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Tuesday, 2 July 2013

Airbus A380-Backed Shares Sold by Doric Ahead of Emirates Lease - Bloomberg

"Doric Lease Corp. and Nimrod Capital LLP sold shares backed by leasing revenue from Airbus SAS A380 superjumbos operated by Emirates, the third such investment asset tied to the world’s largest passenger plane.
The companies issued shares in Doric Nimrod Air Three Ltd. in London today at 100 pence, with an initial market value of 220 million pounds ($334 million), according to a statement. The shares opened at 107.5 pence and rose as high as 109.5 pence.
DNA3 is the duo’s third offering of shares tied to the ownership and stream of leasing revenues for the double-decker A380. Investors buying DNA3 will get quarterly dividends of 8.25 percent a year, based on the 100-pence issue price. Once the plane comes off lease, they will get the proceeds when the aircraft is sold."

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Egyptian Stocks Rally Most in a Year on Bets Army to End Impasse - Bloomberg

"Egypt’s stocks surged the most in a year after the military gave President Mohamed Mursi until tomorrow to find a solution to the political impasse. Bond yields declined from records.
Enlarge image
Rifts between the Islamist president and his opponents have reached a climax as Mursi completed his first year in office - a year his detractors paint as one of turmoil, deepening poverty and sectarian violence. Photographer: Khaled Desouki/AFP via Getty Images
The EGX 30 Index (EGX30) jumped 4.9 percent, the most since last July, to 4,986.81 at the close in Cairo, paring the gauge’s 2013 drop to 8.7 percent. All 30 stocks rose, with Commercial International Bank Egypt SAE (COMI) soaring 8.8 percent. The yield on $1 billion of benchmark 5.75 percent bonds due 2020 fell six basis points to 10.23 percent at 5:28 p.m. in Cairo, while notes due 20 years later yielded 9.89 percent, down 22 basis points."

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Aldar Drops as Acquisition Gains Seen Overdone: Abu Dhabi Mover - Bloomberg

"Aldar Properties PJSC (ALDAR), Abu Dhabi’s biggest developer, fell for the first time since acquiring Sorouh Real Estate Co. on June 30 as investors speculated gains were overdone.
The shares fell 2.6 percent to 2.25 dirhams at the close in Abu Dhabi today, trimming this year’s gain to 77 percent. Aldar shares were the most-active in the Bloomberg GCC 200 Index (BGCC200) of the largest companies in the Gulf, with more than 117 million changing hands today. Aldar’s stock gained 11 percent in the previous three days. Abu Dhabi’s ADX General Index (ADSMI) fell 0.7 percent to 3,583.74, trimming this year’s gain to 36 percent.
Aldar completed the acquisition of Sorouh on June 30, creating a company with $13 billion in assets. The smaller builder’s shares were delisted from Abu Dhabi’s bourse after shareholders received 1.288 Aldar shares for each share held in an all-stock transaction."

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New Qatar emir shakes up sovereign wealth fund -

"Sheikh Hamad bin Jassim al-Thani, Qatar’s former prime minister and architect of its assertive investment strategy, has been replaced as head of the country’s sovereign wealth fund, as the emirate accelerates its transition to a younger generation.
Sheikh Tamim bin Hamad al-Thani, the new emir who took over after his father’s abdication last week, handed the top job at Qatar Investment Authority to Ahmad Al Sayed, the 37-year-old lawyer who has been chief executive of Qatar Holding – the fund’s direct investment arm – for the past four years."

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UAE equities on verge of multi-year rally, says Daman -

"The UAE markets are in the midst of a long-term, multi-year upward trend, and the bullish performance thus far signals a revival that is only in its early stages, according to Daman Investments, the leading Dubai-based investment management company, which held its traditional Summer press briefing today.

Unveiling the 2013 edition of its annual market report to members of the press at a media roundtable, Daman Investments top management officials led by Managing Director Mr. Shehab Gargash, ran through an analysis of both macro and fundamental factors that underpin movements seen in the UAE financial markets.

Research conducted by Daman Investments found that nine of the 11 key factors identified by Daman fall into positive territory, thereby leading it to conclude that the UAE bourses, the Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX) , have an optimistic outlook. "

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GIC, Temasek, Oman to invest in India's HDFC property fund | Reuters

"The Government of Singapore Investment Corp (GIC), investment firm Temasek and Oman's State General Reserve Fund have committed to invest $200 million in a real estate fund run by Indian mortgage lender HDFC, a source with direct knowledge of the matter told Reuters.

The investment is in a $500 million real estate private equity fund launched late last year by HDFC Property Fund, founded by Housing Development Finance Corp (HDFC), India's biggest mortgage lender, the source said, speaking on condition of anonymity as the information is not public.

HDFC Property Fund declined to comment, GIC and Temasek did not respond to an email and State General Reserve Fund could not be contacted immediately."

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Poland’s finance ministers slug it out over pensions and public debt | beyondbrics

"Fights between enemies are nothing unusual. It is battles between (former) friends that tend to be the most bitter, as is the case in an ongoing conflict between Jacek Rostowski, Poland’s finance minister, and Leszek Balcerowicz (pictured), a former finance minister, central banker and the architect of Poland’s post-communist economic reforms.

The two used to be close allies. Rostowski advised Balcerowicz when he was crafting Poland’s passage from communism to capitalism in the early 1990s, and then again when Balcerowicz headed the National Bank of Poland.

But in recent years Balcerowicz’s attachment to an increasingly unfashionable neo-liberal strand of economic thought has put him at odds with Rostowski, who has shed his ideological heritage in favour of trying to keep Poland’s public finances from spinning wildly out of control."

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Provisions dent VTB

Gulf Daily News » Business News » Bahrain banks' profits double

"Bahrain's banks' combined net profits nearly doubled to $1.1 billion in the first three months of this year when compared with $427 million in cumulative profits during the same period last year.

According to data compiled by the Central Bank of Bahrain (CBB), the rebound in profits was across all sectors of the banking industry, including conventional wholesale and retail banks, as well as Islamic wholesale and retail banks.

The CBB said the rebound is a reflection of the recovery in the banking sector."

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GAZ Group Reports Increased 2012 Profits | Business | The Moscow Times

"Automaker GAZ Group, led by former GM executive Bo Andersson, boosted profit to 8.8 billion rubles ($266 million) last year on the back of cost cuts, Andersson said Tuesday.

That is 3 percent up from the previous year, he said, presenting the company's 2012 IFRS financial results.

Cost reduction efforts at the auto division of billionaire Oleg Deripaska's industrial empire spread across purchasing, logistics and energy consumption, Andersson said, while labor productivity increased 7 percent."

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RDIF and Deutsche Bank Plan to Buy Rostelecom Stake | Business | The Moscow Times

"The Russian Direct Investment Fund, or RDIF, the country's state-backed private equity fund, plans to buy a stake in Rostelecom, a spokeswoman for the state-controlled telecom operator said ahead of its expected privatization.

The RDIF is part of a pool of investors that would buy shares owned by the company itself, Rostelecom spokeswoman Kira Kiryukhina said on Tuesday.

She declined further comment, saying the deal had yet to be completed."

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Kashagan: Kazakhstan boosts stake | beyondbrics

"Kazakhstan seems to have overcome its initial doubts and has decided to increase its stake in the giant Kashagan oil field.

So, ConocoPhillips will not be selling its 8.4 per cent stake in the offshore Caspian Sea project to India’s ONGC Videsh as planned since last year. Instead, as announced on Tuesday, Kazakhstan will use its pre-emption rights and put the stake in the hands of state-controlled KazMunaiGas (KMG). The price? $5bn, same as India would have paid.

ConocoPhillips said it had been notified that the Kazakhstan oil and gas ministry was exercising its rights to the 8.4 per cent interest and had designated KMG as the buyer. The deal is expected to close in the fourth quarter of 2013. “The proceeds received by ConocoPhillips under the pre-emption will remain unchanged at approximately $5 billion, including customary adjustments,” said ConocoPhillips."

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Air Lituanica takes to skies in turbulent European market | beyondbrics

"When your neighbours’ aviation businesses are struggling to survive, you would, probably, postpone the launch of a new carrier in your own country. But Lithuania has proved that it is ready to take a risk. Newly established commercial carrier Air Lituanica has started operations with flights between Vilnius and Brussels.

The new airline is the brainchild of Arturas Zuokas, mayor of Vilnius, and 83 per cent of the airline is owned by the city’s municipal government. The remainder of the shares are owned by a group of private investors.

Initially, Zuokas intended to attract a strategic investor to the project but failed to do so. Nevertheless, such plans still exist, and today’s main shareholders will probably continue their search."

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Interview with Egyptian Lawyer Karim Hafez (Part I): A Lawyer’s Perspective on Egypt’s Economic Woes |

"Karim Hafez is one of the leading lawyers in the Middle East, and is Senior Partner and founder of Hafez Law Firm, a premier trial firm and arbitration practice based out of Cairo, Egypt with offices in Paris, Doha and Jeddah. He obtained his PhD in law from Cambridge University, and has held teaching positions at Harvard Law School and the American University in Cairo, where he is currently Adjunct Professor of Law. ArabsThink  had the opportunity to interview Karim Hafez about his experience in practicing law in Egypt (Part II, click here for interview) and on Egypt’s dangerous economic situation. The interview was conducted in June 2013."

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Fitch gives negative outlook for Ukraine's credit rating : Ukraine News by UNIAN

"Credit rating agency Fitch on Monday downgraded the outlook for Ukraine's creditworthiness from "stable" to "negative", according to Xinhua.
The rating agency reconfirmed Ukraine's long-term foreign and local currency Issuer Default Ratings (IDRs) at "B" level.
In accordance with the Fitch scale, the "B" level ratings indicate that credit risk is present in economy, but a limited margin of safety remains.
Fitch does not expect that Ukraine will reach an agreement with the International Monetary Fund (IMF) on a new loan in 2013, the agency said.
It also forecast a 0.5 to 1 percent growth of Ukrainian economy in 2013 and 2 to 3 percent growth in 2014."

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Egypt: the army bounce? | beyondbrics

Egypt: the army bounce? | beyondbrics: "Egyptian debt premiums might be at an all time high (see beyondbrics 1 hour ago), but equity investors are taking a bet that things will improve for Egypt.

The cairo bourse was closed on Monday for a holiday, but opened on Tuesday with a flourish, surging nearly 5 per cent.

In particular, property and property-related financial stocks were up, with National Real Estate Bank for Development, Amer Group, Six of October Development and Pioneers Holding all up over 9 per cent.

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Midyear review of MENA economies - Your Middle East

"A large portion of the different countries' outlooks are either determined by or heavily dependent on factors outside their control, writes Bassam Aoun in his roundup of a number of MENA economies.
As the year has passed its midway mark, changes are still reverberating throughout the region. Governments across the MENA are fighting for legitimacy to this day, often mired in an atmosphere ridden with public skepticism.

Economies have been shouldering a significant amount of the socio-political pressure, subsequently adding to several of these governments’ woes. Some administrations, however, have been capitalizing on newfound opportunities, supplementing a growing divide between nations that are facing a positive outlook and those facing a negative one.

The cross-section analysis of some of the region’s economies below provides a freeze-frame panoramic view of the state of these countries’ markets, based solely on economic figures and credit reports."

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Egypt: markets edgy as Morsi digs in | beyondbrics

"Markets don’t like ultimatums, and Egypt’s army has delivered a big one to the country’s embattled president Mohamed Morsi and his political opponents: 48 hours to sort it out, or we get involved.

Investors have taken note and the premium on Egypt’s debt is rising fast.

As the FT’s Heba Saleh and Borzou Daragahi in Cairo reported, the Egyptian army on Monday issued a 48-hour ultimatum to the country’s political forces saying it would have to intervene if they did not resolve the political crisis, “a pivotal moment in Egypt’s troubled two and half year political transition.”"

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Scores jailed after UAE coup plot trial -

"More than 60 people were jailed on Tuesday for plotting to topple the United Arab Emirates’ rulers, after a contentious trial that has laid bare Abu Dhabi’s alarm over the growing regional sway of Islamist groups.
As the showdown with Egyptian President Mohamed Morsi and the Muslim Brotherhood intensifies in Cairo, the UAE’s Supreme Court handed down prison terms of between three and 15 years for what prosecutors alleged was a coup effort backed by overseas Brotherhood-linked money."

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The oil markets are in a flux | FT Alphaville

"… and it’s all because, the lady loves shale oil.

Well, what we mean is that finally, the surplus stock of crude trapped in America is having a price effect beyond borders because logistical constraints have been removed and storage incentives have started to disappear. Also, because graphs like these can no longer be ignored.

The result: a major narrowing in the WTI-Brent spread.

From JBC Energy on Tuesday:

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Saudi Arabia’s economy remains robust in May | Arab News

"Saudi Arabia’s economy was robust in May. Indicators of consumer spending maintained solid growth in May leading to record highs for both cash withdrawals and point of sale transactions, according to a report by Jadwa Investment.
The report said annual growth in bank lending to the private sector remained solid in May, though the additional credit issued during the month slowed compared with previous month. Bank holding of treasury bills pushed bank lending to the public sector higher.
Bank deposits rose for the third consecutive month in May, pushing the year-on-year growth to its highest level since June 2009. Bank excess deposits at SAMA (Saudi Arabian Monetary Agency) remained high while loan-to-deposit ratio was broadly unchanged in May, giving scope for further lending growth."

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Standard Life seeks end to UAE moratorium on licences for insurers - The National

"Standard Life is lobbying for an end to a moratorium on new licences for onshore insurers, in a bid to tap into the UAE market for savings and investment products.

The Edinburgh-based company says that a freeze on new licences - intended to combat saturation in the general insurance segment - was hampering competition in life insurance lines and contributing to the amount of capital sent overseas.

International insurance firms have sought access to an industry that is expected to grow to US$37.5 billion across the Arabian Gulf by 2017, according to estimates from Alpen Capital."

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Gulf markets rise at start of Q3; investors bet on UAE earnings

"Gulf bourses rose yesterday as investors triggered a fresh buying spree at the start of the third quarter, and expectations of a strong earnings season in coming weeks boosted stocks in the United Arab Emirates.

Dubai’s index climbed 2.5% to a one-week high, extending 2013 gains to 40.4%. Trading volumes improved compared to recent sessions, but remained unimpressive.

“UAE markets started the quarter in a positive note — investors are betting on strong and solid Q2 numbers, they don’t want to miss the bottom after the major drop we have witnessed last week,” said Mohab Maher, senior manager of the institutional desk at Mena Corp brokerage."

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Kuwait's KFH says $296m debt case settled - Banking & Finance -

"Kuwait Finance House, the Gulf Arab state's largest Islamic lender, said on Monday that a customer had settled $296.6m of debt owed to the bank and that the impact of the receipt would be reflected in its second-quarter results.
The customer had owed KD32.6m ($114.3m) to KFH and KD51m to subsidiaries, the bank said in a statement to the stock exchange.
It did not give any details about the debtor, or say whether the customer was a corporate entity or an individual. KFH is expected to release second-quarter earnings in August."

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Aldar merger kicks off new model for large consolidations -

"The high-profile merger of two of Abu Dhabi’s biggest publicly traded property developers was finalised as it began trading on the Abu Dhabi stock market this week, marking the first use of a new legal model for large company consolidations in the region.
Shares of the new Aldar Properties – the combined entity that absorbed the smaller Sorouh Real Estate – gained 6.4 per cent on Monday, after gaining 1.4 percent on Sunday, in its first day of trading as a merged company.
The structure of the new legal model includes the dissolution of one company and the transfer of all its assets and liabilities to a surviving company, in accordance with the Commercial Companies law, lawyers said."

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Blackrock: ETFs are the true market | FT Alphaville

"Interesting. Blackrock has issued an open letter in the spirit of investor reeducation about its products, no doubt in response to the terrible reporting that’s been going on about its err… recent NAV discounts.

You can read the full open letter (complete with lots of bolding emphasis by Blackrock just to make sure you get the point) but a critical extract we think is the following (Blackrock’s emphasis).

The last few weeks have highlighted an underlying trend that merits broader public appreciation. More and more ETFs are becoming the true market, particularly when market sentiment shifts fast. ETFs are increasingly becoming the place where investors of all sizes can see the market price for a given investment exposure, and act on what’s really happening now in the markets. In a rapidly moving market, the reported prices of individual underlying assets may become stale. The ETF price can become the true price for that market, and the underlying assets may eventually catch up with any gap between the two (called a “premium” or “discount”). This is a main reason that so many investors large and small opted to use ETFs during the last month’s volatility."

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