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Tuesday, 6 August 2013

End of an era at the Post

Tanap tender: the gas pipeline to Europe, eventually | beyondbrics

Tanap tender: the gas pipeline to Europe, eventually | beyondbrics:

"Ordinarily the announcement of a pre-qualification tender for the construction of a pipeline wouldn’t rate much coverage outside of specialist news services.

But the publication Tuesday of adverts by the Trans Anatolian Gas Pipeline company (Tanap) requesting applications from companies interested in building its 1,800km gas line is a little different. It represents the beginning of the end of an EU plan hatched over a decade ago to bring gas from the Caspian basin west to European markets in competition to Russian gas.

Back then, the plan was that the EU’s “southern gas corridor” would be realised by the construction of the 3,900km, 31 bcm per year capacity Nabucco pipeline running from eastern Turkey through Bulgaria, Romania and Hungary terminating at Europe’s main gas hub at Baumgarten in Austria and supported by the governments of the five transit countries."

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Uralkali director predicts great demand for potash | Russia Beyond The Headlines

Uralkali director predicts great demand for potash | Russia Beyond The Headlines:

Vladislav Baumgertner: "We believe that, in 2014, demand for potash may grow by 10 percent
to 60 million tons, and, in subsequent years, the market may begin to grow again by 3-4 percent".
Last week, Uralkali General Director Vladislav Baumgertner announced that the company will no longer sell products through the Belarusian Potash Company (BKK, the only exporter of Russia’s private Uralkali and state-owned Belaruskali). Now, only Uralkali Trading will handle sales, and it will concentrate on product volumes instead of price, as it had before.
Until recently, the much consolidated potash industry has lived by the principle of "price before volume" — the small number of producers has allowed them, in most cases, to dictate terms to buyers.
Changing the sales policies of the industry's largest company has caused panic on the market. In just one day, the world's largest potash companies lost more than $20 billion in capitalization."

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MIDEAST STOCKS-Dubai rises for 7th session before break; Egypt firm | Reuters

MIDEAST STOCKS-Dubai rises for 7th session before break; Egypt firm | Reuters:

"Dubai's index gained 0.7 percent on Tuesday to its highest close since November 2008, rising for a seventh straight session, as retail investors continued to speculate actively ahead of long holidays.

Shares in Dubai Financial Market, the Gulf's only listed bourse, rose 1.9 percent, while Dubai Islamic Bank added 4.1 percent to 3.77 dirhams in its highest turnover since April.

DIB broke above major technical resistance at 3.66 dirhams, its peaks in March and July, and a double bottom formed by the 2009 lows points up to around 5.00 dirhams in the long term."

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Poland: goodbye Wig20, hello Wig30 | beyondbrics

Poland: goodbye Wig20, hello Wig30 | beyondbrics:

The Warsaw Stock Exchange is to launch a new, expanded WIG30 index of its 30 largest and most liquid listed companies next month.

The WSE hopes the move will boost interest among investors in the additional 10 stocks. It also hopes more of the biggest companies in central and eastern Europe will want to be listed on it.

Since the bourse began publishing its blue chip WIG20 index in 1994, Poland’s economy and its capital markets have transformed. The number of companies listed on the main market has grown from 24 to 443 and capitalization of domestic companies has risen from €1.7bn to €124bn."

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Ukrainian stocks start week on high note - Business - News - Ukraine Business Online

Ukrainian stocks start week on high note - Business - News - Ukraine Business Online:

"Concorde Capital provides analysis of Monday’s trading in its daily market comment:

“Positive economic data from Europe fueled demand for Ukrainian equities on Monday, August 5. The WIG Ukraine Index of Warsaw-traded stocks increased 1.0%, fueled by a surge in demand for the volatile shares of farmer Agroton (AGT PW +20.0%).  The Index’s other top gainer was grain trader Kernel (KER PW +2.6%), which has improved 8.1% in two sessions. Beyond the Index, traders extended a correction of Serinus Energy (SEN PW -1.9%), which has fallen 6.2% in two sessions after surging 15.6% upon reporting the discovery of a potential oil deposit. In London, real estate developer DUPD (DUPD LN) surged 10.7% -- making for a 14.0% in two sessions – while JKX Oil & Gas (JKX LN) improved 3.2%. Positive Chinese purchasing manager data offered a boost to Ferrexpo (FXPO LN +1.5%). The Ukrainian Exchange (UX) Index of Kyiv-traded stocks fell 0.7%, pulled down by Raiffeisen Bank Aval (BAVL UK -1.9%) and Unicredit’s Ukrsotsbank (USCB UK -1.6%), which has fallen 9.0% in seven straight declining sessions.”"

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Ukraine: taking the EU for a bad ride | beyondbrics

Ukraine: taking the EU for a bad ride | beyondbrics:

In a bid to jump-start its struggling auto assembly industry, Ukraine has introduced yet another tax on auto imports, infuriating officials at the European Union and further jeopardising any chance of signing planned association and free trade agreements with the EU in the autumn.

Signing those agreements would significantly weaken Mosocow’s pull on Kiev, putting it on a steady path towards EU integration. But the agreements were already in doubt after the jailing of opposition leader Yulia Tymoshenko. Now they are even more doubtful.

Monday marked two years that Tymoshenko has been behind bars. And there is little sign that Viktor Yanukovich, Ukraine’s president, will cave in to rising pressure from the EU to release his biggest rival and reverse a broader roll-back on democracy."

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Six things you need to know about Raghuram Rajan | beyondbrics

Six things you need to know about Raghuram Rajan | beyondbrics:

The new governor of India’s central bank has built a reputation as a world-class economist during a quarter century of teaching and writing – helped along by one explosive speech in 2005. Here is a potted biography in six short chapters.

1. He was the party pooper at Alan Greenspan’s farewell bash at Jackson Hole in 2005, raising warnings about the dangers that led to the financial crisis of 2008-09. In response, Lawrence Summers called him a “luddite”.

2. At the time, Rajan was serving as the youngest ever chief economist at the IMF. He was also the first non-westerner in the job, which he held from October 2003 to December 2006."

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SHUAA return to profit in second quarter -

SHUAA return to profit in second quarter - Business Intelligence Middle East - - News, analysis, reports:

"SHUAA returned to profit in Q2 2013, driven by revenue growth in asset management, investment banking and lending divisions and higher fees, commissions and interest income.

Net Profit for Q2 2013 was AED 1.3 million, up from loss of AED 5.9 million in Q1 2013 and loss of AED 15.9 million in Q2 2012 respectively. SHUAA’s strategy of implementing a financial, strategic and operational turnaround has succeeded in turning a profit for the first time in two years.

It also places the second quarter’s earnings in line with the Company’s expectations and earlier earnings guidance."

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Ruble slides further amid economic slump | Russia Beyond The Headlines

Ruble slides further amid economic slump | Russia Beyond The Headlines:

          The ruble-to-dollar exchange rate continued to fall in early August, despite high oil prices,
which have returned to the area of $108 per barrel. Source: PhotoXpress
In early August, the Central Bank of Russia reported on July currency interventions. It sold $4.2 billion and €374 million—the largest volume since October 2011. The greatest part ($3.1 billion) consisted of planned interventions, the volumes of which are determined after assessment of the foreign trade balance and the dynamics of oil prices.
The remaining $1.1 billion consisted of corrective interventions at a volume of up to $200 million per day. The Central Bank carries out these interventions when the rate reaches the boundaries established for the internal operations fluctuation band, which has a width of 1 ruble (the main corridor is 7 rubles).
As the bank sees it, its task is to smooth out the short-term rate movements. Selling or buying (depending on which barrier, higher or lower) $450 million, the Central Bank shifts the boundaries of the corridor by 5 kopecks."

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Can the private sector save Gulf monarchies? | tks @Brian_Whit

Can the private sector save Gulf monarchies?:

"The survival (or not) of Arab Gulf regimes is likely to hinge on their ability (or not) to provide jobs for vast numbers of young people who are due to enter the labour market over the next few years.

Historically, these regimes have sought to buy people's quiescence by creating well-paid but undemanding and often unnecessary jobs in the public sector – but they now recognise that this is not sustainable and are looking instead towards the private sector to create the jobs that will stave off revolution.

Pinning so many hopes on the private sector may be unwise, though, judging by a new research paper by Steffen Hertog of the London School of Economics. Hertog looks in some detail at the state of the private sector in the GCC countries and makes a number of points that ought to worry their regimes."

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[snap] new RBI chief, new rupee low | beyondbrics

[snap] new RBI chief, new rupee low | beyondbrics:

"Raghuram Rajan, chief economic adviser to India’s finance ministry, has just been announced as the next chief of the Reserve Bank of India.

And as if to welcome the news and remind him of the tricky job ahead, the rupee hit a new low on Tuesday, reaching 61.86 to the dollar.

The current central bank governor, Duvvuri Subbarao, is due to finish his five year term in September. Rajan has been appointed for a three year stint.

Rajan was previously chief economist of the International Monetary Fund, and a professor at the University of Chicago."

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Khodorkovsky, partner's appeal rejected, but sentence shortened by 2 months — RT News

Khodorkovsky, partner's appeal rejected, but sentence shortened by 2 months — RT News:

From left: Former head of Yukos Mikhail Khodorkovsky and Menatep head Platon Lebedev (RIA Novosti / Andrey Stenin)
Russia's Supreme Court has reduced the sentence to the former oil tycoon Mikhail Khodorkovsky and his partner Platon Lebedev against their second conviction for money laundering and embezzlement.

The court has ruled the men would be released respectively in August and May 2014 - in both cases two months earlier than scheduled.

Khodorkovsky's defense team has insisted in their appeal that Russia's former richest man and Lebedev were convicted in 2010 on charges that were false and invalid. "

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Hank Greenberg, Abu Dhabi fund, others to buy Tokyo building for $1 bln -sources | Reuters

Hank Greenberg, Abu Dhabi fund, others to buy Tokyo building for $1 bln -sources | Reuters:

"A group including former U.S. insurance magnate Maurice "Hank" Greenberg and an Abu Dhabi sovereign fund have agreed to buy a prominent Tokyo office building for $1 billion, the biggest property deal in Japan since February, people with direct knowledge of the transaction said.

The decision by the foreign and Japanese investors to acquire the ageing but distinctive structure in central Tokyo highlights expectations that real estate values will revive as Prime Minister Shinzo Abe's pro-growth economic policies boost investor sentiment and risk appetite.

It will be Japan's biggest property investment including foreign investors since the 2008-09 global financial crisis."

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Batista Poster Boy For Brazil's Ills - Business Insider

Batista Poster Boy For Brazil's Ills - Business Insider:

It isn't often that a former central bank president feels the need to reassure a country that it's economic problems are not the fault of one single man.
This weekend, however, former Brazilian central bank president Arminio Fraga told the press that erstwhile billionaire tycoon Eike Batista's losses were not the reason for the country's stock market malaise.

Batista himself, over a year ago the 7th richest man in the world, has lost billions from his commodities and logistics empire — EBX — and is now estimated to be worth only around $200 million, including debt."

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Decade-Long Australia Mining Boom Turns to Bust |

Decade-Long Australia Mining Boom Turns to Bust |

"The Australian mining boom built over a decade on Chinese hunger for energy and raw materials is turning into bust for many business owners as China‘s cooling growth reverberates through a country accustomed to winning from the rise of an Asian economic giant.

Endowed with vast mineral resources, Australia has been the envy of the Western world for avoiding recession during the global financial crisis while other wealthy countries drowned in debt. But the country now faces a potentially painful transition as it weans itself off a heavy reliance on its two biggest exports, coal and iron ore.

Australia’s dilemma underscores that China’s long run of supercharged growth has given it enough weight in the world economy to create not only winners, but losers too when its own fortunes change."

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Drake & Scull profits soar on back of Saudi Arabia projects - The National

Drake & Scull profits soar on back of Saudi Arabia projects - The National:

"Profits at Drake & Scull International rose 63 per cent year on year to Dh52.2 million during the three months to June as the Dubai-based contractor benefited from a revival in construction markets in Saudi Arabia and the UAE.

In a statement posted to the Dubai bourse yesterday, Drake & Scull reported that contract revenue during the period nearly doubled to Dh1.340 billion in the second quarter from Dh717.3 million in the same period a year earlier.

The company's backlog of orders reached a record high of Dh11.7bn in June - an increase of 58.1 per cent compared with a year ago."

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Economic growth in UAE bucks the market - The National

Economic growth in UAE bucks the market - The National:

"The UAE's strong economic growth is bucking the trend in emerging markets and private-sector business confidence in Dubai is surging, according to three key indicators published yesterday.

An HSBC index that measures output in non-oil and manufacturing businesses rose to 54.5 points last month from 54.1 the previous month. A reading above 50 signals expansion, with a score below that representing a decline.

It was the 47th month in a row of improvement, underscoring the pace of recovery in the private sector since the global economic downturn in 2009."

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Surge in developers planning to restart stalled Dubai property projects - The National

Surge in developers planning to restart stalled Dubai property projects - The National:

"Dubai is experiencing a surge in the number of developers seeking planning permission to restart stalled housing projects as property values in the emirate soar.

Dubai Land Department said it had valued Dh20 billion of properties for Dubai Municipality to assess planning consent or building permit fees during the first half of this year, almost double the Dh10.5bn it valued during the previous six months.

The increase helped to push the total number of valuations undertaken by the department during the period up 69.8 per cent to 2,388, while their value increased 41 per cent to Dh89.3bn compared with the previous six months."

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HSBC’s EM woes | beyondbrics

HSBC’s EM woes | beyondbrics:

"It was a rough first half for HSBC. While the bank’s two biggest markets – Hong Kong and the UK – turned in strong performances in the first six months of the year, underlying profits from Latin America more than halved as losses from bad loans in Brazil and Mexico jumped.

Several other key Asian markets – including China, India, Indonesia and Vietnam – also posted double-digit declines.

“There has been a slowdown in faster-growing markets in recent quarters,” Stuart Gulliver, HSBC chief executives, told reporters on a conference call on Monday. “Even emerging markets go through business cycles, and this has impacted our revenue and our profit growth.”

Here’s a chart from HSBC’s earnings presentation detailing the damages (H/T to our colleagues over at FastFT for the spot):

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HSBC’s EM index: gloomy | beyondbrics

HSBC’s EM index: gloomy | beyondbrics:

"How gloomy should we be feeling about emerging markets? According to HSBC’s Emerging Markets Index, very. The index – a weighted composite of purchasing managers’ indices from 16 countries – has dipped into negative territory for the first time since the crisis of 2008-09.

Worse, the deterioration was increasingly broad-based across the emerging world. But there were some bright spots amid the gloom – reminding us to be careful when thinking about the emerging markets as if they were one homogeneous group.

The index came in at 49.4 in July, down from 50.6 in June. That’s not good. As PMI followers know, the 50-point line separates expansion from contraction and this is the first time the index has dipped below 50 since April 2009, when it was on the way up.

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Dubai: Export firms more confident on higher sales volumes | Arab News

Dubai: Export firms more confident on higher sales volumes | Arab News — Saudi Arabia News, Middle East News, Opinion, Economy and more.:

"A stable business outlook and improvements in the business environment have pushed the composite Business Confidence Index (BCI) for the second quarter of this year to 120.7 points in Dubai, a 14.6 points increase over the same period in 2012.
BCI has also grown by 6.7 points between the first two quarters of 2013 as seen in the quarterly business confidence survey conducted by the Department of Economic Development (DED) in Dubai.
Over 83 percent of the businesses in Dubai expect an increase or no change in sales volumes during the third quarter of 2013 while many plan to invest in hiring or technology upgrades."

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UAE banks show 'irrational exuberance' over loans - The National

UAE banks show 'irrational exuberance' over loans - The National:

"Tirad Mahmoud, the chief executive of Abu Dhabi Islamic Bank, has warned of "irrational exuberance" in the UAE's corporate lending market, saying companies are seeking to lower borrowing costs by so much that banks may no longer find it appealing to lend.

Mr Mahmoud said ADIB was finding fewer opportunities in corporate lending and is instead seeking to build out its retail banking franchise with a focus on expatriates in the UAE.

"There's irrational exuberance in terms of margin compression. It's moving too fast," he told reporters attending a Ramadan event on Sunday night. "What we see is making lending less interesting for us and therefore our engagement in that area will gradually tail off.""

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SR26bn phosphate plant to shore up KSA exports | Arab News

SR26bn phosphate plant to shore up KSA exports | Arab News — Saudi Arabia News, Middle East News, Opinion, Economy and more.:

The Saudi Arabian Mining Company (Maaden) on Monday announced the signing of a shareholders agreement to jointly develop an SR26 billion fully integrated phosphate production facility in Saudi Arabia with partners — The Mosaic Company and the Saudi Basic Industries Corporation (SABIC).
“Maaden, Mosaic and SABIC will own 60 percent, 25 percent and 15 percent of the project respectively,” Maaden officials said. It will make Saudi Arabia one of the world’s largest phosphate exporters.
The new complex will act as the anchor project at Waad Al-Shammal and will deliver significant value to Maaden shareholders. As one of the largest integrated phosphate fertilizer facilities in the world, it will double Maaden’s cost effective phosphate production and improve Ma’aden’s access to key global markets."

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Saudi Gazette - MENA needs $145.7bn investment in power generation amid demand

Saudi Gazette - MENA needs $145.7bn investment in power generation amid demand:

Strong economic and demographic growth associated with rapid urbanization has led to an increase in energy demand to meet rising electricity and desalinated water needs in the Middle East and North Africa (MENA) region, the International Renewable Energy Agency (IRENA) and Renewable Energy Policy Network for the 21st Century (REN21) said in their joint report recently.

The report estimates that investments worth $145.7 billion will be needed for power generation from 2013.

Of which, investments worth $63.1 billion will be in the GCC, $21.4 billion in Iran and approximately $53 billion in the combined other countries of the region. "

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Citigroup Haunts Abu Dhabi as Mubadala Caught in Brazil Meltdown - Bloomberg

Citigroup Haunts Abu Dhabi as Mubadala Caught in Brazil Meltdown - Bloomberg:

"Mubadala Development Co., the Abu Dhabi sovereign wealth fund, is fighting to avoid losses on its $2 billion investment in Eike Batista’s companies as the former billionaire seeks to save his commodity empire from collapse.
The fund is owed $1.5 billion after converting a preferred equity investment in Batista’s EBX Group Co. into debt, three people with knowledge of the matter said last month. That amount is secured by Batista assets, one of the people said, asking not to be named as details are private. EBX also last month agreed to “redeem” a portion of Mubadala’s original investment."

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