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Monday, 4 June 2012

Will the Oil Bubble Pop Down to $67 This Time: If so that’s Good News :: The Market Oracle

The story so far:

1: There was a bubble in oil prices in 2008. The evidence for that is it popped which is a pretty good clue; although so far no one has figured out what drove the bubble. Yes it was probably speculators with access to easy money, but sadly no smoking gun has been found, although one gets the impression no one looked very hard.

2: The bubble popped, like bubbles tend to do, and then the price drifted back to what appears to have been the “equilibrium” at the time of $80 to $90 a barrel if you are talking Brent. Although by that time too Brent and WTI de-coupled so there is a bit of uncertainty about which line you should be following– if either…using your genius model which was based on a history when WTI used to sell at a premium to Brent.

Abu Dhabi's developers get a lift - The National

Shares of Abu Dhabi’s two biggest publicly traded developers rose yesterday on news that Aldar Properties advertised a tender to build 700 villas on Yas Island.

Aldar’s stock jumped 2.9 per cent, to Dh1.04, on the Abu Dhabi Securities Exchange (ADX) General Index.

Bidders should put their offers in by June 17, according to a report in MEED, the Middle East business-intelligence service.

Iraqi oil a tempting prospect for many, but not at any price - The National

"It is frustrating. The oil ministry's remuneration fee is very low," said a Japanese executive about Iraq's fourth oil bidding round.

The oil companies should have been salivating at the prospect of exploring the country with the world's third-largest conventional reserves, and probably the biggest potential for new discoveries. Forty seven of them qualified to bid in last week's auction.

But over two days, only three blocks out of 12 on offer were awarded, with a fourth bid turned down by the ministry of oil. The super-major companies with existing Iraqi contracts - BP, Shell, Total and ENI - were conspicuously absent. The Russian giant Lukoil, with its Japanese partner Inpex, secured Block 10 in the south-east, while Pakistan Petroleum picked up Block 8 in the restive Diyala province.

Minister expects oil price around $100 - The National

Sultan Al Mansouri, the Minister of Economy, expects oil to trade between US$80 and $100 a barrel this year as the crude market continues to be buffeted by volatility.

Brent Crude, the benchmark for oil sold into Europe, hit a 16-month low of $95.63 a barrel yesterday after falling for a fifth consecutive day on negative economic data out of China and the United States. Prices later recovered to trade at about $97.90 a barrel.

"My expectation is it will hover between $80 and $100 depending on the situation - it could be more than that," Mr Al Mansouri said yesterday.

gulfnews : UAE markets trade with a negative bias

The Dubai Financial Market (DFM) index again closed in the negative territory yesterday as the global and regional market sentiments remained largely bearish on negative global economic growth sentiments.
However, the volume of shares traded on the market remain thin due to a lack of risk appetite among investors.
The global financial markets have all but wiped out the gains made in 2012 on fears of a disorderly sovereign debt default by Greece. As well, a slowing US economy and China’s growth momentum losing traction are also adding to concerns that the global economy would contract during the second half this year.

gulfnews : Oil pipeline reversal could narrow Brent-WTI pricing gap

The Seaway pipeline, which was built in 1995 to transport crude from Freeport, Texas to Cushing, Oklahoma, is now reversed to transport the rising stocks in the latter to the main US refining centre on the Gulf Coast. The reversal may have an impact on crude oil pricing and the direction of international flows.
Before that, let me say that for the evolution of crude oil prices, one has to look at benchmark crudes in the main trading centres. There are many benchmarks but the most famous are West Texas Intermediate (WTI), the famous marker of North America, and Brent, the famous North Sea blend, which has gradually become the international marker by the fact that almost two thirds of traded oils are priced relative to it.

Planet says will match QInvest undertakings over EFG | Reuters

Egypt's Planet, which is seeking to take over EFG Hermes, said on Monday it intended to match financial and legal guarantees as well as other undertakings made by its Qatari competitor, which has a merger deal with the Egyptian investment bank.

Planet said it was ready to begin due diligence immediately in preparation for its intended offer to buy 100 percent of EFG's shares.

Qatar's QInvest is in the process of forming a joint venture with EFG Hermes that would take control of many of the bank's main businesses.

Egypt bars brokerages from trading foreign stocks | Reuters

Egypt's markets watchdog has told local financial institutions they can no longer trade foreign securities, saying it exposes investors to risks that Egyptian authorities are unable to monitor.

A decree signed this week by Prime Minister Kamal al-Ganzouri amends Egypt's capital market law to make it illegal for brokerages and investment firms to deal in all foreign listed or unlisted securities, financial regulator EFSA said.

Traders said the restrictions were imposed after Egyptian investors suffered losses from a sharp drop in Facebook shares after the social platform's initial public offering.

EM’s sovereign wealth: the old world’s newest last resort? | beyondbrics

Investors have lost their appetite for IPOs. Banks are unwilling to lend. But for some sovereign wealth funds, there is hardly a crisis at all.

The Qatar Investment Authority recently bought significant stakes in high-profile companies such as Shell and Tiffany’s and is eyeing a 10 per cent stake in mining company Xstrata. The China Investment Corporation recently launched a €5oom SME investment fund in Europe and is looking for opportunities in emerging Europe and Africa. How come emerging market SWFs are so active in an otherwise depressed financial world?

The reason is that SWFs have a dynamic which is very different from the rest of the financial markets.

MENA stock markets close - June 4, 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)

MIDEAST STOCKS-Gulf mkts downbeat on global woes - Yahoo! News Maktoob

Most Gulf markets retreated on Monday, trading on muted volumes, as sliding oil prices and further declines on overseas markets kept investors at bay.
Global trends dominated moves in Gulf bourses due to a lack of regional catalyst in company news or economic developments.
The United Arab Emirates' bourses were the biggest losers, with both Dubai and Abu Dhabi slumping to four-month lows.
Dubai's index ends 0.3 percent lower, its lowest close since Feb. 2. Trading volumes were down by more than a third from Sunday.

STOCKS NEWS MIDEAST-Saudi reverses early losses, ends up - Yahoo! News Maktoob

Saudi Arabia's index recovers early losses and ends higher for a second straight day in the week, regaining some lost ground from a drop of 4.2 percent on Saturday.
Saudi Basic Industries Corp. leads the gains, rising 1.4 percent and lender Al Rajhi Bank gains 0.4
The index ends 0.3 percent higher at 6,770 points.

New champion for Saudi’s economic cities -

When Amr al-Dabbagh, the former governor of the Saudi Arabian General Investment Authority, was a no show at Riyadh’s biggest international conference, the rumour mill whirred into action.
His absence at January’s Global Competitiveness Forum, a gathering at which he had been at the forefront since its creation in 2006, foretold what was to come: his replacement at the head of the authority known as Sagia.

EFG Hermes says taking legal steps against Planet - Yahoo! News Maktoob

Egypt's EFG Hermes said on Monday it was taking "legal measures" to protect shareholders after a group of investors offered to buy the company at a premium to the market price.
EFG has dismissed as not serious the offer by Planet IB, which includes Egyptian businessman Naguib Sawiris, former AlexBank Chairman Mahmoud Abdel Latif and a member of the ruling family of the Gulf emirate of Sharjah.
In an emailed statement, it said it was "taking the necessary legal steps to protect the rights of the company, its
shareholders and its employees against a media campaign that Planet IB has launched," without saying what those legal steps were.

BREAKINGVIEWS-Egypt's EFG Hermes is worthy of a fight - Yahoo! News Maktoob

Egypt's EFG Hermes is worth a fight. The Middle East's pre-eminent investment bank has sparked rival interest from Qatar and a consortium of Egyptian financiers, backed by billionaire Naguib Sawiris, despite the allegations of illegal share-dealing levelled against the firm's two co-chief executives. While reputation is everything in finance, EFG's diverse business still has value.
The rise of EFG owes something, bankers say, to the connections of co-chief executive Hassan Heikal whose father was close to Egypt's second president Gamal Abdel Nasser. Doubts created by illegal share dealing charges and links to Hosni Mubarak, whose son Gamal still partly owns the firm's private equity business, have helped wipe 60 percent off EFG's market value since the Arab uprisings began. The bank has vowed to
defend its CEOs.

BRIEF-Moody's places JAFZ's B2 ratings on review for upgrade after assigning (P)B1 to JAFZ's sukuk - Yahoo! News Maktoob

Dubai eases debt worry with $1bn loan -

Dubai’s financial centre has raised a $1bn loan to allow it to pay off an upcoming $1.25bn Islamic bond on June 13.
The Dubai International Financial Centre raised the money through lenders including Standard Chartered, Emirates NBD, Dubai Islamic Bank and Noor Islamic Bank.
The sharia-compliant loan is secured against the DIFC’s property portfolio, which analysts consider to be some of the Gulf’s most premium real estate.

UAE '12 GDP Growth Seen At 3%, Dn From 4.2% Last Yr -Econ Min - Zawya

The United Arab Emirates economy is expected to grow by around 3% in 2012 as opposed to 4.2% in 2011, the country's economy minister said Monday.

"I won't be too optimistic about the economic growth for 2012 to be [like] 2011's 4.2% growth... but simply around 3% this year," Sultan Al Mansouri said at a press briefing here.

He cited ongoing euro-zone sovereign debt crisis and slowing international growth as main reasons affecting growth in the Arab world's second-biggest economy.

U.A.E and the world haven't yet come out from the crisis, he added.

The minister's forecast was more conservative than previous estimates. Early this year the minister had said he expects GDP to grow between 3.5% and 4% in 2012.End

HSBC Completes Merger Of Oman Operations With Oman International Bank

British lender HSBC Holdings Plc (HBC, HSBA.L) said Monday it has completed the merger of its indirect wholly-owned Oman operations, HSBC Bank Middle East Ltd., with local lender Oman International Bank SAOG. The combined entity, named HSBC Bank Oman SAOG, is 51 percent owned by HSBC.

With the merger, HSBC intends to serve retail, corporate and institutional customers in Oman. HSBC Bank Oman will begin its operations Monday and Ewan Stirling has been named its chief executive officer. He is currently CEO of HSBC Oman at HSBC.

Simon Cooper, deputy chairman and chief executive officer of HSBC Middle East & North Africa, has been appointed as Chairman of the new firm's seven-member board of directors, with each director serving an initial three-year term.

UAE says sanctions hurting trade with Iran | Reuters

International financial sanctions against Iran are hurting its trade with the United Arab Emirates, the UAE's economy minister Sultan bin Saeed al-Mansouri said on Monday.

"Trade with Iran was always with consumable items...We should not really stop that. The issue is with the financial transactions...regarding that, it has been affected," he told a news conference.

"If you want to export 20 tonnes of rice, the financial system does not allow you to do that." Mansouri did not elaborate.

The rise of the Emirati businesswoman – Expat - My Telegraph

Along with questions such as “are you allowed to drink?” and “do you have to cover your head?”, the question about whether women are allowed to work in the UAE is one most expats are asked by those unfamiliar with the country.
True, compared to somewhere like the UK, the UAE probably has an abnormally high proportion of expatriate stay-at-home mums. But this isn’t because they’re not “allowed” to work, rather because many Western families here can afford to live on one salary, so they have the option of having one parent stay at home.
And, with schools finishing in the middle of the day, proper part-time jobs rarer than a rainy day and no grandparents to help out, it’s impractical for many expat women without family support to even attempt to work in the corporate world while their children are small. For some, that’s a frustration in itself.

UPDATE 1-Dubai's DIFCI gets $1.04 bln loan to repay Islamic bond - Finance News - London South East

DIFC Investments, a unit of the firm running Dubai's financial free zone, has secured a $1.04 billion loan to help repay in full its Islamic bond maturing later this month, reinforcing the emirate's ability to meet its bond obligations.

The five-year, syndicated loan facility is priced at 380 basis points over the London Interbank Offered Rate (LIBOR) and is mainly secured on the investment firm's property assets, a statement filed to the Nasdaq Dubai bourse showed.

DIFCI, whose $1.25 billion Islamic bond maturing on June 13, was seen as a challenging maturity for the emirate will be repaid in full with the proceeds from the loan, the company said.

Tadawul, Qatar, Oman markets seen as more resilient: Analysts - Saudi SE - Zawya

Saudi Arabia's stock market ended 1.0 percent higher yesterday, after the main index plunged 4.2 percent on Saturday, its largest daily drop in 10 months.

Traders warned the Tadawul index could easily slump further if oil prices continued to slide when global markets reopened today.

"A rebound in share prices on Sunday was not a surprise after their abrupt fall on Saturday," Paul Gamble, chief economist and head of research, Jadwa Investment, told Arab News.