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Wednesday, 5 June 2013


"The license to run an embattled Dubai-based carbon trader Advanced Global Trading is about to expire, Rebel Economy has discovered, casting more doubt over this company’s plans to continue operating.
AGT, which Rebel Economy wrote about last week, has attracted suspicion for being an alleged boiler-room operation, where high pressure tactics such as cold-calling are used to sell a product that is often of little value.
The company, headed by British businessman Charles Stephenson, claims to sell claim to sell carbon credits to individuals with the promise of high returns, even though experts say there is no economic reason to invest in such a product other than to offset your carbon footprint."

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Guest post: the Arab world needs credible reformers | beyondbrics

"Egypt is facing its deepest political crisis since February 2011. On Sunday, the Supreme Constitutional Court ruled that both the election to the Shura council, the country’s upper house, and the appointment of a panel charged with drafting the new constitution were unconstitutional. Although no one can predict the exact reverberations of these decisions, they are a reminder of the threat dysfunctional politics represents to the future of the Arab world.

Egypt is staring into a deep economic abyss. The heavily indebted government uses one third of its spending to subsidize prices of fuels and foodstuffs. Most of the benefits of subsidies accrue to wealthier households and big businesses. The imports of subsidized commodities are draining away the country’s foreign reserves, which are at historically low levels."

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Office Space Construction in Downtown Moscow Faces Ban | Business | The Moscow Times

"City Hall will ban office space construction in downtown Moscow but will welcome complex housing projects that involve construction of transport and social infrastructure, Konstantin Timofeyev, head of the Moscow Construction Committee, said at a news conference on Wednesday.

"We have re-evaluated over 2,000 ongoing investment projects in the city," Timofeyev said. "Some of them were canceled while others will continue, but first of all, we will support complex development.""

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MENA wealth rose to $4.8 trillion in 2012, study shows | Business , International | THE DAILY STAR

"Wealthy individuals in the Middle East and Africa saw the value of their assets rise by 9.1 percent to $4.8 trillion in 2012, a study by the Boston Consulting Group published Tuesday showed, as strong economies and rising equity markets fueled regional growth. If current trends continue, wealth in the region could rise to $6.5 trillion by 2017, said the survey.

Global wealth managers have flocked to the region in recent years, lured by its rich energy and commodity reserves, relatively higher economic growth and rising population.

Middle Eastern investors are also becoming more comfortable investing domestically even though the percentage of assets held offshore is relatively high, said Markus Massi, partner and managing director at BCG. Wealth held in equities grew by 18.3 percent in 2012 in the region, the survey showed."

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Bharti Airtel shareholders approve stake sale to Qatar investor - The Times of India

"Shareholders of Bharti Airtel on Wednesday approved a $1.2 billion deal to sell a 5 per cent stake of the company to the Qatar Foundation Endowment, the company said.

The deal marks Qatar's first major investment in a listed Indian company. It will also help Bharti Airtel, India's top telecommunications carrier, pare some its $11.7 billion debt.

The Qatar Foundation Endowment is an investment vehicle of the Qatar Foundation controlled by Sheikha Mozah, the wife of the country's ruler. "

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Goldman Breaks Drought With Saudi Property Bond: Islamic Finance - Bloomberg

"Goldman Sachs Group Inc. (GS), whose shariah-compliant bond program was questioned by Islamic scholars in 2011, led its first sukuk in more than three years after helping a Saudi property developer raise $450 million.
The bank was a lead arranger on Dar Al Arkan Real Estate Development Co. (ALARKAN)’s sukuk on May 21, reforging links with the Riyadh-based real estate company after helping arrange the sale of its $450 million five-year bonds in February 2010.
The New York-based bank is seeking to catch up with U.S. competitors as demand accelerates for securities that conform to Islamic principles. Global sales reached a record $46.5 billion last year, according to data compiled by Bloomberg, while issuance has increased 4 percent to $18.3 billion in 2013. Citigroup Inc. (C) and Morgan Stanley (MS) are U.S. banks that have appeared among the global top 10 underwriters for Islamic bonds in the last five years, according to data compiled by Bloomberg."

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Emaar Drops Most Since April on India JV Fine: Dubai Mover - Bloomberg

"Emaar Properties PJSC (EMAAR) dropped the most since April after its Indian joint venture received notice of a 86 billion-rupee ($1.5 billion) fine for violating foreign exchange rules.
The shares fell 1.7 percent to 5.79 dirhams at the close in Dubai, trimming this year’s advance to 54 percent. Over 39 million shares were traded, more than twice the three-month daily average, according to data compiled by Bloomberg. Emaar has the highest weighting on Dubai’s benchmark index, which gained 0.2 percent.
Emaar MGF Land Ltd. (EMGF), a joint venture with MGF Land Development Ltd and builder of Delhi’s Commonwealth Games Village, has been served with a show-cause notice by the country’s Enforcement Directorate, according to Times of India. The Delhi-based company could face a total penalty in excess of 250 billion rupees for allegedly violating the Foreign Exchange Management Act by diverting foreign direct investment to buy agricultural land, the paper said."

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Egypt Stocks Slump Most in Six Months Before Anti-Mursi Protest - Bloomberg

"Egypt’s benchmark stock index dropped the most in six months as political tensions increased ahead of planned demonstrations marking the first anniversary of Islamist President Mohamed Mursi taking office.
The EGX 30 Index tumbled 2.9 percent, the most since Dec. 6, to 5,071.91 at the close in Cairo, making it the world’s third worst performer, according to data compiled by Bloomberg. About 99 million shares traded, compared with an 12-month daily average of 125 million shares. Orascom Telecom Holding SAE plunged the most since November while private equity firm Egyptian Kuwaiti Holding fell to the lowest since 2009.
All 30 stocks on the index dropped as investors brace for a western backlash against Egypt after after a Cairo court sentenced 43 workers in pro-democracy organizations, including Germans and Americans, to prison yesterday. Mursi, facing growing calls for anti-government protests on June 30, is also under pressure to respond to Ethiopia’s plan to build a dam on the Nile River that Egypt says may reduce its water resources."

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Qatar Ups ‘Efforts’ to Raise Foreign Caps Before MSCI Decision - Bloomberg

"Qatar said it’s making “extensive efforts” to raise foreign ownership limits of companies on its bourse, a week before MSCI Inc. decides whether to upgrade the nation to emerging market status.
The foreign ownership caps of “several large listed companies is at or close to 25 percent of their market capitalization,” the Qatar Exchange cited Yousef Hussain Kamal, the Persian Gulf nation’s finance minister, as saying in an e-mailed statement today. “Several companies have actually exceeded this percentage.” Most companies in Qatar limit overseas holdings at 25 percent.
Qatar and the United Arab Emirates are under consideration for a possible reclassification at MSCI on June 11 from their frontier-market rankings for the fifth year. The index provider, whose gauges are tracked by investors managing about $7 trillion, said last year foreign ownership limits in Qatar needed revising. The caps are the main obstacle to an upgrade, Citigroup Inc. analyst Maria Gratsova said in a report today."

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Live Chart - June 5th 2013 Towards the end of poverty Extreme poverty could be largely eradicated in 20 years - YouTube

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Fiscal demands catch up with Morocco -

"Morocco, long upheld as the stable, business-friendly exception to north Africa’s general economic stagnation and political tumult, has begun to rattle economists and its own elite with its deteriorating public finances.
The twin 28-storey, ivory-coloured towers that loom over Morocco’s commercial hub in the centre of Casablanca are testament to a decades-long reinvention that has transformed segments of the country into a sleek, modern economy integrated into the top rungs of global capitalism. But just a few kilometres away, vast slums such as Sidi Moumen fester with unemployment and rage, a telling counterpoint to the veneer of progress."

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EUROPE - Turkish Cyprus gov’t falls as motion passed

"President Derviş Eroğlu is expected to ask the National Unity Party to form a caretaker government until elections.

The Turkish Cypriot government fell on June 5 after a vote of no confidence passed through Parliament.

A group of lawmakers from the ruling National Unity Party (UBP) recently issued the motion together with opposition parties, pushing the country into political turmoil. Out of the 50-seat Parliament, 27 lawmakers voted for the motion while 21 UBP lawmakers voted against it. Prime Minister İrsen Küçük was expected to hand his resignation to the President Derviş Eroğlu. The ruling party and the opposition agreed last month to hold early elections on July 28. Parliamentary elections were due to be held in April 2014."

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[video] Emerging markets Fed up | beyondbrics

"The possibility of less easy money from the US Federal Reserve has blown the froth off the most popular equity markets, emerging ones in particular. James Mackintosh, investment editor, looks at the correction underway."

Kuwait ‘to tap heavy oil’

"Kuwait is looking to drill over 1000 new wells as it targets significant heavy oil output in the years ahead, according to a report.
The Opec member nation wants to produce as much as 60,000 barrels per day of heavy oil by 2015, local newspaper al-Rai quoted a Kuwait Oil Company (KOC) executive as saying.

"Nearly 1,200 wells will be drilled to produce heavy oil," northern region deputy managing director Hosnia Hashem said, according to the report which was cited by Reuters."

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Mena Fund Manager

"Oman: Building for the futureSteady economic growth and hefty public spending plans mean that Oman is starting to attract more investor interest, while Shariah regulations could be a … read more »"

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Poland cuts rates – again | beyondbrics

"With Poland’s economy slowing rapidly the central bank on Wednesday cut interest rates by a quarter point to a record low of 2.75 per cent in line with market expectations.

It was the latest in a series of reductions that has seen the bank’s benchmark rate come down from 4.75 per cent towards the end of last year.

Poland’s economy has experienced strong growth over the past two decades but it has slowed dramatically in recent quarters. It posted year-on-year growth of just 0.5 per cent in January-March. In quarterly terms the economy grew by just 0.1 per cent."

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Poland & U.S.: Ukraine has to do its part for association with EU : Ukraine News by UNIAN

"Poland has already done a lot of Ukraine, but "there are limits" and now Ukraine must fulfill its end of the deal with Europe, Polish Foreign Minister Radoslaw Sikorski has said, according to the Official web site of Yulia Tymoshenko.
"Ukraine is at a historical crossroads. If it doesn’t meet the conditions by the end of the summer holidays, in November the EU won’t sign the association agreement with Kyiv," Radoslaw Sikorski said during his visit to the United States.
"EU procedures take time, and if Ukraine makes progress right before the November Eastern Partnership summit, EU institutions may not be quick enough with their assessment," Polish Radio cited the Polish minister as saying."

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Acquitted executive, wife trapped in Dubai as prosecutors lodge appeal

"An Australian executive acquitted of fraud-related charges in Dubai has been rocked by the news that prosecutors will appeal against the verdict.

The decision means Marcus Lee and his wife are likely to spend at least another year in the emirate, where Mr Lee has been held under effective house arrest for more than four years.

“Julie and I are both devastated by the news," Mr Lee told Fairfax Media. Under Australian law, prosecutors are unable to appeal an acquittal."

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Limitless ordered to repay $3m over stalled Dubai project - Real Estate -

"State-owned real estate developer Limitless has been ordered to repay AED11m ($3.01m) to a Saudi buyer who invested on a stalled Dubai development, a move which could have wider implications for thousands of other investors who have paid deposits for plots in projects delayed as a result of the financial crisis.
In a June 3 ruling by the Dubai World Tribunal, Limitless was ordered by judges Sir Anthony Evans and Sir David Steel to repay AED11,074,930 ($3,015,063) paid by a Saudi investor Said Al Angari in February 2008 for two plots of land at its Downtown Jebel Ali project.
State-owned Limitless claimed the money represented a 10 percent non-refundable deposit and lodged a counterclaim for Al Angari to pay the outstanding 90 percent due for on the two plots of land."

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Russia: VTB’s Kostin proposes paying dividends in stock | beyondbrics

"Heavyweight banker Andrei Kostin has waded into the debate about the Kremlin-led pressure on Russian companies to boost dividends.

Speaking on Wednesday at a St Peterburg banking conference, the chief executive of state-controlled VTB suggested banks should be allowed to pay some of their dividends in shares.

Given his elevated status and political contacts, Kostin would not have gone public if he thought his proposal would be shot down. So expect some tough talk: the Kremlin wants bigger payouts from state-run groups but the banks want to keep their cash."

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IMF Arab Aid Rises to Record as Stiglitz Sees Dramatic Shift - Bloomberg

"Less than three years after it was criticized for endorsing policies that deepened economic disparity under Arab autocrats, the International Monetary Fund is lending more money to the region than ever.
A $1.8 billion loan to Tunisia, which the IMF board is set to review June 7, will bring total assistance to Arab countries in the past year to about $10 billion, adding to an annual record set last year, according to data going back to 1980. The Washington-based lender has already approved aid to Morocco, Jordan and Yemen and is in talks with Egypt for a $4.8 billion loan accord."

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Guest post: Latvia’s long day’s journey out of night | beyondbrics

"Latvia has just been given the green light by the European Commission to enter the eurozone. What Latvia has achieved in the period since it was rescued by the international community in 2009 is nothing short of remarkable. This achievement is now used as an example for the countries in southern Europe of how to restore growth and competitiveness.

This is often couched in the austerity vs stimulus debate. But this is misleading for the real lesson from Latvia is about how consistent structural reform improving the workings of product and labour markets can enhance an economy’s ability to respond to adversity.

Add to this a remarkable resilience of its population and an economically more favourable neighbourhood in the Nordic region, and you have the core explanation for Latvia’s success."

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CEOs of Emirates, Qatar seek revision of traffic rights - The Economic Times

"The CEOs of the two leading Gulf airlines - Dubai's Emirates and Doha's Qatar - are keen on increasing their share of traffic rights too after Abu Dhabi-based carrier Etihad managed to quadruple its access into India accompanied by an equity deal with Jet Airways.
While Emirates President Tim Clark thinks that the Indian government's generosity towards Etihad's request has "cast the die in this direction", Qatar Airways CEO Akbar Al Baker is looking for a revision of air capacity into India but neither wants to pick a stake in any Indian carriers "at the moment".
"We need more seats. Suddenly Etihad has got 33,000 seats more. We've been asking for revision of traffic rights into India for five years since 2008. Our request predates theirs and the die has been cast in that direction," Clark told ET."

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Will Saudi Arabia Allow the U.S. Oil Boom? | Scoop News

"Technology, technology, and more technology—this is what has driven the American oil and gas boom starting in the Bakken and now being played out in the Gulf of Mexico revival, and new advances are coming online constantly. It's enough to rival the Saudis, if the Kingdom allows it to happen. Along with this boom come both promise and fear and a fast-paced regulatory environment that still needs to find the proper balance.

In an exclusive interview with, Chris Faulkner, CEO of Breitling Energy Companies—a key player in Bakken with a penchant for leading the new technology charge—discusses:"

As always click headline to go to original story

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World Bank Supports Strengthening of Kuwait’s Insolvency and Creditor/Debtor Regime

"A new project will strengthen Kuwait’s commercial law and regulation to be more responsive to the needs and aspirations of market participants and bring up to regional and international standards.

The World Bank team in Kuwait May 29-June 5, 2013, includes some of the world’s foremost experts on corporate rehabilitation, distress resolution, debt recovery, secured transactions, financial reporting, and judicial system strengthening.  They will work with the Government on strengthening key aspects of the country’s insolvency and creditor/debtor regime. The team will provide support on a new law on enterprise bankruptcy and a framework for expedited court approval of distressed debt workout plans. It will include a new regime for the creation, registration and enforcement of security interests in movable and intangible assets, a strengthened framework for the collection and dissemination of commercial credit histories and the creation of a specialized commercial court.

The project, launched in March 2013 and expected to be completed mid-2014, will contribute to Kuwait’s vision of becoming a financial and trade center. "

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Abu Dhabi’s IPIC plans bond sales as costs recede

"International Petroleum Investment Co plans to sell bonds to repay part of a $2bn loan due in September, taking advantage of narrowing spreads between its debt and US Treasury notes that reached new lows last month.

The yield on the Abu Dhabi state-owned company’s 4.875% bonds due in May 2016 dropped to a record 1.285% on May 2, according to data compiled by Bloomberg. The bonds’ spread over five-year Treasuries narrowed on May 20 to 13 basis points, the lowest since the corporate securities started trading in March 2011, the data show. Amid the falling borrowing costs, company officials said last month they want to refinance.

“If you see that the market is willing to lend and you’re going to get lower rates, it makes sense to sell bonds,” Amol Shitole, an analyst with SJS Markets in Bangalore, India, said by telephone May 28. “There’s a window in the market now to take advantage of lower borrowing costs.”"

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Arabtec Plans to Pay Dividends From This Year as Projects Resume - Bloomberg

"Arabtec Holding Co. (ARTC) plans to pay dividend from this year after skipping it in 2012 as the company, which helped build the world’s tallest tower in Dubai, starts work on projects in the Middle East.
Arabtec will pay at least a 10 percent dividend a year from 2013, the Dubai-based the company said in a statement to the local stock market today. The shares have a par value of 1 dirham and a 10 percent payout would equal 10 fils a share, according to data compiled by Bloomberg.
“We are now starting work on several major projects, so the company should see a positive impact on earnings toward the end of the year,” Chief Executive Office Hasan Ismaik said in the statement. “The company is in a very strong position to leverage an extended period of increased activity across the region.”"

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WAM | VP stresses significance of concerted efforts to maintain #UAE's position

"The UAE Vice President, Prime Minister and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum, has stressed the importance of strenuous work to sustain the position attained by the UAE at international arenas.

Sheikh Mohammed made the remark, while touring the interactive workshops held on the sidelines of the Emirates Government Excellence Conference 2013 at the JW Marriott Marquis Dubai.

The workshops highlighted the pioneer position of the UAE in the area of the government excellence at both regional and international levels."

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Frontier markets: handle with care | beyondbrics

"Frontier markets – a disparate group of countries ranging from Trinidad & Tobago in the Caribbean and oil-rich Nigeria in Africa to Bangladesh in Asia – are having their moment in the sun.

With growth in emerging markets beginning to slow, investors are throwing caution to the wind and scrambling to put their cash to work in these small and often illiquid markets. Here are a couple of charts looking at their rise.

1 – FM equities vs EM equities: the divergence widens"

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Oil market struck by light sweet fatigue | FT Alphaville

"John Kemp at Reuters has been following the interesting case of light sweet fatigue in the oil market.

As he first noted on Tuesday, a surge in shale oil production alongside a big increase in modern refinery capacity is increasingly undermining the value of sweet crude in the market.

Or at the very least, the crude is no longer as prized an oil asset as it used to be."

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10 #Saudi Royals Who Could Become the Next Crown Prince — Riyadh Bureau

"Unlike most monarchies, where one of the offsprings inherits power after the death of their father, the Kingdom Saudi Arabia has been unusual because after the death of its founder Abdulaziz Al Saud power has been transferred between his sons based on seniority and consensus. His eldest son Saud was the first, followed by Faisal, Khaled, Fahad and now Abdullah.

As the brothers get older together, this type of horizontal transfer of power creates a succession problem. By the time Abdullah became King in 2005, he was already above 80 years old. He is now on his third Crown Prince after the first two he chose, Sultan and Naif, passed away in October 2011 and June 2012, respectively.

King Abdullah set up in 2006 the Allegiance Council, a body composed of the sons and grandsons of the Kingdom’s founder, to vote by a secret ballot to choose future kings and crown princes. However, it does not seem that the role of the Council has been activated yet."

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