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Thursday, 16 February 2012

A scar on Bahrain’s financial marketplace | Global Investing

Bahrain’s civil unrest — which had a one-year anniversary this week — has taken a toll on the local economy and left a deep scar on the Gulf state’s aspiration to become an international financial hub.

A new paper from the Sovereign Wealth Fund Initiative, a research programme at Center for Emerging Market Enterprises (CEME) at the Fletcher School at Tufts University, examines how the political instability of 2011 is threatening Bahrain’s efforts in the past 30 years to diversify its economy and develop the financial centre.

Asim Ali from University of Western Ontario and Shatha Al-Aswad, assistant vice president at State Street, argue in the paper that even before the revolt, Bahrain lagged in building the foundations of a truly international hub in the face of competition from Dubai and Qatar.

MENA stock markets close - February 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)

Saudi Aramco to Re-Open Oldest Field to Tap Heavy Oil, EIU Says - Businessweek

Saudi Arabian Oil Co. plans to re- open the Gulf kingdom’s oldest oil field and produce there for the first time in 30 years as the company boosts output of heavy crude, the Economist Intelligence Unit said.

The state-owned producer, known as Saudi Aramco, may revive a plan from 2008 to restore production at the mothballed Dammam field, the EIU said in a report. Dammam contains some 500 million barrels of oil and may yield as much as 100,000 barrels a day of Arabian Heavy crude, according to the report.

Aramco, the world’s largest oil exporter, is considering redeveloping the onshore field in response to “tight market conditions,” the London-based researcher said in the report issued yesterday. It shut Dammam, along with several other small fields, in the early 1980s due to low demand. Officials at Aramco’s headquarters in Dhahran, Saudi Arabia, did not answer phone calls seeking comment today, the first day of the Saudi weekend.

Qatar Shares Fall to Lowest in Two Weeks on Dividends - Businessweek

Qatar’s benchmark stock index fell to its lowest level in two weeks amid investor concern that dividend payments offered by companies in the Persian Gulf nation aren’t reflecting their 2011 earnings.

Masraf Al Rayan, a Shariah-compliant bank, fell the most in more than two weeks. Doha Bank QSC, Qatar’s third-largest bank by total loans, declined the most in two weeks. The benchmark QE Index retreated 0.4 percent to 8,593.98, the lowest intraday level since Feb. 2, at 11:24 a.m. in Doha. The Bloomberg GCC 200 Index, which tracks the 200 biggest companies in the six-nation Gulf Cooperation Council, fell 0.1 percent.

Qatari lenders are benefiting from a pickup in lending as the country invests in infrastructure to prepare for the 2022 soccer World Cup. Doha Bank, which reported an 18-percent jump in 2011 net income, announced a lower dividend payment for 2011 than a year earlier. Qatar National Bank SAQ, the country’s largest lender, said last month its acquisition of Turkey’s Denizbank AS would not be possible if the dividend it distributes is too high.

Qatar National Bank Said to Get $4.8 Billion in Bids for Notes - Businessweek

Qatar National Bank SAQ, the Doha- based lender bidding to buy Dexia SA’s Turkish unit, received $4.6 billion in bids for its $1 billion bond sale that closed Feb. 14, a banker familiar with the deal said.

Forty-four percent of the investors in the five-year notes were from the Middle East, 18 percent from Asia, 16 percent from the U.K., 14 percent from Europe, 6 percent from the U.S., the banker said, declining to be identified because the information is private. Banks bought 38 percent of the bonds, fund managers 18 percent, hedge funds 18 percent, central banks 12 percent, pension and insurance funds 8 percent and private banks 6 percent, according to the banker.

The notes pay a 3.375 percent coupon, or a spread of 235 basis points, 2.35 percentage points, above the benchmark mid- swap rate, according to data compiled by Bloomberg. Barclays Capital, Citigroup Inc., HSBC Holdings Plc, Standard Chartered Plc and QNB Capital arranged the transaction.

Even in Oman, Iran traders feel sanctions pinch | Reuters

Iranian traders in Oman, struggling to secure financing because of Western economic sanctions against Tehran, are raising loans from sympathetic Omani businessmen in order to ship foodstuffs to Iran, the traders say.

"Local banks don't give us letters of credit anymore to export food to Iran, but we are grateful for the private loans from our Omani friends," Hassan Ghafour, an Iranian businessman based in the north Oman city of Sohar, told Reuters this week.

Meer Sajjad, an Iranian trader in the capital Muscat, said he was also being forced to turn to fellow businessmen because he could not obtain financing from banks.

Bahrain Islamic, Al Salam end $4.5 bln merger talks | Reuters

Bahrain Islamic Bank and Al Salam Bank said on Thursday that merger talks between both lenders to form a banking giant collapsed due to disagreement on pricing.

Both banks had said in July they initiated talks to form the Gulf Arab state's largest Islamic lender with assets of 1.7 billion dinars ($4.5 billion).

"Bahrain based Islamic retail banks, Bahrain Islamic Bank and Al Salam Bank mutually agreed to end merger talks after they were unable to each agreement on the exchange ration for the shares," the banks said in a statement on the Bahrain bourse.

STOCKS NEWS MIDEAST-Kuwait resumes gains; ENBD weighs on Dubai - Yahoo!

Kuwait's index recovers most of
Wednesday's losses, showing little reaction to the market
regulator instructing the bourse to delist nine companies.
The benchmark climbs 0.3 percent to close at 5,982 points,
edging back up towards Tuesday's five-month closing high.
Companies to be de-listed include International Investment
Group, Wataniya Airways, Al-Safat Global,
International Leasing and Investment and Investment
The regulator also issued ultimatums for nine other
companies to correct their financial positions by March 31,
according to a bourse statement.
"It gives a better reflection of the index, given that most
of these companies have been halted for a while and investors
got used to not trading them," says Jasem al-Zeraei, head of
institutional sales at NBK Capital.

TODAYonline | StanChart closes S$175m credit facility for Robinsons

Standard Chartered said yesterday it has closed a S$175 million senior secured credit facility for Singapore-based retailer Robinsons & Co.

The five-year facility, structured as a leveraged recapitalisation, is the first deal of its kind in Singapore since the 2008 global financial crisis and represents Robinsons' first syndicated debt financing.

Dubai's Al-Futtaim Group, which acquired Robinsons in 2008, mandated the deal to improve the retailer's capital efficiency and refinance existing indebtedness.

Qatar May Set Up $1 Billion Investment Company, QNA Reports - Bloomberg

Qatar’s Supreme Council for Economic Affairs and Investment considered a proposal to set up a $1 billion company that would invest in small enterprises outside the country, the state-run Qatar News Agency reported yesterday, citing Finance Minister Yousef Kamal.
The question of bringing state energy company Qatar Petroleum under the council’s authority was also considered, the agency said.

Dubai's DIC Debt Talks Ongoing After Govt Pulls Credit Facility -Sources - Zawya

The Dubai government has withdrawn a $150 million line of credit set up for Dubai International Capital, a move that is complicating the finalization of the state-linked private equity firm's debt restructuring deal, according to three people familiar with the matter.
The withdrawal is the latest example of an apparent pullback by the government from financial support for state-linked companies restructuring debt. In recent months, the government has rejected requests by banks for government guarantees in debt restructurings at Dubai Group and Drydocks World, according to bankers involved in those talks.

DIC agreed with creditors on the terms of a $2.4 billion debt restructuring late last year, but the pullback on the liquidity facility at the eleventh hour has forced DIC and its banks to again sit around the negotiating table to discuss the final terms, according to one source directly involved in the talks. DIC is a subsidiary of Dubai Holding, the personal investment vehicle of Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai.

gulfnews : Governments don't run markets

The Ministry of Economy is launching a new system of monitoring prices and volume of sales of 650 commodities. This huge range of goods includes only 15 products which have been deemed essential (such as rice, wheat, sugar, flour, meat, oil, bread, eggs and bottled water) and therefore the ministry has put a price cap on them.
It seems that ministry bureaucrats will now have to determine what the ‘right' prices are for 650 types of goods. Their new electronic system will also monitor the quantity of particular goods being brought into the country, the process of their sales and whether there is a shortage. The problem is that this is taking the government into micro-managing large sections of the economy.
The government would be better off allowing competition in a free market to drive down prices. No one likes paying high prices for goods, but strong competition is much more reliable at keeping prices low than government control.

gulfnews : Speedy resolution of civil and commercial disputes

Last November, a 34-year old Lebanese national registered a claim in the Dubai International Financial Centre Courts (DIFC Courts), seeking a Dh100,000 compensation for job termination without notice.
The presiding judge settled the case within 10 days and ordered the defendant to pay the claimant a sum of Dh38,840 immediately.
In another case, a 62-year-old CEO, a European, registered a claim last April against his company, seeking his notice period salary of around $16,666 (Dh61,164). Within four weeks, the presiding judge ordered the defendant to pay the claimant the full amount on or before June 2011.

gulfnews : Seven explanations for one crisis

There are many aspects of our daily lives that the credit crisis post 2008 has the dubious distinction of being responsible for — from the massive uncertainty that it has fostered in the lives of individuals and nations to the almost permanent change in geopolitical equilibrium.
But, to the question of whether there was a single reason for the credit crisis, the answers are vague. Was there, instead, a sprawling and interlinked set of causes for it? Which governmental agency or corporate body was responsible?
Answers to such basic questions of what led to the crisis are still contentious. Predictably, authors of books on such matters have proliferated as well. In an interesting exercise, Professor Andrew Lo from MIT has reviewed 21 books — 10 academic, 10 popular and one governmental report — on the subject and provided a summary of their claims.

gulfnews : Joyalukkas to use $100m syndicated loan for expansion

Dubai-based jewellery retailer Joyalukkas has roped in Standard Chartered Bank (UK), Emirates NBD and Bank of Bahrain and Kuwait (BBK) to sign a Dh367 million syndicated loan to spearhead a massive expansion of its retail network of jewellery stores, Gulf News has learnt.
Standard Chartered Bank is the arranger and facility agent of the syndication that includes a $75 million (Dh275.4 million) term loan for five years and $25 million as working capital.
"We are planning to sign the deal on Sunday with the lenders," a source told Gulf News.

Investment earns DP World an upgrade - The National

DP World, the world's third-largest port operator, has been upgraded from "neutral" to "outperform" by Credit Suisse.

The financial services group said its decision was based on the Dubai-based ports operator's investment in its existing and new facilities, and the fact that its main operations are in regions less affected by the economic downturn.

Credit Suisse raised its target price to US$14.70 from $12.48 and said its valuation was back to mid-2009 levels - at the low end of its 0 to 35 per cent premium to global peers on one-year forward EV/Ebitda, a formula used to determine the value of a company. According to the Credit Suisse analyst Vincent Resillot DP's decision to rely on emerging markets to offset a potential economic slowdown meant it was "geographically hedged", as growth has resumed, especially in the Gulf, Africa and Latin America.

Positive outlook in media free zones thanks to new companies - The National

Dubai's media free zones reported almost 300 new company registrations last year, signalling what one executive described as "positive" growth for the industry.

Media companies from the emerging markets, along with digital specialists and consultancy firms, led the growth in companies registering at Tecom Investments' three media zones.

Mohammad Abdullah, the managing director of Tecom Investments' Media Cluster, said a total of 284 companies registered last year.

Thorny issues start to take heavy toll on Leighton - The National

Leighton Holdings is having a challenging time in the Middle East, facing a possible breach of its ethics code surrounding payments connected to work at a project related to oil exports in Iraq.

In addition, the Australian construction company's joint venture, Habtoor Leighton Group (HLG), based in the UAE, has struggled to collect payments and its book value has been written down, resulting in Leighton suffering an A$153.9 million (Dh608.6m) loss in the Middle East and Africa in the six months to the end of December.

The possible ethics breach is related to Leighton's subsidiary company, Leighton Offshore, "in connection with work to expand offshore loading facilities for Iraq's crude oil exports", the company said.

gulfnews : Bank of Sharjah profit down 37% to Dh254m

Bank of Sharjah reported a net profit of Dh254 million in 2011, down 37 per cent from the Dh404 million earned in 2010.
Total provisions were up at Dh215 million compared to Dh80 million in 2010. As of December 31, 2011, the bank's collective impairment provisions were Dh561 million.
The bank's total assets reached Dh20.93 billion, an increase of 2 per cent over the Dh20.61 billion in 2010.

Nine companies to be de-listed from Kuwait's exchange - The National

Kuwait's stock market regulator is to de-list nine companies from the country's exchange, putting an end to a period of uncertainty for shareholders of companies which have been frozen in trading for as much as three years.

The companies include Investment Dar, Al Safat Global Holding and Al Abraj Holding, the Kuwait Stock Exchange Board of Commissioners said in a statement on its website.

Villa Moda Lifestyle, the luxury department store, was also de-listed. The company is 60.3 per cent owned by DIFC Investments, the investment arm of Dubai's financial free zone which is racing to meet a $1.25 billion (Dh4.59bn) repayment deadline later this year.

gulfnews : UAE to cut $3b costs by 2030

The UAE can reduce its energy costs by up to $3 billion (Dh11 billion) a year by 2030 through implementation of energy efficiency technologies, according to a study by Oliver Wyman, a global management consulting firm.
Driven by increased population and escalating commercial and residential demand for electricity, especially in the summer, the Gulf states have become significant consumers of oil, says the study.
Since natural gas supplies no longer meet local energy demand, the region's oil exporting countries have started to tap into money-generating fuel oil reserves, which is impacting both local economic growth and global energy security, the study noted.

Developers of UAE projects hit by borrowing squeeze - The National

Developers of large projects in the UAE face increasing borrowing costs, an HSBC chief has warned, as international banks cut back on spending and local lenders find themselves unable to compensate on the shortfall.

Jonathan Robinson, the head of project finance for the Middle East and North Africa (Mena) at HSBC, said a limited supply of funds was being outpaced by demand arising from increased infrastructure spending in the Gulf in particular. He said international banks, which have already scaled back their lending, remain reluctant to release funding because of the sovereign debt crisis and regulation that demands higher capital reserves.

Developers have turned to local banks, and local currencies, for financing, but the UAE is among the countries that do not have enough capital in banks to prevent a rise in borrowing costs, Mr Robinson said.

Ex-Aluminium Bahrain Executive Charged by U.K. With Corruption - Businessweek

U.K. prosecutors charged Bruce Allan Hall with corruption and money laundering tied to his time as an executive at Aluminium Bahrain B.S.C., a smelting company in Bahrain.

An Australian national, Hall was released on conditional bail and must appear at a London criminal court next month, the Serious Fraud Office said in an e-mailed statement today. He is accused of accepting bribes over an eight-year period while he worked at the company, known as Alba, the prosecutors said.

Hall was extradited from Australia to London to face the charges, the SFO said. His co-defendant in the case, British investor Victor Dahdaleh, is also scheduled to appear at the same court hearing, the SFO said.