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Wednesday, 18 July 2012

Gulf States Move to Diversify Income Sources -

Gulf countries with plenty of money are turning their attention to mining and commodities in an effort to diversify their portfolios, and their economies.

Saudi Arabia, the world’s biggest oil exporter, has identified mining as a key investment area after oil and petrochemicals, and is spending an estimated $38 billion to develop two cities centered around mining.

“The plan is to bring manufacturing into the Gulf Cooperation Council and have everything at your doorstep. The mining industry has a role to play to bring raw materials in this case,” said Farouk Soussa, chief economist for the Middle East at Citigroup in Dubai.

Demand for Dubai housing to rise as population doubles - The National

It may be time to buy in Dubai with the emirate's population on course to double in less than a decade.

The upbeat growth prediction from Bank of America Merrill Lynch challenges the widely-held belief that over-development during the emirate's boom years would continue to dampen housing demand.

"Dubai's status as a regional financial, transport and logistics hub places it in a position to benefit from growth in neighbouring countries in a self-sustaining fashion," said Jean-Michel Saliba, MENA economist at BofA Merrill Lynch Global Research added.

gulfnews : Realty Court orders developer, broker to repay Dh522,000 to consumer over falsely registered flat

A court has ordered a property developer and a realty broker to jointly repay Dh522,000 to a consumer, who bought a flat in Jumeirah Village, over breach of contract.
The consumer lodged a realty lawsuit against the developer and the broker accusing them of breaching the sales contract and registering a flat different from the one he had purchased in the Property Register in Dubai.
The Dubai Real Estate Court recently considered the contract [between the claimant and the defendants] null and void because the developer and broker failed to honour the terms of the contract.

gulfnews : Banks must get back to basics

HSBC’s chief compliance officer has resigned from his post following the publishing of a report alleging that Britain’s biggest bank may have inadvertently allowed the laundering of billions of dollars in Mexican drug money.
The report, by a US senate sub-committee, also found that HSBC supplied $1 billion to a bank suspected of having links to terror organisations. HSBC is reported to be ready to “acknowledge its mistakes, answer for its actions and fix what went wrong”.
The words from banking executives wring hollow, given that the HSBC revelations are jostling for front page space with the continued fallout from the Barclays Libor interest rate fixing scandal. Just before that, investment bank JPMorgan incurred losses that could run as high as $7 billion on a trade. The litany of wrong-doing and incompetence among banks which has emerged since the start of the financial crisis is disturbingly long.

gulfnews : Four bounced cheques make you appear on blacklist

“Clients who issue four bounced cheques or more will be blacklisted,” a Central Bank official told the Gulf News.
“The banks have the right to close the customer’s accounts if they have exceeded the four bounced cheques within one year,” the source added.
“In case some of these banks have chosen to keep customers’ accounts, then they should comply with all resulted legal rules and obligations,” explained the source.

UPDATE 1-Saudi Zain sees net loss shrink to $93.1 mln | Reuters

Indebted telecoms operator Zain Saudi reported a narrowing second-quarter loss on Wednesday, in line with analyst forecasts.

Saudi Arabia's No.3 telecoms operator, an affiliate of Kuwait's Zain, made a net loss of 349 million riyals ($93.1 million) in the three months to June 30. This compares with a net loss of 448.2 million riyals in the year-earlier period.

Five analysts polled by Reuters on average forecast Zain Saudi would make a quarterly loss of 350 million riyals.

gulfnews : Dubai on strong economic footing: Merrill Lynch

Dubai’s diversification model has right mix to re-accelerate growth, said Bank of America Merrill Lynch in a report entitled “GCC 2020: Time to Shift Gears”.
The report observed that more endowed countries such as Saudi Arabia, Qatar and the UAE have better chances to outperform their regional peers in economic growth.
BofA Merrill Lynch economists said that Dubai is set on course to outperform growth projections driven by job creation, improved funding and solid execution of its diversification strategy.

FEATURE-Ex-bankers go solo in the Gulf | Reuters

After a 16-year career at Morgan Stanley Lebanese-born banker May Nasrallah detected a gap in the Middle East market for advising small companies, prompting her to leave the bank and set up her own financial advisory firm in Dubai.

Three years on, she has lured a number of her former Morgan Stanley colleagues to join her company, deNovo Corporate Advisors, which is helping small private Middle East companies that are looking for acquisitions, joint ventures or capital-raising opportunities in the region.

"We wanted to do something different to the international investment banks in that our advisory firm was created in the Middle East and our focus and strategy is entirely for the Middle East," said Nasrallah, sitting in her office on the 25th floor of Emirates Towers, a swanky office building in Dubai's financial hub overlooking the city's racecourse.

Airline rankings: Qatar gets the cream | The Economist

QATAR AIRWAYS remains the best airline in the world, according to Skytrax, a company specialising in airline and airport research which publishes annual rankings. Its top ten is dominated, as ever, by eastern carriers, with three from the Middle East, six from Asia and one from Turkey. Air New Zealand and Qantas were the only two of 2011's top ten to fail to make this year's group. The Australians' case would not have been helped, one suspects, by the strike-busting decision to ground planes last October.

The airline industry (and your blogger) gets reasonably excited about the awards because of their sheer breadth. Skytrax says it polled over 18m airline customers from over 100 countries, so it's tricky to dispute the results. The triumphant Qatari flag-carrier, which was only founded in 1993, has risen from fourth in 2009 and third in 2010 to top the rankings for two years now. It did not win any other worldwide category, but was rewarded for a strong performance across the board. Category-winners included Singapore Airlines (best economy class, though it offers a smaller seat pitch than Asiana), Cathay Pacific (best business class), Etihad (best first class) and AirAsia (best low-cost airline).

UPDATE 2-Kuwait's NBK blames political deadlock for hurting economy | Reuters

The head of Kuwait's biggest bank blasted the country's political deadlock in a rare public outburst for the Gulf Arab region, underscoring business leaders' frustration with an impasse that has delayed much needed economic development.

Kuwait has seen eight governments come and go in just six years due to bickering between the parliament and cabinet. The last government resigned in June after Kuwait's constitutional court dissolved a parliament elected in February.

Fresh elections are expected to be held after the holy month of Ramadan, due to begin later this week.

MENA stock markets close - July 18, 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)

Arab incubators help web ventures hatch -

Just over a decade after the Arab world’s first wave of internet companies began to sweep across the Middle East, entrepreneurs and investors say the infrastructure to support start-up companies in the region has never been better.
In the early days of the regional internet business in the late 1990s and early 2000s, entrepreneurs had few places to turn when seeking early-stage investment and support needed to start businesses.
A few succeeded, such as Jordan’s Maktoob, which was bought by Yahoo for $164m in 2009. But for the majority, the climate for internet start-ups was simply too harsh.

Cash-rich Islamic funds fuel wild Dubai sukuk rally | Reuters

A spectacular rally in Dubai-linked Islamic bonds is pushing yields to record lows and influencing prices in the entire Gulf debt market. Some investors think the rally has reached excessive proportions, potentially setting bonds up for a partial pull-back when the euphoria starts to fade.

Dubai's $1.25 billion sovereign sukuk, issued at a profit rate of 6.396 percent in November 2009 and maturing in 2014, was yielding just 3.2 percent on Wednesday, for example.

That is a yield plunge of about 2.35 percentage points since early February -- an impressive gain for any credit and especially for Dubai, which until recently was seen as the ugly duckling of the Gulf because of its 2009 corporate debt crisis.

MIDEAST WEEKAHEAD-Overlooked Qatar shares may surprise on the upside | Reuters

Qatar stocks have been overlooked this year during a boom in some neighbouring Gulf markets, but new financial reforms and attractive valuations could pave the way for a rebound.

Concerns about the slow pace of Qatar's massive infrastructure building programme has weighed on the Doha stock market this year.

Trading volumes have also dropped significantly since mid-June with the summer lull kicking in and initial earnings reports presenting a mixed picture for investors.

Palmer steps down from Qatar film role -

The National Bank of Abu Dhabi has announced changes in two senior roles in the management team of the emirate’s biggest lender.
Abdulla Abdul Raheem, the bank’s chief operating officer since 2003, is appointed group deputy chief executive officer. Khalaf al-Dhaheri, the bank’s general manager and deputy chief risk officer, is promoted to replace Mr Abdul Raheem as chief operating officer.
Michael Tomalin, NBAD’s chief executive, said the appointments reflected a company priority of “placing more UAE nationals at the helm of the bank”.

Qatar sets stock regulatory reforms, eases trading rule | Reuters

Qatar has announced financial reforms giving ultimate regulatory authority over the country's stock market to the central bank, lengthening the settlement time for institutions' stock trades, and expediting the creation of banks' brokerage arms.

A circular sent to financial firms this week by the Minister of Economy and Finance said the central bank had taken the place of the Qatar Financial Markets Authority (QFMA), which oversees the stock exchange, as the country's supreme stock market regulatory authority.

"It's essentially another monitoring channel placed upon the QFMA, a regulator to regulate the regulator," said Ahmed Shehada, head of trading at Qatar National Bank Financial Services.

MIDEAST MONEY-Gulf airlines set sights on Saudi skies | Reuters

Saudi Arabia's push towards an open skies policy is attracting the interest of major airlines in the Gulf and raising hopes that poor service and overbooked flights that have characterised air travel across the country could soon be a thing of the past.

More than 54 million passengers passed through Saudi Arabia's 27 airports last year, according to data from the General Authority for Civil Aviation (GACA), rising 13.6 percent from 2010.

But the kingdom, the biggest Arab economy and the largest country in the Gulf geographically, still has one of the smallest airline networks i n the region relative to its size. Saudi Arabian Airlines, the national carrier, and private low-budget carrier National Air Services (NAS) are the only options for flying within the country and they are struggling to keep up with demand.

UAE to begin construction on first nuclear plant | Al Akhbar English

Construction work can start on the United Arab Emirates' first nuclear power plant, the government said on Wednesday, opening the way for a consortium of South Korean companies to build the multi-billion dollar project.

In December 2009, the UAE awarded a group led by Korea Electric Power Corp (KEPCO) a contract to build four nuclear reactors to meet surging demand for electricity.

But Emirates Nuclear Energy Corp (ENEC) has been waiting for the license before it starts pouring concrete for the first two reactors at the Barakah site.

UPDATE 1-Oman's Bank Dhofar swings to H1 profit | Reuters

Bank Dhofar, Oman's third-largest bank by market capitalisation, swung to a net profit in the first half, after taking a one-off provision in the same period last year which pushed it into the red.

The lender made a profit of 19.5 million rials ($50.6 million) in the six months to June 30, according to a statement to the Muscat bourse on Wednesday. In the same period last year, the bank reported a 4.6 million rials loss.

First-half profits in 2011 were hit by a 26.1 million rials provision the bank took after it lost a court case with HSBC Bank Oman and Ali Redha Trading and Muttrah Holding over the ownership of 1.9 million Bank Dhofar shares.

THE DAILY STAR :: Business :: Middle East :: Saudi Arabia plans to start cross-listing foreign firms in 2013

Saudi Arabia plans to start cross-listing foreign companies on its exchange within a year, with a focus on Gulf Arab firms, as it moves closer to opening up its market to foreign investors, a senior stock market official said Tuesday. Waleed al-Bawardi, director of cash and markets at Tadawul, the Saudi exchange, said that details on disclosure requirements were being hammered out with the Capital Markets Authority (CMA) after the regulator amended listing rules in January to allow for cross-listing.

“We are working with the regulator, trying to detail the regulations for the cross-listing,” he said ahead of an event to unveil a new Tadawul initiative at the Jeddah Chamber of Commerce.

“I think within a year we can have some companies ... The initial focus could be on the [Gulf Arab] region and then we’ll see how it goes but this is still initial discussion.”