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Thursday, 22 December 2011

Qatar Steel ups South Steel stake to 29 percent | Reuters

Qatar Steel, a wholly-owned subsidiary of Industries Qatar, increased its stake in South Steel of Saudi Arabia to 29.74 percent, the company said on Thursday, a nearly nine percentage point increase in ownership.

A statement issued by the company said it will be involved in most aspects of South Steel's business, including operations, production and administration.

Qatar, the world's largest exporter of liquefied natural gas, has been investing in other industries. Earlier this month, Qatar Steel secured a $250 million subordinated loan facility from two Gulf banks to finance expansion.

Dubai bond rally is modestly positive sign for 2012 | Alrroya

A year-end rally in Dubai-related bonds sends a positive signal for 2012, suggesting more investors are becoming convinced the emirate can arrange smooth refinancings for state-owned firms next year. But there are still major doubts.

Government-related entities in Dubai have bonds worth $3.8 billion maturing in 2012. With the real estate market still sagging, the stock market moribund and many banks reluctant to lend because of global financial instability, investors have worried that some of those bonds might be restructured, with changes to repayment terms that disadvantage creditors.

Such speculation prompted Sheikh Ahmed bin Saeed al-Maktoum, chairman of the Dubai Supreme Fiscal Committee, to declare on December 7 that restructuring was not on the cards, though he said the government might look into refinancing part of the debts, presumably through issuing new bonds or loans.

Arabian Aerospace - Diversity the route to Abu Dhabi success

Mubadala is the biggest name in the Middle East's aerospace and defence support services with MRO, manufacturing, finance and training all part of a strategy to make Abu Dhabi a centre of aerospace excellence. Alan Peaford finds out how the investment arm of the Abu Dhabi government is achieving this goal.

Mubadala has interests in energy, telecommunications, healthcare and real estate but central to its development and the future of Abu Dhabi is its aerospace division.

The word Mubadala means ‘exchange’ in Arabic, and as the investment arm of the emirate’s government it has a clear task – to move Abu Dhabi away from reliance on income from energy and to develop opportunities for Emiratis with careers not jobs.

MENA stock markets close - December 22, 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)

Emirates Aluminium Said to Seek About $3 Billion for Smelter Expansion - Bloomberg

Emirates Aluminium Co., which is building the world’s biggest aluminum smelter in Abu Dhabi, may seek $3 billion in financing for the venture, two people with knowledge of the project said.
The funding will be split between export credit agencies and commercial banks, the people said, declining to be identified because the deals are yet to be completed. Emirates Aluminium is owned by Mubadala Development Co. and Dubai Aluminium Co.
“We are working with shareholders to finalize the funding structure,” Saeed al-Mazrooei, Emirates Aluminium’s chief executive officer, said today at a press briefing in Abu Dhabi. “There are still many options to decide from,” he said, declining to be more specific.

Oman's Bank Muscat sets $260m rights issue | Reuters

Oman's Bank Muscat , the sultanate's largest bank by assets, will launch a rights issue in the second quarter of 2012, subject to regulatory approval, the bank said in a bourse statement on Thursday.

The 100 million Omani rials ($259.7 million) rights issue will see shares offered at a 20-percent discount to market price, the statement said, although it added that further details about the offering would be published once it had got the regulator's sign-off.

Standard & Poor's raised its long-term rating on Bank Muscat to A- from BBB+ last week, citing "its strong business position, strong capital and earnings, moderate risk position, average funding, and adequate liquidity."

New Central Bank rules will curb personal lending, says UAE banker - Emirates 24/7

New personal lending regulations introduced by the Central Bank earlier this year are expected to curb retail loans although banks in the UAE now have sufficient liquidity, a prominent banker has said.

Michael Tomalin, CEO of the government-controlled National Bank of Abu Dhabi (NBAD), said the liquidity situation in the UAE banking sector, the largest in the Arab world, has dramatically changed compared with 2010.

He said the sector suffered from a liquidity crunch through 2010 while high oil prices and a surge in capital inflow reversed that situation this year.

Dana Gas Slumps to Lowest on Record on Egypt Delay Report - Bloomberg

Dana Gas PJSC (DANA), a fuel producer with most of its output coming from Egypt, tumbled to a record low in its longest stretch of losses in three years after Al Bayan reported that Egypt wants to delay a $148 million payment.
The shares declined 4.3 percent to 45 fils at 12:42 p.m. in Abu Dhabi, the lowest intraday level since the company’s shares were listed in December 2005, according to data compiled by Bloomberg. The stock, down for a sixth day, has lost 38 percent this year compared with a drop of 14 percent in the benchmark ADX General Index. (ADSMI)
Egypt’s government and Dana Gas are in talks on paying part of the money owed and obtaining a grace period of a year or more for the remainder, Al Bayan reported, citing Hany El Sharkawi, the company’s president for Egypt. Dana Gas officials didn’t immediately respond to questions from Bloomberg News.

EM fund managers of 2011: Arab spring | beyondbrics –

After coming top among emerging market equity fund managers in 2011, executives at Tunisian financial services company MAC be forgiven a little boast. Their shariah-complaint MAC al Houda beat the world’s best in 2011 – and they expect another good result in 2012.

“The fund is expected to perform well next year also, given the expected recovery of the Tunisian economy,” says Salma Zammit, one of MAC’s senior investment analysts. With the new government aiming to modernise Tunisia and create in Tunis a hub for Islamic finance, it could be a matter of being in the right place at the right time for MAC.

MAC Al Houda, launched in October 2010 just three months before the overthrow of the repressive Ben Ali regime, generated total returns for 2011 by December 20 of 18.5 per cent, according to figures prepared for the FT by Lipper, the financial research company.

gulfnews : Sanctions hit Iran firms harder

Economic sanctions imposed on Iran have begun to bite as the value of its currency is collapsing, Iranian businessmen have told Gulf News.
An Iranian official on Tuesday told its national radio that the Islamic Republic imposed a ban on imports from the UAE — which the government later denied.

Small slice of a bigger picture - The National

It may seem like a strange indicator, but Ian Ohan knew Dubai's economy was getting back on track simply by studying his company's delivery areas.

The data showed that more people had moved in throughout the year, while takeaway orders grew and rents rose.

While the last factor may not be particularly good news for Mr Ohan, the GCC area developer and owner of NKDPizza, they all point to a stronger economy and better business environment.

Ferrostaal fined $183m in two-year bribery case - The National

The German engineering company Ferrostaal has been fined US$183 million (Dh672.2m) in a bribery case that ends its involvement in a two-year corruption investigation.

The penalty was part of a judgement in a Munich court this week that found two former employees guilty of paying bribes to win contracts.

Ferrostaal was majority-owned by Abu Dhabi's International Petroleum Investment Company (Ipic) until last month. Commodore Contracting, an Abu Dhabi construction company, has a 25 per cent stake in Ferrostaal's new owner, MPC Industries.

Benchmark a major step for Islamic finance - The National

Last month, the world's first Islamic interbank benchmark rate (IIBR) was launched. It was the result of a collaborative approach taken by many Islamic financial institutions, industry associations and Sharia scholars over the course of 24 months to address a decades-old industry challenge: how to decouple Islamic finance from a conventional western pricing benchmark (Libor) 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 standard to better measure the cost of funding for Islamic financial institutions. As contributed pricing for Sharia-compliant funding, it represents the DNA of an Islamic banking industry that is today focused on commercial banking over investment banking.
IIBR brought together more than 20 Islamic finance institutions to create a proprietary Islamic pricing benchmark. It is a major indication to the world that Islamic finance has come of age and can be seen as a sustainable and rapidly developing feature of global financial markets. The benchmark is designed to be used to price a number of Islamic instruments including common overnight to short-term treasury investment and financing instruments such as murabaha, wakala and mudaraba, retail financing instruments such as property and car finance, and sukuk and other Sharia-compliant fixed-income instruments. It can also be used for the pricing and benchmarking of corporate finance and investment assets.

Gulf economies likely to slow next year - Arab News

Economic growth is likely to slow in most of the Gulf's oil exporters next year but governments will remain able to spend to counter the impact of any global slump, a Reuters poll of analysts showed on Wednesday.

Gross domestic product in Saudi Arabia, the biggest Arab economy and the world's top oil exporter, is expected to expand 4.0 percent in 2012, down from an estimated 6.7 percent this year, according to the median forecast in a global poll of 18 analysts.

Next year's growth forecasts were cut for all six members of the Gulf Cooperation Council compared with the last Reuters poll, which was conducted in September. The 2012 estimate for Saudi Arabia was reduced from 4.5 percent.

Gulf economies to slow; stay strong fiscally

Economic growth is likely to slow in most of the Gulf’s wealthy oil exporters next year but governments will remain able to spend to counter the impact of any global slump, a Reuters poll of analysts showed yesterday.

Gross domestic product in Saudi Arabia, the biggest Arab economy and the world’s top oil exporter, is expected to expand 4.0 percent in 2012, down from an estimated 6.7 percent this year, according to the median forecast in a global poll of 18 analysts.

Next year’s growth forecasts were cut for all six members of the Gulf Cooperation Council compared with the last Reuters poll, which was conducted in September. The 2012 estimate for Saudi Arabia was reduced from 4.5 percent.

gulfnews : Dubai and Abu Dhabi markets touch all-time lows

It was a bleak day for the UAE's bourses yesterday as both the Dubai Financial Market and the Abu Dhabi Securities Exchange touched their all-time lows.
Rumours of Iran suspending trade with the UAE and fears of the global effects of Europe's debt woes caused the DFM to close at 1,335.87, down 1.83 per cent.
"Dubai's index today [yesterday] breached its previous all-time low of 1,338. There are no international investors in the market with most of the shares being held by retail investors," said Mousa Haddad, Head Trader with National Bank of Abu Dhabi Asset Management. "We haven't seen the bottom of the market yet. There will be more downsides as most stocks are hitting new lows. The sentiment is negative because of what's happening in Europe and the US," he added.

Cairo’s depleted bank coffers weigh on stocks -

Egypt’s once vibrant stock market is in the dumps. After initial hopes that a revolution-induced slump could be reversed, the market has drifted down, and has now shed half its value this year – making it one of the world’s worst performing indices.
Trading activity has slumped even more, from a daily turnover of about $150m in 2010 to an average of less than $50m over the past three months, according to Zawya, a data provider.

Dubai’s new-found optimism anchored by debt -

Cruise liner the Queen Elizabeth 2 is set to emerge from obscurity mothballed off Dubai to play its part in glitzy New Year’s eve celebrations planned to trumpet the emirate’s economic revival.
Live music and fireworks will entertain dignitaries invited on board the former Cunard flagship, which will be fulfilling its first public engagement since being bought by Dubai World, a troubled conglomerate, for an estimated $100m three years ago.

Islamic Finance: A ‘come together’ consolidation? | alifarabia

Will 2012 be the year of “come together” consolidation for Islamic banks?

Size is often the justification for achieving economies of scale, used to access deals for league table prominence, used as a buffer in a challenging environment, used as defensive measure to ward off unwanted suitors, and so on.

Islamic banks are very much like Islamic (equity) funds. There are hundreds of Islamic banks and funds, but the paid-up capital and assets under management, respectively, is too small to be meaningful. Yet, both, more so Islamic banks, present a unique situation (of an industry risk) of “too small to fail”.