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Wednesday, 21 September 2011

FT.com - Gulf’s dollar peg makes sense

Hobbled by large deficits, high unemployment, slow growth and political brinkmanship, US claims to global economic supremacy are under pressure.

With forecasts that the dollar will become weaker still, many in the Middle East argue that the time has come to adjust the dollar pegs or do away with them altogether.

Five of the six members of the Gulf Co-operation Council – Saudi Arabia, the United Arab Emirates, Qatar, Oman and Bahrain – maintain currency pegs to the greenback. Only Kuwait pegs its dinar to a basket of currencies but that basket is believed to be heavily weighted towards the dollar.


MENA stock markets close - September 21, 2011

ExchangeStatus IndexChange
TASI (Saudi Stock Market)
6142.26-0.03%
DFM (Dubai Financial Market)
1472.650.45%
ADX (Abudhabi Securities Exchange)
2557.990.04%
KSE (Kuwait Stock Exchange)
5955.9-0.35%
BSE (Bahrain Stock Exchange)
1256.560.00%
MSM (Muscat Securities Market)
5741.740.09%
QE (Qatar Exchange)
8497.40.62%
LSE (Beirut Stock Exchange)
1244.330.10%
EGX 30 (Egypt Exchange)
4433.19-0.68%
ASE (Amman Stock Exchange)
2034.850.48%
TUNINDEX (Tunisia Stock Exchange)
4616.090.52%
CB (Casablanca Stock Exchange)
11456.6-0.20%
PSE (Palestine Securities Exchange)
481.020.10%

Abu Dhabi Shares Gain, End 10-Day Drop, on Bets Decline Overdone - Bloomberg

United Arab Emirates shares gained, with Abu Dhabi’s benchmark stock index snapping a 10-day drop, amid speculation losses in the past two months have been overdone given earnings prospects.

Aldar Properties PJSC (ALDAR), Abu Dhabi’s biggest real-estate company, jumped 2.5 percent. Abu Dhabi Islamic Bank (ADIB) rose the most in two weeks. The ADX General Index (ADSMI) increased less than 0.1 percent, rising for the first time since Sept. 6, to 2,557.99 at the 2 p.m. close in the emirate. The index is down 5 percent in the past two months. Dubai’s DFM General Index (DFMGI) rose 0.5 percent today, trimming losses in the period to 3.3 percent.

“The correction we saw in global markets already provides attractive valuations for many stocks,” said Ahmed Talhaoui, head of asset management at Abu Dhabi-based Royal Capital PJSC. “In order to attract investors to the Middle East and North Africa region, we need more time.”

Middle East M&A activity begins recovery - FT.com

The deals may not be of the multibillion-dollar variety that excite international investment banks but merger and acquisition activity shows signs of life after a period of lacklustre growth.

In a report this week, Ernst and Young said M&A deal volumes rose 36 per cent in the first half of 2011 year on year while values were up 8 per cent. Saudi Arabia and the United Arab Emirates were the most active markets.

A survey last month by Zawya, a data provider, found that M&A deals in the Middle East and North Africa increased 33 per cent in the first half compared with the same period last year. The total value of such deals in the first half rose 30 per cent to $21.2bn from $16.3bn in the first six months of last year.


DP World owner confirms $850m loan refinancing | Alrroya

Dubai's Port & Free Zone World (PFZW), the direct owner of global ports operator DP World , has signed an $850 million loan refinancing, the latter said in a bourse statement on Wednesday.

"DP World Limited has been advised that Port & Free Zone World FZE has refinanced its outstanding $850m debt facility secured in part against certain of its shares in DP World," the statement said.

Sources told Reuters on Tuesday that the five-year loan had been signed by 15 banks and was almost evenly split between conventional and sharia-compliant tranches.

Persian Gulf Stocks: Global, Masraf Al Rayan, Wataniya Telecom - Bloomberg

Dubai’s DFM General Index (DFMGI) rose the most this month, gaining 0.5 percent at the 2 p.m. close in the emirate. Qatar’s QE Index (DSM) advanced 0.6 percent. Abu Dhabi’s ADX General Index (ADSMI) was little changed.

Global Investment House KSCC (GLOBAL) dropped 6 percent, the most in a month, to 39.5 fils. National Bank of Umm Al Qaiwain (NBQ) said a Dubai court will look into its appeal in a dispute with the Kuwait-based investment bank. National Bank shares didn’t trade today.

Masraf Al Rayan (MARK) rallied to the highest in more than five years, gaining 0.9 percent to 24.98 riyals. Qatar’s second-largest Shariah-compliant lender had the outlook on its A3 long-term issuer rating changed to positive from stable at Moody’s Investors Service.

ICBC aims to rival HSBC and Stanchart in the Middle East but China has its own problems « ArabianMoney

Normally any bank tilting its lance at HSBC and Standard Chartered Bank in the Middle East could be dismissed with a knowing smile. But not when that bank is one of the largest in the world with $1.9 trillion in assets and the booming Chinese economy behind it.

Step forward the Industrial and Commercial Bank of Bank which first established itself in the region in the midst of the global financial crisis of 2008. The state-owned bank has branches in Abu Dhabi and Doha and a subsidiary in Dubai and is applying for a license to develop a retail network in the UAE.

Czechs in Egypt’s first post-Mubarak foreign direct investment | beyondbrics – FT.com

Czech Pegas, the second biggest producer of synthetic textiles in Europe, is expanding abroad. And the first country the company picked for its FDI premiere is – wait for it – Egypt.

And what is Pegas’s maiden foreign adventure is also – wait for it again – Egypt’s first foreign direct investment since the January revolution.

The initial investment of €55m-60m is linked to a key business deal – a long-term sale agreement with a local customer who will buy what the new plant produces.


Dubai: Nakheel's $1 Billion Sukuk Sits on the Seabed - CNBC

Much of the land backing a $1.03 billion sukuk bond from Dubai property developer Nakheel is unreclaimed seabed, bank sources said, leaving trade creditors holding the paper with scant recourse to tangible assets in the event of a default.

The Islamic bond, or sukuk, is part of Nakheel's $16 billion debt restructuring deal which repays trade creditors 40 percent in cash and 60 percent via the bond.

The two assets that back the sukuk are a strip of waterfront land and a still partially submerged crescent that will form part of a man-made island shaped like a palm at Jebel Ali, on Dubai's outskirts.

Qatar firms post robust growth in the first half net earnings

Qatari companies continued to achieve profits in the first six months of 2011, where a total of 41 companies listed on Qatar Exchange reported a net profit of 17.9 billion riyals in the first half, compared to a net profit of 15.3 billion riyals achieved for the same period last year, a growth of 16.9 per cent, which reflects the strength and rigidity enjoyed by the country’s economy.

The listed companies reported a net profit of 8.9 billion riyals in the second quarter of 2011 compared to 7.3 billion riyals in the same period last year, an increase of 21.6 per cent. However, on a quarter on quarter basis, net profit of Qatari stocks declined marginally by 1 per cent in the second quarter of 2011, compared to the first quarter.

During the previous periods, several Qatari companies reported exceptional non-recurring income, couple of mergers forming bigger entities, as well as the delisting of three companies.

IMF: Gulf states face fiscal costs | beyondbrics – FT.com

Middle East bankers were on Wednesday mulling the implications of the International Monetary Fund’s latest warning about the state of the world economy.

But they can take comfort from the fact that the Fund was far less gloomy about the region than other corners of the world economy – and generally more positive about growth than other forecasters.

The fund highlighted the impact of political unrest on the region – and the dangers inherent in the oil-rich Gulf states’ policies of boosting public spending to get out of political trouble.

Bahrain Default Risk Rises to 6-Month High on Poll: Arab Credit - Bloomberg

Bahrain’s default risk climbed to the highest since March, at the height of confrontations between government troops and protesters, amid concern tensions may flare up before Sept. 24 parliamentary elections.

The cost to insure Bahrain’s debt against default rose to 328 yesterday from a post-crisis low of 219 on July 22, according to five-year credit default swaps from data provider CMA, which is owned by CME Group Inc. The contracts surged to 359 on March 15 as Bahrain declared a three-month state of emergency and Gulf troops arrived to help quash the one-month rallies by mostly Shiite protesters.

The protests, by the mainly Shiite majority, left 35 people dead, hurt tourism and spurred the central bank to cut its forecasts for economic growth this year by two percentage points to 3 percent. Standard & Poor’s and Moody’s Investors Service reduced Bahrain’s credit ratings.Credit Agricole SA (ACA), France’s second-largest bank by assets, is relocating its regional headquarters out of Bahrain, two bankers familiar with the matter said last month.


Get Libyan oil flowing, says Opec - The National

As Libya emerges from a six-month civil war, it faces a long to-do list, from restoring the flow of drinking water to establishing a permanent government.

But the most critical part of the nation's rebuilding effort for now is reviving oil production, said the head of Opec, who is also a former Libyan oil minister.

"Concentrate on your first priority," Abdalla El Badri, the Opec secretary general, said yesterday in Dubai, stipulating that he was offering an opinion rather than advice.