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Wednesday, 7 December 2011

Scandal puts Iranian banks on the defensive -

Iran’s weary bankers, the target of renewed sanctions by the US, Britain and the European Union, appear unsurprised by a financial scandal that is gripping the country. Instead, they see the alleged $2.8bn fraud as rooted in a poor regulatory and supervisory framework and widespread corruption.

“It would be surprising if no corruption happens in the existing banking system,” Hassan Sobhani-Nia, a banking analyst and former parliamentarian, told local media. The cynicism is not surprising.

Iran’s central bank tries to enforce recommendations envisaged in the first two pillars of the Basel accord on capital requirements, and, two years ago, the government of Mahmoud Ahmadi-Nejad, Iran’s president, announced it was embarking on banking reform as part of an economic recovery package. But the authorities have not moved to upgrade the country’s Islamic financial system and any revamping of banking rules to meet international standards has been slow, bankers say.

Saudi Arabia to issue 3 MVNO licences in 2012-regulator | Reuters

Saudi Arabia will issue three mobile virtual network operator (MVNO) licences in 2012, the country's telecoms regulator told Reuters, a move analysts say makes it unlikely the kingdom will award a fourth conventional mobile licence.

MVNOs are mobile service providers which lease excess network capacity from telecoms operators and are common in Europe. In the Gulf, only Oman has issued MVNO licences, with other governments seemingly keen to protect existing operators.

A spokesman for the Saudi Communications and Information Technology Commission (CITC) confirmed by email it would sell the MVNO licences next year, but did not provide more details.

Dubai, Qatar bounce back; Abu Dhabi down -

Saudi Arabia's petrochemical stocks lifted the kingdom's index to a four-week high.

Regional giant Saudi Basic Industries Corp (SABIC) gained 0.8 percent and Advanced Petrochemical rose 4.6 percent.

"Profits have been good this year and should stay pretty good, but the market hasn't responded so valuations are not far off where they were in the depths of 2009," said Paul Gamble, head of research at Jadwa Investment.

MENA stock markets close - December 7, 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)

Dubai Denies Plan to Restructure Debt of State-Owned Companies in 2012 - Bloomberg

Dubai’s government has no intention to restructure debt of state-owned companies next year and is prepared to support these companies through “various options.”

Dubai’s government may consider refinancing part of the debt obligations of state-owned companies next year “if necessary,” Dubai’s Media Office said in an e-mailed statement today.

Dubai’s Biggest Bank May Need $2.2 Billion to Cover Bad Debt, Goldman Says - Bloomberg

Emirates NBD PJSC, the United Arab Emirates’ biggest bank by assets, may need to set aside as much as 8 billion dirhams ($2.2 billion) by the end of 2013 to cover for bad loans, Goldman Sachs Group Inc (GS) said. The shares dropped.

“Looking at the guidance provided on asset quality trends, we calculate a provisioning range of 6 billion dirhams and 8 billion dirhams is required between the fourth-quarter of 2011 and the fourth-quarter of 2013,” analysts including Waleed Mohsin and Ali Shekofti wrote in a report dated today.

Emirates NBD is one of the biggest creditors to Dubai World, one of the emirate’s three main state-owned holding companies that reached a deal in March to delay payments on $25 billion of loans. It is also a key lender to units of Dubai Holding LLC, one of whose investment companies is in talks with banks to reschedule at least $10 billion of liabilities. The bank in October took over the unprofitable Dubai Bank on orders from the emirate’s ruler.

Persian Gulf Stocks: Almarai in Saudi Arabia and Emirates NBD - Businessweek

Saudi Arabia’s Tadawul All Share Index advanced 0.3 percent to 6,235.91, the highest intraday level since Nov. 15, at 1:50 p.m. in Riyadh. Dubai’s DFM General Index increased 0.2 percent. Abu Dhabi’s ADX General Index declined 0.3 percent.

Investors Chronicle - Qatar, a land of opportunity

Qatar looks to be the place to be at the moment, for there seems to be no shortage of funds when it comes to beefing up the state's infrastructure ahead of hosting the 2022 football World Cup and also its bid to hold the 2020 summer Olympics. Indeed, the authorities have already pledged to spend around £65bn on infrastructure ahead of the football tournament alone.

And patient investment by several UK companies is, at last, beginning to pay off. Construction group Carillion has just been awarded its first contract, worth £316m as part of a joint venture with Qatar Building for a major phase of the Msheireb Downtown Doha project. Work will begin this month on the new development which will include retail, commercial, residential and leisure facilities over a 31 hectares site.

Meanwhile, engineering and design consultant Atkins recently clinched a five-year contract worth more than £65m with Ashghal, Qatar's public works authority, to help upgrade the roads and drainage systems in the capital city Doha. Atkins opened an office in Doha nearly 10 years ago, and has already secured work on several highway projects.

Arabian Aerospace - Dubai gets another A380 - this time from Air France

The new service beg an service on December 5 with a daily service departing from Paris-Charles de Gaulle, adding a new option to the choice already offered by Air France and KLM from Dubai and Abu Dhabi.

For the 2011-12 winter season, Air France will operate six Airbus A380 aircraft from Paris-Charles de Gaulle, serving five destinations: New York-JFK, Johannesburg, Montreal, Washington and Dubai.

Air France’s A380 can accommodate up to 516 passengers in four classes, including nine in La Premiere on the main deck, 80 in Business on the upper deck, 38 in Premium Voyageur on the upper deck and 389 in Voyageur between the two decks.

WAM | ADIA appoints Global Head of Alternative Investments

The Abu Dhabi Investment Authority (ADIA) has appointed Benjamin C. Weston as Global Head of Alternative Investments.

Weston will be responsible, together with the Alternative Investments Department's senior management team, for developing strategy in the alternatives space and overseeing the Department's investment programme. Based in Abu Dhabi, Weston will report to Khalifa Almheiri, Executive Director of the Alternative Investments Department.

In a career spanning 30 years, Weston has been focused on the development and use of derivatives by investors, in addition to working closely with the hedge fund community, first as an adviser, and then as an investor.

Ras Al Khaimah 'A/A-1' ratings affirmed on continued growth and debt reduction -

Standard & Poor's Ratings Services today affirmed its long- and short-term 'A/A-1' foreign and local currency sovereign credit ratings on the Emirate of Ras Al Khaimah (RAK). The outlook is stable. The transfer and convertibility assessment on RAK is 'AA+'.

The affirmation reflects RAK's membership of the United Arab Emirates (UAE), which in our view provides an anchor and potential support for political and economic stability. It also reflects sustained economic growth and government surpluses, which are strengthening RAK's slight net creditor position.

In our opinion, membership of the UAE benefits RAK's economic and political stability, and the UAE would provide external support in situations of political, economic, or financial stress. The federal government, funded mostly by Abu Dhabi, meets most of the current expenditure costs of the seven emirates that make up the UAE.

Dubai Shares Rise, End 2-Day Losing Streak on Europe, Dubai Debt - Businessweek

Dubai shares rose for the first time in three days on bets European leaders will step up efforts to fight the region’s debt crisis and after a Dubai Holding LLC unit said it will meet a debt repayment in February.

Emaar Properties PJSC, the developer of the world’s tallest skyscraper, climbed 1.1 percent after tumbling 3.6 percent yesterday, while Drake & Scull International PJSC advanced for the second time this week. The DFM General Index gained 0.2 percent to 1,386.02 at 11:38 a.m. in Dubai, paring the drop for the year to 15 percent. The MSCI Emerging Markets Index jumped 1 percent.

German Finance Minister Wolfgang Schaeuble said Standard & Poor’s move to place 15 euro nations, including Germany and France, on review for possible credit downgrades will help force European leaders to ratchet up efforts to resolve the debt crisis at their summit in Brussels from Dec. 8 to 9. The ratings company said cuts would depend on the meeting’s outcome. The Euro STOXX 50 Future advanced 1.3 percent.

Creditors OK Global Investment bond payment delay to June - Yahoo!

Kuwait's Global Investment House said on Wednesday bondholders have agreed to delay repayment of a 45 million dinar ($163 million) bond to next June from April.

The deferral of the bond repayment to June 10 from April 25
is to help Global in its talks with creditors regarding a wider
debt restructuring.

Global said in September that it had asked bank creditors to
delay principal repayments on debt due in December as part of a move to renegotiate a $1.7 billion restructuring agreement
signed in 2009.

Apicorp seeks $533 mln from local banks - MEED - Yahoo!

Arab Petroleum Investments
Corporation (Apicorp) wants to raise at least 2 billion riyals
($533 million) from local Saudi Arabian banks, MEED said on
Wednesday, citing sources familiar with the matter.

The company is in talks with four or five banks to fund the
club loan, which will be used to finance its ongoing lending
activities. Apicorp could seek to raise more than $533 million.

"Apicorp had been looking at international markets to raise
money, but that has become more difficult recently. With so much
local liquidity, they should get a good deal from local banks,"
says one banker close to the deal told London-based Middle East
Economic Digest.

BERNAMA - UAE Businesswomen Keen To Pursue Investment Partnerships

UAE banks face fresh headwinds, says Fitch -

Banks in the United Arab Emirates face new headwinds due to a weakening global economy and Abu Dhabi's move to scale back spending and delay construction projects, Fitch Ratings said on Tuesday.

In a report, Fitch said the global slowdown will affect key sectors such as trade, tourism and services while a fragile real estate sector and problems at Dubai state-linked firms and other companies "pose significant asset quality challenges".

The ratings agency also cited the short-term impact of slowing projects in the emirate of Abu Dhabi which has taken a tough line on budget spending and jettisoned non-core infrastructure plans, such as building local branches of the Guggenheim and Louvre museums.

Moody's Concerned About Dubai's Medium-Term Refinancing Needs -

Ratings agency Moody's Investor Service has warned that three Dubai government-related entities that have debt repayments worth $3.8 billion due in 2012 may face refinancing risks, and raised wider concerns over the emirate's potential need for further financial support in the absence of capital-raising measures.

Moody's, in a report published Tuesday, said Dubai Holding Commercial Operations Group, or DHCOG, Jebel Ali Free Zone, or JAFZ, and DIFC Investments were all facing refinancing risks and may experience ratings volatility as they move closer to next year's debt maturity dates.

"The refinancing risk affecting DHCOG, DIFCI and JAFZ is exacerbated by the fact that they entered the crisis with weak liquidity profiles and their reliance on what turned out to be weaker than anticipated growth trajectories for some business segments, which determined their ability to service their short to medium-term debt maturities," Moody's said.

gulfnews : Arab world must manage transition risks: IMF chief

The Arab world is moving into the most difficult period in its history and it needs to manage the risks of transitions well in order to reap the fruits of the Arab Spring, Christine Lagarde, Managing Director, International Monetary Fund (IMF), said in a speech on Tuesday.

“We are in the middle of a delicate transition between “rejecting the past” and “defining the future”, a key psychological inflexion point,” Lagarde told audiences at the Woodrow Wilson Center.

“One year on, the region stands at a critical juncture. The transition is going through a rocky patch, and the challenges are substantial, but the light remains on. And the region, together with its international partners, must make sure that this light is never extinguished.

gulfnews : Emirates NBD poised for sukuk sale this month

Emirates NBD, the UAE's largest bank by assets, intends to sell an Islamic bond (sukuk) this month, said Rick Pudner, CEO of the bank yesterday.

Emirates Islamic Bank (EIB), the Islamic bank belonging to the group, is likely to launch a benchmark-sized issue.

"We are aiming for the launch of the issue sometime this month. We have not yet finalised the size of the issue. It will largely depend on the price," said Pudner.

Dubai's first bulk auction of repossessed properties - The National

The Dubai Land Department has sold eight foreclosed properties at auction in the first bulk sale of repossessed homes in the emirate.

The sale may clear the way for lenders to offload millions of dirhams in repossessed property. The homes sold between Dh740,000 (US$201,450) and Dh6 million, well above the minimum prices.

"It was good news to see the [foreclosure] process start to work like other jurisdictions," said Jody Glenn Waugh, a partner with Al Tamimi, a law firm.

DIFC Courts claimants should be in the know - The National

The jurisdiction of Dubai International Financial Centre (DIFC) Courts recently has been expanded to include entities not located in the DIFC. Robert Jordan, a partner in charge of the Middle East practice of the international law firm Baker Botts, gives a few tips to prospective claimants.

Saudi Arabia’s Crude Production Rises to Highest Level in Three Decades - Bloomberg

Saudi Arabia, the world’s biggest crude exporter, boosted output last month to the most in more than three decades to meet customer demand.

“We produced 10 million and 40 barrels in November because that’s what the customers wanted,” Ali al-Naimi said in an interview in Durban, South Africa, where he is attending a climate conference. That’s the highest level since at least 1980, according to data from the U.S. Energy Department. The desert nation pumped 9.4 million barrels a day in October, al- Naimi said on Nov. 20.

Saudi Arabia, the largest and most influential member of the Organization of Petroleum Exporting Countries, will meet with other members of the group on Dec. 14 in Vienna to set output targets for early 2012. The kingdom raised supply this year to make up for halted production in Libya and help prevent oil prices from surging.

Tough economic challenges facing Middle East region » Kuwait Times Website

The region will face tough economic challenges in the wake of continuing political turmoil, remarked an economist. Speaking at the 'Economist Road show' held yesterday at the Salwa Sabah Hall in Salmiya, Simon Williams Chief Economist, HSBC Middle East, forecasted that continuing political transition in the Arab world, (even without being affected by the current global slowdown), would pose a threat to regional growth and stability.

He suggested that West-led economic downturn is unlikely to trigger a repeat of 2008 slump in the Middle East and North Africa. "Exactly one year ago, during the same road show, [which HSBC organizes annually], we never knew that unprecedented political shift could happen in the Arab world," he told an audience comprising mostly bankers, economists and businessmen.

Now, we are witnessing political transition in Tunisia, Egypt and Libya and there are continuing struggles in some parts of the region. What lies ahead, we don't know yet, but I am sure there is no turning back to the old system, and that everyone is anxious because many of us do not know what lies ahead," he asserted.

gulfnews : UAE faces lower growth, but outlook positive

The UAE economy could experience a contraction in gross domestic product (GDP) next year, mostly due to external factors, but the country is in a much better position in terms of meeting its obligations and driving domestic investments, said Bill O'Neill, Chief Investment Officer for Europe, Middle East and Africa (EMEA) at Merrill Lynch Wealth Management.
Merrill Lynch has projected 2.6 per cent GDP growth for the UAE in 2012 compared to 3.9 per cent growth it projected last year. "All the negative factors affecting the UAE economy are external. The European crisis and the political turmoil in the region could have an impact on the economy and the domestic asset prices. But the country's strong fiscal position and financial muscle of sovereign wealth funds will keep the economy and the financial system adequately liquid," said O'Neill.
Overall the global investment climate will be clouded by the spectre of recession across Europe, slower growth and raging inflation across the emerging economies. A disorderly Eurozone sovereign default and/or withdrawal from the common currency head the major risks. Other potential negatives include continued policy paralysis in Europe, contagion to other regions from Eurozone deleveraging, possible currency wars, the risk of bank runs (a rapid withdrawal of deposits) and over-zealous fiscal austerity.

Moody's warns over Dubai debt - The National

Three Dubai Government-related companies that have a total of US$3.8 billion (Dh13.9bn) maturing next year may have to resort to state support to repay their debt, Moody's Investors Service warns.

Overall, Dubai companies face $10bn in repayments due next year but most is expected to be refinanced or repaid without difficulty.

The immediate concern surrounds debt coming due for Jebel Ali Free Zone (Jafza), Dubai International Financial Centre Investments (DIFCI), and Dubai Holding Commercial Operations Group (DHCOG), the private holding company owned by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai.

Dubai Holding unit to repay $500m

Dubai Holding Commercial Operations Group, or DHCOG, the real-estate and hospitality unit of Dubai Holding, said on Tuesday that it would repay a $500 million bond maturing in February 2012 from its own internal cash flow.

“DHCOG will repay the $500 million bond when it matures in February 2012 from its own internal cash flow,” the DHCOG said in an e-mailed statement.

DHCOG’s promise of repayment came amid concern voiced by credit rating firm Moody’s Investors Service about Dubai government-related companies and their ability to repay debts next year.