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Wednesday, 22 May 2013

Fuel Fix » Global oil boom forcing Saudi Arabia to cut oil production

"Saudi Arabia has cut crude oil production this year and will have to cut it further if it wants to prevent a significant drop in the global oil price, according to the latest Global Crude Oil Outlook from Energy Security Analysis Inc.

The Massachusetts-based consulting firm said Saudi Arabia, perhaps with help from Kuwait, Qatar and the United Arab Emirates, will need to drop production by a million barrels a day from 2012 levels to defend $100 Brent crude, the global benchmark oil price.

The prediction is in line with a report from the International Energy Agency, which said last week that most of the world’s new oil production over the next five years would come from outside OPEC."

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MIDEAST WEEKAHEAD-Slow progress on development projects puts Kuwait stock market boom at risk | Reuters

"Kuwait's stock market boom could run out of steam if the government doesn't push ahead soon with long-delayed infrastructure projects aimed at diversifying the oil-reliant economy.

Turnover on the Kuwait Stock Exchange has tripled from six months ago as reduced political unrest and an improved economic outlook have spurred hopes that mega-infrastructure projects will finally get off the ground.

The benchmark share index has risen 38 percent this year, driven by local retail investors mainly, with small cap stocks attracting the bulk of fund inflows."

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Iran’s business shocked by Rafsanjani poll disqualification -

"Iran’s business community has reacted with shock to Tehran’s decision to bar former president Akbar Hashemi-Rafsanjani from running in next month’s presidential poll, seeing it as a blow to the possibility of reform for the beleaguered economy.
Iran’s constitutional watchdog, the Guardian Council, on Tuesday disqualified Mr Rafsanjani and Esfandiar Rahim-Mashaei, an ally of outgoing president Mahmoud Ahmadi-Nejad. The two candidates were considered not loyal enough to the Islamic regime to run for president in the June 14 election."

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How the hotel tide turned for Abu Dhabi -

"Rocco Forte, the chain of luxury hotels, chose Abu Dhabi for its first hotel in the Middle East. That decision would come to haunt it.
The green glass wave-shaped building opened to fanfare in November 2011, but just over a year later, Rocco Forte pulled out.
The story of the hotel – which was delivered two years behind schedule – lays bare the problems for hoteliers struggling amid oversupply in Abu Dhabi. Its failure – in part a result of its location – also underscores a broader issue: the impact of delays to the city’s tourist developments on international business."

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DIFC brings in property veteran -

"The Dubai International Financial Centre has appointed Brett Schafer as chief executive of DIFC Properties.
The DIFC last year restructured its core functions into independent entities, making the DIFC Authority responsible for business development and establishing DIFC Properties as a unit of the centre’s investment arm to manage real estate.
Former Nasdaq Dubai boss Jeff Singer was appointed chief executive of the centre, responsible for attracting and retaining clients in the region’s financial hub."

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Labour unrest threatens UAE construction -

"The return of labour unrest in the United Arab Emirates is a reminder of potential pitfalls as the country embarks on a renewed construction drive.
Workers at a leading contractor, Arabtec, downed tools for several days in a rare strike that echoed labour tensions prevalent during the UAE’s construction boom before the global financial crisis.
Arabtec in a statement on Tuesday said all workers had returned to work with no impact on its projects."

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Turkey: more oil and gas deals with Iraqi Kurdistan | beyondbrics

"Turkey is readying to sign new contracts with US and Russian companies to prospect for and develop oil and gas reserves in the Kurdish controlled region of northern Iraq Turkish officials confirmed Wednesday.

Officials were unable to confirm the names of any of the companies involved or any details of what sort of agreements may be signed beyond that they would be “commercial” agreements.

However the announcement is being widely seen as related to last week’s visit to Washington by Turkish Prime Minister Tayyip Erdogan and energy minister Taner Yildiz, which Turkish officials had suggested may result in some measure of official support for Turkey’s hopes for Kurdish oil and gas reserves to be exported to Turkey and on to regional markets."

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Ensuring balance holds between demand and supply |

"The GCC has achieved plenty in the development of both hard and soft infrastructure over the past three decades, in turn paving the way for high economic growth rates.
It has not been easy to meet the ever rising demand for infrastructure, which exceeded 10 per cent annually in some sectors such as electricity and water. Demand for utility has increased three times over the past three decades; even then the GCC was able to meet demand in an impressively flexible manner.
Given the continuous population growth, especially in regard to the expatriate workforce —where a total of 2.5 million workers joined the Gulf’s labour market last year — the GCC will face serious challenges related to how they can meet growing demand for basic infrastructure services, particularly in the fields of utility, housing, health and education services."

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MIDEAST STOCKS-Kuwait dips from 4-yr high as rally stalls; mkts mixed | Reuters

"Kuwait's rally stalled on Wednesday as investors booked profits in bluechip and mid-cap stocks, while other Middle East markets were mixed in lacklustre trade.

Kuwait's index fell 0.3 percent, easing from Tuesday's near four-year high.

Telecom operator Zain and National Bank of Kuwait shed 1 and 1.4 percent respectively. Small-caps again dominated trade."

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Axiata Said to Weigh Bid for Saudi Telecom’s Axis Indonesia - Bloomberg

"Axiata Group Bhd. (AXIATA), Malaysia’s largest mobile-phone operator, is evaluating a bid for PT Axis Telekom Indonesia, three people with knowledge of the matter said.
Any offer for Axis would be made by Axiata’s Indonesian unit, PT XL Axiata, the people said, asking not to be identified as the information is private. Purchasing the Indonesian carrier would give XL Axiata the mobile-phone frequencies it needs to expand in Southeast Asia’s most crowded wireless market, one person said.
Axis, majority owned by Saudi Telecom Co. (STC), is valued at about $1 billion including debt, according to an estimate from Saudi Fransi Capital. Malaysia’s Maxis (MAXIS) Communications Bhd. also holds a stake in the company."

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U.A.E. Banks to Morocco Return to Bond Market as Yields Drop - Bloomberg

"Two United Arab Emirates banks raised $1.3 billion from bonds sales and Morocco plans to boost the size of its existing dollar-denominated notes as Middle East issuers take advantage of falling borrowing costs.
Emirates NBD PJSC (EMIRATES) sold $1 billion in bonds that don’t mature, the second sale by the Dubai-based lender this year, according to four people familiar with the matter. Abu Dhabi Commercial Bank PJSC (ADCB) returned to the bond market for the third time this year, selling $300 million in 10-year securities, two people said. Morocco hired Barclays Plc, BNP Paribas SA, Citigroup Inc. and Natixis to manage its sale, one person said.
“It’s a good time to tap the debt market and take advantage of the low yield levels at the moment,” Hakim Azaiez, the head of investment at GCA Asset Management in London, said by e-mail today. “There is also a factor that interest rate may rise and that would be another reason for this flow of issuance.”"

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Samba Seen as Top Bank Pick in Saudi Arabia by Dubai’s Arqaam - Bloomberg

"Arqaam Capital said it “strongly” reiterated its “buy” recommendation on Samba Financial Group and that the lender is it’s top Saudi Arabian bank pick.
Samba will likely post a 7 percent increase in earnings per share this year and is well positioned for future demand for corporate lending, Dubai-based Arqaam analyst Jaap Meijer and colleague Michael Malkoun wrote in a note to investors.
Saudi Arabia’s $657 billion economy will grow 4.2 percent this year according to the median forecast of 15 economists compiled by Bloomberg. Bank lending to the private sector rose 15.5 percent in March, according to data from the central bank."

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Recovering Dubai faces billions of maturing debt | Inquirer Business

"As debt-laden Dubai’s economic recovery continues, with grandiose projects making a comeback, the emirate faces some near-term maturity of debt racked up during pre-crisis years but the prospects are not gloomy, analysts say.
Dubai is likely to manage the forthcoming obligations, part of total debt amounting to 100 percent of its gross domestic product, according to Masood Ahmed, the Middle East director at the International Monetary Fund.
“Yes, it can manage,” he told AFP, highlighting the need to be open about the process."

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BBC News - Letter from Africa: A brighter future in Dubai?

"In our series of letters from Africa journalists, London-based Ugandan writer Joel Kibazo says he was surprised by the number of Africans he met during a visit to Dubai.

Every so often we all have what I call a "shaking-head moment", when something hits you and your mind can't quite adjust to what you are hearing or seeing.

A couple of weeks ago, I arrived in Dubai on a late flight and having checked into the hotel I decided only a wake-up call would save me from oversleeping and missing my first meeting the next day."

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Dubai, Qatar deserve MSCI upgrade, says investment firm - Business Intelligence Middle East - - News, analysis, reports

"Dubai and Qatar deserve to be upgraded to emerging-market status at MSCI Inc. (MSCI) next month, T. Rowe Price (TROW) Group Inc. said, after the emirates failed to satisfy the index provider’s requirements for four years.

“I see no reason why they shouldn’t be upgraded and don’t understand why they haven’t been previously,” Oliver Bell, London-based money manager at T. Rowe Price’s Africa & Middle East Fund, (TRAMX) told Bloomberg by e-mail yesterday.

“Both Dubai and Qatar are in a better position and meet more of the criteria than other countries that have been upgraded before.”"

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Hong Kong IPOs: back with a whimper | beyondbrics

"It’s tempting to think that the Hong Kong IPO market is finally back to good health. Two $1bn+ deals have been completed in the past few days and on Wednesday, one of them shot up on its debut.

But don’t pop the champagne just yet. While the deals got done, they did so with a lot of legwork. And its too early to tell whether they will ultimately offer much reward for investors.

Galaxy Securities – the smaller of the two deals – successfully raised $1.1bn in its Hong Kong listing.The stock rose as much as 10 per cent in its first trading session, which had been delayed by a few hours as a monster thunderstorm hit southern China. It eventually closed higher by 6 per cent, to the relief of both bankers and the retail punters who had helped carry the deal."

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Rupee Hits 6-Month Low, Renewing Old Worries - India Real Time - WSJ

"The Indian rupee has fallen to its lowest level in six months, renewing concerns about the government’s finances and the longer-term outlook for an economy that is just gaining traction.

On Wednesday, the rupee fell to 55.62 against the dollar, the lowest level since late November, as part of a dollar rally against major global currencies.

The rupee hit an all-time low of 57.33 against the dollar last year as India’s economy slowed to its weakest growth in nearly 10 years. But foreign investors turned optimistic this year that the worst of the slowdown was over, pouring US$18.8 billion into Indian stocks and bonds so far–up by around 50% on year–which helped support the currency. Meanwhile, the Reserve Bank of India began cutting interest rates in January after a three-year battle with inflation."

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Qatar’s GDP expected to grow 5.2% in 2013 | ArabNews

"Since 2011, Qatar has successfully completed its 20-year investment plan to commercialize its natural gas reserves, the third largest globally with 25 trillion cubic meters or 13.0 percent of the world’s total proven reserves. This has led Qatar’s economy to almost double over the last four years to $ 192.3 billion as of 2011. Qatar's economy is expected to moderate to a steady rate of 5.2 percent in 2013 (6.6 percent in 2012), following record double-digit growth in 2006-2011. The nonoil and gas sector, which is estimated to expand 9.9 percent in 2012, is expected to drive growth in Qatar's economic expansion during 2012 and going forward, according to Global Investment House's review of the Qatar economy."

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Fake Plastic Souks: Arabtec Strike - An Inconvenient Truth ( @alexandermcnabb )

"Dubai's largest construction company, Arabtec, has faced a relatively well co-ordinated labour dispute over the past few days, with UAE media reporting on the affair being somewhat patchy to say the least.

Gulf News in its story today says the company's Abu-Dhabi based workers refused to leave their accommodation on Saturday, with Dubai-based workers refusing to work the following day. However, yesterday's Gulf News story "Arabtec workers return to work" is at odds with 7Days' front page splash yesterday, which ran with 'workers down tools' in its story, 'How can we feed our families with Dhs750'?

The Abu Dhabi workers were based at the 'model' Saadiyat Island labour camp, with TDIC, Abu Dhabi's tourist authority and the master developer of Saadiyat Island (where Arabtex is building the Louvre) telling 7Days yesterday all 'workers have reported for work as usual'."

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