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Monday, 12 September 2011

Nakheel Wrote Off $21.4 Billion in Values After Dubai’s Real Estate Crash - Bloomberg

Nakheel PJSC, Dubai’s biggest developer, told creditors it wrote down 78.6 billion dirhams ($21.4 billion) from the value of its real estate as property prices in the emirate crashed.

The Dubai government-owned company wrote off 301.4 million dirhams in the first half of last year, 73.8 billion dirhams in 2009 and a further 4.44 billion dirhams in 2008, according to its Islamic bond prospectus issued last month and obtained by Bloomberg News. After the write-offs, the company’s share capital dropped to 10.6 billion dirhams in June 2010 from 87.1 billion dirhams in 2008. Nakheel declined to comment.

Dubai’s property market had one of the world’s biggest reversals of fortune following the global credit crunch three years ago, with Deutsche Bank AG saying home prices slumped 64 percent since their peak in mid-2008. Nakheel was forced to reduce staff and halt work on projects including the man-made islands of Deira and Jebel Ali.

Bahrain expected to avoid 2011 recession despite unrest - ArabianBusiness.com

Robust government spending aided by outside financial assistance will prevent Bahrain's economy from falling into recession this year, Business Monitor International has said in a new report.

Analysts added that it maintains a below-consensus outlook for 2012, project real GDP growth of just 1.2 percent.

"Recently released data showing the Bahraini economy expanding only 0.7 percent year-on-year in Q2 underscores our view that growth would slow sharply in 2011," the report said.


WAM | Capital Club to Host Debate on Legalisation of Insider Trading

Capital Club Dubai -the region's premier private business club and a member of the ENSHAA group of companies - will host the latest in its series of high-level debate events on September 14th, considering the topic of whether regulators should legalise insider trading.

The debate will be led by Professor Meziane Lasfer, Professor of Finance at Cass Business School in London, one of the world's top business schools. The debate is the latest initiative to result from a Memorandum of Understanding signed by the two organisations in February 2011.

Prof. Lasfer's visit is part of an ongoing programme which sees world-renowned, London-based, professors fly to the UAE each month to teach students of the Cass Business School Dubai Executive MBA course, ranked the tenth best in the World by the Financial Times.


WAM | DIFC Courts establishes pro bono fund to support disadvantaged litigants

The DIFC Courts, the Dubai International Financial Centre's (DIFC) independent, common law judicial system, have established a pro bono fund to increase access to justice for disadvantaged litigants. Funding would come from the legal costs that can now be claimed by successful pro bono litigants.

The fund builds on the Courts' well established pro bono programme which is supported by numerous international and local law firms, and has already helped several litigants in the community to pursue cases.

Chief Justice Michael Hwang, DIFC Courts, said, "The DIFC Courts were founded with the vision of being as accessible as possible to the community, and today's announcement of the establishment of a fund to help improve access to justice for people that may not have had the resources to pursue a case otherwise is a great step forward in our vision and mission. We will continue to seek out strong and positive initiatives such as this one to further benefit the community." "Our pro bono programme has received enthusiastic support both from individual legal practitioners as well as law firms. We are gratified by the response to our initiative and proud of the social responsibility of our DIFC practitioners. We continue to lead the field in terms of innovation in providing a trusted, reliable, safe platform for dispute resolution." The establishment of the fund was announced alongside the issuance of amendments to the Rules of the DIFC Courts (the RDC) to further enhance the efficiency of proceedings. The RDC are based on the highest standards of commercial court procedures from around the world, and are widely acknowledged for efficiency and promoting parties to settle disputes before trial.


MENA stock markets close - September 12, 2011

Middle East Crude-Dubai in steep backwardation; Oman up | Energy & Oil | Reuters

The Middle East crude market strengthened on Monday with the front-month Dubai curve at its steepest backwardation in nine months while DME Oman climbed to its highest in more than six months on expectations of strong demand in Asia.

Asian refiners are expected to ramp up output on strong refining margins and as some facilities return from maintenance, traders said on Monday. The fourth quarter is also the peak demand season for heating oil as winter arrives in the Northern Hemisphere.

The October-November spread for Dubai swaps widened to 45 cents in backwardation, against a previous high of 50 cents on Dec. 16, 2010, Reuters data showed.

Dubai Stocks Retreat to 3-Week Low on Greek Debt Concern, Crude Oil Drop - Bloomberg

Persian Gulf shares fell, sending Dubai’s index down the most in more than three weeks, on concern Greece may default on its debt and as crude oil dropped.

Emaar Properties PJSC (EMAAR), the developer of the world’s tallest tower, slipped 1.4 percent. Dubai Financial Market PJSC, the only Gulf Arab stock market to sell stock to the public, retreated for a second day. The DFM General Index (DFMGI) lost 0.9 percent, the most since Aug. 21, to 1,460.20 at the 2 p.m. close in Dubai. The Bloomberg GCC 200 Index (BGCC200) of the region’s stocks dropped 1.2 percent and the MSCI Emerging Markets Index declined 2.2 percent.

“Global factors continue to impact stock prices,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities. “Worry about the default of Greece and the slowing of global economies in addition to the complications in Arab Spring revolutions are causing investors to stay on the sidelines.”

Fitch cuts KFH's viability rating to 'bb+';affirms IDR at 'A+' | Reuters

Fitch Ratings has downgraded Kuwait Finance House's (KFH) Viability Rating to 'bb+' from 'bbb-', while at the same time affirming the bank's Long-term Issuer Default Rating (IDR) at 'A+' with a Stable Outlook. A full list of ratings is at the end of this comment.

The downgrade of KFH's Viability Rating reflects the bank's weak asset quality ratios, the resulting high impairment charges that continue to impact profitability, and capitalisation that is lower than some peers despite significant sector concentrations in its financing book. The Viability Rating also considers KFH's dominant franchise in Kuwait, strong funding profile and acceptable liquidity. Upside potential for KFH's Viability Rating would require a significant improvement in asset quality, as well as improved capitalisation given the large financing portfolio sector concentrations. Downside risk could arise from further deterioration in the bank's risk indicators.

KFH's IDRs and Support Ratings reflect Fitch's view that there is an extremely high probability that the bank would receive support from the Kuwaiti authorities, if required. This view is based on Kuwait's strong history of supporting domestic banks, KFH's government-related shareholders and its systemic importance. A change in the IDRs would result from any changes in the ability or willingness of the Kuwaiti authorities to support KFH. Fitch does not view this as likely at present.


Private equity experts strike a very bearish note at Dubai conference « ArabianMoney

The modest IQPC Private Equity MENA Business Summit opened in Dubai today in association with CNBC Arabiya with practitioners striking a very bearish note in their remarks about the market.

‘The end is not in sight, we don’t know how much things will get worse or whether this will last a lot longer,’ commented one panel member. ‘We were all hoping 2011 would be better but it has not turned out that way.’

Oman: powering up the IPO market | beyondbrics – FT.com

Oman’s SMN Power Holding, the Gulf country’s biggest power company has sprung a surprise with an announcement that it’s selling $64m of shares despite the general gloom in the markets and a dearth of initial public offerings in the region.

The company which is three-way joint venture between Mubadala Development, an Abu Dhabi government investment arm, International Power mostly owned by GDF Suez, and Oman’s National Trading, is selling 35 per cent of its total share capital, the company said in an e-mailed statement on Sunday.

It’s the first IPO in Oman’s power sector since August 2008 when Sohar Power, also part-owned by French utilities group GDF Suez (4774:PAR) also the same percentage of its total share capital. Oman’s stock exchange, the Muscat Securities Market has a market capitalisation of $17.2bn and is dwarfed by larger markets in the region such as Saudi Arabia’s Tadawul and Dubai’s financial market.

Abu Dhabi's Gulf Capital to exit two more investments - Maktoob News

Gulf Capital, an Abu Dhabi-based private equity firm, plans to exit two more investments in 2012 after selling its stake in Maritime Industrial Services to London-listed Lamprell Plc last month, its chief executive told Reuters.

"We are looking at two more exits over the course of next year. All options are open for it (exit)," Gulf Capital Chief Executive Karim el Solh said in an interview with Reuters on the sidelines of a private equity conference in Dubai.

"We may look at trade buyers, a financial sale or if the (initial public offering) market is robust, we may take that route too.''

Azerbaijan announces major gas discovery - Maktoob News

Azerbaijan's state energy company has announced the discovery of a major natural gas field off the country's Caspian Sea coast.

Socar vice president Khoshbakht Yusifzade said Monday that the Absheron field, which is operated by French company Total, holds at least 350 billion cubic meters of natural gas and 45 million tons of gas condensate.

Yusifzade says the find takes Azerbaijan's total proven gas reserves to 2.55 trillion cubic meters.

UAE bank NPLs up 30% in one year - Emirates 24/7

Specific provisions made by UAE banks for non-performing loans (NPLs) rose 29.8 per cent year-on-year in July even as bank loans edged up by just 2.6 per cent during the period, data released by UAE Central Bank today showed. UAE banks’ provisions for NPLs rose 2.3 per cent month-on-month to Dh48.4 billion in July 2011, and are up 9.3 per cent for the first seven months of the year, according to official data.

Total provisions in the region’s second largest economy increased to Dh63.5bn at the end of July, up 24 per cent from Dh51.3b a year ago and from Dh61.6bn in September, and are about 6 per cent of total lending, data showed.

Cautiousness and low demand from the private sector has resulted in UAE bank lending rising up by a mere 2.6 per cent in the 12-month period (until end of July) to Dh1.052 trillion, a decline of 0.4 per cent month-on-month and up 2 per cent in the first seven months of 2011.

Renaissance says $2.9 mln fraud loss tough to recover | Reuters

Oman's Renaissance Services has completed an investigation into the misappropriation of $2.9 million at its Topaz unit and does not expect to recover any of the funds easily, the company said in a statement on Monday.

Renaissance added that the fraud was isolated at one foreign unit and did not find any other similar cases of wrongdoing in other parts of its business.

In a rare act of disclosure for a regional company, the oil services firm said last month that it had uncovered evidence of fraud at an overseas arm of wholly-owned subsidiary Topaz Energy and Marine, which had been on the cusp of a $500 million London listing in March.

gulfnews : Saudi Oger mandates banks for loan to fund construction

Saudi Arabian construction company Saudi Oger, said yesterday it has mandated banks to arrange its first loan to be run by non-Saudi institutions, with syndication expected to begin shortly.

Deutsche Bank, China Development Bank and Emirates NBD are to act as initial mandated lead arrangers and bookrunners for the deal, according to a company statement.

The transaction is split between two facilities — a $800 million (Dh2.9 billion) senior secured term loan and a 3.97 billion Saudi riyal advance payment guarantee (APG) — which will partially fund the King Abdullah Project two scheme which the company is completing for the Saudi Ministry of Interior.

Possible market upgrade gives hope to UAE investors - The National

Gulf shares lost as much as US$30 billion (Dh110.1bn) last month as the aftershocks from the meltdown in global markets rippled through the region.

Now investors are nervously bracing themselves for more volatility in the remainder of the year.

About $4.8 trillion was trimmed from global markets with slowing economic growth in the US and the debt crisis in Europe sparking the biggest sell-off since the global financial turmoil of 2008.

IPO starts for Oman's SMN Power, part-owned by Mubadala - The National

SMN Power Holding, an Omani electricity producer part-owned by Mubadala Development, has begun a sale of its shares to the public.

The company plans to raise 24.6 million Omani rials (Dh234.6m) by listing 35 per cent of its shares on the Muscat exchange, according to a prospectus. The initial public offering (IPO) period opened yesterday and ends on October 10.

"The demand for power in Oman has grown by 6 to 7 per cent per annum in recent years and is expected to grow even further," said Johan Van Kerrebroeck, the company's chief executive.

AFP: GCC discusses economic plan for Jordan, Morocco

The Gulf Cooperation Council on Sunday discussed a five-year economic development plan for Jordan and Morocco, which both hope to join the alliance of oil-rich monarchies, officials said.

The six GCC foreign ministers met their counterparts from Jordan and Morocco to consider "a five-year economic development plan to support Jordan," said Amman's Foreign Minister Nasser Judeh.

"This plan also applies to Morocco," GCC chief Abdulatif al-Zayani told reporters after the meeting, the first to include the Jordanian and Moroccan ministers since a GCC decision in May to consider accepting the two countries into the regional alliance.

Abu Dhabi’s oil major spreads net to North Sea - Telegraph

But TAQA Bratani, an arm of the Emirate's national energy company, has become Aberdeen's most unlikely resident in recent years, having set up camp three years ago in the oil capital of Europe.

It's not the inhospitable climate that makes the move so unlikely, but the fact that Abu Dhabi is sitting on 92bn barrels of proven oil reserves, producing 2.5m barrels per day. The UK produces a similar amount, but has only 12bn barrels left – and hundreds of companies all trying to suck oil out of the same basin.

Yet at a time when Britain's oil majors, from BP to Royal Dutch Shell, are growing weary of the mature oil fields they have nursed since the 1970s, TAQA is excited by the region.