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Thursday, 26 January 2012

Egypt: equities soar on political hopes | beyondbrics | News and views on emerging markets from the Financial Times –

Source: Egyptian Stock Exchange

At last some good news from Egypt’s battered financial markets. Stocks soared on Thursday, with a 7 per cent bounce in the EGX 30 index, after Wednesday’s demonstrations on the first anniversary of the anti-Mubarak uprising passed off peacefully.

That extends this year’s gains to over 22 per cent, making Cairo the world’s second best-performing equity market in $ terms after another recovery story – Hungary (on 24 per cent). But how long can it last, given the manifest economic and political challenges?

There was no mistaking the investor enthusiasm on Thursday with the authorities having to suspend trading for 30 minutes after the EGX 100 Index rose 5 percent. Orascom Telecom, a bellwether, jumped nearly 10 per cent. EFG-Hermes, the investment bank, was up 9 per cent.

MENA stock markets close -January 26, 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)

U.A.E. Can Export Oil If Iran Closes Strait, Official Says - Bloomberg

The United Arab Emirates will be able to use ports on the Gulf of Oman for oil exports if Iran closes the Strait of Hormuz, transit point for about a fifth of the global oil supply, Dahi Khalfan, Dubai’s chief of Police, said in an interview with Bahrain TV last night.
“Iran is capable of fomenting tension in the region,” he said in the interview, which was rebroadcast today. “We in the Gulf have cards in our hands that allow us to marginalize the role of the strait and undermine its importance.”
“We tell Iran if you try to close this place, we will open the other gates and nullify the importance of the Strait of Hormuz,” he added.

U.A.E. Sees 2012 GDP Growing at Least 4%, Won’t Lend IMF More - Businessweek

The United Arab Emirates, the second-biggest Arab economy, expects gross domestic product to expand “at least” 4 percent in 2012, Economy Minister Sultan al-Mansouri said.

“Under the circumstances, this is healthy, this is good,” al-Mansouri said in an interview in Davos, Switzerland, where he is attending the World Economic Forum.

Asked if the U.A.E., home to 7 percent of the world’s oil reserves, would boost the resources of the International Monetary Fund to avert a global slowdown, al-Mansouri said: “This issue, we are not part of it right now. We have to address issues in our region, our country.”

UAE leader picks up the tab | beyondbrics | News and views on emerging markets from the Financial Times –

While bailouts for banks and even countries preoccupy the policymakers and protesters of the west, Sheikh Khalifa bin Zayed, president of the UAE, has announced a different kind of bailout: he will spend 2bn dirhams ($545m) on clearing the personal debts of almost 7,000 of his citizens.

So if the loan on that 2011 Landcruiser was starting to sting, you’re in luck. A fund established by the Sheikh, who is also the ruler of Abu Dhabi, will pick up the majority of what is owed as long as debtors commit to setting aside 25 per cent of their monthly salaries to pay down the rest.

Wednesday’s announcement follows Sheikh Khalifa’s handouts to celebrate the 40th anniversary of the UAE’s founding last December. Then, he ordered the establishment of a Dh10bn fund to aid indebted citizens, plus a 35 per cent to 100 per cent salary increase for all government employees and the distribution of 2,500 blocks of land to citizens of Abu Dhabi. With Dh2bn committed this week, the Dh10bn fund still has plenty of firepower left to pick up bad debts in the future.

KUNA : Kuwait to purchase nine oil tankers - Economics - 26/01/2012

As part of efforts to enlarge and modernize its tanker fleet, Kuwait plans to sign a number of contracts with giant international builders of oil tankers in the coming thirty days for building nine new tankers.
In press statements on sideline of Kuwait National Petroleum Company's celebrations of the Environment Day, Chairman and Managing Director of the state-run Kuwait Oil Tankers Company, KOTC, Nabil Bouresly said that KOTC will sign on January 30 contracts with South Korea's Daewoo Shipbuilding and Marine Engineering company (DSME) for building five oil tankers.
Bouresly added that KOTC will also sign mid-February contracts with Hyundai Company for building four tankers of petroleum products.

Saudi Arabia’s Prince Turki Calls Reform ‘Work in Progress’ - Bloomberg

Saudi Arabian modernization is “a work in progress” and the country needs to expand education and employment for its youth as it diversifies the economy, Prince Turki Al-Faisal said.
The country is learning from other states, Prince Turki, a former ambassador to the U.S., said in a Bloomberg Television interview today at the World Economic Forum in Davos, Switzerland. The need to modernize “is recognized as such” by the nation’s leadership, he said, adding that King Abdullah last year moved to extend voting rights to women. “We still need to go forward,” he said.
Saudi Arabia, the world’s largest oil exporter, aims to diversify its economy away from a reliance on crude sales by developing industries such as petrochemicals and manufacturing to create jobs for its 28 million residents.

Qatar Shares Rise a 2nd Day on United Development Earnings, Fed - Businessweek

Qatar’s shares advanced for a second day as United Development Co.’s profit jumped six-fold and after the U.S. Federal Reserve took steps to boost economic growth. Oil rose in New York.

United Development, a Qatari company that invests in infrastructure and energy, surged to the highest in almost a month. Masraf Al Rayan, a Qatari lender, climbed 1.5 percent. Qatar’s QE Index added 0.2 percent to 8,434.70 at the 1 p.m. close in Doha, trimming its drop for the week to 0.3 percent. The Bloomberg GCC 200 Index gained 0.3 percent.

“Qatar is trading on a positive note today following positive performance from international markets and improved earnings at United Development,” said Samer Darwiche, a Dubai- based analyst at Gulfmena Investments.

The National Bank of Kuwait posts record profit of $1 billion in 2011

The National Bank of Kuwait, the emirate’s top lender, said Thursday it posted a record net profit of 302.4 million dinars ($1.087 billion) in 2011 despite difficult challenges and Middle East unrest.

NBK’s net profit is only 0.2 percent higher than the 301.7 million dinars ($1.085 billion) for 2010, the bank said in a statement.

Total assets rose 5.4 percent to $48.9 billion at the end of 2011 from a year earlier, while shareholders’ equity rose 4.5 percent to $7.8 billion over the same period.

Egypt says to seek extra $1 bln to support budget | Reuters

Egypt said on Thursday it would ask the World Bank for a $500 million loan and another $500 million from the African Development Bank to help it fill a budget gap widened by a year of political and economic turmoil.

Planning and International Cooperation Minister Faiza Abu el-Naga, speaking to reporters, said Egypt had also persuaded the International Monetary Fund (IMF) to reduce the interest rate it would charge on proposed $3.2 billion budgetary support package.

"We have achieved a reduction from the IMF on the interest rate on the loan from 1.5 to 1.1 percent," she said, adding that this would put it more in line with interest rates worldwide.

UPDATE 2-UAE lender ADCB's Q4 net profit surges, shares rise - Yahoo!

Abu Dhabi Commercial Bank
posted a 38.5 percent rise in fourth-quarter net profit, helped
by lower impairment provisions and higher interest income,
sparking a late rally in the lender's stock.
ADCB, the third largest lender in Abu Dhabi by market value,
posted a net profit of 514 million dirhams ($139.94 million) in
the fourth quarter, compared with 371 million dirhams a year
earlier, a bank statement said.
Analysts polled by Reuters forecast an average
fourth-quarter net profit of 570 million dirhams.
Reuters earlier calculated a quarterly net profit of 529
million dirhams based on the lender's previous financial

Top Kuwait lender sees 2011 profit flat

National Bank of Kuwait reported flat full-year profits on Thursday, while fourth quarter earnings fell shy of estimates, as the Gulf state's largest lender grappled with what it called a "challenging operating environment."

The lender said net profit was 302.4 million dinars ($1.1 billion) in 2011 compared with 301.7 million in 2010.

Fourth quarter profits stood at 76.8 million, according to Reuters calculations based on previously issued results, down from 77.16 million in the prior-year period.

Qatar Shares Poised for Highest Close in Week on Earnings, Fed Rate Pledge - Bloomberg

Qatar’s shares headed for the highest close in a week as United Development Co. (UDCD)’s profit jumped six-fold and after the U.S. Federal Reserve took steps to boost economic growth. Oil rose in New York.
United Development, a Qatari company that invests in infrastructure and energy, headed for the highest close in almost a month. Qatar National Bank SAQ (QNBK), the country’s biggest bank by assets, gained 0.6 percent. Qatar’s QE Index (DSM) added 0.3 percent to 8,445.72 at 11:11 a.m. in Doha, poised for the highest close since Jan. 19 and trimming its drop for the week to 0.2 percent. The Bloomberg GCC 200 Index was little changed.
“Qatar is trading on a positive note today following positive performance from international markets and improved earnings at United Development,” said Samer Darwiche, a Dubai- based analyst at Gulfmena Investments.

Commercial Bank Qatar Falls Most in Week as Net Misses Estimates - Bloomberg

Commercial Bank of Qatar (CBQK) dropped the most in a week after fourth-quarter at the Persian Gulf country’s second-biggest lender missed analysts’ estimates and as it plans to pay a lower dividend than last year.
The shares fell 2 percent, the most since Jan. 19, to 80 riyals at 9:50 a.m. in Doha.
Net income climbed to 376 million riyals ($103 million) from 308.8 million riyals a year earlier. The median estimate of four analysts was for a profit of 445 million riyals, according to data compiled by Bloomberg.

UPDATE 1-DP World sells stake in container services firm | Reuters

DP World, the world's third-largest port operator, sold its 34 percent stake in U.K-based Tilbury Container Services Ltd for $75.48 million, it said in a statement on Thursday.

The port operator sold the stake in the deep-sea container services firm to a subsidiary of Otter Ports Holdings Ltd, owner of Forth Ports Limited, it said in a statement on the Nasdaq Dubai website.

Tilbury, a key shipping and distribution port access to London and the South East of England, is now fully owned by Otter Port Holdings Ltd following a similar transaction with its other owner Associated British Ports, the statement said.

EFG-Hermes cutting cost as Arab stocks drop | Alrroya

EFG-Hermes Holding SAE, the biggest publicly traded Arab investment bank, said it’s cutting costs to cope with declining stock markets after popular revolts toppled governments in the region.

“We are adopting a very aggressive cost-reduction plan,” Chief Executive Officer Yasser El-Mallawany said in an interview in Davos, Switzerland, where he’s attending the World Economic Forum. “We should see a serious impact partially in 2012, but mostly in 2013, on costs,” without hurting the firm’s biggest revenue sources, he said.

Egypt’s EGX 30 Index slumped 49 per cent last year after the ouster of President Hosni Mubarak. Third-quarter profit at EFG- Hermes plunged 64 per cent to 32 million Egyptian pounds ($5.3 million) as investment-banking income declined. Revenue at the investment bank slumped 38 per cent to 150m pounds and group revenue fell 20 per cent to 396m pounds.

Dubai's CBD posts slight rise in 2011 net profit - Yahoo!

Commercial Bank of Dubai
said on Wednesday that its 2011 full-year net profit
rose slightly driven mainly by a drop in funding costs.
The lender reported a net profit of 822 million dirhams
($223.80 million)for the year, compared with a net profit of 820
million dirhams in 2010, it said in an e-mailed statement.
Total assets at the end of Dec 2011 were 38.2 billion
dirhams, while loans and advances amounted to 26.8 billion
dirhams. Customer deposits stood at 28.4 billion dirhams, the
statement added.
The bank said it took total provisions of 512 million
dirhams in 2011 to cover for possible band loans.

gulfnews : Shifting global economy puts UAE in the spotlight

During the Insead Leadership Forum on Tuesday, my colleague, Antonio Fatas, Portuguese Council Chaired Professor of European Studies and Professor of Economics at Insead, presented a map of the world with a red dot representing the centre of gravity of world economic activity.
The basic idea is simple: put this dot on the map at the spot that is least distant from the most global economic activity. Comparing the location of this dot from 1980 to 2010 shows a clear trend; it is moving south and east. There is no reason to expect that this trend will not continue. A variety of emerging markets have accounted for the lion's share of economic growth over the last 30 years and seem poised to continue to do so.

gulfnews : Dubai Holding to repay $500m debt

Proving the sceptics wrong, once again Dubai Holding Commercial Operations Group (DHCOG), a Dubai government-owned entities (GRE) yesterday confirmed the repayment of a $500 million (Dh1.83 billion) bond and three scheduled interest payments on its Medium-Term Notes (MTN).
Late last year, rating agency Moody's had warned that some Dubai GREs including DHCOG that have debt maturities this year are likely to face refinancing risks. DHCOG responded by saying that it would meet its debt obligations.
"DHCOG will repay the dollar bond, and make the coupon payments, from its internal cash flow. Today's announcements reaffirm DHCOG's proven track record of meeting its financial obligations in full when they are due," said Ahmad Bin Byat, Chief Executive Officer of Dubai Holding.

Corruption purge a boost for Tunisia - The National

A raft of economic reforms and an anti-corruption campaign is spurring a wave of investment in Tunisia for the first time since the regime of Zine El Abidine Ben Ali was overthrown a year ago.

"[Our local partners] are telling us that the middlemen that were taking commissions on behalf of the Ben Ali family and institutionalising corruption are no longer there," said Mohamed Khamis Al Hosani, the chairman at Al Tarabut Group, a UAE company involved in an array of industries across the Middle East and North Africa that include small investments in Tunisia.

"In the old regime, you had to turn away eye-catching projects. The transfer of assets and currency was also a problem, with heavy documentation and central bank approval required and paying off people across the government ranks to get things done."

EXCLUSIVE - Nakheel slams O'Donnell legal bills |

Nakheel lawyers ferociously defending the UAE developer giant against a multi-million dollar breach of contract claim by former CEO Chris O’Donnell have accused the Australian’s legal team of having “not done a proper job” and charging “exorbitant time keeping bills.”

The war of words and bitter battle between Nakheel and O’Donnell continued in court yesterday when a tribunal costs hearing was heard before presiding expert Sir Anthony Evans, the First Chief of Justice at Dubai International Financial Centre court.

The First Chief of Justice announced during the hearing that both a judgement on costs and a much-anticipated final verdict on O’Donnell’s $3m breach of contract lawsuit will be delivered the week beginning Monday, 6 February.

Business : UAB profit up 7.14%; assets rise to Dh10b

Sharjah-based United Arab Bank, or UAB, on Wednesday said its net profit for 2011 increased to Dh330 million while operating income jumped by 22 per cent to Dh401 million for last year.

The bank also announced opening of four new branches in the country and a new headquarters building in 2012.

The banks total assets increased beyond Dh10 billion for the first time in its 37 year history. As at 31 December 2011, the total assets reached Dh10.8 billion, a 40 per cent increase over the Dh7.7 billion reported in the previous year.

Gulf Times – Dubai passes February debt test but more loom

Timely repayment of a $500mn bond owed by a unit of Dubai Holding, owned by the emirate’s ruler, will please investors but the focus is on two larger Islamic bonds owed by state-linked firms maturing this year and whether Dubai will step in with financial aid.
The Gulf emirate has clawed its way back from the depths of its crippling 2009 debt crisis, helped by a revival in trade and tourism and its safe-haven status amid the Arab Spring revolts.

Gulf Daily News » Qatar foreign ownership limit remains

Foreign ownership limits in Qatar, a key issue in the Gulf state's potential upgrade by index compiler MSCI, are likely to remain at 25 per cent through June, the bourse's chief executive officer said yesterday.

"I wouldn't expect news on any changes by June," Qatar Exchange chief executive Andre Went said.

MSCI has delayed until June a decision on whether it will upgrade Qatar and the UAE from frontier market to emerging market status, a move that would boost liquidity on local markets.

Gulf Times – Qatar’s junior bourse ready to receive SMEs

Qatar Exchange (QE) has established a separate junior bourse for small and medium enterprises, QE Venture Market.
The Qatar Financial Market Authority (QFMA) has stipulated small and medium enterprises (SMEs) with a track record of one year and a minimum subscribed capital of QR5mn (50% paid) to be eligible for listing compared to three years and a higher capital base of QR40mn (50% paid) for those in the main market.
No minimum market capitalisation has been mandated but the QFMA stipulated a minimum of 20 shareholders and a minimum float of 10% for SMEs against 100 shareholders and 20% free float in case of the main market.

Segments of the GCC financial markets are beginning to develop traction - Arab News

The uneven performance of the GCC financial markets has continued to reflect the extremely uncertain global economic situation as well as a number of risks - most of them country-specific - in the region itself. Nonetheless, commenting on a review of the financial markets during the last quarter of 2011 by the National Commercial Bank, chief economist, Jarmo T. Kotilaine noted that "the recent data clearly show that a fairly consistent positive momentum has now developed in areas such as bank lending and sukuk. A number of factors suggest that these trends will continue even if they remain to an extent vulnerable to external shocks. By contrast, we are looking at a much more mixed picture for IPOs (initial public offerings), conventional bonds, and alternatives."

Arab Spring Stumps Davos Investors One Year After Egypt Eruption - Bloomberg

One year after Egypt knocked global finance off the agenda at the World Economic Forum, Arab officials returning to Davos may struggle to drum up interest in the region.
Across North Africa, where uprisings ended the autocratic rule of three men, economic growth has stalled, stock markets have slumped and Egyptian bond yields are at a record, with the nine-month treasury bill at 15.802 percent. Foreign direct investment in the Middle East and North Africa last year was the lowest since 2005.
Failure to lure investments threatens to hinder the transition to democratic rule and may spark more deadly protests, while energy-rich states, such as Saudi Arabia, may struggle to diversify their economies and cut the world’s highest youth unemployment rates.

Dubai stocks rise to 6-week high - Arab News

Dubai's bourse jumped to a six-week high on Wednesday, as property stocks surged on hopes that Abu Dhabi's decision to restart stalled projects including the Louvre and Guggenheim museum branches would lift the struggling real estate market.

Most other Gulf bourses gained in muted trade as investors stayed on the sidelines with many of the big companies yet to report fourth-quarter results.

"Dubai managed to be the best performing market in the region today," said Marwan Shurrab, vice-president and chief trader at Gulfmena Investments.

MENA stock markets close - January 25, 2012 (Delayed due to site maintenance)

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)