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Tuesday, 5 July 2016

Analysis: Merging FGB-NBAD should make a big leap of faith | The National

Analysis: Merging FGB-NBAD should make a big leap of faith | The National:

"This article was meant to be about managing a merger. It turns out that this is hard to explain without first understanding the goal of the merger. There has been little information made public in terms of the thinking behind the FGB-NBAD merger, with some commentary from analysts. Here I will discuss various ideas on the merger.

1 So why might FGB and NBAD have decided to merge? One oft-quoted reason is that it was a political decision. But to what end? I’m pretty sure that politics do not drive commercial decisions.

2 Next is the idea of cost savings. Merging the two companies does not only offer the possibility of eliminating overlapping functions, there is also the possibility that FGB’s cost effectiveness, as measured by a cost/income ratio of about 20 per cent, can bring down NBAD’s same ratio of about 38 per cent. That would be a big saving indeed. But in the end it is no different to FGB growing assets organically. A merger doesn’t necessarily make it faster, after accounting for merger costs, it might be the same."



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Standard Life shuts property fund amid rush of Brexit withdrawals | Business | The Guardian

Standard Life shuts property fund amid rush of Brexit withdrawals | Business | The Guardian:

"Investors in Standard Life’s property funds have been told that they cannot withdraw their money, after the firm acted to stop a rush of withdrawals following the UK’s decision to leave the EU.

The firm halted trading on its Standard Life Investments UK Real Estate Fund and associated funds at midday on Monday, citing “exceptional market circumstances” for the decision. It said the suspension would remain in place until it is “practicable” to lift it, and that it would review the decision at least every 28 days.

The £2.9bn fund, which invests in commercial properties including shopping centres, warehouses and offices, is thought to be the first UK property fund to suspend trading since the 2007-2009 financial crisis, when some of the biggest names in investment management stopped withdrawals because they did not have the money to repay investors. "



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MIDEAST STOCKS-Egypt surges on expectations of currency devaluation | Reuters

MIDEAST STOCKS-Egypt surges on expectations of currency devaluation | Reuters:

"Cairo's main stock index rose 2.9 percent on Monday on expectations of a further currency devaluation this fiscal year, while Gulf stock markets closed on a strong footing before the Eid al Fitr holidays.

On Sunday, Tarek Amer, Egypt's central bank governor, was quoted in local papers saying the currency should be a market based one where demand and supply will set the price.

Economists now believe it is inevitable there will be another currency devaluation in the current fiscal year."



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