#GCC and #MiddleEast Finance News: 19 Jul 2009

Sunday, 19 July 2009

Kuwait investors acquiring additional stake in South Africa estate for $1.2 million (Re-post)

Kuwait Investors IFA Hotels & Resorts strengthened its interests in South Africa by acquiring a further 5.25% in Boschendal, one of the oldest wine estates in South Africa, increasing its stake to 37.33%.

The transaction value is not mentioned in their press release, but according to the filings obtained by DubaiBeat.com, the transaction value is approximately $1.2 million. (They had originally bought a 19.25% stake in the Boschendal Estate for approximately $10 million in June 2006. In September 2007 they increased their stake to 26.5%.)

IFA Hotels & Resorts listed on the Kuwait Stock Exchange in January 2006, with a market capitalization of over $1 billion. According to their release, their current portfolio consists of 40 projects in total, of which 23 are hotels. Assets under management are valued at $10 billion. (To see more Kuwait investors like IFA check our investors list)END

Global's Egypt Weekly Market Report - July 16, 2009 (PDF)

Global's Palestine Weekly Market Report - July 16, 2009 (PDF)

Global's Qatar Weekly Market Report - July 16, 2009 (PDF)

Volkswagen plans to buy all of Porsche for US$11.3 billion, says Der Spiegel

Image by carlos_seo (in France - back in August) via Flickr

Porsche SE's controlling families will agree on Thursday to accept an offer by Volkswagen to buy its sports car business Porsche AG for roughly €8 billion (US$11.28 billion), Der Spiegel reported on Saturday.

Germany's leading weekly magazine wrote that the rival Porsche and Piech clans, which own 100% of Porsche SE votes, will approve the two-stage takeover at a supervisory board meeting on 23 July.

Volkswagen would purchase a 49.9% stake in Porsche AG and at a later date acquire the rest, in a deal that would create an integrated automotive group with 10 brands under the leadership of the Wolfsburg-based carmaker.

NBAD on top of adequacy ratio (Interview)

Michael Tomalin, Group Chief Executive, National Bank of Abu Dhabi (NBAD), has always been a no-nonsense banker with clear ideas. While he explained the bank's plans to expand outside the UAE, he also made it a point to discuss with Emirates Business what he thought would make the UAE's banking scenario better. He said it would always be advisable for the UAE to have a more transparent auction system that will help disclose the rates on certificates of deposit (CD). Tomalin also highlighted the role banks should play to establish transparency in the industry, something that has become more important than ever. Excerpts from the interview:

The current financial crisis has prompted financial institutions across the world to go back to basics. What about NBAD?

I believe we have never gone away from basics. We have always been close to basics and this has proved to be right for us time and again.

Saad Group 'making progress' with debt restructuring

Saudi Arabia's troubled Saad Group is making headway in restructuring its debt portfolio and is in talks with affected parties, Emirates Business has learnt.

"Saad is making progress with its restructuring programme and will make further announcements on this as appropriate," a London-based spokesperson of the group told this newspaper in an e-mailed statement.

The spokesperson also denied knowledge of the recent reports in media that its owner, Maan Al Sanea, has been sued by the other troubled Saudi conglomerate, the Algosaibi group through the Ahmed Hamad Algosaibi and Brothers Company (Ahab).

Adia may invest in UAE bonds, says Saudi bank

The Abu Dhabi Investment Authority (Adia) may depart from its long-standing tradition and begin investing in the local market by buying bonds planned by the UAE Government and other institutions, a key Saudi bank said yesterday.

Although it has not specified the size of the planned sovereign bond issue, the UAE Federal Government will not find any difficulty raising money from local and foreign markets given its high rating and strong financial position, Samba Financial Group, previously known as Saudi American Bank, said in a study.

It noted that such a strong position would enable the UAE to repay any debt on time and push ahead with plans to guarantee bonds issued by local banks.

NBAD to enter Far East, Jordan this year in expansion drive; insurance foray on cards

National Bank of Abu Dhabi (NBAD), the largest bank in Abu Dhabi with an asset base in excess of Dh160 billion, is expanding into the Far East with a branch in Hong Kong, Chief Executive Michael H Tomalin told Emirates Business.

The bank has finalised plans to take its tally to 100 with the addition of 13 branches this year, Tomalin said in an interview.

"As of now, we do not have branch operations in the Far East. We have permission to open a branch in Hong Kong and this will be done in the fourth quarter of this year. Though we used to operate branches in Sydney, Tokyo and Singapore in the past, we are now returning to the Far East after a gap," he said.

Ex-minister's case adjourned for tomorrow

The Dubai Court of Cassation has adjourned until tomorrow an appeal filed by the Public Prosecution and the plaintiff challenging an earlier verdict by the Dubai Appeals Court in a case concerning a former minister.

The Appeals Court had earlier found the accused, KBF, who was also the UAE's first ambassador to Australia, not guilty of fraud. The plaintiff, Maysoun Fehmi Jamal, and the Public Prosecution had filed appeals challenging the verdict.

Yesterday's hearing was attended by KBF, while the plaintiff could not attend, which made the judge adjourn to tomorrow as today is a public holiday on account of Isra Wal Miraj. The verdict is expected to be heard tomorrow.

Experts fear oil price may deflate in line with gas

Gas has performed worse than any other exchange-traded commodity this year, raising concerns that oil, its big brother, could have further to fall.

While crude is 39 per cent higher than at the start of the year, gas on the New York Mercantile Exchange (NYMEX) has fallen 36 per cent, with many observers believing that it will head lower.

Data from the US Commodity Futures Trading Commission show that the world’s biggest hedge funds have collectively purchased US$5.8 billion of derivatives that will be in the money if gas prices fall – their largest position against NYMEX gas futures in seven months.

Gulf shoppers bring cheers to West End

There is a Middle-Eastern air in stores in the West End of London as retailers provide Arabic-speaking personal shoppers and put up signs in Arabic to welcome visitors expected to spend a record £250 million (Dh1.5 billion) this summer.

More than 140,000 Middle-Eastern visitors are forecast to visit Bond Street, Oxford Street and Regent Street in the next three months and spend 11 per cent more than they did in the same period last year, said Jace Tyrrell, the head of communications for New West End Company, which represents the district’s 600 retailers and hotels.

The West End is focusing on its Middle-Eastern visitors, who are mainly from the UAE, because they still have high spending power despite the economic downturn, Mr Tyrrell said. “It makes commercial sense for us to be really giving them an increased level of customer service, given their spending.”

Empty Quarter holds its secrets

A scramble for gas in Saudi Arabia’s Empty Quarter has turned into an exercise in futility.

Four teams of foreign partners have failed to make any major discoveries after five years of drilling, leaving Saudi Aramco, the state-owned company, to find and develop other fields across the kingdom.

After four consortiums of international partners have drilled 22 wells, only one team, from the Russian giant Lukoil, said it made a commercial-scale discovery but it remains unclear how significant the find is.

Nabucco pipeline gains support

Support for the Nabucco pipeline has gained momentum in the past few days after a five-nation accord was signed on the project to ship central Asian and Middle-Eastern gas to Europe, bypassing Russia.

The pipeline’s future remains uncertain because it has yet to receive commitments from gas suppliers or customers, but several countries in the past few days have said they want to supply gas to, or buy it from, Nabucco, or help fund the €7.9 billion (Dh40.89bn) project.

On Friday, the US special envoy for Eurasian energy, Richard Morningstar, said Washington would help secure gas for Nabucco by organising meetings between Nabucco consortium officials, potential supplier countries and contractors.

Abu Dhabi's Dolphin to sell bond, says fund manager

Abu Dhabi's Dolphin Energy will raise at least US$750 million through a Eurobond it will launch at the end of a global road show on Wednesday, a fund management source said on Friday.

"The bond will help replace some of the bank loan debt that the company has," said the fund manager, who attended a meeting about the potential issue.

The firm, which is majority owned by Abu Dhabi state investment body Mubadala, met with investors in London on Friday and is meeting investors in the United States next week, taking in the West Coast, Boston and New York.

Saudi Basic Industries' second quarter profit plummets 76%

Saudi Basic Industries (SABIC), the world’s largest chemicals maker by market value, posted a 76% drop in second-quarter net profit and blamed the drop on lower petrochemicals and metals prices.

SABIC said it made a net profit of SAR1.81 billion (US$482.7 million) in the three months to 30 June, down from US$7.55 billion a year earlier when global demand and petrochemical prices were booming.

That was slightly better than analysts' predictions of an average 78% drop in second-quarter profit.

Enjoy the bounce July 19th (Re-post)

Lots of excitement generated by a forceful bounce off oversold conditions in ADX and DFM.

The bounces occurred at or close to some big FIBO levels, so some basic charting techniques and a good dose of bravery would have allowed you to profit handsomely, beginning at levels offering good risk to reward ratio.

Where to now? This time the bounce coincided with a rebound in American markets, as well as some more strength in the Euro against the Dollar, and a good bounce in crude oil, and general weakness in the Dollar last week. The American markets have disheartened the bears, I would say, and revived bullish sentiment in the market. The grounds for the positive performance of global markets have been shaky at best, and remind one of people clutching at straws…

Iraqi Kurdistan opens new oil refinery

Iraq's largely autonomous Kurdistan region opened a new oil refinery on Saturday, with a projected capacity of 40,000 barrels per day (bpd), the director of the group that built the refinery said.

The refinery near the Kurdish capital Arbil is run by private Kurdish group Kar, which will process crude from the Khurmala Dome oilfield, its director Baz Karim told the news agency Reuters.

"The (Kurdistan Regional Government) will pay us for what the refinery produces. Our capacity is now 20,000 bpd but it will be 40,000 bpd by the end of the year," Karim said.

Kuwait shows interest in Continental

The Kuwaiti Investment Authority may be considering investing in German auto parts supplier Continental AG, German business weekly WirtschaftsWoche reported on Saturday.

In an article flagged "Continental: The auto parts supplier talks to the sovereign wealth fund of the emirate of Kuwait over possible investment", the magazine said "Kuwaiti investors" have been in contact with Chief Executive Karl-Thomas Neumann in the past few days.

The investors also held a meeting in Hanover with the premier of Continental's home state of Lower Saxony, Christian Wulff, to discuss the political feasibility of a possible investment, the weekly said.

Cash crisis means golf's first Dubai World Championship could also be its last

The war of words between Sandy Lyle and Colin Montgomerie has failed to stop a much more serious issue also being the talk of Turnberry — golf’s financial crisis.

Despite denials from European Tour chief executive George O’Grady, whispers continue that this year’s Race to Dubai, culminating in the $10million Dubai World Championship, will be the first and last.

Tour sponsor Leisurecorp, who signed a five-year $150m deal in November 2007, suffered so much in the global financial crisis that the Dubai government placed them under the control of state company Nakheel in May.