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Thursday, 8 December 2011

MENA stock markets close - December 8, 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 May ‘Muddle’ Through Debt Strategy Next Year, BofA Says - Businessweek

Dubai, which was on the brink of a default in 2009, may “muddle” through a financing strategy next year as state-linked companies sell assets and refinance debt, Bank of America Merrill Lynch said.

“A perilous exercise of identifying fiscal deficit financing sources may be showing that a mix of domestic banking sector and Abu Dhabi support helped Dubai muddle through so far, and this (opaque) strategy could continue into 2012,” London- based analyst Jean-Michel Saliba wrote in a report today.

Dubai’s government yesterday denied a report that it plans to restructure debt of state-owned companies next year and said it was ready to support them through “various options.” State- owned Dubai Holding Commercial Operations Group LLC, Jebel Ali Free Zone FZE and DIFC Investments LLC, which have a combined $3.8 billion of debt maturing next year, are all facing refinancing risks and may experience “ratings volatility” as they move closer to the maturity dates, Moody’s Investors Service said Dec. 6.

Dubai’s Shares Decline Before Europe Crisis Meeting; Dubai Financial Drops - Bloomberg

Dubai’s shares declined for the third day this week ahead of a meeting of European leaders to discuss how to contain the region’s sovereign debt crisis.

Dubai Financial Market PJSC (DFM), the only Persian Gulf bourse to sell shares to the public, headed for the lowest close since Nov. 28. Drake & Scull International PJSC (DSI), a construction company, lost as much as 1.2 percent. The benchmark DFM General Index (DFMGI) retreated 0.3 percent to 1,382.26 at 12:47 p.m. in the emirate, trimming this week’s gain to 0.2 percent. About 19 million shares traded in Dubai today compared with a six-month daily average of 70 million shares, according to data compiled by Bloomberg.

“All eyes are on what’s going to happen in the summit,” said Haissam Arabi, Dubai-based chief executive officer at Gulfmena Investments. “We are in a standstill, wait-and-see mode.”

Ferrostaal has new Abu Dhabi ties - The National

An Abu Dhabi company has acquired a stake in the owner of Ferrostaal, a German engineering company, after one of the emirate's wealth funds divested from the company in controversial circumstances.

International Petroleum Investment Company (Ipic), which is owned by the Abu Dhabi Government, sold its stake in Ferrostaal after the German company agreed to pay fines for alleged bribery that took place before Ipic's involvement.

Commodore Contracting, a privately owned construction company, has agreed to acquire a 25 per cent stake in Ferrostaal's new owner, MPC Industries, which took control of the engineering group on November 28.

Refining: Domestic processing capacity is rising quickly -

Immaculately dressed with neatly cropped hair, Baz Karim gestures to the rows of vehicles lining up in the loading bay outside the Erbil refinery. More than 200 trucks pass through every day, picking up oil products such as fuel oil and benzene, before delivering them to cement and steel factories, and distribution networks around the region.

The Erbil refinery, the fourth largest in Iraq and the largest private sector one, is a shiny new symbol of private, local investment in Kurdistan – and of the region’s ambitions.

It is part of the Kar Group that Mr Karim founded in 1999, a services company for the oil and gas industry. The company started in fuel trading during the period of United Nations sanctions on Iraq, before the US-led invasion in 2003, supplying fuels funded by non-governmental organisations to the rural poor in Kurdistan.

Saudi oil price rise reflects tight market -

Most retailers wouldn’t dream of raising prices in a recession.
And yet in the oil market, that is precisely what Saudi Arabia appears to have done.

The world’s top oil exporter on Monday announced its official selling prices – or OSPs – and they came as a rather nasty shock to its refiner clients, especially those in Asia.

gulfnews : Profits of Mideast airlines scaled down

Middle East airlines are expected to earn profits of $400 million (Dh1.47 billion) in 2011, down from an initially forecast $800 million, as rising fuel costs hit carriers across the globe, the International Air Transport Association (IATA) said yesterday.

The aviation trade body also revised downward the industry outlook for 2012, anticipating that the Middle East carriers will post profits of $300 million, less than half the previously forecast $700 million profit, as long-haul market conditions deteriorate, in particular those linked to the weak European economies.

Overall, IATA said that for 2011, global profitability remains "weak but unchanged" at $6.9 billion for a net margin of 1.2 per cent. Looking ahead to 2012, the industry body downgraded its central forecast for airline profits from $4.9 billion to $3.5 billion for a net margin of 0.6 per cent as Eurozone crisis pose the biggest risk to the industry's profits.

GCC suffers from lack of regional commerce - The National

Gulf economies have more in common with the US, Europe and Asia than with each other, raising their vulnerability to shocks and threatening efforts to diversify, an IMF report has warned.

Poor integration in the region reflected low trade and financial flows between states, the IMF said in the report released yesterday.

"The GCC countries need to expand and deepen economic diversification and become more complementary in intra-regional trade and financial flows," Serhan Cevik, an IMF economist, wrote in the report.

UAE central bank amends liquidity rules - Arab News

The United Arab Emirates' central bank has approved amendments to liquidity rules for the OPEC member's banks, it said on Wednesday.

"The central bank board reviewed a proposed liquidity regulation for banks operating in the UAE and instructed introduction of some amendments to it," it said in a statement.

The central bank did not give details about measures approved by the board on Tuesday. Its spokesman declined to comment.

gulfnews : UAE well placed to withstand global slowdown

The UAE's economy and the banking system are well positioned to withstand any global economic downturn resulting from Europe's debt crisis, said Jonathan Morris, chief executive officer of Standard Chartered Bank in the UAE.

"We expect the economy to grow at a slower rate in 2012 compared to the 3.8 per cent growth projected for 2011. But the country's strong fiscal position gives it enough room to spend its way out of a potential slowdown. This is true about most Gulf economies," said Morris.

While the Arab Spring had minimal negative impact on economic activity in the UAE, he said, the relative strength of the economy and the safe haven appeal attracted fund flows into the country.

Dubai looks to calm bond markets -

The Dubai government sought to calm bond markets on Wednesday, saying it would only refinance bonds rather than restructure some of the $3.8bn in capital markets maturities coming due in 2012.

Sheikh Ahmed bin Saeed Al Maktoum, chairman of the emirate’s supreme fiscal committee, denied “rumours” that the government would restructure upcoming maturities, adding it may “refinance” maturities.

The moves come after markets reacted to a senior government official quoted in the Financial Times who said Dubai would seek a “commercial agreement” with bondholders.

Dubai says it has no plans to restructure state debt next year, but refinancing is an option - The Washington Post

Dubai said Wednesday it has no plans to restructure billions of dollars of state-linked debt next year, in an apparent effort to quiet suggestions it is facing new financial difficulties.

The statement issued by the emirate’s official media office followed media reports and assessments by credit rating firm Moody’s Investors Service a day earlier that renewed questions about Dubai’s ability to tackle its more than $100 billion pile of debt.

Moody’s estimates Dubai and its government-backed companies have some $13.8 billion in bank and bond debt coming due before the end of next year. The rating firm raised particular concerns about the financial sustainability of three companies that owe a combined $3.8 billion in 2012.

Gulf Daily News » Bahrain's economy to grow 2.4pc next year

Bahrain's economy is likely to grow from two per cent this year to 2.4pc next year on the back of government investment.

But across the GCC and in spite of stable oil prices, growth is likely to slip from this year's regional average of 6.9pc to 3.4pc, according to Merrill Lynch Wealth Management.

"Investors should focus on investments that offer yield, quality and diversification amid expectations that the global economy will avoid recession but experience fragile growth in 2012, according to the investment house's chief investment officer for Europe, Middle East and Africa (EMEA) Bill O'Neill.

Abu Dhabi reins in grand ambitions -

An artist’s rendering of Saadiyat Island with Frank Gehry's Guggenheim museum on the left

An artist’s rendering of Saadiyat Island with Frank Gehry’s Guggenheim museum on the left. The construction timeline has been extended

It is basking in oil-fuelled cash at a time of global financial turbulence. And it has been spared the threatening ripples of the Arab spring. Yet Abu Dhabi, the wealthy capital of the United Arab Emirates, is not banking on immunity. Instead, it has been creating its own stress.

For months, the government has thrown itself into a spending review that is leading to a rethinking of priorities in an emirate that has been trying to transform its oil-dependent economy, developing whole new cities in projects ranging from vast cultural centres to a semiconductors industry.

The review has cast doubt on the future of Saadiyat Island, designed to be the sprawling site of a new Arab cultural city with world-class museums surrounded by hotels, golf courses and luxury villas. The timeline on the museums projects, including the Frank Gehry-designed Guggenheim, has been extended.

A Step Forward For Islamic Finance Authenticity: IIBR | alifarabia

‘Don’t cheat the world of your contribution. Give it what you’ve got.’ – Steven Pressfield

On November 22, 2011, the world’s first Islamic interbank benchmark rate (IIBR) was launched. It is the result of a collaborative approach taken by many Islamic financial institution, industry associations, and Shariah scholars, over the course of 24 months, to a decades-old industry challenge: how to decouple Islamic finance from a conventional Western pricing benchmark (LIBOR) and the law of necessity when an ‘Islamic’ alternative was not available. The objective was to support and preserve Islamic finance authenticity.

The IIBR is an interbank benchmark that offers a reliable and realistic benchmark to better measure the cost of funding for Islamic financial institutions. The IIBR, contributed pricing for Shariah compliant funding, is the DNA of Islamic banking, as the industry, today, is commercial banking over investment banking.