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Wednesday, 15 February 2012

MIDEAST MONEY-Sanctions sap Dubai's role as Iran trade hub | Reuters

Reza, an Iranian businessman in his mid-thirties, moved to Dubai 10 years ago to make his fortune. For a while, he succeeded -- annual sales at his machinery trading firm reached $70 million. Over the past 18 months, most of what he built has crumbled.

Tightening international sanctions against Iran over its disputed nuclear programme have culminated in making it impossible for Reza to send payments through banks. That has forced him to fire 22 of 26 staff and to sever business ties with machinery making giants such as Japan's Komatsu, he says.

"If I can't move any money, how can I do business?" said Reza, who declined to give his full name because of concern that publicity could cause political problems for him inside Iran.

» Dubai Economic Outlook: Let’s keep it real, shall we? –

Kipp spent the better half of this Wednesday at the Dubai Economic Outlook 2012 to find out the economic outlook for 2012. Would you believe us if we tell you, it is rather positive. Not really? Well, what if we told you the forum was organised by the Department of Economic Development of the Government of Dubai. It is all beginning to make sense now, isn’t it?

Sheikh Ahmed Bin Saeed Al Maktoum, Chairman of the Dubai Economic Sector Committee and President of Dubai Civil Aviation and Chairman and CEO of Emirates Group, kicked off the conference with his cheerful prediction of a growth rate for 2012 at a cheery 4 –ish percent (that is, 4.1 percent according to his speech and then 4.5 percent by other media sources).

UPDATE 1-Kuwait telco Wataniya Q4 profit rises 57 pct | Agricultural Commodities | Reuters

Kuwait's Wataniya on Wednesday reported a 57 percent rise in its fourth-quarter net profit as the telecoms operator included more consolidated earnings from its Tunisian unit.

Wataniya, majority-owned by Qatar Telecom (Qtel), made a net profit of 38.2 million dinars ($137.4 million) in the fourth quarter, compared with a profit of 24.3 million dinars in the same period a year earlier.

In 2011, Wataniya raised its stake in its unit Tunisiana to 75 percent. This enabled Wataniya to consolidate 100 percent of Tunisiana's revenue from the first-quarter of 2011 onwards, up from 50 percent, while it now includes three-quarters of Tunisiana's profit, also up from 50 percent.

MENA stock markets close - February 15, 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)

Dubai Plans to Prove ‘Everybody Wrong’ as $3.25 Billion in Repayments Loom - Bloomberg

Dubai, the emirate that teetered on the brink of default in 2009, expects two of its main companies to refinance $3.25 billion of debt this year without government help as economic growth accelerates.
The second-biggest member of the United Arab Emirates federation doesn’t need to raise money from international bond markets in 2012 and has “no intention” to seek support from Abu Dhabi, Mohammed Al Shaibani, director general of the Dubai ruler’s court, said in an interview in Dubai. Abu Dhabi gave $20 billion to its neighbor in 2009 to help restructure debt.
“We have been proving everybody wrong in the last three years and this is going to be a fourth year proving everybody wrong,” he said. “Of course this year is much better than last year in every way you look at it.”

Renaissance Soars as 2011 Revenue Beats Estimates: Muscat Mover - Businessweek

Renaissance Services SAOG led gains in Oman after the provider of services to the oil and gas industry reported a higher-than-expected increase in 2011 revenue.

The shares surged 6.4 percent, the steepest rise in more than five months, to 0.552 Omani rial, at the 1 p.m. close in Muscat. The benchmark MSM30 Index rose 0.5 percent to 5,636.86, the highest level in a month.

Revenue increased 14 percent to 290 million rials ($753 million), the Muttrah, Oman-based company said in a statement to the Muscat bourse today. The median estimate of five analysts was for revenue of 277 million rials, according to data compiled by Bloomberg.

UPDATE 2-Abu Dhabi helps Dubai again with bank bailout | Reuters

The acquisition of a struggling Islamic lender by Dubai's largest bank Emirates NBD was bankrolled in part by oil-rich neighbour Abu Dhabi, which helped Dubai avoid default just over two years ago, ENBD's finance chief said on Wednesday.

In October, ENBD was ordered by Dubai's ruler to take over loss-making Dubai Bank, which had been rescued by the emirate's government earlier in 2011.

ENBD, whose fourth-quarter results were hit by its exposure to Dubai-linked entities, said the United Arab Emirates' finance ministry gave it a 2.8-billion dirhams ($762.3 million), eight-year loan at below market rates to facilitate the purchase of Dubai Bank.

MIDEAST DEBT-Abu Dhabi's Dolphin bond vulnerable to pull-back | Reuters

A $1.3 billion, 10-year bond from Abu Dhabi's Dolphin Energy is attracting huge demand in the Gulf's secondary debt market, but it is reaching levels which it may not be able to sustain in the long term.

The frenzy over the bond illustrates the distortions which can occur in the region's bond market because of uneven supply of high-grade debt. Dolphin's bond is this year's first highly rated conventional issue from the Gulf, so it has a scarcity value which may not persist once more supply hits the market.

Dolphin's 2021 bond has rocketed in price from par when it was issued on Feb. 8 to just under 103.0 bid on Wednesday, yielding about 5.1 percent.

Sukuk proves a capital but complex friend -

Gulf capital markets have witnessed a surge in sukuk sales in recent months, as issuers turn to Islamic finance for capital.

Such finance has offered companies a way to raise money after tight global credit conditions last year limited issuance from the region.

Islamic banks, important buyers of sukuk, are highly liquid. Low loan-to-deposit ratios leave them with excess funds to deploy into new investments. At the two largest publicly listed Islamic banks in the United Arab Emirates, total loans amount to only four-fifths of their combined deposit base.

Middle East gaining momentum following global financial crisis, says leading economist -

The Middle East is "on track" for recovery from the global financial crisis despite the concerns around the Euro, according to a leading economist.

Speaking in Dubai on the current global economy and outlook for the Middle East, Andrew Scott, Professor of Economics at London Business School, said 2012 will be a year of slow growth but the region is doing well in re-balancing its economies and is beginning to gain momentum.

“The recovery is on track. You can see the region beginning to gain some momentum. Obviously there can’t be expected to be rapid growth for those exposed to the finance and real estate sectors so growth will need to come from elsewhere."

Kuwait Finance House 2011 profit drops 24pc

Kuwait Finance House (KFH), the country's largest Islamic bank, said on Wednesday its profit fell by 24 per cent in 2011, as the lender put aside money to meet investment losses.

Profit for the year fell to KD80.3 million ($289 million) from KD106 million in 2010, the bank said in a statement.

KFH made KD9.6 million in the fourth quarter last year, based on Reuters calculations, compared with an estimated profit of 20 million for the period.

Global crisis has encouraged growth in the sukuk market, says S&P report -

Standard & Poor's Ratings Services has published a report examining why sukuk issuance is gaining acceptance in markets beyond its established strongholds in Malaysia, Indonesia, and the Gulf Cooperation Council (GCC) region.

In our view, European banks are reducing their overseas exposure as their capital requirements have increased and their domestic economies faltered. Governments in the Middle East and Asia have therefore turned instead to local investors to back their infrastructure projects.

Banks in the Middle East and Asia that comply with Sharia law have also demonstrated a strong appetite for new assets that meet their requirements.

Dubai Sees DIFC Investments, Jafza Debt Refinancing Without State Support - Bloomberg

Dubai, the emirate that teetered on the brink of default in 2009, expects two of its main companies to refinance $3.25 billion of debt without government support.
DIFC Investments LLC, a unit of the emirate’s tax-free business financial center, has $1.25 billion in Islamic bonds maturing in June, while Jebel Ali Free Zone FZE, another business park, has 7.5 billion dirhams ($2 billion) in Shariah- compliant notes due in November.
“I’m very confident they will manage to sort out these issues on their own,” Mohammed Al Shaibani, director general of Dubai ruler’s court, said in an interview in the emirate today. “We are available for any advice, any help. But mainly they will manage it themselves.”

Dubai’s Shares Retreat on Speculation Five-Day Rally Overdone - Businessweek

Dubai’s shares retreated for the first time in six days on investor bets that gains prompted by investor optimism ahead of Emaar Properties PJSC’s earnings were overdone.

Emaar, the developer of the world’s tallest skyscraper, decreased the most in six weeks after reporting quarterly profit. Dubai Investments PJSC, the owner of stakes in more than 40 companies, fell the most in two weeks. The DFM General Index, up 6.1 percent this month, declined 1.1 percent to 1,522.96 at the 2 p.m. close in the emirate. The 31 companies on Dubai’s gauge trade at about 9.4 times estimated earnings compared with 10.6 times for the MSCI Emerging Markets Index.

Dubai’s index “has been performing well in the last couple of weeks,” said Samer Darwiche, a Dubai-based analyst at Gulfmena Investments. “Some investors are booking profits today after good results from Emaar.”

TEXT-S&P rates Industries Qatar 'AA-';otlk stbl | Reuters

-- Petrochemical, fertilizer, and steel producer Industries Qatar QSC (Industries Qatar) benefits from access to competitively priced gas feedstocks and the resulting excellent cost positioning across its range of products, in our opinion, along with diversification by product and end market, and very strong operating cash flow.

-- We believe there is an "extremely high" likelihood that the Qatari government would provide extraordinary support to Industries Qatar if financial stress arises, owing to the company's "very important" public policy role and "integral" link with the Qatari government.

-- We are assigning our 'AA-' long-term rating to Industries Qatar.

Dubai government still backs state-linked firms: Sheikh Ahmed | Alrroya

The Dubai government will continue to support state-linked entities, the chairman of its Supreme Fiscal Committee said on Wednesday, two weeks after it walked away from debt talks at Dubai Group.

Sheikh Ahmed bin Saeed al-Maktoum, who is also chairman of Dubai's largest bank Emirates NBD and Emirates airline , spoke on the sidelines of an economic outlook event.

"We will continue to support the GREs (government-related entities)," said Sheikh Ahmed, who is uncle to the ruler of Dubai and a close advisor.

Emaar profit lifted by shift from Dubai realty | Reuters

Emaar Properties, builder of the world's tallest tower, more than doubled quarterly profit thanks to sharply lower provisions and gains in hospitality and retail units following a shift away from the bleak Dubai property market.

Net profit was 716 million dirhams for the fourth quarter ended December 31, up from 274 million a year before and ahead of an average analyst forecast of 475.7 million in a Reuters poll.

"The strong growth was mainly driven by the development business but the performance of Emaar's hospitality segment also surpassed our expectations by 15 percent in terms of quarterly revenues," said Jan Pawel Hasman, associate vice president for equity research at EFG-Hermes in Cairo.

Abu Dhabi’s Sorouh see surge in 2011 profits - Real Estate -

Abu Dhabi-based property firm Sorouh Real Estate has recorded a surge in 2011 income, driven in part by the handover of its Sun and Sky Towers on Reem Island.
The firm’s net profit hit AED383.3m ($104.3m) last year, up from AED16.2m ($4.4m) in 2010. The delivery of Sun and Sky Towers is said to have generated AED2.2bn. Revenues for the period were AED3.8bn, compared with AED1.2bn for the previous year.
“Revenues were driven by the handover of Sun and Sky, construction income from national housing projects, revenue from subsidiary companies, a significant land transaction and rental income from investment properties,” the company said.

Eni sees 2012 output rising on Libya | Reuters

Italian oil and gas group Eni expects its output this year to improve thanks mainly to the gradual recovery of production in Libya which is expected to return to pre-conflict levels in the second half of the year.

Eni, the biggest foreign oil and gas operator in Libya, said on Wednesday 80 percent of its production in the country was back on stream. Before the conflict in Libya Eni produced 270,000 barrels of oil per day.

The group, which is targeting an output growth of 3 percent per year to 2014, said in a statement its oil and gas production in the fourth quarter fell 14 percent to 1.68 million barrels per day.

Dubai to target 4.5 pct growth in 2012 -official - Yahoo!

Dubai will aim for economic growth of 4.5 percent this year, up from an estimated expansion of more than 3 percent in 2011, a senior economic official said on Wednesday.
"The GDP of Dubai has witnessed growth of 2.5 percent in 2010 and it is expected to increase over 3 percent in the year 2011," Sheikh Ahmed bin Saeed al-Maktoum, chairman of the Dubai Supreme Fiscal Committee, said during a presentation on the emirate's economic outlook.
"And we hope in this year we will see more and can get to 4.5 percent."

Profits fall at Dubai's Emirates NBD after upping bad loan provisions - The National

Emirates NBD’s earnings plunged in the fourth quarter as it booked more charges for bad debts and wrote down the value of its stake in Union Properties.

The bank also revealed that it had paid a nominal sum, totalling Dh10, for its acquisition of Dubai Bank, the failed Islamic lender, following guarantees from the Dubai Goverment and a capital injection from the Ministry of Finance.

The UAE’s biggest bank by assets reported a 62 per cent fall in net profits for the fourth quarter to Dh152m missing analysts’ estimates.

gulfnews : Legal lifeline for bankrupt firms

Bankruptcy proceedings have an inevitable air of finality about them. They dissect the circumstances that led a business to crash and burn. What often remains unsaid are the dashed hopes and aspirations of the promoters and employees alike.
In other words, there was no option of a second chance. Not anymore, if the proposed UAE Bankruptcy Law comes into effect with full force.
For the country's small and medium-sized businesses the new law does give them some time to try to turn things around.

Egyptian growth held in check by protests and strikes - The National

Egypt's economy hardly grew in the three months to the end of September last year as persistent protests and strikes hurt output.

Slower activity across industry, construction and tourism meant GDP expanded at just 0.2 per cent in that period in comparison with the same period in 2010, Magdy Emam, the head of the planning ministry's infrastructure division, was quoted by Egyptian media as telling a parliamentary committee.

"Before the revolution GDP growth was strong, but people were unhappy as the benefits were not being shared equally," said Jean-Michel Saliba, the Middle East and North Africa economist at Bank of America Merrill Lynch. "Now the overall size of the pie is smaller, which compounds the problem." Egypt's economy has been beset by protests and labour strikes since the overthrow of Hosni Mubarak as president in February last year.

Industries Qatar hopes for rebound as profit falls - The National

Fourth-quarter profit for Industries Qatar (IQ), the group controlling Qatar's petrochemical, fertiliser and steel sectors, fell 19 per cent compared with the same period a year earlier.

Falling petrochemical prices, a drop in revenue in its steel business and expenses arising from a project delay contributed to the profit decline. Full production at IQ's new fertiliser plant, Qafco 5, and a rebound in petrochemical demand will lead to better financial results in the current quarter, analysts said.

Emaar profits soar on tourism boom - The National

Emaar Properties reinvigorated Dubai's battered property sector with a sharp rise in earnings that underscored the emirate's tourism-driven turnaround.

The region's largest developer reported a 76 per cent increase in fourth-quarter profit after retail and hospitality revenues soared.

"We were expecting a good quarter and definitely the numbers are ahead of our expectation," said Yazan Abdeen, a fund manager at ING Investment Management.

Kingdom continues to lead GCC markets with two IPOs in Q4 - Arab News

Initial public offerings (IPOs) in the Gulf Corporation Council (GCC) markets continued spiraling downward in the fourth quarter of 2011 summing up a difficult year for IPOs on the regional exchanges. The three IPOs in Q4, 2011 raised a total of $212 million, with offering values falling marginally by 3 percent compared to the third quarter of 2011 but down significantly by 79 percent year on year, says PwC, a leading international professional services organization.

Saudi Arabia continued to lead the GCC markets with two IPOs in the last quarter of 2011 contributing $148 million or 70 percent of the total amount raised on the GCC exchanges. The only other IPO in the GCC during Q4, 2011 was Oman’s SMN Power Holding which raised $63.8 million. Although the number of IPOs in the last quarter of 2011 remained the same as Q4, 2010, the average IPO size decreased significantly from USD 343m to $71 million in Q4, 2011.

Abu Dhabi firm unlikely to get good price for RHBCap stake

Aabar Investments PJSC, the Abu Dhabi sovereign wealth fund which announced last June that it was acquiring Abu Dhabi Commercial Bank PJSC's (ADCB) 25% stake in RHB Capital Bhd, will not get a good price if the stake is sold at current market conditions.

Bank analysts said the timing of the stake sale, if it was true Aabar was seeking buyers for the stake, was unfortunate given the volatility of the markets.

Reuters reported that Aabar was exploring the sale of the stake and had engaged in early talks with Sumitomo Mitsui Banking Corp.

White House unveils tougher Iran oil curbs -

The Obama administration issued new rules surrounding sanctions on Iran that could make it much harder for China and other countries to increase or even maintain their current purchases of Iranian oil.
Under the new rules unveiled on Tuesday, the US will have the power to impose sanctions on any commercial banks handling Iranian imports if the country they belong to has not “significantly reduced” the volume of oil it imports from Iran before the end of June.

EM equities: no signs of slowing | beyondbrics –

It’s been a good year so far to be an emerging market equities investor, to say the least. The MSCI Emerging Markets Index surged 11 per cent last month – its strongest January in 11 years, rebounding from a 21 per cent tumble last year – and is currently at its highest level since August.

And it seems that fund managers are counting on more EM joy still. According to a monthly survey by Bank of America Merrill Lynch – considered a barometer of sentiment in financial markets – there has been a “stunning rise in asset allocation to EMs” in February. Even after last month’s stellar performance, the jump towards EMs is the second biggest in the past 12 years.