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Tuesday, 1 May 2012

Bankers Find It Tough to Tap Gulf Region's Wealth -

On a recent sunny day, Eric Swats, a fund manager at Rasmala Investments, sat under a parasol at a restaurant on the terrace of the Dubai International Finance Center, talking up his new $25 million Rasmala Global Sukuk Fund.

Mr. Swats hopes it will tap into fast-growing demand from Middle Eastern and Asian investors for sukuk, securities that comply with Islamic law. “The market for conservative and well-managed” Islamic finance products is “underserved and underdeveloped,” he said over a lunch of salad and fruit juice.

The Middle East has proved a far tougher environment for financiers than the El Dorado it was imagined to be a few years ago. Bankers learned the hard way during the credit crunch that they could win business only by tailoring their offerings to the region’s specific needs.

Profit up at focused Tabreed in Abu Dhabi - The National

Tabreed,a district cooling company based in Abu Dhabi, reported a 15 per cent rise in profit in the first quarter as the company focused on chilled water and stripped away more of its non-core business.

Net profit reached Dh36.8 million (US$10m), up from Dh31.9m in the first quarter of last year, the firm said yesterday.

"Our performance in the first quarter builds upon last year's achievements in establishing Tabreed as a stable utility business," said Waleed Al Muhairi, the chairman of Tabreed.

The Associated Press: Emirates CEO sees room for more US destinations

To say that the head of Dubai's Emirates airline wears many hats is something of an understatement.
Sheik Ahmed bin Saeed Al Maktoum holds several government positions in the Gulf city-state, and is an uncle of Dubai's ruler. He was appointed chairman of Dubai World in 2010 to oversee the troubled state conglomerate's turnaround plan.
But it is role at the helm of Emirates airline for which Sheik Ahmed is best known. The University of Denver graduate became chairman of the newly formed airline in 1985, and later took on the job of CEO too.

Arabian Peninsula Media Roundup (May 1)

[This is a roundup of news articles and other materials circulating on the Arabian Peninsula and reflects a wide variety of opinions. It does not reflect the views of the Arabian Peninsula Page Editors or of Jadaliyya. You may send your own recommendations for inclusion in each week's roundup to by Monday night of every week.]

MENA stock markets close - May 1, 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)

TEXT-Fitch affirms National Bank of Abu Dhabi | Reuters

Fitch Ratings has affirmed National Bank of Abu Dhabi's
(NBAD) Long-term Issuer Default Rating (IDR) at 'AA-' with a Stable Outlook and
its Viability Rating at 'a-'. A full list of rating actions is at the end of
this release.

NBAD's IDRs, Support Rating and Support Rating Floor reflect Fitch's belief that
there is an extremely high probability of support from the government of Abu
Dhabi (rated 'AA'/Stable/'F1+') in the first instance, and also from the UAE
authorities, if required. This is based on NBAD's importance to Abu Dhabi and to
the UAE banking system, the bank's majority (70.5%) ownership by - and close
ties to - the Abu Dhabi government, and the UAE authorities' long record of
support for domestic banks.

The Viability Rating reflects the bank's strong franchise, especially in Abu
Dhabi; its close links to the Abu Dhabi government, which benefit both its
lending and its funding profile; its consistently sound profitability; and its
relatively sound asset quality, despite some deterioration. The rating also
reflects concentrations in loans and deposits and risks inherent in the UAE
operating environment.

UAE's Etihad seeks more routes with Aer Lingus stake | Reuters

Etihad Airways has bought a 3 percent stake in Irish airline Aer Lingus (AERL.I) as a precursor to a commercial tie-up that could help Abu Dhabi's flagship carrier gain more European routes to catch up with Middle Eastern rivals.

The deal also positions state-owned Etihad as a potential buyer of the indebted Irish government's 25 percent stake in Aer Lingus, which it is considering selling as part its international bailout.

After months of speculation about a possible deal, the airlines said on Tuesday that Etihad's stake purchase reflected "its desire to forge a commercial partnership," with Aer Lingus.

Qatar to allow trade union, scrap 'sponsor' system - Ahram Online

Qatar is to allow the establishment of a trade union to protect labour rights and scrap the "sponsor" system for foreign workers, a top official said in local dailies on Tuesday.
The union, independent from the labour ministry, "will have the right to receive the complaints of workers and protect their rights," the ministry's undersecretary Hussein al-Mulla told Alarab daily.

The union "will be run by Qataris but as a foreigner you will have the right to vote but not run in the board of directors elections," he said, adding that the project awaited the emir's approval.

Dubai sukuk to fund airport expansion: Sheikh Ahmed - CNBC

Dubai will employ $1.25 billion raised through an Islamic bond last week to fund the expansion of its airport and sees no risk to repaying creditors at its flagship conglomerate Dubai World on time, a top Dubai official told Reuters on Tuesday.

"We will use proceeds from the $1.25 billion sukuk to fund Dubai International Airport expansion," Sheikh Ahmed bin Saeed al Maktoum, a close advisor and uncle to Dubai's ruler and a key figure in the emirate's recovery from its 2009 debt debacle, said in an interview on the sidelines of a Dubai travel show.

Sheikh Ahmed, a charismatic figure who has been the public face of Dubai in recent years, holds a host of top positions in the glitzy emirate including the chairman post at its largest bank Emirates NBD , Dubai World and at crown jewel Emirates airline .

SHUAA provides update on strategic progress ahead of first quarter earnings -

SHUAA Capital, a leading regional financial services company, today gives an update on its business turnaround activities ahead of the announcement of its Q1 2012 financial results to be published on 7 May 2012.

Commenting HH Sheikh Maktoum bin Hasher Al Maktoum, Executive Chairman of SHUAA Capital, said: “Ahead of the Q1 results I wanted to inform shareholders of the strategic progress we have made to reposition SHUAA Capital, since I was appointed Chairman this time last year.  We now have a clear direction, a significantly reduced cost base and a much higher degree of financial visibility.

UPDATE 1-Kuwait's KIPCO upbeat on outlook after Q1 | Reuters

Kuwait Projects Co., the country's largest investment company, sounded a confident note on its full-year outlook after reporting a 5-percent increase for first-quarter profit on Tuesday.

KIPCO, a major regional investment house with stakes in media, industrial, financial and real estate companies, said it made net profit of 8.5 million dinars ($30.66 million) in the first three months of the year, compared with 8.1 million dinars a year earlier.

First-quarter revenue rose 16 percent to 108.4 million Kuwaiti dinars while consolidated assets grew to 6.1 billion dinars.

Barclays goes to Doha | beyondbrics –

It’s one small step for Barclays but one giant leap for Qatar’s financial centre. The UK bank will be the first to base a sizeable asset management operation in Doha’s financial zone, thanks in part to a $250m investment from Qatar.

The Qatar Financial Centre, facing off against regional competitors in Dubai and Bahrain, has long said it hopes to build a niche specialty as an asset management hub. While some local and regional firms, as well as international banks, have become licensed asset managers within the QFC, this week’s deal will make Barclays the most significant international operation in the centre.

Barclays Natural Resources Investments (BNRI) will open its regional office in the QFC and shift top management, including Mark Brown, its managing director, to Doha to run the natural resources private equity fund from the new office.

Doha's Double Hedge - Forbes

We often learn more about hydrocarbon fundamentals when a deal collapses, rather than seeing actual completion. Centrica’s failure to lure Qatar into a twenty year £30bn LNG supply contract in return for an equity stake in the UK based company is one of those moments.

Doha was polite enough to give Centrica a consolation £2bn deal with Qatargas  for 2.4m tonnes of LNG over three years, rather than 4m tonnes for 20 years that Sam Laidlaw preferred. Forget any of the small print involved, the reason for this is very clear: As far as the Qatari’s are concerned, the core market to stitch up is the Pacific basin (i.e. Asia). Atlantic Basin (Western) plays are little more than a tool to exact top prices in prime Asian markets. Tying up too much long-term gas in European hubs wouldn’t be a smart move; the Qatari’s are too canny for that. Centrica failed to grasp this underlying fundamental – which underpins why it only got LNG scraps from Doha’s table.

STOCKS NEWS MIDEAST-Dubai down for 5th session; Qatar slips - Yahoo! News UK

Dubai's benchmark ends lower for a fifth session in muted activity as investors book profits amid a lack of market-moving news, while Barwa Real Estate weighs on Qatar's index.
Dubai bellwether Emaar Properties slips 0.6 percent, Dubai Investments sheds 1.3 percent and contractor Drake and Scull falls 1.6 percent.
The emirate's index drops 0.5 percent to 1,624 points, trimming 2012 gains to 20 percent.

UPDATE 1-DIFC Investments returns to profit, nears sukuk refi deal - Yahoo! News UK

DIFC Investments, the investment arm of the company running Dubai's financial free zone, swung to a full-year profit in 2011, financial statements showed, and is close to a bank deal to refinance an upcoming Islamic bond
The firm is "committed" to the repayment of its $1.25 billion Islamic bond, or sukuk, Chairman Abdulla Mohammed Saleh said in a statement to Nasdaq Dubai.
DIFC Investments' financial records stated that an agreement to refinance the sukuk was close and that management was confident that final agreements were "imminent."

Saudi Arabia’s Taqa Plans Acquisitions to Expand, Al-Riyadh Says - Bloomberg

Saudi Arabia’s Industrialization & Energy Services Co., which counts Saudi Arabian Oil Co. as its main client, plans to expand its business through acquisitions or establishing energy companies, al-Riyadh reported.
The company, known as Taqa, plans to distribute a 0.5 riyal-a-share (13 cents) dividend for 2011, the newspaper reported, citing a shareholders’ meeting. The Saudi government holds a 45 percent stake in the company.

Kuwait's Gulf Bank Q1 profit down 25 pct | Reuters

Kuwait's Gulf Bank posted a 25 percent fall in first-quarter net profit, it said in a statement on Tuesday.

Net profit for the first three months ending March 31 was 7.37 million dinars ($26.58 million), compared to 9.78 million in the same period a year ago, the bank said in the statement on the Kuwait bourse website.

Gulf Bank's stock fell 2.3 percent to 430 Kuwaiti fils by 0843 GMT.

Egypt’s Moussa Sees Spending Vital to Economic Recovery - Bloomberg

Amre Moussa, the front-runner in Egypt’s presidential race, is pledging to boost public spending in his first year in office to lower the highest unemployment rate in at least two decades.
Moussa, a former foreign minister and secretary-general of the Arab League, would mobilize funds from Arab countries and international lenders to spend on infrastructure, according to his manifesto published earlier this month. He also pledges to restore security to encourage foreign investment, lowering yields that have surged about 50 percent since last year’s uprising.
“We will need to pump money into the economy to create jobs,” Ashraf Sweilam, Moussa’s economic adviser, said in a telephone interview from Cairo. “We will not increase the budget deficit a lot, especially if we restore security. This will improve sentiment and help us achieve a growth rate that counterbalances” the increased spending, he said.

Tea with FT Middle East: Muneef Tarmoom -

Muneef Tarmoom learnt how to pitch ideas at the Abu Dhabi Investment Authority, the emirate’s sovereign wealth fund, where young graduates were called upon to defend their investment strategies at regular get-togethers.
“During the weekly meetings, we usually had intimidating sessions with questions coming across to the young recruits. You got challenged with whatever you put forward in terms of investments, disposals. It was there. With time, you sharpened your analytical capabilities,” says Mr Tarmoom, sitting back in an armchair at Abu Dhabi’s Emirates Palace hotel.

Saudi's Tasnee eyes debut riyal sukuk | Reuters

Saudi Arabia's National Industrialization Company (Tasnee) will begin meeting investors next week ahead of a potential debut Islamic bond, or sukuk, the petrochemicals firm said in a regulatory filing.

HSBC's Saudi Arabian unit has been selected to organise the roadshows, which could lead to a privately-placed transaction, according to a statement published late on Monday.

A number of Saudi entities have priced their first local currency sukuk this year as interest in the country's debt market grows on the back of high investor liquidity and a desire to diversify funding sources away from bank loans.

Bahrain's Arcapita unit files for bankruptcy protection - Yahoo! News UK

A unit of Bahrain investment house Arcapita has filed for bankruptcy protection in the United States, the company said in a statement.
Falcon Gas Storage Company, a non-operating subsidiary of Arcapita, also intends to file a motion for joint administration with its parent company for the ongoing Chapter 11 restructuring, it said in the statement late on Monday.
In March, Arcapita became the first Gulf entity to file for Chapter 11 bankruptcy protection in the U. S. after it was threatened with legal action if it did not repay a hedge fund in full.

Qatar hotel group targets Europe and United States | Reuters

Qatar National Hotels will look to Europe and the United States for its next acquisition after the state-owned hotel group bought Raffles hotels in Paris and Singapore this year, its chairman said on Monday.

"Considering the recession in Europe and the very low asset prices ... we see huge acquisition opportunities in Europe and the U.S.," Sheikh Nawaf bin Jassim bin Jabor al-Thani told reporters.

In January, QNH took over two Raffles Hotels & Resorts' including its flagship Singapore hotel in its first foray outside the Middle East. It also owns a hotel in the Egyptian Red Sea resort of Sharm el-Sheikh as well as properties in Qatar.

Dubai tourism actually two years behind its original visitor targets « ArabianMoney

Dubai tourism officials said that visitor numbers are set to reach 10 million this year compared with seven million five years ago. It’s an achievement but two years behind the original target of 10 million by 2010. It also looks highly unlikely that another early target of 15 million visitors by 2015 will be reached.

What intervened to slow things down of course was the global financial crisis of 2008-9 and its impact on Dubai building programs that came to a grinding halt with the local real estate crash. Symbolic of the crash was the old Oasis Beach Hotel on the Jumeirah strip.

Gulf Daily News » Key Bahrain banking sector bouncing back

Bahrain's banking sector is bouncing back from the downturn caused by the unrest a year ago and the global financial crisis of 2008. Retail banks saw growth of between 2.5 per cent and 3.5pc in the first three months of the year driven by consumer spending.

But while corporate business has remained flat some of the investment banks have also been showing positive numbers, according to Bahrain Association of Banks (BAB) chairman Abdulkarim Bucheery.

"Most of the retail banks have been showing growth while some investment banks like Arab Banking Corporation has posted 13pc growth and Gulf International Bank has achieved an impressive 23pc growth," he said at a meeting of the BAB yesterday.

gulfnews : NBF posts 27.3% increase in net profit

National Bank of Fujairah (NBF) yesterday reported a net profit of Dh64.5 million, up 27.3 per cent for the first quarter of the year, compared to Dh50.6 million reported in the corresponding quarter of 2011.
The bank said the results were driven by strong core business performance and effective asset and liability management.
NBF reported loan loss provisions of Dh43.4 million compared to Dh45.1 million in the corresponding quarter of 2011.

gulfnews : DP World to buy back limited shares

DP World shareholders have approved a plan to buy back "a limited number of shares." The shareholders also "authorised the company to reduce its share capital by cancelling any or all of the ordinary shares purchased," the Dubai-based company said in a statement to Nasdaq Dubai yesterday.
DP World's request for the "renewal of an existing authority allowing the company to allot, or issue, up to a limited number of shares — 5 per cent of the nominal value of the issued and unconditionally allotted share capital of the company — free of pre-emption rights" was also approved by the shareholders, it said.
DP World also said yesterday that gross container volumes handled at its terminals rose 9.5 per cent to 13.8 million twenty-foot equivalent units in the first quarter. Excluding the contribution from new capacity, like-for-like growth was 7.4 per cent, it said.

Pioneering Bahrain finds itself reliant on Saudi largesse - The National

The first GCC country to discover oil is now the first to encounter the economic and political challenges of energy vulnerability.

Bahrain started the Gulf boom when the forerunner of today's Chevron struck oil there in 1932. In those days, Bahrain was politically dependent on Britain, and Chevron could deal with the ruler only through the resident British representative.

In 1958, Bahrain agreed to surrender to Saudi Arabia its claim to the Fasht Abu Safa offshore area in return for half of the revenue from the oilfield there. From the mid-1970s, it nationalised its own oilfield, but production dropped steadily.

GCC on growth path but can do better still - The National

One third of the way into 2012, the scorecard for the world economy is mixed.

Overall the recovery is progressing, but this masks significant divergences between regions and even between countries within regions.

Most prominent is that the expansion in the United States is becoming stronger while the euro zone remains mired in recession.

Foreign investment in UAE equities still subdued - The National

Many of the trading booths on the floor of the Abu Dhabi Securities Exchange stood empty with the lights turned off yesterday, still bearing the names of companies that shut down last year.

More than half the brokerages in the country have closed in the past two years, as foreign investors fled with the onset of the global financial crisis.

"We are all living in hope that foreigners will come back with heavy buying like in the past," said Tamer Ali, a broker at Al Wathba Shares & Bonds Centre, as he awaited calls from clients.

GCC countries look towards developing world for growth - The National

It is one of the most exclusive economic clubs in the world, and it's not the G20, the G8 or the IMF board of directors. It's the dwindling list of countries that have retained the gold standard of investment grade status: the AAA rating. From Canada to Sweden, from Switzerland to Germany to Australia, these AAA countries will soon be an even smaller club as France's status totters.

Savvy long-term investors, however, should be mindful of the new and far more consequential "AAA": Asia, Africa and the Americas. These high-growth regions will drive global economic growth over the next two decades, and this new club will have a far bigger effect on our future than the old guard, most of whom will face sluggish growth over the coming decade. Many of these new AAA countries will be gathered in Dubai this week for the Annual Investment Summit, sponsored by the UAE Ministry of Foreign Trade.

Saudi Headed for Emerging Status to Schroder on MSCI Coverage - Bloomberg

MSCI Inc. (MSCI)’s move to resume coverage of Saudi shares in standalone indexes could pave the way for emerging-market status should the market open to foreign investors, Schroder Investment Management Ltd. and Citigroup Inc. said.
“This is a very positive development and a step in the right direction for a potential inclusion into the MSCI Emerging Markets Index (MXEF), once the market opens up for foreign investments,” Rami Sidani, the Dubai-based head of Middle East and North Africa investments at Schroder Investment Management, whose parent company oversees about $291 billion, said in a telephone interview.
The Capital Market Authority in Saudi Arabia, the world’s top oil exporter and home to the biggest stock market in the Persian Gulf, said in January it will allow overseas companies to list securities on the bourse. The decision spurred speculation the kingdom is taking steps to open up its exchange to foreign, non-regional investors, who currently can’t directly invest.

Etihad buys stake in Aer Lingus in possible link-up deal - The Irish Times - Tue, May 01, 2012

ABU DHABI-BASED airline Etihad has quietly acquired 2.987 per cent of Aer Lingus’s shares over the past couple of months.

Aer Lingus last night confirmed it was in discussions with Etihad in relation to reciprocal code-sharing arrangements. The two airlines are also investigating the possibility of joint procurement opportunities.

Aer Lingus said Etihad had given an undertaking it does not intend to increase its shareholding pending the outcome of these discussions. Aer Lingus said: “There is no certainty as to the outcome of these discussions.”

Own Your Own LBO: MGM Resorts International - Seeking Alpha

With record low interest rates, we are looking for investment opportunities in companies that can take advantage of the situation. One of our low interest rate plays is to invest in the equity of highly levered companies that are positioned to grow and repay debt over the next few years. As small investors, we do not have the wherewithal to do take-private LBO transactions like large private equity funds, but we can invest in public companies that have the characteristics of LBO transactions. These companies are not expected to be targets of LBOs themselves, since they already have high levels of debt, but patient investors may be able to generate attractive returns. The high leverage in these situations will amplify the return to equity holders, if successful outcomes are achieved.

We call these situations "Own Your Own LBO" and profiled one such situation, SUPERVALU (NYSE: SVU), here. While the SUPERVALU call was a bit early, we increased our position significantly before the recent earnings release that sent the stock up significantly. In these situations, how you invest is as important as what you invest in; more on that below. Now, on to MGM Resorts International (NYSE: MGM).

Five blocks to be awarded this year | Oman Observer

Exploration and Production Sharing Awards (EPSAs) covering five onshore oil and gas blocks are expected to be awarded before the end of this year, the Under-Secretary of the Ministry of Oil & Gas stated here yesterday.
Nasser bin Khamis al Jashmi said bids received for four of the five blocks are currently under evaluation, while a bid round for the fifth block was launched earlier this week.
“We’ve already opened tenders for four blocks — 51, 55, 54 and 58. Those were tendered (some time ago). Bids were received recently and are under evaluation. These blocks, along with Block 65 (tendered earlier this week) make it in all five blocks that we possibly will be able to sign this year,” Al Jashmi told journalists in Saih Rawl, the central Oman hub of Petroleum Development Oman’s (PDO) gas processing operations, yesterday.

Qatar's Qtel numbers spark stampede for shares - The National

Investors bought up shares of Qatar Telecom yesterday after first-quarter net profit exceeded analyst estimates amid expectations of an initial public offering for the company's Iraq business.

Profit in the first three months reached 711.4 million riyals for the mobile operator, based in Doha, beating the 644m-riyal consensus of analysts. The company, also known as Qtel, made 810.8m of net income in the same period last year.

"Qtel continues to deliver solid numbers and perform ahead of expectations," said Tariq Qaqish, the deputy head of asset management at Al Mal Capital in Dubai.

gulfnews : UAB to invest Dh40m in expansion strategy

The United Arab Bank (UAB), headquartered in Sharjah, said here yesterday it is investing Dh40 million in its Abu Dhabi expansion programme.
This is part of an aggressive expansion plan that would see the bank growing its branch network in the country to 20 from 14 by the end of this year.
"Abu Dhabi is a strategic focus for United Arab Bank and our branch expansion reinforces our presence and commitment towards the emirate of Abu Dhabi."