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Thursday, 29 March 2012

Saudi oil minister wants lower prices - Overheard - WSJ

Ali Naimi is not fond of extremes. The Saudi Arabian petroleum minister is so worried by high oil prices — Brent crude commands about $123 a barrel — he felt compelled to pen an Op-Ed in today’s Financial Times. The last time he took to the newspapers, according to a search of Factiva, was back in February 2009, following oil’s crash from triple digits to less than $40 amid the financial crisis.

Mr. Naimi’s message Thursday was simple: very high oil prices are bad for the global economy, which is ultimately bad for oil demand, and Saudi Arabia will act to bring them down. He singles out Europe in particular as an example of a weak economy being undermined further by high energy costs, a point echoed in the OECD’s latest assessment of economic prospects, also released Thursday.

Oil accounts for 45% of Saudi Arabia’s economy and the vast majority of its (swelling) public budget. Its rulers know that geopolitical risks centered on Iran are keeping prices high. That is encouraging consuming countries to look for alternative energy sources, reduce energy consumption, and even consider releasing barrels from strategic reserves.

MIDEAST STOCKS-UAE shares dip on risk-aversion; most bourse down - Yahoo! News UK

A negative global backdrop weighed on United Arab Emirates bourses on Thursday as risk-averse investors reduced positions, and most other regional markets also ended lower.
Dubai's index retreated 2 percent, giving back Wednesday's gains but it remains 21.8 percent up year-to-date.
"We're seeing a high-correlation with global markets and sentiment," said Rami Sidani, Schroders Middle East head of investment.
"Dubai outperformed regional markets yesterday (Wednesday) and, on days of negative global sentiment, investors here book profits."

UAE: HSBC doubles up | beyondbrics – FT.com

HSBC may be cutting back in emerging markets that it sees as non-strategic. But in those it deems strategic, it is beefing up.

On Thursday it announced plans to buy the UAE-based onshore retail and commercial operation of Lloyds, the British bank which is under some pressure to bolster its balance sheet. It’s not a big deal by world banking standards, involving gross assets of just $769m. But when it comes to implementing a strategy every little bit helps, for both HSBC and Lloyds.

HSBC said the business it was buying from Lloyds had about 8,800 personal and commercial customers and a loan book of approximately $573m as of 31 December 2011.

Dubai Duty Free Said to Seek $1.1 Billion Through Bank Loan - Businessweek

Dubai Duty Free is raising a $1.1 billion loan backed by the airport retailer’s future cash earnings and hired lenders including Citigroup Inc. (C) (C) to help with the plan, two bankers familiar with the deal said.

Dubai Duty Free’s parent, Investment Corp. of Dubai, the emirate’s main state-owned holding company, also mandated HSBC Holdings Plc. (HSBA), Dubai Islamic Bank PJSC (DIB) and Emirates NBD PJSC (EMIRATES) to help with the fundraising, the people said, declining to be identified because the information is private. The five-year financing plan pays a margin of 3.5 percentage points over the London interbank offered rate, they said. A spokeswoman for Dubai Duty Free, who didn’t wish to be identified because of company policy, declined to comment.

Dubai Duty Free, which began operations in 1983, operates 18,000 square meters of retail space at Dubai International and is the world’s single-largest airport retailer based on 2010 revenue. It reported a 15.6 percent rise in 2011 revenue to $1.46 billion.

MENA stock markets close - March 29, 2012

 ExchangeStatus IndexChange  
 
 TASI (Saudi Stock Market)
 
7782.840.20%  
 
 DFM (Dubai Financial Market)
 
1648.87-2.04%  
 
 ADX (Abudhabi Securities Exchange)
 
2553-0.54%  
 
 KSE (Kuwait Stock Exchange)
 
6165-0.35%  
 
 BSE (Bahrain Stock Exchange)
 
1152.450.18%  
 
 MSM (Muscat Securities Market)
 
5690.07-0.53%  
 
 QE (Qatar Exchange)
 
8790.730.01%  
 
 LSE (Beirut Stock Exchange)
 
1221.160.02%  
 
 EGX 30 (Egypt Exchange)
 
5021.91-0.36%  
 
 ASE (Amman Stock Exchange)
 
1990.40.21%  
 
 TUNINDEX (Tunisia Stock Exchange)
 
4816.960.08%  
 
 CB (Casablanca Stock Exchange)
 
10908.7-0.01%  
 
 PSE (Palestine Securities Exchange)
 
486.71-0.22%  


Mubadala hands part of Aldar stake to ADCB for loan - Yahoo! News UK

Mubadala Development Co will transfer a 14-percent stake in Aldar Properties to Abu Dhabi Commercial Bank in return for a loan facility, the state-owned investment fund said on Thursday.
Mubadala, which owns 49 percent of the struggling developer after an Abu Dhabi government bailout, said the 571.9 million shares would revert back to it in April 2013 when the facility matures or earlier if repaid ahead of schedule. It did not state the size of the facility.
At Thursday's Aldar closing share price of 1.22 dirhams, the stake is worth 7 billion dirhams ($1.9 billion).

HSBC to buy Lloyd's retail banking ops in UAE - sources | Reuters

HSBC, Europe's biggest bank, plans to buy Lloyds Banking Group's retail operations in the United Arab Emirates, four sources said on Thursday.

HSBC was slated to make an announcement at 4:30 p.m. (1230 GMT) on Thursday.

Spokesmen at HSBC and Lloyd's declined to comment.

Lloyds said in January that it was in talks to sell its operations in the United Arab Emirates, its Middle Eastern hub with assets of 6.1 billion dirhams ($1.7 billion) in 2010.

FT Alphaville » Saudi Arabia resorts to Jedi mindtricks

Saudi Arabia’s oil minister Ali Naimi penned a sharply worded piece in the Financial Times on Thursday declaring that high prices are unjustified because “there is no lack of supply.”

But what does resorting to an op-ed in the Financial Times actually tell us about the kingdom’s position?

Could it be that the Saudis have taken a leaf out of the Fed’s book, an institution also known to have lost  firepower, and resorted to communications as a policy instrument in its own right? That is, when all else fails, resort to Jedi mindtricks: “This is not the supply shortage you’re looking for”.

Persian Gulf Stocks: Abu Dhabi Commercial Bank, Gulf General - Bloomberg

Dubai’s DFM General Index (DFMGI) fell the most in three weeks, declining 2 percent to 1,648.87 at the 2 p.m. close in the emirate, trimming its gains this year to 22 percent. Abu Dhabi’s ADX General Index fell 0.5 percent.

WAM | Emirates News Agency

The Telecommunications Regulatory Authority (TRA) would like to state that it does not, at this time, have any intention whatsoever to license a third operator in the UAE telecommunications market.

This statement comes in response to articles which have been circulated in some local newspapers about this matter. The TRA would like to reaffirm that both Etisalat and du are currently meeting the needs of the UAE market.

Commenting on the issue, Majed Al Mesmar, TRA Deputy Director General said: " The TRA sees no need to add a new operator to the UAE market at this time; hence it has no immediate intention to do so. What was circulated in few local newspapers is misleading and does not accurately express the actual statements of the TRA regarding the issue."

Saudi’s NCB Capital to Boost Global Investment With TCW, Amundi - Bloomberg

NCB Capital, a Saudi Arabian investment company with 44 billion riyals ($11.7 billion) of assets, is expanding outside of the region through alliances with TCW Group Inc. and Amundi Asset Management.
NCB Capital plans to start two funds in the second half of 2012 pending regulatory approval managed by TCW and Amundi, said Chief Investment Officer Faysal Badran. TCW and Amundi now manage a combined $550 million of international funds for NCB Capital, the Saudi wealth manager said in a statement on March 24.
“The international funds business is a relative small portion of our business, and that’s why we’re doing this deal,” Badran, who is also NCB Capital’s head of asset management, said in a phone interview yesterday. “We’ve always had international funds but there was a desire to refocus on better performing investment managers last year.”

Zain confirms dividend, to back Zain Saudi issue | Reuters

Kuwait telecoms group Zain agreed to issue a dividend of 65 fils per share on Thursday and said it would back a subscription by its Saudi affiliate.

Zain Chairman Assad al-Banwan confirmed the 2011 dividend at its annual general meeting.

Meanwhile, the Kuwaiti telco's deputy chairman said it would would guarantee any new issues made by Zain Saudi, its indebted affiliate.

gulfnews : Dubai's GGICO reports Dh1b loss for 2011 amid debt restructuring

The Dubai investment company Gulf General Investment Company (GGICO) reported a loss of over Dh1 billion in 2011 as it continues its debt restructuring.
In a statement to the Dubai Financial Market today, GGICO said its loss was Dh1.08b in 2011, compared with Dh973m a year earlier, blaming the results on "impairment of real estate, fair losses in financial securities, impairment on revaluation of repossessed apartments and providions in receivables."
Revenue for 2011 is Dh1.983m, down from Dh2,853m in 2010.

Dubai Shares Led Persian Gulf Lower on Oil; Drake & Scull Falls - Bloomberg

Dubai’s benchmark stock index led declines in the Persian Gulf as oil dropped and U.S. government data showed that orders placed with factories for durable goods rose less than economists estimated.
Islamic Arab Insurance Co. (SALAMA), an insurance provider, slumped the most since March 8. Drake & Scull International (DSI), a construction company, declined for the first time this week. The DFM General Index (DFMGI) lost 1.1 percent to 1,663.91 at 11:31 a.m. in the emirate, trimming this year’s rally to 23 percent. Abu Dhabi’s ADX General Index retreated 0.6 percent.
“The external backdrop is not conducive to the continuation of Dubai momentum,” said Julian Bruce, the Dubai- based director of institutional sales trading at EFG-Hermes Holding SAE. “We expect overall enthusiasm to wane going into the weekend.”

DP World profits up as trade, tourism and retail leads Dubai upswing but can it last? « ArabianMoney

Spending by tourists on Visa cards during the Dubai Shopping Festival was up 22 per cent with Russians and Chinese replacing the recession-hit British and paying hotel bills was the biggest item of expenditure.

Meanwhile Dubai global ports operator DP World has reported a 10 per cent rise in handling of twenty foot equivalent containers to 54.7 million last year and a leap in profits from $451 million in 2010 to $751 million. Trade, tourism and retail is booming again.

Egypt's Orascom Tel jumps 9.9 pct on Algeria News | Reuters

Egypt's Orascom Telecom jumped 9.9 percent at the opening on Thursday, extending the previous day's gains when an Algerian finance ministry source said the government would pay $6.5 billion for a majority stake in its Djezzy unit.

The increase prompted the stock market to suspend trade on OT shares.

Resolution of a long-running dispute over Djezzy would lift a cloud that has hung for years over OT, a heavyweight on Egypt's bourse, and could bring more funds flowing into the country's entire equity market.

GCC bank provisions soar 59% in Q4 - Emirates 24/7

Banks in Gulf oil producers are pushing ahead with a drive to build up loan loss provisions in the wake of the 2008 global fiscal distress and regional debt default problems, with those of key banks soaring by 59 per cent in the fourth quarter over the previous quarter, according to a Kuwaiti bank.

Provisions by the 22 banks covered in the report by Global Investment House (GIH) about the banking sector in the six-nation Gulf Cooperation Council (GCC) also jumped by around 51 per cent year-on-year.

Saudi Arabia was the only country whose banks recorded a decline in provisions YoY while Kuwait and the UAE accounted for the bulk of Q4 provisions.

People on the move - FT.com

The board of Emaar Properties has been expanded to 11 members from eight with the replacement of four members being interpreted as a dilution of government influence at Dubai’s biggest real estate company. Majid Saif al-Ghurair, a businessman, Saeed al-Tayer, chief executive of the Meydan racecourse project, as well as representatives from Investment Corporation of Dubai, the state holding company, and the ruler’s court were not reappointed after two three-year terms. New government representatives have been named, but the board’s expansion under Mohammed Alabbar, the founding chairman, is expected to afford the developer more autonomy as the Dubai blue-chip stock, about one-third owned by the government, seeks to drive the wounded real sector back to growth.

gulfnews : Nascent Arab political equilibriums

Except for unlikely bold decisions reached by attendees at the 23rd Arab League summit in Baghdad, it may be safe to anticipate yet another political failure, one that will highlight existing differences among wary rulers.  In the aftermath of sui-generis uprisings in so many countries, most will now confront years, perhaps decades, of adjustments.
Many will pretend that meagre efforts will address popular concerns.  All will return home empty-handed and, even worse, devoid of fresh ideas to mobilise their respective populations’ socio-economic powers to create wealth and enhance sorely needed liberties.
Though few seem to comprehend what ails their societies, political equilibriums will eventually emerge, even if the transitory period promises to be unsettling precisely because decades of neglect gave rise to these revolutions in the first place.

gulfnews : Arabs need a spring of peace, development In Theory

It is not known who coined the term ‘Arab Spring' to refer to the protests and political unrests in the Arab world, but few can deny that a vastly changed landscape has been left behind.
Radical changes have been seen in Egypt, Tunisia, Libya and Yemen in 2011 and 2012, while Syria's so-called Arab Spring has turned out to be a series of bloody events.
Until now, the Arab Spring has not yet yielded its fruit. On the contrary, the security and economies of the countries have deteriorated. The situation is likely to worsen due to rising unemployment and the outflow of capital.

gulfnews : Mixed response to Damas takeover

The takeover of jeweller Damas by Qatar-based conglomerate the Mannai Group and investment bank EFG Hermes is a positive indicator of the company's value but may be a disadvantage to minority shareholders, analysts said Wednesday.
The $445 million (Dh1.634 billion) deal, which will see the Qatari company and Egyptian investment bank pay around $0.45 per share, is likely to see Damas eventually taken private and de-listed from the Dubai bourse, they added, a likely negative move for company shareholders.
"The fact that such a big group is coming in to buy the company means they believe there's value there and it is higher than the price it says," said Mohammad Yasin, an Abu-Dhabi based capital markets specialist. He pointed out that the purchase price the conglomerate has agreed to is a 45 per cent premium over Damas' share price before Mannai confirmed its interest in January.

Middle East's richest find fortunes fell after downturn - The National

Many of the Middle East's wealthiest merchant families have lost as much as a third of their fortunes since the onset of the global financial crisis in 2008, according to a new report.

The billionaire owners of some of the biggest family trading empires in the region have suffered a 33.5 per cent reduction in wealth between 2008 and last year, according to a report from Société Générale Private Banking and Forbes Insights.

The report studied 21 billionaires in the UAE, Saudi Arabia, Kuwait and Lebanon, out of a global sample of 1,253.