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Sunday, 19 February 2012

Travelodge set for takeover by two US hedge funds | Business |

Travelodge, known for its £10-a-night rooms, is be taken over by two American hedge funds that stand ready to inject some much-needed cash and save the budget hotel chain from collapsing into administration.

The debt-laden company, which has more than 470 hotels in Britain, Ireland and Spain and employs over 6,000 people, needs to raise £60m to survive. It is owned by Dubai International Capital, a private equity house backed by the Gulf state, which stands to lose up to £400m.

Two New York-based hedge funds, Avenue Capital and GoldenTree Asset Management, which have been creditors to Travelodge since 2006 when DIC bought the business, have pledged to step in with £60m, a Travelodge spokesman said, and intend to seize control of the hotelier in return. They are talking to Travelodge's main lenders – Investec, Barclays, Royal Bank of Scotland and Babson – about whether they want to be involved in the rescue.

Travelodge to Get Financing From Hedge Funds Amid Restructuring - Businessweek

Travelodge Ltd. will get financing from two New York-based hedge funds as the U.K. budget hotel chain owned by Dubai International Capital restructures debt.

Avenue Capital Group LLC and GoldenTree Asset Management LP have underwritten a medium-term facility of 60 million pounds ($95 million), James Leviton, a spokesman for Travelodge, said by phone after the Sunday Times reported the company had six weeks to raise the money or it could face bankruptcy.

“All the lenders are working together to find a sensible solution to the debt structure,” Leviton said. “Travelodge is not going into administration.”

MENA stock markets close - February 18, 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 Arabia Cut Oil Output, Export: Industry Report - Business News - CNBC

The world’s top oil exporter, Saudi Arabia, appears to have cut both its oil production and export in December, according to the latest update by the Joint Organizations Data Initiative (JODI), an official source of oil production, consumption and export data.

The OPEC heavyweight saw production decline by 237,000 barrels per day (bpd) from three-decade highs of 10.047 million bpd in November, the JODI data showed on Sunday.

The draw-down was sharper for the actual amount exported, declining by 440,000 bpd, or 5.6 percent, to come in at 7.364 million bpd, the data also showed. The level would still be similar to exports after a steep ramp-up last June.

Dubai’s Shares Surge Most in Almost a Year as Debt Concerns Fade - Businessweek

Dubai’s shares surged the most in almost a year on investor confidence debt-burdened companies in the emirate will meet payment obligations without government support and as quarterly earnings beat estimates.

Emaar Properties PJSC, developer of the world’s tallest skyscraper whose fourth-quarter profit topped expectations last week, advanced the most in almost a month. Dubai Islamic Bank PJSC, the United Arab Emirates’ biggest lender complying with Shariah rules, rallied 3.3 percent. Dubai’s DFM General Index advanced 3.6 percent, the most since March 13, to 1,571.09 at the 2 p.m. close in the emirate. The Bloomberg GCC 200 Index rose 0.6 percent at 1:49 p.m. in Riyadh.

There has been “increasing positive sentiment with Dubai entities saying debt will be repaid without government assistance,” said Julian Bruce, equity sales head at EFG-Hermes Holding SAE in Dubai. With “full-year earnings looking much more healthy and some companies recommencing dividend payments,” trading volume has also improved, he said.

Dubai's DIFCI hires Moelis for $1.25bn bond options | Alrroya

DIFC Investments (DIFCI), the investment arm of the firm that runs Dubai's financial free zone, has hired US investment bank Moelis & Co to advise on options for a $1.25 billion Islamic bond maturing in June, three sources familiar with the matter said on Sunday.

The DIFCI bond, along with a $2bn Islamic bond from Jebel Ali Free Zone (Jafza) which matures later this year, are in the spotlight as investors weigh Dubai's refinancing risks in 2012.

DIFCI, whose assets range from aerospace to retail, saw profits wiped out in 2010 mainly due to the devaluation of its property portfolio in the aftermath of the 2008 global financial crisis which ended Dubai's real estate boom. It posted a $272 million loss for 2010.

Dubai Shares Head for 7-Month High as Oil Rises on U.S. Outlook - Businessweek

Dubai shares headed for the highest close in seven months, leading gains in Persian Gulf markets, after oil rose amid signs the U.S. economy is improving and as European leaders made progress on a second Greece bailout.

Emaar Properties PJSC, developer of the world’s tallest skyscraper, set for the biggest increase in a week. Deyaar Development PJSC surged 5.6 percent. Dubai’s DFM General Index advanced 1.9 percent to 1,545.51, poised for the highest close since July 14, at 11:06 a.m. in the emirate. The Bloomberg GCC 200 Index of Persian Gulf stocks rose 0.3 percent.

“The positive sentiment is coming from the U.S.,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities. “The U.S. markets are moving ahead despite the confusion coming out of Greece,” helping lift local shares, he said.

gulfnews : Abu Dhabi's Ghantoot Group plans $500m investment in Oman

In its biggest ever expansion drive outside of the UAE, the Abu Dhabi-based Ghantoot Group on Sunday announced that it will invest $500 million (Dh1.83 billion) in various projects in Oman's hospitality, water and power sectors.
A top official for Ghantoot Group said that starting in 2012, the group plans to establish two power plants, three hotels and investment in other facilities in water desalination, transmission and distribution and oil and gas projects aimed to benefit the Sultanate.
The first power plant, of 140MW capacity, will be set up in Ras Al Khaimah in the UAE to supply electricity exclusively to Musandam, in Oman, and adjoining areas, while another power plant, of 120MW capacity, will be set up in central Oman at a site to be finalised soon. When completed, the two plants will provide power to Omani consumers at a lower cost to the government.

Dar Al Arkan to repay $1.3bn as land sales rise - Real Estate -

Dar Al Arkan Real Estate Development Co. plans to repay about 5bn riyals ($1.3bn) of debt this year as the Saudi Arabian developer sells land to build its cash holdings, the chief financial officer said.
“We will repay our debts this year, which amount to about 5 billion riyals and includes our sukuk maturing in July,” Andy Raheja said in an interview at the Bloomberg office in Dubai on Feb. 15. “We have been selling land and not deploying it back into more land and are building up a cash pile in order to repay the sukuk.”
Dar Al Arkan, the second-biggest property company in the kingdom by market value, holds about 35 million square meters of land mainly in Riyadh and Jeddah. It expects to continue making about 800 million riyals every quarter from land sales, Raheja said.

AFP: Kuwait to post record income, surplus

OPEC member Kuwait was forecast Sunday to post its largest revenues and budget surplus ever this current fiscal year on the back of high oil prices and production, a local economic report said.
Revenues of the oil-rich Gulf state in the 2011/2012 fiscal year, which ends March 31, are expected to top $100 billion for the first time, ending between $101 billion and $104 billion, the National Bank of Kuwait (NBK) said.
Oil income is forecast to contribute around 95 percent of the revenues, according to NBK which said the average price for Kuwaiti oil will be about $109 a barrel way above the budget price of $60 a barrel.

Vegas Wire: MGM's CityCenter loses $45 million in quarter - Business

MGM Resorts International said Monday that its CityCenter development had a net operating loss of about $45 million in the fourth quarter, but saw revenues increase about 4 percent.
The company, which owns the 67-acre Strip complex in a 50-50 partnership with Dubai World, preannounced quarterly earnings for CityCenter on Monday when it unveiled plans to refinance $240 million in debt.
In a statement, MGM Resorts said it plans to refinance the debt through a private placement and said the funds, along with cash on hand, would be used to pay off $300 million of CityCenter's $2.5 billion debt.


Here we go again…I’ll update the inflation outlook tomorrow, but this is the big risk I discussed to the disinflation outlook. Gas prices are surging again (via Huffington Post):

“At $3.53 a gallon, prices are already up 25 cents since Jan. 1. And experts say they could reach a record $4.25 a gallon by late April.

“You’re going to see a lot more staycations this year,” says Michael Lynch, president of Strategic Energy & Economic Research. “When the price gets anywhere near $4, you really see people react.”

Egypt to sign IMF loan next month, minister says | Reuters

Egypt expects to sign a $3.2 billion loan agreement with the International Monetary Fund (IMF) next month and will receive one-third of the funds immediately upon signing, Finance Minister Mumtaz al-Saeed was quoted on Sunday as saying.

The loan accord would be signed during a visit to Egypt in March by IMF regional director Masood Ahmed, al-Ahram newspaper quoted him as saying. Egypt would receive another one-third of the loan in three months and the final one-third in six months.

The loan, which has a interest rate of 1.2 percent, would be used to support the 2012/13 budget and to compensate for the depletion of Egypt's foreign reserves, al-Ahram quoted Saeed as saying.

Kingdom set to emerge as leading frontier economy with 4.6% growth - Yahoo!

Alkhabeer Capital, a leading Saudi investment company, has released its latest global economic outlook for 2012.
According to Alkhabeer Capital, the combined GDP (gross domestic product) of the GCC region is expected to register a growth in excess of 4 percent where Qatar will top the list with (7 percent) followed by Saudi Arabia (4.6 percent), Kuwait (3 percent), Oman (2.7 percent), the UAE (2.4 percent) and Bahrain (1.2 percent).
At the same time, regional inflation is also expected to ease as commodities and global growth flattens during 2012.

Trial opens in $2.6 bn Iran banking fraud case - Yahoo!

The trial in a $2.6 billion dollar banking fraud case that the Iranian media describe as the country's biggest ever opened on Saturday with some of the 32 accused facing possible death sentences.
The accused were charged with involvement in taking bribes and financial corruption, Iranian media reported.
The lead defendant, who was identified only by the initials MA, is accused of being "corrupt on earth," a charge which carries the death penalty under Iran's penal code, the reports said.

gulfnews : UAE MBAs among best in Arab world

Private universities in the UAE have dominated the list of top MBA programmes in the Arab world.
In this month's Forbes Middle East issue, 12 private UAE institutions' MBA programmes were among the top 20.
American University of Sharjah (AUS) came second, followed by Canadian University of Dubai in third place, American University of Dubai in sixth place, University of Wollongong in Dubai in seventh place and American University in the Emirates in the ninth.

gulfnews : GCC Focus: Trade with US vital for both sides

Thanks to steady increases, the six economies of the Gulf Cooperation Council (GCC) have succeeded in reversing the balance to their advantage in 2011 with regard to doing business with the US.
Calculating statistics released by the US Census Bureau, this writer feels that the GCC has collectively enjoyed a $10 billion (Dh36 billion) net trade balance in goods in 2011. By comparison, the US recorded a tiny $500 million trade surplus in 2010.
The shortage with the GCC is insignificant by American standards, having sustained a deficit of $737 billion in goods trade last year.

gulfnews : Welcome reprieve for Emirati investors

Emiratis were by no means alone in being hit by the plunge of Dubai's property market, when both novices and experienced investors were stung by flipping one apartment too many.
While analysts say there are no current figures to quantify how many Emiratis lost money during that period, legal action against investors as well as well-publicised government debt payoffs suggest that it was significant.
But, Saeed Hirsh, a London-based economist at Capital Economics, explained that middle class Emirati investors were perhaps in a more difficult position when the heyday ended — in that they could not simply get on a plane and never come back.

gulfnews : Middle class in Gulf countries torn by crisis

The middle class in the Gulf countries has been hammered by the global financial crisis, according to estimates which show small investors have lost between 70 and 90 per cent of their investments in the regional stock markets.
When the stocks of some companies fell below the initial public offering (IPO) price by 80 per cent some small investors lost almost all their investments, while the losses were double for those who purchased the shares after the IPO.
The recent government measures, especially salary and wage raises, have compensated the middle class workers in government organisations, but the rest, including small investors, traders and the retired, still suffer from declines in their investment returns which comprise a large percentage of their annual income.

Saudi Shares Gain as U.S. Economic Data Indicate Growth, Oil Price Climbs - Bloomberg

Saudi Arabian shares rose after signs of an improving U.S. economy and progress on a bailout for Greece bolstered the outlook for fuel demand.
Southern Province Cement Co. (SOCCO), the kingdom’s biggest cement producer by market value, reached its highest intraday price since August 2006. National Industrialization Co. (NIC), known as Tasnee, rose for the fifth day in six.
The Tadawul All Share Index (SASEIDX) rose 0.3 percent to 6,830.31 at the 3:30 p.m. close in Riyadh. More than four stocks rose for every stock that fell. The 151-member measure has gained 6.4 percent this year.

HSBC Saudi Arabia launches Amanah Sukuk Fund - Arab News

HSBC Saudi Arabia has launched its new HSBC Amanah Sukuk Fund. The open-end Shariah compliant fund aims to provide investors with income stabilizing and potential growth over the medium-to-long term by investing in local and international sukuks.

The fund also invests in Shariah compliant money market funds, term deposits and certificates. The performance of the fund is measured against a composite benchmark, which includes HSBC/NASDAQ Dubai Amanah US Dollar Sukuk Index. One of the main features of the fund is the income distribution, whereby earned income will be distributed to customers on a quarterly basis.

gulfnews : Tourism gets priority in Oman development

Oman is looking to attract close to 2 million foreign tourists in 2012 in a year its capital city Muscat has been designated as the Arab capital for tourism, a senior official at the Ministry of Tourism said here yesterday.
"We are not looking at mass tourism. We are promoting Oman as a cultural and historical destination - a country which has mountains, desert and a long coastline. We are looking to attract high-end tourists," Haitham Mohammad Gasani, Director of Tourism Promotion at Oman's Ministry of Tourism, told reporters at a news conference.
He added however, that their target for tourist arrivals could be affected if new troubles erupt in the Middle East.

BusinessGhana - Untapped UAE oil fields estimated to hold over 500 mln barrels

The three oil fields in the United Arab Emirates (UAE) that South Korean companies are entitled to develop are estimated to hold more than 500 million barrels of oil, the commerce minister here said Friday.

Early last year, the UAE signed a memorandum of understanding with Seoul giving South Korean firms the rights to develop the fields in Abu Dhabi. Both sides recently agreed they will conclude the main contract next month.

"The size of those oil fields is really huge as they make up about 11 percent of the whole of Abu Dhabi," Commerce Minister Hong Suk-woo said in a meeting with reporters Thursday.