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Monday, 2 January 2012

Abu Dhabi’s wealth fund keen to invest in India

At a time when the overseas investments in India are on a decline, the Abu Dhabi Investment Authority's (ADIA) — one of the world’s largest sovereign wealth fund worth $700 billion — is now looking for investment opportunities in India.
ADIA’s MD Sheikh Hamed bin Zaved Al Nahvan is set to visit India with a 14-member delegation in two weeks’ times (January 15-21) to explore investment opportunities in India, said a senior government official in the ministry of commerce and industry.
So far, ADIA has been focused in the US and Europ. In India, the ADIA has a 12% stake in Infrastructure Leasing & Financial Services (IL&FS).

Decline in housing costs forecast to continue - The National

Housing prices and rents will continue to decline in the UAE this year, despite growing demand for homes in many neighbourhoods, local analysts predict.

A wave of completed projects will add thousands of homes to the market and give home buyers a variety of choices.

"Unless we see a real pick-up in demand driven by population growth and job creation, I can only see the downward trend [in prices] continuing," said Paul Maisfield, the general manager in Abu Dhabi for Asteco, a property firm.

Taib Securities brokerage pulls out of UAE amid trade drop - The National

Taib Securities, the brokerage arm of Bahrain's Taib Bank, says it will close its UAE operations immediately to cut losses amid depressed market conditions, and shift focus to its home market.

The closure comes as fears continue to mount that many of the country's remaining brokerages will close before the end of the first quarter as trading volumes plummet.

"We are closing the UAE office because volumes are very low," said Khaldoon bin Latif, the general manager at Taib Securities in Bahrain. "From a return on investment perspective, it didn't make any sense," he added.

MENA stock markets close - January 2, 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)

Dubai Shares Drop Most in More Than a Week on Profit Concern - Bloomberg

Dubai’s benchmark index retreated the most in more than a week amid speculation some companies may report slower fourth-quarter earnings growth.
Shuaa Capital PSC (SHUAA), the investment bank controlled by Dubai’s ruler, tumbled 8.7 percent. Air Arabia PJSC (AIRARABI), the biggest low-cost carrier in the Middle East, fell for the first time since Dec. 27. The benchmark DFM General Index (DFMGI) dropped 0.9 percent, the biggest decline since Dec. 21, to 1,341.56 at the close of trading. About 24 million shares were traded in Dubai today, compared with a 12-month daily average of 100 million shares, according to data compiled by Bloomberg (VOLDFM).
Fourth-quarter earnings in the United Arab Emirates will show “insignificant growth,” said Tariq Qaqish, deputy head of asset management at Al Mal Capital in Dubai. “There is no real short-term catalyst for investors to look forward to.”

United Development Extends Decline on Qatar Fund’s Stake Offer - Bloomberg

United Development Co. (UDCD) tumbled to the lowest level in three weeks after Qatar’s pension fund last week offered to buy a stake in the investment company for less than its trading price.
The shares dropped 6.8 percent to 22.81 riyals, the lowest since Dec. 8, extending the decline since the Dec. 29 announcement to 16 percent. The benchmark QE Index (DSM) gained 0.1 percent at the close of trading.
Qatar’s state-owned Pension and Social Insurance Authority said it seeks to become a “strategic shareholder” in the energy and infrastructure investor by offering to buy 80 million shares at 20 riyals each.

UAE markets halt gains; Qatar ticks up - Stocks -

UAE markets halted two-session gains with investors finding little reason to add risk, while Aldar Properties ended higher, rising since the announcement of asset sales to Abu Dhabi.
Abu Dhabi's benchmark slipped 0.2 percent to close at 2,397 points and Dubai's index dipped 0.9 percent to 1,342 points.
Aldar ended 2.2 percent higher, having gained as much as 5.4 percent in early-trade, accounting for more than half of all shares traded on the benchmark.

Goldman Sachs advisor defends $2 bn Islamic bond scheme - The Economic Times

An advisor to Goldman Sachs has defended the U.S. bank's $2 billion Islamic bond programme against criticism it may contravene religious principles, in a controversy that could affect Western banks' ability to enter the Islamic debt market.

In October, Goldman registered the sukuk programme with the Irish Stock Exchange. It set up a Cayman Islands-registered special purpose vehicle, Global Sukuk Co Ltd, to issue a sukuk based on murabaha, a cost-plus-profit arrangement which complies with Islamic law.

Some analysts however have suggested Goldman might use the proceeds of the issue to lend money to clients for interest, which would be against Islamic law, and that the issue might not trade at par value on the Irish exchange, which would also contravene sharia law.

26,465 apartments, 1,179 villas sold in Dubai in 2011 « ArabianMoney

The Dubai Land Department has reported a 20 per cent increase in the value of transactions it recorded in 2011 over 2010, with 26,465 apartments and 1,179 villas sold in the year.

Mortgage activity was up 12 per cent but still a very low for a city of two million inhabitants. There were just 3,315 mortgages granted worth a total of $18.8 billion.

Morocco GDP growth picks up in Q3 | Reuters

Morocco's economic growth reached 4.7 percent in the third quarter of 2011, up from the second but still below the full-year target after a slowdown as mining and tourism activity shrank, the country's planning authority said on Monday.

Agricultural output rose 4.1 percent rise after a flat third quarter of 2010, and non-agricultural GDP was up 4.9 percent instead.

Hotel and restaurant activity dropped 2.6 percent and mining fell 1.8 percent, the authority said.

Revolutions take a heavy toll on profitability of Arab banks - Financial Services - Zawya

The public revolts against regimes across the Middle East and North Africa from the beginning of last year have taken their toll on the profitability of the banking and financial services industry in the region. Bankers and analysts say the impact is likely to linger for many years.

Rating agencies and international organisations such as the Institute of International Finance (IIF) and the International Monetary Fund (IMF) have projected a gloomy outlook for the banking sectors of the affected countries, particularly Egypt and Lebanon.

Last month, rating agency Moody’s changed its outlook for Lebanon’s banking system to negative from stable. Moody’s cited slower economic growth following a sharp GDP deceleration in the first half of 2011; downside economic risks due to regional political uncertainty, particularly in Syria; and the banks’ asset and loan exposures to other regional countries experiencing political unrest and/or an economic slowdown such as Egypt and Jordan as the rationale for the rating action.

Dubai plan to cut state spending urges bond upturn -

Dubai government bond yields tumbled the most in four weeks after the Gulf emirate pledged to halve its 2012 budget deficit as state companies confront $15.5bn in debt maturing this year.
The sheikhdom, which was on the brink of default in 2009, said Dec 25 it aims to reduce spending this year by 4.2 percent, narrowing the shortfall to AED1.83bn ($498m), or 0.6 percent of gross domestic product, from a 2011 target of AED3.78bn. Since, the yield on the government’s 7.75 percent bond due October 2020 fell 36 basis points, or 0.36 percentage points, to 6.92 percent.
“A conservative budget puts the authorities in a good position heading into 2012,” Khatija Haque, a senior economist at Emirates NBD, the UAE’s biggest bank by assets, said by email. “The authorities are confident that all the financial obligations will be met next year.”

Qatar Group May Buy Kuwait’s Arab African Bank Stake, Qabas Says - Bloomberg

A Qatari investment group may offer to buy Kuwait’s stake in Cairo-based Arab African International Bank, Al-Qabas reported, citing people it didn’t identify.
The unidentified Qatari group is expected to visit Kuwait and make the offer to the Kuwait Investment Authority, the country’s sovereign wealth fund, the Kuwait-based newspaper said. It didn’t provide offer details.
The Central Bank of Egypt and the Kuwait Investment Authority each hold 49.36 percent of Arab African International Bank, according to data compiled by Bloomberg.

UAE banks post Dh24.9bn profit in 10 months - Emirates 24/7

Net profits of banks operating in the UAE grew by 11.3 per cent between January 1, 2011 to October 31, 2011 to reach Dh24.98 billion, according to the governor of the Central Bank of the UAE Sultan Nasser Al-Suwaidi.

Banks operating in the UAE have enough liquidity to meet the local markets' demands on loans and financing investments and in doing so they rely on their reserves, deposits and capitals, Suwaidi said in statements.

"Last October, these banks were able to restore balance between loans and deposits and minimise the gap which appeared for the first time last September," Al Suwaidi explained.

gulfnews : Tawteen to find 300,000 jobs for Emiratis by 2020

Nearly 300,000 jobs in seven sectors will be filled by Emiratis until 2020, said the head of strategy of a governmental body tasked with finding employment for Emirati jobseekers.
Dr Abdullah Amer Al Bishr, head of the strategy, planning and policy at Abu Dhabi Tawteen Council (ADTC), said 298,000 jobs will be created for UAE citizens in seven industries including media, real estate, financial services, tourism, health care and energy.
Al Bishr told a seminar on ‘Emiratis in the private sector' held on December 26, some 65,000 jobs or 9.5 per cent of the total jobs in the emirate can immediately be filled by Emiratis because these jobs are high paying and skills required are matching those of the citizens on the ADTC's database.

gulfnews : Virgin completes buyout of Northern Rock

Virgin Money completed its acquisition of bailed out British lender Northern Rock Friday, despite calls for the sale to be delayed while the national auditor investigates whether the deal is good value for money.
The British government agreed in November to sell Northern Rock to Virgin Money — the banking arm of billionaire Richard Branson's Virgin Group — for between £747 million (Dh4.2 billion) and £1 billion.
The deal does not recoup all of the £1.4 billion spent by the authorities to keep the bank afloat during the credit crisis. The opposition Labour Party wanted the deal to be put on hold while the National Audit Office investigates the sale.

gulfnews : Qatar adopts new listing and IPO rules

The Qatar Financial Markets Authority (QFMA) said it has officially adopted the new listing and IPO rules in the secondary market after an in-depth consultation with the concerned parties.
Nasser Ahmad Al Shaibi, CEO of QFMA, said: "The new rules, while part of the authority's strategic plan, were a result of intense discussions between QFMA and the Qatar Exchange to further consolidate the local financial market and to regulate the working relationship between various parties concerned with the listing process to cope with developments in Qatar's capital markets.
"In particular, the new rules also encourage newly established small- and medium-sized enterprises (SMEs) to list on the Qatar Exchange."

gulfnews : Scheme to favour Indian bourses

The Indian government's decision to allow qualified foreign investors (QFIs) to directly invest in the Indian equity market is meant to "widen the class of investors, attract more foreign funds, reduce market volatility and deepen the Indian capital market," according to an Indian government statement posted on its website.
The Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) are expected to issue relevant circulars to put the scheme into operation by January 15, it added.
"QFIs have been already permitted to have direct access to Indian mutual funds schemes pursuant to the Budget announcement 2011-12. Today's decision is a next logical step in the direction," said the government.

gulfnews : Gulf Air looks beyond the crisis

After Samer Majali took over his new position as the Chief Executive Officer of Gulf Air in 2009, he set out a three-phased turnaround plan for the ailing company.
The three-year strategy included a more focused international network in phase one, higher standard of services and developing the fleet and route network in a focused manner in phase two, and a fleet optimisation to support a new approach to flight schedule and route network in phase three.
The unexpected dramatic events in Bahrain and in the region have delayed the breakeven by months.

Troubled brokerages face battle for survival - The National

Fears are mounting that many more brokerages in the UAE will close within weeks as brokers forecast lower trading activity in the first quarter, even after volumes almost halved last year.

"This quarter will be make or break for many brokerages," said Mohammed Ali Yasin, the chief investment officer at CAPM Investment, which owns Asayel Shares and Bonds brokerage. "The coming days are going to be very, very challenging."

Investor sentiment, dampened by the Arab Spring and Europe's debt crisis, triggered the closure of 45 brokerages last year.

Oil will keep GCC warm if the world freezes over - The National

The continued struggle by Europe and the US to shrug off the malaise from the financial crisis of 2008 is likely to restrict growth - even in the buoyant Asian economies that supported high oil prices last year.

"Europe has now entered another recession, only a little more than two years after the last recession ended," says Joachim Fels, an analyst at Morgan Stanley, in a research note. "Our US base case remains anaemic growth of just over 2 per cent next year. Unsurprisingly against this backdrop, growth prospects for emerging-market economies have dimmed further."

Diminished global growth and the possibility of a double-dip recession in the euro zone are widely predicted to push the price of oil below US$100 a barrel at least in the first half of this year, with prices possibly rebounding later in the year alongside a recovering world economy and underlying supply risks.

Saudi Arabia to lead GCC in economic growth in 2012

In reviewing measures of economic performance in Saudi Arabia, the budget of SR690 billion ($184bn) is expected to create a large number of jobs in the kingdom this year; indeed, recruitment experts are predicting that the country will add more jobs than any other nation in the region.

“Saudi Arabia, followed by Qatar, will be at the forefront of job creations taking recent employment trends into account,” Hasnain Qazi, Middle East Business Manager at Huxley Associates, told Emirates 24|7.

Experts believe that Saudi Arabia, Qatar and the UAE will drive positive growth for the region as a whole.

Saudi Arabia, Asia set to dominate sukuk market in 2012 - Arab News

Asia and Saudi Arabia are inevitably set to dominate the sukuk market in 2012 with high quality quasi-sovereign issuers taking the lead, especially to fund infrastructure and projects in the oil, gas, petrochemicals and transport sectors.

"The outlook for 2012 appears bright," explained an experienced Islamic banker to Arab News on the condition that he remains anonymous. "The ringgit-denominated sukuk market will continue to dominate with several mega issuances to fund infrastructure development activities and programs. The total sukuk issuance for 2012 is expected to hover between RM50 billion to RM60 billion, which would account for 70 percent of global sukuk issuances for 2012. Wakala and Ijara sukuk structures will dominate. I am expecting new entrants from Asia Pacific, Kazakhstan and possibly a couple of African countries to enter the sukuk market," he added.

The major move by far will come over the next two weeks in Malaysia when Projek Lebuhraya Utara-Selatan Berhad (PLUS), a wholly-owned subsidiary of PLUS Expressways Berhad, the major provider of expressway operation services in Malaysia, is expected to launch a mega RM34.35 billion sukuk program.

WAM: Non-oil UAE trade grew 23% to AED 524 bln in 7 months, says FCA

UAE non-oil foreign trade has been on the go for 7 months of 2011 compared to the same period of the previous year. The preliminary statistics released by the Federal Customs Authority (FCA) show that UAE non-oil foreign trade has grown for the staid period by 23% compared to the same period of the previous year as Total non-oil Foreign Trade has grown from AED 426 billion during the first 7 months of 2010 to AED 524 billion in the same period of 2011, i.e., an increase of AED 98 billion.

The preliminary statistics for the first 7 months of 2011 show a 22% growth in imports to increase from AED 276.3 billion during the first 7 months of 2010 to AED 337.1 billion for the same period in 2011, FCA said in an emailed press release.

On the other hand, exports witnessed an astounding growth by 45% for the same period with an increase from AED 44.5 billion to AED 64.7 billion. Re-exports, however, experienced a growth rate of 16% to go up from AED 105.2 billion to AED 122.1 billion for the same period.

Iran's dangerous trade game | Nima Khorrami Assl | Comment is free |

Over the past two decades, imposition of sanctions on Iran has evolved into a dynamic game between Tehran and the international community, with every new round provoking a series of Iranian counter-measures. One of Tehran's weapons in this tussle has been to use its trade policy as a way of discouraging some countries from co-operating with sanctions or aligning themselves too closely with the anti-Iran camp.

A highly visible example has been Iran's trade relations with the six Gulf Cooperation Council (GCC) states – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates. Iran has deliberately expanded its trade and investment ties so as to increase the economic costs for them of joining western-sponsored sanctions initiatives. Since 2000, for instance, GCC exports to Iran have increased dramatically, reaching $13.4bn in 2008-09, and thus the GCC states, particularly the UAE, have enjoyed a sizeable trade surplus with respect to Iran.

Simultaneously, Tehran has used trade to discourage the GCC states from forming a united anti-Iranian front headed by Saudi Arabia. This is why it has called for the joint development of its shared gas fields with Kuwait and Qatar but not the Saudis, preferred to trade in UAE dirhams but not other GCC currencies, insisted on regional security arrangements, championed the cause of Shia Muslims in Bahrain and Saudi Arabia, maintained friendly relations with Oman where the vast majority of the population resent the Wahhabi/Saudi version of Islam, and given the Qatar Airways the right to operate its domestic flights.

Year of distress ahead for investors - The National

Last year, a period of unrest in which three governments were overthrown in North Africa, was not kind to stock market investors.

But even though the UAE experienced none of the turmoil that occurred elsewhere, including in the Gulf, and the Emirates even briefly appeared as a shelter from the storm, Dubai's main stock market nevertheless fell to its lowest level since 2004.

Investment banks have withdrawn equity sales and research teams from the UAE as part of tens of thousands of job cuts worldwide, while about half of the Emirates' brokerages closed as trading dwindled.