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Wednesday, 10 October 2012

Promoting Entrepreneurship in the Gulf Region -

On a recent Thursday evening, ahead of the Islamic weekend, the newest cafe-office space in Dubai, Make business hub, was busy and buzzy. About 60 guests from the United Arab Emirates and nearby countries were being courted by seven international start-ups, who were presenting their business plans in the hope of attracting angel investors and venture capital funding.
The start-ups had been discovered by SeedStartup, a venture capital fund and start-up accelerator program based in Dubai. “We invest between $20,000 and $25,000 in businesses we believe have potential and take a 10 percent equity,” said Rony el-Nashar, the founder of SeedStartup. “It’s a higher risk we’re taking, because we’re investing in essentially nothing.”

Saudi Arabia: Office space glut in prospect -

Saudi Arabia’s King Abdullah Financial District is being built to reflect the size of the country’s economy, which dwarves all others in the Arab world. But unlike its Gulf neighbours that are desperate to attract foreign institutions to their capitals, Riyadh just needed more high-grade office space.
The financial district, still under construction, looms on the outskirts of the capital, Riyadh, which is a sprawling low-rise city that grew faster than the government’s planners had time to anticipate. Basic infrastructure remains poor, jamming the streets with traffic as workers commute to the centre.

Qatar: Campaign to attract portfolio managers -

When the Qatar Financial Centre was launched in 2005, it took aim at Dubai’s fledgling operation, hoping that Doha’s superior financial firepower would lure banks away from the emirate.
For the next five years, Doha was locked in a losing battle to bring in institutions from banks to insurers.
In 2010, however, it downsized its staff and set about a more targeted strategy, focusing on asset management and reinsurance.

United Arab Emirates: Dubai’s dual purpose role is cemented -

Ashok Aram, chief executive of Deutsche Bank in the Middle East, describes Dubai as a trading collar serving two financial purposes: a call option on the oil wealth of the Gulf and put option on the region’s instability.
If oil prices remain high, Dubai benefits as the prime location to recycle petrodollars. If instability in the Middle East worsens, the city retains its status as a haven and launch pad for the oil-rich region, thanks to its stellar infrastructure.
The Dubai International Financial Centre (DIFC), which hosts non-retail financial services and related businesses, was, before the Arab uprisings, emerging as the region’s pre-eminent financial centre.

Bahrain: Hopes pinned on niche role -

Even before last year’s political upheaval shocked Bahrain’s financial sector, its traditional strengths were waning. Dubai and Doha had started to encroach on its growth as they launched their own financial hubs, with western-style regulators and courts, to attract the cream of global banking.
Bahrain is still struggling to recover from the aftermath of unrest that reached its peak in March 2011 as bankers were caught in tear gas clouds and police clashed with stone throwing youths.
Since protesters were cleared from the city centre 18 months ago, instability has continued to dog the island amid violence in the districts dominated by majority Shia residents who have led calls for more democracy from the Sunni-led government.

Egypt proposes mortgage law changes to boost home ownership | Reuters

Egypt's financial regulator has proposed changes to the mortgage law to allow remortgaging and higher borrowing levels for people on low incomes, in a drive to boost home ownership in the country of 83 million.

However, Ashraf el-Sharkawy, chairman of the Egyptian Financial Services Authority (EFSA), announcing the proposals on Wednesday, said that no changes could go ahead until they were approved by a yet-to-be-elected parliament to replace the one dissolved this year. No election date has been set.

Conservative lending rules and red tape have long been blamed for holding back development of the mortgage sector in Egypt. As well as helping more people to buy their own home, particularly poorer Egyptians, economists say a more active mortgage industry would boost the economy.

Dubai is back to its grand designs -

From plans for a giant replica of the Taj Mahal to the prospect of leafy suburbs being torn up to extend its creek, Dubai is rekindling projects that evoke memories of flamboyant pre-crisis times.
These projects, though eyecatching, are a concern for investors, who worry that the emirate might not have learnt from the bursting of its huge real estate bubble in 2008.
Dubai has only recently regained the confidence of financiers. The cost of insuring its debt fell below 300 basis points on September 6 for the first time since its 2009 debt crisis.

Alcoa/Bahrain legal deal raises questions over Middle East commission payments | beyondbrics

Alcoa’s settlement of a landmark US lawsuit brought by Bahrain’s state-controlled aluminium company over alleged corruption is a deal that will reverberate around the Gulf – and far beyond the metals industry.

The agreement announced on Tuesday – under which Alcoa will pay Aluminium Bahrain (Alba) $85m – has thrown a fresh spotlight on the commission payments at the heart of a growing number of probes into western multinationals operating in the Middle East. It has also opened the way for other companies to come to The US courts with claims that they have been ripped off by western multinationals involved in bribery.

Alba had accused Alcoa of overcharging it by more $400m for raw materials over a 12 year period and of recycling some of the money to pay millions of dollars of bribes to officials in Bahrain. Alcoa, which denied liability, said the settlement was the “best possible outcome” of the dispute, avoiding the “time and expense of complex litigation”.

Saudi Hollandi Bank Q3 net profit up 5.9 percent, beating view - Yahoo! News Maktoob

Saudi Hollandi Bank posted an 5.9 percent rise in its third-quarter net profit, beating analyst expectations, it said in a bourse statement on Wednesday.
The kingdom's eighth-largest lender, said that it made 317 million riyals ($85 million) compared with 299 million riyals in the three months ending September 30.
Six analysts surveyed by Reuters forecast the firm to post, on average, a net profit of 292 million riyals.

MIDEAST STOCKS-Egypt rallies on econ sentiment; Gulf mixed - Yahoo! News Maktoob

Egypt's index rebounded strongly on Wednesday after two sessions of declines as positive sentiment generated by government efforts to reassure investors over President Mohamed Mursi's plans for the economy buoyed sentiment.
But Gulf markets were muted amid low volumes as investors preferred to remain on the sidelines in anticipation of quarterly results and global economic worries.
In Egypt, the benchmark climbed 3.4 percent as remarks by ministers at a Cairo conference helped allay unease
generated by Mursi's weekend pledge to recover 1 billion Egyptian pounds ($164 million) from firms operating in Egypt.

ArabNet - Egypt Based Ecommerce Retailer Jumia Receives Funding from J.P. Morgan Asset Management, one of Africa’s fastest growing e-commerce retailers, announced today an investment by J.P. Morgan Asset Management. The investment will go towards strengthening Jumia’s current footprint, improving operations, and offering more brands, more categories and more services according to Head of Public Relations Lamis Dessouky. J.P. Morgan Asset Management also announced that it has invested in Zando, a leading online fashion retailer in South Africa.

Jumia, which launched in Egypt in the spring of 2012 with the support of the leading e-commerce ventures incubator Rocket Internet, currently operates in Egypt, Morocco and Nigeria, and plans to expand in additional countries in the coming months. The site offers a wide range of general merchandize categories including fashion apparel, shoes, electronics, mobile phones, books, toys and beauty products. “This investment confirms that Egypt will become a very large market in the very near future,” explains Lamis.

MENA stock markets close - October 10, 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)

STOCKS NEWS MIDEAST-Gulf mkts mixed; Oman down - Yahoo! News Maktoob

Most Gulf markets end mixed, but trading volumes across the region are muted due to a combination of local and global factors.
Oman's index sheds 0.3 percent to end at 5,648 points, but local and foreign institutional investors remain on
the sidelines.
"There was minor profit booking in the market today, but there was a lack of contributions from local and foreign
institutions. This trend might continue for one or two days but the fundamentals of the market are positive," says Adel Nasr, at United Securities in Muscat.

UPDATE 1-Saudi SABB Q3 net profit rises 4.1 pct; misses view - Yahoo! News Maktoob

Saudi British Bank (SABB) posted a 4.1 percent rise in its third quarter net profit on Wednesday, missing analysts forecasts, as increased operating expenses hurt earnings growth.
SABB, the kingdom's fourth largest listed bank by market value and an affiliate of HSBC, posted net earnings of
656 million riyals ($175 million) in the three months ending September 30, compared with 630 million riyals in the same period last year.
Nine analysts polled by Reuters had pencilled in profit of, on average, 815 million riyals.

Morocco delays $1 bln sovereign bond sale: minister | Reuters

Morocco has delayed its maiden dollar bond sale to end-November pending market stability, the budget minister said in published remarks on Wednesday, but banks have already been mandated for an issue that may exceed the initial $1 billion mark.

The delay's announcement, carried by L'Economiste newspaper, comes amid intense speculation King Mohammed would soon make a rare official tour of the Gulf Arab region from where Rabat hopes to raise a substantial share of the issue.

Initially estimated at $700 million-$1 billion, the cash-strapped country now says it may go for more.

Awaiting the Iraqi oil rush | FT Alphaville

Over the current decade, Iraq accounts for around 45% of the anticipated growth in global output. Iraq becomes a key supplier to fast-growing Asian markets, mainly China, and by the 2030s Iraq is the second-largest global oil exporter, overtaking Russia.
That’s the main conclusion of the International Energy Agency’s special report on Iraq published on Tuesday.

The agency expects production to more than double to 6.1 mb/d by 2020 and reach 8.3 mb/d by 2035 in its central scenario (details of which are below). It adds:

Qatar National Bank net profit rises 10% |

Qatar National Bank, or QNB, reported a near 10 per cent jump in third quarter profit as lending surged, while the Gulf Arab state’s largest lender by market value said it was able to maintain one of the lowest non performing loan ratios in the region.
According to Zawya Dow Jones calculations third quarter net profit increased 9.5 per cent to 2.08 billion Qatari riyals (Dh2.09 billion or $571 million), from 1.90 billion riyals a year ago.
The quarterly result was a touch short of the 2.11 billion riyals that analysts at EFG Hermes had forecast and also missed the 2.22 billion riyals effort that Arqaam Capital had pencilled in.

CPI Financial | News | Abu Dhabi needs 12% growth to recover

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"Comparing the adopted Abu Dhabi 2030 vision for growth, the annual average rate of growth in real GDP between 2008 and 2010 was negative, -1.6 per cent due to declining oil revenues in 2009," the UNDP said in its first Human Development Report 2011-12 that reviews progress Abu Dhabi has made in social sector in past 40 years.

QInvest Said to Cut Jobs at Brokerage, Asset Management - Businessweek

QInvest LLC, the Qatari investment bank forming a joint venture with Egypt’s EFG-Hermes Holding SAE, is cutting jobs at its brokerage and asset management divisions, two people familiar with the matter said.

As many as 13 people are leaving the Doha-based bank, one of the people said, declining to be named because the cuts aren’t public. Calls to the mobile phone of QInvest chief executive officer Shahzad Shahbaz weren’t immediately returned.

QInvest joins other lenders cutting jobs as deal flow slows and banks seek to reduce costs. Credit Suisse Group AG cut two Dubai investment banking jobs and is moving others to Qatar, two people with knowledge of the matter said last month, while Deutsche Bank AG eliminated seven jobs at its investment bank unit in Dubai, two people with knowledge of the matter said.

Qatar's QIIB eyes benchmark 5-yr dollar sukuk - Yahoo! News Maktoob

Qatar International Islamic Bank plans to issue a benchmark-sized, five-year dollar sukuk, arranging banks said on Wednesday.
Benchmark-sized is normally understood to mean at least $500 million. Early price talk for the sukuk was released at 205 basis points over midswaps.
HSBC, Standard Chartered and QNB Capital are mandated arrangers on the deal. Investor meetings are due to conclude in London on Monday.

STOCKS NEWS MIDEAST-Low volumes mark early Dubai trade; Gulf down - Yahoo! News Maktoob

Real estate stocks come under selling pressure in early trade on Dubai's exchange but volumes are low, suggesting investors prefer to wait until later in the day before taking up any new positions.
Deyaar slips 1.4 percent and Union Properties is down 1 percent. Around the market, only about 14 million shares have changed hands by 0730 GMT.
"Volumes are still nothing compared to what you see on a daily basis. Turnover is low, because of the uncertainty in international markets which is creating a wait-and-see scenario among regional investors," says Marwan Shurrab, vice president and chief trader at Gulfmena Alternative Investments.

Regional financial directors mull Islamic sukuk issues as a way to get around tighter bank lending rules « ArabianMoney

The annual gathering of the Association of Corporate Treasurers in Dubai yesterday brought together the finance directors of the region to discuss the nuts-and-bolts of doing business here. Naturally issues like the civil war in Syria and Iranian sanctions were among the most controversial.

But financial folk are practical people who bother more about how to get things done than high politics. And one problem challenging their minds at the moment is how to raise finance.

Challenge of entrepreneurship in GCC |

In Saudi Arabia, small and medium enterprises (SMEs) contribute 33 per cent to the country’s gross domestic product (GDP) and employ 25 per cent of its local workforce according to a Capita Group International (CGI) 2011 report. In the UAE, SMEs contribute 30 per cent to the country’s GDP and employ 86 per cent of its total workforce. The CGI report indicates that SMEs contribute 35 per cent to 45 per cent to the global GDP and an estimated 40-60 per cent to global employment. SMEs employ 52 per cent of the US private sector workforce and they contributes 64 per cent and 44 per cent to the GDP of Spain and Austria, respectively. This shows that small firms in GCC are relatively inefficient. Their share of employment is far greater than their share of GDP. According to the National Commercial Bank (NCB) report, most of the businesses in the GCC, especially SMEs, are saddled with low efficiency, low growth, little innovation and weak management.

Noor Islamic Bank also in breach of lending limits - The National

Hussain Al Qemzi, the chief executive of Noor Islamic Bank, believes that fully complying with the Central Bank's new lending limits could take as long as three years.

Topic Dubai Holding Central Bank of the UAE Emirates NBD Noor Islamic Bank NBAD
In April, the Central Bank gave lenders six months to curtail lending to governments and their commercial holding companies .

The deadline to implement the rules passed 10 days ago, but several banks admit they are in breach.

UAE car sales shift into top gear with seven-year high - The National

Car sales across the country have accelerated by almost 30 per cent this year, the biggest rise since 2005.

More than 200,200 cars were sold in the UAE between January and August this year, according to industry figures.

“We haven’t seen [that number for] the last seven or eight years,” said Michel Ayat, the chief executive of Arabian Automobiles.

The assault continues |

The assault continues. At least that is how banks see it — and understandably so.
Last week’s EU-commissioned Liikanen review into the structure of Europe’s banks piled another 153 pages of regulatory reform proposals on top of everything that has come before — Basel III, CRD4, Vickers, Volcker, Dodd-Frank.
Five years after the financial crisis began, it is still too early to feel sorry for the banks that helped cause it. For all the complicity of politicians, regulators, investors and customers, the crisis could not have happened without the banks themselves, and reforming them was always a priority. But as the layers of regulatory reform mount, it is well worth highlighting the inadequacies of that process. In the case of Liikanen — and its central idea of ringfencing banks’ trading businesses — there are at least two shortcomings.

Oman finalises Islamic Banking rules |

The regulatory framework for Islamic Banking has been finalised, Hamoud Bin Sangour Al Zedjali, executive president of the Central Bank of Oman (CBO), announced while addressing delegates at the two-day Oman Investment Forum 2012, which ended on Tuesday.
He added that amendments to the Banking Law — a prerequisite for the rollout of Islamic Banking services in the Sultanate — are currently under way. Two new local banks, Bank Nizwa and Al Izz Islamic Bank, have been granted initial approvals while almost all local banks have evinced interest in establishing windows for practicing Islamic banking, Al Zedjali said.