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Thursday, 15 December 2011

Regional upheavals test relative Saudi stability -

On the fringes of Deera Square, dubbed “Chop-Chop Square” by foreigners for the public beheadings carried out there, Ali Mohammed explained how oil-rich Saudi Arabia had spent heavily to avoid the popular uprisings that have toppled other Arab regimes.

“In these other countries, the government keeps all the money,” said Mr Mohammed, a civil servant paid a more than liveable SR16,000 ($4,300) a month. “Here, it is half and half.”

Any talk of revolution in Riyadh has proved exaggerated. But the Arab uprisings have focused attention on the contrast between the Saudi monarchy’s increasing financial largesse and its reluctance to allow more than minimal political change.

State Grid, Oman Oil, Brookfield to Bid for Portugal’s Sale of REN Stake - Bloomberg

The Portuguese government said it approved State Grid International of China, Oman Oil Co. and Brookfield Infrastructure Group Corp. as bidders in the planned sale of stakes in REN-Redes Energeticas Nacionais (RENE) SA.

National Grid Plc withdrew a proposal, Luis Marques Guedes, the secretary of state for the presidency of the council of ministers, said today at a press conference in Lisbon. The government aims to complete the sale as soon as possible, Marques Guedes said.

Portugal in April became the third euro-area country after Greece and Ireland to request a bailout from the European Union and the International Monetary Fund. As part of that aid package, the government will sell its stakes in energy companies including REN and utility EDP-Energias de Portugal SA.

Qatar Central Bank to Hold Lenders’ Islamic Assets to Maturity - Businessweek

Qatari commercial banks will be required to transfer accounts from their Islamic divisions into a portfolio to be held by the central bank until they mature, under a rule separating the two kinds of finance.

“These will be carried in a portfolio, outside the activity of their business,” Central Bank Governor Sheikh Abdullah bin Saud Al Thani said in a telephone interview today. “We are not in the business of mixing the Islamic with the non- Islamic by the end of the year.”

The central bank sent a circular to commercial lenders in February ordering them to stop taking new Islamic deposits immediately and shut Islamic branches by year-end on concern they may be using funds from the conventional bank for Islamic loans. Banks have the option to transfer Sharia-compliant accounts to an Islamic bank, Sheikh Abdullah said in an interview with the Qatar News Agency on Dec. 11.

MIDEAST STOCKS-UAE markets fall after MSCI snub; Qatar down | Reuters

The United Arab Emirates' main markets fell more than 1 percent and Qatar ended lower on Thursday after the bourses failed for the third time to gain emerging market status from influential index compiler MSCI.

MSCI, which had already denied a promotion to the UAE and Qatar in 2009 and 2010, cited investor concerns on the effectiveness of a new delivery-versus-payment system, or DvP, at some of the bourses. Stringent foreign ownership limits in Qatari stocks was also an impediment, it said.

Dubai's benchmark fell 1.3 percent and Abu Dhabi lost 1.2 percent to its lowest finish since March 2009.

MSCI to UAE and Qatar: keep trying | beyondbrics –

It’s late, the doors are closed, and poor Qatar and the United Arab Emirates aren’t getting in.

Perhaps they didn’t have the right shoes, their hair was not quite right or they just simply didn’t look the part, either way the message from the bouncer on Thursday was clear, just like the last time: try again in six months time.

Well, it wasn’t a nightclub. It was the MSCI emerging market index that Qatar the UAE were trying to enter. But the disappointment was just as real.

Standard Chartered Sees Challenging 2012 For Mideast; Low Growth - Exec - Zawya

Standard Chartered (STAN.LN), the U.K-based lender with an emerging markets focus, expects to post low single digit growth in the Middle East next year as the Arab Spring and global financial turbulence weighs on economic sentiment in the region, a senior executive at the bank said Thursday.

"It (2012) could be quite challenging because the Middle East is very much a part of the globalized world. We (the Middle East) are not immune to what is happening to the rest of the world," V. Shankar, who was recently appointed group executive director of the bank, told Zawya Dow Jones in an interview.

In addition, he said the outlook for the U.S. isn't rosy either, the global cost of funding is rising as banks are deleveraging and that there could be a problem in availability in dollar funding in the Middle East.

MENA stock markets close - December 15, 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 reshuffle: reinforcing economy team | beyondbrics –

King Abdullah of Saudi Arabia appointed two heavyweights to head up the ministry of economy and planning, and the ministry of commerce and industry at a time when consolidating economic planning is crucial to maximizing the benefits of the huge spending earmarked for the coming years.

Muhammad al-Jasser was transferred from his role as central bank governor to head the ministry of economy, in a move that observers said should bolster the ministry which has in the past taken somewhat of a back seat, at least in public.

But others say the job change could be a downgrade for al-Jasser, who moves after only three years at the central bank where he oversaw half a trillion dollars of the country’s wealth.

Aldar to Convert Mubadala-Held Bonds to Shares at Lower End of Price Range - Bloomberg

Aldar Properties PJSC (ALDAR) will convert bonds into shares at the lower end of their price range as Abu Dhabi’s biggest real-estate company grapples with tumbling property prices and declining market value. The shares dropped.

Aldar will today convert 2.1 billion dirhams worth of bonds held by Mubadala Development Co., an investor with stakes in Carlyle Group and General Electric Co., into shares of 1.75 dirhams each, the company said in a statement to the Abu Dhabi bourse today. The original conversion terms stipulated that the bonds would be converted at not higher than 2.30 dirhams and not lower than 1.75 dirhams.

Property values and rents slumped in the United Arab Emirates after banks curtailed lending and speculators pulled out due to the global credit crunch. Home prices in Abu Dhabi, the U.A.E. capital, may drop 30 percent more after declining as much as 55 percent from the market’s peak in mid-2008, according to Dubai-based Rasmala Investment Bank Ltd.

Egypt may resume talks on financing from IMF: minister | Reuters

Egypt may resume negotiations with the International Monetary Fund for a financing facility, a minister said on Thursday after Cairo turned down an offer of a $3 billion facility in June saying it did not need the funds.

Egypt's economy has been hammered by the uprising that unseated Hosni Mubarak in February, widening the budget deficit.

"Egypt may need to restart talks with the IMF to obtain loans," Planning and International Cooperation Minister Faiza Abu el-Naga told reporters, adding that the decision to turn down the facility earlier this year "may be under review."

Hammerson sells London building to Kuwait for $271m | Reuters

British property group Hammerson has sold a property in London's financial district to the real estate arm of Kuwait for 176 million pounds ($271 million), one of a string of buildings for sale in the area.

The 214,200 square feet property at 60 Threadneelde Street is on the site previously occupied by the London Stock Exchange and represents a yield of 4.75 percent for the buyer, St Martins Property Investments, Hammerson said on Thursday.

Hammerson completed the nine-storey office development in January 2009 at a cost of 124 million pounds.

Dubai Stocks Drop Most in Six Weeks as MSCI Extends Review; Emaar Declines - Bloomberg

Dubai stocks dropped the most in six weeks, leading a decline in United Arab Emirates and Qatar, after the countries failed to secure emerging-market status at index provider MSCI Inc. (MSCI)

Emaar Properties PJSC (EMAAR), the builder of the world’s tallest skyscraper in Dubai, headed for the biggest loss since Oct. 3. Dubai Financial Market, the only publicly traded stock market in the six-nation Gulf Cooperation Council, dropped to the lowest since Nov. 27. Dubai’s benchmark DFM General Index fell 1.6 percent, the most since Nov. 1, to 1,362.53 at 10:32 a.m. in the emirate. Abu Dhabi’s ADX General Index (ADSMI) lost 0.8 percent, with Aldar Properties PJSC (ALDAR) tumbling 4.2 percent. Qatar’s QE Index fell 0.6 percent.

MSCI, whose stock indexes are tracked by investors with about $3 trillion in assets, will extend its review for reclassification of the U.A.E. and Qatar from frontier status “in order to give additional time for market participants to assess the effectiveness” of the new payment systems in the exchanges, according to a statement.

Standard & Poor's Applies Its Revised Bank Criteria To 17 Arab Mediterranean Banks And Subsidiaries - Zawya

Standard & Poor's Ratings Services today said it has reviewed its ratings on 17 Arab Mediterranean banks and related subsidiaries by applying its new ratings criteria and updated group methodology for banks, which were published on Nov. 9, 2011. See the list below for the ratings on these entities and their relevant subsidiaries, including any rating changes that resulted from applying our new criteria.

We will publish individual research updates on the banks identified below, including a list of ratings on affiliated rated entities, as well as the ratings by debt type--senior, subordinated, and junior subordinated. The research updates will be available at and on RatingsDirect on the Global Credit Portal. Ratings on specific issues will be available on RatingsDirect on the Global Credit Portal and

Chinese real estate bubble pops just like Dubai three years ago « ArabianMoney

The spectacular real estate boom is over in China with new home prices in Beijing crashing by 35 per cent last month and the growth of M2 money supply dropping to its lowest in a decade. All real estate booms end this way.

Dubai was no different three years ago when an off-plan-fuelled frenzy crashed to earth leaving local property prices down 60 per cent. For the past two years hedge fund billionaire Jim Chanos has been warning that Chinese property was ‘Dubai x1000′ and has been shorting the market.

Libya's expected to have sanctions lifted | Reuters

Libya's central bank and a subsidiary are expected to have U.N. sanctions against them lifted on Friday in a move to ease a cash crunch since the country's civil war ended, diplomats said on Wednesday.

They said the Central Bank of Libya and the Libyan Foreign Bank (LFB), an offshore institution wholly owned by the central bank, would be taken off the Security Council's sanctions list unless there were objections from council members.

When a rebellion broke out in February against leader Muammar Gaddafi, the Security Council froze Libyan assets abroad estimated at $150 billion, but the bulk of that sum remains beyond the reach of the oil-rich country's new rulers.

gulfnews : 'Profitability of Gulf's corporate banking recovers after slowdown

Profitability of corporate banking business in the Gulf is recovering fast from the global financial turmoil, according to a recent study by the Boston Consulting Group (BCG).

According to the firm's recently-released Corporate Banking Benchmarking Report, as loan loss provisions (LLPs) in corporate banking peaked in 2009, corporate banking profitability consequently declined to levels below those of 2007. However, provisions began to decrease in 2010 and continued to decrease in the first half of 2011.

"This has resulted in a corporate banking profitability increase of over 40 per cent from 2009 levels even as revenues have remained flat throughout 2009-2010 and the first half of 2011," said Markus Massi, Partner and Managing Director and BCG's regional leader in Wholesale Banking and Capital Markets.

gulfnews : UAE, Qatar fail third bid for MSCI's emerging market status

The UAE and Qatar have failed for a third time to be upgraded to emerging markets status by MSCI, the index compiler announced on Thursday morning.

Both countries will continue to be categorised as frontier markets and will remain under review for potential reclassification to emerging markets as part of the company’s 2012 review, MSCI said in a statement posted on its website.

“ Investors continue to stress significant concerns over the effectiveness of the new framework to fully ensure the safeguarding of their assets under certain circumstances, particularly for failed trades where a forced sale of assets, without the owner’s consent, remains a possibility ”MSCI statement

Abu Dhabi developer reveals late payments of Dh500m following loss - The National

Eshraq Properties has revealed it is owed almost Dh500 million (US$136.1m) in overdue payments, only months after receiving approval to list on the Abu Dhabi Securities Exchange.

One of Abu Dhabi's highest-profile property developers, Eshraq reported a loss for the third quarter of Dh919,117 on Sunday. The developer did not report any revenue from the handover of properties during the period.

But among the disclosures in the company's financial statements are Dh499.3m worth of unpaid trade receivables that are at least two months in arrears, an amount described as "shocking" by one industry expert, who asked not to be named. Such debts have swelled by 41 per cent since the end of last year.

Saudis triumph as recession concern unifies OPEC | The Salt Lake Tribune

The Organization of Petroleum Exporting Countries (OPEC) agreed Wednesday in Vienna to increase its production target for the first time in three years in a move that appeared to signal that Saudi Arabia and Iran had put aside their differences on oil policy for the time being.

The move should have little lasting impact on oil prices because the production target of 30 million barrels a day is closely in line with current output. But the agreement had symbolic value, coming six months after a meeting of OPEC ministers ended in disarray as they failed to reach a consensus to raise production levels.

“We have an agreement to maintain the market in balance,” said Venezuelan energy minister Rafael Ramírez.

Iranians seek to placate Saudi Arabia -

Iranian officials used the meeting of oil producing nations in Vienna on Wednesday to set aside their differences with Saudi Arabia, agreeing to a common production ceiling of 30m barrels a day for the first half of next year.

Analysts said the Iranians appeared in no mood to challenge the Saudis at the Opec meeting after months of rising tensions that have pushed relations between the two Gulf rivals to a new low.

The consensus in Vienna comes just six months after Iran joined Algeria and Venezuela to argue against a Saudi-favoured move to increase production.

Gulf banks: Saudi Arabia and Qatar spread their wings -

Of all the Gulf’s Islamic banks, one stands out in the crowd.

Al Rajhi has quietly emerged as one of the world’s largest sharia-compliant lenders and has maintained slow but steady growth.

Against a backdrop of improved lending conditions in Saudi Arabia, the Arab world’s largest economy, the Riyadh-based bank reported a year-on-year increase in third-quarter profits of 18 per cent.

Gulf banks: Saudi Arabia and Qatar spread their wings - Financial Times

Against a backdrop of improved lending conditions in Saudi Arabia, the Arab world's largest economy, the Riyadh-based bank reported a year-on-year increase in third-quarter profits of 18 per cent. It credited these results to higher revenue from fees ...

and more »

New Saudi central bank chief could hasten market opening |

Fahd Bin Abdullah Al-Mubarak, chosen on Tuesday as Saudi Arabias new central bank governor, is a US-educated former investment banker with financial markets experience that could help open the Saudi stock exchange to foreign investment.

Mubarak in some ways contrasts starkly with his well-respected predecessor Muhammad Al-Jasser.

Jasser, who took office in February 2009, was a long-term government official and central bank insider who began his career at the finance ministry in 1981, and served as the central banks vice governor for almost 15 years.

Proposed Law in U.A.E. Could Encourage Investing -

The United Arab Emirates is moving ahead with a major overhaul of corporate law to introduce unified accounting standards for all businesses, amend guidelines for share offerings in local capital markets, and extend the possibility of foreign majority ownership of companies nationwide.

Currently, foreigners are not allowed to own more than a 49 percent stake in businesses outside specially designated free zones and only large — usually public — businesses are held to international accounting standards.

The planned changes, which are the biggest in nearly 30 years and took four years to prepare, would widen access for outsiders to the internal U.A.E. market and may encourage more investment internally. While no date has been set for final approval of the new law, analysts say its adoption by the federal cabinet in the first week of December was a significant step forward.

U.A.E., Qatar Fail to Secure Upgrade to Emerging by MSCI - Bloomberg

The United Arab Emirates and Qatar failed for a second time this year to secure an upgrade to emerging-market status at MSCI Inc., as the Persian Gulf countries struggle to revive equity trading.

MSCI, whose stock indexes are tracked by investors with about $3 trillion in assets, will extend its review for reclassification of the two countries from frontier status “in order to give additional time for market participants to assess the effectiveness” of the new payment systems in the exchanges, according to a statement.

Trading volumes in Persian Gulf stock markets (BGCC200) have plunged this year as foreign funds trimmed holdings of riskier assets amid regional uprisings and as Europe’s debt crisis deepened. Dubai volumes are at a six-year low while Abu Dhabi’s are at the lowest since 2004. In Qatar, trading is about 43 percent lower than in the same period in 2009. The decision came after a delay in June, when MSCI cited “stringent foreign ownership limits” as a barrier for upgrade.