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Monday, 19 December 2011

Arab Petroleum Signs Loan for U.A.E. Oil Terminal in Fujairah - Bloomberg

Arab Petroleum Investments Corp., a development bank owned by 10 Arab oil-producing nations, and National Bank of Fujairah PSC (NBF) agreed to lend the first tranche of a $110 million loan to Socar Aurora Fujairah Terminal.
The debt was worth $61 million, according to an e-mailed statement from Arab Petroleum. The project is a joint venture between State Oil Co. of Azerbaijan, Swiss commodity trader Aurora Progress SA, and the Fujairah government. The United Arab Emirates has a 17 percent stake in Arab Petroleum.

MENA stock markets close - December 19, 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)

Emaar inks US$1 billion financing facility backed by Dubai Mall --

Dubai's Emaar Properties, builder of the world's tallest tower, has signed a US$1 billion financing which is secured against its mammoth Dubai Mall, the developer said in a statement on Monday.

The two-tranche facility, which consists of both sharia-compliant and conventional funding, is split between a five-year tranche and an eight-year amortising loan and carries a margin of 350 basis points.

Dubai Islamic Bank, National Bank of Abu Dhabi and Standard Chartered have providing the finance, which will be initially used to repay an existing US$300 million facility taken out in 2010, Emaar said.

36% in UAE saw financial situation worsen in 2011 - Emirates 24/7

According to a recent consumer confidence index survey conducted by and YouGov, just 20 per cent of UAE respondents believe their current situation has improved from last year, but 43 per cent are optimistic their financial status will improve in the coming year.

Thirty-eight per cent respondents in the UAE say their (and family’s) current financial situation is the same while 36 per cent say it is worse than last year. Only one-fifth claim to have seen their finances improve in the same period.

About 66 per cent say the country's economy is the same, 34 per cent say it has declined than it was 12 months ago.

Abu Dhabi property stocks slump; index at 21-month low - Stocks -

Dubai contractor Arabtec rose to a 13-month high, extending gains to help lift the emirate's index.

Shares in Arabtec climbed 1.8 percent, up for a third session to reach its highest close since November 2010. Traders said an individual investor wants to purchase a sizable stake in the firm.

Dubai's index advanced 0.1 percent to 1,374 points, trimming 2011 losses to 15.7 percent.

A tweet fit for a prince | beyondbrics –

Prince Alwaleed bin TalalSaudi Arabia’s billionaire Prince Alwaleed bin Talal (pictured) has invested some $300m in Twitter, the social media network used frequently as a tool of protest.

While the move might look odd for a member of the royal family in a country which is nervous of the internet, it seemed to make sense to the shareholders of Kingdom Holding, the prince’s investment company. Its shares surged by 5 per cent after the announcement. Saudi Arabia’s benchmark Tadawul All Share index fell 0.25 per cent.

“Our investment in Twitter reaffirms our ability in identifying suitable opportunities to invest in promising, high-growth businesses with a global impact,” Alwaleed said in a statement reported by Reuters.

Alwaleed Buys Into Twitter « Alpha Dinar- talking Gulf finance

Prince Al Waleed Bin Talal, through his company Kingdom Holding Co., has acquired a 3% stake of the popular social networking website Twitter for $300 million. The news sent KHC’s stock up by more than 7% during today’s trading. The deal values Twitter at $10 billion, which represents a 25% jump since late summer, when the website was valued at $8 billion. The demand for social networking websites is still growing, with investors’ appetite for such investments is still strong even with the current macro economic conditions. Facebook, which is thought to be going public next year, saw similar small private transactions multiply the firm’s value during the past couple of years.

The only issue that I have with Twitter as an investment is the ability to monetize the website. How will Twitter justify such a valuation unless it generates revenue and in turn profit? Will they add an advertising capability, similar to what Facebook did? Will they create a new type of premium accounts that users have to pay for and offer add capabilities, similar to what LinkedIn did? Other social websites are revenue generating and some are even profitable. Facebook, for example, generated revenue of $2.5 billion for the first three quarters of 2011, and profits of $714 million for the same period.

So unless Twitter finds a way to generate money, an investment into the website will be worthless.

Etihad increases Air Berlin stake to 29.21 percent - Yahoo!

Etihad Airways is raising its stake in Air Berlin to 29.21 percent from 2.99 percent, as part of plans for strategic cooperation, Air Berlin said on Monday.
The move comes shortly after Etihad said a report it planned to raise its stake in Air Berlin was "inaccurate".
The cooperation includes a codeshare agreement. Air Berlin estimates the effects of the anticipated synergies to amount to about 35 million euros ($45.7 million)to 40 million euros in 2012, it said.
Air Berlin said it still plans to join the Oneworld alliance of airlines by European spring 2012.

Iran, Russia's Tatneft sign $1B tentative oil deal - Yahoo!

Russia's Tatneft and Iran have signed a $1 billion preliminary deal to develop the Zagheh oil field, state TV reported Sunday, deepening Moscow's business links with Iran despite U.S. calls for further sanctions over Iran's nuclear program.
The Zagheh oil field, located outside the town of Deilam in south Iran on the shores of the Persian Gulf, contains an estimated 3 billion barrels of heavy crude oil.
Iran's state TV quoted Oil Minister Rostam Qasemi Sunday as saying that the field will produce 7,000 barrels per day of heavy crude in the first phase of its development within two years.

HSBC: Bigger is better for Arab Gulf bonds | Alrroya

HSBC Holdings Plc, the top arranger of Arabian Gulf bond sales this year, said investors will seek the safety of larger debt issues in 2012 amid the Arab uprisings and Europe’s sovereign debt turmoil.

Bond sales similar in size to Qatar’s $5 billion offer last month would draw in investors seeking securities that are actively traded in the secondary market, Andrew Dell, head of HSBC’s Middle East and Africa debt capital markets business, said in a December 15 telephone interview.

“In choppy markets, investors want liquidity and liquidity comes with very large transactions,” said Dell, who is based in Dubai. Investors are seeking securities that give them flexibility to “adjust their portfolios,” Dell said.

UAE banks are prepared for any fresh crisis: Central Bank - Emirates 24/7

UAE banks have built up sufficient reserves and boosted their capital base after the 2008 global financial distress and this will enable them to withstand a fresh crisis in the future, the central bank chairman has said.

Khalil Foulathi said stress tests conducted by the International Monetary Fund on the UAE’s 23 national banks and 28 foreign units showed they are highly capitalized and in a “good health.”

His figures showed UAE banks’ Tier 1 capital adequacy far exceeds the global requirement of eight per cent as it stands at 12 per cent. He said some banks in the second largest Arab economy are even capitalized at as high as 20 per cent.

EU Contagion - Zawya

Deleveraging in EU banks is one of the many issues impacting the ME economies in the 2012. Tourism, trade, investment and oil exports could also suffer as the EU crisis unravels. 

All eyes are fixed on the European Union these days, as the region remains mired in a sovereign debt crisis that threatens the very future of the economic bloc.

"The whole world has an interest in the resolution of a crisis that deepened dramatically through the fourth quarter, and enveloped more and more major economies putting European leaders on the back foot as events threatened to overwhelm them," says Deutsche Bank in a report on the world's economic outlook for 2012.

Nations to Weigh Impact of Possible Iran Oil Curbs -

The Obama administration, its European allies and key Arab states are intensifying discussions on how to maintain stability in the global energy markets in a possible precursor to a formal embargo on Iran's oil exports and its central bank.

Such an embargo would constitute the most direct economic confrontation yet between Iran and the West and would amplify tensions as Iran repeatedly threatens to close the Strait of Hormuz, through which passes about one-fifth of the world's oil supply.

U.S. and European officials indicated in interviews they are taking steps that could lay the groundwork for such financial penalties as part of the effort to counter Iran's nuclear program.

Promising signs for Saudi sukuk - Arab News

Sukuk markets in Saudi Arabia have seen steady, albeit unspectacular growth, as leading blue chip names — notably Saudi Electricity Co. and SABIC (Saudi Basic Industries Corp.) —have repeatedly tapped the market and a handful of others have followed suit. The Saudi Stock Exchange Tadawul now has secondary trading platform for sukuk with a total eight of listed issuances at present.
Recent months have seen encouraging innovation in the market due to new tenors and innovative structures, such as the first-ever true project sukuk by Saudi Aramco Total Refining and Petrochemical Company (SATORP). But in truth the Saudi and GCC sukuk markets have not yet matched the performance of Malaysia which routinely accounts for up to two-thirds of global issuance while having only one-fifth of the GCC’s GDP (gross domestic product). A large part of the difference seems to be linked to the important role of government-linked institutions as sukuk issuers in Malaysia.
Signs are now emerging of potentially transformative changes in the GCC sukuk markets. Yields have dropped and overall issuance levels picked up after greater consensus about acceptable structures and procedures for default-type situations. Beyond Bahrain, regional sovereigns, such as Qatar, Dubai, and Ras Al-Khaimah have issued sukuk, along with government-owned corporations and multilateral organizations such as the Islamic Development Bank. Last week saw indications that Saudi Arabia might be about to enter the sovereign sukuk market, although the actual issuance may be done through a fund or a government agency, possibly as soon as Q1 of 2012. The large budget surpluses create little foreseeable need for external financing and the Kingdom has until recently prioritized efforts to pay down its public debt to less than 10 percent of GDP, a goal that has now been accomplished.

Saudi Arabia’s Oil Output Fell in October as Demand Fluctuated - Bloomberg

Saudi Arabia, OPEC’s largest oil producer, decreased output by less than one percent in October from a month earlier as it adjusted production to meet fluctuations in customers’ demand, government data showed.
The kingdom pumped 9.36 million barrels a day, down 0.85 percent from 9.44 million barrels in September, according to the data the government submitted to the Joint Organization Data Initiative.
The country exported 7.08 million barrels of crude oil a day in the month, up from 6.81 million barrels a day in September, statistics posted today on the initiative’s website. The Saudi crude data includes condensates and excludes natural- gas liquids, according to the website.

Story of UAE's per capita income | Al Bawaba

The UAE’s GDP is expected to peak at Dh1.248 trillion in current prices this year to maintain its position as the largest in the Arab world after Saudi Arabia’s economy.

The increase will be a result of higher prices, with Dubai’s crude price averaging at as high as $101 in the first 10 months of 2011, nearly 34.6 percent above the $75 average price in the same period of 2010, EIB said. It showed the nominal GDP has raced by nearly 34 percent annually over the past five years because of strong oil prices, pushing the country’s per capita income to a projected Dh174,000 from Dh100,000.

Despite the global crisis, GCC countries will record good growth rates in 2011 thanks to the surge in their income and the fact that their exposure to European banks and other institutions is minimal.

gulfnews : Emirates NBD may take over Amlak next year

Emirates NBD, the UAE's largest bank by assets, could take over Islamic property finance company Amlak next year. This along with the recent takeover of Dubai bank will adversely impact the bank's profitability and capitalisation levels, HC Securities, a brokerage firm, said yesterday.

The acquisition of Dubai Bank, according to the brokerage, lowered the shareholder value slightly and has a negative impact of one percentage point on Tier 1 capital. The report said there is a chance of Emirates NBD buying Amlak.

"We think an Emirates NBD acquisition of Amlak has become more likely and believe the bank may also have to absorb some of the refinancing needs of government-owned entities in 2012, particularly if European and US banks reduce their exposure to the region. This may impact asset yields and potentially provisioning needs as well," wrote Jaap Meijer, head of financials team, and Kareem Gali, analyst at HC Securities.

gulfnews : Outlook positive but growth to slow

Qatar's economic growth will slow next year and it faces an increased risk of lower oil and gas prices due to weaker global demand, but the overall outlook for its economy is positive, the International Monetary Fund (IMF) reported yesterday.

The world's top liquefied natural gas exporter saw its economy expand at a double-digit clip in 2011 and it plans to spend heavily on infrastructure projects before it hosts the 2022 football World Cup.

"The economic outlook for 2012 remains positive, despite increased external risks. Real gross domestic product growth rate is projected to moderate to six per cent in 2012," the IMF said in a statement after concluding its annual consultation with Qatar on December 1. For this year, the IMF has estimated growth of 19 per cent.

gulfnews : Dubai undecided on bond issue in 2012

The Dubai government has no plans for a sovereign borrowing next year, and any capital raising activity in 2012 is likely to be small-scale, a senior government official said.

"Currently, there's no decision to issue bonds in 2012, mainly because the budget hasn't been finalised yet. So if there's a need, it would be to support the budget, and that would be very minor," Abdul Rahman Saleh Al Saleh, Director-General of the Dubai Department of Finance, told Zawya Dow Jones in a recent interview.

The Dubai government and some of its affiliated companies have successfully tapped the financial markets several times since Dubai World announced a standstill on its debt repayments in November 2009.

gulfnews : New law allows full company ownership

Foreign companies setting up in specialised economic zones or making major investments in strategic sectors such as tourism and manufacturing may obtain full equity ownership, said Abdullah Al Saleh, Undersecretary in the Ministry of Foreign Trade.

His comments clarified a doubt on the draft companies law approved by the UAE cabinet last week. The law will allow the cabinet to issue a resolution specifying the types of businesses and sectors in which a foreign partner may hold more than 49 per cent of a company's capital.

"Picking on what His Excellency mentioned, the law will not provide for a percentage, the law is silent on the statutory restriction; the limitation of 51-49 per cent is not addressed in this law. It has left it to the investment law to cover the percentages for certain businesses. But ... certain business can own the business 100 per cent, sectors like tourism, health care, education which are on top of the UAE agenda as key sectors for the economy this year," said Samer Qudah, partner and head of corporate structuring at Al Tamimi and Company.

Canadian oilfields to go as Taqa reviews core assets - The National

Abu Dhabi National Energy (Taqa) plans to sell a group of small Canadian oilfields and is weighing the sale of more assets as it reviews its portfolio.

Taqa North, a subsidiary of the majority government-owned company, is set to close the sale of the oilfields in Saskatchewan by March of next year, according to a filing yesterday with the Abu Dhabi Securities Exchange.

Taqa did not disclose the buyer or the value of the sale.

ADS thrives on gold and currencies - The National

Gold and currencies have proven more attractive propositions than languid stock markets for ADS Securities as the company has doubled trading volumes to as much as US$4 billion (Dh14.69bn) a day this year.

Since launching last year, ADS has increased its daily volumes of foreign exchange and bullion trades to between $3bn and $4bn per day - about double the amount registered in February.

"You felt the market needed a shock awake to get it back in the region," said Philippe Ghanem, the managing director of ADS. "ADS is like a constant shock to the market."