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Thursday, 12 July 2012

Abu Dhabi Leads Gulf Oil Producers With Pipeline to Avoid Iran - Businessweek

Abu Dhabi is exporting oil for the first time in three decades through a pipeline that circumvents the Strait of Hormuz as Middle Eastern producers seek to nullify Iranian threats to block the shipping chokepoint.

The $3.3 billion link across the United Arab Emirates to the port of Fujairah, to be inaugurated July 15, ensures that at least some Abu Dhabi crude will reach buyers if Iran shuts the waterway. A closure of the transit point would put at risk a fifth of the world’s oil supplies.

“This is a significant step to maintain the flow of oil if there is ever an issue of security around the Gulf,” said Danny Sebright, president of the U.S.-U.A.E. Business Council in Washington and a former Defense Department and intelligence official who worked on the Gulf region. “The opening of this pipeline will spur others to give careful consideration to similar plans that may have been put on the shelf,” he said in a July 1 telephone interview.

IEA forecasts rebound in oil demand - The National

Developing economies' need for oil will be greater than demand in member countries of the Organisation for Economic Co-operation and Development (OECD) by next year, the International Energy Agency (IEA) said yesterday.

Demand for crude will rise next year as the global economy recovers, and the increase will lead to a permanent shift in demand distribution, said the body representing the world's developed economies, in its July monthly report.

"Global oil product demand will average 90.9 million barrels per day (bpd) for 2013, with non-OECD demand exceeding that for the OECD for the first time ever in [the second quarter of next year], a trend that is unlikely to be reversed," said the report.

Non-OECD demand is forecast to be 45.7 million bpd next year, 600,000 bpd more than OECD demand, according to the IEA.

Best year yet for Gulf Islamic bonds - The National

Qatar's sale of a US$4 billion (Dh14.69bn) sukuk has made this year the Arabian Gulf's best ever for sales of Islamic bonds - with five and a half months still to go until the end of the year.

Investment banks have funnelled cheap credit towards the Gulf in an effort to make up for declining fee income and maintain relationships with big corporate clients.

Gulf borrowers have raised $17.4bn this year, led by sovereign sukuk sales from Saudi Arabia, Qatar and Dubai, according to Bloomberg data.

Oil rises as US adds Iran sanctions

Oil rose after the U.S. announced more sanctions on Iran, the second-biggest crude-producing member of the Organization of Petroleum Exporting Countries.

Futures climbed 0.3 percent after the U.S. said it will target Iran's weapons proliferation networks and "front companies" helping to evade international sanctions. Crude dropped earlier as the euro fell to a two-year low against the dollar and the International Energy Agency forecast "muted" growth in oil demand in 2013.

"Concern that the new sanctions will disrupt supply are lending the market support," said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. "The big picture for the global economy remains pretty bleak."

UPDATE 2-Emaar sees demand for sukuk in boost for Dubai | Reuters

Emaar Properties saw strong demand for a $500 million seven-year Islamic bond, or sukuk, priced on Thursday, arranging banks said, in the latest sign that investor confidence in Dubai is returning as state-owned firms repay their debts.

Orders worth $4.65 billion were placed for the sukuk from 185 individual investors, according to statistics provided by the lead banks.

While problems remain at some state-linked enterprises, most notably at Dubai Group, a unit of Dubai Holding, Dubai has been successfully rebuilding its reputation among international investors since shocking global markets in November 2009 with a request to restructure $25 billion of debt at Dubai World.

Sudan bourse gets boost from Gulf Arab Investors | Reuters

Sudan expects trading volumes on its small stock market to double this year because of the interest of Gulf Arab investors since it launched computer-based trading, the head of the Khartoum Stock Exchange said on Thursday.

In January, the Khartoum bourse set up, with Oman's help, an electronic trading system that ended the writing of bond and stock prices on white boards in a stuffy room in the heart of the Sudanese capital.

The new trade system has better linked the bourse, founded in 1995, to Gulf Arab bourses such as Dubai or Muscat.

MENA stock markets close - July 12, 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)

Azerbaijan: Total gas find raises hopes of more Caspian discoveries | beyondbrics

Total’s announcement this month of huge reserves at its offshore Absheron field  in Azerbaijan does not on its own transform the European energy market.

At an estimated 150-300bn cubic metres (bcm), the gas field contains the equivalent of four to eight months of EU annual gas consumption.

But Total‘s news changes the picture for Azerbaijan, say experts, because it creates the tantalizing possibility that the country could yield more such finds – and grow into a major gas source for the EU.

UPDATE 1-Dubai's Emaar launches $500 mln 7-yr sukuk | Reuters

Dubai real estate developer Emaar Properties launched a $500 million seven-year sukuk at a profit rate of 6.4 percent on Thursday, arranging banks said.

Emaar, builder of the world's tallest tower, Burj Khalifa, is seeking to take advantage of tightening spreads to raise cheap financing as well as strong global demand for sukuk.

Final pricing is due later in the day, with order books said to be in excess of $4.5 billion. Pricing at launch for the sukuk was tighter than guidance released on Wednesday, signalling strong appetite for the deal.

Qatar Investment Group Buys Valentino Fashion -peHUB

Mayhoola for Investments S.P.C. (“Mayhoola”), an investment vehicle backed by a major private investor group from Qatar, has agreed to acquire Valentino Fashion Group S.p.A. (“VFG”). The sale and purchase agreement between Mayhoola and Red & Black Lux S.à.r.l. (“Red & Black”), a company indirectly controlled by the Permira Funds in partnership with the Marzotto family, was signed on 11th July 2012.

Through the acquisition of VFG, Mayhoola will acquire Valentino S.p.A. (“Valentino”) and the M Missoni license business, while MCS Marlboro Classics is being carved-out from VFG and will remain under the ownership of Red & Black. Red & Black will continue to own also a majority stake in Hugo Boss, which is not part of this transaction.

The Permira Funds, in partnership with the Marzotto family, acquired control of VFG through Red & Black in 2007, as part of a wider transaction which included Hugo Boss.

Saudi Arabia wins oil battle against Iran

We may not have noticed that we are actually in the heart of an international battle whose political, security and military implications cannot be predicted. The Arab, American and Iranian military forces have been put on maximum alert in the Gulf region. War against Iran’s oil exports has already started.

It seems that the first round in the series of the ferocious battles between Iran and Saudi Arabia, the two giant oil-exporting countries, was settled in favor of the latter. The Kingdom continued to produce oil regardless of the Iranian threats warning the Kingdom against filling the shortage in oil supplies that might result from the absence of Iran in the market. Iran, however, did not dare to close down the Strait of Hormuz nor did it attack the GCC oil installations, as it had threatened.

MIDEAST WEEKAHEAD-Solid earnings provide a fillip for Saudi banking stocks | Reuters

Saudi Arabia's banks have posted robust second-quarter earnings and analysts see upside for their stocks given attractive valuations, whereas p e trochemical stocks will be vulnerable following a sharp drop in oil prices.

Al Rajhi Bank, the Gulf's largest lender, posted a 13.6 percent jump in quarterly net profit and Samba Financial Group's profit rose 5.1 percent, both matching analysts' forecasts. [ID: nL6E8IA7FW] [ID: nL6E8IA7EZ]

Saudi banks are benefiting from the government's expansionary fiscal policy, ample liquidity and improving corporate loan demand.