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Tuesday, 4 June 2013

Qatar T-bill yields lowest since at least October 2012 | Reuters

"Yields in Qatar's Treasury bill auction fell on Tuesday to their lowest level since at least October 2012 as demand increased to its highest in as many months, central bank data showed.

Yield on the OPEC member's 91-day T-bills eased to 0.82 percent from 0.87 percent in May. It was down at 0.98 percent from 1.05 percent for 182-day T-bills and at 1.04 percent from 1.09 percent for 273-day notes, data showed.

The central bank (QCB) drained 4 billion riyals ($1.1 billion) from the market, keeping the amount unchanged from previous months. There is no available data from before October because the central bank did not publish it then."

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RPT-Fitch Affirms Gulf Bank at 'A+'; Upgrades VR to 'bb-' | Reuters

"Fitch Ratings has affirmed Kuwait-based Gulf Bank's (GB) Long-term Issuer Default Rating (IDR) at 'A+' with a Stable Outlook. The Viability Rating (VR) has been upgraded to 'bb-' from 'b+'. A full list of rating actions is at the end of this comment.

The upgrade of the VR reflects GB's substantial and sustained improvement in asset quality and capitalisation since 2009, the bank's sound liquidity and its relatively cautious growth plans, focusing on its core market."

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Kuwait’s Zain launches share sale of its Iraqi operations - Alarabiya.net English | Front Page

"Kuwait telecom operator Zain will set up a holding company through which it will offer a quarter of its stake in its Iraqi unit to the public, it said on Tuesday.
Zain Iraq must float a quarter of its shares and list on the Iraq Stock Exchange (ISX) as part of its $1.25 billion licence, as were Iraq’s two other national operators.
Under plans announced on Tuesday, Zain will set up a holding company, named “Khatam Communications” to hold its Iraqi operations and will offer 55.9 million shares at one dinar each in the firm. The offer period starts on June 4 and will run for 30 days, Zain said in a bourse statement."

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Turkey takes a battering - YouTube


MIDEAST STOCKS-Egypt drops to 5-wk low on political woes; Gulf mixed | Reuters

"Egypt's bourse dropped to a five-week low on Tuesday, making its biggest one-day loss in two months on increasing fears of political instability, while Gulf markets were mixed.

Cairo's main benchmark lost 1.6 percent, its lowest since April 30.

Investors are selling ahead of planned protests on June 30, which marks the one-year anniversary of President Mohammed Morsi taking office. Some are worried the protests could get violent."

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Guest post: what if Erdogan goes? | beyondbrics - #direngeziparki

"Demonstrations continue to rage in Turkey and there is still no sign of an no olive branch extended by the government to the demonstrators. Prime minister Recep Tayyip Erdogan, has claimed that calm would be restored upon his return from a trip to north Africa – likely Wednesday. Meanwhile, unions representing 240,000 public sector workers declared two days of industrial action.

One thought for the day – the demonstrators have been calling for Erdogan’s resignation. While I think this is very unlikely, what if it happened? Who could possibly replace Erdogan and what would be the consequences?

A year or so ago, the biggest political risk in Turkey was perceived to be what happened if Erdogan was forced to step down for ill health, given the lack of a clear successor and the paucity of the opposition."

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Bahrain SWF Mumtalakat appoints new COO - Banking & Finance - ArabianBusiness.com

"Mumtalakat Holding Company, the investment arm of Bahrain, said on Tuesday it has appointed a new chief operating officer.
It said Zulfe Ali had moved up from his previous position within the company of vice president Corporate Finance when he managed Mumtalakat's portfolio of liquid investments.
A company statement said Ali has nearly 20 years of experience in the financial services industry in both asset management and investment banking."

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Gulf Markets Seen Rangebound; UAE Stocks in Focus - Middle East Real Time - WSJ

"Stock markets in the Persian Gulf are seen trading in ranges on Tuesday as investors eye fresh catalysts for direction, but activity is expected to slow as the weather turns hotter.

“Market volumes are expected to ease back from recent highs with the approach of summer months and Ramadan,” a fund manager at Abu Dhabi-based Invest AD said in a client note.

The U.A.E. remains in the spotlight as both the markets there have rallied sharply on the back of a re-rating of the country’s economy. Dubai’s benchmark is up some 50% this year and Abu Dhabi shares have added 36% in value."

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Deloitte Middle East | Tax | Deloitte ME Tax handbook ’12 - Page gives contact to receive 2013 edition which has just been released.

"Welcome to the Deloitte 2012 Middle East Tax handbook.

The objective of the handbook is to guide you through the updates and developments of most of the Middle Eastern and North African countries.

With over 85 years of service in the region, Deloitte is well placed to be your trustworthy partner through these extraordinary and challenging times."

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Guest post: Turkey unrest threatens financial flows and economic stability | beyondbrics #direngeziparki

"The mass protests over the decision of the Istanbul municipality to fell trees at Gezi Park in the city sparked commentary that a “Turkish Spring” is underway.

No, this is not a Turkish Spring. But it is no less unique and potentially lethal to the economy. The ruling Islamist AKP needs to understand that the half of the population that has not voted for the party is crying out for attention. If these people’s demands are not met, financial markets could experience an upheaval that would destroy Turkish economic stability, creating a vicious cycle that could rapidly erode the gains of the last 10 years.

It is important to put the demonstrations in a broader context. Turkey is already on a very shaky ground, as Syria and potentially Iran plot to cut the country’s regional influence."

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Life in Oz...& Dubai: Jebel Ali Village - the good news

"I've said from when it hit that the global financial crisis was the best thing that could have happened to Dubai.

While the real economy - the trading, dealing, manufacturing, re-exporting -  was ticking along quietly in the background the property development sector went bananas and threatened to destroy Dubai.

Ridiculous projects, far too many all at the same time, were planned and many started. The worst culprit in my opinion was the the developer Nakheel. That's the company which built Jumeirah Palm Island and The World Islands, and had two more even bigger palm islands under way at the same time, plus the 75 km long Arabian Canal and dozens of other projects."

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Reminder - AM Conference Call (Today @13:30 BST): Iran, Turkey, Egypt, Libya, Syria, Lebanon, Kuwait


Dear Friends of Arabia Monitor, 
If you have not done so already, we invite you to register for our monthly conference call which will take place today, Tuesday June 4th, at 13:30 UK time. Kindly RSVP to info@arabiamonitor.com, following which we will share the dial-in details. 
Please find below the themes on the agenda:
  • Egypt’s economic reform program implementation is proving slow, a concern for budget sustainability. Further volatility can be expected ahead of the month of Ramadan, with inflationary pressures set to increase
  • Mid-June marks the calendar for a controversial electoral law decision in Kuwait and elections in Iran. Significantly escalating risks of political uncertainty
  • Developments in Turkey - What do they mean, and what do they imply for the region?
  • Emerging markets sovereign credits started to weaken again during May 2013 vs. April 2013. The JPM EMBI Global Emerging Debt Index is down 2.4% May MTD and 1.8% YTD on the back of rising UST yields. The weakening extends across the board for sovereign bonds, CDS and sukuk
Join the conversation online on our website www.arabiamonitor.com and on our twitter feed @ArabiaMonitor.
Kind regards,
Arabia Monitor Research Team
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Qatar’s gaining global prominence opens opporunities for US ..

"Qatar’s gaining global prominence has thrown open partnership opportunities for the American companies, the US Ambassador Susan L Ziadeh has said.

“Qatar’s rising international prominence is bringing about new and exciting partnership opportunities for the American companies,” she said, addressing an American trade mission, featuring 13 innovative American companies from a wide range of technology, infrastructure and communications sectors.

The trade missions offer an invaluable opportunity for top-tier US companies to meet face to face with potential partners, laying the foundation for long-lasting, high-quality business relationships, the Ambassador said."

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Gulf Daily News » Business News » Vodafone Qatar loss narrows

"Vodafone Qatar, an affiliate of Britain's Vodafone Group, reported a smaller-than-expected fourth-quarter loss yesterday as its subscriber base rose by nearly a third and revenue increased.

Vodafone, which ended Ooredoo's (Qatar Telecom) domestic monopoly in 2009, made a fourth-quarter net loss of 73.9 million riyals ($20.3m) in the three months to March 31, according to Reuters calculations.

That compares with a loss of 126.5m riyals in the year-earlier period."

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Severn Trent Rejects Sweetened Canadian, Kuwaiti Offer - Bloomberg

"Severn Trent Plc (SVT), the second-largest publicly traded U.K. water utility, rejected a sweetened takeover proposal from a Canadian infrastructure investor and Kuwait’s sovereign wealth fund that valued the company at 5.2 billion pounds ($7.98 billion), saying the offer was too low.
The spurned approach, the second since May 14, values the utility at 2,079.49 pence a share because stockholders wouldn’t receive a 45.51 pence dividend, Coventry-based Severn Trent said today. LongRiver Partners, the bidding group, comprises the Kuwait Investment Office, Borealis Infrastructure Management Inc. and Britain’s Universities Superannuation Scheme.
“The board unanimously believes that LongRiver’s revised conditional proposal at 2,079.49 pence per share, excluding the final dividend which we have already announced, fails to value the attractions to Severn Trent’s shareholders of Severn Trent’s increasingly rare combination of yield, inflation-linked business model and potential,” Chairman Andrew Duff said in the statement."

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UPDATE 2-Aluminium merger hints at closer Dubai, Abu Dhabi ties | Reuters

"Dubai and Abu Dhabi plan to merge their state aluminium producers in a $15 billion deal that suggests the two emirates are willing to consolidate business interests to better compete in the global economy.

Combining Dubai Aluminium (Dubal) and Emirates Aluminium (Emal) to create the world's fifth-largest aluminium producer goes against the grain for the two wealthy Gulf emirates, which for decades have built competing interests in sectors ranging from stock markets to ports and airlines.

But the global financial crisis dealt a blow to Dubai's breakneck economic expansion and the free-wheeling city state found its fortunes more closely entwined with those of its oil-rich neighbour in 2009, when Abu Dhabi stepped in with a $10 billion bailout that allowed Dubai to avoid a debt crisis."

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Business News Roundup: UAE Aluminum Merger, UAE PMI, Bahrain Banks Merger - Middle East Real Time - WSJ

"BAHRAIN BANKS MERGER Khaleeji Commercial Bank and Bank Al Khair, a pair of Bahraini banks, are in talks over a potential merger.

The banks have signed an agreement to explore the feasibility of a merger and are forming a steering committee to do due diligence and execute the deal, Gulf Finance House, which owns Khaleeji Commercial bank, said in a statement on the Bahrain bourse website Monday.

The proposed tie-up between Khaleeji, an Islamic bank founded in 2004 and listed on the Bahrain bourse, and Bank Al Khair, an Islamic investment bank, comes amid a wave of talks among Bahraini lenders. Three small Bahraini banks completed a merger in January, and Bahrain’s Al Salam Bank and BMI Bank are currently pursuing a merger."

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Dubai sells half of Dubal to Abu Dhabi in $15bn merger with Emal raising around $4bn to help repay its debts « ArabianMoney

"Abu Dhabi sovereign wealth fund Mubadala is buying half of the Dubai-owned aluminium company Dubal based in Jebel Ali for an undisclosed sum, revealed The National newspaper today. This move is a part of a mega-merger between Dubal and Emirates Aluminium to create the world’s largest aluminium producer, Emirates Global Aluminium with a market value of $15 billion.

Mubadala will therefore pay the Investment Corporation of Dubai around $4 billion that will most probably go to pay down the debts of the Dubai Government. This is essentially a debt for equity swap. Abu Dhabi is being repaid by Dubai selling off the family silver, albeit at 2013 prices, not 2009’s which would have been much lower."

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Iran oil output heads to 25-year low - FT.com

"Iranian oil production is heading to its lowest in 25 years after its biggest customers in Asia cut their imports amid tightening US and European energy sanctions.

The current drop comes as Iran’s main clients, China, India, Japan and South Korea, slashed their imports, with the four Asian countries as well as Turkey, importing about 750,000 b/d in April, according to customs data. This is down more than 30 per cent from 1.1m b/d the previous month."

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Turkey: markets up but fears persist | beyondbrics

"The Turkish stock market bounced back 4.4 per cent on Tuesday morning after Monday’s 10.5 per cent collapse, the lira was steady against the dollar and the bond market strengthened, with the yield on two-year lira bonds falling 46 basis points to 6.32 per cent, after Monday’s surge.

But with so much uncertainty around, it’s far too early to talk about stabilisation. There were sporadic clashes overnight between protestors and riot police. Trade union leaders declared a two-day strike starting on Tuesday, which, if nothing else, gives plenty more people the opportunity to participate in the demonstrations.

So far, two protestors have died, one killed by a taxi and a second shot dead late on Monday.

A lot depends on prime minister Recep Tayyip Erdogan, who branded the demonstrators extremists before leaving on a three-day tour of north Africa. The protestors see the premier as the driving force in what they see as Turkey’s growing authoritarianism and creeping Islamisation."

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