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Monday, 1 October 2012

The IMF's Interest Rate Is Low, But Can Egypt Really Afford It? - Al-Monitor: the Pulse of the Middle East

The fact that the interest rates on the loans provided by the International Monetary Fund (IMF) are small does not mean that we should be rushing to borrow from them. Our attitude towards borrowing from this fund should not depend on the interest rate. Rather, it should depend on the results that would come about as a result of this agreement.
 
It is true that the interest rate offered by the IMF is very low — both by domestic and international standards — and that the repayment plan is the most affordable plan available in the world's monetary market.

Saudi Banks May Double Property Lending Amid New Laws, NCB Says - Businessweek

Saudi Arabia’s banks may double real- estate financing this year as the biggest Gulf Arab economy overhauls mortgage rules and demand for housing increases, National Commercial Bank said.

Financing may climb to 60 billion riyals ($16 billion) from 29.3 billion riyals in 2011, economists Said Al Shaikh and Albara’a Alwazir said in a research report. Total housing stock may expand by 2.4 million units in the next 10 years, with annual demand rising to 264,000 units by 2020 from 195,000 in 2011, they said. National Commercial Bank, which is owned by the government, is the biggest lender in the kingdom.

“This significant growth in real-estate bank lending highlights a historical shift away from the conservative lending that has been practiced in previous years,” they wrote. “The mortgage market, upon the implementation of the mortgage law, has the potential to attract non-bank lenders.”

UAE's First Gulf Bank launches five-year $650 million bond | Reuters

Abu Dhabi-listed First Gulf Bank FGB.AD launched a $650 million five-year bond on Monday, the first major Gulf borrower to issue since the traditional summer lull, taking advantage of healthy investor demand for regional debt.

The bond launched at a spread of 210 basis points over midswaps, at the tighter end of final guidance released earlier in the day, indicating appetite for the lender's new issue was strong.

Order books had approached $3 billion ahead of launch, a banker familiar with the deal said, allowing FGB to issue $650 million. The borrower had indicated it would look to raise at least $500 million from the bond sale, which it said would be used for general funding purposes.

Mining merger mess - YouTube

UPDATE 1-Egypt talks on $4.8 bln deal with IMF delayed - Yahoo! News Maktoob

Egypt's negotiations for a $4.8 billion loan from the IMF have been delayed to give the government more time to draw up its economic reform programme, the two sides said on Monday.
Egypt was due to receive a team from the International Monetary Fund at the end of September to discuss the terms of the loan. It urgently needs financial support to prop up state coffers weakened by economic turmoil since the popular uprising last year that ousted President Hosni Mubarak.
"The authorities are working on their economic programme and have indicated that they need some additional time to advance their preparations and be ready to receive a mission," IMF spokeswoman Wafa Amr said in emailed statement on Monday. "We are ready to send a technical team to Cairo to discuss possible financial support for a homegrown programme as soon as this process is completed."

MENA stock markets close - October 1, 2012

 ExchangeStatus IndexChange  
 
 TASI (Saudi Stock Market)
 
6882.120.62%  
 
 DFM (Dubai Financial Market)
 
1608.941.91%  
 
 ADX (Abudhabi Securities Exchange)
 
2634.921.13%  
 
 KSE (Kuwait Stock Exchange)
 
5974.68-0.13%  
 
 BSE (Bahrain Stock Exchange)
 
1078.72-0.79%  
 
 MSM (Muscat Securities Market)
 
5562.910.52%  
 
 QE (Qatar Exchange)
 
8522.680.15%  
 
 LSE (Beirut Stock Exchange)
 
1117.210.15%  
 
 EGX 30 (Egypt Exchange)
 
5650.07-2.95%  
 
 ASE (Amman Stock Exchange)
 
1910.030.39%  
 
 TUNINDEX (Tunisia Stock Exchange)
 
4928.95-0.65%  
 
 CB (Casablanca Stock Exchange)
 
9455.64-0.17%  
 
 PSE (Palestine Securities Exchange)
 
438.86-1.55%  


FT Alphaville » A Qatari sub-plot?*

A few nervous bid arbitrageurs have their eyes are on the Qataris right now — wondering, expectantly, whether the Gulf state’s sovereign wealth fund will now support the takeover merger of equals between Glencore and Xstrata.

The Glenstrata share ratio has been hiked and the Qataris, it is assumed, don’t really care about the size of retention bonuses at Xstrata. But a public endorsement of the deal was noticeably lacking on Monday…

That leaves us room to share the following speculation, which may or may not have a material impact on Glenstrata actually becoming a reality.

MIDEAST STOCKS-Abu Dhabi property merger talks lift UAE; most Gulf mkts up - Yahoo! News Maktoob

Shares in Abu Dhabi's two largest property companies surged on Monday ahead of their planned merger, lifting the UAE capital's bourse to a seven-month high, while other Gulf markets also gained.
Sorouh Real Estate jumped 5.1 percent to 1.26 dirhams ($0.34) and Aldar Properties climbed 4.8 percent to 1.34 dirhams.
On Sunday, a senior Sorouh executive said a merger agreement announcement with Aldar was expected "within a month." "For Aldar, breaking the 1.30 level gives it a target of 1.47 dirhams," said Nabil Al Rantisi, managing director at MENA Corp. "Sorouh's next target is 1.38 dirhams."

Turkey: world’s most expensive petrol underlines policy challenges | beyondbrics

Turkey won itself a dubious honour at the weekend: a fuel tax hike made it the mainstream economy with the most expensive petrol in the world. It all depends on the vagaries of the exchange rate of course, but the new price of TL4.83 a litre, or €2.08, outstrips Norway’s €2.06, according to AFP, leaving other high fuel tax economies such as Italy, the Netherlands and Spain some way behind.

Then the government followed by increasing gas and electricity rates by 10 per cent on Monday.

Such increases serve a twin purpose in Turkey, albeit at the risk of stoking inflation: they reduce the country’s current account deficit, more than 80 per cent of which is accounted for by energy imports, and also help plug the country’s much smaller budget deficit.

WAM | ADIA appoints Head of Principal Investments, Private Equities Department

The Abu Dhabi Investment Authority (ADIA) announced today the appointment of Colm Lanigan as Head of Principal Investments in its Private Equities Department, with immediate effect.

In this new role, Lanigan will be responsible, alongside senior management, for developing strategy and overseeing the execution and management of principal investments, in which ADIA acquires equity stakes in private companies, typically alongside private equity sponsors or partners. Based in Abu Dhabi, Lanigan will report to Hareb Al Darmaki, Executive Director of ADIA's Private Equities Department.

With over 20 years of public and private markets experience, Lanigan's career has included senior roles in some of the world's largest and most respected financial institutions. Most recently, he served as Managing Partner of Tara Capital, a boutique private equity firm that he started in 2005. Prior to this, he was a partner at Caxton-Iseman Capital, the private equity affiliate of hedge fund Caxton Associates, where he helped to expand the firm's principal investment business.

Kuwait should take measures to cut spending: central banker | Reuters

Kuwait's government should take all necessary measures to cut spending and current monetary policy settings are in line with economic developments, Central Bank Governor Mohammad al-Hashel said on Monday.

"We think it (the government spending) is very high and we should take all the necessary actions to reduce the current expenditure and spend more on investment and capital expenditure because this is the way for the future and we have to secure sufficient funds for future generations in order to continue the prosperity of our country," he told reporters.

Hashel, who spoke after a meeting of Arab central bank governors in Kuwait, also said he will not hesitate to change policy settings when needed and that the OPEC member's economy could grow 5-6 percent this year.

STOCKS NEWS MIDEAST-Banks rebound as Saudi index rises for 2nd day - Yahoo! News Maktoob

Saudi Arabia's index is up for a second day since Saturday's one-month low as bargain hunters target banking and cement stocks.
Samba Financial Group and Riyad Bank each add 0.7 percent, while regional heavyweight Al Rajhi Bank
gains 1.1 percent.
"Sentiment is still strong on locally-driven sectors," says Hesham Tuffaha at Bakheet Investment Group head of asset management. "Banks are doing well. There is the upcoming mortgage law to be implemented - it will take time for banks to benefit, but there will be stronger growth in 2013 compared to this year."

UPDATE 1-UAE's First Gulf Bank eyes 5-yr bond issue, launch soon - Yahoo! News Maktoob

Abu Dhabi-listed First Gulf Bank plans to issue a five-year, benchmark-sized dollar-denominated bond imminently, arranging banks said on Monday.
Early price talk was seen at 220 basis points over midswaps but market sources expect this to tighten at launch, although this will depend on demand for the deal.
FGB's existing 2017 maturity - a $500 million Islamic bond, or sukuk, - was yielding about 2.7 percent on
Monday, according to Thomson Reuters data, at a spread of about 207.6 basis points.

FT Alphaville » The Glenstrata fudge

Here’s the key bit from Monday’s confirmation that Xstrata’s independent directors are once again recommending merger terms from Glencore…

1.   To approve the New Scheme subject to the resolution to approve the Revised Management Incentive Arrangements to be put to the Further Xstrata General Meeting being passed.  The Independent Xstrata Non-Executive Directors intend to recommend unanimously that eligible Xstrata Shareholders vote in favour of only this resolution at the New Court Meeting; and
2.   To approve the New Scheme subject to the resolution to approve the Revised Management Incentive Arrangements to be put to the Further Xstrata General Meeting not being passed.

Business - FDI to Dubai jumps 7% in H1

Signalling the strong resurgence of investor confidence in Dubai’s economic growth, foreign direct investment, or FDI, to the emirate recorded a seven per cent jump in the first half of this year.
Dubai FDI, the foreign investment office at the Department of Economic Development, said on Sunday the emirate drew Dh16.5 billion in FDI during the first six months of 2012.

Statistics compiled by Dubai FDI showed that during the first half, 113 companies initiated 115 FDI projects. January saw the highest average capital investment while the highest number of projects in a single month — 26 — was recorded in April 2012.

U.A.E. Central Bank Won’t Extend Deadline for Loan Cap - Businessweek

The United Arab Emirates won’t extend its deadline for banks to comply with new rules that cap lending to governments and state enterprises, said Saif Al Shamsi, assistant governor at the central bank.

“The decision stands as is,” though each bank will be dealt with individually, Al Shamsi told reporters in Kuwait today. The deadline expired yesterday.

The U.A.E. central bank said April 4 that banks must not lend more than 100 percent of their capital to local governments and the same amount to government-related entities to help reduce risk. There was no limit under previous rules.

Libya says pushing forward with Islamic finance plans | Reuters

Libya hopes to start implementing its new Islamic banking law by the end of the year and expects strong demand among the public for sharia-compliant financial services, Libyan central bank governor Saddek Omar Elkaber said on Monday.

The country approved an Islamic banking law in May and has been working to amend its legislation to attract foreign investment and stimulate its private sector following last year's war that ousted Muammar Gaddafi.

"The demand is so high in Libya so we set up a higher committee for Islamic finance...Now they are working to set up a road map for Islamic finance in Libya," Elkaber told reporters on the sidelines of an Arab central bankers' conference in Kuwait.

Qatar's Barwa Bank eyeing potential Doha IPO: CEO | Reuters

Qatari lender Barwa Bank is planning an initial public offering on the Doha stock exchange and is being advised by local investment bank QInvest in the process, Barwa's top executive said on Monday.

"We have been working with QInvest on a listing advisory relationship for quite some time," Chief Executive Steve Troop told Reuters by phone, declining to give specific details.

Barwa Bank is 37.3-percent owned by Barwa Real Estate Co BRES.QA while Qatar Holding, the investment arm of the Gulf state's sovereign fund, has a 12.1 percent stake. The remaining shares are owned by several individuals and corporates, according to the lender's 2011 results.

John Templeton’s Investment Rules | PRAGMATIC CAPITALISM

Here’s a good list of legendary investor John Templeton’s investment rules.  Barry Ritholtz has more details on each rule at his site, but the summary is below.  It’s a nice addition to our growing list of rules and guidelines.

1. Invest for maximum total real return
2. Invest — Don’t trade or speculate
3. Remain flexible and open minded about types of investment
4. Buy Low
5. When buying stocks, search for bargains among quality stocks.
6. Buy value, not market trends or the economic outlook
7. Diversify. In stocks and bonds, as in much else, there is safety in numbers
8. Do your homework or hire wise experts to help you
9. Aggressively monitor your investments
10. Don’t Panic
11. Learn from your mistakes
12. Begin with a Prayer
13. Outperforming the market is a difficult task
14. An investor who has all the answers doesn’t even understand all the questions
15. There’s no free lunch
16. Do not be fearful or negative too often


Will the Dubai property market trust a major off-plan launch by a foreign developer? « ArabianMoney

The huge Indian real estate developer Sobha is to launch a billion-dollar mega project at the Cityscape Global 2012 property show in Dubai this week. To be known as the Meydan Sobha City this middle-class district will comprise 280 villas, 13 towers, low-rise apartments, a shopping mall, hotels, retail complex and schools.

It will be in a secondary location between the Al Khail and Emirates Road next to the Meydan Godolphin Parks, 15 minutes from Dubai International Airport, Emirates 24/7 website reported. Officials said construction work would begin early next year. Sobha, however, is well known to Indians who are the biggest buyers of Dubai property and often treat the emirate as an offshore Indian real estate market.

Xstrata, Glencore make headway in takeover talks | GulfNews.com

Xstrata Plc is set to recommend shareholders vote in favour of a £20.5 billion (Dh121.68 billion or $33 billion) sweetened takeover offer by Glencore International Plc after revising the voting structure and winning assurances it will have a majority of the board.
Xstrata, the largest exporter of coal used by power stations, will make changes to secure the loyalty of top managers and balance investor demands, in order to create the world’s fourth-largest mining company, according to a person familiar with the deal, who asked not to be identified as the talks are private.
Glencore earlier this month raised its offer to 3.05 of its shares for each one in Xstrata from 2.8, after investors said the original bid undervalued the Swiss mining company. The Baar, Switzerland-based commodities trader invited Xstrata to propose changes to the bonus package to ensure shareholder backing for the year’s biggest takeover.