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Monday, 31 March 2014

Qatar’s QNB Said to Hire McKinsey to Advise on Egypt Bank Growth - Bloomberg

Qatar’s QNB Said to Hire McKinsey to Advise on Egypt Bank Growth - Bloomberg:



"Qatar National Bank, the nation’s largest lender, hired McKinsey & Co. to help formulate a strategy for its Egyptian business as it seeks to boost operations, two people with knowledge of the matter said.



The company is helping the state-controlled lender devise a five-year plan for Qatar National Bank Alahly, said the people, who asked not to be identified because the information is private. QNB is working to increase profitability and market share in Egypt, according to one of the people.



QNB bought 97 percent of the lender in March last year from Societe Generale SA (GLE) for $2.45 billion. The Doha-based bank is seeking to expand in Egypt, a country with a population 40-times greater than Qatar’s, even as relations between the two nations deteriorate after the military-backed overthrow of Mohamed Mursi’s Muslim Brotherhood government last July."



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Ukraine wants to regain control of Odessa refinery - minister | Reuters #EuroMaidan

Ukraine wants to regain control of Odessa refinery - minister | Reuters:



"The Kiev government wants control of the Odessa oil refinery to return to Ukrainian hands, interior minister Arsen Avakov said on Monday.



Russian newspaper Kommersant said earlier this month that the refinery's previous owner, Vetek, transferred the plant to Russia's VTB bank after failing to repay the loan which it had received to buy it from Lukoil last year.



Avakov said the refinery was now controlled by a Russian bank, which he did not name.



Vetek is owned by tycoon Serhiy Kurchenko who amassed a large fortune under the presidency of Viktor Yanukovich, who was removed from power last month.



Ukraine's prosecutor general issued a warrant for Kurchenko arrest earlier this month, on suspicion of stealing state property."



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Funds still attracted by China's potential - YouTube

Funds still attracted by China's potential - YouTube: ""



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Converging Interests May Lead to Cooperation Between Israel and Gulf States - NYTimes.com

Converging Interests May Lead to Cooperation Between Israel and Gulf States - NYTimes.com:



"Looking for a potential bright spot in the roiling upheaval of the Middle East, American and Israeli officials meeting in Jerusalem on Monday held out the hope of growing security cooperation between Israel and its Arab neighbors in the Persian Gulf.



That idea, basically unthinkable a few years ago, could be more plausible now because of widespread worry over Iran’s nuclear program, coupled with chaos in Syria and turmoil in Egypt. Even though Saudi Arabia and other gulf countries have long viewed Israel as the Arab world’s biggest adversary, the rise of threats they all share in common is creating a new urgency to find common ground, the officials said. 




Emerging from meetings with his Israeli counterparts on Monday, Gen. Martin E. Dempsey, the chairman of the Joint Chiefs of Staff, said that discussions included “an outreach to other partners who may not have been willing to be partners in the past.”"



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Times of Oman | News :: Oman Oil eyes Oxy’s assets in the Sultanate

Times of Oman | News :: Oman Oil eyes Oxy’s assets in the Sultanate:



"Oman Oil Company, the Sultanate's investment arm, is interested in buying Occidental Petroleum's assets in the country, said a senior official at the Ministry of Oil and Gas.



Occidental (Oxy), which plans to sell its Middle East assets, recently said that it may break up the assets in the Middle East region to sell it to individual countries, rather than its earlier plan to sell it to a consortium, due to the recent political tensions.



Earlier, state investment firms of Oman, the United Arab Emirates and Qatar formed a consortium to buy the US firm's assets in the Middle East, which is estimated to cost around $8 billion. "



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UPDATE 1-Kuwait's Burgan Bank says to raise capital this year | Reuters

UPDATE 1-Kuwait's Burgan Bank says to raise capital this year | Reuters:



"Kuwait's Burgan Bank wants to raise more capital this year to comply with the Basel III banking industry regulations while any acquisitions were unlikely to come soon, the lender's chief executive said on Monday.




The increase, which may happen in the third or fourth quarter of this year, could be "pure capital" or perpetual bonds or both, CEO Eduardo Eguren said, depending on discussions with regulators and shareholders.



"We are discussing this with the central bank," he told reporters on the sidelines of the bank's annual general meeting.



"I know that we may need to increase capital by 20, 30 percent for sure," he said, without giving an exact figure."



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MIDEAST STOCKS-Egypt extends profit-taking bout; Qatar, Bahrain rise | Reuters

MIDEAST STOCKS-Egypt extends profit-taking bout; Qatar, Bahrain rise | Reuters:



"* Ex-dividend Raysut Cement drags down Oman



* Omantel also falls as govt starts discounted public offer



* Batelco gains on relaxed price regulations



* Qatar climbs on blue chips, still offers some dividends



By Olzhas Auyezov

DUBAI, March 31 (Reuters) - Egypt's bourse posted its biggest percentage loss in seven months on Monday as local investors continued to book profits on positions built in anticipation of former army chief Abdel Fattah al-Sisi's run for president.



The main Cairo index tumbled 3.6 percent to 7,805 points, dropping for a third session in a row, as all but two of its 30 consituent stocks closed in the red and trading volume surged again after declining on Sunday.



The market has dropped 8.0 percent over three days. It is still up 15.1 percent year-to-date, having surged on hopes that Sisi, seen by many investors as the best guarantor of stability, would run in this May's elections.



When Sisi finally did announce his candidacy last week, investors started booking profits; the move was amplified by an earnings report by EFG Hermes, which swung to a net loss in 2013 because of one-off charges."



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An outsider’s take on what makes Dubai tick | GulfNews.com

An outsider’s take on what makes Dubai tick | GulfNews.com:



"Visitors to Dubai are often left wonderstruck by its achievements. For most of them, it presents a culture shock beyond description and negates all that they have been conjuring up in their minds about the place.



Whether it is the infrastructure, quality of life, sense of security or even the way people dress, the initial reaction is one of disbelief and it takes a while for reality to set in.



For some visitors, particularly those from the developing world, the Dubai experience has an inspirational dimension that sets them thinking about what they have been missing in their own countries. It is a stark reminder of how their own governments frittered away great opportunities for progress, although hardcore patriots among them would insist that Dubai is quite an ‘unreal’ place and that what is possible here may not be practical elsewhere, given the scale and the depth of problems as well as the burden of history inherited by their countries through the ages."



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Varieties of Value - YouTube

Varieties of Value - YouTube: ""



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Sanctions Gain Plan: China looks to profit in West-Russia jab fest - YouTube

Sanctions Gain Plan: China looks to profit in West-Russia jab fest - YouTube: ""



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S&P expects Ukraine crisis will gradually de-escalate | #EuroMaidan

S&P expects Ukraine crisis will gradually de-escalate:



"The base-case scenario for the further relations between Russia, Ukraine and their international partners will be a trend for a gradual de-escalation of the crisis, reads a report of Standard & Poor's.



S&P said that there is a large likelihood that all conflict issues will be settled.



With the said scenario, Russia's GPD growth will moderately slow in 2014, to 1.2%, and in 2015 it will gradually improve to 2.2%, S&P said.



S&P expects that the ruble will stabilize at the current lower levels, the capital outflow will slow to a modest pace and the inflation pressure will gradually weaken."



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Former Soros Manager Sets Up Frontier Markets Firm in Dubai - Middle East Real Time - WSJ

Former Soros Manager Sets Up Frontier Markets Firm in Dubai - Middle East Real Time - WSJ:



"When money managers set up in the U.A.E., they’re usually either investing in the region or trying to tap the Middle East’s large pools of capital for funds that look elsewhere. Ahmad Zuaiter, however, is doing something a little different: using Dubai as a geographically central base from which to invest in frontier markets globally.



Mr. Zuaiter, who managed money for George Soros until 2011, has been working for more than a year on a new firm called Jadara Capital, based in the Dubai International Financial Centre. He’s now raising money for Jadara’s maiden fund, which will invest in stocks in frontier markets from Argentina to Vietnam and is expected to launch in May or June.



“Most of the asset management firms, particularly in the DIFC, tend to be asset-gathering focused,” Mr. Zuaiter said. “The predominant funds are the ones that export capital out of here. They’re geared toward gathering assets and then finding a product and putting assets in and selling that product. We’re the opposite, in a sense.”"



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Capital begins to return to Arab nations despite problems of political instability - FT.com

Capital begins to return to Arab nations despite problems of political instability - FT.com:



"The world may be recovering from the financial crisis, but the Middle East’s attempts to lure investment have lagged behind during three years of political unrest.



Global foreign direct investment rose 11 per cent in 2013 to $1.46tn, a level comparable with the pre-crisis average, according to the United Nations Conference on Trade and Development. West Asia, however, was the only region to witness a fifth consecutive year of declining FDI in 2013, falling another 20 per cent to $38bn.



Saudi Arabia, the largest Arab recipient, faced a decline of 19 per cent to $9.9bn; Unctad said: “The worsening political instability in many parts of the region has caused uncertainty and negatively affected investment.”"



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Qatar Spending To Rise 3.7% To $60bn In 2014/15 » Gulf Business

Qatar Spending To Rise 3.7% To $60bn In 2014/15 » Gulf Business:



"Qatar plans to increase government spending by 3.7 per cent to QAR218.4 billion ($59.98 billion) in the 2014/15 fiscal year, the QNA state news agency said on Sunday, quoting from a budget approved by the Gulf state’s ruler.



The OPEC member state expects a record QAR225.7 billion in revenues, up from QAR218 billion in the previous year’s budget, the agency said. The calculations are based on an assumed oil price of $65 a barrel, QNA added.



The budget is “the largest in the history of the state of Qatar,” Finance Minister Ali Sherif al-Emadi said, according to the agency.



Qatar, the world’s top liquefied natural gas (LNG) exporter, is expected to implement a massive infrastructure building programme in preparation to host the 2022 World Cup soccer tournament."



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Etihad Credit Bureau ready to launch services | GulfNews.com

Etihad Credit Bureau ready to launch services | GulfNews.com:



"Al Etihad Credit Bureau, a federal government company that provides UAE credit reports, announced that it is operationally ready, and prepared to launch its services in line with government directives and the law.



The announcement came after the bureau had completed all necessary testing that ensure law compliance.



The official operational launch will take place once the bureau’s by-laws have been published in the Official Gazette.



The bureau has completed the final steps of its pre-operational phase, including an intensive security audit of the system, penetration testing, and a complete system review. The pre-launch phase also included signing agreements with all the UAE’s financial institutions for the submission of credit data to the bureau."



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Dubai’s office realty yields catching up fast | GulfNews.com

Dubai’s office realty yields catching up fast | GulfNews.com:



"Dubai’s property upturn is no longer just about residential — yields on its commercial property have firmed up at around the 5 per cent mark which could entice investors to give it a serious thought. At a 5 per cent yield for an office in the central business district, Dubai compares favourably against the likes of Munich and Frankfurt (4.5 and 4.7 per cent respectively) and London City (3.75-4.75 per cent) among cities within Europe, Middle East and Africa (Emea), according to Knight Frank’s new report on global capital flows.



Within the Emea territory, Johannesburg’s central business district yields tops, at 8-9 per cent. An improving real estate demand has also driven up yields in Madrid and Barcelona, to 6 and 6.25 per cent respectively.



This year, global transactions on commercial property should be in line for a “at least” 15 per cent growth and take the total past $600 billion (Dh2.2 trillion). Last year, the gross of $536.7 billion was the highest on commercial realty since 2007, Knight Frank records."



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Dashed Ikea Dreams in Ukraine Show Decades Lost to Corruption - Bloomberg #EuroMaidan

Dashed Ikea Dreams in Ukraine Show Decades Lost to Corruption - Bloomberg:



"Almost half of Ukrainians say they desire Ikea products more than any other global brand, yet the largest home-furnishings retailer hasn’t been able to crack the market in a decade of trying. The reason: it won’t pay a bribe.



As Prime Minister Arseniy Yatsenyuk’s government rushes to fend off Russia’s expansion and raise the $35 billion it says it needs to avoid default, the country of 45 million faces the more basic problem of rampant graft that no leader has been able to tackle in 23 years of independence.



Stuck between the European Union and its former imperial master Russia, Ukraine has emerged as the most corrupt country on the continent, according to Transparency International. That and “incompetent” leadership are the reason a nation endowed with most of the ingredients needed to create a vibrant economy fell so far behind its peers, according to analysts including Erik Nielsen, chief global economist at UniCredit SpA (UCG) in London."



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Top Saudi IPO Adviser Sees Two Big Years Ahead for Listings - Bloomberg

Top Saudi IPO Adviser Sees Two Big Years Ahead for Listings - Bloomberg:



"Saudi Fransi Capital, the top adviser for initial public offerings in the kingdom since 2012, expects the pace of share sales in the Gulf’s largest stock market to accelerate as equity valuations improve.



“The Saudi market is looking for new issuances and I think we’re going to have two big years for IPOs,” Chief Executive Officer Yasir Al-Rumayyan said in a March 27 phone interview from Riyadh. “Our deal pipeline is really big,” he said, declining to give more details on specific deals.



Saudi Arabian companies are joining counterparts across the Gulf planning to raise funds as asset values and investor demand increase. The investment banking arm of Banque Saudi Fransi (BSFR), a lender part-owned by Credit Agricole (ACA), has advised on 7 equity offerings worth 8.4 billion riyals ($2.4 billion) since 2011, surpassing global banks such as JP Morgan Chase & Co and HSBC Holdings Plc (HSBA) on equity advisory work in the kingdom."



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Sunday, 30 March 2014

Growth is global - LVMH watch chief - YouTube

Growth is global - LVMH watch chief - YouTube: ""



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Saudi Arabia’s Algosaibi Calls Meeting on $5.9 Billion Default - Bloomberg

Saudi Arabia’s Algosaibi Calls Meeting on $5.9 Billion Default - Bloomberg:



"Ahmad Hamad Algosaibi & Brothers Co. invited creditors including BNP Paribas SA (BNP) and Standard Chartered Plc to discuss claims on $5.9 billion of debt as it seeks to recover from the Middle East’s biggest default.



The Saudi Arabian company, with interests ranging from construction to finance, will “outline proposals aimed at achieving a comprehensive settlement” with about 100 creditors at a May 7 meeting in Dubai, according to a copy of an invitation sent to banks today and seen by Bloomberg News. The company didn’t give further details on the proposed terms.



Banks rejected an original debt restructuring proposal from Algosaibi four years ago. Algosaibi and billionaire Maan al-Sanea’s Saad Group defaulted on at least $15.7 billion in 2009 as the global economic crisis froze credit markets and asset prices slumped. The two family holding companies, related by marital ties, have been locked in legal disputes ever since."



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SocGen accused over Libya deals - FT.com

SocGen accused over Libya deals - FT.com:



"The Libyan Investment Authority has accused Société Générale of helping to funnel bribes worth tens of millions of dollars to close associates of Saif al-Islam, the son of former Libyan leader Muammer Gaddafi.



The claim was made in a $1.5bn lawsuit filed against the French bank in London’s High Court.



SocGen said it planned to contest the legal claim against it, which it considered “groundless and without substance”."



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Shifting sands of a deal in Dubai

Shifting sands of a deal in Dubai:



"As happy endings go, it is fraught. The key players in this intrigue are safely back home in Australia, and yet the two property executives who lost their liberty in Dubai for almost five years – Matt Joyce and Marcus Lee – have not spoken to each other since 2010. Joyce and Lee, former colleagues on the colossal Dubai Waterfront development, are unlikely to break the ice any time soon, even now that the emirate's Court of Appeal has found both innocent of bribery charges.



Joyce and his wife and children have returned to live on a $5.8 million cattle farm in Victoria, the purchase of which they settled in August 2009 while he and Lee were still behind bars in Dubai, seven months after their arrest on Australia Day that year."



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Times of Oman | News :: Omantel Initial Public Offer to open on Monday

Times of Oman | News :: Omantel Initial Public Offer to open on Monday:



"The much-awaited public offer of Oman Telecommunications Company (Omantel) shares to the Omani individuals will open on Monday, which is the second phase in the Government's divestment plan.



This follows the successful completion of the first phase under which there was private placement of 71.25 million shares with high net worth Omani individuals and institutions on a book building and auction basis.



The Ministry of Finance has reserved a further 71.25 million shares under the public offer for Omani individuals at an attractive fixed offer price of OMR1.350 per share. The public offer price of OMR1.350 per share is currently at a discount of 150 baisas or 11.1 per cent to the ex-dividend Omantel share price of OMR1.500 per share at the end of last week on March 27, 2014. "



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MIDEAST STOCKS-Emaar leads Dubai gains; Egypt extends drop | Reuters

MIDEAST STOCKS-Emaar leads Dubai gains; Egypt extends drop | Reuters:



"* Dubai's Emirates NBD rises after EFG Hermes upgrade



* Egypt extends correction following Sisi's presidential bid



* Cairo closes above intraday low, may have bottomed out





* Saudi Arabia makes modest gains after succession move



By Olzhas Auyezov

DUBAI, March 30 (Reuters) - Property stocks helped Dubai's bourse lead regional gains on Sunday, while Egypt fell for a second session since former army chief Abdel Fattah al-Sisi said he would run for president.



Dubai's index rose 1.3 percent to 4,438 points, its highest close since September 2008.



Shares in heavyweight Emaar rose 1.3 percent to 9.95 dirhams, a level last seen in August 2008. The developer's stock has rallied for the past two weeks after it hiked its annual dividend and said it would list its shopping malls unit.



Other real estate and construction companies, such as Union Properties, Deyaar, Drake and Scull and Atabtec Holding, were also in the black."



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UAE banks’ assets surge 13.1 per cent in 2013 | GulfNews.com

UAE banks’ assets surge 13.1 per cent in 2013 | GulfNews.com:



"The aggregate assets of banks operating in the UAE surged 13.1 per cent to Dh2.02 trillion in 2013 compared to Dh1.79 trillion in 2012, according to the Board of Directors of the UAE Banks Federation.



The Board of the UAE Banks Federation, a professional representative body representing 49-member banks operating in the UAE, met in Dubai and reviewed its performance.



At the current level, the UAE banking sector is largest in the Arab world in terms of assets. Last year, the UAE banks’ total deposits increased to Dh1.27 trillion from Dh1.16 trillion 2012.



The Board of the UAE Banks Federation approved its Financial Statements and Auditors’ Report for 2013, as well as the estimated budget and auditors’ nomination for 2014."



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Key Conglomerate Mirrors Dubai’s Economic Rebound - Middle East Real Time - WSJ

Key Conglomerate Mirrors Dubai’s Economic Rebound - Middle East Real Time - WSJ:

The Dubai Holding unit’s net profit in 2013 nearly tripled.
 
Dubai Media Office


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Dubai Stocks Climb to 5-Year High Before Earnings; Qatar Gains - Bloomberg

Dubai Stocks Climb to 5-Year High Before Earnings; Qatar Gains - Bloomberg:



"Dubai’s stock index, the world’s best-performer this year, advanced to the highest in more than five years as first-quarter earnings expectations spurred investor sentiment. Qatar also gained.



The DFM General Index (DFMGI) rose 1.3 percent to 4,438.35, the strongest close in the Emirate since September 2008. Shuaa Capital PSC, the investment bank controlled by Dubai’s ruler, surged 5.6 percent. Qatar’s gauge increased 0.7 percent, the strongest close in almost three weeks.



Dubai’s 4.9 percent economic expansion in 2013 helped companies in the emirate to boost their earnings. Shuaa returned to profit last year after making losses since 2008. The DFM Index has advanced 32 percent this year, making it the top performer among more than 90 indexes tracked by Bloomberg.



“We should expect some positive surprises in terms of earnings for first quarter and investors want to be positioned before that,” Sebastien Henin, head of asset management at The National Investor, said by phone from Abu Dhabi. The market is continuing “positive momentum” from the last week, he said."



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Dubai Holding's DHCOG says 2013 net profit jumps 178 pct | Reuters

Dubai Holding's DHCOG says 2013 net profit jumps 178 pct | Reuters:



"(Reuters) - Dubai ruler's flagship company Dubai Holding said on Sunday its unit Dubai Holding Commercial Operations Group (DHCOG) has almost tripled its 2013 net profit to 3.3 billion dirhams thanks to a surge in core operational revenues.



DHCOG, which runs four businesses operating in 24 countries, reported a 178 percent increase in net profit from 1.2 billion dirhams from last year, the company said in an emailed statement.



During the year, total revenues rose by 27 percent to 11.6 billion dirhams, while total assets reached 116 billion dirhams.



It incorporates hotels group Jumeirah, business park TECOM Investments and Emirates International Telecommunications aside from a real estate division, Dubai Properties Group. "



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Shuaa Capital mandated to run IPO of Able Logistics Group | The National

Shuaa Capital mandated to run IPO of Able Logistics Group | The National:



"Shuaa Capital said it has been mandated to run the initial public offering of Able Logistics Group, a freight forwarding, land transportation and warehousing services company.



The Dubai investment bank will be the exclusive financial advisor, lead manager and book runner for the issue which will list on the Dubai Financial Market this year, it said in a statement today. Shares of Shuaa rallied as much as 15 per cent to Dh1.64 each this morning."



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Adia among leaders in record year for sovereign wealth funds | The National

Adia among leaders in record year for sovereign wealth funds | The National:



"Sovereign wealth funds (SWFs), the big government-owned investing institutions, had a year of record activity in 2013, with the highest levels ever of direct transactions, showing a strong recovery from the financial crisis.



According to the Sovereign Wealth Fund Institution, an American organisation that tracks SWF performance, some $174 billion of direct transactions took place during the year, way ahead of 2012’s $65.09bn.



“This rebound of direct transactions reflects sovereign funds’ growth in assets, maturation of internal operations in the larger funds and improved confidence in the world economy,” said the institute."



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Deira set to reclaim Dubai's property momentum | GulfNews.com

Deira set to reclaim Dubai's property momentum | GulfNews.com:



"Dubai’s traditional commercial heartland — Deira — gets an opportunity to reclaim centre-stage as Nakheel opens sales for 94 plots on two of the “Deira Islands” on Sunday. All of the plots have been marked for hotels and resorts, with easy access to water, and should take anywhere around three to four years to complete.



The plots would be between 80,000 to 67,000 square feet. Together, they comprise more than 12 million square feet of untapped land.



“What the release of so many plots simultaneously does is help set a possible new benchmark for land values on the Deira side, which had — until now — reached a certain saturation level in terms of land for development,” said Cecilia Reinaldo, who heads the UAE operations of Fine & Country, a realty services firm.



“In contrast, all of the action had been concentrated on New Dubai, where plot values could be between Dh150-500/600 a square foot [on built-up area] depending on the location. Nakheel’s plot sales give Deira the opportunity to catch some of that momentum.”"



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Connectivity works wonders for GCC states | GulfNews.com

Connectivity works wonders for GCC states | GulfNews.com:



"It is not in the least surprising for the UAE to attain the best results among Middle East and North Africa countries in the 2014 version of the ‘Logistics Performance Index (LPI). This can be partly attributed to Dubai’s status as the leading trading hub in Asia.



The study, executed by the World Bank, is published bi-annually. The 160 economies surveyed must do well in six components to obtain an outstanding performance.



These variables compromise of efficiency in customs and border clearance; the quality of trade and transport infrastructure; ease of arranging competitively priced shipments; the quality of logistics services including trucking, forwarding and customs brokerage; tracking and tracing consignments; and timeliness of shipments reaching consignees within scheduled delivery times."



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Saturday, 29 March 2014

Lukoil starts output from massive Iraq oilfield - Your Middle East

Lukoil starts output from massive Iraq oilfield - Your Middle East

One of the biggest undeveloped oilfields in the world has begun commercial production in south Iraq, officials said on Saturday, part of ambitious plans by Baghdad to dramatically ramp up output.

The announcement was made during a ceremony attended by Oil Minister Abdelkarim al-Luaybi and Deputy Prime Minister Hussein al-Shahristani, as well as officials from Russian energy giant Lukoil, the principal firm developing the enormous West Qurna-2 field.

It comes just weeks ahead of parliamentary elections, with the country looking to fund reconstruction of its dilapidated infrastructure and economy by upping crude sales.

"Production started today," said Nasir Hashim Fakhr, the Iraqi oil ministry official charged with the development of West Qurna-2 field in the southern Basra province.

MSCI upgrade could lead to equity diversity in the UAE and Qatar | The National

MSCI upgrade could lead to equity diversity in the UAE and Qatar | The National:



"Much has been made of the forecast millions of dollars of investment that the equity markets of the UAE and Qatar are expected to receive when their stocks are included in MSCI’s emerging market listings from June.



In the latest forecast, EFG-Hermes, the Egyptian investment bank, said that the move would net the UAE exchanges US$538 million and Qatar US$475m.



But aside from the cash, the upgrade of the markets from their previous frontier markets status is also expected to provide an impetus to the economy in other ways.



EFG-Hermes believes the move could help to usher in a new era in local bourses, challenging the dominance of state-owned companies and barriers to foreign ownership of shares."



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The New UAE Companies Law – What Will Be Changing? » Gulf Business

The New UAE Companies Law – What Will Be Changing? » Gulf Business:



"Recent reports from news agencies such as Reuters has put the new UAE Commercial Companies Law back at the forefront of practitioners’ minds.



The UAE Federal National Council approved the revised form of the new companies law in May 2013 (the “Draft Companies Law 2013”) and reports from Reuters suggest that the ratification by His Highness Sheikh Khalifa bin Zayed Al Nahyan, the President of the UAE, is expected shortly.



Based on various sources, we do not expect that the law to be published in the Gazette will differ substantially from the Draft Companies Law 2013, however, before the law is published there is no absolute certainty as to its final form and the below analysis is based on the draft version as it currently stands."



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Egypt’s economy continues to operate in vacuum | GulfNews.com

Egypt’s economy continues to operate in vacuum | GulfNews.com:



"Egypt’s next president is likely to face a far more complex problem than cracking down on Islamists — meeting the demands of workers desperate for decent jobs and wages.



While the authorities have cowed the Muslim Brotherhood by throwing its members behind bars in their thousands, factory employees say they are ready for a fight. Officials realise workers’ demands cannot be ignored as a wave of strikes will compound Egypt’s instability just as the new leader — most likely to be army chief Field Marshal Abdul Fattah Al Sissi — struggles to mend the economy.



At the Diamond textile factory near Cairo, staff are determined to win more rights and say the popular uprising that toppled autocrat Hosni Mubarak in 2011 has failed to produce any improvement in social justice. “For more than 20 years we did not speak or demand our rights,” said Essam Al Husseini, who began work at Diamond almost two decades ago and makes only 1,300 Egyptian pounds ($190) a month, barely enough to feed his family."



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Friday, 28 March 2014

SEBI to further probe Jet-Etihad deal, Abu Dhabi carrier officials may be called - The Economic Times

SEBI to further probe Jet-Etihad deal, Abu Dhabi carrier officials may be called - The Economic Times:



"In further regulatory turbulence for Rs 2,060 crore Jet-Etihad deal, capital market regulator Sebi has initiated fresh proceedings against the Abu Dhabi carrier, whose officials may be called for personal hearing next month to explain their stance.



Etihad, which has purchased 24 per cent stake in Jet Airways, has rejected any obligation to make an open offer for minority shareholders, but Sebi is not yet convinced with its justification for the same, sources said.



Etihad officials will be called for a personal hearing early next month to explain its position and why action should not be taken against the carrier for not making an open offer as it is getting joint control and substantial rights in running Naresh goyal-led Indian airline, sources said.
"



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IMF urges #Bahrain to retarget subsidies, control spending - ArabianBusiness.com

IMF urges Bahrain to retarget subsidies, control spending - Politics & Economics - ArabianBusiness.com:



"Bahrain needs to retarget is subsidies to lower income families while controlling other spending commitments in a bid to stabilise debt levels, according to a new report by the International Monetary Fund (IMF).



Following an IMF mission to the Gulf kingdom, officials have said that despite a GDP growth of 4.9 percent last year, authorities need to make fiscal adjustment a priority.



The mission noted that Bahrain's state budget deficit is expected to continue to rise in the medium term."



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Fitch: Ukraine's IMF Deal Positive, Major Challenges Remain | Reuters #EuroMaidan

Fitch: Ukraine's IMF Deal Positive, Major Challenges Remain | Reuters:



"LONDON, March 28 (Fitch) The announcement of a staff-level agreement for a Stand-By Arrangement (SBA) with the International Monetary Fund (IMF) supports Ukraine's credit profile, Fitch Ratings says. It increases the likelihood of the sovereign gaining access to external financing. It may also spur structural reforms that reduce imbalances and address Ukraine's twin deficits. However, there are significant risks to implementing the programme in light of the continuing geopolitical risk in the region and the possibility of a further escalation of the crisis, and the domestic political and economic situation following the fall of Viktor Yanukovych's government and the the incorporation of Crimea into the Russian Federation. Failure to take unpopular measures has seen previous IMF agreements suspended, and structural reform will be a long-term process. The scale of the challenges facing Ukraine is reflected in our 'CCC' foreign-currency sovereign rating, which denotes substantial credit risk."



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Fitch: Ukraine's IMF Deal Positive, Major Challenges Remain | Reuters #EuroMaidan

Fitch: Ukraine's IMF Deal Positive, Major Challenges Remain | Reuters:



"LONDON, March 28 (Fitch) The announcement of a staff-level agreement for a Stand-By Arrangement (SBA) with the International Monetary Fund (IMF) supports Ukraine's credit profile, Fitch Ratings says. It increases the likelihood of the sovereign gaining access to external financing. It may also spur structural reforms that reduce imbalances and address Ukraine's twin deficits. However, there are significant risks to implementing the programme in light of the continuing geopolitical risk in the region and the possibility of a further escalation of the crisis, and the domestic political and economic situation following the fall of Viktor Yanukovych's government and the the incorporation of Crimea into the Russian Federation. Failure to take unpopular measures has seen previous IMF agreements suspended, and structural reform will be a long-term process. The scale of the challenges facing Ukraine is reflected in our 'CCC' foreign-currency sovereign rating, which denotes substantial credit risk."



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U.S. Oil Boom Shifts Alliance as Obama Visits Saudi King - Bloomberg

U.S. Oil Boom Shifts Alliance as Obama Visits Saudi King - Bloomberg:



"When Barack Obama sits down tomorrow with Saudi Arabia’s King Abdullah, he’ll do so knowing the U.S. is importing the least crude in two decades, a shift changing America’s strongest relationship in the Arab world.



Five years after Obama’s first visit to Riyadh, the drilling of shale oil fields from North Dakota to Texas has put the U.S. on the path to energy independence, weakening economic interdependence between the two nations as they work through disagreements on Syria and Iran.



The U.S. energy boom that’s upended global markets is now reshaping political alliances built over decades. Almost 70 years after Franklin Roosevelt cemented relations with the Saudi royal family, the U.S. finds itself free to address policy differences with oil as less of a bargaining chip, analysts said. The shift gives the U.S. a freer hand in shaping Middle East policy, especially in seeking an accommodation with Iran while lessening Saudi influence in Washington."



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Are you better than an algorithm? - YouTube

Are you better than an algorithm? - YouTube: ""



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Vienna initiative - YouTube

Vienna initiative - YouTube: ""



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Oil pipeline politics take a toll on Kurdish business | The National

Oil pipeline politics take a toll on Kurdish business | The National:



"Maher Akrawe was making a killing with his business in Erbil late last year.



The surge of contracts and investment projects provided plentiful opportunities for the construction contractor.



Today, he is taking small works on existing projects and complaining that business has dried up ever since political tensions between Erbil and Baghdad peaked this year.



“It’s not the same,” Mr Akrawe said. “There’s no money. Everyone is being affected here.”



The political row was ignited late last year after it emerged that the Kurdistan Regional Authority (KRG) planned to build an oil pipeline and sell crude independently to Turkey, breaking sovereignty norms. The government in Baghdad retaliated by cutting the Kurdish region from the national budget."



'via Blog this'

Middle East funds going bullish for equities | The National

Middle East funds going bullish for equities | The National:



"Middle East fund managers are willing to buy most of the region’s main equity markets on dips, believing corporate earnings and balance sheets will continue improving this year, a monthly Reuters survey shows.



Markets retreated early this month as retail investors rushed to take profits during the worst of the geopolitical uncertainty over Ukraine. Dubai’s bourse fell 6.7 per cent from its peak close to its trough. Qatar’s bourse dropped 3.8 per cent.



But many fund managers said they did not view the pull-back as a sign of long-term vulnerability in the markets, but as an opportunity created by natural volatility."



'via Blog this'

Dubai’s Damac picks banks for potential sukuk issue -IFR | GulfNews.com

Dubai’s Damac picks banks for potential sukuk issue -IFR | GulfNews.com:



"Dubai developer Damac Real Estate will meet investors in Singapore, the UAE and London from March 28 for a potential offering of a dollar-denominated sukuk, Thomson Reuters service IFR reported on Thursday.



London-listed Damac has appointed Barclays, Citigroup, and Deutsche Bank as joint global coordinators, as well as joint lead managers with Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital and National Bank of Abu Dhabi to arrange the meetings.



Damac did not say how much it could borrow or provide any other details."



'via Blog this'

Moody’s assigns credit positive to Gulf telecom operators | GulfNews.com

Moody’s assigns credit positive to Gulf telecom operators | GulfNews.com:



"Moody’s has given a credit positive to Gulf telecom operators who have signed deals to share their mobile networks.



On March 18, Etisalat (Aa3 stable) signed a memorandum of understanding with six other mobile telephony companies active in the Middle East and Africa – among them Ooredoo (A2 stable) and Saudi Telecom Company (STC, A1 stable).



“The pact is credit positive because the telecom operators within Gulf Cooperation Council (GCC) countries – Etisalat, Ooredoo and STC – will benefit from lower operating costs and more efficient uses of capital owing to the infrastructure-sharing agreement. Reduced costs will help operating profitability, which has been declining for a number of years,” Martin Kohlhase, vice-president – Senior Analyst at Moody’s, said in the Moody’s Credit Outlook, a biweekly newsletter."



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Rusal Posts $3.2 Billion Annual Loss on Prices, Writedowns - Bloomberg

Rusal Posts $3.2 Billion Annual Loss on Prices, Writedowns - Bloomberg:



"United Co. Rusal (486) posted the biggest annual loss since 2008 as the world’s largest aluminum producer wrote down the value of assets after prices of the metal fell.



The net loss widened to $3.2 billion in 2013 from a restated loss of $528 million a year earlier, Moscow-based Rusal said today in a statement. Adjusted earnings before interest, taxes, depreciation and amortization fell 29 percent to $651 million, missing the $692.6 million average of 10 analyst estimates compiled by Bloomberg. Revenue fell 10 percent to $9.8 billion as the company cut output to curb costs as prices fell.



Rusal has idled smelting capacity in the past year, taking its most inefficient plants offline and cutting 2013 output to 3.9 million metric tons. The cuts accompanied an 8 percent drop in the average price of aluminum on the London Metal Exchange. The company wrote down about $2 billion of assets, including its Taishet project, according to the statement today."



'via Blog this'

Ukraine’s IMF Deal Wins Over SocGen as Bonds Get Buy Tag - Bloomberg

Ukraine’s IMF Deal Wins Over SocGen as Bonds Get Buy Tag - Bloomberg:



"Societe Generale SA made Ukraine one of its top emerging-market bond recommendations after the country won an International Monetary Fund aid package to help stave off default.



The French bank raised its recommendation on Ukrainian bonds from neutral, saying the notes have the “largest overweight call” among emerging-market Eurobonds as the IMF pledged to help the country meet its debt maturities over the next two years. The government’s bonds due 2023 rose to 91.8 cents on the dollar yesterday, trimming the yield 0.59 percentage point to a two-month low of 8.84 percent. 




International lenders will provide $27 billion of loans after Ukraine takes steps to stabilize its economy, the IMF said in a statement yesterday. The government signed a political pact with the European Union a week ago, after the ouster of the pro-Russia President Viktor Yanukovych prompted Russia to stop lending to its former Soviet vassal state and annex the Crimea region."



'via Blog this'

BRIC Bust Fuels Investor Rush Into Frontier-Market ETFs - Bloomberg

BRIC Bust Fuels Investor Rush Into Frontier-Market ETFs - Bloomberg:



"As investors dump emerging-market equities at an unprecedented clip, they’re turning more and more to frontier markets in search of the next growth story.



No exchange-traded fund focused on developing nations has grown faster in the past year than BlackRock Inc. (BLK)’s iShares MSCI Frontier 100 fund, whose biggest holdings are in Kuwait and Qatar. Assets under management surged nine-fold to $581 million, fueled by $458 million of inflows and returns of 22 percent. In contrast, BlackRock and Vanguard Group Inc.’s flagship emerging-market exchange-traded funds have seen investors pull a record $26 billion in the period, according to data compiled by Bloomberg. The MSCI BRIC Index is down 5.4 percent this quarter, even as it is poised for its best week of gains this week.



While Brazil, Russia, India and China led the global economy out of the 2008 financial crisis, investors have been fleeing the biggest developing nations as their growth sputters."



'via Blog this'

Thursday, 27 March 2014

MIDEAST STOCKS-Egypt drops as Sisi presidential run sparks profit-taking | Reuters

MIDEAST STOCKS-Egypt drops as Sisi presidential run sparks profit-taking | Reuters:



"* Egypt's bourse succumbs to profit-taking after brief rally



* EFG Hermes' 2013 loss amplifies market's decline



* Market seen needing new catalyst to resume rally



* Qatar's blue chips lift index

* Banks again weigh on Bahrain



By Olzhas Auyezov

DUBAI, March 27 (Reuters) - Egypt's market made its largest decline in seven months on Thursday after former army chief Abdel Fattah al-Sisi said he would run for president, spurring investors to book profits from a sustained market surge.



Cairo's main index was up as much as 1.4 percent shortly after opening, but ended 2.7 percent lower, its largest drop since last August.



That slump trimmed 2014 gains to 21.7 percent as many investors, who had long expected Sisi's announcement, closed positions.



"It was more or less expected that the market should bounce reacting to the Sisi news," said Mohamed Radwan, director of international sales at Pharos Securities. "When the news was confirmed profit taking took place.""



'via Blog this'

New Issue-ICICI(Bahrain) prices A$150 mln 2019 bond | Reuters

New Issue-ICICI(Bahrain) prices A$150 mln 2019 bond | Reuters:



'via Blog this'

Qatar announces contracts worth $23 bln at defence conference | Reuters

Qatar announces contracts worth $23 bln at defence conference | Reuters:



"Qatar announced contracts worth $23 billion on Thursday to buy attack helicopters, advanced anti-missile interception systems and other military equipment, as the Gulf state accelerates a military build-up.



The world's top liquefied natural gas (LNG) exporter announced deals with 20 companies, including firms from the United States which were awarded deals worth 27.5 billion Qatar riyal ($7.55 billion), said a spokeswoman for a Doha defence conference where the announcements were made.



The announcements included a contract with Boeing to buy 24 Apache helicopters for 8.9 billion riyals."



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Risk assessment is upside down - YouTube

Risk assessment is upside down - YouTube: ""



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Oman sets up committee to ensure financial stability | Reuters

Oman sets up committee to ensure financial stability | Reuters:



"Oman's government and regulators have set up a "financial stability committee" to monitor and manage risks in the banking and capital markets, the Gulf nation's finance ministry said on Wednesday.



The creation of the committee follows a suggestion by the International Monetary Fund last year that Oman's authorities "should articulate a formal mandate over financial stability".



The Supreme Committee for Financial Stability includes the chief executive of the Capital Market Authority, representatives from the finance ministry and the ministry of commerce and industry, and the head of the central bank's financial stability unit."



'via Blog this'

IMF Offers Ukraine Up to $18 Billion in Loans | TIME.com #EuroMaidan

IMF Offers Ukraine Up to $18 Billion in Loans | TIME.com:



"(KIEV, Ukraine) — The International Monetary Fund says it will loan Ukraine’s fledgling government between $14 billion and $18 billion.



 Ukraine had faced three months of anti-government protest when President Viktor Yanukovych fled the country late February. The new government is struggling to keep the country’s economy afloat. Russia’s takeover of the Crimean Peninsula exacerbated the issue.



After talks in Kiev, the IMF said in a statement Thursday that the precise amount would be determined once Ukrainian authorities offered more precision on their needs and it was clear what other aid the country would receive."



'via Blog this'

Russia To Aid Banks, Companies in Case of Crisis - Finance Ministry | Business | RIA Novosti

Russia To Aid Banks, Companies in Case of Crisis - Finance Ministry | Business | RIA Novosti:



"MOSCOW, March 27 (RIA Novosti) – Russia will support banks and help companies with large external debts by using the National Welfare Fund if a financial crisis occurs in the country, Prime news agency cited Finance Minister Anton Siluanov as saying on Thursday.



“The NWF is an emergency resource that can be used in the case of a crisis to help banks and large companies and corporations that have large obligations before external creditors,” Siluanov said, adding: “But I don’t see any grounds for this yet.”"



'via Blog this'

The Ukraine crisis provides both risks and opportunities for Azerbaijan

The Ukraine crisis provides both risks and opportunities for Azerbaijan:



"The Kremlin’s partition of Crimea from Ukraine has put other states along Russia’s “near abroad” on edge. But while most of Russia’s neighbors seem to be worried about becoming Vladimir Putin’s next target, one state, Azerbaijan, stands to benefit, at least over the longer term, from the sudden turn of events. 



The Crimean crisis has revived fears among European Union states over their dependency on Russian natural gas imports, as well as the reliability of Ukraine as a transit state. This, in turn, is giving greater impetus to energy diversification projects across Europe, creating an opportunity for Azerbaijan to capitalize on its role as an alternative energy supplier at the head of the Southern Corridor energy route.  




Azerbaijan already plays an important role as a regional supplier. In 2012, Azerbaijan exported 24 million tons of oil and 7 billion cubic meters (bcm) of natural gas, primarily via the Baku-Tbilisi-Ceyhan and Baku-Tbilisi-Erzerum pipelines, respectively. Azerbaijan also has plans to significantly increase its natural gas exports once the Shah Deniz II gas field comes online in 2017-2018. That will mean an additional 10 (bcm) of Azerbaijani gas heading to Europe. "



'via Blog this'

No Dubai property market bubble despite price rises, says investment guru Marc Faber | The National

No Dubai property market bubble despite price rises, says investment guru Marc Faber | The National:



"Marc Faber, the famed investor known for his often gloomy opinions on markets, has warned of asset bubbles in the US and China but does not see one yet in Dubai’s property market.



Mr Faber, the author of the Gloom, Boom & Doom Report newsletter, said that after their huge bull run since 2009, US stocks would enter a bear market, dragging prices down by 20 or 30 per cent.



In China, a huge build-up in consumer credit since the government unveiled an economic stimulus plan in 2008 would burst sooner or later, he said.



But Dubai’s property market was at a less critical phase, Mr Faber said on the sidelines of the Middle East Investment Summit in Dubai on Wednesday."



'via Blog this'

Multimedia Cable TV Plans Biggest Warsaw IPO Since December - Bloomberg

Multimedia Cable TV Plans Biggest Warsaw IPO Since December - Bloomberg:



"Multimedia Polska SA owners seek to sell a 49 percent stake in Poland’s third-biggest cable TV operator by the end of June in what is set to be central Europe’s largest initial public offering since December. 




Multimedia will return to public trading after its owners delisted it from the Warsaw Stock Exchange in 2011, taking advantage of low valuations and starting a search for an industry investor. In 2012 Multimedia hired JPMorgan Chase & Co. to help it find a buyer and dropped the plan the same year. Sales have increased 12 percent since 2011 as the company boosted its customer base, while net income dropped 31 percent.



The value of initial and secondary share offerings of European companies has jumped 51 percent to a seven-year high of $61 billion this year from a year earlier. BI European Cable and Satellite index, which shows market capitalization of pay TV providers in Europe, trades at an all-time high after it gained 44 percent since the start of 2013."



'via Blog this'

U.S. Oil Boom Shifts Alliance as Obama Visits Saudi King: - Bloomberg

U.S. Oil Boom Shifts Alliance as Obama Visits Saudi King: - Bloomberg:



"When Barack Obama sits down tomorrow with Saudi Arabia’s King Abdullah, he’ll do so knowing the U.S. is importing the least crude in two decades, a shift changing America’s strongest relationship in the Arab world.



Five years after Obama’s first visit to Riyadh, the drilling of shale oil fields from North Dakota to Texas has put the U.S. on the path to energy independence, weakening economic interdependence between the two nations as they work through disagreements on Syria and Iran.



The U.S. energy boom that’s upended global markets is now reshaping political alliances built over decades. Almost 70 years after Franklin Roosevelt cemented relations with the Saudi royal family, the U.S. finds itself free to address policy differences with oil as less of a bargaining chip, analysts said. The shift gives the U.S. a freer hand in shaping Middle East policy, especially in seeking an accommodation with Iran while lessening Saudi influence in Washington."



'via Blog this'

Wednesday, 26 March 2014

Abu Dhabi's Etihad Airways to raise $2 billion for deliveries in 2014 | Reuters

Abu Dhabi's Etihad Airways to raise $2 billion for deliveries in 2014 | Reuters:



"Etihad Airways plans to raise $2 billion to pay for aircraft deliveries this year, the Abu Dhabi-based airline said on Wednesday after road shows in New York and London.



Etihad will take delivery of 18 aircraft this year that include 10 Airbus aircraft and 8 Boeing planes, a statement from the airline said.



"The airline is looking to raise US$2 billion to finance its fleet deliveries in 2014 which will include its first A380 and Boeing 787 aircraft," Etihad said in a statement, without giving details of how the money will be raised."



'via Blog this'

Abu Dhabi's Hilal Bank reports 2013 net profit up 42 pct | Reuters

Abu Dhabi's Hilal Bank reports 2013 net profit up 42 pct | Reuters:



"Abu Dhabi government-owned Al Hilal Bank said its 2013 net profit jumped 42 percent on the back of strong asset growth.



The Islamic lender, owned by Abu Dhabi Investment Council, made a net profit of 441.4 million dirhams ($120.16) in 2013 compared to 310.3 million dirhams in the prior year, a statement from the bank said on Wednesday.



"The significant net profit upsurge for the full year of 2013 is largely attributed to growth in assets along with improvement in asset quality and liability mix," the statement said."



'via Blog this'

Ukraine’s Next Casualties Could Be Its Farmers - Businessweek #EuroMaidan

Ukraine’s Next Casualties Could Be Its Farmers - Businessweek:



"After taking part in protests that toppled President Viktor Yanukovych in February, some Ukrainian farmers rushed back to their land to prepare for spring planting.



The question now is whether they can afford to grow what they plant. A 25 percent decline in the hryvnia currency this year has pushed up the cost of fertilizer and other essentials, while the government’s deteriorating finances are choking off farmers’ access to credit. Russia is adding to farmers’ woes by canceling discounts on fuel it sells to Ukraine—and by annexing Crimea, the site of several Black Sea ports that are important for agricultural exports. 




“Neglecting these problems can cause the country another crisis—food,” Alex Lissitsa, president of the Ukrainian Agribusiness Club, said on March 18. The Kiev-based industry group is predicting that 20 percent of acreage set aside for grain and oilseed planting will go unsown this year."



'via Blog this'

MIDEAST STOCKS-Property, bank stocks lift UAE bourses, other mkts muted | Reuters

MIDEAST STOCKS-Property, bank stocks lift UAE bourses, other mkts muted | Reuters:



"* Dubai's Shuaa Capital surges on hopes for lucrative IPO deals



* Abu Dhabi's TAQA falls for second day since posting 2013 loss



* Qatar Islamic Bank gains on Turkey acquisition plan



* Batelco rises after bond buyback proposal



By Olzhas Auyezov

DUBAI, March 26 (Reuters) - Banks and property stocks lifted Dubai and Abu Dhabi's markets on Wednesday, while other regional bourses were little moved.



Dubai's bourse added 0.9 percent as Emaar Properties and contractor Arabtec Holding rose 0.8 and 2.8 percent respectively.



Investment bank Shuaa Capital was the top gainer, surging 14.7 percent on bets it may benefit from an expected increase in initial public offerings in the United Arab Emirates. Shuua's trading volume was its largest of 2014.



The UAE government has indicated it will soon approve a long-awaited companies law that analysts hope will cut the minimum free float in IPOs to 30 percent from 55 percent at present."



'via Blog this'

Guest post: soft war, or when finance is the continuation of politics by other means | beyondbrics #EuroMaidan

Guest post: soft war, or when finance is the continuation of politics by other means | beyondbrics:

By Roland Nash of Verno Investment Research
As the conflict between Russia and the west for influence in Ukraine unfolds, finance has found itself in the unfortunate position of sitting squarely in the front line. From the acceptance by Viktor Yanukovich of a $15bn loan from Russia to the freezing of oligarch bank accounts in the US and Europe, finance has been used as a tool to push the political agenda of both sides.

The immediate consequence has been a fall in the value of Russian assets, the latest of many that have plagued Russia over the past 20 years. If a market correction is the only impact, recent weeks will prove little more than another example of how Russian markets have a tendency to overreact to newsflow. But there could well be a more far reaching impact – and perhaps with rather different consequences from those intended by the US and EU.

In the 14 years that Vladimir Putin has dominated Russian politics, arguably the biggest threat to his authority was the 2008 financial crisis. By suddenly facing the removal of access to financing, Russian businesses and the elites that controlled them found they were unable to meet obligations – not just to the west, but to each other, the Russian public and the Russian government. The equity market lost $1tn in value in the space of three months, western banks threatened to take control of Russian industry in lieu of debts, and the economy declined by 8 per cent in 2009 – the biggest recession of any major country globally. While Putin had created a highly successful power-vertical in Russia, it transpired that the whole edifice of the Russian economy could be threatened by what was little more than collateral damage from decisions taken in the US and Europe to support their own economies.

By the same token, the crisis also demonstrated the soft power of western finance in Russia. It is one of the great ironies of Russia’s post-Soviet experience that one of the events that did most to restore the influence of the state across the Commonwealth of Independent States was a financial crisis in the west. With the removal of sources of external private finance, businesses, banks, oligarchs and even governments had no choice but to turn to the Russian state for liquidity. Into the vacuum left by western finance walked the only entity that had been saving during the 10-year post 1998 economic boom: the Russian state. Through Sberbank, VTB and VEB, the state provided liquidity and in return gained influence.

The experience of 2008 was a lesson that appears to have been learned by both the West and Russia. From the western standpoint, finance has been chosen as one of the few mechanisms available to apply pressure on Russia in response to events in Crimea. Targeted asset freezes and restricting certain Russian companies’ access to finance are measures that appear to be viewed as a surgical way of directly pressuring those making decisions related to Ukraine. Rumours of the threat of wider sanctions abound, with the effect of artificially creating the circumstances that so impacted Russian economic stability in 2008. Actual concrete decisions are not always necessary – rumour alone can be highly destructive.

From the Russian standpoint, just as the lesson from 1998 was not to let government finances ever become over-exposed to the west, so the lesson in 2008 was to limit private sector exposure. Companies and banks have been encouraged to increase domestic borrowing and decrease reliance on the west. Oligarchs have been far more reluctant to leverage their holdings through western banks. From a policy standpoint, the central bank has floated the rouble and the Kremlin has been vocal about its awkwardly titled policy of “de-offshorisation”.

Both sides are manoeuvring. Russian stocks are particularly vulnerable to geopolitics because so much of the free float is owned by foreigners, creating the opportunity for considerable value destruction if holders become nervous of deteriorating politics. Of the 18 per cent fall in the equity market so far in 2014, at least half can be directly attributable to the impact of events in Ukraine, which would imply a $60bn cost to Russia.

But equally, a collapse in Russian valuations hurts foreign funds disproportionately because they own so much of the market. Indeed, Russian corporates are looking at lower valuations as an opportunity to buy back their stock from foreign holders. A similar trend is under way in debt markets. Companies that borrowed in western financial markets at 5 per cent are now able to buy back their debt at yields several hundred basis points higher.

In Ukraine itself, finance is likely to play a key role as military tensions subside. The west’s arsenal of multilateral lenders is likely to be deployed to prop up the Ukrainian economy and persuade it of the advantages of looking west. In Crimea, Russia is likely to want to illustrate the merits of stronger ties with the homeland and, given the smaller scale of the project and the relative priority of policy, could well prove to be the more successful.

In the longer term, the costs to Russia are likely to prove more substantive. Partly this will reflect a lower availability of financing at a time when Russia needs to be investing. But it’s the quality of financing rather than the quantity that may have the bigger impact. Russia is only capital constrained because such a large proportion of domestic savings are exported abroad. Financial markets are global, and if the west is not prepared for political reasons to provide financing, then other sources are likely to take advantage of any improved economics. Organisations like the Russian Direct Investment Fund have already proved successful at both raising and deploying institutional funds in Russia. But if, as is likely, capital deployment in the absence of the west involves greater state involvement, then there could well prove to be an efficiency loss that will cost Russia over the longer term.

From the west’s standpoint, financial engagement has been one of the major successes of the integration of Russia into the global economy since the break-up of the Soviet Union. Incentivising Russian organisations to adopt the standards and the disciplines that most effectively ensure access to western finance encourages many of the trends that the west should, in its own interests, be working to achieve. Disincentivising western finance from engaging with Russia may indeed damage Russian growth, but it will also undermine some of the most encouraging trends of the last decade.

There is a feeling in Moscow that the model of finance that has developed in Russia over the last 20 years may have been permanently changed by the reaction to events in Ukraine. This, like other crises before it, will undoubtedly create opportunities for capital deployment. But it may also change attitudes that will have unintended costs for both sides.



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Russia's Capital Outflow Could Reach $100Bln in 2014 - Putin's aide | Business | RIA Novosti

Russia's Capital Outflow Could Reach $100Bln in 2014 - Putin's aide | Business | RIA Novosti:



"March 26 (RIA Novosti) - Capital flight from Russia may reach some $100 billion in 2014, a presidential aide said Wednesday.



“I believe that the figure would be around $60-80 billion, but counting interventions [by Central Bank to reduce volatility], it could be some $100 billion,” Andrey Belousov said.



According to Central Bank data, net capital outflow from Russia increased from $54.6 bln in 2012 to 62.7 bln last year.



The World Bank warned earlier on Wednesday that Russia may see capital outflow at $150 bln this year due to the current standoff with the West over the Crimean crisis."



'via Blog this'

Live chart: World GDP - YouTube

Live chart: World GDP - YouTube: ""



'via Blog this'

Kuwait to scrap controversial sponsor system - Politics & Economics - ArabianBusiness.com

Kuwait to scrap controversial sponsor system - Politics & Economics - ArabianBusiness.com:



"Kuwait will scrap the controversial sponsorship system for foreign workers and hand sole responsibility for recruiting expats to the newly established Labour Public Authority later this year, local media has reported.



The authority was approved by the parliament last year in a bid to reduce abuse of the sponsorship system, which requires employers to take responsibility for a foreign worker.



MPs argued the system – of which similar systems are used across the GCC – had too many loopholes that led to visa trafficking and even allegations of a widespread visa fraud ring within high levels of government, including members of the ruling family. The allegations are being investigated.



International human rights groups also have criticised the sponsorship programmes in Gulf states such as Qatar and Saudi Arabia, which forbid employees from leaving the country or changing companies without the permission of their employer."



'via Blog this'

Why Doesn’t Russia Seem Concerned About Sanctions?: Video - Bloomberg

Why Doesn’t Russia Seem Concerned About Sanctions?: Video - Bloomberg: ""



'via Blog this'

Kuwait based Arab Fund to invest record $412 in Egypt | Al Bawaba

Kuwait based Arab Fund to invest record $412 in Egypt | Al Bawaba:



"Egypt’s interim government signed two agreements with the Arab Fund for Economic and Social Development (AFESD) on Monday to finance projects in the electricity sector, a statement from the cabinet said.



A power station in Assiut, which is currently being upgraded to increase Egypt’s electric capacity by 650MW, will be funded by AFESD’s first $200m assistance package.



In December 2013, the Upper Egypt Electricity Production Company (UEEPC) and Banque Misr signed an EGP 285m loan agreement to fund renovations and replacements in Assiut’s power station.



The Islamic Development Bank (IDB) allocated $220m in February to finance the Assiut station. The allocation came as a part of a nearly $705m initiative to fund projects focusing on infrastructure, human development and education in “Muslim communities”, the bank said."



'via Blog this'

Gazprom boasts of South Stream progress - UPI.com

Gazprom boasts of South Stream progress - UPI.com:



"March 25 (UPI) -- Russian energy company Gazprom said it placed a high priority on developing the South Stream gas pipeline network for the benefit of European consumers.



Alexei Miller, chairman of the Russian energy company, met in Moscow with Vasily Golubev, governor of the Rostov region of Russia, which borders the Sea of Azov.



The company said in a statement both sides reviewed the prospects for the construction and eventual supplies for the planned South Stream natural gas pipeline.



"Gazprom gives high priority to developing the infrastructure for South Stream, [a] strategic project aimed at strengthening the European energy security," it said Monday."



'via Blog this'

Really ready for higher rates? - YouTube

Really ready for higher rates? - YouTube: ""



'via Blog this'

Gulf Capital plans to sell remaining stake at Gulf Marine Services after raising $600m in IPO | The National

Gulf Capital plans to sell remaining stake at Gulf Marine Services after raising $600m in IPO | The National:



"Gulf Capital plans to sell off the remainder of its stake in Gulf Marine Services over the next two years after generating gains of more than US$600 million through the firm’s initial public offering.



Through its buyout fund, Gulf Capital reduced its shareholding in GMS from 80 per cent to 49.7 per cent last week through the offshore contractor’s IPO on the London Stock Exchange.



The deal marks one of the most lucrative private equity exits in the Middle East and gives a fillip to the region’s fledgling buyout industry."



'via Blog this'

Taqa shares slide after $884m Canadian gas writedown | The National

Taqa shares slide after $884m Canadian gas writedown | The National:



"Taqa shares tumbled 10 per cent after the energy investor disclosed a US$884 million writedown on its Canadian gas assets.



The company known also known as Abu Dhabi National Energy downgraded the value of the North American holdings by 13.8 per cent to take into account a drop in gas prices since cheap shale volumes appeared in North America. It will not pay investors a dividend for 2013 because of the loss.



Shares fell to a six-month low of Dh1.26 on the Abu Dhabi bourse after the announcement."



'via Blog this'

Etihad secures regulatory approval to buy 49% stake in Air Serbia | GulfNews.com

Etihad secures regulatory approval to buy 49% stake in Air Serbia | GulfNews.com:



"Etihad Airways has secured the approval of Serbian regulatory authorities for it take a 49 per cent stake in Air Serbia.



In August 2013, Etihad announced it would inject $200 million (Dh734.6 million) into the struggling Serbian national carrier as part of its bid to become a minority stakeholder.



Etihad’s initial loan of $40 million to Air Serbia will now be converted to equity.



The two airlines already have a codeshare agreement with Air Serbia flying from Belgrade to Abu Dhabi."



'via Blog this'

An escalated Ukraine issue will not be localised | GulfNews.com

An escalated Ukraine issue will not be localised | GulfNews.com:



"How important is Ukraine for the UAE? In a nutshell, not really. The Ukraine-Russia crisis has been in the media spotlight in the last few weeks, and potential implications of an increase in tension in the Black Sea have been the focus of numerous analyses.



However, its impact on the Gulf region is unclear. Ukraine plays a marginal role for the countries of the Gulf Cooperation Council (GCC): trade exchanges are minimal and investment flows almost non-existent. In 2012, Ukrainian exports to the UAE amounted to only $414 million (Dh1.52 billion), 29 per cent of total exports to the GCC but equivalent to only 0.24 per cent of Ukrainian GDP.



UAE’s exports to Ukraine were insignificant, reaching only $68 million in 2012 or 0.02 per cent of Emirati exports. This pattern is not particular to the UAE. Exchanges between Ukraine and the GCC have been historically small."



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Ukraine Awaits IMF as Obama Warns Russia of Consequences - Bloomberg

Ukraine Awaits IMF as Obama Warns Russia of Consequences - Bloomberg:



"Ukraine will receive an assessment today from the International Monetary Fund on the country’s bailout request as the U.S. continues to muster global support for penalizing Russian encroachment on Ukrainian territory.



An IMF mission was completing talks in Kiev on a loan that Ukrainian Finance Minister Oleksandr Shlapak said yesterday would amount to between $15 billion and $20 billion. Shlapak said the team would announce its findings today.



As the government in Kiev pursues the help it needs to avert default, U.S. President Barack Obama is scheduled to speak today on what the standoff with Russia over Ukraine means for European security. Yesterday, he warned Russian President Vladimir Putin that Russia would face more sanctions if it moved further into eastern Ukraine after its annexation of Crimea.



“It is now up to Russia to act responsibly and show itself to be once again willing to abide by international rules,” Obama said at a news conference in The Hague. “If it fails to do so, there will be additional costs.”"



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Occidental’s $8 Billion Deal Stalled by Brotherhood Row - Bloomberg

Occidental’s $8 Billion Deal Stalled by Brotherhood Row - Bloomberg:



"Occidental Petroleum Corp., (OXY) seeking to raise as much as $8 billion by selling a stake in its Middle East business, said a political dispute in the region is complicating plans to sell to a single investor group. 




The oil and gas producer may need to break up the assets and sell them to individual countries because political tensions has made it too complicated to win agreement for a single sale to a group made up of Oman, the United Arab Emirates and Qatar, Chief Executive Officer Steve Chazen told investors at the Howard Weil Energy Conference in New Orleans yesterday.



“The notion that they were going to somehow cooperate with each other in an oil investment is difficult at best right now,” Chazen said. “At their suggestions, we’ll probably make separate deals with the three countries with somewhat different assets in each one. In some ways, that’s a lot simpler.”"



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Tuesday, 25 March 2014

J Sainsbury could attract renewed attention from Qatar, says broker | Business | theguardian.com

J Sainsbury could attract renewed attention from Qatar, says broker | Business | theguardian.com:



"It's an old chestnut that the Qataris could take another tilt at J Sainsbury following their failed bid attempt in 2007.



Now Shore Capital's Clive Black has taken another look at the situation, not just with regard to a possible takeover but also the other implications of the Qatar Investment Authority's 26% stake in the supermarket group.



Black said that Sainsbury's shares had fallen sharply in recent weeks following a disappointing fourth quarter update. But he pointed to a strong forecast net asset value and a good dividend yield as potential supports for the share price. And one other support should be the Qatar stake. Black said:"



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