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Saturday, 30 June 2012

gulfnews : Three banks announce merger in Bahrain

Three Bahrain-based Islamic investment banks Capivest, Elaf Bank and Capital Management House are to merge.
The announcement was made after the extraordinary general meetings of the three banks approved the transaction. The merger will be effective after obtaining the final approval of the Central Bank of Bahrain and the Ministry of Industry and Commerce, the banks said.
Once implemented, the newly created entity will have shareholders’ equity of almost $350 million (Dh1.28 billion) and assets in excess of $400 million. The transaction is the first three-way merger in Bahrain.

UAE in strong place as world turns defensive - The National

The UAE economy is today enjoying a period of stable growth, three years after the contraction it suffered during the peak of the global financial crisis.

Credit Suisse believes that over the next two years, the UAE will continue on a path of gradual recovery, with GDP growing at about 3 to 4 per cent year on year. Sustained high oil prices, domestic demand growth and prudent fiscal policies are critical factors in the country's ability to sustain growth.

Although the Emirates seems less oil-dominated than other GCC countries (with net oil exports accounting for 30 per cent of GDP compared with 50 to 60 per cent in Saudi Arabia, Qatar and Kuwait), net oil exports play a key role since they also are a major growth driver for other key sectors, especially banking and real estate.

Egypt entrepreneurs fear for future - The National

As politicians and economists start drawing up plans to bring Egypt's economy back from the brink, the country's small business owners say they are unlikely to reap benefits any time soon.

The election of a new president, Mohammed Morsi,has put the country on a firmer footing on the path to establishing civil democratic rule.

But changes to the cabinet and delays on rewriting the constitution have kept the economic situation uncertain.

Investors must use caution in Libya - The National

As the elections in Libya approach, Mohamed Karbal, the managing director of the Karbal & Co law firm, explains the legal minefield of investing in the country.

Can foreign investors dip their toes in Libya?
There are four ways for foreign investors to conduct business in Libya: establishing a joint venture; opening a branch office; opening a representative office; and through direct investment.

Libya readies for dawn of new economic era - The National

Libya will come to a historic political and economic crossroads on Saturday as the first democratic elections for 40 years are held.

The polls are expected mark a new beginning for the wealthy North African economy that stagnated under the dictatorship of Muammar Qaddafi.

Already, investors are watching for the outcome of the elections with an eagle eye as opportunities abound in oil, infrastructure, property and tourism.

Mulk set to spend $1bn on global expansion - The National

Mulk Holdings, a manufacturing conglomerate based in Sharjah, is investing up to US$1 billion (Dh3.67bn) in an ambitious expansion project in the UAE, Europe and Asia over the next two years.

The company plans to set up a facility in Abu Dhabi's Khalifa Industrial Zone (Kizad) with two other joint venture partners to make aluminium components, said Shaji Mulk, the company's chairman.

It is also planning to increase the capacity of an existing plant in Serbia as well as new projects in Turkey and India.

So far, so good for Egypt but economic reform set for delay - The National

Markets have so far reacted favourably to the victory of the Muslim Brotherhood's Mohammed Morsi in Egypt's first post-revolution presidential elections.

The near 13 per cent rise by the EGX30 Index - since the result was announced - reflects relief that the political process prevailed in spite of fears that the military might override the will of the people.

Mr Morsi's initial calls for an inclusive government have also been welcomed.

Energy sector is more than just oil production - The National

As more foreign companies enter the UAE's oil and gas fields, a new prospect is coming into view: the country is positioned to become a true regional hub for the energy industry.

As more areas are opened to exploration, and as existing concessions come up for renewal, a number of new companies are moving into the business. Companies from Germany, Austria, South Korea and China have all recently signed deals. Some of the new entrants are operating, or plan to operate, elsewhere in the region. They will need regional headquarters.

With an already developed oil and gas industry, ample reserves, stable government, a relatively open economy, superior travel and shipping infrastructure, and an excellent reputation, the UAE is the obvious location for those offices. With them would come oilfield-services companies that are essential to the industry.

gulfnews : A pipeline to jobs and regional stability, Emirati youth say

The UAE’s strategic oil pipeline that will bypass the Strait of Hormuz will boost employment and promote stability in the country, Emirati youth have said.
The oil export pipeline from Habshan in Abu Dhabi to Fujairah is expected to start exports within a month and will initially operate at a rate of 1.5 million barrels per day (bpd). It is expected to increase to 1.8 million bpd.
The UAE is now producing about 2.6 million bpd and has a production capacity of around 2.7 million bpd. “The pipeline will boost the economy in terms of employment. Unemployment is a big issue because not a lot of Emiratis are involved in the multi-million contract deals that are made to develop this country,” said Maitha Ahmad, a 26-year-old business executive.

gulfnews : Integrity must be restored among banks

Banking and financial services constitute the backbone of the modern global economy. In their traditional role, they are entrusted with the savings of people and, after due diligence, are required to lend funds to businesses that generate employment and provide goods and services to the community.
However, as banking institutions moved away from this basic role and started making money from ever more opaque financial instruments, a moral rot set in among those that were entrusted with the effective functioning of the global economy on which we all are dependent. Banks now routinely put their own interests ahead of the responsibility they have towards the communities they serve.
After the global financial crisis, sparked by their reckless behaviour, it was hoped that some sense of responsibility and the threat of effective regulation will restore ethical behaviour among bankers. But it turned out to be a false hope.

gulfnews : Handsome profits for regionally-listed firms

It is business as usual in the economies of the six-nation Gulf Cooperation Council (GCC) countries when it comes to the ability of locally-listed firms of registering gorgeous profits. Recently-released statistics put combined net profits of 543 listed companies at $14.5 billion (Dh53.24 billion) during the first quarter of 2012. This represents a notable increase of 12.9 per cent of net income compared to the same period in 2011.
Undoubtedly, this level of profit-making says a great deal about the current status of business activities in the region. At the very least, the economies are doing fine, with consumers having the ability and willingness to spend. Needless to say, per capita income in Qatar, put at a whopping $107,000 per annum, is second to none in the world. What’s more, Qataris are noted for spending and investing rather than saving.
Part of the credit goes to the authorities and their determination of augmenting public sector spending with all the positive spill-over effects on the economic situation. Continuing the Qatari example, the budget for fiscal year 2011-13, which got under way in April, projects expenditures of a record $48.9 billion, showing growth of 27 per cent.

gulfnews : Arab bank assets by end of June stood at $2.65tr

Abu Dhabi Volume of assets at Arab banks expanded to 2.65 trillion (Dh9.74 trillion) end of June 2012 with a growth rate of 2.5 per cent compared to 2011, a report by Union of Arab Banks (UAB) showed.
“In spite of various internal and external issues facing the Arab countries, the banking sector has achieved positive results and has not been affected by the turmoil in the region by recording continuous growth,” UAB said.
“We expect that the volume of assets of Arab banking sector would reach by end of June of 2012 $2.65 trillion, with a growth of 2.5 per cent compared to the same period of 2011,” UAB said.

gulfnews : Creative destruction could renew Gulf Markets

Last week’s reflections in this space on the subject of economic change reminded me of something my Japanese boss told me years ago in banking. “Change is good,” he said brightly.
I don’t remember exactly what that was about, but I’m pretty sure I had the contrary notion ‘If it ain’t broke, don’t fix it’ in mind, feeling that whatever was coming had more to do with making a mark than making things better, a familiar trait of middle management.
His opinion might have been explained by his experience of coming up through the Japanese banking system, which certainly needed changing, seeming to be riddled with inertia, with failing institutions hiding (and being allowed to hide) their balance-sheet horrors for fear of the shockwaves if they actually revealed the true scale of their losses and vulnerability. A bit like the European banking sector right now, as it happens.

British justice minister calls for banker prosecutions - Yahoo! News Maktoob

Britain's justice minister called Saturday for criminal prosecutions of bankers and stronger financial regulation after scandals erupted over rate manipulation and mis-selling by major lenders.
"We are very bad at prosecuting financial crime in this country," Justice Secretary Ken Clarke told BBC radio.
"I suspect financial crime is easier to get away with in this country than practically any other sort of crime."

Saudi Stock Market close - June 30, 2012

General Index
Intraday  3 month  
 Daily Statistics
 General Index6709.91
 Change (%)1.89%
 T. Volume204311213
 T. Companies 157

Saudi Shares Advance on European Debt Optimism, Oil-Price Surge - Bloomberg

Shares in Saudi Arabia, the Arab world’s biggest stock market, rose the most in 10 weeks after U.S. equities rallied on optimism that an accord among European leaders on banks will help contain the region’s debt crisis.
Saudi Basic Industries Corp. (SABIC), the world’s largest petrochemicals maker, and Al-Rajhi Bank (RJHI), the kingdom’s biggest bank by market value, advanced the most since April 17. National Industrialization Co. (NIC) gained the most since June 4. The Tadawul All Share Index rose 1.9 percent to 6,709.01 at the 3:30 p.m. close in the capital Riyadh.
“The Saudi market was supported by positive news from the European summit,” Turki Fadaak, the head of research at Albilad Investment Co. in Riyadh, said today. “This led to a strong rise in oil and commodity prices.”

Saudi's Bahri gains 9 percent after merger announcement | Reuters

Shares at Saudi National Shipping Co (Bahri) 4030.SE rose 9 percent on Saturday after it signed an agreement with Saudi Aramco to buy its Vela marine unit for $1.3 billion in cash shares.

On Wednesday State oil giant Saudi Aramco and Bahri announced the agreement that would make Bahri the world's fourth largest owner of very large crude carriers, or VLCCs. Bahri will be the exclusive provider of VLCC crude oil shipping services to Saudi Aramco, under a long term agreement.

Saudi Shares Advance on European Debt Optimism, Oil-Price Surge - Businessweek

Shares in Saudi Arabia, the Arab world’s biggest stock market, rose the most in 10 weeks after U.S. equities rallied on optimism that an accord among European leaders on banks will help contain the region’s debt crisis.

Saudi Basic Industries Corp., the world’s largest petrochemicals maker, and Al-Rajhi Bank (RJHI), the kingdom’s biggest bank by market value, advanced the most since April 17. National Industrialization Co. gained the most since June 6. The Tadawul All Share Index (SASEIDX) rose 2 percent to 6,715.70 at 11:24 a.m. in the capital Riyadh.

“The Saudi market was supported by positive news from the European summit,” Turki Fadaak, the head of research at Albilad Investment Co. in Riyadh, said today. “This led to a strong rise in oil and commodity prices.”

Barron's: Get Ready For A Chinese Hard Landing - Business Insider

In its latest print edition, Barron's magazine is calling for a Chinese hard landing -- a scenario where a hot economy slows sharply, potentially falling into recession.
Though recently announced interest-rate cuts and a ramp-up in the government's already massive infrastructure spending could postpone the day of reckoning, to us it looks like the Great China Growth Story may be falling apart.
Barron's Jonathan Laing doesn't present much new evidence.  However, he compiles almost all of the bearish arguments and quotes all of the big China bears like Jim Chanos.

ENERGY - Gazprom ‘warns’ Turkey on gas deal

Gazprom on June 29 sent a warning signal to Turkey over Ankara’s agreement with Azerbaijan to build a gas pipeline to Europe, a rival to the Moscow-backed planned South Stream trunk.

Gazprom said Turkey demanded additional gas supply from Russia after an explosion on the Turkey-Iran natural gas pipeline June 28, which cut the gas flow. The statement said Gazprom has increased gas supply to Turkey, but added that if the Trans-Anatolian project is “completed as planned in 2018, Turkey could then apply for help to Baku,” according to Gazprom’s e-mailed statement.

Turkey, Gazprom’s second largest customer, and Azerbaijan signed a deal on June 26 to build $7 billion Trans-Anatolian natural gas pipeline (TANAP) to carry Azeri gas to European markets. The TANAP rivals the South Stream natural gas pipeline project, which is supported by Russia, and goes through Turkey.

gulfnews : Oman wary of GCC Union proposal

Notwithstanding the Omani Minister Responsible for Foreign Affairs’ most recent declaration that there was “no Gulf union,” and that such a scheme now only existed “among journalists”, the Sultanate’s perspective on Saudi King Abdullah Bin Abdul Aziz’s proposal to transform the Gulf Cooperation Council (GCC) into a much stronger alliance reflected an existing schism within the alliance. Inasmuch as the Saudi monarch moved on his union proposal because he was persuaded that an existential threat from Iran confronted GCC States, the affable Yousuf Bin Alawi Bin Abdullah’s forceful declaration revealed that Muscat did not share the view that such a threat existed.
Other GCC governments, including Kuwait and the UAE, expressed similar reservations though neither volunteered to voice them in public. Bahrain and Qatar supported the proposal, while Manama stressed its urgency. Still, Muscat’s categorical assessments meant that no unanimity existed, although that did not in and of itself, indicate that the project was in permanent abeyance. In fact, the very idea of union was imbedded in the GCC when the alliance was created in 1981.

BBC News - How Iran is giving oil sanctions the slip

A complete European Union oil embargo on Iran over its nuclear programme comes into force on Sunday, but the Islamic Republic has already found some ways of circumventing the sanctions.

The Pacific islands of Tuvalu have some 11,000 inhabitants on a total of 26sq km (10 square miles) of land.

Few Iranians can find the tiny state on the map or have even heard of it, but out of a fleet of 39 Iranian oil tankers, 15 now fly the Tuvaluan flag.

UAE's Fujairah emirate to step up petroleum facilities - NY Daily News

Sheikh Hamad bin Mohammed Al Sharqi, the ruler of Fujairah and member of United Arab Emirates' supreme council, has directed the Fujairah Port Authority to increase petroleum facilities and berths at the port.

Sheikh Hamad also directed the authority to invite tenders as soon as possible for constructing these facilities to enable the port to cope up with the increasing storage capacity of oil companies to store crude and its derivatives.

Based on these directives, contracts have been awarded to build two new berths to serve oil tankers.

The Fujairah Port currently has seven dedicated berths for oil tankers with a total length of 2,340 metres, all boasting the latest equipments for docking and handling.