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Monday, 12 March 2012

MENA stock markets close - March 12, 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)

MIDEAST STOCKS-Developers lift Abu Dhabi on merger talks, weigh on Egypt | News by Country | Reuters

Abu Dhabi's two largest property developers lifted the emirate's bourse on Monday as investors cheered the pair's merger talks, while Egypt's Palm Hills dragged down the market after reporting lower revenue.

Aldar Properties and Sorouh Real Estate surged 9.8 percent each. The two firms said late on Sunday they were looking at a state-backed merger and a decision was expected within three months.

"Aldar holds a very high amount of debt on its balance sheet as opposed to Sorouh, which has lower leverage and a better cash flow visibility," said Ali Adou, portfolio manager at The National Investor. "So the solution might be to merge both entities and dilute the debt."

South Sudan: a tricky sell in NY | beyondbrics –

It’s not easy convincing investors that your brand-new country is worth backing. Last July, Riek Machar, South Sudan’s vice president, was in New York to mark his newly-independent country’s admission to the United Nations. As he did so as the oil wealth that provides 98 per cent of state revenue was flowing fast.

Today that oil flow is frozen due to a dispute with its neighbours in Sudan. So to reduce its vulnerability to such troubles Machar has been back to New York to fire up South Sudan’s search for American investment. But did anyone bite?

In an interview with beyondbrics, Machar said his country wanted to recruit US companies to search for new oil fields, build a refinery, kick-start the development of commercial agriculture and – brace yourself – start a wildlife tourism industry.

Hedge fund complicates Arcapita $1.1 bln debt deal | Business | The Guardian

U.S hedge fund Davidson Kempner Capital Management is part of the creditor committee for the $1.1 billion debt restructuring at Bahrain investment house Arcapita, the first time a fund has fulfilled such a role in the Gulf Arab region.
Previous restructurings in the region, like Dubai World's $25 billion debt deal, have been bank-only affairs, leading to long extensions as banks, concerned with provisioning, opaque legal remedies and maintaining relationships with local borrowers, adopted a conciliatory attitude.
The presence of the distressed debt investment firm on the committee, confirmed by three sources close to the matter, is expected to change the dynamic of negotiations, with the fund having the potential to drive a much harder bargain.

Qatar’s hydrocarbon reserves worth $9.5trn

Qatar’s hydrocarbon reserves are estimated to be worth an astronomical $9.5 trillion at current export prices, according to QNB Capital. The reserves work out to about one-sixth of the region’s (GCC) total which is estimated at a staggering $65trn.

QNB Capital said in a press statement issued yesterday that the reserves estimates are based on its new analysis. The GCC estimates are almost a third of the $200trn value of the world oil and gas reserves.

To put $65trn in context, it is equivalent to 47 times the GCC’s estimated GDP (gross domestic product or size of the economy) in 2011, or 93 percent of global GDP.  It is also 125 times the estimated $521bn that the region’s governments received in oil and gas revenue during 2011.

Dubai’s Emirates NBD Said to Plan Cutting 15% of Workforce to Reduce Costs - Bloomberg

Emirates NBD PJSC (EMIRATES), Dubai’s biggest bank, plans to cut as much as 15 percent of its workforce to reduce costs, according to two people familiar with the matter.
The job cuts will affect about 500 to 700 employees across all departments and are likely to be carried out this month, said one of the people, declining to be identified because the information is private. The reductions will affect Emirates NBD and not the group, which also includes subsidiaries Emirates Islamic Bank PJSC and Dubai Bank PJSC, the person said.
A spokesman for Emirates NBD declined to comment. He didn’t want to be identified because of company policy.

Abu Dhabi realty merger to salve state fund's pain | Reuters

Abu Dhabi's move to merge builders Aldar Properties and Sorouh Real Estate is geared towards shoring up sovereign wealth fund Mubadala and stabilising the emirate's brittle real estate market.

Bankers say that a deal is likely to be effected through a share swap, which would dilute Mubadala's sizeable stake in Aldar, a developer hit by stagnant sales and falling asset prices, and improve its ability to tap capital markets.

"Mubadala will emerge as the winner in this merger ... the terms of the deal are not clear but it's likely that the merger will reduce Mubadala's stake and its exposure to Aldar," said an Abu Dhabi-based property sector analyst.

Dubai, Abu Dhabi most competitive cities in MENA region - Bikya Masr

A new Economist Intelligence Unit report lists Dubai as the most competitive city in the Middle East and 40th globally.

The United Arab Emirates capital, Abu Dhabi is close behind, coming in at 41s position on the report.

Both the UAE cities are ranked ahead of Barcelona, Shanghai, Kuala Lumpur, Milan, Rome among others in competitiveness.

“It is a sign that Dubai, Abu Dhabi and the country as a whole are really moving forward on efforts to make it a leading destination for business and companies in the region,” said a researcher at Citi, which commissioned the report.

Developer’s fightback builds confidence -

Dar Al Arkan, the Saudi real estate company, has access to one of the most lucrative property markets in the region – but it has spent much of this year scrambling to convince investors it can pay back its debts.
Under fire from a group of unhappy shareholders who mobilised online, the company has taken the step – rare in the Gulf – of making public the details of its plans to pay back a $1bn bond and show it is on a firm footing.

Qatar gov becomes financial watchdog chair-Fin Min | Reuters

Qatar's central bank governor has become the chairman of the Qatar Financial Centre Regulatory Authority (QFCRA) in the first step towards establishing a single regulator in the Gulf Arab state, its finance minister said on Monday.

Qatar announced a plan in 2007 for a unified market watchdog, which would make the regulation process simpler and clearer for companies, but there has been little progress since.

"As of March 7, the central bank governor has been chairman of the QFCRA as part of the process of unifying the regulatory regime," Youssef Kamal told a financial conference in the Qatari capital without giving further details.

Dubai Investments may pay premium to state debt: report | Alrroya

Dubai Investments PJSC, whose cash holdings tumbled during an economic slump, may need to pay higher yields than government bonds to attract investors to an Islamic debt sale on concern it may struggle to repay the sukuk.

The Dubai-based company with stakes in more than 40 businesses from real estate to glass production is considering selling bonds that comply with Islam’s ban on paying interest, Chief Executive Officer Khalid bin Kalban said in a March 7 interview. The unrated company will have to offer at least 5 per cent on a five-year sukuk, according to SJS Markets Ltd. That’s 61 basis points more than yields on Dubai’s Shariah- compliant notes due November 2014.

Many of Dubai Investments’ businesses suffered when the sheikhdom’s real-estate market crashed on the heels of the 2008 global credit crisis, sending home prices plunging more than 60 per cent from a peak that year. The company’s cash holdings dropped 71 per cent between 2008 and 2010 to Dh399 million ($109m) and profit fell for a third year in 2011.

Dubai Record Air Traffic Signals Rebound From Property Slump Accelerating - Bloomberg

Gary Seabrook is busy tripling capacity at the paint business he runs near the Dubai port because he doesn’t want to miss out on any sales.
The general manager of Caparol Paints in the United Arab Emirates and a Dubai veteran of 23 years has seen the booms and bust, and his company is now investing as much as 40 million dirhams ($10.9 million) so it can serve countries across the Gulf and North Africa. Exports by companies based in Dubai increased 15 percent last year, the Chamber of Commerce said.

Majid al Futtaim eyes $500 mln Egypt loan: sources | Reuters

Dubai-based developer Majid al Futtaim (MAF) has picked two Egyptian banks to arrange a loan worth around $500 million, to fund construction of its Mall of Egypt project, three sources with knowledge of the move told Reuters.

The developer, the sole franchise of Carrefour in the Gulf, has chosen Banque Misr and National Bank of Egypt as lead arrangers for the deal, two of the sources said.

The cash will be used to fund the group's Mall of Egypt, a 160,000-square metre site in Cairo which will be one of North Africa's largest shopping centres.

Aldar Rallies With Sorouh on Bets of State-Backed Merger: Abu Dhabi Mover - Bloomberg

Aldar Properties PJSC (ALDAR) and Sorouh Real Estate Co. (SOROUH) surged, leading gains on Abu Dhabi’s benchmark index, on bets their potential merger into a company with $15 billion in assets would bolster their businesses.
Aldar, the biggest developer in the United Arab Emirates capital, and Sorouh, the second-biggest, both advanced 9.8 percent to 1.34 dirhams, the highest intraday level since July 11, at 11:55 a.m. in Abu Dhabi. The stocks lifted the ADX General Index (ADSMI) up 0.8 percent to 2,607.45, the highest since March 7. The ADX Real Estate Index (ADRE) jumped 9.7 percent.
The two builders, which have played an integral part in Abu Dhabi’s drive to turn itself into a tourism and business hub, said in a joint statement yesterday they set up a team to study a possible merger with the “blessing” of the emirate’s government. The team will present a plan in the next three months. Government-owned Mubadala Development Co. holds 49 percent of Aldar while the Abu Dhabi Investment Authority, a sovereign wealth fund, has a 7 percent stake in Sorouh.

Aldar merger with Sorouh may be rejected like Emaar and Dubai Properties « ArabianMoney

After the Dubai real estate crash three years ago there was a very serious proposal that Emaar merge with Dubai Properties but following a six-month study it was recommended for rejection.

Abu Dhabi has now ordered a three-month study of a $15 billion merger between Sorouh and Aldar Properties, its two real estate giants. Of course the devil is in the detail of such a proposal.

However, the conclusion should likely be the same as the proposed Emaar and DP merger. Why?

Abu Dhabi stockmarket investigates 'unusual' Aldar Sorouh share trading - The National

The Abu Dhabi Securities Exchange has launched an investigation into what it describes as unusual shareprice movements of Aldar Properties and Sorouh Real Estate before they announced a $15 billion merger yesterday.

The share prices of both companies, Abu Dhabi's biggest developers, rose exactly the same amount yesterday to close up 7.9 per cent at Dh1.24. After the market closed the companies released a joint statement to announce they are considering a merger.

Both stocks moved up in lockstep again today.

Essex House Goes on the Block -

Dubai Investment Group is putting up for sale the Jumeirah Essex House, an 81-year-old Midtown Manhattan hotel and the crown jewel of the Middle East investor's U.S. real estate portfolio.

For the Dubai government fund, the planned sale marks the next step in its efforts to reduce property holdings in the U.S. While it is possible that Dubai could accept offers to refinance or recapitalize the hotel, a sale is considered the most likely outcome, say people familiar with the matter.

Hotel experts say the 509-room hotel, with its signature red neon sign, could fetch between $375 million and $500 million. Located on Central Park South, it has a prime location.

gulfnews : Continuous oil price assessments are crucial

When the oil companies were setting the price of oil prior to 1973 and when Opec took over this role between 1973 and 1986, oil prices were relatively stable and its development easy to follow. However, after Opec abandoned this role, oil pricing has become the domain of the market which tends to treat the oil like any other commodity.
In today's fast changing market, following price development is an arduous task. In the last four years prices have gone up close to $145 a barrel to as low as $34 a barrel though the average is $87.95 a barrel.
Oil producers, consumers, traders, refiners, oil companies and governments are in need of oil price assessment almost on a continuous basis. This role has been taken and developed by specialised oil media publications where activities include not just crude and product price reporting but analysis of factors contributing to the price evolution.

gulfnews : Aldar, Sorouh plan Dh13.61b merger

Abu Dhabi's two major property developers Aldar Properties and Sorouh Real Estate said they have started talks on a possible merger which could create a new entity with Dh13.61 billion in assets based on the net value of their combined assets as of December 31, 2011.
"In line with this decision, a team will be set up to study the move and to look at the legal and commercial aspect of the merger, prior to making recommendations to their respective boards," Aldar said in a regulatory filing with the Abu Dhabi Exchange, where both companies' shares are listed.
The study will take three months and will be conducted in coordination with relevant government bodies. "The Abu Dhabi government is continuing to rationalise its projects and implement major restructuring plans in some of its most important entities, making it more responsive to market conditions," Jones Lang LaSalle, the global real estate consultancy, said recently.

gulfnews : United Arab Bank makes a leap for market share

Incorporated in 1975 with its headquarters in Sharjah, United Arab Bank (UAB) is known for its strong financial fundamentals, solid profitability, good asset quality and capitalisation levels.
The bank maintained its strong performance when many counterparts were impacted on asset quality and profitability due to the challenging economic environment.
The bank recently reported Dh330 million net profit for 2011, up 7.1 per cent over 2010. Against the overall lacklustre loans and deposit growth of 3.8 per cent and 1.9 per cent respectively in the UAE last year, UAB reported a 46 per cent increase in loans and advances and 72 per cent growth in customer deposits.

Gulf Times – Qatar shares snap 5-day losing run on small caps

The Qatar Exchange yesterday snapped a five-day losing streak as the benchmark index gained 0.50% mainly on the buying support from small cap segments. Foreign institutions’ bullish outlook helped the 20-stock benchmark settle 43 points higher at 8,636.82 points.
The market is however down 1.62% year-to-date.
About 62% of the stocks extended gains to investors with major movers being Doha Bank, Industries Qatar, Masraf Al Rayan, Woqod, Nakilat and Mazaya Qatar. Salam International Investments (SIIL) and Barwa bucked the trend.

Stagnation in real incomes - Arab News

Failing to build the private sector more quickly is also taking its toll on improvement of real incomes among Saudi citizens and residents. Looking at nominal GDP figures, which fluctuate widely based on oil prices, per-capita GDP figures have shown a distinct improvement in the last decade. Each Saudi resident earned $20,651 in 2011, a surge of 124 percent since 2000.

Yet these data can be viewed unrepresentative; per capita income measured at constant prices tell a very different story.

According to this measure, real per-capita income growth has been stagnant since the early-1980s. Each Saudi resident was earning $9,061 in 2011, virtually on par with the level in 1991 and below a 1980 peak of $14,733.

NBK crosses threshold of $1bn profits in 2011 | Kuwait Times

National Bank of Kuwait (NBK) held its annual general assembly meeting at the bank’s headquarters yesterday. Nasser Al-Sayer, NBK Deputy Chairman, stated that NBK Group delivered success at every level despite a difficult year. “NBK Group achieved a strong performance thanks to the bank’s resilience, clear strategy, conservative culture, and high professional standards, all of which have limited the bank’s exposure to lower quality assets in and outside of Kuwait.”

The General Assembly endorsed the recommendation of NBK’s Board of Directors to distribute a cash dividend equivalent to 40% of the nominal value of the share (40 fils per share) and bonus shares by 10% (10 shares for every 100 shares) to shareholders on record at the time of the General Assembly meeting.

Strong financial performance
Al-Sayer stated that NBK has succeeded in achieving a net profit of KD 302.4 million ($1,086 million) during 2011, compared with KD 301.7 million ($1,083 million) in 2010. “NBK continued crossing the threshold of one billion dollar profits in 2011, which confirms NBK’s strength and ability to deliver strong results despite the crisis,” he noted.

UAE bourses need anchor to solve a unique local riddle - The National

The way stock markets function in the UAE is something of a riddle.

There is no trading volume to speak of because there is little money to be made trading on either the Abu Dhabi or the Dubai exchanges.

And then there is little money to be made in trading on either of these exchanges because there is no trading volume to speak of.

Is property investment in Dubai still viable? – The Express Tribune

Most of us have heard the Dubai story: small Gulf emirate not rich in oil decides to diversify its economy, executes it marvelously – and suddenly has the rug pulled out from under it due to its utilisation of debt in achieving growth. Against this backdrop, a lot of people have asked me about investing in property in Dubai. This article is an attempt to analyse in simple terms whether any directional bet can be taken.
According to the International Monetary Fund, the total debt of Dubai and its government  related entities (GREs) stands at $109 billion, or around 125% of its GDP – comparable to the 150% debt-to-GDP ratio of Greece. According to the Bank of America, $15 billion of these loans are due or to be refinanced in 2012. The situation is not as dire as Greece though, as Abu Dhabi has above $600 billion in assets and is expected to come to the emirate’s rescue. To the lay investor, the resolution to Dubai’s problems may simply seem to mean Abu Dhabi forking out a chunk from its fat wallet, but the situation is slightly more complicated.

Mobius Rules Out Chavez-Style Policies in Egypt as Stocks Soar - Bloomberg

Islamist parties that have taken control of Egypt’s parliament are unlikely to follow in the footsteps of leaders like Venezuelan President Hugo Chavez by seizing private assets, Mark Mobius said.
Concerns, particularly in the U.S., that an Islamist-led government in Egypt may alienate foreign investors are unwarranted, said Mobius, who oversees more than $50 billion in emerging-markets assets as executive chairman of Templeton Emerging Markets Group. Egypt’s benchmark stock index has surged 46 percent and is the world’s best-performing measure this year, data compiled by Bloomberg show.
“What we have to be careful about is a growth of extreme nationalism,” he said in an interview on March 8 in Dubai. “As soon as there is a sign of that then the game is over like what happened in Venezuela. We were completely out of Venezuela as soon as Chavez came in because we knew that assets will be confiscated. But I don’t see that happening in Egypt.”

gulfnews : Standard Chartered seeks Saudi licence

Standard Chartered has sought a full commercial banking licence from the Saudi central bank as the UK lender aims to plug the biggest gap in its growing Gulf Arab business, two sources familiar with the matter said on Sunday.
With multi-billion dollar spending plans to beef up infrastructure, housing and education, Saudi Arabia tops the list of global institutions seeking to tap growth in the Gulf Arab region.
The kingdom is also on the verge of opening up its stock markets to foreign direct investors.

Dubai's DIFC aims to be the bridge that links East with West - The National

Abdulla Mohammed Al Awar has been the chief executive of the Dubai International Financial Centre (DIFC) since 2009.

The centre is widely regarded as the premier financial hub in the Gulf region, but it has faced challenges as a result of the global economic downturn as well as the financial legacy of rapid expansion in the emirate's boom years.

The Arab Spring has also thrown up new opportunities for the DIFC, as Dubai seeks to promote itself as a haven compared to areas that have experienced civil unrest.

Aldar, Sorouh Merger Talks May Spark Consolidation Among U.A.E. Companies - Bloomberg

Aldar Properties PJSC (ALDAR) and Sorouh Real Estate Co. (SOROUH)’s talks about merging into a developer with $15 billion in assets may spark consolidation among other United Arab Emirates companies and push up real estate shares.
“We will likely see a lot of market activity across real estate names in both Abu Dhabi and Dubai and this news will help the stocks in the short term,” said Sebastien Henin, who helps oversee $100 million at The National Investor in Abu Dhabi. “We should expect more mergers as the companies lead the way.”
The two builders, part of Abu Dhabi’s drive to remake itself into a tourism and business hub, set up a team to study a possible merger with the “blessing” of the emirate’s government, which owns stakes in both, according to a joint statement yesterday. The team will present a plan in the next three months.

Dubai Safe Haven to Attract Institutions to Stocks, Mobius Says - Bloomberg

Dubai’s stock market, now in the midst of a bull run, will attract more institutional investors as its property market recovers and the United Arab Emirates remains sheltered from regional turmoil, Mark Mobius said.
“Because of political turmoil you see money coming into Dubai in search of safety,” Mobius, who oversees about $50 billion as executive chairman of Templeton Asset Management Ltd.’s emerging markets group, said at an interview in Bloomberg’s Dubai office on March 8. “It’s definitely going to dawn on institutional investors.”
The Dubai Financial Market General Index (DFMGI) surged 4.7 percent yesterday, the most since December 2009, to 1,686.66, bringing the advance from a low in January to 30 percent. Last month, the benchmark surpassed the 20 percent threshold some consider the beginning of a bull market, and had the top monthly gain among benchmark equity indexes worldwide.

Gulf Daily News » Local News » Bahrain's economy is bouncing back

Bahrain economy bounced back despite the repercussions of the February-March unrest.

According to updated figures, the economy expanded by 3.2 per cent in fixed prices in the fourth quarter of last year, compared with the same period in 2010.

The national economy also grew by 14.5pc in current prices in the same period, benefiting from skyrocketing oil prices in the international markets.

Fund file: Egypt, right or wrong? | beyondbrics –

Egypt numbers are hair-raising for investors. Since the beginning of the year its benchmark index has risen nearly 50 per cent, but those invested in Egypt stocks witnessed falls in the same index of 50 per cent in 2011. Investors must now assess whether a healthy recovery is underway or another crash is coming, as a report in Monday’s FTfm explains.

Even those with a long term view looking at Egypt’s fundamentals do not have an easy choice. Ahmed Heikal, chairman of Citadel Capital, an Egyptian private equity group, said in June last year:  ”If we get things right, we could be Turkey in 10 years. If we get them wrong we could be Pakistan in 18 months.”

Erring on the side of caution, JP Morgan Asset Management pulled out of Egypt altogether last year and is not being tempted back in by the recent rally.