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Tuesday, 7 August 2012

Standard Chartered case highlights Middle East's challenges - The National

What a difference a month makes.

When Peter Sands, the group chief executive of Standard Chartered, was awarded Euromoney's Banker of the Year award last month, he admonished rival lenders over their ethical lapses.

"Good banking is never needed more than now," Mr Sands said at the time.

Consumer rights need to be protected | GulfNews.com

The formation of a special team to safeguard consumer rights by the Department of Economic Development in Dubai will help strengthen the consumer protection movement initiated by the government. However, this should not be done in isolation.
Most consumers in the UAE are not clear about their rights. In most cases, they are at the mercy of the salesman’s and customer service agent’s interpretation of their rights. Despite repeated campaigns by the DED, most retailers still do not adhere to the exchange policy, the return of goods policy and their customer service obligations.
Since most consumers are expatriates, they do not fight back against these violations and silently accept what is given. Customer service is the biggest source of consumer frustration in the UAE. The government could engage the consumers, retailers and the media in a nationwide campaign to promote consumer rights. For that, all the seven emirates should draft a common code relating to consumer rights so that all consumers could follow a common policy guideline. In this regard, the federal government’s Ministry of Economy could take a leadership role.

New central bank caps will curb lending growth | GulfNews.com

Already contending with the fallout from the Eurozone crisis and high provisions for bad loans, banks in the UAE face a further challenge in the second half of the year — new central bank regulations that may further curb their sluggish lending growth.
While there have been exceptions — First Gulf Bank saw its loans grow 5.9 per cent in the first half — UAE central bank data show total loans and advances in the system grew by just 1.8 per cent in the first six months of 2012.
Lending growth is a key driver of the UAE banks’ profits, and analysts fear any chance of a revival could be further delayed by a recent central bank circular that caps lending to local governments and related entities at 100 per cent of capital, with effect from end of September. Another regulation requires banks to have at least 10 per cent of their liabilities in liquid assets by the end of the year.

Emal’s first steel raised in Phase II expansion | GulfNews.com

The first structural steel for Emirates Aluminium’s (Emal) Phase II expansion was erected July 29, 2012, Emal, a joint venture between Abu Dhabi’s Mubadala and Dubai Aluminium (Dubal), said in a statement.
It is the latest milestone for the UAE flagship industrial project and brings the company another step closer to becoming one of the world’s largest single-site aluminium smelters. Once completed in 2014, the potline at the Al Taweelah site will be the longest in the world at 1.7 km,” the company pointed out.
Saeed Al Mazrooei, Emal President and CEO, said “I am pleased to see phase II progressing on schedule. This milestone which was achieved as per plan is very critical to our first hot metal date.”

DFM Index falls, ADX gains | GulfNews.com

The Dubai Financial Market (DFM) index fell again on Tuesday, though marginally, as profit-taking by investors cashing in on the market’s recent gains continued. Overall, the market index is nudging upwards, helped by some strong second quarter corporate earnings, although the downside risks remain as the economies in Europe and the US are slowing.
The volume of trade on the Dubai market fell compared to the first two days this week due to the absence of a catalyst and lack of investor interest due to Ramadan. The DFM index closed at 1,556.79, down 0.15 per cent. Around 60.92 million shares, cumulatively worth about Dh80.86 million were traded on the stock market.
Analysts say the market is well poised for a sustained rally if the global macro-economic indicators take a turn for the better and the US Federal Reserve announces a third round of quantitative easing to shore up a flagging domestic economy and the European Central bank comes out with its own quantitative easing.

NBAD bonds receives $4.3b in bids | GulfNews.com

National Bank of Abu Dhabi PJSC, the UAE’s second-biggest bank by assets, received $4.3 billion in bids for the $750 million of bonds it sold on Tuesday, according to a banker familiar with the deal.
A total of 270 investors bid for the seven-year notes, the banker said, asking not to be identified because the information is private. Forty-one per cent of the buyers were from Europe, 30 per cent from Asia, 25 per cent from the Middle East and 4 per cent from the US offshore, the banker said. Fund managers bought 52 per cent of the bonds, commercial banks 19 per cent, central banks and multilateral agencies 15 per cent, private banks and hedge funds 10 per cent, insurance and pension funds 3 per cent and others 1 per cent, the banker said.
NBAD’s bonds were priced to yield 3.043 per cent, or 180 basis points over the benchmark midswap rate, the banker said.

StanChart will not be the last bank to be stung by the US - FT.com

Standard Chartered, a British bank, has found itself on the receiving end of a bluntly worded message: do business with Iran, and the US will punish you for it. Executives at the bank are not the only ones wondering: “Who are these Americans to penalise a British bank for doing business with a third country? What gives Washington the right to strong arm European regulators into supporting US foreign policy plans?” The answer: the same Americans who do not want to see Iran develop a nuclear weapons capability but who are not prepared to provoke another Middle Eastern war by dropping bombs to destroy it.
For the past several years, market anxiety over Iran has focused on the risk of military strikes on the country’s nuclear programme. When will Benjamin Netanyahu, Israeli prime minister, give the order to drop the bombs? Will Barack Obama help? Will Iran block the Strait of Hormuz, the bottleneck through which about 40 per cent of the world’s seaborne crude oil passes each day? Are we heading towards another war in the world’s most volatile region?

Saudi Arabia is spending more than it should - IMF - Yahoo! News Maktoob

Saudi Arabia's government is spending more than it should do if it wants to preserve the country's oil wealth for future generations, the International Monetary Fund said in a report released on Tuesday.
"While the government has built significant policy buffers, fiscal spending is above the level consistent with an
intergenerationally equitable drawdown of oil wealth," the Fund said in an annual assessment of the Saudi economy.
The IMF did not specify an appropriate level of spending, but said the government should be flexible in providing social welfare benefits, broaden its tax base and ensure its expenditure was efficient.

Overheard at Iftar: deals and dining - FT.com

A huddle formed next to the row of ornate marble sinks, where men in their traditional white robes washed their hands, rolling up their crisp sleeves after the late-night feast.
Three men in dark grey suits had the sheikh surrounded. Close to his face, they got their moment to utter in lowered voices their predicament or business need, which only he could hear.
“They always catch me,” the Abu Dhabi ruling family member later joked, making light of the constant stream of people seeking financial help, government doors to be opened or investments to be considered.

FT Alphaville » A regulator gone rogue? Maybe, maybe not

At pixel time, shares in Standard Chartered were down 31 per cent from the point at which this was published — an “Order Pursuant to Banking Law No 39,” issued by the New York State Department of Financial Services.

In lurid detail, this sets out the claim that the London-based EM bank willfully evaded US sanctions against Iran over the course of a decade.

Now, quite a few people (including this correspondent) are owning up to not having heard of the New York State DFS previously. Jonathan Guthrie, in a lucid Lombard note, reckons this might partly explain the grandstanding tone of the order: the department was only created last year (by New York governor Andrew Cuomo) and needs to make a name for itself…

Egypt foreign reserves resume decline in July | Reuters

Egypt's foreign reserves resumed a steep decline that began last year when a popular uprising sent the economy into a tailspin and led the central bank to start selling dollars to prop up the country's pound.

Reserves fell last month to $14.42 billion from $15.53 billion in June, according to central bank figures released on Tuesday.

They were pulled lower by the government's repayment of a $1 billion eurobond and a $607 million payment to Paris Club lenders, the bank said on its website.

Dubai Shares Drop on Bet Rally Last Week Overdone as Qatar Gains - Businessweek

Dubai’s benchmark stock index fell for a second day on investor speculation a rally last week prompted by earnings that exceeded expectations was overdone.

Emaar Properties PJSC (EMAAR), which last week surged 5.2 percent, dropped the most since July 23. Dubai Financial Market PJSC (DFM), the only publicly traded Gulf Arab stock market, declined for a second day. The DFM General Index fell 0.2 percent to 1,556.79, the lowest level since Aug. 2, at the close in the emirate. The measure rallied 2.7 percent last week. The Bloomberg GCC 200 Index (BGCC200) gained 0.1 percent and Qatar’s QE Index rose 0.2 percent.

“The market is experiencing some slight profit-taking on selected stocks” after the rally last week, said Samer Darwiche, a Dubai-based analyst at Gulfmena Investments Ltd.

Dubai hotels boast strong jump in revenue | GulfNews.com

Hotels in Dubai have reported a strong double-digit increase in revenue per available room (RevPAR) while those in Abu Dhabi have continued on their downward spiral in the first half of the year, according to the latest report by Ernst & Young.
Year to date results of the latest Middle East Hotel Benchmark Survey Report reveal that Dubai hotels recorded a 12.7 per cent increase in RevPAR, while hotels in Abu Dhabi recorded a 11.1 per cent decrease in RevPar.
In addition, average room rates (ARR) in Dubai for the month of June were also up by 10.9 per cent compared to those in the capital’s hotels which saw rates down by 12.8 per cent.

Dubai World Tribunal aims to wind up bulk of cases by mid-2013 - Emirates 24/7

The special tribunal set up to manage disputes relating to Dubai World and its subsidiaries is looking to wind up the bulk of its cases by the middle of 2013 and thereafter continue to remain in dormant state.

“We should probably have very few active cases in the second part of next year… We are hoping to decide in the first half of next year all the cases we have so far, but more cases may or may not come in,” Sir Anthony Evans, chairman of Dubai World Tribunal and a former chief justice of Dubai International Financial Centre (DIFC) Courts, said in an interview to Arabian Business.

Dubai World Tribunal was set up in September 2009 and was designed to hear disputes relating to government-backed investment vehicle Dubai World and its subsidiaries.

MIDEAST STOCKS-Political turmoil drags Kuwait to 7-mnth low | News by Country | Reuters

Kuwait's bourse slumped to a seven-month low after members of parliament again boycotted a session of the country's assembly on Tuesday, foiling an attempt to swear in a new cabinet and further highlighting the political travails hampering the state.

The move, the second such boycott in a week, makes the assembly's dissolution and further elections - Kuwait has seen eight governments come and go in just six years - more likely.

The political stagnation is blamed for delaying much needed economic development, with the head of Kuwait's largest bank slamming the deadlock last month in a rare public outburst for the Gulf Arab region.

MENA stock markets close - August 7, 2012

 ExchangeStatus IndexChange  
 
 TASI (Saudi Stock Market)
 
6961.340.25%  
 
 DFM (Dubai Financial Market)
 
1556.79-0.15%  
 
 ADX (Abudhabi Securities Exchange)
 
2510.870.24%  
 
 KSE (Kuwait Stock Exchange)
 
5708.57-0.41%  
 
 BSE (Bahrain Stock Exchange)
 
1090.540.00%  
 
 MSM (Muscat Securities Market)
 
5433.65-0.01%  
 
 QE (Qatar Exchange)
 
8365.280.24%  
 
 LSE (Beirut Stock Exchange)
 
-
 
1143.950.00%  
 
 EGX 30 (Egypt Exchange)
 
5049.510.55%  
 
 ASE (Amman Stock Exchange)
 
1875.240.41%  
 
 TUNINDEX (Tunisia Stock Exchange)
 
5221.5-0.29%  
 
 CB (Casablanca Stock Exchange)
 
9852.83-0.16%  
 
 PSE (Palestine Securities Exchange)
 
440.40.12%