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Wednesday, 3 July 2013

Gulf’s private equity lowers its sights - FT.com

"At the beginning of the Middle East and North Africa private equity gold rush of the late 2000s, most managers of newly formed funds advertised the strategic merits of mega infrastructure deals and the like and promoted the establishment of funds exceeding $1bn.
Apart from inflating both the egos and the intakes of financial sponsors, this approach has been costly and unsustainable. Fast forward to 2013, we have hardly any mega deals announced and no noticeable infrastructure assets in play. Moreover, there is a lot of capital “hangover” – a reported $7bn in total committed but undeployed money – amassed by the private equity industry during the exuberant era."

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An expanding economy should keep Dubai healthy - The National

"I still have on my phone a picture of the front page of Britain's Daily Mail from late November 2009, soon after Dubai World announced its intention to restructure US$25 billion of debt. It screamed loudly and aggressively: "Bye bye Dubai."

I look at the image whenever I want to remind myself of two things: the stupidity of some sections of the British press, and the ability of Dubai to overcome adversity.

Of course Dubai didn't fade away back then. In fact, given the fundamental financial strength of the UAE, there was never a real possibility of that. As is often the case, the headline writers of Fleet Street went for a cheap rhyme rather than a statement of fact."

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Qatar seeks to shake off trophy investor image - FT.com

"The government of the gas-rich state of Qatar is rethinking the way it invests billions of dollars of state funds in property in a bid to introduce a commercial rigour to its voracious deal-making and to end its reputation as a trophy investor.
The tiny Gulf state is reviewing scores of deals made through government-funded vehicles since 2007 as it shapes a new investment strategy, according to people familiar with Qatar Investment Authority, the asset manager with more than $100bn in assets, under whose auspices most property deals are made."

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Dubai to launch futures contract linked to Indian equities index - FT.com

"Dubai’s Gold and Commodities Exchange will this week launch a futures contract linked to a popular Indian equity index, allowing investors to bet offshore on movements in the Mumbai bourse’s biggest companies.
The move, expected on Friday, will target the Gulf’s large Indian population as well as the corporate market, in an effort to offer foreign shareholders a cheaper and easier way to access equities in one of the world’s great growth economies."

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Poland makes one more rate cut as economy hints at recovery | beyondbrics

"
Poland’s central bank on Wednesday cut its benchmark interest rate by a quarter point to a record low of 2.5 per cent, in what most analysts feel is the end of the bank’s loosening cycle as the economy is starting to show slight signs of reviving.

The bank’s rate-setting Monetary Policy Council has been trying to get ahead of the slowing economy, cutting rates eight times since the end of last year, and there are signs that the economy has at least hit bottom and may be ready for a rebound.

William Jackson, emerging markets economist at Capital Economics, wrote:"

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Why The Oil Market Is Wrong On Egypt | @REBELECONOMY

"This guest post is by Robin Mills, energy strategist and economist. He is the author of “The Myth of the Oil Crisis” and “Capturing Carbon”.
An unlikely pairing has made it to the headlines this week: international oil markets and Egypt.
The price of US light crude oil has risen above $100 a barrel for the first time since September 2012 while Brent crude oil, the European benchmark, has risen to about $105, apparently on concerns over political turmoil in Egypt."

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UAE exchange houses to feel effect of fresh US sanctions on Iran, experts say - The National

"New economic sanctions imposed on Iran by the US will have a major impact on UAE businesses, experts say.

The rules, which came into effect on Monday, are wide-reaching and mainly target non-US companies. Anyone who breaks the sanctions risks severe penalties.

The measures most likely to affect the UAE are restrictions on banking transactions in Iranian rials and sales of gold to Iran. It is understood there is concern among UAE authorities about the possible repercussions for exchange houses and gold dealers."

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Why the new crisis in Egypt is a black swan for financial markets « ArabianMoney

"Global stocks continued to plunge in the advance of a climax in the power struggle in Egypt with a military coup seemingly just hours away. Gold, oil and silver prices strengthened.

Is this the black swan event that will trigger a wider correction in global financial markets? Many commentators have been looking for a catalyst to bring an over-extended rally to an end. Perhaps this is it."

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Yanukovych: Ukraine set to fulfill all EU requirements - ForUm

"Ukraine is set to fulfill all commitments under the Action Plan for signing the Association Agreement during the Vilnius summit of "Eastern Partnership" in November of this year, President of Ukraine Viktor Yanukovych said, the President’s press service informs.

"We look forward to the upcoming summit to be held in November this year. We intend to fulfill all the requirements, put forward to Ukraine" Yanukovych told a joint press conference after the meeting of the presidents of the Visegrad Group and Ukraine in town of Wisla.

The President expressed confidence that the vast majority of the European integration laws will be adopted this plenary week."

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Dubai’s DGCX Plans to Offer Plastics, Renminbi Futures Contracts - Bloomberg

"Dubai Gold & Commodities Exchange, the Middle East’s first derivatives market, plans to offer futures contracts based on polypropylene and the renminbi as it seeks to tap into growing trade with China.
The deliverable plastics contracts, to be denominated in dollars, are being developed in partnership with China’s Dalian Commodity Exchange and are expected to begin trading in the third quarter, Chief Executive Officer Gary Anderson said at a news conference in Dubai today. The six-nation Gulf Cooperation Council, which includes oil-rich Saudi Arabia and the United Arab Emirates, produce more than 20 percent of the world’s plastics and a majority of that flows into China, he said.
The exchange aims to focus on contracts needed within the region, Anderson said. The plastics contract will trade alongside a renminbi futures contract to enable users to hedge their exposure to the currency, he said."

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Kuwait Finance House to Start Dollar Sukuk Fund as Yields Climb - Bloomberg

"Kuwait Finance House KSC will start a $100 million sukuk fund as a slump in global bond markets offers a chance to invest at higher yields, the chief executive of its Malaysian asset-management unit said.
The fund will buy investment-grade sovereign and corporate dollar notes that comply with Islam’s ban on interest from the Middle East, Indonesia and Malaysia, KFH Asset Management Sdn. Chief Executive Officer Mushthaq Ahmad Ibrahim said in an interview in Kuala Lumpur today. It will probably start purchasing debt this month, he said.
The average yield on Shariah-compliant notes touched 4.17 percent on June 25, the highest since May 2011, the HSBC/Nasdaq Dubai US Dollar Sukuk Index shows, after Federal Reserve Chairman Ben S. Bernanke said June 19 the central bank may taper its monthly debt purchases this year and end them in 2014. Global debt funds recorded an unprecedented $23.3 billion in outflows for the week through June 26, according to a June 28 report from Citigroup Inc., which cited data from EPFR Global."

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Egypt Bonds Fall as Pound Forwards Drop After Mursi Defies Army - Bloomberg

"Egypt’s benchmark bonds declined, pushing the yield to a record, as stocks and forward contracts for the pound dropped after President Mohamed Mursi rebuffed the military’s deadline to end the political crisis.
Enlarge image
Egypt's pound has weakened almost 12 percent since Dec. 30, when the central bank eased its support in order to conserve foreignian reserves that plunged by more than half since the 2011 revolt that ousted Hosni Mubarak.
The yield on the $1 billion of 5.75 percent bonds due April 2020 jumped 13 basis points to 10.35 percent at 2:34 p.m. in Cairo, the highest on a closing basis since the notes were sold in 2010. Twelve-month non-deliverable Egyptian pound forwards weakened 8.1 percent, the most since Jan. 2, to 9.05 a dollar, data compiled by Bloomberg show. That signals investors expect a depreciation of 22 percent in a year from 7.0289 a dollar today."

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Turkish inflation adds to woes | beyondbrics

"
This was not a number the markets wanted to see, particularly after the upheaval in Turkey in recent weeks. The country’s inflation for the 12 months to the end of June hit 8.3 per cent, up from 6.5 per cent in May. “This increase is beyond anyone’s expectation,” wrote Ozgur Altug at BGC Partners in Istanbul in a note.

The lira flirted with the level of TL1.95 to the dollar, close to its all time lows, while the stock market also fell some 3 per cent from the previous day’s close by early afternoon.

In fact, core inflation remains relatively stable, at about 5.5 per cent, but rises in unprocessed food prices and energy price pressures due to the recent slide in the lira have stoked up the headline rate. The central bank target of 5 per cent inflation by the end of the year – which already seemed optimistic – now appears even harder to attain, with many analysts forecasting 7 per cent or more."

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Gazprom ups 2013 Europe gas export forecast | Russia Beyond The Headlines

"Gazprom plans to export to Europe more than 160 bcm (5.6 trillion cubic feet) of natural gas in 2013, Gazprom CEO Alexey Miller told the Annual General Meeting on Friday, June 28.
According to him, Gazprom sold 139.9 bcm of natural gas to European consumers in 2012 (see the chart) under long-term contracts, while total sales amounted to 151 bcm.
Back in February, Gazprom’s forecast was a moderate one, projecting growth to 152 bcm this year."

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Egypt stocks slide as deadline nears | beyondbrics

"
Egyptian stocks fell by nearly 2 per cent in early trading on Wednesday as the country braced itself for a trial of strength between Mohamed Morsi, the Islamist president, and the country’s military leaders.

The central bank ordered banks to close early, at 2 pm instead of 5 pm, although the stock exchange began trading normally at 10.30 am. An ultimatum issued by the army on Monday gave Morsi until 5 pm on Wednesday to resolve the country’s political crisis.

Stocks rallied in Cairo on Tuesday after the Supreme Council of the Armed Forces put a statement on its Facebook page saying: “We swear to God that we will sacrifice even our blood for Egypt and its people, to defend them against any terrorist, radical or fool.”"

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Live chart: FDI - YouTube


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UAE sedition trial: Inside the court as history is made - The National

"After four months, 13 sessions and thousands of pages of files and evidence, the 94 accused and their families would know their fate imminently. Across the nation, virtually everyone was discussing one thing: the verdict in the trial.

Family members were escorted in and allowed to take their seats. This time, walking into the State Security Court was different from previous hearings: the atmosphere was tense and security was high. You could almost cut through the air of anticipation, nervousness and hope as people repeatedly glanced at the clock on the wall, waiting for the judge to arrive.

There were considerably more bailiffs than before, both female and male, to keep the local media away from family members and defendants. Every move, every sigh, every wave was noted, as the bailiffs worked to ensure order."

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UAE shares fail to hold on to its rally | GulfNews.com

"UAE indices failed to hold on to the bull rally for the past two days due to political turmoil in Egypt.
Dubai’s DFM index slipped by 0.77 per cent to close at 2260 points while Abu Dhabi’s ADX index fell by 0.73 per cent at 3583.74 points on Tuesday.
Among the gainers on Dubai bourse, Takaful-EM rose by 6.56 per cent to Dh0.650 while Depa by 2.50 to $0.410 and Al Slam Bank – Bahrain by 2.17 per cent to Dh0.940."

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Jet Etihad deal faces regulatory hurdles | GulfNews.com

"Shares of Jet Airways slid as much as six per cent on Tuesday amid new investor worries over whether the Abu Dhabi-based Etihad airline would get final permission to buy a stake in the private Indian carrier.
The Jet-Etihad deal, announced in April, marks the first overseas investment in an existing Indian carrier since New Delhi eased restrictions to allow foreign firms to take up to a 49 per cent holding in the country’s airlines.
But a request by the prime minister’s office on Monday for the plan to be discussed by cabinet raised new worries about the fate of the deal. It sent shares of Jet down six per cent before they retraced to trade two per cent lower at Rs455 (Dh28)."

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ETF Riddle: What do Gold, Japan, Qatar, Bonds and the Sun Have in Common?  - Bloomberg

"U.S. exchange-traded funds attracted some $73 billion in the first half of 2013, a few billion less than last year's record-breaking pace. Not bad in the wake of a June selloff sparked by the Federal Reserve's talk of tapering its bond buying. Fed Chairman Ben Bernanke's little performance contributed to $11 billion in ETF outflows, the worst month since January 2010.
The five statistics below tell the tale of the biggest trends in ETF Land over the past six months -- and what to keep an eye on in the next six."

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Kyiv to repay $24.1 m interest on eurobonds in 2013

"Kyiv will repay $24.1 million of interest on eurobonds by the end of the year, Deputy Head of Kyiv City State Administration Ruslan Kramarenko has told Interfax-Ukraine.

According to him, in particular $10 million will be repaid in interest income on 2005 eurobonds, another $14.1 million – on 2011 eurobonds.

As reported, the Kyiv budget for 2013 foresees UAH 1.351 billion for servicing debts."

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Abu Dhabi energy firms ride a wave - The National

"UAE energy companies are teaming up with oil and gas giants to form ventures, capitalise on investing opportunities and gain a larger presence in overseas energy markets.

Shell, for example, in April was chosen by the Abu Dhabi National Oil Company (Adnoc) to participate in a 30-year joint venture to develop the major Bab sour gas reservoirs in the emirate of Abu Dhabi.

Shell will hold a 40 per cent interest, with Adnoc holding 60 per cent."

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