#GCC and #MiddleEast Finance News: 21 Jul 2011

Thursday 21 July 2011

Abu Dhabi Shares Snap Three-Day Drop, Led by NBAD on Earnings - Bloomberg

Abu Dhabi shares advanced, snapping a three-day decline, after the United Arab Emirates second- largest bank by assets, National Bank of Abu Dhabi PJSC (NBAD), posted second-quarter earnings that topped analysts’ estimates.

National Bank of Abu Dhabi rallied the most in more than a month after profit rose 2.5 percent in the quarter. Abu Dhabi Islamic Bank (ADIB) PJSC, the U.A.E.’s second-biggest bank complying with Shariah rules, advanced 1.8 percent. The ADX General Index (ADSMI) increased 0.2 percent to 2,693.27 at the 2 p.m. close in Abu Dhabi, paring its loss for the week to 1.2 percent. The Bloomberg GCC 200 Index (BGCC200) gained 0.2 percent.

NBAD results “beat consensus with positive surprise on loan growth,” said Hassan El Salah, head of institutional equities at Al Ramz Securities LLC, an Abu Dhabi-based brokerage. “The shares are likely to do well going forward.”

S&P raises Kuwait’s credit rating to ‘AA’ after shifting criteria; cites strong economy - The Washington Post

Credit rating agency Standard & Poor’s is raising its rating for Kuwait based on the strength of the oil-rich Gulf nation’s economy.

S&P boosted Kuwait’s long-term rating Wednesday to ‘AA’ from ‘AA-’ with a stable outlook following a shift in the company’s sovereign government rating methodology.

It says Kuwait’s solid economy and “exceptionally strong” public finances merit the higher rating under its new criteria.

Bahrain may delve deeper, look to Russia for gas | Reuters

Bahrain should drill deeper for natural gas and even look as far as Russia to meet growing demand for fuel as supply talks with its neighbours stall, Bahraini energy minister Abd al-Hussein Mirza said in an interview with Kuwait news agency KUNA.

Demand for gas in the small Gulf oil producing country has grown rapidly in the last few years, pressing the island nation to find new sources of gas to feed its refining, power and aluminium smelting industries.

The Bahraini government expects drilling under a new gas exploration deal with U.S.-based Occidental to start soon, but in the meantime it is considering importing gas from Turkmenistan or Russia because of slow progress on dealing with gas-rich Iran or Qatar.

Gulf International, Abu Dhabi plan rgt sukuk issues-sources | Reuters

An Abu Dhabi government department and Bahrain's Gulf International Bank are planning ringgit-denominated sukuk issues in Malaysia, as Middle Eastern issuers seek to diversify their funding options, sources said on Thursday.

Gulf International Bank, a conventional wholesale bank, has begun work on a ringgit sukuk programme which would allow it to raise at least $1 billion, sources said.

Abu Dhabi's transport department is considering a ringgit Islamic funding programme in the Southeast Asian country but has yet to mandate any banks for the deal, the sources said.

Doha Bank Q2 profit jumps 13.1 pct; beats forecasts | Reuters

Doha Bank , Qatar's fifth largest bank by market capitalisation, posted a 13.1 percent jump in second-quarter net profit on Tuesday, beating analysts' forecasts on increased lending and growth in customer deposits.

The lender reported a net profit of 339 million riyals ($93 million), according to Reuters calculations, compared with 299.7 million riyals in the same period last year.

Analysts polled by Reuters on average expected a quarterly profit of 304.90 million riyals.

Danger of debt woes in Saudi - The National

Tough policy reforms are needed in Saudi Arabia if the kingdom is to avoid running a budget deficit from 2014, a report has warned.

High government spending, a lack of increases in oil output and rising domestic crude consumption are setting the country on a path to escalating debt, said the report by Jadwa Investment, a Saudi financial services company.

'Preventing this outcome requires tough policy reforms in areas such as domestic pricing of energy and taxation, an aggressive commitment to alternative energy sources, especially solar and nuclear power, and increasing the kingdom's share of global oil production,' Brad Bourland, the chief economist, and Paul Gamble, the head of research, wrote in the report by the Saudi investment company.

NBAD looks to the top line as loans boost its profits - The National

National Bank of Abu Dhabi (NBAD) reported a 2.5 per cent increase in second-quarter profits, buoyed by a rise in income from loans.

Net profit rose to Dh1.03 billion (US$280.4 million) compared with Dh1bn in the same period last year, the bank said.

'Our focus remains on top-line operating revenue,' said Michael Tomalin, the chief executive of NBAD, the UAE's second-biggest bank by assets. 'Given the weak global economy and some regional uncertainty, low interest rates and absence of any major exceptional items, this increase can be judged a fine achievement.'

Al Jaber in bank talks over debt standstill - The National

Al Jaber Group yesterday held talks with its banks over a debt standstill agreement as the family conglomerate, based in Abu Dhabi, seeks to delay repayments as part of a wider restructuring of the group.

At a meeting in Abu Dhabi, Al Jaber Group, which has interests in property, manufacturing and aviation, submitted a draft standstill agreement and a business proposal to banks involved in its debt restructuring talks, said one person close to the company who asked not to be identified.

'We're at a very early stage,' the source said. 'But it's the first time all of the creditors have sat down together.'

Zain Saudi signs term sheet with Kingdom Holding, Batelco, for stake sale - The Washington Post

Mobile phone service provider Zain Saudi says it has signed a nonbinding term sheet for the sale of a $950 million, 25 percent stake, in the company to Bahrain’s Batelco Group and the investment firm headed by Saudi billionaire Prince Alwaleed bin Talal.

The announcement Wednesday by Saudi Zain, a subsidiary of Kuwait’s Zain, comes after Kingdom Holding Co. said in June its board had signed off on a similar term sheet with Batelco. KHC and Batelco are trying to buy the Kuwaiti telecom giant’s stake in the Saudi firm.

KHC has said it expects the deal to be finalized by the end of the third quarter of 2011.

Bahrain, Oman Ratings Removed From CreditWatch Negative by S&P - Bloomberg

Bahrain and Oman were removed from CreditWatch negative by Standard & Poor’s Ratings Services, which cited measures to ease political tensions in both Persian Gulf nations.

Bahrain’s long- and short-term local and foreign currency sovereign credit ratings were affirmed at ‘BBB/A-3’ with negative implications, S&P said in an e-mailed statement today. Oman’s ‘A/A-1’ long-term and short-term local and foreign currency ratings were affirmed, S&P said in a separate statement.

S&P cited “the diminished near-term political tensions and our expectation that increased public spending will lift economic growth next year,” in its statement on Bahrain. Oman benefits from “political pressures easing,” S&P said.