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Tuesday, 24 July 2012

The one capitalism that dare not speak its name |

On December 26, 1992, a year after the Soviet Union imploded and lurched to embrace American-style capitalism, the Economist editorialised about a “universal agreement that there was no serious alternative to free-market capitalism as the way to organise economic life.”
Since its origins in mid-19th century Britain, the Economist has been the main propaganda organ for the neoclassical ideology of the free market (minimal government, invisible hand, etc). It is the job of all ideologues to make their own preferred political and economic system seem natural and perfect. Still, someone in that 1992 editorial meeting ought to have said, “Not so fast.”
In a special report on state capitalism last January, the Economist admitted that “the era of free-market triumphalism has come to a juddering halt.”

Dubai shares gain as bargain hunters return |

Dubai’s bourse halted three sessions decline to close 0.78 per cent higher at 1,505.02 as bargain hunters returned to the floor.
Among the gainers, Ekttitab rose 4.64 per cent to close at Dh0.879, followed by Dubai Investment by 1.85 per cent to Dh0.717 and Emaar by 1.58 per cent to Dh3.21.
Among the losers, Depa fell 5.26 per cent to $0.360, followed by DP World by 3.74 per cent to $10.30 and Dartakaful by 2.66 per cent to Dh0.548.

Mideast hotels’ occupancy and room rates improve in first half of 2012 |

Middle East hotels saw occupancy and average room rates improve in the first half of the year, boosted by double-digit demand growth compared to the first six months in 2011, according to the latest study by STR Global. It revealed that the 2012 year-to-date data for the hotels across the broader Middle East and Africa (MEA) region, however, showed a 9.4 per cent occupancy increase to 60.6 per cent, a 1.5 per cent ADR (average daily rate) decrease to $162.37, and a 7.7 per cent rise in RevPAR (revenue per available room) to $98.38, over the same period last year.
In June 2012 alone, hotel occupancies in MEA recorded a double-digit growth with RevPAR rising 6.8 per cent to $79.22 for the region’s hotels. Occupancy increased 8.7 per cent to 58.2 per cent during the month, while the average daily rate (ADR) fell 1.8 per cent to $136.16.

Safest Bank Rises in Qatar Spreading Wealth: Riskless Return - Bloomberg

As politicians around the world take steps to curb profits at the biggest lenders, Qatar National Bank SAQ (QNBK) is producing the best risk-adjusted returns by increasing ties with the government, its largest customer.
Shares of the Doha-based lender returned 4.3 percent in the past five years after adjusting for price swings, the top gain among the 50 biggest banks by market capitalization, according to the BLOOMBERG RISKLESS RETURN RANKING. Qatar National Bank, valued at $25 billion, had the highest total return and the third-lowest volatility.
The lender, whose chairman is also the country’s finance minister, has become 50 percent more profitable than global peers by luring deposits from government-backed savers and lending to government-backed borrowers as Qatar spends about $130 billion to prepare for the 2022 soccer World Cup. Political ties are fueling Qatar National Bank’s growth while China and Brazil cut loan margins, U.S. (S5FINL) lawmakers curb trading and European (SX7P) leaders call for a financial-transaction tax.

HSBC, OIB merger brings banking in Oman to global stage | Oman Observer

As the operations and technology systems of two leading banking players, Oman International Bank and HSBC, gradually integrate to become one, customers will have access to a full range of award-winning retail banking and wealth management products and services through state-of-the-art delivery channels such as a phone banking and personal Internet banking services by the end of the year.
They will also be able to make best use of a newly-expanded network of 90 branches and 143 ATMs conveniently situated across the Sultanate.

Shoeshiners buff rueful reflection of DIFC's shortage of choice gossip - The National

I do feel sorry for the shoeshine boys in the Dubai International Financial Centre these days.

Most of the year, as I can see from Caribou Coffee in the central concourse, they are a blur of activity, with a constant stream of customers hopping up into the elevated armchairs with the steel footrests.

The typical punter is, literally, a well-heeled investment banker type for whom a few thousand dirhams on a pair of office shoes is commonplace. The shoeshine team must be experts on the finest in men's footwear.

Islamic finance's fortune turns in Egypt - The National

When Ahmed El Naggar opened the world's first Islamic bank in Egypt in 1963, the country looked as if it could harness that legacy to grow into one of the biggest Islamic finance hubs in the world.

But years of suspicion that the Muslim Brotherhood, illegal at that time, would use Islamic finance as a way to gain prominence in the country has left Egypt trailing behind its Arabian Gulf neighbours mainly because no tight regulation or laws have been implemented.

As Egypt's first Islamist president Mohammed Morsi takes the helm, the country's Islamic finance fortunes are beginning to look up.

Baghdad flexes muscles to bar Chevron over Kurdish oil deal - The National

Baghdad has barred the US oil company Chevron from bidding for Iraq government contracts after the super-major bought into the Kurdish autonomous region's oil sector.

Chevron last week acquired an 80 per cent stake in two Kurdish oil fields from India's Reliance Industries. It followed a similar move by ExxonMobil - the world's biggest oil company by market capitalisation -which bought the rights to six fields in November.

The Iraqi government considers contracts signed with the Kurdish Regional Government (KRG) as illegal and has blacklisted companies already active in Kurdistan, including Exxon. "Chevron is barred from any agreement or contract with the federal ministry of oil and its companies …unless it retreats from the contract it signed in Kurdistan region," Iraq's oil ministry said yesterday.

Qatar raises stakes with more Xstrata share buying | Reuters

Qatar, the second-largest shareholder in takeover target Xstrata, has again raised the stakes in its standoff with suitor Glencore, announcing for the second day in a row that it has bought shares, taking its holding to over 11 percent.

Qatar Holding bought shares consistently after commodities trader Glencore's $26 billion all-share bid for Xstrata was announced in February, lifting its stake from 3 percent to almost 11 percent, but the buying stopped after sovereign wealth fund's surprise announcement in June that it was demanding improved terms to support the deal.

It only resumed buying on Friday, in a purchase announced Monday, and it returned to the market on Monday, according to a regulatory filing on Tuesday.

Abu Dhabi to build first commercial jet by 2018

Abu Dhabi will become the first Arab city to manufacture a commercial airplane in a business venture announced by United Arab Emirates aerospace company Mubadala, which plans to build an aircraft by 2018.

Mubadala hopes to make the UAE capital a global aerospace center, joining forces with Italy’s Piaggio Group, Homaid El Shemmari, chief executive of Mubadala aerospace company said this week.

Mubadala acquired a 31.5 percent stake in Piaggio, which specializes in the production of aircrafts and spare engines and component materials for aircraft structures.

Top UAE lenders beat Q2 estimates, raise hope for future - Yahoo! News Maktoob

The three largest lenders in the United Arab Emirates on Tuesday posted estimate-beating second-quarter profit as increased net interest and Islamic financing income boosted revenues and provisioning fell.
Analysts said the results pointed to steady future growth in a sector which in recent years has been hampered by high provisioning, in particular on exposure to Dubai state-linked entities.
Emirates NBD, Dubai's largest bank, posted a fourth straight drop in quarterly profits on Monday due to further provisioning against Dubai Holding.

MENA stock markets close - July 24, 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)

UPDATE 1-Abu Dhabi Commercial Bank Q2 profit beats estimates | Reuters

Abu Dhabi Commercial Bank's (ADCB) second quarter profit topped forecasts on Tuesday thanks partly to steeply lower provisions.

The United Arab Emirates' third biggest lender by market value posted net profit of 733 million dirhams ($199.6 million) for the three months ended June 30, down from 1.3 billion dirhams in the prior-year period.

In the second quarter last year, ADCB booked a $357-million one-time gain on the sale of its 25-percent stake in Malaysia's RHB Capital to Abu Dhabi fund Aabar Investments.

UPDATE 1-National Bank of Abu Dhabi Q2 profit edges up, meets estimate | Reuters

National Bank of Abu Dhabi , the largest lender by market value in the United Arab Emirates, reported a 2-percent rise in quarterly profit on Tuesday due to higher net interest income, meeting forecasts.

NBAD had second-quarter net profit of 1.05 billion dirhams ($284.8 million), up from 1.03 billion dirhams in the same period a year earlier, the bank said in a statement.

Analysts had forecast an average profit of 1.031 billion dirhams in a Reuters poll.

STOCKS NEWS MIDEAST-Emaar snaps 3-day decline; UAE mkts end mixed - Yahoo! News Maktoob

Dubai's bellwether Emaar Properties halts a three-day decline as bargain hunters return, while UAE markets end mixed and Qatar ends at a 12-day low. Shares in Emaar rise 1.6 percent to 3.2 dirhams per share. The stock is up 24.9 percent year-to-date and has rallied in recent weeks on the back of earnings optimism.
Three analysts polled by Reuters expect the developer to post an average profit of 516.3 million dirhams ($140.6 million), which would be a 106 percent increase on the year-earlier period. 
"Emaar's next short-term target is 3.27 (dirhams) and in the long-term you should see it around 3.33 to 3.50," says Amjad Bakir, head of MENA CORP Securities.

The Unfinished Story of Iraq's Oil Law: An Interview with Greg Muttitt

“No Blood For Oil” was a slogan featured on many a sign in demonstrations during the run up to the US-led invasion of Iraq, and throughout the early years of the occupation as global opposition to it grew. But as Iraq faded from the headlines in 2009, the struggle over its oil continued. In the following interview, Greg Muttitt, investigative journalist and author of the groundbreaking Fuel on the Fire: Oil and Politics in Occupied Iraq (2012), discusses the attempts by occupying forces, multinational oil giants, and newly minted Iraqi “leaders” to privatize Iraq’s oil. Having worked directly with Iraq’s oil unions, Muttitt also describes the heroic role that Iraqi civil society played in challenging these efforts, how it all shook out and where it might be headed today, at an especially sensitive moment when the Iraqi labor movement is facing a series of fresh attacks. The audio interview was conducted on 13 July 2012, and what follows is an edited transcript.

TEXT-Fitch affirms Kuwait at 'AA'; outlook stable | Reuters

Fitch Ratings has affirmed Kuwait's Long-term foreign and local currency Issuer Default Ratings (IDR) at 'AA'. The Outlooks on both ratings are Stable. Fitch has simultaneously affirmed Kuwait's Country Ceiling at 'AA+' and Short-term foreign currency rating at 'F1+'.

Kuwait's 'AA' ratings are primarily supported by its strong sovereign net foreign assets (SNFA), estimated by Fitch at USD323bn in 2011 (equivalent to 191% of GDP). These result from double-digit budget surpluses registered every year since 1999 thanks to receipts from the country's large oil reserves (6.1% of total world oil reserves). However, exposure to the oil sector (half of GDP, 83% of government revenue and 78% of CXR) is a vulnerability, given oil price volatility and regional geopolitical threats. Difficulties in reaching agreement at the political level have frustrated efforts to diversify away from oil.

Kuwait outlook upgraded from neutral to positive

Kuwait Financial Centre “Markaz” recently released a semi-annual review of its “What to expect in 2012” report in which the authors review the first half of 2012 and project the remainder of 2012 based on an assessment of various drivers that affect the performance of GCC stock markets. The first half of 2012 was mostly about markets reacting to events in the developed world. The regional markets clearly lacked major triggers except for the disappointment from MSCI, which came in June.

Market talks, early in the year, about Saudi Arabia allowing foreign investor participation did not see any constructive development as well. Concerns about Chinese hard landing also affected market sentiment due to its impact on commodity demand. Anemic growth in developed countries, combined with slowdown in emerging markets (especially China) pushed down Oil prices in the first half. Brent Crude lost 8.9% in the first half after a good 14.4% rally in the first quarter.

No need for bonds to fund fiscal deficit: Hamdan - Zawya

The UAE does not need to issue sovereign bonds to finance a small deficit in its 2012 budget as it will use its own financial resources to bridge the shortfall, according to the Minister of Finance.

Sheikh Hamdan bin Rashid Al Maktoum, Dubai's deputy ruler, said the Ministry of Finance has completed studies on the proposed public debt law and it would be presented to the federal cabinet for further study and endorsement.

In a statement published on the Ministry's website, Sheikh Hamdan said the public debt draft law is on par with international standards, including those recommended by the World Bank and the International Monetary Fund.

UPDATE 1-UAE First Gulf Bank Q2 net profit up 14 pct, beats estimates | Reuters

First Gulf Bank, the second-largest lender by market value in the United Arab Emirates, posted a 14 percent rise in second-quarter net profit on the back of increased lending and a better net interest margin, beating analysts' forecasts.

The lender, majority-owned by Abu Dhabi's ruling family, made a net profit of 1.02 billion dirhams ($278 million) for the three months ended June 30, compared with 890 million dirhams in the prior-year period, it said on Tuesday.

Analysts polled by Reuters had estimated an average profit of 950.1 million dirhams for the second quarter.

TABLE-Qatar C/A surplus shrinks to $9.9 bln in Q1 | Reuters

Qatar's current account surplus shrank to 36.1 billion riyals ($9.9 billion), or 20.5 percent of gross domestic product, in the first quarter of 2012, the central bank's preliminary data showed on Tuesday.
The OPEC member booked a surplus of 38.0 billion riyals in January-March 2011, or 26.9 percent of GDP.