saudi, UAE soon | Reuters

Egypt expects to reach a loan agreement with Saudi Arabia and the United Arab Emirates worth several billions of dollars each soon, while another $500 million should come from the Arab Monetary Fund, the country's finance minister said on Wednesday.

"There are talks about a package coming from Arab countries, from Saudi Arabia, from the Emirates. We are under discussion, but both of them have presented proposals of a couple of billion dollars each," Egyptian Finance Minister Hazem el-Beblawi told Reuters on the sidelines of a meeting of Arab finance ministers in the UAE capital.

Asked when he expected a deal to be reached, he said: "Before the end of the year. It should be quite soon."

Qatar’s Shares Rise a Second Day on Salary, Pension Increases; Oil Gains - Bloomberg

Qatar’s benchmark stock index rose for a second day after the Persian Gulf country issued a decree to raise salaries and pensions for its nationals. Oil advanced.

Qatar National Bank SAQ (QNBK), the nation’s biggest lender by assets, climbed 1 percent. Doha Bank QSC (DHBK), the fourth-biggest bank by assets, gained the most since Aug. 17. The QE Index (DSM) increased 0.6 percent, the most since Sept. 4, to 8,393.06 at 11:20 p.m. in Doha. The Bloomberg GCC 200 Index (BGCC200) of regional shares advanced 0.7 percent.

The move “will definitely boost sentiment in Qatar,” said Ahmed Talhaoui, head of asset management at Abu Dhabi-based Royal Capital PJSC. “These increases are massive and it could set a precedent” for the rest of the region, he said.

Moody's: DP World's strengthening credit fundamentals driven by emerging markets focus (UAE) - Zawya

DP World's solid operational and financial results for H1 2011 show that its operations in emerging markets are generating at least 75% of the group's revenues and will continue underpinning its strengthening credit fundamentals, says Moody's Investors Service. Despite the greater weight of emerging markets, DP World nevertheless maintains a solid footing in developed markets, with ports supporting logistics and trade activities in a number of western European locations.

These results stand out against a background of wider market concerns about the political turmoil in parts of the Middle East as well as about growth prospects for the major global economies.

According to DP World's H1 2011 results released on 25 August, underlying consolidated throughput and revenues have grown by 11% and 17%, respectively, with all regions contributing, but with emerging markets as the clear driving force. This includes the full pro-forma consolidation of its Australian ports, of which DP World sold a 75% stake (to Citi Infrastructure Investors) and which were deconsolidated from March 12. Importantly, stable containerised revenues accounted for 80% of the group's total, further to the addition of handling capacities in India, Pakistan and China. In addition to volume growth, DP Worldhas continued to focus on cost management and has demonstrated its ability to command price increases (with like-for-like revenues per standard container rising to USD93 in H1 2011 vs. USD90 in H1 2010), resulting in a 22% increase in reported EBITDA margins, excluding one-off items.

Cost of Arab Spring - Zawya

Gulf states have pledged $150-billion in response to the regional unrest, according to Bank of America Merrill Lynch estimates. But it may not be enough.
Gulf states have spent $150-billion as response to the regional unrest, according to Bank of America Merrill Lynch (BAML) estimates.

The figure makes up nearly 5% of the six countries' GDP for the year and constitutes around 57% of this year's combined spending.

"This has averted potential disquiet over governance in most countries, though, over a longer-term horizon, economic reforms will be needed to buoy private sector growth and job creation," says BAML in a note.

"We expect the oil boom-led economic diversification program set up after the lost decade of the 1990s to continue over the next decade, unless oil settles in a marked or sustained manner below the regional breakeven price (US$80)."

But in the Gulf states' haste to create jobs, there is a danger of overcapacity in certain sectors.

There are close to $1.8 trillion projects under way in the Gulf, according to Citibank, with close to $600-billion worth of projects in Saudi Arabia alone. Of these, nearly $180-billion are in early stages of development, apart from $130-billion in the UAE.

Saudi FinMin: Euro crisis could hurt, sees opportunities | Reuters

Saudi Arabia's finance minister pointed to risks to its exports on Wednesday should the financial crisis in Europe lead to slower economic growth, although it may also present opportunities for its oil-rich investors.

There are growing fears that a fresh crisis in Europe could trigger a global recession.

Asked about any potential impact, Alassaf said: "Concerns could be for trade, or demand for Saudi production or exports."

UAE banking system resilient, finance minister says | Reuters

The banking system of the United Arab Emirates is in good shape and will be able to withstand any external shocks, the Gulf Arab country's finance ministry said on Wednesday.

"We're quite comfortable and confident of the resilience of our banking sector," Minister for Financial Affairs Obaid Humaid al-Tayer told reporters after a meeting of Arab finance ministers in Abu Dhabi.

"We remain always vigilant," Tayer said, adding that the country would always act to ensure confidence and liquidity in the banking system.

UAE investor rejects Tanzania graft accusations | Reuters

A UAE businessman has denied allegations in a U.S. cable that he offered gifts to Tanzanian President Jakaya Kikwete as well as donating $1 million to the ruling party in exchange for investment deals in the east African country.

The managing director of Albwardy Investment, which is owned by Dubai-based investor Ali Albwardy, described the accusations published by WikiLeaks from a February 2006 U.S. cable as "monstrous and totally untrue".

"At no time has a bribe been either requested or given to President Kikwete by Mr. Ali Albwardy, the UAE owner of the Kilimanjaro hotel," Philip d'Abo said in a statement issued via the president's office in Tanzania on Wednesday.

When will it be time to buy emerging markets like the UAE? « ArabianMoney

Over the summer this website made a fairly cogent argument for buying UAE equities, vis-a-vis political stability, oil wealth, depressed valuations and a high economic growth outlook. But timing such purchases is always tricky.

Our enthusiasm in late July, with editor Peter Cooper presenting this idea to the Agora Financial annual investment conference in Vancouver, was quickly subsumed by the sudden slide in global financial markets in August. Marc Faber understandably dropped our article on this subject from his September newsletter.

Austrian OMV seen taking Syrian crude cargo-source - Maktoob News

Austrian oil and gas company OMV is expected to take a cargo of Syrian Souedie crude, which it purchased on the spot market last month, an industry source said on Tuesday.

The European Union, the biggest buyer of Syrian crude oil, banned imports of the country's oil on Saturday to put economic pressure on President Bashar al-Assad, while allowing fuel sales to Syria to continue.

However, Syrian crude under existing contracts can be still imported to the EU until Nov. 15.

Bankers fear repeat of 2008 meltdown - The National

Europe's financial system is in the midst of a crisis that leading bankers are comparing to the period just before the meltdown of 2008.

Bank shares in Europe fell sharply for a third day yesterday. BNP Paribas, France's biggest bank, dropped 5.2 per cent after falling 6 per cent on each of the previous two days.

Josef Ackermann, the Deutsche Bank chief executive, said conditions in Europe reminded him of September 2008, when the US investment bank Lehman Brothers failed and the world started its worst recession since the 1930s.

A crisis that could 'eclipse the Depression' - The National

At the beginning of this week, Europe's top bankers marked the end of the summer holidays and the return to work by warning of Armageddon, the sky falling on our heads, and the end of the world as we know it.

If the euro zone breaks up, "we will have a recession which makes the 1930s look like nothing", Gerrit Zalm, the chairman of ABN Amro Group, told Dutch television. "The whole of Europe will crumble."

True, there were worries that a US regulator was suing several banks over the selling of toxic mortgage debt and that disappointing employment figures indicated America was heading to a recession. But could it be this bad?

Key role for Mubadala in Carlyle's market float - The National

Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, is among the first to benefit from an initial public offering (IPO) announced yesterday by the Carlyle Group, a major global buyout firm.

Mubadala has invested hundreds of millions of dollars in Carlyle that will convert into a substantial publicly traded share if the listing is given the green light by regulators, according to documents released in Washington.

The conversion will give the Abu Dhabi company new Carlyle shares at a 7.5 per cent discount to the IPO price.

Oman spending to rise to $24 bln in 2011 - Fin Min | Energy & Oil | Reuters

Oman's government spending should rise to 9.2 billion rials ($23.9 billion) this year, slightly higher than expected, but the Gulf Arab oil exporter will be comfortable if Brent crude stays above $80 per barrel, its finance minister said on Tuesday.

The small non-OPEC oil producer has been hit by protests demanding jobs, higher salaries and an end to graft this year as unrest spread through the Arab world, making it boost expenditure well above the original plan.

"Now, it is 9.2 billion rials," Darwish al-Balushi told Reuters about government spending in 2011, speaking ahead of a Wednesday meeting of Arab finance ministers in the capital of the United Arab Emirates.

UNB's foreign currency and financial strength ratings affirmed | Union National Bank

Capital Intelligence (CI), the international credit rating agency, today announced that it has maintained Union National Bank's (UNB) Foreign Currency Long-term and Short-term ratings at 'A+' and 'A1' respectively with a 'Stable' Outlook.

The Support rating is '1', reflecting the Bank's strong ownership and the extremely high likelihood that official support will be forthcoming in case of need. The Financial Strength rating is retained at 'A+' with a 'Stable' Outlook in view of the Bank's continuing strong capital base and rising profitability.

UNB performed well in 2010 despite the slow growth in the domestic economy and the continuing depressed state of the real estate sector. The Bank found opportunities to lend in Abu Dhabi and in the consumer market across the emirates. Key profitability ratios improved last year on the back of a wider interest differential and increased non-interest revenues. Both operating profitability and return on average assets (ROAA) were strong.

Gulf states’ policy of spending to silence unrest raises questions of sustainability - The Washington Post

The Arab Spring hasn’t come cheap.

Uprisings this year across the Arab world — stoked by chasms of income disparity, high unemployment and inflation — are now being addressed with pledges of money.

From Egypt to the Gulf states, more than $160 billion has been pledged to fund job creation, social programs and private sector growth — funding that nervous governments hope will be enough to appease their increasingly impatient populations. More than 75 percent of that total is for Saudi Arabia alone, where the oil-rich kingdom wants to buy domestic stability with jobs and handouts

9th Worst Market - Real Estate - Zawya

Supply keeps coming, as Dubai remains the ninth worst housing market in the world.

Dubai is the ninth worst real estate market in the world, according to a survey of 50 cities.

But that is an improvement.

The first quarter report of UK-based consultant Knight Frank's periodic survey of 50 key residential markets across the world, showed Dubai was the worst residential market in the world, but the new survey shows a major improvement, especially on a six-month basis.

Guest post: Expect the Gulf to deepen ties to Asian bond markets | beyondbrics –

The Gulf credit market is in a comparatively strong position to weather volatility in global markets. The Gulf countries’ rich hydrocarbon resources provide large current account surpluses, making them net exporters of capital, and their external trade patterns are more connected to Asia.

This contrasts with emerging economies in central and eastern Europe, many of which run current account deficits, leaving them dependent on foreign capital to maintain their balance of payments. In addition, their exports are largely dependent on demand from the European Union, where growth is weak and uncertainty is high.

Gulf banks’ balance sheets, particularly in the UAE and Qatar, have much more stable funding profiles compared to their situation in 2008. Liquidity has increased substantially in the past year. Total loan-to-deposit ratios in Qatar and the UAE have fallen below 100 per cent, indicating an ample base of deposits to fund banks’ loan portfolios. The Qatar Central Bank has even taken measures this year to drain some excess liquidity, including selling short-term bills.