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Monday, 16 January 2012

MENA stock markets close - January 16, 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)

Egypt: $3.2bn may not be enough | beyondbrics | News and views on emerging markets from the Financial Times –

Egypt’s long-awaited talks with the International Monetary Fund started on Monday on a possible $3.2bn loan.

But for investors, that might not be enough, says Raza Agha of RBS, who suggests Egypt might need much more “to raise investor confidence”.

Agha did not say in his report how much Cairo might require. But he said in a subsequent email to beyondbrics that it could require $10bn-$12bn to put the finances back in the condition they were in December 2010 – before the political crisis. That, in turn, would involve tough decision in both Cairo and Washington since it is far more than Egypt would normally be allowed to borrow under the IMF quota system.

Abu Dhabi Shares Drop to Three-Year Low on Dana Gas Debt Concern, Europe - Bloomberg

Abu Dhabi shares retreated to the lowest in almost three years on speculation Dana Gas PJSC (DANA) may struggle to refinance debt and as investors trimmed holdings of riskier assets on concern Europe’s debt crisis may worsen.
Dana Gas, which has a $1 billion Islamic bond maturing in October, tumbled to the lowest on record. Emirates Telecommunications Corp. declined for a third day. The ADX General Index (ADSMI) lost 0.8 percent to 2,324.73, the lowest level since March 2009, at the 2 p.m. close in Abu Dhabi. Dubai’s DFM General Index (DFMGI) fell 1 percent, extending its drop after closing at the lowest since June 2004 yesterday.
The MSCI Emerging Markets Index (MXEF) lost 0.5 percent at 12:38 p.m. in London and before a debt sale by France, which was stripped of its top credit rating by Standard & Poor’s. S&P also cut eight other European nations on concern the region hasn’t done enough to contain its debt crisis.

Pain of European debt crisis spreads to Gulf -

The European debt crisis is hitting home in the oil-rich Gulf as companies struggle more than ever to hammer out large-scale restructuring deals with international banks, prompting concerns over a wall of refinancing required this year.
With the prospect of about $25bn in bonds and sukuk maturing in the region this year, bankers are becoming increasingly concerned that casualties will emerge.

A scarcity in dollar funding as European banks retrench from riskier markets, as well as limited and expensive access to debt capital markets, is combining to create serious refinancing problems, even as oil prices remain well above the budget break-even figures for their governments.

Commercial Bank of Kuwait’s Board Resigns Over Legal Case - Bloomberg

Six board members of the Commercial Bank of Kuwait SAK, the country’s third-largest lender, resigned over a legal dispute with Investment Dar Co., the bank’s acting Chief Executive Officer Elham Mahfouz said.
“The ruling is not final yet,” Mahfouz said in phone interview today from Kuwait City. “We have appealed against the ruling today.” She did not give any details of the court decision.
Commercial Bank said in May 2009 it owned 19.2 percent of Boubyan Bank KSC (BOUBYAN), an Islamic lender controlled by National Bank of Kuwait SAK. Investment Dar (TID) lost a buyback option on the stake, which it sold for 94.1 million dinars ($336.7 million) in December 2008. Commercial Bank subsequently agreed to sell its stake in Boubyan Bank to National Bank of Kuwait for about 121 million dinars.

Call for UAE bourses to reduce trading fees - The National

Brokers are calling on the UAE stock exchanges to reduce market trading fees that are 15 times higher than Saudi Arabia amid depressed market conditions and lower volumes.

"The commission fees have been the top priority on the agenda in meetings with the regulator and the bourses," said Abdel Hadi Al Sadi, the chief operating officer at Al Ramz Securities in Abu Dhabi. "Brokerages have even expressed flexibility in reducing their own fees because at times it can take weeks for clients to just cover the cost of the market commission when there is no liquidity."

The country's two main exchanges, the Abu Dhabi Securities Exchange and the Dubai Financial Market, take a standard fee of 15 basis points per trade, while brokerages are supposed to take a flat commission of 15 basis points too but due to competition for business frequently charge much less.

Unrest deals severe blow to Bahrain’s bourse - Arab News

During the year 2011, Bahrain's economy reeled under socio-political unrest that started at the beginning of the year. Consequently, Bahrain bourse had the worst performance in all GCC markets. Bahrain All-Share index shed 20.15 percent of its value by the end of 2011, according to a report by Global Investment House (Global).

Trading activity

The political unrest had its effects on the trading activity of the exchange. During 2011, 520.2 million shares were traded on Bahrain bourse, down from 612.2 million shares traded in 2010 (-15.0 percent). Aggregate value of shares traded stood at BHD105.0 million ($276.5 million), down from BHD108.4 million ($285.6 million) in 2010 (-3.2 percent).

Gulf Air: seat 1A? Not for you, minister | beyondbrics –

Bahrain’s national carrier is used to perennial business problems, but the state-owned airline wouldn’t have expected a public row with the foreign ministry.

Gulf Air, one of the Middle East’s oldest airlines, has seen its glory days eroded over the years with the rise of Gulf competitors, such as Dubai’s Emirates, Qatar Airways and Abu Dhabi’s Etihad.

The airline, which launched a turnaround programme in 2009, has faced even starker pressures since pro-democracy protests rocked the strategically-vital island last February.

Egypt's IMF talks positive, minister says | Reuters

Talks between Egypt's government and the International Monetary Fund got off to a positive start on Monday, the country's planning and international cooperation minister said.

Egypt needs to secure foreign help to fill a budget shortfall after the economy was thrown into crisis following an uprising that ousted the country's president last February.

The previous army-backed interim government turned down an offer of $3 billion in financial assistance from the IMF last June but since then the country's funding problems have worsened and its currency has come under heavy pressure.

Abu Dhabi Shares Drop to 3-Year Low on Dana Debt Concern, Europe - Businessweek

Abu Dhabi shares retreated to the lowest in almost three years on speculation Dana Gas PJSC may struggle to refinance debt and as investors trimmed holdings of riskier assets on concern Europe’s debt crisis may worsen.

Dana Gas, which has a $1 billion Islamic bond maturing in October, tumbled to the lowest intraday level on record. Emirates Telecommunications Corp. declined for a third day. The ADX General Index lost 0.6 percent to 2,330.79, the lowest level since March 2009, at 12:38 p.m. in Abu Dhabi. Dubai’s DFM General Index fell 0.8 percent, extending its drop after closing at the lowest since June 2004 yesterday.

The MSCI Emerging Markets Index lost 0.6 percent before a debt sale by France, which was stripped of its top credit rating by Standard & Poor’s. S&P also cut eight other European nations on concern the region hasn’t done enough to contain its debt crisis. About 44 million shares traded in Abu Dhabi today, compared with a 12-month daily average of 62 million shares.

UPDATE 1-Lender SABB's Q4 up 65 pct on lower operating costs | Reuters

Saudi British Bank posted a 65-percent rise in quarterly profits on Monday, citing lower operating costs for the gains.

The lender, an affiliate of HSBC, said it had net income of 655 million riyals ($174.7 million) in the three months ended Dec. 31, compared with 397 million riyals in the prior-year period.

Analysts had forecast average profit of 691 million riyals, according to a Reuters survey.

Royal Bank of Scotland to sell Middle East M&A business - The Economic Times

Part-nationalised Royal Bank of Scotland is in talks to sell its mergers and acquisitions business in the Middle East and cut some jobs as part of a global restructuring at the U.K. bank, its regional head said on Monday.

Simon Penney, RBS' chief executive for Middle East and Africa, told Reuters the bank would focus on debt products, risk management and transactional banking.

"We'll be selling our M&A business in the region but everything else remains the same," Penney said, adding that "less than five people will be leaving" as a result.

Egypt's Orascom, Nasr City scrap Tigan cooperation | Reuters

Egyptian group Orascom Development and local real estate firm Madinet Nasr Housing scrapped an agreement to cooperate in developing the Tigan real estate project, Orascom said on Monday.

Swiss-based Orascom Development Holding through its subsidiary was managing the 3.5 million square metre development with Madinet Nasr but said in a statement the two firms had reached a joint decision to cancel the agreement because the time was unsuitable to launch the project.

The fate of the Tigan project was not immediately clear after Orascom withdrew from managing the development.

Qatar: A tiny country asserts powerful influence - CBS News

Qatar is a sliver of a country wedged between Saudi Arabia and Iran, yet Qatar has avoided the chaos, violence and killing of the Arab Spring. There have been no protests, no unrest. Ironically, many Arab leaders believe the engine behind the region's violent revolution is Al Jazeera, a 24-hour satellite television network based in Qatar. The man behind Al Jazeera, the man who created the influential channel, is the emir of Qatar, His Highness Sheikh Hamad bin Khalifa Al Thani. Why are Qataris so tranquil? Maybe it's because Qatar's 250,000 citizens are, quite literally, the richest people in the world and very content with their lives in this oil-and-gas-rich speck of a nation. Bob Simon reports.

Saudi Aviation Authority Said to Raise 15 Billion Riyals From Sukuk Sale - Bloomberg

Saudi Arabia’s General Authority of Civil Aviation raised 15 billion riyals ($4 billion) from the sale of Islamic bonds, said a banker familiar with the transaction.
The 10-year notes will pay a profit rate of 2.5 percent, said the banker, who declined to be identified because the details are private. The authority plans to use funds from the sale to build a 27 billion-riyal ($7.2 billion) airport in Jeddah. HSBC Holdings Plc’s unit in Saudi Arabia managed the transaction.
The world’s largest oil exporter, which expects to post a 12 billion-riyal budget surplus this year, is undertaking a $384 billion plan to develop housing, education and transportation. Companies controlled by the government have turned to Islamic debt, which pays asset returns to comply with the religion’s ban on interest, to help finance projects.

gulfnews : Calls for bourse merger as indexes take a beating

Dubai's benchmark stock exchange slumped to a more than seven-year low Sunday amid renewed calls for the UAE's equity markets to merge into a single entity.
The Dubai Financial Market (DFM) General Index tumbled 0.99 per cent to 1,314.47 — its lowest close since June 2004 — after nine EU countries had their credit ratings downgraded and speculation mounted that local companies will report disappointing full-year earnings.
The Abu Dhabi Securities Exchange (ADX) fell to a more than three-week low, slipping 0.69 per cent to 2,344.18.

gulfnews : Abu Dhabi Investment Authority head visits India

Shaikh Hamed Bin Zayed Al Nahyan, Managing Director of Abu Dhabi Investment Authority (ADIA), is visiting India from today.
The five-day visit is at the invitation of Indian Commerce, Industry and Textiles Minister Anand Sharma, said a press release issued by the Indian Embassy in Abu Dhabi. Shaikh Hamed is accompanied by a high-level delegation of senior officials of ADIA.
India and the UAE enjoy time-tested relations, and currently they are the largest trading partners for each other. According to Indian figures, bilateral trade was $67 billion (Dh245.89 billion) last year.

Saudi retailer aims to stitch up expansion - The National

When a company outgrows a market, it is often difficult to know where it will find additional revenue and value for investors.

But analysts are still fairly upbeat on Fawaz Abdulaziz Alhokair & Company, a major Saudi fashion retailer that is spreading its wings in Central Asia.

The biggest mid-range retailer in the kingdom is planning a 400-store expansion that is expected to include nascent markets such as Kazakhstan, Azerbaijan, Armenia, Belarus and Georgia.

$1bn sukuk triggers sell-off for Dana Gas - The National

Dana Gas experienced a sell-off yesterday amid uncertainty over how the UAE gas explorer and producer plans to repay a US$1 billion sukuk due in October.

"The company has not announced if they found a solution to refinance the sukuk, and they clearly don't have the cash to pay it," said Hassan El Salah, the head of institutional trading at Al Ramz Securities in Abu Dhabi.

Dana dropped 7.5 per cent to close at 37 fils on the Abu Dhabi Securities Exchange. The shares plunged as much as 10 per cent during the trading session. Dana lost 38 per cent last year.

Middle East unlikely to 'go public' in 2012 - The National

Put together by college friends in the hallowed halls of Harvard University just eight years ago, Facebook has become a global phenomenon.

It now boasts more than 800 million users and had revenue of US$4.27 billion (Dh15.68bn) in 2011.

This year the social network site will grab more headlines if, as expected, it goes ahead with its plan to float on the Nasdaq. The initial public offering (IPO) will probably be worth about $100bn.

Saudi oil refinery deal shows close ties|Economy|

In what Riyadh calls "the largest expansion by any oil company in the world", Sinopec's deal on Saturday with Saudi oil giant Aramco will allow a major oil refinery to become operational in the Red Sea port of Yanbu by 2014.
The $8.5 billion joint venture, which covers an area of about 5.2 million square meters, is already under construction. It will process 400,000 barrels of heavy crude oil per day. Aramco will hold a 62.5 percent stake in the plant while Sinopec will own the remaining 37.5 percent.
The deal "represents a strategic partnership in the refining industry between one of the main energy producers in Saudi Arabia and one of the world's most important consumers", said Aramco president and CEO Khalid Al-Falih.

Itqan Capital banks on Saudi opportunities - Arab News

Bahrain-based Al-Baraka Banking Group (ABG) has announced the launch of Itqan Capital, formerly known as Altawfeek Financial Group, in Saudi Arabia, through its fully-owned subsidiary Al-Baraka Islamic Bank Bahrain (ABIB).

ABIB owns the majority of shares of the newly launched company.

ABIB Chairman Khaled Al-Zayani, while underlining the importance of the business model of the newly launched firm, said it would focus on four areas including asset management, principal investment, investment banking, and custodial services — all supported by centralized advisory, research and business development capabilities.

German funds plan $2 billion Oman solar project | Reuters

Private investment funds Terra Nex of Switzerland and Germany's Middle East Best Select (MEBS) plan to build 400 megawatts (MW) of solar power generating capacity in Oman, the European investors said on Sunday.

Terra Nex, a wealth management company specializing in Middle East investment, and MEBS plan a 2-billion dollar integrated project to develop solar technology in the oil and gas exporting country, including facilities to manufacture solar panels for Oman and for export.

"Oman's stable business environment and pro-environmental policies makes the Sultanate a natural partner to this project," David Heimhofer, chairman of Terra Nex, said in a statement.

GCC sukuk market shows signs of revival - Arab News

The consensus seems to be universal that the outlook for the sukuk market in 2012 is bright. While Malaysia and Southeast Asia seems to be setting the pace, there are signs that the sukuk sector in the Gulf Cooperation Council (GCC) markets and a few fellow MENA countries such as Turkey are showing a rebound, with Saudi Arabia and the UAE offering the best potential.

Sukuk structuring experts such as Mohamad Safri Shahul Hamid, a senior executive of CIMB Islamic Bank, stress that the (Malaysian) ringgit sukuk market will continue to dominate with several mega issuances to fund infrastructure development activities and programs. Safri projects Malaysian Sukuk issuances to total up to RM60 billion in 2012 which would account for 70 percent of global Sukuk issuances for the year.

Persian Gulf Restructuring to Rise in 2012, Morgan Stanley Says - Businessweek

Restructuring in the six-nation Gulf Cooperation Council is likely to increase this year as underlying problems at companies in the region resurface, Morgan Stanley said.

“In many cases, a lot of underlying issues haven’t been resolved,” Peter Fort, the bank’s regional executive director for mergers and acquisitions, told reporters in Dubai today. “Some of the restructuring that were done in 2009/2010 are requiring re-negotiation, so you’ll probably see a wave of re- restructuring as well.”

Companies in the GCC, which includes the U.A.E. and Saudi Arabia, have almost $90 billion of foreign-currency debt maturing through the end of 2013, according to a Dec. 19 estimate by Barclays Capital analysts. Companies in Abu Dhabi, Dubai, Kuwait and Oman have already undergone restructuring after the global financial crisis hurt the region’s property and financial services sectors.

Profitable firms in the Middle East urged to pay big dividends - The National

Fund managers are warning the region's most profitable companies to pay big dividends or risk losing investors.

The alert comes on the eve of earnings reporting season, when major companies such as Etisalat and Abu Dhabi Islamic Bank among others decide what to do with a year's bumper revenues.

"Companies who have decent balance sheets, cash flows and were growing this year and opt not to give attractive dividends will be penalised," said Haissam Arabi, the chief executive of Gulfmena Investments, an asset management company based in Dubai.

Ignore the hyperbole on Hormuz: embargoes don’t work -

In recent weeks there has been intense speculation that in the event of a European Union oil embargo, Iran would try to close the Strait of Hormuz, through which flow 32 per cent of global oil exports and 28 per cent of global liquefied natural gas exports. Such an attempt is unlikely, although, to be clear, history suggests that sanctions would not work in constraining the Iranian regime.
The first reason to believe Iran might stop short of closing the strait is simply because such a move would fail. Cutting off Gulf oil supplies represents an existential threat to the west that it would have to use force to counter. The response, if transit were seriously threatened, would rapidly degenerate into a shooting war between Iran and the US supported by many of its allies. While oil prices might reach unprecedented new levels, the US Navy would quickly restore access.

Saudi equities: a lifting of the veil? | beyondbrics –

Riyadh may be a parched, inhospitable place for dapper fund managers, but many may start to make more regular pilgrimages to the capital of Saudi Arabia in the coming years – and not just to raise fresh funds, the traditional cause for a visit in the oil-rich state.

Saudi Arabia’s Tadawul stock market, the largest and most liquid in the Arab world, may this year finally allow foreign institutional investors to invest directly into its blue-chip listed companies, rather than the swaps the Capital Markets Authority introduced in 2008.

These swaps have proven moderately popular, particularly among dedicated frontier market investors, but count as derivates – which come under a tight cap for many larger fund managers – and have to be held by locally-authorised brokers, which raises counterparty risks.