Egypt’s shares climbed the most in almost three weeks, leading a rally in the Middle East, on rising investor demand for emerging market assets. Oil last week rose the most since February, helping push Gulf stocks higher. Commercial International Bank Egypt SAE, the country’s biggest publicly traded lender, gained 2.4 percent and Orascom Telecom Holding SAE surged the most in four months. The EGX 30 Index advanced 1.5 percent, the most since Sept. 13, to 6,736.24 at the 2:30 p.m. close in Cairo. The Bloomberg GCC 200 Index of Gulf stocks rose 0.4 percent and Israeli benchmark index gained 0.6 percent at 3 p.m. in Tel Aviv.
Emerging-market stock and bond funds are attracting record investment this year because developing economies are expanding at a faster pace than the U.S. and Europe, according to EPFR Global. Investors put a net $30.2 billion into the equity funds last quarter and year-to-date inflows of $49.4 billion would be a record annual tally, an EPFR report issued Oct. 1 showed.
“There was a big inflow into emerging markets last week and that has helped Egypt,” said Angus Blair, head of research at Cairo-based investment bank Beltone Financial. “There is a key shift in sentiment toward emerging markets and global institutions are starting to focus on it since there is diminished spending in developing markets.”
Sunday 3 October 2010
Nakheel Holds Preliminary Talks With Nasdaq Dubai to List Islamic Bonds - Bloomberg
Nakheel PJSC, the developer of palm- shaped islands off Dubai’s coast, is in preliminary talks with Nasdaq Dubai to list Islamic bonds and is confident of reaching an accord with its creditors by the year end, its chairman said.
“We are in the final stages of negotiation and we are confident we will reach an agreement,” Ali Rashed Lootah told reporters in Dubai today. Lootah said a “good percentage” of bank creditors have agreed to the company’s plan to alter the terms on more than $10 billion of debt and contractor claims.
The developer, which appointed an independent consultant to start evaluating claims by trade creditors, said it paid trade creditors 3.4 billion dirhams ($930 million) as the company restarts work on stalled projects across the emirate. Nakheel plans to pay creditors 40 percent in cash with the rest through a tradable Islamic bond, known as sukuk.
“We are in the final stages of negotiation and we are confident we will reach an agreement,” Ali Rashed Lootah told reporters in Dubai today. Lootah said a “good percentage” of bank creditors have agreed to the company’s plan to alter the terms on more than $10 billion of debt and contractor claims.
The developer, which appointed an independent consultant to start evaluating claims by trade creditors, said it paid trade creditors 3.4 billion dirhams ($930 million) as the company restarts work on stalled projects across the emirate. Nakheel plans to pay creditors 40 percent in cash with the rest through a tradable Islamic bond, known as sukuk.
Nakheel Holds Preliminary Talks With Nasdaq Dubai to List Islamic Bonds - Bloomberg
Nakheel PJSC, the developer of palm- shaped islands off Dubai’s coast, is in preliminary talks with Nasdaq Dubai to list Islamic bonds and is confident of reaching an accord with its creditors by the year end, its chairman said.
“We are in the final stages of negotiation and we are confident we will reach an agreement,” Ali Rashed Lootah told reporters in Dubai today. Lootah said a “good percentage” of bank creditors have agreed to the company’s plan to alter the terms on more than $10 billion of debt and contractor claims.
The developer, which appointed an independent consultant to start evaluating claims by trade creditors, said it paid trade creditors 3.4 billion dirhams ($930 million) as the company restarts work on stalled projects across the emirate. Nakheel plans to pay creditors 40 percent in cash with the rest through a tradable Islamic bond, known as sukuk.
“We are in the final stages of negotiation and we are confident we will reach an agreement,” Ali Rashed Lootah told reporters in Dubai today. Lootah said a “good percentage” of bank creditors have agreed to the company’s plan to alter the terms on more than $10 billion of debt and contractor claims.
The developer, which appointed an independent consultant to start evaluating claims by trade creditors, said it paid trade creditors 3.4 billion dirhams ($930 million) as the company restarts work on stalled projects across the emirate. Nakheel plans to pay creditors 40 percent in cash with the rest through a tradable Islamic bond, known as sukuk.
Abu Dhabi launches Iraq equities fund - Maktoob Business
Abu Dhabi's Invest AD has launched an Iraq equities fund to meet growing interest in the country from institutional and high net worth investors, it said on Sunday.
Government-owned Invest AD will seed the fund, which will invest in listed equities and pursue non-listed entities, the company said in a statement. It did not disclose the value the fund.
"As Iraq stabilises, it should take its place as one of the major economies in this vibrant region," Invest AD Chief Executive Officer Nazem Fawwaz Al Kudsi said in the statement.
Government-owned Invest AD will seed the fund, which will invest in listed equities and pursue non-listed entities, the company said in a statement. It did not disclose the value the fund.
"As Iraq stabilises, it should take its place as one of the major economies in this vibrant region," Invest AD Chief Executive Officer Nazem Fawwaz Al Kudsi said in the statement.
GCC Market Analytics: September Large Cap Monitor
September was a good month for GCC markets with 33 of the 35 large capitalisation stocks monitored rising in value during September.
The best large cap performers were Abu Dhabi Commercial Bank (+37%) and Kuwait's Gulf Insurance (+32%). The only large cap decliner in September was Bahrain's Albaraka Banking Group (-0.67%)
Enjoy.
The best large cap performers were Abu Dhabi Commercial Bank (+37%) and Kuwait's Gulf Insurance (+32%). The only large cap decliner in September was Bahrain's Albaraka Banking Group (-0.67%)
Enjoy.
RAK Bank puts expansion plans in GCC on hold - Emirates24|7
In spite of the healthy growth rate, RAK Bank chairman is cautiously optimistic and is holding expansion plans outside the UAE.
“We have to be fair of ourselves,” Sheikh Omar bin Saqr Al Qasimi, said. “Our size is not that big to adventure outside. We are very positive about going out to neighbouring countries like Kuwait, Qatar and Oman but we are withholding our thoughts on that. We looked at these countries but we have no actual dates to penetrate them.
Currently our plans are centred only in the UAE. We are expanding but slowly and in a conservative manner.”
“We have to be fair of ourselves,” Sheikh Omar bin Saqr Al Qasimi, said. “Our size is not that big to adventure outside. We are very positive about going out to neighbouring countries like Kuwait, Qatar and Oman but we are withholding our thoughts on that. We looked at these countries but we have no actual dates to penetrate them.
Currently our plans are centred only in the UAE. We are expanding but slowly and in a conservative manner.”
SICO positive on growth opportunities for GCC regional asset management industry
The impact of the global financial crisis on the GCC investment management industry will come under the spotlight at the Fund Forum Middle East 2010 conference to be held in Bahrain on 4th to 6th October.
Securities & Investment Company is a wholesale bank offering a selective range of investment banking services, including asset management, brokerage, corporate finance and market-making, on a regional basis and with a particular emphasis on Bahrain. Through its wholly owned subsidiary, SICO Fund Services Company (SFS), SICO also provides custody and fund administration services.
As of June 30th , 2010 , SICO reported total assets of BD76.340m, with shareholders' equity of BD53.170m. SICO's shares have been listed on the Bahrain Stock Exchange since May 2003. Securities & Investment Company was the first 'closed' company to list on the exchange.
Securities & Investment Company is a wholesale bank offering a selective range of investment banking services, including asset management, brokerage, corporate finance and market-making, on a regional basis and with a particular emphasis on Bahrain. Through its wholly owned subsidiary, SICO Fund Services Company (SFS), SICO also provides custody and fund administration services.
As of June 30th , 2010 , SICO reported total assets of BD76.340m, with shareholders' equity of BD53.170m. SICO's shares have been listed on the Bahrain Stock Exchange since May 2003. Securities & Investment Company was the first 'closed' company to list on the exchange.
GCC Market Analytics: Weekly GCC Index Analysis (Week 41)
All GCC indices are now trading above their 20-day, 50-day and 100-day moving averages confirming the positive price moves seen over the past couple of weeks.
Currently, the Kuwait Index is showing particular strength. Historically, when the Index has been in a similar position, the following 5 day change has been positive over 80% of the time with an average gain of 1.82%.
The outlook for all other indices is positive with the exception of the ADX Index and the Bahrain Index which are neutral.
Enjoy.
Currently, the Kuwait Index is showing particular strength. Historically, when the Index has been in a similar position, the following 5 day change has been positive over 80% of the time with an average gain of 1.82%.
The outlook for all other indices is positive with the exception of the ADX Index and the Bahrain Index which are neutral.
Enjoy.
The Bid, Again � Alpha Dinar- talking GCC finance
October 3, 2010 by Saud
Last week, UAE’s Emirates Telecommunications Corp (Etisalat) has made a preliminary and conditional offer to buy a major stake in Zain. Etisalat offered to buy 46% of the company at a price of KD1.7 per share, a 25% over last closing price and 35% over Tuesday’s price- the day before the announcement.
Based on the calculations in the table above, the KD1.7 per share offer seems attractive given that it’s a 35% premium over Tuesday’s closing price. Also, the offer implies a 2011E EV/EBITDA multiple of 10.5x and 2011E P/E of 19.8x, a 89% and 118% premium vs the CEEMEA peer average, respectively.
One drawback of the deal would be Etisalat’s ownership in Mobily
Saudi Arabia. The regulation in Saudi Arabia doesn’t allow one owner to own two operators. Hence, they would have to sell one of their stakes in either Mobily (27.5% owned by Etisalat) or Zain Saudi (25% owned by Zain)- they would probably sell Zain Saudi.
Saudi Arabia. The regulation in Saudi Arabia doesn’t allow one owner to own two operators. Hence, they would have to sell one of their stakes in either Mobily (27.5% owned by Etisalat) or Zain Saudi (25% owned by Zain)- they would probably sell Zain Saudi. Kharafi Group, the second largest shareholders in Zain, are inviting the minority shareholders to join in this deal through National Investment Co. All shareholders who own no more than 300,000 shares have the opportunity to join in this deal.
The stock traded heavily on the day the news was out, as 27 million shares traded as opposed to 6.5 million the day before and the price increased by 8%. The stock was halted from trading on Thursday, however all Kharafi’s stocks rallied. Investors who are not joining in the deal should be careful as the price could plunge after the deal.
GCC Market Analytics: Weekly GCC Trend Analysis (Week 41)
The DFM General Index moves back to a Neutral outlook this week whilst the ADX Index continues to be Very Bullish.
The Saudi Tadawul Index slips to Bearish from Neutral and the trend conditions in both the Kuwait and Bahrain markets have moved into their most bullish phases.
The outlook for the QE Index and Muscat 30 Index continues to be Very Bullish.
Enjoy.
Notes:
1. In the "Current Trend Conditions" section the short-term, medium-term and long-term trend values are determined by dual moving averages. The trend value is "Up" when the the shorter length moving average is greater the longer length moving average. The trend value is "Down" when the the shorter length moving average is less then the longer length moving average. For more information on dual moving averages see previous post here.
2. Dual moving average parameters are specific to each index and time-frame (short, medium and long)
The Saudi Tadawul Index slips to Bearish from Neutral and the trend conditions in both the Kuwait and Bahrain markets have moved into their most bullish phases.
The outlook for the QE Index and Muscat 30 Index continues to be Very Bullish.
Enjoy.
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1. In the "Current Trend Conditions" section the short-term, medium-term and long-term trend values are determined by dual moving averages. The trend value is "Up" when the the shorter length moving average is greater the longer length moving average. The trend value is "Down" when the the shorter length moving average is less then the longer length moving average. For more information on dual moving averages see previous post here.
2. Dual moving average parameters are specific to each index and time-frame (short, medium and long)
3. The "Outlook" value can be "Very Bullish," "Bullish," "Neutral," "Bearish" or "Very Bearish." The value is determined by the historical performance of the index when the same short, medium and long-term trend conditions were in evidence in the past.
4. The top chart shows a plot of the historical price performance of the index. Highlighted on the chart are the past periods when the current trend conditions were in evidence in the past
5. The bottom chart shows the non-compounded percentage returns of the index when the current trend condition were in evidence in the past.
Abu Dhabi's Taqa Said to Be in Talks to Refinance $3.2 Billion Credit Line - Bloomberg
Abu Dhabi National Energy Co., the state-run utility known as TAQA, is in talks with banks to raise about $3 billion of loans to refinance an existing credit line, according to four people with knowledge of the negotiations.
TAQA is seeking a facility of three to five years, said two of the people, who declined to be identified because the discussions are private. The company has not yet hired banks, according to the people.
Proceeds will replace a $3.15 billion revolving credit that matures next year, the people said.
TAQA is seeking a facility of three to five years, said two of the people, who declined to be identified because the discussions are private. The company has not yet hired banks, according to the people.
Proceeds will replace a $3.15 billion revolving credit that matures next year, the people said.
Emirates Islamic Bank May Acquire Dubai Bank, Buy Amlak, Ittihad Reports - Bloomberg
Emirates Islamic Bank, the United Arab Emirates Islamic lender controlled by Emirates NBD, may acquire Dubai Bank and then purchase Amlak Finance PJSC once the acquisition is complete, Al Ittihad reported, citing people it did not identify.
Talks are in the initial stages for the acquisitions, the newspaper said.
Talks are in the initial stages for the acquisitions, the newspaper said.
Blocked cash flow is in need of fiscal plumbing
Trading volumes on the Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market (DFM) are at an all-time low. Companies' valuations are suffering. Stock brokerage houses are wringing their metaphorical hands. Aabar has decided to go private. Initial public offerings (IPOs) expected to return this year are yet to occur: the announced IPO of Axiom Telecom is a major test. If we wait longer, there will be no one around to celebrate if the rumoured merger between the ADX and the DFM/NASDAQ-Dubai comes off.
Is the problem restricted to the UAE and the Middle East? It appears so. Western markets are doing fine, while Hong Kong is booming and attracting new issuers every other week. Singapore has captured numerous pools of liquidity during the financial crisis; pools that were no longer comfortable in tax havens or old Europe or those that are being created in Asia, South America and in the Middle East. Unfortunately, the Gulf states are attracting only a small portion of this flow and when they do capture some of it, it is reinvested somewhere else.
The problem is, however, common to the MENA region at large and for both private and publicly listed companies. Over the past three years, investors' profiles have changed. Large investors (family offices, institutions or fund managers) have in general a shorter investment time horizon than before but, more importantly, need the ability to arbitrage their positions on a regular basis. This is also true for investors in private companies or private equity who are looking at a two to three-year exit horizon rather than five to seven years previously.
Is the problem restricted to the UAE and the Middle East? It appears so. Western markets are doing fine, while Hong Kong is booming and attracting new issuers every other week. Singapore has captured numerous pools of liquidity during the financial crisis; pools that were no longer comfortable in tax havens or old Europe or those that are being created in Asia, South America and in the Middle East. Unfortunately, the Gulf states are attracting only a small portion of this flow and when they do capture some of it, it is reinvested somewhere else.
The problem is, however, common to the MENA region at large and for both private and publicly listed companies. Over the past three years, investors' profiles have changed. Large investors (family offices, institutions or fund managers) have in general a shorter investment time horizon than before but, more importantly, need the ability to arbitrage their positions on a regular basis. This is also true for investors in private companies or private equity who are looking at a two to three-year exit horizon rather than five to seven years previously.
Evolution at DIFC set to strengthen its position
The Dubai International Financial Centre (DIFC) is in flux with companies shutting down and new ones arriving in droves. Of the 973 companies that have set up in the DIFC since it opened in 2004, almost a fifth have dissolved, become inactive or been struck off by the registrar, according to an analysis of the DIFC Company Register. That leaves 780 active companies in the commercial facility. Meanwhile, 70 companies have arrived so far this year and 351 have joined within the past two years.
Marwan Lutfi, the deputy chief executive and head of business development at the DIFC Authority, said the DIFC was becoming a more focused financial centre. Many of the UAE companies that had a second office in the DIFC were under pressure to close one of their offices, while major banks were increasingly consolidating their international operations from around the region into the DIFC. About 65 per cent of companies in the DIFC used their offices to service operations across the region, Mr Lutfi said.
"At the centre, you see a lot of change taking place," he said. "All business is in a period of revising plans." Mergers between big western firms have also spurred some consolidation of offices. Dresdner Bank closed its offices at the DIFC after its merger with Commerzbank, which already had space in the centre. And the recruitment agency Whitehead Mann's offices were closed after its merger with Korn/Ferry last year.
Marwan Lutfi, the deputy chief executive and head of business development at the DIFC Authority, said the DIFC was becoming a more focused financial centre. Many of the UAE companies that had a second office in the DIFC were under pressure to close one of their offices, while major banks were increasingly consolidating their international operations from around the region into the DIFC. About 65 per cent of companies in the DIFC used their offices to service operations across the region, Mr Lutfi said.
"At the centre, you see a lot of change taking place," he said. "All business is in a period of revising plans." Mergers between big western firms have also spurred some consolidation of offices. Dresdner Bank closed its offices at the DIFC after its merger with Commerzbank, which already had space in the centre. And the recruitment agency Whitehead Mann's offices were closed after its merger with Korn/Ferry last year.
Qatar-based lender foresees birth of a regional superbank
A Middle East "superbank" with the financial clout to outperform local rivals in foreign markets will emerge within the next decade, says an executive at a Qatari bank who is trying to make such a scenario a reality. "We continue to look for other acquisition targets because we want to be a truly regional bank," said George Nasra, the managing director of the International Bank of Qatar (IBQ), adding that Saudi Arabia would be an obvious target.
Mr Nasra said the proposed superbank would do well to emulate Santander by using "serial acquisitions" to enter and dominate new markets around the Gulf during the next five to 10 years. He said while "local champions" had started to emerge in the Middle East, these banks lacked muscle compared with established rivals in the West. "While impressive in operations and growth rate, few are venturing outside the boundaries of their local marketplace to generate business," he said.
"Compared to their global counterparts, they still lack in size despite their impressive growth. "[Even] combining the 10 largest banks in the Middle East will not match some international players." However, Mr Nasra said legislation in Middle Eastern markets restricted that possibility. "Unfortunately, regulation is the main obstacle," he said. His comments sounded an uncharacteristically bold tone for the Qatari banking sector, which has focused on local markets rather than expanding internationally.
Mr Nasra said the proposed superbank would do well to emulate Santander by using "serial acquisitions" to enter and dominate new markets around the Gulf during the next five to 10 years. He said while "local champions" had started to emerge in the Middle East, these banks lacked muscle compared with established rivals in the West. "While impressive in operations and growth rate, few are venturing outside the boundaries of their local marketplace to generate business," he said.
"Compared to their global counterparts, they still lack in size despite their impressive growth. "[Even] combining the 10 largest banks in the Middle East will not match some international players." However, Mr Nasra said legislation in Middle Eastern markets restricted that possibility. "Unfortunately, regulation is the main obstacle," he said. His comments sounded an uncharacteristically bold tone for the Qatari banking sector, which has focused on local markets rather than expanding internationally.
DIC creditors seek better terms
Creditors of Dubai International Capital (DIC), an arm of the government-owned conglomerate Dubai Holding, are demanding more stringent terms on the extension of a US$1.25 billion (Dh4.59bn) loan that originally came due in June. The two sides are understood to be some way from reaching a final settlement on the loan, a deal seen as a key step towards restoring order to Dubai's finances after Dubai Worldreached a pact last month to restructure about $24.9bn of debt.
The acceptance of the Dubai World deal by 99 per cent of the government-owned group's bank creditors gave a boost to local stock markets and sent down the cost of insuring Dubai debt against default. It also laid the groundwork for Dubai's sale last week of $1.25bn of government debt, its first round of fund-raising since Dubai World said it would seek a standstill on debt repayments in November. The debts of DIC and Dubai Holding have now begun to take centre stage as confidence in the emirate's economic recovery begins to take hold.
DIC is a private equity group that owns stakes in companies including the UK budget hotel chain Travelodge and a minority stake in EADS, Europe's largest aerospace group. A source familiar with the talks said DIC was pushing for a new five-year loan with an interest rate based on the London interbank offered rate (Libor) plus 0.85 percentage points. But creditors are understood to want much higher interest rates, according to observers, plus asset sale tests in the second and fourth years of the new five-year loan.
The acceptance of the Dubai World deal by 99 per cent of the government-owned group's bank creditors gave a boost to local stock markets and sent down the cost of insuring Dubai debt against default. It also laid the groundwork for Dubai's sale last week of $1.25bn of government debt, its first round of fund-raising since Dubai World said it would seek a standstill on debt repayments in November. The debts of DIC and Dubai Holding have now begun to take centre stage as confidence in the emirate's economic recovery begins to take hold.
DIC is a private equity group that owns stakes in companies including the UK budget hotel chain Travelodge and a minority stake in EADS, Europe's largest aerospace group. A source familiar with the talks said DIC was pushing for a new five-year loan with an interest rate based on the London interbank offered rate (Libor) plus 0.85 percentage points. But creditors are understood to want much higher interest rates, according to observers, plus asset sale tests in the second and fourth years of the new five-year loan.
US auto and housing sales remain in depression � ArabianMoney
US auto sales are still 27 per cent below pre-recession levels and US housing sales last month were the second lowest on record. And yet the smallest uptick is presently seized upon as a signal that a recovery has arrived.
In truth this is a depression and both US auto and housing sales seem locked in a deep slump. The traction to drag the US economy out of this depression just is not happening. Printing money is pumping up the stock market, not the real economy.
US consumer rules
The US consumer is 70 per cent of the national GDP and these guys just are not borrowing and spending as they used to do. How can they? They still have the debts of the boom to repay, and are saving because they are rightly fearful about the future outlook.
WHERE ARE OIL AND GAS PRICES HEADED? | PRAGMATIC CAPITALISM
Oil is heading to US$200 per barrel. This isn’t speculation but hard fact. But forewarned is forearmed, and with this price expected within the next five years, investors have plenty of time to position themselves.
We recently have been talking about tools that investors can use to navigate the economic landscape. The gold-to-oil ratio is one such tool, but another popular compass is the oil-to-natural gas ratio.
The oil-to-natural gas ratio relates more to nuances within the energy complex, rather than the gold-to-oil ratio, which relates to monetary values. It’s the WTI Cushing price of crude oil per barrel to the Henry Hub Spot Price for natural gas per million thermal units.
We recently have been talking about tools that investors can use to navigate the economic landscape. The gold-to-oil ratio is one such tool, but another popular compass is the oil-to-natural gas ratio.
The oil-to-natural gas ratio relates more to nuances within the energy complex, rather than the gold-to-oil ratio, which relates to monetary values. It’s the WTI Cushing price of crude oil per barrel to the Henry Hub Spot Price for natural gas per million thermal units.