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Monday, 17 October 2011

Saudi Basic Third-Quarter Profit Surges 54% as Sales Rise; Beats Estimates - Bloomberg

Saudi Basic Industries Corp. (SABIC), the world’s biggest petrochemicals maker, said third-quarter profit surged 54 percent, beating analysts’ estimates.

Net income jumped to 8.2 billion riyals ($2.2 billion) from 5.3 billion riyals a year earlier, Chief Executive Officer Mohamed Al-Mady said at a press conference in Riyadh today. The estimate of four analysts was for a profit of 7.7 billion riyals, according to data compiled by Bloomberg.

Saudi petrochemical companies have been recovering from the global financial crisis as oil prices soared and as demand from fast-growing Asian economies including China and India rose. Oil prices averaged about $90 a barrel in the third quarter compared with $76 a barrel in the year-earlier period.

MENA stock markets close - October 17, 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)

Analysis: Gulf, Asia economic links yet to fulfill rich promise | Reuters

On the face of it, the economies of the oil-rich Gulf and of fast-growing Asia are a perfect match. Yet they face a long slog to dispel the suspicion that theirs is no more than a marriage of convenience.

Barriers that have kept investment strikingly modest, the scant need for capital and a yawning divide of culture and language will have to be overcome if the two regions want to enrich what is now a fairly basic relationship: the Gulf ships oil and gas to Asia and recycles part of the petrodollars by importing manufactured goods, construction services and labor, most of it low-skilled.

"The fact that Asia and the Middle East, in particular the Gulf, account for a growing share of the global economy means that intra-regional investment will inevitably grow and mature. But it will likely be a slow process, evolving over decades rather years," said Ben Simpfendorfer, managing director of Silk Road Associates, a Hong Kong consultancy.

Banks forced to extend loans for bond deals -

Banks in the Middle East are increasingly being forced to extend loans to clients to be awarded a dwindling number of bond advisory deals, bankers say.

As a result, heavyweight banks with sizeable balance sheets such as Standard Chartered and HSBC are mopping up the region’s bond mandates, while others such as JPMorgan and Barclays Capital are slipping down the league tables.

So far this year HSBC is topping the bookrunner league tables for debt capital markets for a second consecutive year, according to Dealogic, a data provider. At the same time, JPMorgan, which led the tables as recently as 2009, has not made the top 10 so far this year, according to the data. Barclays Capital, third last year, has also dropped out of the first 10 this year.

Dubai’s Abraaj eyes up to 4 exits in next 18 months

Dubai-based private equity firm Abraaj Capital plans to sell up to four of its investments in the next 18 months, a senior executive said on Monday.

Abraaj has been trying to offload its stake in Turkish hospital group Acibadem in a deal that could be worth at least $500 million.

Matteo Stefanel, senior partner, said other exits were likely. “We are also looking at one to three exits in the next 18 months,” Stefanel told Reuters on the sidelines of a conference, without elaborating on details.

Abu Dhabi's IPIC may issue new bonds after investor meetings | Reuters

Abu Dhabi's International Petroleum Investment Co (IPIC) is eyeing a potential bond issue "subject to market conditions" after meeting investors in Europe and the United States in coming days.

Barclays Capital , JP Morgan , Mitsubishi UFJ Securities , Natixis and Societe Generale are arranging meetings and IPIC has picked Goldman Sachs as global coordinator, a mandate announcement said on Monday.

IPIC met investors in London in June but insisted at the time it was not in the market for a bond, and would only undertake a capital markets transaction in coordination with Abu Dhabi's Debt Management Office (DMO).

European banks look to Middle East for asset buyers -

Banks across Europe are pinning their hopes on Middle East sovereign wealth funds and healthier banks in North America and Asia as the most likely buyers of the mountain of assets they plan to sell over the coming months.

“Beyond Europe there are buyers,” said one eurozone bank boss. “Look at what happened with Dexia.”

Bankers believe that the planned sale of the Luxembourg unit of struggling lender Dexia to Qatari investors, as well as the sale by Belgium’s KBC of its Luxembourg private banking unit to Precision Capital, a Qatari-backed fund, show the way forward.

Almarai May Set Up First Sukuk Program in 2012 for Expansion - Businessweek

Almarai Co., Saudi Arabia’s largest food producer by market value, may set up its first Islamic bond program by early 2012 as it seeks financing for expansion.

The riyal-denominated sukuk would be available only to the local market and would help finance an “ambitious capital expenditure development plan and working capital needs,” Chief Financial Officer Paul-Louis Gay said in an e-mailed response to questions today. The size of the program is “not clearly defined yet,” he said. The Riyadh-based company plans to set up the program by the end of this year or early next year.

Sukuk sales in the six-nation Gulf Cooperation Council, which includes Saudi Arabia and the United Arab Emirates, declined to $3.73 billion so far this year from $3.97 billion a year earlier. Saudi Aramco Total Refining & Petrochemical Co., a venture between Saudi Arabian Oil Co. and Total SA, sold 3.75 billion riyals ($1 billion) of Islamic bonds earlier this month.

Omani lender NBO's Q3 profit jumps 44 pct | Reuters

National Bank of Oman made a net profit of 10.2 million Omani rials ($26.5 mln) in the third quarter, Reuters calculated, a jump of 43.7 percent from the prior-year period.

Nine-month profit rose to 27.3 million rials from 21.7 million rials in the same period last year, the company said in a statement to the bourse.

Etihad in talks to buy Aer Lingus stake: FT - Emirates 24/7

Etihad, the Middle Eastern airline, has approached the Irish government to buy its 25 per cent stake in the national carrier Aer Lingus, the Financial Times reported on Monday.

The newspaper cited people with knowledge of the move as saying it is unclear how far talks have progressed and that they might not result in any deal.

The approach comes after James Hogan, Etihad chief executive, met the Irish prime minister Enda Kenny at a recent investment event in Dublin, the global Irish Economic Forum.

Al Hilal to keep plans on track - The National

Al Hilal Bank intends to press on with branch openings and a bond issuance, in spite of trouble on world markets and diminishing opportunities for the banking sector at home.

The Islamic lender is opening a branch in Kazakhstan this week, with three to follow in the UAE by the end of next year, as it makes inroads into markets held by more established banks.

In August, Al Hilal revealed plans for its first sukuk, of an expected size of at least US$1 billion (Dh3.67bn). Despite difficult conditions on credit markets, the bond issuance will go ahead, said Mohammad Berro, the bank's chief executive.

Saudi Maaden gets $911.5 mln financing | Metals & Mining | Reuters

Saudi Arabian Mining Co (Maaden) said on Sunday it signed with 13 local and international banks a 3.7 billion riyal ($991.5 million) facility for the second phase of its aluminum project.

The financing, signed by Maaden's subsidiary Maaden Bauxite and Alumina Company, is for the construction of the second phase of Maaden and Alcoa Inc 's $10.8 billion integrated smelter and rolling mill complex, the firm said in a bourse statement.

"The loans will be paid in 21 semiannual installments... and will be for the period of 16 years. Financing agreements for the remaining 4.35 billion riyals will be completed later with Public Investment Fund and Saudi Industrial Development Fund," the statement said.

gulfnews : Qatar emerges a strong regional financial centre

With the ideal business environment and right regulatory frameworks already in place, Qatar will become the region's focal point for all forms of asset management, reinsurance and captive insurance activities in the next few years, a top official said.

"I would hope that in five or six years, Qatar will be the leading jurisdiction of choice for international firms who want to do business in the region within those business sectors," said Akshay Randeva, director of strategic development of the Qatar Financial Centre Authority, the commercial arm of the QFC.

Like other countries in the Gulf such as Saudi Arabia, Bahrain and the UAE, Qatar aims to position itself as a world-class financial centre. To set itself apart from the competition, the government decided to focus on core markets of asset management, reinsurance and captive insurance.

Gulf Times – ‘Qatar spend drive to attract PE, capital’

Private equity (PE) and foreign capital are set to flow into Qatar as the country has lined up huge $65bn expenditure to prepare for the 2022 FIFA World Cup, according to Qatar First Investment Bank (QFIB).

“PE firms in the region have a positive outlook on sectors that will benefit from government spending such as the energy, healthcare and general infrastructure construction,” said QFIB chief executive Emad Mansour. He will highlight the opportunities for PE before a global audience at Super Return Middle East conference beginning today in Dubai.

Qatar’s mega spending drive planned ahead of the 2022 World Cup would undoubtedly attract foreign capital to such sectors, Mansour said. Qatar is expected to spend $65bn on construction, logistics, transport and infrastructure to prepare the country for the mega sporting event, he said.

Alleged Iranian money-laundering scheme in Kuwait raises global concern

The issue of alleged money-laundering in Kuwait is no longer a local concern, but it is raising alarm in other Gulf Arab and Western countries, sources said.

The sources, Gulf Arab diplomats who spoke on condition of anonymity, told the Kuwait al-Rai daily that investigations have begun, inquiries that have expanded since claims that Iran was behind plans to assassinate the Saudi ambassador in Washington.

The investigations are looking into the extend to which some Kuwaiti officials and a businessman are involved in breaking the EU, U.S., and U.N. sanctions placed against Iran.

UAE's CBD Q3 profit falls | Reuters

UAE lender Commercial Bank of Dubai posted a marginal drop in third-quarter net profit of 1.4 percent, the bank said on Sunday.

CBD, which is 20 percent owned by the Dubai government, made a net profit of 254 million dirhams ($69.2 million) in the three-month period to September 30, according to Reuters calculations based on a statement to the Dubai Financial Market.

This was down slightly from 257.6 million dirhams in the corresponding period in 2010.

HSBC to Halt U.A.E. Retail Brokerage - Bloomberg

HSBC Holdings Plc (HSBA), Europe’s biggest bank, will stop offering brokerage services to retail investors in the United Arab Emirates and will focus on institutional clients after local trading volumes and stocks plummeted.

“Given the market today, the limited volumes, the risk and volatility for retail clients, we decided to primarily focus on the institutional side of the business,” Georges Elhedery, Middle East and North Africa Head of Global Markets, said in an interview yesterday. “The investment required to make ourselves visible in the retail space versus the opportunity that the retail market offers us doesn’t make a lot of sense today.”

Some brokerages have chosen to suspend licenses or cut costs after political unrest in the Middle East and debt restructurings reduced Dubai trading volumes to a six-year low. Rasmala Holdings Ltd., which has a research venture with Royal Bank of Scotland Group PLC, stopped retail brokerage in May. Shuaa Capital PSC (SHUAA), the investment bank controlled by Dubai’s ruler, plans to focus on institutional and high net-worth clients, its new chief executive officer said last week.

THE DAILY STAR :: Gulf bourses disappointed by G-20 meeting; Egypt continues to rally

Gulf bourses were mixed Sunday with the UAE’s two markets hitting new multi-month lows as traders said the weekend’s Group of 20 meeting in Paris had failed to reduce uncertainty over the eurozone debt crisis and the outlook for the global economy.

Dubai’s benchmark fell 0.7 percent to its lowest close since March 7, when regional markets were tumbling in the early stages of the Arab Spring political turmoil. In Abu Dhabi, the benchmark slipped 0.3 percent to a 22-month low.

In their meeting Saturday, G-20 finance ministers and central bankers pressed Europe to act decisively on the debt crisis at an Oct. 23 EU summit.

Abu Dhabi’s Falcon says close to goal of $1bn in assets -

Falcon Private Bank, the Swiss bank owned by Abu Dhabi’s Aabar Investments, is close to reaching its target of $1bn in assets under management out of the UAE by the year-end.

The Zurich-based bank, which saw inflows of $541m in net new money in the first two months of the year, had assets valued at $950m as of September 2011, it said in a statement.

“In line with expansion plans, Falcon Private Bank set a target of increasing assets under management from the UAE to $1bn by the end of 2011,” the firm said on Sunday.

MENA region raises a miserable $219m in just two IPOs in Q3 « ArabianMoney

Capital markets continue to be severely depressed with just $219 million raised in only two IPOs, both in Saudi Arabia, across the whole of the Middle East and North Africa region in the third quarter.

No wonder investment banks like Dubai’s Shuaa Capital have just opted for a new wealth management strategy rather than traditional mergers, acquisitions and fund raising exercises like IPOs. The IPO business is dead.

Long gone are the days of the 2005 regional stock market boom when IPOs could attract more applications than the GDP of the UAE.