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Monday, 30 April 2012

MSCI and Saudi Arabia: friends again | beyondbrics –

After a discreet but damaging spat over licensing that saw Saudi Arabia fall out of MSCI’s indices in 2009, the Middle East’s largest economy and the world’s most influential emerging markets index provider appear to have kissed and made up.

MSCI said on Monday that it will reintroduce its Saudi Arabia Domestic Indices and related regional indices – such as the MSCI Arabian Markets – in June, a move that some hope could signal another move by Saudi Arabia to ease foreign investor access to its bourse, the largest and most liquid in the Arab world.

Making no mention of the undignified scrap of yesteryear, MSCI and the Tadawul, Saudi Arabia’s stock exchange, put out a joint statement on Monday celebrating the rapprochement:

Saudis foresee closer Gulf political union -

Saudi Arabia’s foreign minister has said Gulf states are ploughing ahead with plans for closer political union, amid Arab fears of the threat from neighbouring Iran.
Saud al-Faisal, in a speech delivered by his deputy, said co-operation within the existing six-member bloc might be insufficient to deal with “existing and coming challenges”, arguing that co-ordination of foreign policy would generate benefits if applied via a “federal format.”

MENA stock markets close - April 30, 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)

Capitalism and Class in the Gulf Arab States

What if capitalists in a particular country could draw on a reserve army of semi-skilled labor that includes hundreds of millions of noncitizens whom they could import, hire, fire and expel at will, without worrying about laws, regulations, and collective action? What if they could perfect labor market segmentation to a degree whereby only one social class—capital—reproduces itself, but another—labor—never does? What if, asks Adam Hanieh in his new book, Capitalism and Class in the Gulf Arab States, the economies of the Gulf Arab states should not be conceptualized as underdeveloped, semi-feudal economies that happen to sit on stupendous sources of wealth that they either squander or distribute to local constituencies in return for political loyalty? Hanieh’s groundbreaking book argues that we should not view the Gulf Arab states as anomalies in the worldwide economy. Instead, he claims, the story of twentieth-century capitalism could not be told without recounting their central role: the “global economy is part of the actual essence of the Gulf itself—the development of the global ‘appears’ through the development of the Gulf” (16).

NBAD in talks over UAE central bank lending limit | Reuters

National Bank of Abu Dhabi is in discussions with the United Arab Emirates' central bank over proposed lending caps on local government entities and was "confident" a solution would be found, its chief executive said on Monday.

"We are in active conversations with the central bank. We are confident that, by the end of these, we will have a solution that allows the bank to manage its balance sheet," Michael Tomalin said on a conference call on Monday to discuss earnings results, which were released last week.

In the first such change in nearly two decades, the central bank said at the start of April it was imposing new limits of 100 percent of the capital base for all lending by a bank to governments of the seven-member UAE federation and their quasi-sovereign entities, and 25 percent to individual borrowers.

MIDEAST STOCKS-Kuwait hits 10-month high; Gulf ends mixed | News by Country | Reuters

Kuwait's index hit a 10-month high on Monday as retail investors picked up mid- and small-cap stocks, while UAE bourses ended lower and other Gulf markets were mixed.

Kuwait's index climbed 0.5 percent to its highest finish since June 2011.

Small and mid-cap stocks were the most active. Investor Holding, Gulf Investment House gained 5.3 and 7.9 percent respectively.

MSCI to Reintroduce Indices for Saudi Arabia - MarketWatch

MSCI Inc. a leading provider of investment decision support tools worldwide, announced today that it will reintroduce coverage of the Saudi Arabia equity market with the release of standalone country indices, after reaching agreement with the Saudi Stock Exchange (Tadawul) for the provision of market data.

The reintroduced MSCI Saudi Arabia Domestic Indices, including large cap, mid cap and small cap indices, are designed for institutional investors wishing to invest in Saudi Arabia, and who are not constrained by foreign ownership limits.

"We are delighted that we are once again able to offer indices covering the Saudi Arabia equity market," said Baer Pettit, Managing Director and Head of the MSCI Index business. "We believe that this announcement will be welcomed by investors both in the region, and globally. Our clients continue to demand high quality indices that accurately reflect the equity market opportunity in the region, either as benchmarks or as the basis for various financial instruments."

STOCKS NEWS MIDEAST-Kuwait at 10-mth high; UAE mkts slip - Yahoo! News UK

Kuwait's bourse rises for a sixth session, hitting a 10-month high as local retail investors pick up mid- and small-cap stocks, while UAE bourses end lower.
Kuwait's index climbs 0.5 percent to 6,369 points, its highest finish since June 2011.
Small and mid-cap stocks are the most active. Investor Holding, Gulf Investment House gain 5.3 and 7.9 percent respectively. Gulf Finance House slips 6.5 percent.

Bahrain’s Islamic Regulator AAOIFI Issues 7 Financial Standards - Bloomberg

Bahrain’s Accounting & Auditing Organization for Islamic Financial Institutions issued seven Islamic standards for the industry, the regulator’s Secretary General Khaled Al Faqih said today.
The guidelines will govern financial rights or the disposal of rights, bankruptcy and liquidity management, Al Faqih said at a news conference in the capital Manama. The agency also listed rules for capital and investments protection, investment agency contracts, profit calculations from investment instruments, and the right to terminate legal contracts due to fraud, he said.
AAOIFI, which has 200 members, sets accounting and auditing standards that are used in Bahrain, the Dubai International Financial Centre, Jordan, Lebanon, Qatar, Sudan and Syria, according to its website. It has issued 48 Shariah guidelines and regulators in countries including Malaysia, Saudi Arabia, Australia and South Africa base some of their rules on AAOIFI.

Dubai's JAFZA says in advanced talks to refinance $2 bln sukuk - Yahoo! News UK

Dubai's Jebel Ali Free Zone (JAFZA) is in advanced talks with financial institutions over a financing package to meet its $2 billion-equivalent Islamic bond, or sukuk, maturity in November, the company said in a statement on Monday.
The chairman of the state-linked industrial free zone, located on the outskirts of Dubai, said in the statement that
proceeds of the funding package will be used solely for the redemption of its 7.5 billion dirhams ($2.04 billion) sukuk.
JAFZA reported a net profit of 242 million dirhams in 2011, compared to 140 million dirhams in the previous year, its financial statements showed.

What's next for Islamic banks? -

Traditionally, Islamic banks have outperformed their conventional peers in most markets. However, a closer look suggests the market dynamics are changing, demonstrating a new trend.

Two key indicators are cause for reflection: slowing growth rates and eroding profitability, according to A.T. Kearney, a global management consultancy.

Declining growth rates are occurring in key geographies including KSA, Bahrain and the UAE, where growth rates have dropped to between 3%- 8% from double-digit figures. In parallel cost income ratios are increasing in most markets, putting pressure on profitability.

Stage set for the return of IPO activity in the GCC during 2012 as stock market conditions and investor confidence improves - Zawya

Initial Public Offering (IPO) activity began to show early signs of recovery towards the end of Q1 2012 in the six nation Gulf Corporation Council ("GCC") stock markets. Investor confidence began to return to markets with share price levels generally improving across the markets, according to PwC, a leading international professional services organisation.

WAM | Bank of Sharjah announces financial results for three months ending March 31

Bank of Sharjah today announced its financial results for the three months ending March 31, 2012, revealing the strength of its balance sheet, soundness of its assets quality, and continued growth with total income and operating profit before impairment charges increasing both by 15%.

During the first quarter of 2012, net interest income increased by 10% compared to the corresponding period of 2011. This increase was driven by the decrease in the cost of funding, mainly on customer deposits, despite the 5% increase in deposits.

Furthermore, Non-interest income for the quarter increased by 34% compared to the corresponding period of 2011. This was driven by gains on the traded investments portfolio, as a result of the improvement witnessed by the UAE stock markets during the quarter.

Death on the Danube ... and a tale of corruption in Libya - Brian Whitaker's blog, April 2012

Shokri Ghanem, the man in charge of Libya's highly corrupt oil industry during the last five years of Gaddafi's rule, was found dead yesterday – floating in the river Danube near his home in Vienna. His family have suggested that he fell in the river after suffering a heart attack, though foul play has not yet been ruled out.

Either way, his death will make it more difficult to uncover the whole truth about a series of oil-related scandals in Libya – including the unfolding Ras Lanuf refinery affair which I wrote about here just a few hours before Ghanem died.

Though Libya under Gaddafi was officially a "people's" state, its oil industry provided a wealth of opportunities for individuals and companies to cream off money that rightfully belonged to the people. For five years Ghanem was in charge of that industry, and whether or not he personally benefited from the corruption, he probably had more knowledge than anyone else of what was going on – so much so that on one occasion he expressed fears for the safety of himself and his family.

RBS sees no issues with $60 bln Gulf 2012 refinancing needs - Yahoo! News UK

Gulf borrowers need to refinance around $60 billion of debt in 2012, a Royal Bank of Scotland
regional executive said on Monday, noting there should be no significant issues in meeting this target.
"We don't see any issue with the refinancing needs of the region," Jacco Keijzer, head of debt capital markets for the Middle East and Africa, told reporters in Dubai.

Abu Dhabi eyes stake in Manchester Airport - report - Transport -

Abu Dhabi is part of a joint venture making a bid for a 50 percent stake in Manchester airport, according to a report on Sunday.
Manchester Airport Group plans to raise about GBP1bn (US$1.6bn) by selling a 50 percent stake to fund its bid to buy London-based Stansted airport, the UK’s Sunday Times newspaper said without saying where it got the information.
Among those looking to acquire the stake are Australia-based Industry Funds Management, Hong-Kong-based Cheung Kong Holdings and a joint venture between UK-based investment firm 3i Infrastructure and the Abu Dhabi Investment Authority, the report said.

Qatar to put $250M into Barclays portfolio firms - MarketWatch

U.K. listed financial services company Barclays PLC Monday said Qatar Asset Management Company, or QAMC, will co-invest $250 million in Barclays Natural Resource Investments, or BNRI's, current and future portfolio companies.

Algeria postpones Djezzy appeal on $1.3 bln fine | Reuters

An Algerian court on Sunday postponed an appeal hearing into a $1.25 billion fine imposed on Djezzy, the local mobile phone unit of Russian telecoms firm Vimpelcom, until May 6, a judicial source told Reuters.

Djezzy chief executive Tamer El Mahdy, who has been convicted in the case and faces jail if the conviction is upheld, failed to appear for the hearing at the Ruisseau court in Algiers, the source said.

A lower court ruled last month that Djezzy and its CEO were guilty of violating foreign exchange regulations. Djezzy's parent company denied the allegations against it and its chief executive, and lodged an appeal.

UPDATE 1-Dubai Islamic Q1 net profit rises 11 pct | Reuters

Dubai Islamic Bank (DIB), the largest sharia-compliant lender in the emirate, on Monday said its first-quarter net profit rose 11 percent, in-line with one analyst's forecast and helped by growth in its core businesses.

DIB, an advisor to Dubai government's recent $1.25 billion bond sale, posted a net profit of 245 million dirhams ($66.70 million) for the first-quarter, it said in a bourse statement.

That compared with net profit of 222 million dirhams for the year-ago period. An analyst polled by Reuters forecasted net profit of 246 million dirhams for the quarter in a Reuters poll.

gulfnews : Hotels feel impact of Arab Spring

More than a year after the popular risings across the Arab world changed the region's business outlook, hotel operators still believe in the investment potential of the Middle East, but expressed concern about the impact of rising Islamist parties on the tourism industry.
The strong tourism fundamentals of the region are still there and recovery is only a matter of time, according to a panel of experts at the Arabian Hotel Investment conference which addressed the Arab Spring impact as a major theme.
"The fundamentals are the same… Sinai is still a great place to go for diving and the fish have not gone away," said Paul Pisani, senior vice-president of hotels development at Corinthia Hotels.

4G Gulf uptake slow but set to rise - The National

Uptake of 4G internet in the Gulf has been "slow", despite operators spending millions of dollars installing and promoting faster mobile networks.

The new networks offer mobile-data speeds of more than double the best possible connection offered by 3G.

Regional operators admit they have attracted few 4G subscribers - but say the numbers are set to pick up with the wider availability of compatible devices.

UAE stockbroker certification brings 'credibility' to markets - The National

Fifty stockbrokers have become the first in the country to pass an internationally recognised professional qualification, the securities regulator said yesterday.

The brokers, including analysts and trading managers, completed all three levels of the Chartered Institute for Securities and Investment exam, introduced by the Securities and Commodities Authority (SCA).

The programme "takes into serious consideration the UAE financial market legislations and the characteristics of the local investment environment, with the aim of providing the financial industry with world-class professionals", said Abdullah Al Turifi, the chief executive of the SCA.

Gulf region on Jumeirah's radar - The National

Jumeirah Group, the Dubai luxury hotel company that manages the Burj Al Arab, is turning its focus to expanding closer to home, with countries including Saudi Arabia and Qatar on its radar.

The company yesterday said it was in discussions for projects in Doha and had letters of understanding for hotels in Saudi Arabia.

"Now, very significantly, we are concentrating on coming back strongly into this region," said Gerald Lawless, the executive chairman of Jumeirah Group.

MALAYSIA PRESS-Abu Dhabi's IPIC keen on Petra Energy stake-The Edge Malaysia | Reuters

A sovereign wealth investment firm from the Middle is said to be among the interested parties eyeing Perdana Petroleum Bhd 's 26.9 percent stake in Petra Energy Bhd, according to sources privy to the matter.

gulfnews : Goldman's $2b sukuk debut puts Islamic scholars on edge

Goldman Sachs Group Inc's $2 billion (Dh7.34 billion) Islamic debt debut is leading scholars to call for stricter supervision.
Goldman said in an Oct-ober 18 prospectus that it would use proceeds for general corporate purposes and financing needs.
Non-Islamic banks need to make investment plans clearer, while approvers need to supervise more rigorously, Rusni Hassan and Mohammad Akram Laldin, who sit on the Malaysian central bank's Sharia Advisory Council, said in separate interviews.

Dubai petrol subsidies in the billions - The National

Dubai has spent billions to ensure that its motorists can fill their tanks cheaply, official documents show.

Federal legislation mandates that Emirates National Oil Company (Enoc), which is owned by the Dubai Government, and its subsidiary Emirates Petroleum Products Company (Eppco) sell petrol at subsidised prices.

As a result, the companies are losing money on petroleum sales, forcing the Government of Dubai to make up the difference.