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Monday, 19 March 2012

The price that launched a wall of ships - FT.com

For the traditionally dull oil shipping market, the events of the last week have come as a shock.
In a matter of days, Saudi Arabia has hired the largest number of super-tankers in years. When the tankers load their cargo in Ras Tanura, the world’s largest oil terminal, in the next couple of weeks and start a 40-day voyage towards the US Gulf coast, they will deliver a wall of oil with a single aim: to bring prices down.

Agricel aims to make desert yield crops - FT.com

Private equity deals in the Middle East have focused recently on selling more hamburgers and fizzy drinks to the Gulf’s fast-food obsessed population.
So a Dubai-based venture capital business seeking to introduce soilless farming technology that promises to deliver water savings of up to 90 per cent – potentially making desert farming viable – has a novel ring.
Agricel, founded by venture capitalists Yalman Khan and Kunal Wadhwani, aims to commercialise the research of Professor Yuichi Mori of Waseda University in Japan, who says his technology can increase food yields up to 50 per cent.

Egypt and the IMF: drawn out | beyondbrics – FT.com

There’s no pleasing everyone. As Egypt and the IMF started talks on Monday about a $3.2bn loan package, equity markets dropped. The EGX30 index closed 0.62 per cent down and the CMA general index fell as much as 3.8 per cent before recovering to close 1.45 per cent down.

Why? After a big run-up this year, some negative signals out of Cairo will have given investors the trigger they were waiting for to take profits.

Egypt’s state-run news agency reported that the IMF was demanding approval from all parties in Egypt’s parliament before signing any agreement, according to Saad el-Hosseini, head of the parliament’s budget committee.

Four ways to service the debt - The National

Q & A: How Dubai Inc can pay the bills?

The fund, established in July 2009 to help state-owned companies, may have US$1.55 billion (Dh5.69bn) that has yet to be drawn down, estimates Exotix, based on last June's prospectus. Much of this cash may be earmarked for Nakheel, which has already benefited from a last-minute intervention by the fund to repay a $3.5bn bond that matured in December 2009. But funds could also be deployed to assist other companies facing repayments this year, including DIFC Investments and Jebel Ali Free Zone. The laws governing the fund were amended last year to allow it to support non-government entities and sell debt instruments for the Dubai Government.

Sun, sea and sand warm Dubai's prospects - The National

Dubai Inc bondholders should look to the beach and not the boardroom as US$13 billion (Dh47.75bn) in debt comes due this year.
The tourist dollar is just one reason why the impending wall of debt facing the emirate is looking much more manageable. 
Dubai welcomed 9.3 million hotel guests last year, duty free sales are at record highs and the malls are bustling. The rebound is helping to bring fresh confidence to credit markets and supporting the price of bonds of even some of the most indebted government-related companies. The question now is how they will benefit from that trend when their debts come due in the months ahead.The tourist dollar is just one reason why the impending wall of debt facing the emirate is looking much more manageable.


U.A.E. Planning Fujairah LNG Terminal to Bypass Hormuz - Bloomberg

Abu Dhabi plans to build a terminal for importing liquefied natural gas at a port that would avoid the need for vessels to pass through the Strait of Hormuz, four people with knowledge of the situation said.
Mubadala Development Co. and International Petroleum Investment Co., both funds run by the government of Abu Dhabi, will set up the plant in Fujairah, another of the United Arab Emirates’ seven sheikhdoms, said the people, who declined to be identified because the project hasn’t been announced publicly. Mubadala didn’t respond today to messages left on the mobile phones of two press officials. IPIC didn’t respond to an e- mailed request for comment.
The offshore LNG terminal, which is designed to float, would receive its first imports in 2014, one of the people said. Chilled liquid fuel, once turned back to gas, would then be sent to industrial sites in the U.A.E., the people said.

Emaar Properties May Expand Board to 11 Members, Drop Four - Bloomberg

Emaar Properties PJSC (EMAAR) may expand its board to 11 members from eight and replace four directors as the developer of the world’s tallest tower in Dubai considers dividend payments for last year at a meeting today.
Four of the current board’s eight members have been nominated by Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum, Dubai’s Crown Prince and chairman of the Executive Council of the emirate, according to a company statement posted on the Dubai Financial Market’s website today. They include Chairman Mohamed Ali Alabbar, Noor Islamic Bank CEO Hussain Al Qemzi, Ahmad Jamal Jawa and Ahmad Thani Al Matrooshi.
The new members would be DP World Ltd. Vice Chairman Jamal Majid Bin Thaniah and the Dubai-based port operator’s senior vice president, Arif Al Dehail. Dubai Holding LLC’s chairman of operations Fadel Al Ali, Abdul Rahman Hareb Rashed Al Hareb, Marwan Iqbal Mohammed Abdullah Abdeen, Abdullah Saeed Balyoahah and Abdullah Mohammed Al Marri were also nominated to the board.

Abu Dhabi's Manazel plans 2012 market listing

Manazel Real Estate, which focuses on mid-income housing and has assets worth $1.39 billion, plans a listing on Abu Dhabi stock exchange this year, its chairman said, betting improved market sentiment will create appetite for the issue.

The Abu Dhabi-based joint stock company with around 3,000 shareholders has initiated the process of listing with the United Arab Emirates' market regulator.

'It is the right time to start the listing, the markets will move up by the end of this year,' Mohamed Muhana al-Qubaisi told Reuters. 'We have a good track record with stable income forecast in the coming years.'

National Bank of Abu Dhabi Said to Sell $750 Million Bonds - Bloomberg

National Bank of Abu Dhabi PJSC, the United Arab Emirates’ second-biggest bank, will raise $750 million from a sale of dollar bonds, according to three people familiar with the plan.
The five-year securities may be priced to yield 190 basis points over the midswap rate, said the people, declining to be identified because the information is private. Barclays Plc (BARC), HSBC Holdings Plc (HSBA), UBS AG (UBSN) and National Bank of Abu Dhabi are managing the offering, they said. NBAD sold $850 million of five-year notes in 2009 at a similar spread over midswaps.
National Bank of Abu Dhabi has $308 million of bonds and interest payments due this year, according to data compiled by Bloomberg. The bank continues to monitor opportunities in global markets as part of its strategy to diversify the funding base and extend maturities of its liabilities, Stephen Jordan, the state-controlled lender’s general manager of the liquidity management & interest rates product group, said on Feb. 15.

UAE investment banking undergoes shake-up - FT.com

An exodus of international investment bankers from the United Arab Emirates has been followed by the downsizing of local investment banks reeling from last year’s low volumes, with the country’s big wholesale banks emerging to pick up the pieces.
Despite the market recovery, local investment banks continue to slim down their operations, providing an opportunity for bigger, better funded players to move in on their territory.

MENA stock markets close - March 19, 2012

 ExchangeStatus IndexChange  
 
 TASI (Saudi Stock Market)
 
7616.010.00%  
 
 DFM (Dubai Financial Market)
 
1668.070.46%  
 
 ADX (Abudhabi Securities Exchange)
 
2604.74-0.06%  
 
 KSE (Kuwait Stock Exchange)
 
6231-0.04%  
 
 BSE (Bahrain Stock Exchange)
 
1148.01-0.46%  
 
 MSM (Muscat Securities Market)
 
5896.35-0.52%  
 
 QE (Qatar Exchange)
 
8684.010.15%  
 
 LSE (Beirut Stock Exchange)
 
1211.680.34%  
 
 EGX 30 (Egypt Exchange)
 
5032.98-0.62%  
 
 ASE (Amman Stock Exchange)
 
2004.780.19%  
 
 TUNINDEX (Tunisia Stock Exchange)
 
4759.56-0.09%  
 
 CB (Casablanca Stock Exchange)
 
11102.20.12%  
 
 PSE (Palestine Securities Exchange)
 
487.890.30%  


Persian Gulf Stocks: Drake & Scull and Saudi Electricity - Bloomberg

Saudi Arabia’s Tadawul All Share Index (SASEIDX) rose 0.5 percent to 7,650.77, the highest intraday level since September 2008, at 2:45 p.m. in Riyadh. The DFM General Index (DFMGI) rose for the first time since March 14, gaining 0.5 percent.

UPDATE 1-Qatar boosts position as top Lagardere shareholder | Reuters

Energy-rich emirate Qatar has increased its stake again in Lagardere, boosting its position as the largest shareholder in the French media-to-aerospace conglomerate.

The unit of the Qatar Investment Authority, the emirate's sovereign wealth fund, said in a regulatory filing it could raise the stake further after increasing it to 12.8 percent and may seek representation on the group's supervisory board.

The Gulf state has been a staunch supporter of chief executive Arnaud Lagardere in the face of criticism from some shareholders of the CEO's strategy for the company his father founded, becoming its top shareholder in December.

Kuwait Gulf Oil Plans to Boost Non-Associated Gas Output by 2020 - Bloomberg

Kuwait Gulf Oil Co., a unit of state-run Kuwait Petroleum Corp., plans to produce about 400 million cubic feet a day of non-associated natural gas by 2020, the official KUNA news agency reported.
Output will increase to 500 million cubic feet a day by 2030, the agency said, citing Hashim el-Rifai, Kuwait Gulf Oil’s chairman. The report did not say how much non-associated gas Kuwait Gulf Oil produces now.
Sami al-Rushaid, the chairman of Kuwait Oil Co., Kuwait Petroleum’s production arm, said in November 2010 that Kuwait was producing about 1 billion cubic feet of gas a day less than it needed for domestic needs. The country had an output at that time of 1 billion cubic feet of associated gas, which is found together with oil, and 130 million to 140 million cubic feet of non-associated gas, which occurs in deposits of its own.

Ruble Gains Versus Dollar as Tax Period Starts; Bond Yields Fall - Bloomberg

The ruble strengthened against the dollar for a fifth day and the yield on Russia’s dollar- denominated bonds due 2020 fell amid speculation exporters are converting revenues into the Russian currency to pay taxes.
The Russian currency appreciated 0.2 percent to 29.2347 per dollar as of 2:39 p.m. in Moscow, heading for the strongest closing level this month. The yield on the country’s $3.5 billion of bonds due 2020 dropped one basis point, or 0.01 percentage point, to 3.928 percent.
“The tax period is providing us with good dollar supply,” Dmitry Sinitsyn, head of foreign exchange in Moscow at Credit Suisse Group AG, said by e-mail. “Risk-on sentiment is helping the ruble -- the market feels safe being long on it, with stocks and oil trending upwards.”

UPDATE 1-Kuwait eyes 13 pct budget rise amid industrial unrest | Reuters

Kuwait's state budget for next fiscal year envisages a spending increase of about 13 percent from the current year's plan, state news agency KUNA reported on Monday as the oil-rich state grappled with a wave of industrial unrest.

The budget for the 2012/2013 fiscal year, which starts on April 1, is expected to total around 22 billion dinars ($79 billion), KUNA quoted the head of parliament's budget committee as saying.

That estimate assumes revenues of around 14 billion dinars, 12.8 billion dinars of which would come from oil, Adnan Abdulsamad said. The projection is based on an oil price of $65 a barrel, KUNA added.

Bahrain’s Arcapita files for U.S. bankruptcy protection

Bahrain investment house Arcapita has filed for bankruptcy protection in the United States after it was unable to reach a $1.1 billion debt repayment with creditors, it said on Monday.

Arcapita blamed non-bank creditors -- hedge funds, in other words -- for its inability to strike a deal on its proposal to delay repayments by three years.

“The actions of certain non-bank creditors have precluded Arcapita from reaching such a consensual resolution before the March 28th maturity date, jeopardizing Arcapita’s ability to satisfy its fiduciary duties to its stakeholders,” Chief Executive Atif Abdulmalik said in a statement.

Saudi Arabia moves to calm oil market - FT.com

Saudi Arabia is taking steps to calm the oil market, boosting exports, filling up strategic oil stocks overseas and tapping oilfields to expand production capacity.
The moves by the world’s largest oil producer would be welcomed by the White House as it battles the negative impact of rapidly rising fuel prices. They come as oil prices surge above $125 a barrel, the highest since the crisis of 2008, and set record highs in a number of currencies, including the euro and sterling.

FT Alphaville » The Saudi oil sales enigma

Something of a strange one this. Every analyst and his dog has for the longest while been preaching that demand for crude post-crisis has really been all about emerging market demand… that the US, by and large, has become increasingly irrelevant when it comes to global supply and demand.

Yet, from Reuters last week, we had this:

NEW YORK/LONDON, March 16 (Reuters) – Saudi Arabia is preparing to extend this year’s unexpected surge in oil sales to the United States, according to tanker industry sources and government data, adding to speculation about the response of the world’s top oil exporter to sanctions against Iran and a rally in prices.

Mixed view on winners and losers of Aldar Sorouh merger - The National

Aldar shareholders, being pegged as the winners in a proposed merger with Sorouh, may find the tables are turned on them once a deal is announced, say analysts.

Bank of America Merrill Lynch projects that a combined entity with a market cap of US$2.45 billion (Dh8.9bn) would give a merger ratio of 1.56 times, or one Aldar share for every 1.56 Sorouh shares.

Aldar and Sorouh have yet to announce the actual merger ratio. But if the US bank’s prediction is correct, Aldar’s stock is the more valuable of the two companies.

Push to add Arabic for courts in DIFC - The National

Common law courts operating inside Dubai International Financial Centre could easily operate in Arabic and English, officials say, but not before legislation is passed to allow it.

The independent courts, including a court of first instance and a court of appeal for civil and commercial disputes, were set up in 2007 to enact a 2004 law passed by the former Ruler of Dubai, Sheikh Maktoum bin Rashid.

But according to Dubai Law No.12 of 2004, which defines the powers, procedures, functions and administration of the courts within the financial sector free zone, they must operate in English.

gulfnews : Managing their finances more responsibly

The UAE Central Bank has directed lenders to help reduce the debt burden of Emiratis, although it has not specified how this should be done. The Central Bank is rightly concerned that some individuals have unaffordable monthly instalments for personal loans.
Efforts to implement such a directive must be dealt with very carefully to avoid any unintended consequences for the economy or the financial system.
They should not be seen to compromise the principle that everyone has a responsibility to repay the debts that they incur. This is the basis of global economic activity and the international financial system and is the backbone of business confidence. Any perception that banks will have to accept an arrangement that will be detrimental to their business will not be good for investor confidence. However, the Central Bank has made it clear that any solution should be a result of more cooperation between the agencies concerned.

gulfnews : Emirates to hire 10,000 professionals this year

Emirates, the world's biggest international passenger carrier, will hire up to 10,000 professionals this year to manage its growth, a senior official said.
"We will hire 10,000 people this year to manage our expansion and growth as 30 new aircraft join our fleet," Boutros Boutros, Emirates Divisional Senior Vice-President for Media Relations, Sponsorships and Events, told a gathering of top Indian management professionals on Saturday.
Emirates Group, which also includes the ground handling and ticketing arm Dnata, has nearly 60,000 people on its payroll.

Widening the Web of Arabic content - The National

There is a company that focuses exclusively on growing the amount of Arabic content on the internet. Known as Danat e-ventures, this business incubator started in 2006 and invests in new online startups. Here, Hisham Baker, the company's general manager, discusses how it works.

OPEC Recycles Dollars Into Debt 50% Faster Than Foreigner - Bloomberg

OPEC nations are plowing cash into U.S. Treasuries at a more than 50 percent faster rate than all other foreign investors, an unintended benefit of oil prices above $100 a barrel.
Organization of Petroleum Exporting Country members increased their net purchases of government debt by $43.3 billion, or 20 percent, in the 12 months ended Jan. 31, compared with a 13 percent rise for non-OPEC foreign holdings, Treasury Department data showed last week. With prices up $26 a barrel since Sept. 30, producers have an additional $780 million in profits every day, according to data compiled by Bloomberg.
International investors, which own about $5 trillion, or half of the marketable U.S. government debt outstanding, are key to President Barack Obama’s administration financing a budget deficit forecast to exceed $1 trillion for a fourth year. OPEC’s purchases may help temper a plunge in Treasuries after yields surged last week by the most since January 2009 amid gains in jobs, retail sales, and manufacturing.

Gulf Times – Qatari banks’ earnings ‘to grow by double digits’

Qatar’s banking sector is expected to witness strong profitability with average earnings slated to see double-digit growth year-on-year (Y-o-Y) in 2012 on strong domestic lending, according to Global Investment House.
“We forecast average earnings growth of 18% Y-o-Y in Qatari banks in 2012 with the sector benefiting from strong domestic lending activity. Overall, we assume 2012 net loan growth of 16.2% for the sector,” Global said, adding “Qatar’s burgeoning economy will trickle down quite favourably to its banking sector”.
Although spreads are expected to tighten due to increased share of public share lending, more competition and funding costs, it said volume growth would drive net interest income that is forecast to grow by 18.9%.

Qatar eyes Aussie CSG assets - National Rural News - Agribusiness and General - Finance - Stock & Land

LIQUEFIED natural gas heavyweight Qatar has emerged as a potential buyer of unconventional gas assets in Australia.
It raises the possibility that the Middle East nation might seek a stake in BG Group's $US16 billion ($15.1 billion) Queensland Curtis LNG project.

A source close to the investment vehicle Qatar Petroleum International told The Australian Financial Review the fund wanted long-term exposure to the boom in alternative gas sources through direct equity investments.

UAE lenders likely to take loans haircut - The National

The Central Bank's plans to ease repayment burdens on UAE nationals will result in banks taking a 50 per cent haircut on some personal loans, as the Government attempts to restructure the private debts of the most indebted Emiratis.

Banks are expected to shoulder the burden of debt forgiveness, said Jonathan Morris, Standard Chartered's chief executive for the UAE.

"Banks are being asked to write down around 50 per cent and the Government will take off the rest," he said. "It's a loan, not a free cheque, as we've seen elsewhere in the region."

gulfnews : Credit growth in UAE will remain under pressure

UAE credit growth will remain under pressure this year as the debt restructuring of some government related entities (GREs) and high loans to deposit ratios are likely to limit the lending capacity of local banks, according to Standard Chartered officials.
"The loans to deposit ratios of UAE banks are close to 100 per cent while many UAE banks will be involved in the debt restructuring of some of the government related entities, which could curtail their lending, said Shady Shaher, Standard Chartered's economist for the Middle East and North Africa.
The bank officials said although the debt overhang of some of the GREs will continue to be a drag on the UAE economy and the banking sector for some time, the strong recovery of the economy largely driven by trade, tourism and hospitality sectors in Dubai and high government spending in Abu Dhabi will see economic growth gaining traction.

Goldman Sachs involved in Travelodge rescue deal - Telegraph

It was revealed last month that two New York-based hedge funds, Avenue Capital and GoldenTree Asset Management, plus an unknown third party, were negotiating a debt-for-equity swap that would win control from Dubai International Capital (DIC), which bought Travelodge in 2006.
The US investors, who have been long-term buyers of Travelodge’s debt, agreed to underwrite a £60m loan facility to stabilise the company’s finances as it battles with an interest bill of £100m a year.The debt-for-equity swap is expected to be concluded by September. Sources close to the negotiations said Goldman Sachs was responsible for only a very small percentage, leaving Avenue Capital and Golden­Tree Asset Management as the dominant partners in the deal.
DIC, the investment arm of Dubai’s sovereign wealth fund, is expected to lose £400m as a result of the debt-for-equity swap.