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Monday, 21 July 2014

Arabtec Drops Second Day as Investors Question Aabar Backing - Bloomberg

Arabtec Drops Second Day as Investors Question Aabar Backing - Bloomberg:



"Arabtec Holding Co. (ARTC) fell to the lowest level in a week as some investors questioned the government’s support for the United Arab Emirates’ biggest publicly traded builder.



Shares in the company, which helped build the tallest tower in the world, pared an earlier 9.9 percent drop to close 1.8 percent lower at 4.38 dirhams, the lowest since July 14. The stock yesterday fell the maximum allowed after state-controlled Aabar Investments PJSC, the builder’s second-largest shareholder, said talks about its stake in the company are “strictly confidential.”



Arabtec’s shares were halted from trading at the end of last week pending clarification of its ownership. Aabar is in talks to buy at least half of a 28.9 percent stake held by the construction company’s former Chief Executive Officer Hasan Ismaik, a person with knowledge of the situation said July 15. Aabar is negotiating a price of 5 dirhams to 6 dirhams a share, the person said."



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Exxon, OMV start drilling Black Sea's Domino 2 well | Energy & Oil | Reuters

Exxon, OMV start drilling Black Sea's Domino 2 well | Energy & Oil | Reuters:



"ExxonMobil and OMV Petrom announced the start of drilling at a well that will help it assess the size and commercial viability of its Domino 1 Black Sea well, the most significant gas discovery in the region to date.



The two companies said on Monday they had started drilling at the Domino 2 well in the deepwater sector of the Neptun block in Romanian waters, which is about 200 kilometres (124 miles) offshore and is being drilled in a depth of about 800 metres.



Southeast Europe hopes natural gas exploration in the Black Sea will help cut its dependence on Russian supplies, but a gas bonanza remains elusive because deep water and tough geology have required costly high-tech equipment."



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EconoMonitor : EconoMonitor » As Russia’s Isolation Grows, Oil Companies Caught in Middle

EconoMonitor : EconoMonitor » As Russia’s Isolation Grows, Oil Companies Caught in Middle:



"The confrontation between Russia and the West took a turn for the worse with the downing of a Malaysian airliner on July 17, and that could spell trouble for several major oil companies operating in Russia.



Just one day earlier, U.S. President Barack Obama slapped sanctions on Russia over its ongoing role in the destabilization of Ukraine. The sanctions prohibited American banks from issuing loans with a maturity of over 90 days to four key Russian companies – Rosneft, Novatek, Gazprombank, and VEB.



“Because Russia has failed to meet the basic standards of international conduct, we are acting today to open Russia’s financial services and energy sectors to sanctions,” U.S. Treasury Official David S. Cohen said in a press release describing the agency’s actions."



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Q&A With Dubai International Capital’s David Smoot - Middle East Real Time - WSJ

Q&A With Dubai International Capital’s David Smoot - Middle East Real Time - WSJ:



"Dubai International Capital, the private-equity arm of one of the emirate’s main holding companies, recently agreed to sell industrial packaging firm Mauser for $1.7 billion to a U.S. investor. The deal will help DIC, which once owned Madame Tussauds and Travelodge, further pay down debts it amassed before the financial crisis to fund a global buying spree. The Wall Street Journal sits down with DIC’s Chief Executive David Smoot for an update on the group’s asset disposals, its restructuring and future.



WSJ: Are you currently looking to sell any other of your remaining investments? 




Mr. Smoot: “Our entire portfolio, with the exception of land we own [a large plot in the desert] which is strategic from a Dubai perspective, is available for sale. The other major assets, Doncasters and Almatis, we believe there is still lots to play for in both companies so we continue to groom and prepare them.”"



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Turkish stock exchange at 14-month high in defiance of geopolitical tensions - ECONOMICS

Turkish stock exchange at 14-month high in defiance of geopolitical tensions - ECONOMICS:



"The Turkish stocks have started off the week strongly at a 14-month-high despite rising geopolitical tension from Israel’s blistering assault on Gaza, as well as a plane crash rift in Ukraine and ongoing turmoil in Iraq.



The Borsa Istanbul (BIST) 100 index has opened the day at 82,992 points with a 378-point rise, touching the highest point it has seen since May 31, 2013.



Tensions in the Middle East and Ukraine seem to leave investors cold with Turkey’s close involvement in the rift, particularly due to Prime Minister Recep Tayyip Erdo─čan’s increasingly harsh rhetoric against Israel over its strikes on Gaza that have killed more than 300 Palestinians over the past couple of weeks."



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Ukraine nerves send European shares lower | Reuters

Ukraine nerves send European shares lower | Reuters:



"European stock markets fell across the board on Monday, concerned by an escalation in tensions between Russia and the West and reports the Ukrainian army was moving on a major rebel stronghold.



The step up in rhetoric over Russia's involvement following last week's downing of a Malaysian airliner had offered hope for some investors that stronger action by Western powers could push the conflict toward a peaceful conclusion.



But reports that Ukrainian forces were moving into the eastern city of Donetsk added to concerns that the conflict in one of Europe's biggest countries instead may escalate further."



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Ukraine Again Shuts Down Corporate Bond Revival: Russia Credit - Businessweek

Ukraine Again Shuts Down Corporate Bond Revival: Russia Credit - Businessweek:



"Prospects for a revival in Russian corporate bond sales are dimming again as stepped-up sanctions by the U.S. and questions over the downing of a Malaysian airliner curbed interest in the nation’s debt.



“The door is shut again,” Michael Ganske, head of emerging markets at Rogge Global Partners Plc in London, where he helps manage $8 billion in developing-nation bonds and currencies, said by e-mail July 18. “It’s hard to imagine that international investors would be open to new issuance from Russian entities.” 




While Russian companies including OAO Sberbank and Alfa Bank seized on a lull in tension with Ukraine to issue euro-denominated debt last month, fresh U.S. sanctions last week and the downing of a Malaysian Air jet over eastern Ukraine on July 17 threaten to drive away investors. Corporate foreign-currency bond sales have tumbled 67 percent this year to the lowest level since 2009."



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Dubai stock market crashes 6% making a double top « ArabianMoney

Dubai stock market crashes 6% making a double top « ArabianMoney:



"The Dubai Financial Market failed to hold onto its recent rebound and fell by six per cent, the most in years, confirming the double top that we forecast on this website a week ago (click here).



The immediate cause was the lifting of the suspension of trading in Arabtec shares despite no real news on the ownership issues surrounding its major shareholdings. It’s arguable that the suspension was lifted too soon."



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The BRICS Don’t Like the Dollar-Dominated World Economy, but They’re Stuck With It | TIME

The BRICS Don’t Like the Dollar-Dominated World Economy, but They’re Stuck With It | TIME:



"The latest summit of the world’s leading emerging markets took more steps toward replacing the U.S.-led global financial system. But change will come very, very slowly



When the BRICS get together for their annual summit — as they did last week in Brazil — they always make a lot of noise about changing the way the global economy works. They have good reason to be frustrated. The BRICS (Brazil, Russia, India, China and South Africa) are gaining in economic power and crave the political clout to match, but standing in the way is a global financial system organized by the West and dominated by the U.S. They’re forced to conduct their international business in the unstable U.S. dollar, making their economies swing back and forth with the winds of policy crafted in Washington, D.C., and New York City. The West has ceded influence in institutions like the World Bank and the International Monetary Fund (IMF) only grudgingly. To them, today’s financial system is out of touch with the changing times, and ill-suited to support the world’s up-and-coming economic titans.



So in their summit, from July 14 to 16, the five BRICS announced two major initiatives aimed squarely at increasing their power in global finance. They announced the launch of the New Development Bank, headquartered in Shanghai, that will offer financing for development projects in the emerging world. The bank will act as an alternative to the Washington, D.C.—based World Bank. The BRICS also formed what they’re calling a Contingent Reserve Arrangement, a series of currency agreements which can be utilized to help them smooth over financial imbalances with the rest of the world. That’s something the IMF does now."



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A safer world, even as global energy struggles abound | The National

A safer world, even as global energy struggles abound | The National:



"It may seem that the world is becoming a more dangerous place for energy. Geopolitical, military and revolutionary crises centre on oil and gas. The oil services giant Schlumberger now needs extra security in 20 countries, up from just two in 2001, as the Financial Times observed. Oil prices rose on the fighting in northern Iraq, then again on the news of the downing of the Malaysia Airlines flight in eastern Ukraine.



In Iraq and Syria, the “Islamic State” funds itself with looted oil. Libyan petroleum ports close and reopen in disputes over federalism and payments. Civil war in South Sudan threatens oilfields. Russia cuts gas to Ukraine as separatist fighting continues. Chinese and Vietnamese warships face off over a drilling rig in the South China Sea. Mexican drugs cartels siphon oil from pipelines and threaten to kidnap workers.



Yet despite these conflicts, the world has become a much safer place. From a peak during the 1980s, wars within and between states have dropped sharply since 1990. Even including the Syrian civil war, the death rate from political violence has fallen steadily since the 1970s. Oil price volatility has been exceptionally low over the past three years, and although prices remain high, there has not been a 1973 or 1979-style shock."



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Emirates NBD repays remaining Dh4 billion 2008 crisis support from UAE government | The National

Emirates NBD repays remaining Dh4 billion 2008 crisis support from UAE government | The National:



"Emirates NBD, Dubai’s largest lender, has repaid the remaining Dh4 billion of support which it received from the UAE government in 2008, the country’s finance ministry said.



The Ministry of Finance injected Dh70bn into the country’s banks to shore up balance sheets after the collapse of Lehman Brothers in September 2008 triggered a crisis in the world’s financial system.



“Emirates NBD informed the Ministry this week that it had repaid Dh4bn to the Finance Ministry which is the final payment of the government subsidies that the bank had received,” the ministry’s website quoted undersecretary Younis Haji Al Khoori as saying in a statement dated last week but seen on Sunday."



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Emirates: Carriers must agree on a response to #MH17 downing | GulfNews.com

Emirates: Carriers must agree on a response to MH17 downing | GulfNews.com:



"The head of one of the world's largest airlines has called for an international meeting of carriers to agree on a response to the downing of a Malaysian airliner, including a potential rethink of the threats posed by regional conflicts.



Tim Clark, president of Dubai's Emirates, the world's largest international airline by number of passengers, said domestic regulators worldwide may decide to be more involved in giving their carriers guidance on where it is safe to fly.



"The international airline community needs to respond as an entity, saying this is absolutely not acceptable and outrageous, and that it won't tolerate being targeted in internecine regional conflicts that have nothing to do with airlines," Clark told Reuters in a telephone interview.



He said the International Air Transport Association (IATA) could call an international conference to see what changes need to made in the way the industry tackles regional instability."



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UAE may issue federal bonds by 2018, studies ongoing, says ministry | GulfNews.com

UAE may issue federal bonds by 2018, studies ongoing, says ministry | GulfNews.com:



"The UAE is expected to issue its first ever federal government bonds before 2018 to help the country’s banks meet global liquidity rules, but feasibility studies are yet to be completed, a senior finance ministry official said.



UAE banks, such as National Bank of Abu Dhabi and Emirates NBD, could buy the dirham-denominated government debt to help meet liquidity requirements being phased in under the Basel III global banking standards.



“The purpose of issuing bonds is to meet the requirements of Basel III, since the central bank needs to accommodate Basel’s requests that the country’s banks maintain certain portions of sovereign bonds, in which case the unavailability of bonds will make the requirement difficult to fulfil,” Younis Al Khouri, undersecretary at the federal Ministry of Finance, said."



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Etisalat profit jumps 26% on Maroc Telecom buy | GulfNews.com

Etisalat profit jumps 26% on Maroc Telecom buy | GulfNews.com:



"Etisalat reported a 26 per cent jump in second-quarter profit on Sunday, beating analysts’ estimates, as the UAE firm’s acquisition of a majority stake in Maroc Telecom bolstered its bottom line.



The former telecom monopoly, which operates in 19 countries across the Middle East, Africa and Asia, made a net profit of Dh2.5 billion ($680.7 million) in the three months to June 30, up from Dh1.98 billion in the year-ago period, according to Reuters calculations.



Etisalat, which beat the Dh2.19 billion average forecast of analysts polled by Reuters, did not give a quarterly net profit breakdown in its results statement."



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JPMorgan Goes From Sell to Buy and Back on Russia - Bloomberg

JPMorgan Goes From Sell to Buy and Back on Russia - Bloomberg:



"Just a month after lifting its call on Russia stocks to buy, JPMorgan Chase & Co. reversed course, telling investors to sell as the market plunged after the U.S. imposed more sanctions and an attack on a civilian jet deepened tensions in Ukraine.



The flip-flop highlights how volatile markets have become in a country that’s been mired in a conflict in neighboring Ukraine for months. The Russian Market Volatility Index, which reflects traders’ projections for future price swings in equities, jumped 9.9 percent last week to the highest since May 12 as the benchmark Micex index sank to a seven-week low.



In cutting its call, JPMorgan joined Deutsche Bank AG and Barclays Plc turning bearish. Deutsche Bank AG predicted a decline of about 10 percent by year-end while Barclays Plc said stocks could see a correction. JPMorgan’s analysts led by Adrian Mowat said they reduced Russian stocks to underweight, the equivalent of sell, on heightened international tension, stronger sanctions linked to the Ukraine conflict and declining oil prices."



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Speculators Cutting Bullish Oil Bets Miss Ukraine Rally - Bloomberg

Speculators Cutting Bullish Oil Bets Miss Ukraine Rally - Bloomberg:



"The downed jetliner in Ukraine and Israel’s Gaza offensive blindsided speculators who had cut bullish crude bets on the assumption that risks to supply were diminishing.



Crude futures rose after money managers slashed net-long positions in West Texas Intermediate, the U.S. benchmark grade, by 15 percent in the seven days ended July 15, the Commodity Futures Trading Commission said. It was the biggest drop in bullish wagers since March 2013.



“A lot of people were clearly caught off guard by events,” Amrita Sen, chief oil analyst for London-based Energy Aspects Ltd., a researcher, said by phone July 18."



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