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Sunday, 2 October 2011

EFG Positive On Q3 Earnings; Expects Q4 Market Rally; No UAE-Qatar MSCI Upgrade Though | alifarabia

The regional stock markets may be sending negative signals, but the Middle East listed companies are expected to see a 38% rise in earnings in the third compared to the same period last year, according to EFG-Hermes estimates.

“Materials sector earnings are driven by higher oil prices, lower provisioning and loan growth will likely drive earnings growth for the Saudi banks, and the UAE’s real estate sector will likely see a Y-o-Y turnaround after heavy losses from UP and Aldar in 2010, in our view. (Excluding UP and Aldar reduces earnings growth expectations to 16.8% Y-o-Y and 2.6% Q-o-Q). We believe Q-o-Q growth will be driven by Emaar and UP showing strong earnings growth, seasonally high earnings from SEC and Air Arabia due to the summer period, and OCI, which should benefit from strong fertiliser prices,” notes EFG.

MENA corporate earnings will rise nearly 21% year-on-year, according to the Egyptian bank.

MENA stock markets close - October 2, 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 'committed to free market' after investor fears, Egypt Politics - Maktoob News

Egypt's deputy prime minister said on Sunday that his country was committed to a free market economy, after the ownership of three companies was returned to the state, sparking fears among investors.

"The government will not backtrack on a free market economy," said Hazem al-Beblawi, who is also the interim government's finance minister.

On September 21, the Cairo Administrative Court suspended the privatisation contracts of three companies, returning them to the public sector.

Egyptian Shares Climb After Military Presents Timetable to Transfer Power - Bloomberg

Egypt’s shares rallied the most in almost two weeks as local newspapers reported the ruling military council agreed on a timetable to transfer power.

Orascom Construction Industries, the country’s biggest publicly traded builder, rose 1.6 percent. Cairo Poultry Co. (POUL) soared to the highest intraday level in almost a week after EFG- Hermes Holding SAE raised the company to “buy.” The benchmark EGX30 Index gained 1.8 percent, the most since Sept. 20, to 4,213.52 at 12:33 p.m. in Cairo. The gauge lost 23 percent in the third quarter. In the Persian Gulf, the Bloomberg GCC 200 Index (BGCC200) of shares fell 0.2 percent today.

The military agreed to amend the elections law to allow political party candidates to run for seats set aside for independents, Al Ahram newspaper reported. Presidential elections will take place 45 to 60 days after a constitutional referendum, it said. Several thousand protesters rallied in Cairo on Sept. 30 to demand the ruling military council end a state of emergency and announce a time frame.

Abu Dhabi’s Taqa Sets Up 3.5 Billion Ringgit Sukuk Program - Bloomberg

Abu Dhabi National Energy Co. (TAQA) set up a 3.5 billion Malaysian ringgit ($1.1 billion) sukuk program as the state-controlled utility known as Taqa diversifies its financing options.

“The program will allow Taqa to issue quickly if and when the market conditions are optimal,” the company said in a statement to the Abu Dhabi bourse today. The sale will be Taqa’s first ringgit sale, according to Bloomberg data.

Malaysia, the world’s largest market for Islamic bonds, has eased foreign ownership rules and encouraged new Shariah- compliant products to attract investors. Tamweel PJSC (TAMWEEL), the Dubai-based mortgage lender, plans to raise at least $300 million to $500 million from sukuk sale this quarter denominated either in Malaysian ringgit or dollars, acting Chief Executive Officer Varun Sood said last week.

Egypt govt aims to rely less on local banks: finmin | Reuters

Egypt is looking at ways to reduce its dependence on borrowing from local banks because it is a burden on the economy, the finance minister said on Sunday.

The government, grappling with an economic slowdown and rising costs after a popular uprising, rejected an offer of IMF funds in June and has said it will rely on the local market to plug its financing needs.

But Egypt's banks are demanding higher yields at government debt auctions, so that yields at last month's Egyptian treasury bill auctions rose to their highest since the 2008 financial crisis. Traders have said they could rise further if the government does not secure external funding.

The crisis returns -

The mood is grim at the address Hotel in Downtown Dubai. Overlooking the iconic Burj Khalifa, the hotel has become a vantage point for viewing the spectacular dancing fountain that comes to life several times a day. But as we wait for the arrival of two of the UAE’s most senior government leaders, smiles are hard to come by and the music from the fountains is being drowned out by talk of a second global recession.

Gold has just slumped another $60, silver has plunged again to record losses of 40 percent in one week alone. Britain’s top 100 companies have lost $117bn in value the previous week, while the International Labour Organisation has just warned that G20 countries could end up losing 40 million jobs by 2012. Somehow, news of the eurozone’s plan for $2.6 trillion bailout for debt ridden countries, being flashed in the television screens at the hotel’s reception, goes unnoticed.

Everyone wants to know only one thing: is the crisis going to spread to the region? It is Sheikh Ahmed Bin Saeed Al Maktoum, chairman of state-backed conglomerate Dubai World and Emirates Airline, who appears first. Amidst the chaos, he is (as always) a figure of calm. Is he worried about a slowdown in the local economy and the event that Abu Dhabi could, as experts have warned, be affected?

UAE to pump $76bn into energy sector - Emirates 24/7

The UAE could pump a whopping $76 billion into projects to develop its hydrocarbon sector over the next five years to become the second largest Arab energy investor after Saudi Arabia by overtaking Iran.

Official estimates showed energy capital investments in the Middle East and North Africa (Mena) could total around $525 billion during 2012-2016 but such projects face funding problems, rising costs and other challenges.

“In the contexts of a global economic downturn and regional political turmoil, our review of Mena energy investment for the five-year period 2012-2016 points to a broken momentum, yet mixed outlook. On the one hand, driven by the oil downstream and the power sector the anticipated investment of $525bn is higher than the actual capital requirements found in the last review,” said the Dammam-based Arab Petroleum Investment Corporation (Apicorp), an affiliate of the 10-nation Organisation of Arab Petroleum Exporting Countries (Oapec).

DIC sells off stake in Ishraq Dubai to Almulla Group - Emirates 24/7

Dubai International Capital (DIC), the private equity arm of Dubai Holding, has exited its investment in Ishraq Dubai, which owns many hotels in the UAE, by selling it off to the Dubai-based Almulla Group, a diversified private business group.

In a joint media statement on Sunday, the companies said Ishraq Dubai was 51 per cent owned by DIC and 49 per cent by Ishraq Gulf Real Estate Holding, which in turn is majority owned by DIC. The sale is another in a series of successful exits made by DIC this year.

“The successful sale of Ishraq Dubai follows a strong series of exits that have consolidated our private equity track record in the Mena region,” said David Smoot, CEO of DIC. “The sale of Ishraq Dubai is an important achievement as this represents a strong return from our only ‘greenfield’ investment, a venture which we launched back in March 2005,” he added, without divulging the financial terms of the deal.

Mideast M&A crashes by 79% in Q3 as Arab Spring frustrates new deals « ArabianMoney

Electronic business information provider Bureau van Dijk blames the political unrest of the Arab Spring for a 79 per cent plunge in merger and acquisition deals in the third quarter of 2011 with just 60 transactions across the whole Middle East worth $1.6 billion. However, the situation is less bad in terms of the total value of M&A activity which dropped by $400 million from Q3 last year.

BvD commented: ‘This suggests that in the case of deals which actually reach the agreed stage, target company valuations were not lower than this time last year. That said, Q3’s 60 deals worth $1.6 billion does not compare favourably with Q2’s 99 worth $6.5 billion’.

GCC financial markets integration, merger of brokerage firms under way

Yahya bin Said Abdullah al Jabri, Executive President, Capital Market Authority (CMA) says, “A GCC-wide integration of the financial markets is in the process”. In response to a query about its significance, Al Jabri said, “Once integrated there are ample of benefits in terms of wider scope for investors both domestic and foreign, increased turnover, more liquidity, expansion of markets to the other countries markets, possible to introduce new and sophisticated financial instruments in to the market”.

About the new trends and developments taking place in the market at this moment, Al Jabri said, “It is believed that the market is in its recovery stage. In the next couple of years the markets across the globe are expected to show positive trends. The global crisis and markets sentiments are the possible reasons for the recent down trend in the markets.

“This has been observed across the GCC and the other parts of the world. We are not exception but the impact is negligible. At CMA we are seriously considering this issue and the possible steps like encouraging the merging of the brokerage companies, addressing the issue of reducing the trade commissions and observing and insisting the corporate to follow strict corporate governance code.

gulfnews : Regional stock markets expected to open lower

The region's stock markets are likely to open lower and are expected to trade within a range in the week ahead as the financial markets around the world are beginning to price in another global recession and the likelihood of a sovereign debt default by Greece, say market experts.

"The credit default swap market is already pricing in a high probability of a Greek default. Leaving aside the macro-environment headwinds, the attention of the regional markets will be on the reporting season which kicks off with Qatar National Bank reporting its third-quarter earnings on October 5," Anastasios Dalgiannakis, head of trading at Dubai-based Mubasher Financial Services, told Gulf News.

Gary Dugan, chief investment officer - Private Banking at Emirates NBD said they remained cautious on international equities.

No new Nakheel cases 'to be heard by tribunal' - The National

The Dubai World Tribunal will not handle any new legal claims involving Nakheel, the developer's top executive says.

"No new cases will be in the tribunal," Ali Rashid Lootah, the chairman of Nakheel, told The National. "We are now back to the original position. Back to the law of the land."

The Government's department of legal affairs has reportedly issued a policy decision removing new Nakheel cases from the tribunal, which was established two years ago to handle disputes involving Dubai World and its subsidiaries.

Gulf's focus turns to earnings results - The National

Fund managers are banking on rosy third-quarter results to help improve sentiment that has soured quickly in recent weeks, putting pressure on Gulf stock markets.

Companies will begin to report their results for the third quarter this week. The numbers may give equities a small boost.

"We expect a positive continuation in third-quarter numbers, as we had in the second quarter," said Marwan Shurrab, the chief trader at Gulfmena Investments, an asset management company in Dubai.

Tony Hayward's comeback gamble - The National

Tony Hayward has wasted little time in making a return to the oil industry.

The man forced to quit as BP chief executive over the Deepwater Horizon oil spill catastrophe in the Gulf of Mexico last year took up a new leadership position last month as the head of Genel Energy, a merger between the investment company Vallares and Genel Energy International.

Vallares, co-founded by Mr Hayward, is merging with the Turkish outfit in a US$2.1 billion (Dh7.7bn) deal. Mr Hayward will have surprised few with his determination to remain a key player in the world he knows best, but the stage he has chosen for his comeback is interesting because Genel's sole area of activity is Iraqi Kurdistan.

Stock trade scandal in India claims Dubai figure - The National

The president of a bank based in Dubai has resigned and his licence has been revoked by a financial regulator in the emirate after he became embroiled in a stock trading scandal in India.

Arun Panchariya, the president and a board member of Euram Bank Asia, a bank based in the Dubai International Financial Centre (DIFC), has resigned.

He stepped down after being named in a high-level investigation by the Securities and Exchange Board of India (Sebi) into an "elaborate scheme to manipulate markets" run by banks, brokerages and funds over two years.

Saudi Equity Movers: Sabic, Kayan, Zain Saudi Arabia, Kingdom - Businessweek

The Tadawul All Share Index climbed less than 0.1 percent to 6,116.71 by the 3:30 p.m. close in Riyadh. The following were among the most active stocks in Saudi Arabia’s market today. Stock symbols are in parenthesis.

Zain Saudi Arabia (ZAINKSA AB) declined 2.4 percent, the steepest loss since Aug. 14, to 6.10 riyals after Kingdom Holding Co. (KINGDOM AB) and Bahrain Telecom Co. said they won’t proceed with an offer to buy a 25 percent stake in the kingdom’s third-largest mobile-phone company by market value for $950 million. Kingdom Holding’s shares gained 0.3 percent to 7.40 riyals.

Saudi Basic Industries Corp. (SABIC AB), the world’s largest petrochemicals company, dropped 0.8 percent to 91.75 riyals, its biggest fall since Sept. 12. The company’s Sabic Innovative Plastics unit had its ratings withdrawn by Moody’s Investors Service.

Business : UAE deposit-loan gap falls at fastest pace in 7 months

The gap between deposits held by UAE banks in August and loans shrank at its fastest pace since February despite a sharp fall in deposits last month, data released by the UAE Central Bank showed on Saturday.

The gap at the end of last month stood at Dh21.6 billion, a decrease of Dh40 billion from Dh61.6 billion in July. The banks witnessed the lowest gap in January at Dh13.6 billion, according to the Central Bank. The gap reached at its peak level in May at Dh74.8 billion.

While deposits with UAE banks plunged by more than Dh35 billion last month, lending went slightly up in August. Deposits recorded a 3.2 per cent decline to Dh1,078.4 billion and loans witnessed 0.5 per cent increase in August and stood at Dh1,056.8 billion.

Will the Arab Spring Be Followed by a Rich Aerospace harvest in Dubai? | Aviation International News

As the next biennial Dubai Air Show approaches, all eyes are on the Middle East, but not entirely for the usual reasons. Even after being dented by the financial crisis of 2008-2009, the region still holds huge potential for the air transport and aerospace industries. But to what extent could this potential be affected–negatively or positively–by the fallout from the so-called Arab Spring political upheaval still unfolding in Bahrain, Yemen, Egypt, Syria, Libya and Tunisia? The truth is that no one knows the answer to this, nor can anyone say for sure how much farther the wave of change might spread as the United Arab Emirates (UAE) prepares to host one of the world’s top airshows.

What we do know is that the Dubai Air Show (November 13 to 17) is still growing, at least in terms of numbers of exhibitors. Organizer Fairs & Exhibitions (F&E) believes that the number of exhibitors could nudge 1,000 this year, compared with 890 companies in 2009. That said, the weakened world economy is manifesting itself in that some exhibitors are reducing the scale of their presence so that the overall floor space for this year’s show will not be larger.

Once again, this year’s is supposed to be the last staging of the Dubai Air Show at the Dubai Airport Expo center before it moves to the Dubai World Central complex at the new Al Maktoum International Airport. F&E has abandoned the separate Emirates Hall that was introduced in 2009 and will keep all the exhibitors in the three main halls at Dubai Airport Expo. It has extended the reception building to make more room for exhibit space, and more companies are opting for new outdoor pavilions on the flight display line.

Oil scene: Weak economic data batter crude markets - Arab News

Alarming economic data from global economic powerhouses continue to batter crude markets. China’s manufacturing sector reportedly shrunk again in September, for a third month in a row, the longest contraction since 2009, and in the meantime, as the German retail sales too fell 2.9 percent in August — the largest decline in four months — the US consumer spending slowed too.

Oil demand is falling. In the US it fell by 4 percent in July from a year earlier, to 18.555 million barrels a day — the lowest level for the month since 1996; revised government data released Thursday show.

US gasoline demand for the month too fell 3.7 percent to only 8.96 million barrels a day, the lowest level since 2000, despite the fact that July is regarded the peak month of the summer driving season. This is the fourth straight drop in year-on-year total oil demand after 14 consecutive year-on-year increases beginning in February 2010.

gulfnews : Alternative to the western finance model gains favour

From September 19 to 23, Toronto hosted the massive Swift International Banking Operations Seminar (Sibos) event from Society for Worldwide Interbank Financial Telecommunication (Swift), where I was involved in the session called ‘Islamic Finance 2.0: Growth Opportunities for All'.

There were a number of interesting takeaways from the session that may provide insights on the marketing and positioning of Islamic finance in ‘open minded' western countries, such as Canada and the Arab spring countries.

While presenting Islamic finance in non-Muslim countries, it is described to be ‘similar' to conventional finance in terms of the economic objectives and benefits while de-emphasising the Arabic terminology (form). This is a diametrically opposite approach of positioning it in Muslim countries where it appears to be hyper-sensitive to the linkage and similarities to conventional finance.

gulfnews : Qatar Airways to announce A380 deal at Dubai show

Qatar Airways has signed a fresh order for additional A380 aircraft, the airline's chief executive said here.

The new order for a "few more" superjumbos will be on top of the five aircraft that the airline previously ordered.

Akbar Al Baker, chief executive of Qatar Airways, said they will officially announce the deal in the upcoming Dubai Airshow."