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Sunday, 25 December 2011

GOLDMAN COMMENT: Holidays and Rest

What a shame that 2011 is drawing to a close. It was such a nice easy year for everyone…
This will probably be my last Viewpoint for the year, so let me wish you all the very happiest of holidays and best wishes for 2012.
One thing for sure we can say about 2012 is that there will be no shortage of things to think about. In some ways, for the discerning analyst and the ambitious alpha generating fund manager, you couldn’t wish for a better environment. The only dilemma is that it is probably quite easy to get something(s) wrong!
Against the background of our December Monthly, let me make some guesses about 2012:
1. We won’t all talk about Europe quite as much next year as we have in 2011, although I suspect that, in the first few weeks of the year, it might seem like it. Europe will still be called Europe, and with a bit of luck, it might go back to being as dull as it usually is. (especially with Man United out of the Champions League)
2. As I have said in the past few weeks, the EMU cannot survive without Italy in it, and Italy cannot survive with 6-7 pct 10-year bond yields. In that regard, the stage that this crisis has moved in recent weeks is both scary and exciting. Take your pick as to which one you wish to explore (if not both).
3. The Euro is more likely to reach1.10 next year, rather than 1.50. I doubt it will see both, and it might not see either, but 1.10 is more likely than 1.50.
4. The Yen is more likely to see Y100 than Y60, and I suspect Y100 is quite likely (although I thought that about 2011 too). In fact, if we can clear the Y79.50-80.0 area, it is rather probable.
5. EUR/CHF is more likely to see 1.40 than 1.00.
6. There are plenty of economic, political, social and policy risks for 2012. They are not all negative. It is quite conceivable that not only the US will continue to surprise on the upside, but others could too. This includes some of the BRIC and other Growth Markets like Brazil and even India – where it is ever-so-fashionable to now think the days of License Raj and Hindu weak growth are back.
7. Europe might easily disappoint even more on the downside – indeed, our first formal GDP forecast is below consensus. But it is not impossible that it might surprise on the upside.
8. The S&P is more likely to be above 1400 this time next year than below 1000.
9. China won’t have any kind of landing in reality, neither hard nor soft, but it will still be travelling. It might have seemed like a soft one though.
10. The MIST will continue to hover around the BRICs…As some observers have noticed, the other 4 countries that we define as Growth Markets – Indonesia, South Korea, Mexico and Turkey – can also be expressed in the form of a nifty acronym. And, they are rather interesting places, with all 4 having something to offer. Right at this moment in time, they don’t seem to have the same specific issues as each of the BRICs, but they are not quite as important for the rest of us. However, all 8 countries put together are going to become more and more important for the ongoing evolution of the world economy and markets.
11. A team from Manchester will probably win the English Premier League. A team from Manchester will probably not win the Champions League.
Seasons greetings. With a bit of luck, you won’t read one of my Viewpoints again until January 7/8th 2012.

S&P raises BankMuscat long-term rating to ‘A-’ | Oman Observer

Standard and Poor's, leading global credit rating agency, has raised the long-term rating on BankMuscat to 'A-' from 'BBB+' and affirmed the 'A-2' short-term rating. The ratings also reflect BankMuscat's 'bbb' anchor, as well as its strong business position, strong capital and earnings, moderate risk position, average funding, and adequate liquidity.
The long-term rating is one notch higher than the Bank's stand-alone credit profile as SandP has classified the Bank as having high systemic importance in Oman. The stable outlook reflects SandP’s expectation that BankMuscat will remain the dominant player in Oman and experience no significant change to its business and financial profile over the next two years.
AbdulRazak Ali Issa, Chief Executive, said: “BankMuscat is proud to receive yet another affirmation of its robust performance, competitive advantage and stability. The SandP rating upgrade, achieved during challenging situation, will further promote investor confidence and improve the overall performance of the Bank, marked by positive manage
ment and corporate strategies. BankMuscat is committed to sustaining its sound and stable track record as well as business and financial profile.”

Abu Dhabi’s Agthia buys Turkish bottled water producer Pelit Su for undisclosed amount - The Washington Post

Abu Dhabi state-backed food and drink company Agthia Group is buying Turkish spring water producer Pelit Su for an undisclosed amount.

Agthia said Sunday it expects to acquire all of Pelit Su’s shares during the first half of 2012.

Financial details weren’t disclosed.

MENA stock markets close - December 25, 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)

Egypt’s Shares Rally Most in a Month as Competing Politicians Signal Unity - Bloomberg

Egyptian stocks advanced the most in almost four weeks after weekend protests against the military’s rule were peaceful and the bourse said competing political parties will open tomorrow’s trading session.
Citadel Capital SAE, a Cairo-based private equity firm, rose 2.7 percent. Orascom Construction Industries (OCIC), the country’s largest publicly traded builder, climbed the most since Nov. 29. The benchmark EGX 30 Index (EGX30) jumped 1.9 percent, the biggest advance this month, to 3,683.66 at the 2:30 p.m. close in Cairo. In the Persian Gulf, Dubai’s DFM General Index (DFMGI) slid to the lowest level in more than seven years. The Bloomberg GCC 200 Index, which tracks the largest 200 companies in the region, gained 0.2 percent.
“The fact that different political factions are joining hands to open the exchange tomorrow is giving a morale boost for investors that they will back up the stock market and the economy despite their differences,” Mohamed Radwan, head of international sales at Cairo-based Pharos Holding for Financial Investment, said by telephone.

Aldar Advances Most in 2 Months as Board Affirms Share-Listing Commitment - Bloomberg

Aldar Properties PJSC (ALDAR) headed for the biggest gain in almost two months after the board of Abu Dhabi’s biggest developer by market value affirmed its commitment to keep the shares listed on the emirate’s stock market.
The shares climbed 2.4 percent to 85 fils at 10:53 a.m. in Abu Dhabi, poised for the biggest increase since Oct. 30.
The “Aldar board is fully committed to maintaining the company’s listing” on the Abu Dhabi Securities Exchange, the company said in a statement to the bourse.

Banks lift Qatar; Dubai slumps to new 7-year low - Stocks -

Telecom operator Zain Saudi closed at a two-month high after a stock upgrade while the kingdom's index slipped from Saturday's five-month higher as investors booked profit on petrochemical and banking stocks.
Shares in Zain jump 5.5 percent to SR5.75, their highest close since Oct. 29.
Riyad Capital upgraded the stock to 'buy' with a price target of SR6.40.

Dubai expects budget deficit of $499 million in 2012, less than half of 2011 shortfall - The Washington Post

Dubai’s government expects to run a budget deficit of nearly half a billion dollars in 2012 as it works to move beyond its financial difficulties.

Dubai’s official media office said Sunday the projected 1.83 billion dirham ($499 million) deficit will be less than half of its 2011 shortfall.

The emirate expects to spend 32.26 billion dirhams in 2012 while bringing in 30.43 billion dirhams, mainly through service fees, customs duties, oil revenues and dividends paid by its state-run companies.

Egypt's Citadel narrows 3Q losses on cost cutting | Reuters

Egyptian private equity firm Citadel Capital said on Sunday it narrowed third quarter losses by 30 percent in 2011 despite a challenging local and regional environment.

The company said it made a standalone net loss of 20.7 million Egyptian pounds in the third quarter compared with a net loss of 29.6 million Egyptian pounds in the same period last year.

"Cost-cutting at the firm and platform company levels has allowed us to preserve cash, while new fundraising from international limited partners and regional co-investors alike has seen us add important equity and debt to key platform investments," Citadel Capital Chairman and Founder Ahmed Heikal said in an e-mailed statement.