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Tuesday, 17 July 2012

Rot of corruption in banking industry poisons investors - The National

Barclays' global ignominy proceeds apace. The UK-based banking corporation stood down this week from the UAE's Central Bank panel that fixes Eibor, the Emirates' interbank lending rate. This comes just two weeks after Barclays was given record fines of $453 million (Dh1.66 billion) by UK and US regulators for manipulating Libor, the London equivalent of Eibor, both in the run-up to the 2008 global financial crisis and in its aftermath.

The Barclays rate rigging that triggered the resignation of its chief executive Bob Diamond is part of a scandal that involves much of global banking and finance. Libor is made up of banks' daily estimates of their borrowing costs, which influences the costs at which they lend. As such, Libor serves as a benchmark for the borrowing and lending costs of mortgages, loans and derivatives that are worth more than $450 trillion worldwide.

Lenders around the globe feel the thick end of the lash - The National

There seems to be no end to the pain for the world's banking system. On top of the euro-zone crisis and the ever widening Libor scandal, there now come serious allegations against HSBC that "the world's local bank" supplied services to suspected drug dealers and terrorists over a number of years.

And, while not connected to the grave allegations bankers face elsewhere, banks in the UAE also came in for criticism yesterday from the ratings agency Moody's Investors Service on the way it has been accounting for loans impaired as a result of the 2008 crisis.

If the Moody's criticisms are well-founded, it casts serious doubt on the strength of the UAE financial sector at the worst possible time.

Bounced cheques: Rules reform in UAE 'must take the stretch out of rubber cheques' - The National

Draft insolvency laws meant to overhaul bankruptcy procedures and bring the UAE into line with international standards will be redundant as long as bounced cheques remain a criminal offence, lawyers warn.

Many banks tend to begin criminal proceedings as soon as a customer defaults, rather than try to negotiate, says Mazen Boustany, head of banking and finance at the law firm Habib Al Mulla & Company.

"When you have a bazooka, you use it," Mr Boustany says. "The purpose is not to put the borrower in jail. The purpose is to recover the funds."

Telecoms firms thrive on mobile connections - The National

Mobile internet connections are spurring growth for telecommunications operators in the Arabian Gulf as revenues from voice calls "flatline", analysts say.

The Saudi Arabian mobile operator Mobily on Sunday posted a 22 per cent rise in second-quarter profit, which it attributed partly to the greater uptake of data packages.

Data revenue grew to 25 per cent of Mobily's total revenues during the second quarter, the firm said in a statement posted on the Tadawul, the Saudi Arabian stock exchange. The company sells smartphone packages as well as home-internet connections that run on mobile networks. Such data packages mark a big opportunity for telecoms operators in the Gulf, analysts said. "It's the data side that is exciting - that's where the growth is," said Ibrahim Masood, a senior investment officer for asset management at Mashreq.

gulfnews : HSBC helped Iran, drug cartels launder money, inquiry shows

HSBC Holdings Plc did business with firms linked to terrorism, let money-laundering safeguards in its Mexico operations erode and circumvented U.S. sanctions against Iran, according to US Senate investigators.
The Permanent Subcommittee on Investigations released a 335-page report today detailing a decade of lax controls that allowed HSBC affiliates around the world to give terrorists, drug cartels and other criminals a portal into the US financial system. Lawmakers plan to question senior executives from Europe’s largest bank at a hearing in Washington tomorrow.
“HSBC used its US bank as a gateway into the U.S. financial system for some HSBC affiliates around the world to provide U.S. dollar services to clients while playing fast and loose with U.S. banking rules,” said Senator Carl Levin, the Michigan Democrat who heads the subcommittee. “The failure of accountability here is dramatic.”

Turkey’s CarrefourSA – sale or no sale? | beyondbrics

To paraphrase Oscar Wilde, to lose one board member may be regarded as misfortune; to lose four looks like – if not carelessness, then certainly a sign of something being seriously amiss.

And when the chairman and three other board members at Carrefour’s Turkish affiliate abruptly resigned on Monday, they left little doubt about their views on the matter:

“Since we have not received the necessary support and assistance from Carrefour, we realised our presence on the board would no longer be beneficial and decided to resign.”

Barclays to leave UAE rate panel in 90 days - sources | Reuters

Barclays, hit by the Libor scandal in Britain, will leave the rate-setting panel for interbank lending in the United Arab Emirates after a mandatory 90-day notice period, as the hunt begins for a replacement, industry sources said on Tuesday.

The British-based lender had previously indicated to the UAE central bank that it wanted to quit the 12-member panel, whose quotes are used to set the Emirates interbank offered rate (Eibor).

The central bank and treasury officials from the panel members met on Tuesday to discuss Barclays' move, and concluded that the mandatory notice period would be enforced to allow the central bank time to find a replacement.

Dubai: African hub, Nigerian bolthole | beyondbrics

Dubai has long been the regional hub for the oil-rich Gulf states, but the ambitious city state is never one to rest on its laurels.

The emirate has for years been touting itself as the central node for 2bn people, spanning the Middle East, the subcontinent, central Asia and eastern Africa. Now, even West Africa, an eight-hour flight away, is on its radar.

Paris and London have long been the hub for western African states, but Dubai is now giving these established centres a run for their money. Emirates airline’s Dubai-Lagos flight is renowned for constantly being packed.

MENA stock markets close - July 17, 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)

UAE, Qatar markets rally on Q2 hopes - Stocks -

UAE and Qatar markets extend gains, with Dubai finishing at a 10-week high as investors pick up stocks on earnings optimism.
Dubai's index ends 0.9 percent higher at 1,529 points, its highest close since May 8.
"The index broke the 200-day moving average at 1,505-1,515 and this gives it more strength towards 1,546 in the near-term," says Amjad Bakir, head of MENA Corp Securities.

Saudi Arabian Revenue From Oil and Products Rises 48%, OPEC Says - Bloomberg

Saudi Arabia’s revenue from exports of crude oil and other petroleum products jumped 48 percent in 2011 as shipment volumes increased over the previous year, OPEC reported.
The world’s largest crude exporter shipped oil and products valued at $318.5 billion last year compared with $215.4 billion in 2010, the Organization of Petroleum Exporting Countries said in its annual statistical bulletin. Saudi exports of crude and other petroleum products rose 6.9 percent to an average of 8.12 million barrels a day last year, according to the data posted on OPEC’s website yesterday.
Iran, the group’s second-biggest producer after Saudi Arabia, exported crude and petroleum products valued at $114.8 billion compared with $72.2 billion in the previous year, the data showed. Iran’s revenue increased even as the volume of the nation’s shipments fell 8.5 percent, according to OPEC.

Investcorp buys 30% of Turkey's luxury menswear retailers Orka Group -

Investcorp’s Gulf Opportunity Fund, the private equity fund of Investcorp for the MENA region including Turkey, and Orka Group, one of Turkey’s leading and fastest growing menswear retailers, announced today that they have signed a definitive agreement whereby Investcorp’s Gulf Opportunity Fund will acquire a 30% stake in the Group.

Orka Group, through its brands Damat, Tween and D’S Damat, is a leading retailer of branded menswear in Turkey.  Founded in 1986 by Süleyman and Halidun Orakçıoğlu with the introduction of its luxury brand Damat, the Group has become a respected international provider of luxury menswear.

Orka’s fashion products are sold in more than 250 stores and 40 different countries around the world, including franchises.

Engineer spells out permanent repair plan for Harmon Hotel - Business -

An engineer hired by contractor Perini Building Co. on Monday began spelling ways to permanently repair the unfinished Harmon Hotel as testimony concerning demolition of the CityCenter property resumed after a four-month hiatus.

Steve Schiller, president of John A. Martin & Associates, said computer models show an earthquake could cause loads to shift back and forth across floors four through seven, placing an extraordinary stress on some walls. Reinforcing the Harmon at certain key points would alleviate this shear reversal hazard, he said at the hearing in Clark County District Court.

A formal written plan has not been placed on the record. After the hearing, CityCenter attorney Steve Morris said his clients had received a cost estimate from Perini of $20 million, of which the contractor would absorb $4 million because of construction defects. Perini's plan places the bulk of the blame - and also repair costs - on CityCenter because of an alleged faulty design, Morris said.

MIDEAST DEBT-In UAE money market, an echo of Libor controversy | Reuters

The decision by Barclays to quit the United Arab Emirates' interbank rate-setting panel underlines the global impact of the Libor scandal, by raising questions over whether the UAE lending benchmark needs to be reformed.

Barclays has said it wants to leave the panel of banks which sets the Emirates interbank offered rate (Eibor), industry sources told Reuters this week. That follows the British bank's admission that it manipulated the London interbank offered rate (Libor), for which it was fined over $450 million by U.S. and British regulators.

UAE authorities have not accused anyone of manipulating Eibor, which is used as a basis to price loans and other financial instruments in the Gulf's top financial centre.

After the Arab Spring, a Rush to Do Business in the Middle East -

More than a year has passed since the Arab Spring, the catchall name for the revolutions sweeping the Middle East. The political and economic changes have closed some doors and opened others for business people willing to tolerate risk.

“I have seen a flurry of activity because of the Arab Spring that was not happening before,” said Naava Mashiah, an Israeli who is the chief executive of M.E. Links, a consulting company that she described as working “to nurture economic relationships between Israel and other places.”

Ms. Mashiah, who works out of Geneva, said much of the activity is in soft diplomacy and informal development meetings, often coordinated with human rights and nongovernmental organizations. She mentioned helping clients develop contacts in or from locations that include Tunisia, Qatar, Egypt and Libya.

Kuwait : Global completes the exit of Al Rayan Holding Company |

The Private Equity asset management team at Global Investment House announced today that it has completed the exit of two of its managed funds, the Private Equity Fund and Global Opportunistic Fund I, along with co-invested clients from Al Rayan Holding Company. The transaction was completed on the 12th of July 2012 and represents 82% stake.
The Funds launched Al Rayan in 2007, and through acquisitions and organic growth created a network of 6 schools with over 10,500 registered students, making it the largest educational group in Kuwait offering educational services from kinder garden to high school. In late 2009, the Company went through a restructuring program of its operations which included several organizational and business growth initiatives through the leadership of a team from the Private Equity arm of Global. As a result, between 2009 and 2011, revenues, EBITDA, and operating profits grew at a compounded annual growth rate of 12%, 26% and 73% respectively.

Gulf Times – Qatar credit growth expands 35.3% until April this year

Qatar’s credit growth accelerated in the first months of this year, expanding by 35.3% through to April 2012, according General Secretariat for Development Planning report on Qatar’s Economic Outlook for 2012-13.
Credit to the personal sector climbed by 14.1% and that to the corporate sector jumped by 80.4%. Broad money supply increased by 12.1% year on year until end-March, the report said, according to Qatar News Agency.
Regarding banks interest rates, it said: “Qatar Central Bank (QCB) has kept interest rates at the levels it set in its last reduction of August 2011.”