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Monday, 24 October 2011

Dubai Paid 1 Dirham for Dubai Bank Stakes, Alrroya Says - Bloomberg

Dubai’s government paid a nominal price of 1 U.A.E. dirham for Emaar Properties PJSC (EMAAR)’s and Dubai Holding’s stakes in indebted Dubai Bank PJSC, Alrroya reported today, citing unidentified people.

Emaar and Dubai Holding, which owned 70 percent and 30 percent stakes in the bank respectively, gave up their ownership in exchange for debt exemption, the newspaper said. Dubai Bank was rescued by Dubai’s government in May after loan losses increased. It was subsequently taken over by Emirates NBD PJSC, the United Arab Emirates biggest lender by assets.

MENA stock markets close - October 24, 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)

Exclusive: Saudi Arabia won't tap reserves, mulls project bonds | Reuters

Saudi Arabia will not need to tap into its reserves this year to finance additional budget spending but it is considering whether to issue Islamic or conventional bonds to help fund specific projects, the country's Finance Minister Ibrahim Alassaf told Reuters.

Responding to a wave of social unrest across the region, the world's top oil exporter pledged early this year to spend an estimated $130 billion, or nearly 30 percent of its economic output, on housing and other social measures for its citizens over an unspecified period.

That came on top of a record 2011 government budget of 580 billion riyals ($154 billion), raising the possibility that Saudi Arabia might have to dip into its fiscal reserves, estimated by analysts at about $280 billion, to fund spending.

UAE's Jumeirah Group eyes Europe expansion, no bond sales | Reuters

Luxury hotelier Jumeirah Group, owned by the ruler of Dubai, is looking at doubling its properties under management globally by early 2012 and tapping into growing tourism demand, its executive chairman said on Monday.

"We will open in Kuwait, Majorca, and Azerbaijan. We will almost double the number of hotels under management for Jumeirah in a 14 month period," Gerald Lawless told the Middle East Investment Summit held at Reuters' offices in Dubai.

"We have a few other potential projects "bubbling"... Some of them are in Europe," he said, adding the Jumeirah Group would count 20 hotels by the end of the first quarter 2012.

Banks shed staff in Dubai as deals dry up -

International investment banks are shedding staff in Dubai and sending top executives home as deals in the region dry up and stock market volumes fall to historic lows, bankers say.

As concerns mount over global economic growth, many foreign banks have come under pressure from headquarters to cut costs and are responding by trimming employees involved in mergers and acquisitions, equity research, and credit and equity sales.

Adam Key, Citigroup’s head of equity capital markets for the region, has relocated to London while Deutsche Bank, Germany’s largest bank, is moving Christopher Laing, head of equity capital markets for the Middle East and Africa, back to London. Credit Suisse, Nomura and Goldman Sachs have also cut jobs in equity-related roles.

How safe is your debt? - Zawya

Dubai and Abu Dhabi find themselves at the opposite end of the sovereign debt spectrum.

While Dubai continues to remain in the list of the ten riskiest 'sovereigns' in CMA Datavision's quarterly update, Abu Dhabi is now seen as among the ten safest sovereign debt.

CMA provides independent, intraday pricing on approximately 1,400 CDS and CDS indices, and is widely used by traders, risk managers, treasurers and researchers in financial institutions.

Dubai firm plans $500 mln copper smelter in Tanzania | Reuters

Dubai-based City Energy & Infrastructure LLC plans to build a copper smelter and sugar plant in Tanzania over the next three years at a total investment of $500 million, a senior company official said on Monday.

City Energy & Infrastructure said it would construct the east African country's first ever copper smelter with a capacity of 300,000 tonnes of blister copper per year.

"The copper refinery will process around 1.2 million tonnes of copper ore per annum. Construction should take about 24 to 36 months," Irfan Khan, a director and shareholder of the company told Reuters.

Investors cautious on Dubai, govt-related entities -Moody's, UAE Economy - Maktoob News

Investors are cautious about the ability of some of Dubai's government-related entities to refinance their debt piles even as the emirate works to restore confidence in its financial health, a managing director at Moody's said on Monday.

While economic zone Jebel Ali Free Zone (JAFZA) and Dubai International Financial Centre Investments (DIFCI) have been chipping away at their $1.25 billion and $2 billion debts maturing next year, there is still a lack of clarity as to how the firms will refinance, said David Staples, managing director of EMEA corporate finance at the ratings agency.

"There's a question mark in the eyes of investors as to how they're going to do that. Dubai should be seen as supportive and Dubai is assumed to be supportive," he said, speaking at the Reuters Middle East Investment Summit.

Emirates NBD Q3 net slumps 59 pct on impairments, UAE Industries - Maktoob News

Emirates NBD , Dubai's largest bank by market value, posted a 59 percent slump in third-quarter net profit, widely missing analysts' forecasts, after taking provisions against the ruler of Dubai's investment vehicle.

The lender, which is 55.6 percent owned by the Dubai government, made a net profit of 175 million dirhams ($47.6 million) for the three months to September 30, compared with 424 million in the corresponding period in 2010, a statement to the Dubai bourse said on Monday.

Impairment allowances rose to 1.57 billion dirhams in the quarter, compared with 1.24 billion dirhams this time last year, as the bank took full provisions against loans affected by restructurings at Dubai Holding, the personal investment vehicle of Sheikh Mohammed bin Rashid Al Maktoum.

Saudi Arabia won't tap reserves, considers project bonds, Saudi Arabia Industries - Maktoob News

Saudi Arabia will not need to tap into its reserves this year to finance additional budget spending but it is considering whether to issue Islamic or conventional bonds to help fund specific projects, the country's Finance Minister Ibrahim Alassaf told Reuters.

Responding to a wave of social unrest across the region, the world's top oil exporter pledged early this year to spend an estimated $130 billion, or nearly 30 percent of its economic output, on housing and other social measures for its citizens over an unspecified period.

That came on top of a record 2011 government budget of 580 billion riyals ($154 billion), raising the possibility that Saudi Arabia might have to dip into its fiscal reserves, estimated by analysts at about $280 billion, to fund spending.

Arab Spring good news for authoritarian states bad news for those living with revolutions « ArabianMoney

Who is gaining most this year from the Arab Spring of uprisings, revolutions and civil wars? The citizens of the authoritarian states who have seen salaries and social spending jump, or those living with the reality of transformation?

Put that way the naive optimism of some supporting the Arab Spring is revealed as dangerous. Any student of history knows that revolutions usually make life much harder before they sometimes work out for the best. They are very hard times indeed for the ordinary citizen.

Business : Saudi banking is least leveraged

Saudi Arabia is the largest economy and banking market in the Arab world, with almost 40 per cent of all deposits in interest free Shariah-compliant savings products and an embryonic, high growth mortgage, takaful (Islamic insurance), consumer credit and leasing industries.

Despite the $24 billion Al Gosaibi-Saad Group debt debacle, Saudi banking is the least leveraged in the GCC, with loans/deposit ratios rarely in excess of 80 per cent and a conservative, best in regional breed regulator in SAMA.

The persistence of $100-plus Brent crude oil prices, the government’s new $138 billion social welfare programme, a natural oligopoly with only 12 major banking networks across the kingdom, a fabulously wealthy sovereign that happens to be the world’s leading oil producer with $500 billion in central bank reserves, the largest public spending programme in the Middle East, tens of billions of riyals in non-interest bearing deposits, a huge capital market now opening up to foreign investors makes the macro case for Saudi bank investing compelling, even irresistible.

Dubai neither doomed to fail, nor a safe haven: BofA-ML - Emirates 24/7

While the worst is definitely a view that’s visible from a rear-view mirror in Dubai and there are a number of positives that are fast emerging, the emirate is yet to have fully emerged from its financial problems, a new report has said.

“The consensus has moved quite a bit over the past two years on Dubai, swinging from doom and gloom on Dubai World restructuring to an Arab safe haven in H1, 2011,” pointed out Bank of America-Merrill Lynch’s (BofA-ML) MENA Quarterly report dated October 20.

“It is true that a significant headway has been made on debt restructuring and Arab spring has diverted tourists, businesses and financial capital into Dubai,” BofA-ML analysts acknowledged.

gulfnews : Battle for East Mediterranean gas looms

Last week I discussed in this column the flashpoint that is evolving in the East Mediterranean due to the tussle for discovered and yet-to-be-discovered natural gas resources.

There is no doubt that this battle will be fierce because all the countries involved — except Syria — are poor in hydrocarbon resources. But before I go into individual countries, one must ask the question of what is the ultimate size of the resource in the Levant Basin which extends from the borders of Gaza to the southern borders of Turkey?

To answer this question we have nothing to go by except the US Geological Survey, which released — coincidentally or not — in March its first assessment of the zone, estimating that it contained 1.7 billion barrels of oil and 122 trillion cubic feet (TCF) of gas.

gulfnews : The Arab Spring Report: Uprisings came at a hefty price

The popular uprisings across the Middle East this year came at a hefty price, costing the affected countries more than $55 billion (Dh202 billion).

The resulting high oil prices, however, mean oil-exporting countries that have suppressed or avoided revolutions emerged the biggest winners from the Arab Spring, according to a summary report by political risk consultancy Geopolicity released last week.

The report, called Re-thinking the Arab Spring: A road map for G20/UN support? and based on IMF data, showed that Libya, Syria and Egypt suffered the worst losses in terms of GDP, followed by Tunisia, Bahrain and Yemen. Between them these states lost $20.6 billion of their gross domestic product and public finances were eroded by another $35.3 billion.

gulfnews : UAE's non-oil trade grows 22%

The UAE's non-oil foreign trade increased 22 per cent year on year from January to the end of June, according to a statement by the Federal Customs Authority (FCA).

Non-oil foreign trade increased to Dh445 billion from Dh364.3 billion in the same period last year, the statement said.

Imports grew by 20 per cent from Dh236.5 billion in the first half of last year to Dh285 billion, according to the statement.

gulfnews : DIFC: A new global dimension

The Dubai International Financial Centre (DIFC) value proposition — including its location, high-quality infrastructure, application of and compliance with best international standards and practices, internationally recognised legal and regulatory framework, a strong regulator, availability of highly skilled and experienced human capital, critical mass in terms of the number and quality of institutions and ancillary services — continues to attract banks and financial institutions.

The fundamental point is that the centre of the world's economy has shifted East and a new financial markets architecture is emerging to the benefit of the DIFC, centrally located between Europe and emerging Asia and Africa.

DIFC's international standards have helped attract foreign direct investment (FDI) and the linkages/connectivity with the rest of the Middle East, India, China, the rest of Asia, and Africa have meant that international and regional companies (banks and financial institutions) are setting up offices at the DIFC to tap into these potential markets, helping DIFC to become the regional business and financial hub for international companies.

Private sector reforms can cure Arab joblessness - The National

"When Tunisians and Egyptians flooded the streets of their capitals earlier this year, the explanations behind the protests were nearly as numerous as the people. Corruption and fossilised regimes were part of the equation. But the principal factor for the unrest, many said, was persistent and crippling unemployment.

"Jobs, jobs, jobs," Dominique Strauss-Kahn, the former IMF director, said about the Arab revolutions in April. "If you have a recovery in terms of macroeconomic figures that doesn't translate in any way to jobs … the people don't feel any change in their situation."

As new governments look to move beyond uprisings and address their people's long-standing grievances, one question needs an immediate answer: where will the jobs come from?

Soured stock deals spawn rash of disputes - The National

Declining stock markets have produced a spate of legal clashes between brokers and their clients over trades made at the peak of the market.

Brokerages are required to settle all commercial disputes before they can be dissolved, and as the number of firms looking to wind up has increased, so too have arguments between trading houses and disaffected clients.

"In the last three years, court cases related to stock market disputes have not just doubled, or tripled, they have quadrupled," said Mohammed Ali Yasin, the chief investment officer at CAPM Investment in Abu Dhabi.

Oman utility's stock advances on first day trading on market - The National

SMN Power Holding, an Omani electricity company part-owned by Mubadala Development, advanced on its first trading day since listing on the Muscat Securities Market.

The stock ended the day at 3.63 Omani rials, up 3.1 per cent from the initial public offering (IPO) price of 3.52 rials per share.

The IPO, which had been planned since the company was formed five years ago, was 1.7 times subscribed, according to a statement from one of the company's biggest shareholders, meaning that investors placed orders for 70 per cent more shares than were available.

Profit for RAK Properties falls 55% - The National

RAK Properties' profit declined by 55 per cent in the third quarter compared with the same period last year, despite the handover of units in three developments.

The Ras Al Khaimah developer's revenue increased to Dh201 million (US$54.7m) from Dh68m in the third quarter last year, as it completed the sale of apartments and villas in Julphar Towers and the Mina Al Arab projects in RAK, as well as the RAK Tower on Reem Island in Abu Dhabi.

But profit fell to Dh30.3m compared with Dh67.5m, as the cost of sales increased to Dh142m, up from Dh43m last year. The company did not explain the increase in a statement posted on the Abu Dhabi Securities Exchange.

Reform the key to investment - The National

Arab economies are promising to move towards political reform, steps that may help to entice the return of foreign investment.

Jordan, Libya and Qatar have indicated moves in the direction of democracy at the regional meeting of the World Economic Forum (WEF) in Jordan's Dead Sea resort.

While economics is usually at the forefront of WEF meetings, regional unrest this year has thrust political reform into the spotlight. Signals of more political openness are going down well with foreign investors.

Real jobs, not a culture of entitlement, the way forward - The National

Economic growth has been one of the unintended victims of the Arab Spring. But as the new democracies of the region consider their priorities, it is critical that they not become enemies of business.

The toppled regimes of Libya, Tunisia and Egypt were notorious for their tight control over economic as well as political activity, and liberalisation was often a cover for giving monopoly businesses to friends of the presidents.

Some governments in the region have responded to the Arab Spring by falling back on old solutions of patronage: handing out free housing, benefits or government jobs. This is a dead end. It only sows the seeds of crisis in the future by fostering a culture of entitlement, undermining productivity and increasing the size of government.

Saudi Prince’s Death Raises Succession Questions - Bloomberg

Saudi Arabia, the world’s largest oil exporter, is waiting for a successor to the crown prince as the ruling family gathers tomorrow for prayers after the death of Sultan bin Abdulaziz Al Saud.

The crown prince’s death on Oct. 22 has set in motion “a challenging moment for Saudi Arabia,” Tarik Yousef, a fellow at the Washington-based Brookings Institute, said in an interview in Jordan. “It’s time to address succession questions and react quickly. Observers are anxious about a political vacuum.”

Prince Nayef, born in 1934, is the most likely royal for the crown prince role among other elderly candidates from the Al Saud family. King Abdullah, who is 87, left a hospital in Riyadh last week after undergoing surgery to relieve back pain. He travelled to the U.S. in November for three months of medical care.

Saudi Cement Makers Beat Tadawul Index on $500 Billion Government Spending - Bloomberg

Saudi Arabia’s cement makers are beating the benchmark stock index on speculation they will benefit from about $500 billion in government spending and projects including the world’s tallest tower in Jeddah.

The Tadawul All Share Cement Index, which includes nine stocks, has climbed 19 percent this year, the third-best performance after media and retail stocks, and compared with a drop of 7.3 percent for Saudi Arabia’s Tadawul All Share Index. (SASEIDX) Cement companies offer a dividend yield of 6.6 percent, second only to transport companies, among the 15 index groups in the Tadawul.

“The sector will continue to benefit from large infrastructure spending under way in Saudi Arabia,” said Yong Wei Lee, who helps oversee about $1.2 billion as a senior fund manager at Emirates NBD Asset Management in Dubai.

Qatari Diar to Invest $543.8 Million in Egyptian Projects - Businessweek

Qatari Diar Real Estate Investment Co., the real-estate arm of the Persian Gulf country’s sovereign-wealth fund, signed a $543.8 million contract with Consolidated Contractors Co. to develop two projects in Egypt, according to an e-mailed statement from the Doha-based company.

The contract allocates $464.3 million to Qatari Diar’s “Nile Corniche” project in Cairo and $79.5 million to a coastal resort development in Sharm El Sheikh, it said. The projects will create 4,000 jobs in Egypt, the company said.

“This agreement is a testament to our commitment to bringing these two signature mixed-use developments to life,” Mohamed bin Ali Al Hedfa, group chief executive officer, said in the release. “Through these projects, Qatari Diar aims to support Egypt’s real-estate and tourism sectors and the country’s strong potential for long-term growth.”

Gulf Times – Qatar banks see flat profit growth amid QCB lending curbs

Qatar’s banking sector saw flat net profit growth during the first nine months of this year. The credit portfolio was about 58% of the total assets, while impairment losses/provisions presented a mixed picture.

Cumulative net profits of the eight listed banks registered a 22% growth during the January-September period this year against a 21% jump in the corresponding period of the previous year, according to the data collected from the Qatar Exchange.

The banks’ cumulative net profits stood at QR11.27bn and total assets were valued at QR563.65bn during the third quarter ended September this year.

BP to invest heavily in Oman’s gas sector | Oman Observer

UK oil giant BP has lined up a $15 billion investment into of Oman in recognition of the potential of its gas sector and as part of a significant push into gas in the Middle East.

This was disclosed by Dr Jonathan Evans, BP’s General Manager for Oman, in a recent interview with the Energy Exchange in which he discussed BP’s position in the tight gas-rich country.

The Middle East region is in dire need of gas to keep up with its industry needs and rising population. And as the demand for grand air-conditioned homes and sleek glass towers rises, so does the demand for electricity needed to power these projects and more. According to The Oxford Institute for Energy Studies, an estimated gas shortage of 73 billion cubic meters is experienced in the Middle East and North Africa (MENA) region.

Kuwait Stock Regulator Files Case on Membership Termination - Businessweek

Kuwait’s Capital Markets Authority filed a case in the country’s court to challenge a cabinet decree ending the tenure of three of its board members, according to an e-mailed statement today.

The market regulator received the government’s decree issued on Oct. 19 terminating the memberships of Saleh Mohammed al-Yousif, Yousif al-Ali and Naif Falah al-Hajraf, the statement said. The legal measures were taken to “emphasize the authority’s independence,” according to the statement.

Kuwaiti newspapers reported that the government revoked memberships of the three members for allegedly violating regulations by maintaining second jobs while serving on the board of the authority.

gulfnews : Why a road map is necessary to chart the course of change

The Arab Spring Report recommends that the Arab League and the GCC (Gulf Cooperation Council) must drive the reform process internally with coordinated external support at this critical juncture in history.

A medium- to long-term road map is required and should observe that benefits will only trickle down to the public when changes are made to political freedoms, economic equality, transparency and media across the Arab world, it said.

However, it also points out that international assistance has fallen well short of expectations. "The support promised by the G8 in Deauville in May 2011 has to a large extent not materialised.

Arab Spring, economic winter spook MENA investors | Reuters

Rattled first by political instability in the region and then by Europe's debt crisis, investors in the Middle East will remain on edge in the coming months, seeking out sparse opportunities obscured by numerous risks.

Since the Arab Spring -- a series of revolts against authoritarian regimes stretching from Tunisia in north Africa to Bahrain in the Gulf -- started sweeping across the region, investors have taken flight.

A sharp equities sell-off was followed by a stabilisation after investors realised that regional heavyweight Saudi Arabia had bought stability with a set of populist measures.

gulfnews : Growing in good and bad times

One of the first challenges the UAE faced after the union was declared, was to create a viable financial system that supported the economic ambitions of the young nation.

It involved the creation of an independent monetary authority and a financial regulator. The process began with the creation of the UAE Currency Board on May 19, 1973, through Union Law No (2) of 1973.

The Currency Board's first task was to issue a unified national currency to replace other currencies that were in circulation during the period immediately following the establishment of the federation in 1971.

Dubai property deals drop by 45% |

A new report by real estate consultancy CBRE has found that transactions in Dubai's property market fell by 45% in the third quarter as investors remain cautious about entering the market. The number of residential deals slumped to 1,459 in the quarter, down from 2,648 in the year-earlier period, CBRE noted. "There's a lot of uncertainty in the market still. Despite stabilising prices, there is still reluctance to get back into the market, certainly on the investor side. At the moment, people are still slightly risk averse," said Matthew Green, head of research and consultancy at CRBE.

UAE's Etisalat Indian unit to fight charges | Reuters

UAE telecoms operator Etisalat on Sunday said Indian affiliate Etisalat DB would contest charges filed by Indian authorities relating to the allocation of its 2G licence in January 2008.

India may have lost up to $39 billion in revenue when the telecoms ministry gave out lucrative licences and radio spectrum in 2007/08 at below-market prices as many ineligible firms won licences.

Reliance Telecom, Etisalat DB and Unitech Wireless were charged in April. Indian authorities framed these charges on Saturday, Etisalat said in a statement to the Abu Dhabi bourse, the latest step in the judicial process.

gulfnews : Bahrain predicts economy will grow 5% next year

Bahrain's economy is set to grow 5 per cent in 2012 after slowing this year, as the government implements a stimulus package and receives aid from other Gulf nations, said Shaikh Mohammad Bin Eisa Al Khalifa, chief executive officer of the country's Economic Development Board.

"A lot of it is stimulus spending," Shaikh Mohammad said yesterday in an interview in Jordan. "It is our largest capital-expenditure budget, plus the money coming in from the GCC."

Economic growth may slow to as little as two per cent this year, compared with an earlier forecast of five per cent, he said.

Iran moves to impeach economy minister -

Iran’s parliament has decided to impeach the minister of the economy over an alleged financial scandal amid mounting political infighting which has weakened the government of the president, Mahmoud Ahmadi-Nejad.

The presiding board of the parliament announced on Sunday its approval to begin the impeachment process which several parliamentarians have pushed for in recent weeks.

Shamsoddin Hosseini must appear before the parliament next week and answer questions raised in his impeachment letter including “the failure to implement law and [prevent] violation of law . . . vis-a-vis banks” and “no resistance against the interference of executive officials”.

WAM | World Economic Forum Considers Impact of Youth Leadership, Launches Global Shapers Middle East

In an effort to tap into the potential of the youth generation, especially given recent events in the Arab world, the World Economic Forum today launched the Global Shapers Middle East Community.

A WEF statement said :''The Global Shapers Community is a worldwide network of Hubs led by 20- to 30-year-olds who are exceptional in their potential, achievements and drive to make a positive contribution to their communities. The newest community to join the group was announced today at the World Economic Forum Special Meeting on Economic Growth and Job Creation in the Arab World, at the Dead Sea, Jordan.

"We are becoming increasingly aware that solutions to our global challenges must purposefully engage youth at all levels - locally, nationally, regionally and globally. This generation has the passion, dynamism and entrepreneurial spirit to shape the future," said Klaus Schwab, Founder and Executive Chairman, World Economic Forum.

Banking blues - Zawya

The global financial industry is in a downward spiral. More than 100,000 jobs have been lost in the banking sector across the developed world and more are no doubt on the way as the financial sector contemplates the horror of the EU debt crisis and the great deleveraging that continues to show no sign of abating.

Major international banks from the United States and the European Union are selling off units, restructuring, recapitalising, and shrinking their operations as they comply with stricter regulatory regimes and face poor economic growth in their main markets.

New trading rules has also reduced the prowess of commercial and investment banks in proprietary trading, commodity trading and more complex areas such as dark pools and high frequency trading, vastly reducing their money-making skills.

Post-war production - Zawya

With Colonel Muammar Gaddafi now dead, all eyes have moved to Libya's prized oil assets and how quickly the National Transitional Council can get oil production up and running to feed Libyans which now have much greater expectations from the new leadership.

It's ironic that the man who used his formidable oil assets as a weapon to hold his people - and the world - hostage, saw little reaction from oil markets upon his death.

The market fluttered briefly, dipping lower on news that the self-appointed 'king of kings' had been shot by rebel fighters, but it was quickly outweighed by news that France and Germany planned a summit to address the euro zone debt problems - the oil maverick's death was a mere blip in the day's trading session.