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Saturday, 30 June 2012

gulfnews : Three banks announce merger in Bahrain

Three Bahrain-based Islamic investment banks Capivest, Elaf Bank and Capital Management House are to merge.
The announcement was made after the extraordinary general meetings of the three banks approved the transaction. The merger will be effective after obtaining the final approval of the Central Bank of Bahrain and the Ministry of Industry and Commerce, the banks said.
Once implemented, the newly created entity will have shareholders’ equity of almost $350 million (Dh1.28 billion) and assets in excess of $400 million. The transaction is the first three-way merger in Bahrain.

UAE in strong place as world turns defensive - The National

The UAE economy is today enjoying a period of stable growth, three years after the contraction it suffered during the peak of the global financial crisis.

Credit Suisse believes that over the next two years, the UAE will continue on a path of gradual recovery, with GDP growing at about 3 to 4 per cent year on year. Sustained high oil prices, domestic demand growth and prudent fiscal policies are critical factors in the country's ability to sustain growth.

Although the Emirates seems less oil-dominated than other GCC countries (with net oil exports accounting for 30 per cent of GDP compared with 50 to 60 per cent in Saudi Arabia, Qatar and Kuwait), net oil exports play a key role since they also are a major growth driver for other key sectors, especially banking and real estate.

Egypt entrepreneurs fear for future - The National

As politicians and economists start drawing up plans to bring Egypt's economy back from the brink, the country's small business owners say they are unlikely to reap benefits any time soon.

The election of a new president, Mohammed Morsi,has put the country on a firmer footing on the path to establishing civil democratic rule.

But changes to the cabinet and delays on rewriting the constitution have kept the economic situation uncertain.

Investors must use caution in Libya - The National

As the elections in Libya approach, Mohamed Karbal, the managing director of the Karbal & Co law firm, explains the legal minefield of investing in the country.

Can foreign investors dip their toes in Libya?
There are four ways for foreign investors to conduct business in Libya: establishing a joint venture; opening a branch office; opening a representative office; and through direct investment.

Libya readies for dawn of new economic era - The National

Libya will come to a historic political and economic crossroads on Saturday as the first democratic elections for 40 years are held.

The polls are expected mark a new beginning for the wealthy North African economy that stagnated under the dictatorship of Muammar Qaddafi.

Already, investors are watching for the outcome of the elections with an eagle eye as opportunities abound in oil, infrastructure, property and tourism.

Mulk set to spend $1bn on global expansion - The National

Mulk Holdings, a manufacturing conglomerate based in Sharjah, is investing up to US$1 billion (Dh3.67bn) in an ambitious expansion project in the UAE, Europe and Asia over the next two years.

The company plans to set up a facility in Abu Dhabi's Khalifa Industrial Zone (Kizad) with two other joint venture partners to make aluminium components, said Shaji Mulk, the company's chairman.

It is also planning to increase the capacity of an existing plant in Serbia as well as new projects in Turkey and India.

So far, so good for Egypt but economic reform set for delay - The National

Markets have so far reacted favourably to the victory of the Muslim Brotherhood's Mohammed Morsi in Egypt's first post-revolution presidential elections.

The near 13 per cent rise by the EGX30 Index - since the result was announced - reflects relief that the political process prevailed in spite of fears that the military might override the will of the people.

Mr Morsi's initial calls for an inclusive government have also been welcomed.

Energy sector is more than just oil production - The National

As more foreign companies enter the UAE's oil and gas fields, a new prospect is coming into view: the country is positioned to become a true regional hub for the energy industry.

As more areas are opened to exploration, and as existing concessions come up for renewal, a number of new companies are moving into the business. Companies from Germany, Austria, South Korea and China have all recently signed deals. Some of the new entrants are operating, or plan to operate, elsewhere in the region. They will need regional headquarters.

With an already developed oil and gas industry, ample reserves, stable government, a relatively open economy, superior travel and shipping infrastructure, and an excellent reputation, the UAE is the obvious location for those offices. With them would come oilfield-services companies that are essential to the industry.

gulfnews : A pipeline to jobs and regional stability, Emirati youth say

The UAE’s strategic oil pipeline that will bypass the Strait of Hormuz will boost employment and promote stability in the country, Emirati youth have said.
The oil export pipeline from Habshan in Abu Dhabi to Fujairah is expected to start exports within a month and will initially operate at a rate of 1.5 million barrels per day (bpd). It is expected to increase to 1.8 million bpd.
The UAE is now producing about 2.6 million bpd and has a production capacity of around 2.7 million bpd. “The pipeline will boost the economy in terms of employment. Unemployment is a big issue because not a lot of Emiratis are involved in the multi-million contract deals that are made to develop this country,” said Maitha Ahmad, a 26-year-old business executive.

gulfnews : Integrity must be restored among banks

Banking and financial services constitute the backbone of the modern global economy. In their traditional role, they are entrusted with the savings of people and, after due diligence, are required to lend funds to businesses that generate employment and provide goods and services to the community.
However, as banking institutions moved away from this basic role and started making money from ever more opaque financial instruments, a moral rot set in among those that were entrusted with the effective functioning of the global economy on which we all are dependent. Banks now routinely put their own interests ahead of the responsibility they have towards the communities they serve.
After the global financial crisis, sparked by their reckless behaviour, it was hoped that some sense of responsibility and the threat of effective regulation will restore ethical behaviour among bankers. But it turned out to be a false hope.

gulfnews : Handsome profits for regionally-listed firms

It is business as usual in the economies of the six-nation Gulf Cooperation Council (GCC) countries when it comes to the ability of locally-listed firms of registering gorgeous profits. Recently-released statistics put combined net profits of 543 listed companies at $14.5 billion (Dh53.24 billion) during the first quarter of 2012. This represents a notable increase of 12.9 per cent of net income compared to the same period in 2011.
Undoubtedly, this level of profit-making says a great deal about the current status of business activities in the region. At the very least, the economies are doing fine, with consumers having the ability and willingness to spend. Needless to say, per capita income in Qatar, put at a whopping $107,000 per annum, is second to none in the world. What’s more, Qataris are noted for spending and investing rather than saving.
Part of the credit goes to the authorities and their determination of augmenting public sector spending with all the positive spill-over effects on the economic situation. Continuing the Qatari example, the budget for fiscal year 2011-13, which got under way in April, projects expenditures of a record $48.9 billion, showing growth of 27 per cent.

gulfnews : Arab bank assets by end of June stood at $2.65tr

Abu Dhabi Volume of assets at Arab banks expanded to 2.65 trillion (Dh9.74 trillion) end of June 2012 with a growth rate of 2.5 per cent compared to 2011, a report by Union of Arab Banks (UAB) showed.
“In spite of various internal and external issues facing the Arab countries, the banking sector has achieved positive results and has not been affected by the turmoil in the region by recording continuous growth,” UAB said.
“We expect that the volume of assets of Arab banking sector would reach by end of June of 2012 $2.65 trillion, with a growth of 2.5 per cent compared to the same period of 2011,” UAB said.

gulfnews : Creative destruction could renew Gulf Markets

Last week’s reflections in this space on the subject of economic change reminded me of something my Japanese boss told me years ago in banking. “Change is good,” he said brightly.
I don’t remember exactly what that was about, but I’m pretty sure I had the contrary notion ‘If it ain’t broke, don’t fix it’ in mind, feeling that whatever was coming had more to do with making a mark than making things better, a familiar trait of middle management.
His opinion might have been explained by his experience of coming up through the Japanese banking system, which certainly needed changing, seeming to be riddled with inertia, with failing institutions hiding (and being allowed to hide) their balance-sheet horrors for fear of the shockwaves if they actually revealed the true scale of their losses and vulnerability. A bit like the European banking sector right now, as it happens.

British justice minister calls for banker prosecutions - Yahoo! News Maktoob

Britain's justice minister called Saturday for criminal prosecutions of bankers and stronger financial regulation after scandals erupted over rate manipulation and mis-selling by major lenders.
"We are very bad at prosecuting financial crime in this country," Justice Secretary Ken Clarke told BBC radio.
"I suspect financial crime is easier to get away with in this country than practically any other sort of crime."

Saudi Stock Market close - June 30, 2012

General Index
Intraday  3 month  
 Daily Statistics
 General Index6709.91
 Change (%)1.89%
 T. Volume204311213
 T. Companies 157

Saudi Shares Advance on European Debt Optimism, Oil-Price Surge - Bloomberg

Shares in Saudi Arabia, the Arab world’s biggest stock market, rose the most in 10 weeks after U.S. equities rallied on optimism that an accord among European leaders on banks will help contain the region’s debt crisis.
Saudi Basic Industries Corp. (SABIC), the world’s largest petrochemicals maker, and Al-Rajhi Bank (RJHI), the kingdom’s biggest bank by market value, advanced the most since April 17. National Industrialization Co. (NIC) gained the most since June 4. The Tadawul All Share Index rose 1.9 percent to 6,709.01 at the 3:30 p.m. close in the capital Riyadh.
“The Saudi market was supported by positive news from the European summit,” Turki Fadaak, the head of research at Albilad Investment Co. in Riyadh, said today. “This led to a strong rise in oil and commodity prices.”

Saudi's Bahri gains 9 percent after merger announcement | Reuters

Shares at Saudi National Shipping Co (Bahri) 4030.SE rose 9 percent on Saturday after it signed an agreement with Saudi Aramco to buy its Vela marine unit for $1.3 billion in cash shares.

On Wednesday State oil giant Saudi Aramco and Bahri announced the agreement that would make Bahri the world's fourth largest owner of very large crude carriers, or VLCCs. Bahri will be the exclusive provider of VLCC crude oil shipping services to Saudi Aramco, under a long term agreement.

Saudi Shares Advance on European Debt Optimism, Oil-Price Surge - Businessweek

Shares in Saudi Arabia, the Arab world’s biggest stock market, rose the most in 10 weeks after U.S. equities rallied on optimism that an accord among European leaders on banks will help contain the region’s debt crisis.

Saudi Basic Industries Corp., the world’s largest petrochemicals maker, and Al-Rajhi Bank (RJHI), the kingdom’s biggest bank by market value, advanced the most since April 17. National Industrialization Co. gained the most since June 6. The Tadawul All Share Index (SASEIDX) rose 2 percent to 6,715.70 at 11:24 a.m. in the capital Riyadh.

“The Saudi market was supported by positive news from the European summit,” Turki Fadaak, the head of research at Albilad Investment Co. in Riyadh, said today. “This led to a strong rise in oil and commodity prices.”

Barron's: Get Ready For A Chinese Hard Landing - Business Insider

In its latest print edition, Barron's magazine is calling for a Chinese hard landing -- a scenario where a hot economy slows sharply, potentially falling into recession.
Though recently announced interest-rate cuts and a ramp-up in the government's already massive infrastructure spending could postpone the day of reckoning, to us it looks like the Great China Growth Story may be falling apart.
Barron's Jonathan Laing doesn't present much new evidence.  However, he compiles almost all of the bearish arguments and quotes all of the big China bears like Jim Chanos.

ENERGY - Gazprom ‘warns’ Turkey on gas deal

Gazprom on June 29 sent a warning signal to Turkey over Ankara’s agreement with Azerbaijan to build a gas pipeline to Europe, a rival to the Moscow-backed planned South Stream trunk.

Gazprom said Turkey demanded additional gas supply from Russia after an explosion on the Turkey-Iran natural gas pipeline June 28, which cut the gas flow. The statement said Gazprom has increased gas supply to Turkey, but added that if the Trans-Anatolian project is “completed as planned in 2018, Turkey could then apply for help to Baku,” according to Gazprom’s e-mailed statement.

Turkey, Gazprom’s second largest customer, and Azerbaijan signed a deal on June 26 to build $7 billion Trans-Anatolian natural gas pipeline (TANAP) to carry Azeri gas to European markets. The TANAP rivals the South Stream natural gas pipeline project, which is supported by Russia, and goes through Turkey.

gulfnews : Oman wary of GCC Union proposal

Notwithstanding the Omani Minister Responsible for Foreign Affairs’ most recent declaration that there was “no Gulf union,” and that such a scheme now only existed “among journalists”, the Sultanate’s perspective on Saudi King Abdullah Bin Abdul Aziz’s proposal to transform the Gulf Cooperation Council (GCC) into a much stronger alliance reflected an existing schism within the alliance. Inasmuch as the Saudi monarch moved on his union proposal because he was persuaded that an existential threat from Iran confronted GCC States, the affable Yousuf Bin Alawi Bin Abdullah’s forceful declaration revealed that Muscat did not share the view that such a threat existed.
Other GCC governments, including Kuwait and the UAE, expressed similar reservations though neither volunteered to voice them in public. Bahrain and Qatar supported the proposal, while Manama stressed its urgency. Still, Muscat’s categorical assessments meant that no unanimity existed, although that did not in and of itself, indicate that the project was in permanent abeyance. In fact, the very idea of union was imbedded in the GCC when the alliance was created in 1981.

BBC News - How Iran is giving oil sanctions the slip

A complete European Union oil embargo on Iran over its nuclear programme comes into force on Sunday, but the Islamic Republic has already found some ways of circumventing the sanctions.

The Pacific islands of Tuvalu have some 11,000 inhabitants on a total of 26sq km (10 square miles) of land.

Few Iranians can find the tiny state on the map or have even heard of it, but out of a fleet of 39 Iranian oil tankers, 15 now fly the Tuvaluan flag.

UAE's Fujairah emirate to step up petroleum facilities - NY Daily News

Sheikh Hamad bin Mohammed Al Sharqi, the ruler of Fujairah and member of United Arab Emirates' supreme council, has directed the Fujairah Port Authority to increase petroleum facilities and berths at the port.

Sheikh Hamad also directed the authority to invite tenders as soon as possible for constructing these facilities to enable the port to cope up with the increasing storage capacity of oil companies to store crude and its derivatives.

Based on these directives, contracts have been awarded to build two new berths to serve oil tankers.

The Fujairah Port currently has seven dedicated berths for oil tankers with a total length of 2,340 metres, all boasting the latest equipments for docking and handling.

Friday, 29 June 2012

Glencore and Qatar enter $26 billion poker game | Reuters

Commodities trading giant Glencore (GLEN.L) and Xstrata (XTA.L) are digging in for days or even weeks of brinkmanship to try and save Glencore's $26 billion takeover deal after Qatar's state investment fund interrupted proceedings this week with a last-minute call for better terms.

Bankers involved in the transaction have already flown out to the oil-rich Gulf state as the companies roll up their sleeves for what one person familiar with the matter described as a "poker game".

The talks will pit Glencore's strong-willed chief executive Ivan Glasenberg against Qatar Holding's "iron man" Ahmad al-Sayed, who has built up a stake of nearly 11 percent in Xstrata since the Glencore deal was announced in February.

Etihad, Qatar said to eye SpiceJet stake - Transport -

Etihad Airways and Qatar Airways are reportedly in talks to acquire a minority stake in low-cost Indian carrier SpiceJet.
According to a report by India's Business Standard, which cited sources familiar with the development, the Gulf airlines are mulling the move as the Indian government considers allowing overseas airlines to invest in domestic carriers.
When asked about the potential deal, a SpiceJet spokesperson told the paper: "Some foreign carriers have expressed interest in picking up a stake in SpiceJet if there would be a change at the policy level by the government.

U.S. sanctions may stop UAE from importing Iranian condensates | Reuters

Dubai's national oil company may have to stop importing condensate from Iran unless Washington grants it an exemption or temporary exception from this week's tightening of U.S. sanctions, diplomatic and industry sources said.

U.S. State Department officials said that financial transactions that facilitate the import of Iranian condensate are liable to a new round of measures effective June 28 that aim to cut Iran's oil revenues and force Tehran to drop its disputed nuclear program.

The fresh sanctions target condensate, produced in association with gas, which is Tehran's second-biggest source of export revenue after crude and refined products, which were targeted in earlier sanctions.

Abu Dhabi's TDIC eyes breakeven after 2011 losses | Reuters

Abu Dhabi's Tourism Development Investment Company (TDIC), builder of branches of the Louvre and Guggenheim, made a net loss of 1.27 billion UAE dirhams ($346 million) in 2011 due to asset writedowns amid a regional property slump.

The state-owned company added that higher deliveries of residential properties this year may help the state-owned developer break even in 2012.

The loss, "driven predominantly by increased depreciation of newly completed assets, was lower than projected due to strong cost control across the company", TDIC said in a statement on state news agency WAM.

Doha Festival City signs QAR3.7 billion syndicated facility -

Bawabat Al Shamal Real Estate Company WLL (BASREC) has signed a QAR 3.7 billion (US$1.02 billion) 10 year syndicated facility to finance the development of the Doha Festival City project.

QInvest acted as Financial Advisor to BASREC and Sole Bookrunner for the facility. Commercial Bank of Qatar (CBQ) and Barwa Bank took the Mandate Lead Arranger (MLA) roles with CBQ who was the original lender also acting as the Lead and Documentation Bank on the conventional tranche as well as the conventional Facility Agent. Barwa Bank was the Lead and Agent Bank on the Islamic tranche, also taking the role of Islamic Documentation Bank.

The MLAs were joined in the facility at Lead Arranger level, across the two tranches, by Ahli Bank, Doha Bank, International Bank of Qatar, Al Khalij Commercial Bank (al khaliji) , Qatar International Islamic Bank and Qatar National Bank.

Glencore expected to sweeten terms to win Xstrata | Reuters

Commodities trader Glencore , scrambling to save its $30 billion offer for miner Xstrata, is expected to sweeten its bid in order to seal the deal, after key shareholder Qatar said it could oppose the takeover on current terms.

Qatar, which remained silent on its intentions for months as it built the second-largest stake in Xstrata, said in a surprise statement on Tuesday that it supported the principle of the deal but demanded an improvement in terms from 2.8 new Glencore shares for every Xstrata share to 3.25.

Glencore, which made its long-awaited move for Xstrata in February, had been expected to improve the terms of its all-share deal in the early days after the offer was announced.

Hastie managers, workers left high and dry in UAE - ABC News (Australian Broadcasting Corporation)

Five weeks after the collapse of the Hastie Group, 1,000 staff based in the United Arab Emirates (UAE) have been left in the lurch, with their former managers forced to support them out of their own pockets.

In Australia, about 80 per cent of the 2,700 workers made redundant are now back working for other contractors, having received their full termination entitlements.

But the 1,000 mainly Indian and Bangladeshi labourers are yet to see a cent of their entitlements, known locally as gratuities, after Hastie's bank account was drained of $3 million just days before administrators were appointed.

‘Qtel’s planned buyout of Wataniya credit-negative’

Moody’s Investors Service says that the proposed minority buyout by Qatar Telecom Q.S.C. (“Qtel”; rated A2/stable) of shares in Wataniya (not rated) is credit-negative as it will reduce Qtel’s liquidity headroom given that this is the second significant minority buyout that it has announced within a month. Moody’s explains that Qtel’s A2 rating and stable outlook remain unchanged, and believes the company can absorb the initial negative cash impact pro-forma the combined effects of material upcoming and closed transactions.

Emirates A380s Said to Be First Used as U.S. Bond Collate - Bloomberg

Four Airbus SAS A380 passenger jets being leased to Emirates Airline are the first of their kind to be used as collateral in a U.S. corporate bond offering, according to a person familiar with the transaction.
Doric Nimrod Air Finance Alpha Ltd., a leasing company, sold $587.5 million of debt secured by four A380s to be operated by Dubai-based Emirates, according to data compiled by Bloomberg. The two-part offering was the first sale of dollar- denominated bonds backed by a non-U.S. airline’s planes, said the person, who wasn’t authorized to discuss the deal publicly.
Emirates is the biggest customer for the A380, the world’s largest passenger aircraft. With just 75 in service, investors needed reassurance that the plane will be valuable collateral in case of a default, said Mark Lapidus, managing director of Doric Asset Finance Ltd., the issuer’s London-based parent.

Bonanza of bond sales in region - The National

The strongest six months for sukuk issuance on record has put the Arabian Gulf's bond markets on track for their best year yet.

The news comes as the region takes advantage of low interest rates to load up on cheap debt.

Companies and governments have sold a total of US$20.4 billion (Dh74.93bn) of bonds so far this year, including $12.4bn of sukuk, according to Bloomberg data. Both totals are the highest on record.

Thursday, 28 June 2012

gulfnews : Majid Al Futtaim said to get $3b bids for bonds

Majid Al Futtaim Holding LLC received $3 billion (Dh11 billion) in bids for the $500 million bonds it sold today, according to a banker familiar with the transaction.
Investors from the UK made up 36 per cent of the bids, while 25 per cent were from Europe, 19 per cent from the Middle East and 20 per cent from Asia, said the banker, who asked not to be identified because the information is private. Fund managers bought 70 per cent, banks 16 per cent, private lenders 11 per cent and insurance companies 3 per cent, the banker said.
The debt of the Dubai-based private company was priced to yield 5.25 per cent, or 389.7 basis points over the benchmark midswap rate, the banker said. JPMorgan Chase & Co, National Bank of Abu Dhabi, Barclays, Standard Chartered and UBS AG managed the sale.

Egypt’s equity dawn remains in doubt -

The election of a new Egyptian president has raised hopes among investors that the country’s once rapidly growing economy will finally begin to right itself.
Its sagging stock market has jumped nearly 17 per cent from where it was before Sunday’s announcement that the Muslim Brotherhood’s Mohamed Morsi had won the contest.
Many market analysts, though, caution that Egypt’s troubles are far from over. It suffers from low foreign reserves and a yawning budget deficit.

London Whale Trade Explodes, Current Estimate of JP Morgan Losses as High as $9 Billion « naked capitalism

So again, what did Dimon know when? Under the hot lights at the House Financial Services Committee, he repeatedly brushed off the losses on the failed Chief Investment Office trades as no biggie. Let us remind readers that the size of the CIO’s balance sheet would make it the 8th largest bank in the US and it was running half of JPM’s total risk exposures, so it’s hard to see the failure of oversight as something to be waived off. And now it turns out the losses are going to clock in at a much higher number than the $2 billion that Dimon kept repeating in the hearings. Recall he refused to update that number, maintaining the public would have to wait for the bank’s second quarter earnings release (admittedly, he did signal the final result could come in much higher). Funny that they’ve now leaked out well in advance of that date. Per the New York Times’ Dealbook (hat tip Richard Smith):

Qatar iron man faces off with Glencore | Reuters

Ahmad al-Sayed, the Qatari investment manager holding the fate of Glencore's (GLEN.L) $26 billion takeover of Xstrata (XTA.L) in his hands, is known as an aggressive negotiator who relishes the big deal.

The lawyer was formerly general counsel at Qatar Investment Authority (QIA), the sovereign wealth fund of the gas-rich Gulf state, before taking the helm as chief executive of Qatar Holding in 2008.

Well-liked and trusted by Sheikh Hamad bin Jassim al-Thani, the Qatari prime minister who is also chief executive of QIA and chairman of Qatar Holding, he has significant influence at the top level where decisions are made.

Timur Kuran weighs the legacy of Islam’s economic divergence from the West

How is it that Islamic civilization, which flourished in the 10th century while Europe was still mired in the Dark Ages, found itself far behind the West economically and politically at the beginning of the 20th?
That question has long been subject to broad-brush speculation by scholars, but Duke University economist Timur Kuran has forgone any hand waving to argue that a special mix of trade and legal traditions can explain why İstanbul languished while London and Antwerp bloomed. In his critically acclaimed book “The Long Divergence: How Islamic Law Held Back the Middle East,” Kuran summons a meticulous knowledge of economics, history and Islamic law to find the many roots of that slow-emerging disparity: Islamic inheritance law dispersed wealth among the family rather than heaping it on first sons, trade laws nullified commercial partnerships after a single signatory’s death and Middle Eastern trusts were inextricably bound to their founding mandate unlike European corporations, which were dynamic and self-governing. These reasons and more, argues Kuran, meant that capital remained diffuse in the Middle East while the West rose to commercial might unchallenged.

Bank Al Khair ex-CEO convicted of embezzlement | Reuters

A Bahraini court has sentenced the former chief executive of Bank Al Khair in absentia to four years in jail for embezzlement and squandering the bank's funds, the Islamic lender said.

It said the Criminal Court of Bahrain also convicted Majid Al-Refai at a hearing on Tuesday of destroying bank documents as well as preventing shareholders and authorised entities from accessing bank records.

Rifai said in an emailed statement to Reuters on Thursday that he was aware of the verdict and denied all charges.

MENA stock markets close - June 28, 2012

 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)

First Capital of Switzerland Investment Bank (FCSIB) Named as the Best Investment Bank 2012 in the UAE - MarketWatch

First Capital of Switzerland Investment Bank (FCSIB) has been recognized as the "Best Investment Bank in the UAE" for 2012 by critically acclaimed magazine World Finance.

World Finance's esteemed panel, with input from its readers, determined the winners based on a series of criteria that are based on strategies, ideas and innovations signifying achievements and best practices in a particular field. These awards are the only industry honors based on voter participation.

First Capital of Switzerland (FCS) Group CEO Abdulrahman Al Ansari said: "The last few years have been difficult for the financial industry and investment banking sector in particular. This award comes as a genuine byline for our continued endeavors to be a market leader in setting the pace for a positive shift in the financial industry in the Middle East. This award reestablishes our pledge to our valued clients and stakeholders to provide optimal, customized solutions to place them in the best possible position within the market."

Glencore Courts Qatar as Xstrata Tweaks Merger Pay - Bloomberg

Glencore International Plc and Xstrata Plc (XTA), seeking to salvage the year’s biggest takeover, moved to appease dissident investors who have threatened to derail the 16 billion-pound ($25 billion) deal.
Glencore yesterday met with Xstrata’s second-biggest shareholder, Qatar Holding LLC, over the sovereign wealth fund’s call for a 16 percent increase in the commodity trader’s bid, people familiar with the London talks said. Xstrata revised payments for executives intended to keep them at the combined company by adding a link to performance and made all bonuses payable in shares after holders attacked them as excessive.

'Sluggish' U.S. gaming worries Moody's Investor Service -

Moody's Investors Service expressed a cautious view of the U.S. casino market Wednesday, warning that weak gaming revenues and downward consumer trends could place several companies, including Caesars Entertainment Corp. and CityCenter Holdings, "at great risk."
Officials from the companies didn't dispute Moody's assessment that the U.S. gaming market has stalled but rejected notions the businesses are in trouble.
"Our debt is old news," Caesars Entertainment Senior Vice President Jan Jones said of the company's nearly $20 billion in long-term debt, an industry high. "It's the same debt we've had for the last five years, and we don't have any maturities coming due any time soon. The disappointment about the report is that Moody's is correct, the market is sluggish right now."
Moody's said consumer confidence has weakened, payroll expansion has slowed, and retail sales have softened, slowing the improvements in U.S. gaming revenues.

Persian Gulf Stocks: Industries Qatar and Qatar Telecom Moved - Bloomberg

Qatar’s QE Index (DSM) fell 0.5 percent to 8,123.02, the lowest since Aug. 24, at the close in Doha. The measure is down 7.5 percent this year. Dubai’s benchmark DFM General Index (DFMGI) was little changed and Saudi Arabia (SABIC)’s market was closed for the weekend.

Exclusive: Saudi readies oil line to counter Iran Hormuz threat | Reuters

Saudi Arabia has reopened an old oil pipeline built by Iraq to bypass Gulf shipping lanes, giving Riyadh scope to export more of its crude from Red Sea terminals should Iran try to block the Strait of Hormuz, industry sources say.

The Iraqi Pipeline in Saudi Arabia (IPSA), laid across the kingdom in the 1980s after oil tankers were attacked in the Gulf by both sides during the Iran-Iraq war, has not carried Iraqi crude since Saddam Hussein invaded Kuwait in 1990.

Saudi Arabia confiscated the pipeline in 2001 to compensate for debts owed by Baghdad and has used it to transport gas to power plants in the west of the country in the last few years.

Bahrain Sells $1.5B in 10-Year Bonds at Yield of 6.143% - Source -

The Kingdom of Bahrain sold a $1.5 billion, 10-year bond, at a yield of 6.143% to investors on Wednesday, according to investors familiar with the deal.

Specialty Food Makers Adopt a ‘Made in U.A.E.’ Label -

Rosso Vivo, a two-month-old artisanal pizzeria in Dubai, has the city’s Italian community talking. A tough crowd to please, they appear to have given the cozy restaurant their approval, returning in groups to enjoy a slice of Naples, the Italian city credited as the birthplace of pizza.

A lot about the Rosso Vivo pizzas is actually Neapolitan: the craft, the chef Raffaele Medaglia and even the bricks are shipped from Naples to build the oven.

One exception is the bocconcini mozzarella. It comes from the Italian Dairy Products factory, about 40 kilometers, or 25 miles, from Dubai, within an emerging industrial-free zone in the neighboring emirate of Sharjah.

Glencore Said to Meet Qatar for Talks on Xstrata Purchase - Bloomberg

Glencore International Plc met with Qatar’s sovereign wealth fund in London today to try to revive a 16 billion-pound ($25 billion) takeover of Xstrata Plc, three people with knowledge of the situation said.
Qatar Holding LLC late yesterday surprised global markets by objecting to the proposed deal, which would create the fourth-biggest mining company, because the price was too low. The fund has spent more than $4 billion amassing an 11 percent Xstrata stake this year. Its stance adds to investor opposition to the transaction and raises concern the deal will fail.
Glencore, headed by CEO Ivan Glasenberg, seen here, today said it’s considering a proposal put to its board from Xstrata about changes to the payments. Photographer: Andrey Rudakov/Bloomberg
“This is a seismic development that has almost certainly caught Glencore off guard,” Liberum Capital Ltd. analysts wrote in a note today, referring to Qatar’s stand. “We firmly expect Glencore (GLEN)’s response will be that the economics don’t support a merger at 3.25 and that it is opposed to sweetening its offer.”

Wednesday, 27 June 2012

CPI Financial | News | Dubai Holding establishes Board for TECOM Investments

The move is in continuation of Dubai Holding’s efforts to further strengthen corporate governance at its entities. Dubai Holding’s Corporate Governance model constitutes of three independent non-executive directors and two executive directors. The Board will be responsible for defining the investment philosophy, setting long-term business strategy and overseeing implementation; ensuring adequacy of internal controls and strategic risk management.
Ahmad Bin Byat, Chief Executive Officer of Dubai Holding, said, “Strengthened corporate governance forms a key pillar of Dubai Holding’s strategic guidelines. In accordance with international best practices, Dubai Holding is pleased to announce the appointment of a strong and experienced board for TECOM. We are confident that with such solid governance framework, TECOM will continue to further build on its success.”

Three banks in Egypt face the threat of downgrade - The National

The ratings agency Standard & Poor's yesterday said three of Egypt's biggest banks could be in for a downgrade.

The news came days after S&P said Egypt's long-term debt was on watch for a possible cut as political and economic turmoil in the aftermath of the country's revolution took its toll.

Commercial International Bank (CIB), the largest private-sector lender in the country, and two of the country's largest domestic banks, National Bank of Egypt (NBE) and Banque Misr were placed on credit watch with negative implications because they faced "significant sovereign risk" as political tensions escalate, the ratings agency said.

Banker to fight four-year term for embezzlement - The National

Majid Al Refai, the banker sentenced to four years in prison by a Bahraini court for embezzlement, is to fight the verdict from his native Kuwait, says his adviser.

The former chief executive of Bank Alkhair, an Islamic wholesale bank based in Bahrain, Al Refai was this week found guilty by a Bahraini court of embezzlement, misappropriating bank funds and destroying bank records.

"He continues to assert his innocence of these charges, and is exploring all legal routes for challenging the verdict from Kuwait," said one of his advisers, who declined to be identified.

NBAD looks West for expansion - The National

National Bank of Abu Dhabi says it will expand in western countries as the lender, along with many counterparts in the Arabian Gulf, has avoided the credit rating downgrades hammering many big rivals in the West.

"Our strong credit ratings will certainly create opportunities in geographies where many local banks have been downgraded and where customers and investors are looking for a safe haven for their funds," said Abdulla AbdulRaheem, NBAD's group chief operating officer.

Downgrades of 15 global investment banks by Moody's Investors Service last week left half a dozen regional lenders among the world's most highly-rated. Six banks - NBAD, Qatar National Bank (QNB), National Bank of Kuwait, Sabb (Saudi British Bank), Banque Saudi Fransi and Samba Financial Group - are currently rated Aa3 and were left unscathed by the ratings agency's knife.

gulfnews : Kuwait and economic diversification

Economic diversification represents one of the main strategic goals set by the Gulf Cooperation Council (GCC). This approach was adopted in 1986 after the collapse of oil prices that reached seven dollars per barrel. This called for the introduction of policies of austerity and led to delay in payment of salaries in some institutions and the postponement of many projects due to cuts in expenditure.
Since then, successes made by GCC countries have varied greatly and relatively. The UAE and Saudi Arabia, for example, achieved significant progress in diversification of sources of income and reducing reliance on oil.
A few years later, Qatar followed suit and made significant progress, as the UAE managed to develop important sectors, such as tourism, services, and some modern industries in the UAE and energy -based industry. Saudi Arabia succeeded in developing consumer products, while Qatar has developed gas-related industries and services.

Saudi giant plans to merge two oil carriers - Yahoo! News Maktoob

Saudi Arabia's oil giant Aramco on Wednesday announced plans to merge its company Vela with Saudi firm Bahri to form the world's fourth largest oil transporter.
Under a non-binding memorandum of understanding, Bahri would pay Vela $1.3 billion, made up of $832,000 in cash and the rest in stocks.
"By creating a new global leader in shipping, Saudi Aramco hopes to build a strong company that can leverage its capabilities in the shipping sector and would meet its growing business portfolio," it said.

THE DAILY STAR :: News :: Middle East :: Obama, UAE prince talk Iran, Syria, oil -White House

U.S. President Barack Obama discussed conditions in Iran and Syria as well as global energy prices with Abu Dhabi Crown Prince Mohammed bin Zayed al-Nahayan on Wednesday, the White House said.

They agreed there was an urgent need to stop the bloodshed in Syria and for political transition there, and also said Iran should meet its international obligations related to its nuclear program, according to a statement issued after their meeting.

"Noting the profound changes taking place in other countries in the Middle East, they called on governments and citizens alike to avoid violence, advance tolerance, and protect human rights - particularly the rights of women," the White House said.

Qatar, Glencore and Xstrata: many shares, much power | beyondbrics

Opposition from Qatar’s sovereign wealth fund to the terms of the planned merger between Glencore and Xstrata merger has brought the $65bn deal to the verge of collapse.

The Qatari fund’s move shows the extent to which big sovereign funds, many from emerging markets, have begun flexing their muscles, and of the influence they may now exert on big developed nation corporations.

The Qatar Investment Authority owns 10 per cent of Xstrata and has several similar stakes in some of the world’s biggest companies.

Analysis: Politics hinders aid to Arab Spring economies | Reuters

When Saudi Arabia withdrew its ambassador to Cairo in late April, yields on Egyptian Treasury bills rose and stock prices slipped as investors feared Egypt would be cut off from billions of dollars of Saudi financial aid.

The diplomatic row, triggered by street protests in Cairo against Saudi Arabia's arrest of an Egyptian lawyer, was quickly patched up. The ambassador returned to Cairo within a week and a few days later, Saudi Arabia placed a $1 billion, eight-year deposit in Egypt's central bank.

But more than a year after the start of the Arab Spring uprisings around the Middle East, the incident showed how countries hit by the unrest face uncertain prospects for obtaining foreign aid, which is badly needed to rebuild their economies and ease social tensions.

Azerbaijan-Turkey-Europe: Raising a Glass to Gas |

Just when you thought it would never happen, Turkish Prime Minister Recep Tayyip Erdoğan has announced that Azerbaijan, Turkey and Europe will soon be tied “organically." The organic matter in question is, of course, natural gas, soon to flow through a new pipeline, per a long-awaited June 26 agreement between Azerbaijan and Turkey.  

Europe’s organic dependence on Russia could decrease after some 16 billion cubic meters (bcm) of Azerbaijani gas start to flow each year via the Trans-Anatolian Natural Gas Pipeline (TANAP), to be completed in 2018. Turkey will be happily siphoning off six billion cubic meters of the gas, while the rest will head further afield, to Europe. The volumes are projected to nearly double by 2023 and further increase to 31 bcm by 2026.

Shah Deniz 2, the second stage of development of a massive gas field off Azerbaijan's Caspian-Sea coast, will provide the bulk of the supplies, but Erdoğan expressed hope that, in future, the gas will come not only from Azerbaijan, but from its across-the-Caspian-Sea neighbors in Central Asia.

Investcorp signs $504 million debt refinancing deal: sources | Reuters

Bahrain-based investment company Investcorp INVB.BH has signed up to a $504 million-equivalent loan aimed at refinancing debt due in 2013, with the final amount potentially being increased in the coming weeks as more banks join the lending syndicate, sources said on Wednesday.

The loan heads off any refinancing risk next year for the firm, which once owned luxury brands Gucci (GUCG.PK) and Tiffany & Co (TIF.N) but like other private equity houses in the Gulf has been hit in more recent times by unfavorable market conditions.

Investcorp wanted to secure funds ahead of its financial year-end on June 30 so the loan could be included in its full-year results, two banking sources said.

Bahrain Said to Offer Record-High Yield in Bond Sale - Businessweek

Bahrain, which quashed anti- government protests in 2011, will pay more to raise $1.5 billion than it did in prior 10-year bond sales, a person familiar with the sale said, as investors focus on political risks.

The smallest member of the six-nation Gulf Cooperation Council priced bonds at 437.5 basis points over similar-maturity midswaps, or about 6.15 percent, according to the person, who asked not to be identified because the information is private. Bahrain last sold 10-year debt in March 2010 at 5.5 percent, data compiled by Bloomberg show. The yield on the bonds due in March 2020 was 5.54 percent at 4:31 p.m. in Dubai.

“International investors are still a bit unsettled about the situation there and they would demand a premium to reflect their nervousness,” Nick Stadtmiller, head of fixed income research at Dubai-based Emirates NBD PJSC (EMIRATES), said today. “Credit spreads for Bahrain are quite a bit wider than they were a couple of years ago, which largely has to do with political uncertainty.”

Gulf banks rated high for capital ratios -

Gulf banks are on average better capitalised than their global peers and look set to remain largely immune to the European crisis in the coming years, according to a report by Standard & Poor’s, the rating agency.
The 26 Gulf banks covered by the agency have risk-adjusted capital ratios – a measure of a bank’s ability to absorb risks – of 12-13 per cent, about 5 percentage points higher than the 100 largest global banks covered by S&P.
The strong capitalisation is thanks in part to high regulatory requirements, but also because of conservative management at the banks.

MENA stock markets close - June 27, 2012

 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)

CNBC announces new Middle East programme -

CNBC, First in Business Worldwide, today announced that it is launching a new series covering business and finance in the Middle East, significantly increasing its news coverage of the region.

Each fortnight, starting on 4 July, CNBC’s Yousef Gamal El-Din will present a new half-hour series, Access: Middle East which will air in primetime programming.  Gamal El-Din will travel around the region taking an in-depth look at the key business centres, interviewing top business leaders and policy makers.  The programme will examine the economy and highlight those industries leading the growth.

Access: Middle East will air across CNBC’s regional networks in EMEA, Asia-Pacific and on CNBC World in the United States, with a combined reach of more than 190 million homes.  The series will be produced from CNBC’s bureau in Dubai.

Bulgaria pins hopes on Black Sea gas | beyondbrics

These are early days, but interest from energy majors in Bulgaria’s offshore gas potential is raising hopes that the country can reduce its dependency on Russian imports.

ExxonMobil of the US, Total of France and Melrose Resources of the UK have submitted bids for the 15,000 sq km Khan Asparuh field in the Black Sea near the maritime border with Romania. A five-year exploration permit should be awarded in coming days and, if deposits are found, extraction could start in three to four years.

Exxon and OMV of Austria recently found natural gas deposits of 40bn to 80bn cubic metres in a field on the Romanian side of the border. Delyan Dobrev, Bulgaria’s energy minister, said a similar discovery at Khan Asparuh would cover domestic gas needs for up to twenty years.

Ex-adviser to Russian government: “zero prospect” of Moscow being international financial centre | Emerging Markets, Emerging Views

Tim Reucroft, a London-based consultant who has advised Russia and other emerging markets on capital market infrastructures, has said the Kremlin’s plan to turn Moscow into an international financial centre has “zero prospect” of materialising.

An IFC is all about cross-border flows, and so the Russians are wrong to be focusing on the domestic infrastructure, Reucroft, director of research at the Thomas Murray cash and securities risk management firm, argued at a conference in Moscow early this month and in a subsequent emailed interview with

Reucroft advised the Russian government on the IFC project back in 2008 and designed an architecture for cross-border financial business in Moscow and St Petersburg.

Saudi Stocks Head for Biggest Drop in Three Weeks - Businessweek

Saudi Arabia’s shares headed for the biggest drop in more than three weeks as oil prices fell, raising investor concerns that the world’s top oil exporter may reduce the size of a $500 billion government stimulus.

Nama Chemicals Co. (NAMA), a developer of industrial projects in chemicals and petrochemicals, plunged 6.5 percent. Al Rajhi Bank (RJHI), the kingdom’s biggest lender by market value, fell the most since June 19 in intraday trading. The Tadawul All Share Index lost 1.8 percent, poised for the biggest drop since June 2, to 6,579.00 at 1:13 p.m. in Riyadh. The measure has lost 16 percent this quarter, the worst since the fourth quarter of 2008. The Bloomberg GCC 200 Index retreated 0.6 percent.

“Oil below $80 just creates a psychological effect that the government will reduce spending and the economy will be affected,” said Marwan Shurrab, assistant fund manager and chief trader at Gulfmena Investments Ltd in Dubai. The drop “is more related to global growth and global demand for commodities,” he said.