Gulf States Could Gain by Ending Peg to Dollar, DIFC Economist Saidi Says - Bloomberg

Gulf states could gain by ending their peg to the dollar in favor of a basket of currencies, said the chief economist of the Dubai International Financial Centre.

“It would be advantageous for the GCC countries, given the center of their trade is particularly with Asia and with Europe, to have a currency basket,” Nasser Saidi told Bloomberg Television in Abu Dhabi today.

He said such a move could not be easily implemented at a time of global financial uncertainty, “so I think the countries of the region are going to wisely wait until you have much less volatility in money markets and financial markets before taking any decisions with respect to the exchange rate regime.”

Saudi Arabian Regulator Approves Falcom Petrochemical Exchange-Traded Fund - Bloomberg

Saudi Arabia approved its second exchange-traded fund this year as the kingdom seeks to expand investment opportunities in the Middle East’s largest bourse.

Falcom Financial Services will offer an exchange-traded fund for petrochemical companies on the bourse, the Riyadh-based Capital Market Authority said in a statement on the exchange’s website today. The market regulator approved in March its first ETF, offered by Falcom.

Saudi Arabia, the world’s largest oil supplier, is opening its stock market to more direct international investment. Previously, non-resident foreigners were only permitted to trade through share-swap transactions.

FACTBOX-Recent investments by Qatar's sovereign wealth fund | Reuters

Qatar's sovereign wealth plans to invest $2.8 billion in Agricultural Bank of China's initial public offering, sources confirmed on Monday. [ID:nTOE65K06U]

Qatar Investment Authority (QIA) was one of the most active sovereign funds in 2009 with 14 publicly reported investments valued at over $32 billion. The fund was established in 2005 and is believed to have assets under management around $70 billion.

The Gulf country is expected to be the largest source of global real estate capital during 2010, real estate consultancy Jones Lang LaSalle said in a recent report.

UAE's Aabar mulls stock exchange delisting, UAE Investment Companies, Banking & Investment - Maktoob Business

Abu Dhabi-based Aabar Investments will meet on June 24 to discuss a date for an extraordinary general meeting as it considers converting to a private joint stock company and delisting from the bourse.

International Petroleum Investment Co (IPIC), wholly-owned by the government of Abu Dhabi, is the majority shareholder in Abu Dhabi-listed Aabar, which has stakes in Daimler and Virgin Galactic.

The statement on the bourse website said Aabar's board of directors will meet on June 24 to discuss and resolve:

"...converting the company into a private joint stock company, cancelling the listing of the company and its shares from the Abu Dhabi Securities Market."

Oman, Abu Dhabi Shares Rally as Oil Gains; China Signals Yuan Flexibility - Bloomberg

Oman and Abu Dhabi shares advanced, helping lead Gulf Arab markets higher, after China signaled it will relax the yuan’s peg to the dollar, boosting confidence in the global economic recovery. Oil rose to a six-week high.

Oman Cables Industry SAOG surged to the highest intraday level since June 3 after the company was raised to “overweight” at Taib Bank. National Bank of Abu Dhabi, the United Arab Emirates’ second-biggest lender, gained 4.3 percent. Oman’s benchmark gauge jumped 2 percent, the most in more than six months, to 6,257.8 as of 1:22 p.m. in Muscat. Abu Dhabi’s ADX General Index climbed 0.9 percent to 2,559.81, the highest level in two weeks. The Bloomberg GCC 200 Index gained for a third day, rising 1.8 percent.

“Positive movements in global markets have a direct impact on local markets,” said Ziad Dabbas, a financial analyst at the National Bank of Abu Dhabi. “The U.A.E. markets are oversold and prices appear attractive.”

Gulf Arab financial firm pays back $500M in debt

An investment company owned by six Gulf Arab nations says it has fully paid back $500 million worth of debt that was due this week.

Monday's announcement by the Gulf Investment Corporation comes amid intense scrutiny over the region's ability to pay back lenders. Companies still able to cover their debts are eager to distinguish themselves from less healthy borrowers in the wake of credit problems in Dubai and elsewhere in the oil-rich region.

Kuwait-based Gulf Investment says it paid off the loans using cash it had saved up to manage its debt pile.

Middle East banks will see recovery next year

With non-performing loans to increase in the remaining quarters of the year, and loan growth to be subdued, banks in the Middle East will continue to suffer in 2010, and are only likely to recover next year, according to a Credit Suisse analyst.

"All in all what we are saying is that in 2010 margins are going down, loan growth is subdued, NPLs to peak and credit costs are high," said Mohammad Hawa, head of Mena equity strategy and Financials Research, Credit Suisse, Investment Banking, during a media roundtable in Dubai last week."

The prospect for next year is based on improvement in all the indicators that are weighing heavily on the banks' performance this year, he said, adding that some of the region's banks are better placed than others, including their global peers, amidst the recovery process.

RAK Ceramics in record $258.6m Bangladesh IPO subscriptions

RAK Ceramics, one of the world's leading ceramics manufacturers, Sunday said it has received collections of more than $258.6 million (Dh949 million) in an initial public offering by its Bangladesh subsidiary, setting a record for IPO collections in the country.

"We went for the IPO due to the government's regulation. As per the Bangladesh Government's rule, we have to go public once the turn-over hits a certain level," Dr. Khater Massa'ad, CEO of RAK Ceramics, told Gulf News.

"We will utilise the money to repay debts and enhance our market share."

Iran sanctions prompt DFSA call - The National Newspaper

The Dubai Financial Services Authority (DFSA) said yesterday it would require companies in the Dubai International Financial Centre free zone to “treat all transactions with clients domiciled in Iran as high-risk transactions”.

The announcement came in response to the UN Security Council resolution to impose sanctions on Iran.

The DFSA said companies should increase monitoring of financial transactions “particularly with the central bank of Iran, Bank Melli and Bank Saderat” or any other entity highlighted by the Security Council as high risk.

Mortgage giants slim down - The National Newspaper

Amlak and Tamweel, the country’s two largest mortgage providers, are beginning to scale back.

Mortgage brokers and industry insiders say the companies, which have been in stalled merger talks since the end of 2008, have begun to pare down their loan portfolios as they ponder their return to financial health.

While neither of the publicly listed companies has released quarterly financial information this year, both saw the value of mortgages decline last year. Amlak had Dh10.06 billion (US$2.73bn) of loans and mortgages on its books at the end of 2008, but had only Dh9.49bn by the middle of last year, a drop of Dh568 million.

Sky Gardens at centre of battle over ownership - The National Newspaper

Taaleem, the UAE’s second-largest private school operator, has filed a claim against National Bonds Corporation and Deyaar Development as part of a Dh236.5 million (US$64.3m) dispute over a high-end property development.

The lawsuit, filed in the Dubai International Financial Centre (DIFC) Courts, has uncovered a dispute involving high-profile players from the country’s property market.

Sky Gardens, a blue glass and yellow stone 43-storey building near The Gate, was bought for Dh1.64 billion at the peak of the market in the summer of 2008 by Amlak, the Islamic home finance company.

Big fish in chips may batter Intel - The National Newspaper

Globalfoundries has teamed up with Samsung and IBM to help design smaller, more efficient chips for mobile phones in a move that will put the Abu Dhabi-owned microchip maker in direct competition with the global giant Intel.

The agreement between the three technology heavyweights highlights a major push in the industry to provide the next generation of hardware for smaller devices such as smartphones and tablet computers.

Globalfoundries has embarked on aggressive expansion efforts since the Advanced Technology Investment Company (ATIC), owned by the Abu Dhabi Government, purchased a 65.8 stake in the company from Advanced Micro Devices. It recently increased its stake to 73 per cent.

NBK's Islamic leasing funds flourish in Kuwait

Kuwait's largest bank, the National Bank of Kuwait (NBK), could perhaps appropriately adopt the sobriquet as the world's leading Islamic leasing bank just as HSBC Amanah has aspirations of being the world's local Islamic bank.

In the space of a fortnight NBK has launched its latest tranches of leasing funds under its KD Ijara and Thahabi Ijara Fund brands. Such is the pent-up demand for these investment products that the entire subscription to NBK's Islamic KD Ijara Fund IV was fully subscribed on the first day of its offering period on June 13 with a fund size of 33 million dinars. The offering was supposed to close on July 29. The first in this series was launched in June 2009 and assets are invested in an unincorporated investment fund that invests in the Wafra Ijara KWD Fund IV.

The same investor appetite was repeated for NBK's Thahabi Ijara Fund VI, a premier NBK US dollar Islamic leasing investment vehicle, launched earlier in June 2010. Assets of this fund are invested in an unincorporated investment fund that invests in the Wafra Equipment Income Ijara Fund. The offer period officially closes on July 1.

Saudis hoard twice as much gold as thought

Saudi Arabia, the world’s fourth-largest holder of foreign exchange reserves, is sitting on more than twice as much gold as previously thought, according to new estimates that point to the revival of bullion as part of emerging economies’ official reserves.

The changes in Riyadh’s reserves were revealed by the World Gold Council, the industry-backed body which regularly tracks official bullion holdings. According to the WGC, the Saudi Arabian Monetary Agency, the central bank, has gold reserves of 322.9 tonnes, more than double the 143 tonnes it had previously reported.

The central bank said in a footnote of its latest quarterly report that “gold data have been modified from first quarter 2008 as a result of the adjustment of the Sama’s gold accounts”.

Canara Bank opens first ME office in Sharjah, sees 'big opportunity' | TradingMarkets.com

India's Canara Bank, the country's third-largest bank in terms of domestic operations, opened its first Middle East representative office in Sharjah on Sunday with a positive outlook of doing business here in the UAE.

The bank, instituted in 1906, has "a rich tradition of financing," and has not shown any loss during its 104 years of existence, A C Mahajan, Canara Bank's Chairman and Managing Director, told Khaleej Times after the inauguration.

"Canara Bank is a very premier organisation, with a motive of serving the society... the interests of businesses and the poor are protected, and investments are secure," he said.