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Friday, 23 March 2012

THE DAILY STAR :: Key political risks to watch in United Arab Emirates

The United Arab Emirates is vulnerable to any fallout from tension over Iran's nuclear programme, which has escalated after Tehran threatened to shut the Strait of Hormuz and stop the bulk of the region's oil flows.

Any move to obstruct Hormuz could spark a wider military confrontation. The United States has said it would not tolerate the strait being blocked.

On the domestic front, the UAE has escaped the upheaval that has shaken the Arab world, but the case of five activists convicted late last year of insulting the country's rulers suggests the oil-producing state is not immune to calls for reform.

UPDATE 1-UAE: any inclusion of yuan in reserves long-term issue - Yahoo! News UK

Any decision by the United Arab Emirates to include the Chinese yuan into the UAE central bank's official foreign currency reserves would be the result of a long-term process, the bank's head said on Friday.
In January, the UAE signed a three-year currency swap agreement with China worth 20 billion dirhams ($5.45 billion) to boost two-way trade and investment.
Asked if the central bank also considered making the Chinese yuan a part of its official reserves, Central Bank Governor Sultan Nasser al-Suweidi said: "This is a long-term issue."
"It is a long-term agreement so it will take time to implement it. So we are patient," he told reporters on the
sidelines of a financial conference in the UAE trade hub Dubai.
China, a relatively modest importer of UAE crude, has signed a series of currency swap agreements in recent years with key trading partners to boost the use of the yuan for the direct settlement of international trade.

Price war heralds investment banking shake-out | Reuters

Investment banks fighting for survival in a world of stricter regulation and more expensive funding are embroiled in a price war as they battle to hang on to clients.

Some are offering ultra-low prices across a range of their most prominent activities such as equity and debt sales, advice on mergers and acquisition (M&A), and more arcane - but widely used - derivative instruments.

Rivals are left with the choice of following suit and losing money, or sticking to their guns and hoping that the cut-price banks will eventually be forced out of the market.

UAE cbank gov: rate of lending growth "reasonable" - Yahoo! News UK

The rate of bank lending growth in the United Arab Emirates is "reasonable," Central Bank Governor Sultan Nasser al-Suweidi said on Friday.
"Bank lending is going at a reasonable rate. The rate has been close to 3.5 percent, which is reasonable under the circumstances," he told reporters on the sidelines of a financial conference.
He described the central bank's monetary policy as "good", when asked the possibility of shifts in monetary policy, without elaborating.

Oman's MB Petroleum 'black sheep' of assets - The National

Dabbling in the murky world of junk bonds is often a fraught exercise, but not without rewards for yield-hungry investors.

Oman's MB Petroleum Services, an oilfield company, was one of the first companies in the region to tap markets with a "high-yield" issuance, as such bonds are also known.

But the bond's performance has lived up to its billing - in all the wrong ways - according to Exotix. The specialist investor in illiquid investments initiated coverage of the company's bonds with a "hold" rating yesterday.

Egypt Biggest Yield Drop Since Revolt Signals Longer-Term Sales - Bloomberg

The biggest drop in Egypt’s borrowing costs since the start of protests that toppled former President Hosni Mubarak last year is fuelling speculation the government will sell longer-term debt to meet financing needs.
The average yield on one-year Treasury bills fell 15 basis, the most since January 2011, to 15.768 percent in an auction of 3.5 billion pounds ($580 million) of notes yesterday, according to central bank data on Bloomberg. Yields that had climbed to a record 16 percent last year fell yesterday after the central bank allowed lenders to free up more funds.
A lack of demand forced the government to cut the average maturity of its local debt to 1.3 years at the end of last year from 1.7 years in December 2010, according to Finance Ministry data. Egypt’s banks bore the brunt of government financing after foreign investors dumped local securities following the uprising that ousted Mubarak, while four credit rating cuts by Moody’s Investors Service effectively shut the country out of global bond markets.