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Monday, 23 December 2013

Saudi Gazette - Saudi nonoil sector to grow 5.4% in 2014

Saudi Gazette - Saudi nonoil sector to grow 5.4% in 2014:

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Although 2014 will prove to be a challenging time for policy making on relatively volatile international economic environment and a stronger dollar, among others, a number of key points in the Saudi 2014 budget announced Monday showed that “Saudi Arabia will be able to sustain economic growth ahead,” the National Commercial Bank (NCB) said in its comment on the new budget.

The NCB report said the elevated capital expenditure will continue to boost non-oil growth in the near to medium-term. It also sends a positive signal to the private sector, which will improve overall confidence levels in the economy. Moderating global commodity prices and the expected effective nominal appreciation of the Saudi riyal, especially that tapering is dollar positive, imply that growth in the budget can be larger in real terms.

NCB “believes that restraining growth in current expenditure could imply higher government savings, and as more resources are injected through specialized credit institutions, this will enhance and support private sector activities.”"

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Bail hurdle remains despite acquittal of Dubai fraud accused Marcus Lee

Bail hurdle remains despite acquittal of Dubai fraud accused Marcus Lee:

"Marcus Lee thought his five-year nightmare in Dubai had ended with his final acquittal on property fraud charges but there is another hurdle: his $300,000 bail has not been returned and, without it, he cannot pay his debts and so cannot leave the country with his wife, Julie.

While his former boss Matt Joyce has returned to Australia with his family since his acquittal, Mr Lee fears he could be trapped in Dubai until at least late next month. His passport was returned on December 15 after he was cleared in November for the third time. His application for the revocation of his bail conditions was also granted. The Lees thought that would have included the return of the 1 million dirhams bail they paid when Mr Lee and Mr Joyce were released after nine months in prison in 2009. The Lees had been forced to sell their family home in Australia to meet the bail.

But when Mr Lee went to ask for the return of his cash, he was told he would need to apply again."

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EconoMonitor : EconoMonitor » Great Graphic: The Rise of China as a Trade Power

EconoMonitor : EconoMonitor » Great Graphic: The Rise of China as a Trade Power:

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This Great Graphic is from Amazing_Maps. It shows in red those countries for which China is the largest trading partner.   China is the second largest trading partner for the countries in orange. Countries in yellow are where China is the third or lower bilateral trading partner.   Too recent for this map, China has become New Zealand’s largest trading partner."

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Saudi Arabia sets record $228bn budget for 2014 - Al Arabiya News

Saudi Arabia sets record $228bn budget for 2014 - Al Arabiya News:

"Saudi Arabia today set its 2014 budget spending at a record 855 billion riyals ($228bn), equal to the country’s projected revenues.

That spending figure marks a modest rise of 4.3 percent on planned spending in 2013, the finance minister announced in the country’s budget plan.

Saudi Arabia’s gross domestic product grew by an estimated 3.8 percent in 2013, compared with 5.8 percent in 2012, Reuters reported.

Economists said that the budget looked “healthy” but acknowledged that the rise in spending is much lower than in previous years."

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MIDEAST STOCKS-Markets narrowly mixed; Qatar recovers from 2-week low | Reuters

MIDEAST STOCKS-Markets narrowly mixed; Qatar recovers from 2-week low | Reuters:

"* Petrochemical shares support Saudi

* No major reaction to slower spending rise in 2014 state budget

* Kuwait closes before court upholds election result

* Small caps dominate UAE

* Qatari Investors Group soars as institutions buy

By Nadia Saleem

DUBAI, Dec 23 (Reuters) - Middle Eastern share markets were narrowly mixed on Monday, struggling for direction amid a lack of new catalysts, although Qatar's bourse recovered from a two-week low as bargain hunters returned.

Saudi Arabia's benchmark climbed 0.1 percent to a new five-year high after trading flat for most of the session. Petrochemical shares supported the market with the sector's index up 0.2 percent.

The market showed little reaction to the announcement of the 2014 state budget, which projected spending would rise a modest 4.3 percent from this year's plan, suggesting the kingdom was starting to slow expenditure growth after three years of huge increases.

Kuwait's index also climbed 0.1 percent. After the close, the Constitutional Court ruled that parliamentary elections held earlier this year were legal, rejecting suits that could have caused the dissolution of parliament and fresh elections."

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$3Bln Ukraine Eurobond Issue Bought by Russia | Business | The Moscow Times

$3Bln Ukraine Eurobond Issue Bought by Russia | Business | The Moscow Times:

"Russia has closed a deal to buy Ukraine's newly-issued $3 billion Eurobond, part of a $15 billion bailout of its smaller neighbor, Russian Finance Minister Anton Siluanov said Monday.

Russia offered a lifeline to Ukraine last week, helping revive the country's economy and keep it within Moscow's orbit.

Moscow is tapping its National Welfare Fund, a rainy day reserve, to buy $15 billion worth of Ukrainian Eurobonds. It is also offering Kiev relief on the price of gas exports.

"The deal was closed on Friday," Siluanov told journalists, referring to the $3 billion bond. He added that another tranche of help would be set next year.

The non-tradable Eurobond matures in two years and has a coupon of 5 percent."

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Unresolved tensions to slow Bahrain growth, says S&P - Politics & Economics - ArabianBusiness.com

Unresolved tensions to slow Bahrain growth, says S&P - Politics & Economics - ArabianBusiness.com:

"Unresolved domestic political tensions in Bahrain will cause annual GDP growth per capita to stagnate over the next four years, according to Standard & Poor's Ratings Services.
The rating agency said in a new report, which affirmed the Gulf kingdom's long- and short-term foreign and local currency sovereign credit ratings at 'BBB/A-2' with a stable outlook, that fiscal dependency on sustained high oil prices were also constraining ratings.
At the same time, S&P affirmed the 'BBB/A-2' ratings on the Central Bank of Bahrain.
"The ratings are constrained by our view of Bahrain's unresolved domestic political tensions and its fiscal dependency on sustained high oil prices and international donor support," the S&P report said."

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beyondbrics quiz of 2013 | beyondbrics

beyondbrics quiz of 2013 | beyondbrics:

"Sharpen your pencils, it’s the 2013 beyondbrics quiz of the year!

Biits and bobs, pictures and charts, quotes and questions – it’s everything you need to while away the hours over the quiet season. Plus there is a prize to be won. Or just pride. Enjoy!

#1 Who said of which country: “they are not going west, I don’t think they are going east, I feel they are going down.” (2 points)"

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Qatar fund in talks to invest $200 million in Indian property: source | Reuters

Qatar fund in talks to invest $200 million in Indian property: source | Reuters:

"Qatar Investment Authority (QIA), the sovereign wealth fund of the gas-rich Gulf emirate, is in talks to invest $200 million in residential property in India, a source with direct knowledge of the matter told Reuters.

QIA is holding "conversations" with Kotak Realty Fund, run by Kotak Mahindra Bank Ltd (KTKM.NS), which would manage the investments on behalf of the fund, said the source, who asked not to be named because the deal has not been finalized.

Kotak would also make a small investment and plans to focus on residential property developments in major cities across Asia's third-largest economy for QIA, the source said.

Kotak declined to comment. QIA did not respond to emails or telephone calls."

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Former BP geologist: peak oil is here and it will 'break economies' | Nafeez Ahmed | Environment | theguardian.com

Former BP geologist: peak oil is here and it will 'break economies' | Nafeez Ahmed | Environment | theguardian.com:

"A former British Petroleum (BP) geologist has warned that the age of cheap oil is long gone, bringing with it the danger of "continuous recession" and increased risk of conflict and hunger.

At a lecture on 'Geohazards' earlier this month as part of the postgraduate Natural Hazards for Insurers course at University College London (UCL), Dr. Richard G. Miller, who worked for BP from 1985 before retiring in 2008, said that official data from the International Energy Agency (IEA), US Energy Information Administration (EIA), International Monetary Fund (IMF), among other sources, showed that conventional oil had most likely peaked around 2008.

Dr. Miller critiqued the official industry line that global reserves will last 53 years at current rates of consumption, pointing out that "peaking is the result of declining production rates, not declining reserves." Despite new discoveries and increasing reliance on unconventional oil and gas, 37 countries are already post-peak, and global oil production is declining at about 4.1% per year, or 3.5 million barrels a day (b/d) per year:"

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Qatar to Boost Europe LNG Sales as Gas Trades at 7-Year High - Bloomberg

Qatar to Boost Europe LNG Sales as Gas Trades at 7-Year High - Bloomberg:

Qatar is poised to boost contracted liquefied natural gas exports to Europe by the most in five years as prices in the region are at their highest since 2006.

Qatari shipments to Europe under medium- or long-term contracts will rise 22 percent next year, the biggest jump since 2009, according to data from Poten & Partners Inc., a New York-based shipbroker. Centrica Plc, the U.K.’s biggest supplier of energy to homes, last month extended an import contract with state-owned Qatar Liquefied Gas Co., the world’s biggest LNG producer, to December 2018 and increased volumes by 20 percent.

“We are offering good deals because we are ready to sell,” Ibrahim Al Ibrahim, a vice chairman of Qatari state-owned LNG producer Ras Laffan Liquefied Natural Gas Co. and the emir’s economic adviser, said in an interview in Doha. “We have a certain amount of gas. We want to sell it. We will sell it."

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EMRE DELİVELİ - Why economists are not surprised by the graft scandal

EMRE DELİVELİ - Why economists are not surprised by the graft scandal:

"Of course, they are surprised. Even though I was expecting some kind of retaliation, I would not have dreamed of such a wide-scale operation. But most Turkey economists are probably not shocked that construction projects are part of the investigation.

Even a first-time visitor to Istanbul would notice right away that the whole city looks like one huge construction site. Interestingly, I have some difficulty explaining this real estate boom to foreign economists, who point out that home prices have not risen as much as in other countries that went through bubbles, or that the share of construction in GDP is lower than in many peers.

Prices have been held relatively at bay by the astonishing rise in supply, which has been financed by a Ponzi-like scheme: Construction companies start a new project before they sell a significant part of their completed ones. They finance this spree by borrowing from banks, which get extra business by lending to homebuyers. "

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GCC markets present a ‘standout opportunity’ | The National

GCC markets present a ‘standout opportunity’ | The National:

"Amin El Kholy, Arqaam Capital’s managing director of asset management.

What is the asset class and geography you are focused on, and what is the outlook for the month ahead?

We are long-term investors in emerging and frontier markets and our views extend beyond one month. Our focus is on the Middle East, North Africa and Turkey, and expanding into sub-Saharan Africa in 2014. The Middle East and North Africa and Africa represent US$5 trillion of collective GDP growing at a nominal rate of 9 per cent, close to 1.5 billion people and an estimated $800bn of foreign direct investment.

The outlook for the next decade is for a historic transformation of the region’s countries and economies into their next stage of development. History shows that such transitions (most recently in Asia) result in phenomenal investment opportunities."

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Majid Al Futtaim to build Oman’s biggest mall | The National

Majid Al Futtaim to build Oman’s biggest mall | The National:

"Majid Al Futtaim Properties is to invest 180 million Omani rials (Dh1.71 billion) to build the country’s biggest mall in Muscat as part of its ambitious plans to expand in the region.

“Mall of Oman further demonstrates our commitment to the Omani market and to our growth plans in the wider Mena region,” George Kostas, the chief executive of Majid Al Futtaim Properties, said.

“Oman’s new shopping and entertainment destination is expected to generate 1,500 jobs for its construction and a further 3,500 jobs once opened and will enhance the sultanate’s retail and entertainment offering for both residents and tourists.”"

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Dubai Offices Vacant With Multiple Owners Structure - Bloomberg

Dubai Offices Vacant With Multiple Owners Structure - Bloomberg:

The Index tower on Dubai’s answer to Wall Street has 23 floors of empty offices out of the 25 it opened in 2011. A few hundred feet away, buildings controlled by the Dubai International Financial Centre are almost full.

The difference is ownership. The office space in the Index on Sheikh Zayed Road was sold in pieces to nine different investors under a system known as strata title, according to developer Union Properties PJSC (UPP), meaning potential tenants face the prospect of having multiple landlords. The DIFC buildings have one owner, making it easier to lease large amounts of space to individual companies."

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Russia Crisis Haunts Deutsche Bank’s Smith Seeing China Bust - Bloomberg

Russia Crisis Haunts Deutsche Bank’s Smith Seeing China Bust - Bloomberg:

"China is winning praise from Goldman Sachs Group Inc. to Morgan Stanley and Jefferies Group LLC, which predicted last month a “massive” multiyear bull run for stocks.

John-Paul Smith doesn’t share the enthusiasm.

When the Deutsche Bank AG equity strategist looks at the country, he says he detects some of the same signs of a financial meltdown that led him to predict Russia’s 1998 stock market crash months in advance. China’s expansion is being fueled by soaring corporate borrowing, a high-risk model that needs to be replaced by the kind of free-market measures and budget cuts that fed Russia’s growth in the aftermath of the country’s default and subsequent 44 percent monthly tumble in the Micex Index (INDEXCF), Smith said."

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