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Wednesday, 14 December 2011

MSCI bourse status fails to excite investors -

MSCI, the index provider, is due to announce on Thursday whether the stock markets of the United Arab Emirates and Qatar have achieved coveted emerging markets status.

At issue are the performance of relatively new delivery versus payment systems, and Qatar’s limit on foreign ownership of stocks.

MENA stock markets close - December 14, 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)

Saudi Shares Advance First Time in Four Days on New Economy Team - Bloomberg

Saudi Arabian shares gained for the first time in four days after a new economy team was appointed to oversee a record spending plan aimed at reducing unemployment and reliance on crude exports.

Sahara Petrochemical Co. (SPC), a Saudi chemicals maker, gained the most in a month, rising as high as 4.1 percent. Jabal Omar Development Co. (JOMAR) had the highest close in three weeks after securing a government loan. The Tadawul All Share Index (SASEIDX) advanced 0.8 percent to 6,238.87 at the 3:30 p.m. close in Riyadh. Oman’s MSM30 Index (MSM30) rose 1.2 percent and Qatar’s QE Index (DSM) climbed 0.1 percent.

Saudi Arabia, the world’s largest exporter of oil, yesterday appointed Fahad al-Mubarak as central bank governor, replacing Muhammad al-Jasser, who was named economy and planning minister. Tawfiq al-Rabea was appointed trade and industry minister. The high-level changes follow the naming of Prince Nayef bin Abdulaziz as heir to the throne in October.

$5 billion of projects queue up for Abu Dhabi's Kizad - The National

Khalifa Industrial Zone Abu Dhabi (Kizad) has US$5 billion (Dh18.4bn) of committed projects from over 30 industrial companies spanning glass to clean technology, says a senior official.

The industrial zone in Al Taweelah hopes to announce the names of the firms in the first half of next year, said Khaled Salmeen, executive vice president of Industrial Zones, Abu Dhabi Ports Company (ADPC), the parent company of Kizad.

"We have US$5 billion of committed projects," he said. "We are able to attract very valuable industries with huge know-how."

Gulf maintains a healthy credit outlook -

The Gulf Co-operation Council credit market has held up well in recent months despite shaky global conditions.

Qatar’s recently issued 2017 dollar bond and the Abu Dhabi bond maturing in 2019 both yield less than 3.5 per cent – near the rate on 10-year French bonds. Credit default swaps on Dubai have been volatile this year but remain fairly anchored. Dubai CDS finished last week at 450 basis points – lower than the CDS on Italy, which have been trading at more than 500 bps.

Coke invests $980m in Saudi drinks company -

Coca-Cola has made the biggest investment into the Middle East’s consumer packaged goods sector through a $980m deal to buy into Saudi Arabia’s drinks company Aujan Group.

The US multinational will take a roughly 50 per cent equity stake in Aujan, an established drinks distributor in the Middle East and north Africa founded more than a century ago in the eastern province of Saudi Arabia.

Aujan has doubled revenues since 2006 to reach $850m this year and hopes to double it again over the next five years as the newly-formed partnership uses the financial clout of Coca-Cola to expand across the region, especially in fast-growing markets such as Egypt and Iraq, according to its chairman, Adel Aujan.

FT Alphaville » The Saudi production puzzle

Last week it transpired that Saudi Arabian oil production had hit its highest level in three years.

As Bloomberg reported at the time:

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.

Jabal Omar to get 3 bln riyal Saudi govt loan | Reuters

Saudi developer Jabal Omar has signed a loan agreement for 3 billion riyals ($800 million) with the finance ministry to complete some of its projects in Mecca, the company announced late on Tuesday.

"The loan will be repayed over eight years, two of which are a grace period," according to a statement issued via the bourse.

Jabal Omar is in charge of developing an area near the Grand Mosque in Mecca, Islam's holiest city. The project will include luxury hotels, shops and houses.

Carlyle buys 42% of Saudi Arabia's Alamar Foods - MarketWatch

U.S.-based private-equity firm The Carlyle Group Wednesday said it purchased a 42% stake in Alamar Foods, the franchise operator of Domino's pizza and Wendy's hamburgers in the Middle East, from Saudi Arabia Al Jammaz family.

Carlyle, in an emailed statement, said the transaction closed Dec. 14. No financial details were disclosed.

Alamar operates Domino's and Wendy's in the region, with the exception of Wendy's in Saudi Arabia, through 185 restaurants across 11 countries and a food processor supplying the quick service and casual dining restaurant industry.

Dubai Shares Extend Gains on MSCI Speculation; Emaar Advances - Bloomberg

Dubai shares extended gains for a third day in four on speculation by investors that the United Arab Emirates may be upgraded to emerging-market status by MSCI Inc. (MSCI) tonight.

Emaar Properties PJSC (EMAAR), the builder of the world’s tallest skyscraper, gained more than 1 percent. Arabtec Holding CO. (ARTC), the country’s biggest construction company, reached its highest intraday price since January. The benchmark DFM General Index (DFMGI) advanced 0.3 percent at 11:10 a.m. in Dubai to 1,396.50, extending the weekly gains to 0.9 percent. Oman’s MSM30 Index (MSM30) soared 1.1 percent and Qatar’s QE Index (DSM) climbed less than 0.1 percent.

“Investors are betting that Dubai stocks will benefit if the U.A.E. gets upgraded to emerging-market status by MSCI,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities.

OPEC Discusses 30 Million-Barrel Ceiling - Bloomberg

Members of the Organization of Petroleum Exporting Countries including Iran and Saudi Arabia agreed that the group should set a production ceiling of 30 million barrels a day, an OPEC delegate said.

The group may not allocate individual quotas to each of the 12 nations because there may be disagreement on how the total oil output should be distributed, the person said, declining to be identified because the matter hasn’t been decided.

Oil ministers arrived in Vienna this week for their meeting today, when they will decide output levels for the first half of 2012. OPEC’s last gathering in June broke up without consensus when six members including Iran and Venezuela opposed a push to pump more oil by Saudi Arabia and three other Gulf nations, which went ahead with an increase to make up for Libyan supplies lost during an armed rebellion to oust then leader Muammar Qaddafi. The group will begin discussions at 10 a.m. local time and a press conference is scheduled for 4 p.m.

To tame oil prices, follow Saudi's steps: IEA official | Reuters

Major oil producers must follow top exporter Saudi Arabia in increasing output to help tame high prices that threaten global economic growth, the chief economist for the International Energy Agency (IEA) said on Wednesday.

Oil prices, which at $109 a barrel already pose a "major risk" to the fragile global economy, could rise further to $150 in coming years if there is no more investment to boost oil output in the Middle East, said IEA's Fatih Birol.

His comments come ahead of Wednesday's meeting of the Organization of the Petroleum Exporting Countries, where ministers are expected to agree to a new collective output target that legitimizes a big increase in supply over the last six months.

Saudi Arabia’s King Appoints New Economic Team Amid Record Spending Plans - Bloomberg

Saudi Arabia, the Arab world’s biggest economy, named a new central bank head and economy minister as the kingdom presses forward with a record spending plan aimed at reducing unemployment and diversifying an oil- dependent economy.

Fahad al-Mubarak was appointed central bank governor, replacing Muhammad al-Jasser, who was named economy and planning minister, state run al-Ikhbariya television said yesterday. Tawfiq al-Rabea was appointed trade and industry minister.

Saudi Arabia’s drive to create jobs comes amid a wave of popular uprisings in the Middle East, triggered in part by unemployment. King Abdullah announced a $130 billion spending plan in the first quarter and in August 2010 unveiled a $384 billion plan to develop transportation, housing and education.

gulfnews : UAE ready with draft federal insolvency law

The UAE is ready with the first draft of a new Federal Insolvency Law, which will be presented to the Cabinet early next year once a technical committee completes a thorough evaluation of its provisions, a senior official from the Ministry of Finance said yesterday.

"The UAE Ministry of Finance was mandated with the responsibility of creating a draft law dealing with insolvency and bankruptcy. The Ministry completed the draft and passed it on a technical committee in November. Once the committee completes its evaluation and amendments, the final draft will be submitted to the government," said Ahmad Mahmoud Al Hammadi, Assistant Undersecretary in the Ministry of Finance.

Speaking at a conference on insolvency reforms in the Middle East and North Africa (Mena) organised by Hawkama Institute of Corporate Governance, Al Hammadi said the Finance Ministry and the government are working on a new law that will bridge the gaps in the existing law.

2ndUPDATE: Qatar Petroleum: Closes Financing On $10.4 Billion Barzan Project

State-run Qatar Petroleum, or QP, said Tuesday it had successfully closed the debt and export credit agency-backed financing portions for its $10.4 billion Barzan gas project, which will supply natural gas to meet rapidly-rising domestic demand, against difficult overall conditions in global debt markets.

In an emailed statement, Qatar Petroleum said the project, in which Exxon Mobil Corp. (XOM) is a partner, will be financed with up to 30% equity and the remaining 70% by a combination of banks and export credit agencies, or ECAs, in the form of a syndicated loan expected to total $7.2 billion. Exxon Mobil also provided a pro-rata portion of the senior debt.

One Doha-based banker said a positive outlook for Qatar's hydrocarbons-driven economy--projected by the International Monetary Fund in September to see real gross domestic product growth of 18.7% in 2011--was one key incentive for investors.

UAE’s bankruptcy laws: unworkable | beyondbrics | News and views on emerging markets from the Financial Times –

The UAE’s insolvency laws have been in force since 1993 but lawyers are hard pressed to come up with a single example of their being used to wind down a struggling company. Untested and widely regarded as unworkable, they are in bad need of replacement.

The juddering impact of the global financial crisis has persuaded the government to draft a new set of regulations, which will hopefully allow companies to conduct orderly wind-downs through the courts.

It won’t be easy. Bankruptcy carries a heavy stigma anywhere but especially in the Gulf, where owners of small businesses can bear personal responsibility and, when businesses fail, often flee the country rather than face public humiliation or, worse, imprisonment. Even then, with nobody seeking the courts’ protection, it takes on average more than five years to wind a company down under the current framework.

MENA Projects: Saudi Arabia Still the Driving Force; UAE Slowdown Continues | alifarabia

In October this year, $16.9bn of projects were awarded across MENA. On a cumulative basis, just over $82bn of projects have been awarded across the region in the year to end October. This compares favourably with FY10 when almost $80bn of projects were awarded. Saudi Arabia is the main driving force accounting for a third of the 2011 total. Iraq accounts for 20%.The UAE has awarded almost $14bn in the year to end October, almost $20bn below FY10.