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Friday, 17 February 2012

Dubai property pain - Zawya

While Dubai's economic environment is improving rapidly, the real estate sector is likely to go through more pain and fall by a further 15-20% before bottoming out, says Dubai-based Rasmala.

"We believe the Dubai residential market may see delivery of 30,000-35,000 units of apartments and villas combined in 2H11-2013, upon an existing supply base of roughly 322,000 units," said Rasmala analysts in a note. "This translates into roughly 10% incremental supply, which we believe would further depress real state asset values."

The investment bank believes that Dubai residential sales may fall from their current levels of AED750 per square feet to AED600-650 - or 15-20%.

Guest post: beware oil at $120 a barrel | beyondbrics – FT.com

Investors’ eyes are still locked on Greece. But some sort of Greek deal is already in the price in the markets. What isn’t, however, and what now presents a big risk, is oil.

Geopolitics and plenty of liquidity have quietly driven the price of Brent to $120 a barrel. This is where it starts to hurt. Even in Asia.

Exports are the obvious headache. In recent months, US consumers have stepped up and offset weakness in Europe. But American shoppers are notoriously sensitive to the price of gas. Recall early 2011: the year started equally promising until the relentless rise in oil prices snuffed out America’s recovery. So far this year, the climb in the cost of gasoline in the US has been even sharper than in 2011.

Fund flows: a healthy slowdown | beyondbrics | News and views on emerging markets from the Financial Times – FT.com

Last week we reported record inflows into emerging market bond funds – so a slowdown was always going to be likely.


But while fixed income inflows did indeed decline in the week to Wednesday, they still look solid, at $637m in the sample universe monitored by EPFR, the Boston-based fund tracker. And with investors increasingly hopeful of a decisive resolution to the eurozone crisis, Royal Bank of Scotland reckons the good news will keep on coming.


Demetrios Efstathiou, analyst at RBS, wrote:


We stick with the theme of the past few weeks. We expect the positive momentum in flows to continue. With data not surprising on the downside and barring a Greek default, the euphoria started by LTRO should remain on course.

Loop, Etisalat, Unitech, S Tel, Sistema & Videocon demand two stage spectrum actions - The Economic Times

All mobile phone companies, whose licences were cancelled by the Supreme Court earlier this month, have demanded that the upcoming auctions for 2G airwaves be split into two rounds, with different base prices.

Companies such as Videocon, Sistema, S Tel, Uninor, Loop and Etisalat DB amongst others, have demanded that sector regulator Trai allow only those players whose licenses were quashed by the apex court, or other new entrants who want to enter the telecoms sector in India, to participate in the fist stage of the bidding process, which is for start-up spectrums. These companies have said that incumbents such as Bharti Airtel and Vodafone must only be allowed in the second phase, which would be for additional airwaves.

The Supreme Court in its February 2 order had directed that the 122 revoked licences be reassigned in four months through an auction process.

Dragon Oil says mulling approach for Bowleven | Reuters

Oil firm Dragon Oil said it was considering making a takeover offer for Bowleven, a British company with assets in Cameroon, in a move which would form part of a long-stated plan to expand beyond its Turkmenistan production base.

"Dragon Oil notes the recent movement in Bowleven's share price and confirms that it is in the preliminary stages of exploring a possible offer for all of the issued and to be issued share capital of Bowleven," Dragon said in a statement on Friday.

Shares in Bowleven soared 65 percent to 122 pence at 1150 GMT, on news that Dragon was considering an approach, exceeding earlier gains of around 18 percent on takeover rumours before Dragon announced its interest.

Egypt-U.S. Rift Hangs Over IMF Loan Talks - Bloomberg

Egypt’s politicians and media are issuing ever-louder accusations of American meddling just as the country seeks loans from the International Monetary Fund, where the U.S. is the biggest shareholder.
“America is behind the chaos,” blared a red headline on the front page of state-run Al-Gomhuria newspaper this week. The Muslim Brotherhood said U.S. money was being spent “to destroy Egypt and ruin its society.” The dispute over the prosecution of employees at U.S.-based NGOs, accused of breaking rules on foreign financing, has opened the deepest rift for decades between the military allies. It’s happening as the government prepares to submit an economic program to parliament that will be the basis for its application for a $3.2 billion IMF credit.
Egypt needs the money to help an economy in stagnation since last year’s uprising against Hosni Mubarak. Tourists and investors have stayed away and the central bank, seeking to avert a currency crisis, spent more than half its reserves. Bond yields rose this month amid investor concern that a worsening dispute with the U.S. will complicate efforts to raise funds.

Family companies seek funding to expand abroad - The National

Family-owned businesses and other private-sector companies are turning to capital markets to generate funding as they start to outgrow their Gulf backyards and seek expansion overseas.

The move is expected to lead to more public sales of bonds and sukuk and to initial public offerings in the region from companies that would not traditionally seek out investment on capital markets, said Rezwan Mirza, a managing director and regional head of Barclays Corporate.

"Companies that were more regionally-focused 10 years ago are now breaking out," he said.

Mix required for Dubai economic recovery - The National

Dubai's economy has undergone a rapid transformation in recent years, branching out into new areas from transport to tourism.

But now the emirate is being urged to make similar steps in diversifying its export strategy.

Officials are worried too narrow a range of commodities are being shipped to too few countries.

Egypt-U.S. Rift Hangs Over IMF Loan Talks as Reserves Plunge - Businessweek

Egypt’s politicians and media are issuing ever-louder accusations of American meddling just as the country seeks loans from the International Monetary Fund, where the U.S. is the biggest shareholder.

“America is behind the chaos,” blared a red headline on the front page of state-run Al-Gomhuria newspaper this week. The Muslim Brotherhood said U.S. money was being spent “to destroy Egypt and ruin its society.” The dispute over the prosecution of employees at U.S.-based NGOs, accused of breaking rules on foreign financing, has opened the deepest rift for decades between the military allies. It’s happening as the government prepares to submit an economic program to parliament that will be the basis for its application for a $3.2 billion IMF credit.

Egypt needs the money to help an economy in stagnation since last year’s uprising against Hosni Mubarak. Tourists and investors have stayed away and the central bank, seeking to avert a currency crisis, spent more than half its reserves. Bond yields rose this month amid investor concern that a worsening dispute with the U.S. will complicate efforts to raise funds.

Money pours back into Mideast stock markets - Arab News

A sharp rise in trading turnover shows money is pouring back into Middle Eastern stock markets, after a year in which the global financial crisis and political turmoil in the Arab world kept most markets depressed.

Analysts believe the bulk of the recent buying is by local investors seeking short-term profits, rather than by foreign funds and other long-term institutional investors.

They say the rallies could be cut short if the global financial environment worsens again — for example, if the euro zone debt crisis flares up once more — or if there is a geopolitical crisis such as conflict with Iran over its disputed nuclear program.

UPDATE 1-Dubai's Emirates NBD hires banks for Swiss franc bond - sources | Reuters

Emirates NBD, Dubai's largest bank, is planning to issue a Swiss franc-denominated bond and has appointed two banks to look at the sale, banking sources said on Thursday.

One of the sources said the banks appointed are Credit Suisse and BNP Paribas.

"The two arrangers are appointed to assess the market, depending on the market conditions, the sale will be decided," he said.

Dubai group to back Malcolm Walker's Iceland bid - Telegraph

It has also emerged Mr Walker and the management team are working with financial backers including Landmark Group, the Dubai-based owners of restaurant chain Carluccio's and South African group Brait.
As The Daily Telegraph revealed on Thursday, Mr Walker has also got the backing of Lord Kirkham of DFS.
The extra cash provided by the backers has allowed Mr Walker to raise his bid from the original £1.25bn.

Aabar becomes UniCredit's top shareholder | Reuters

Abu Dhabi sovereign wealth fund Aabar Investments has increased its stake in Italian bank UniCredit to 6.5 percent by exercising a call option, market regulator Consob said on Thursday.

Aabar previously had 4.99 percent of UniCredit, Consob said.

Consob said on its website that the increase in the stake dated back to Feb. 14.

The regulator also said in an update on its website that U.S. fund Capital Research and Management has cut its stake to 2.732 on Feb. 10 from a previous 5.4 percent holding.

Aluminium Bahrain's 2011 net profit up 53 pct | Reuters

Aluminium Bahrain (Alba), which owns the world's fourth-largest aluminium smelter, saw its full year 2011 net income jump 53 percent to $564 million, the company said on Thursday.

However, Alba also said production only increased by 3.6 percent while sales were up 4.5 percent.

Bonds: Dubai vs Bahrain | beyondbrics – FT.com

Dubai or Bahrain, which is safer for bond investors? A year ago the answer was easy – Bahrain. Dubai’s reputation had been rattled by the manifest difficulties of its overborrowed companies.

But in the wake of the Arab Spring, things look different. The rulers of Dubai have avoided the turmoil that has struck the region. Bahrain, of course, has not, with anti-government protests early last year that provoked a violent reaction from the authorities. It’s clear where investors prefer to put their money.

As the chart shows, Dubai’s five-year credit default swaps are trading this week at around 415 basis points, according to Markit. This is about the same level as they were in January 2011, when protestors filled the streets of Cairo and the Arab Spring turned into a regional phenomenon as it spread from Tunisia to Egypt.