#GCC and #MiddleEast Finance News: 19 Oct 2011

Wednesday 19 October 2011

Abu Dhabi's IPIC eyes new Oman, UAE refineries - ArabianBusiness.com

International Petroleum Investment Company (IPIC) may spend $6.5bn on two oil refineries to be built in the UAE and Oman, according to documents released by the Abu Dhabi government-owned company.

The investment firm may spend $3.5bn to build a 200,000 barrel-a-day oil refinery at Fujairah on the UAE’s east coast, a bond prospectus posted on the London Stock Exchange website on Wednesday showed.

That’s an increase from the $3bn the company said it would spend on the project in a similar bond document released in March.

MENA stock markets close - October 19, 2011

Exchange

Status

Index

Change

TASI (Saudi Stock Market)

6106.74

-0.71%

DFM (Dubai Financial Market)

1363.35

0.42%

ADX (Abudhabi Securities Exchange)

2445.85

-0.04%

KSE (Kuwait Stock Exchange)

5884.1

-0.22%

BSE (Bahrain Stock Exchange)

1147.1

-0.06%

MSM (Muscat Securities Market)

5532.36

-0.13%

QE (Qatar Exchange)

8376.31

-0.28%

LSE (Beirut Stock Exchange)

1218.34

0.00%

EGX 30 (Egypt Exchange)

4263.99

1.17%

ASE (Amman Stock Exchange)

1948.44

0.46%

TUNINDEX (Tunisia Stock Exchange)

4625.98

0.01%

CB (Casablanca Stock Exchange)

11362

-0.17%

PSE (Palestine Securities Exchange)

484.46

1.22%

U.A.E. Sets Up 10 Billion-Dirham Emirates Development Bank - Businessweek

The United Arab Emirates will start Emirates Development Bank with 10 billion dirhams ($2.7 billion) of capital to help promote economic growth in the country.

The bank will support the U.A.E.’s development initiatives, including industrial and real estate projects, and will facilitate real estate loan applications, the finance ministry said in an e-mailed statement today. It will also provide financial services for small and medium-sized businesses and offer advice and feasibility studies.

“This move falls in line with the vision of the U.A.E. government to support the nation’s economic development and to guarantee coverage of all its short and long-term development requirements,” Obaid Humaid Al Tayer, Minister of State for Financial Affairs said in the statement, without giving further details.

UAE loses a quarter of its millionaires in one year - Emirates 24/7

The number of UAE’s high net worth individuals (those with $1 million or more in financial assets) declined by 24.8 per cent to 41,324 in 2011 from 54,971 in 2010, according to just released second annual Global Wealth Report by Credit Suisse Research Institute (CSRI).

The CSRI report reckons it will take the country another five years to gain back the same number of millionaires that it lost last year, and expects the number of UAE millionaires to reach 54,000 in 2016.

According to the earlier World Wealth Report, released in June by Merrill Lynch Global Wealth Management and Capgemini, the population of UAE millionaires was more than 66,000 in 2008, taking the total tally of UAE individuals who’ve lost their ‘millionaire’ status to almost 25,000 in three years since the onset of the global economic slowdown.

Saudi and Qatari banks cheer investors - FT.com

Bank earnings in Saudi Arabia and Qatar brought some confidence to hard-pressed regional investors this week, although they are less excited about numbers due to come out of the United Arab Emirates and Kuwait.

Analysts say the main point of difference is credit growth, which is at two-year highs in Saudi Arabia for example, but is still stagnating in the UAE.

In Saudi Arabia, leading banks’ earnings are up 26 per cent so far this quarter compared with the same period last year, according to CAPM Investment in Abu Dhabi. Credit growth in the largest Arab economy accelerated to 9.2 per cent year-on-year in August, the highest since April 2009, while in the UAE it slowed to 2.6 per cent in July.

Dubai Shares Rise Most in Two Weeks on Bets Decline Is Overdone - Businessweek

Dubai’s shares advanced the most in almost two weeks on bets a drop this month prompted by worries Greece may default is overdone and amid reports France and Germany may have reached an accord on a Europe rescue fund.

Emaar Properties PJSC, the developer of the world’s tallest tower, rose 0.8 percent after Arqaam Capital Ltd. started the company with a “buy” recommendation. The stock has slumped 9.8 percent in October. Dubai Financial Market PJSC, the only Gulf Arab stock market to sell stock to the public, gained the most since August. The DFM General Index added 0.4 percent, the most since Oct. 6, to 1,363.35 at the 2 p.m. close in Dubai. The gauge has lost 4.8 percent this month.

“The market was very weak in previous sessions, particularly for real-estate stocks, and today we are seeing a technical rebound,” said Sebastien Henin, who helps oversee $100 million at The National Investor in Abu Dhabi. “Some of these names have good fundamentals.”

Saudi's Almarai sees $36 mln writedown on Zain Saudi stake - Maktoob News

Saudi Arabia's Almarai , a founding shareholder in Zain Saudi , will likely take a $36 million impairment on its stake in the telecoms carrier at the end of 2011 if the shares remain stuck near current levels, the company's chief financial officer said on Wednesday.

Diary firm Almarai was one of nine founding shareholders in Zain Saudi and owns a 2.5 percent stake initially valued at 350 million riyals ($93 million). The operator launched services in 2008, competing against rivals Saudi Telecom Co and Etihad Etisalat (Mobily).

"If the share price of Zain Saudi will stay at the level it's at currently or lower by year-end, we will then propose an impairment of the assets," Paul-Louis Gay, Almarai chief financial officer.

Goldman Sachs registers $2 bln sukuk programme - Maktoob News

Goldman Sachs has registered a $2 billion Islamic bond programme with the Irish Stock Exchange through its Cayman Islands special purpose vehicle Global Sukuk Company Limited, according to International Financing Review (IFR).

The Islamic bonds, or sukuk, could be denominated in UAE dirhams, U.S. dollars, Saudi riyals or Singapore dollars but a time frame for issuance was not provided.

Dar Al Istithmar Limited, which has offices in the U.K. and Dubai, is the sharia adviser of the programme.

UAE house prices, rents to drop 20% more - Maktoob News

Property prices and rents in the United Arab Emirates may fall a further 20 percent in 2011 and 2012 due to oversupply, financial services firm Arqaam Capital said.

"We think there is a further leg down to the UAE property market before residential prices and rents recover. We see a further 15 percent to 20 percent in downside to prices and rents in the financial year 2011-201212," analyst Mohammad Kamal wrote in Arqaam Capital's report on UAE real estate.

"Genuine revival triggers will only appear in a broad macroeconomic recovery, via job creation, a rise in discretionary spending, continued regulatory evolution, resumed mortgage lending, and growth in tourist flows," Kamal said.

Dubai Deal Drought Sends Bank Staff Home - Bloomberg

Deutsche Bank AG (DBK) and Credit Agricole SA (ACA) are among international banks withdrawing employees from Dubai as deals dry up, revenue falls and lenders curb costs.

Deutsche Bank, Germany’s largest, will relocate Christopher Laing, head of equity capital markets for the Middle East and Africa, back to London after three years in Dubai. Credit Agricole’s corporate and investment banking unit said last month it would shut its mergers advisory team in Dubai. Citigroup Inc. (C) transferred its regional head of equities,

Adam Key, back to the U.K. in recent months.

“Dubai never quite fulfilled its promise as a regional banking hub,” said Raj Madha, a banking analyst at Rasmala Investment Bank Ltd., a Dubai-based asset manager. “With limited capital market activity, and little sign of a serious improvement in the near future, it’s not surprising that investment banking costs are being transferred elsewhere.”

S&P downgrades Egypt on economic stability risks - The Economic Times

Standard & Poor's on Tuesday cut Egypt's credit ratings deeper into junk territory, saying the transition to a new government has increased risks to macroeconomic stability.

It warned another downgrade is possible if the political transition is less smooth than expected, making it more difficult to finance the government's borrowing requirements or the country's external needs.

S&P cut Egypt's foreign-currency rating to BB-minus from BB. The local-currency rating was cut by two notches, to BB-minus from BB-plus. All the ratings have a negative outlook.

MIDEAST DEBT-Shares, bonds diverge in Abu Dhabi's Aldar | Reuters

Shares in troubled Abu Dhabi developer Aldar Properties sank to a record low this week, but increasing bids for the company's bonds show investors are starting to see value in its debt.

They are hoping that indirect involvement in the company by the Abu Dhabi government will reduce the risk of any payment delays on its bonds and strengthen its credit portfolio -- illustrating how in the Gulf, government connections, even implicit ones, can be crucial for investor perceptions.

The stock price plunged to an all-time low of 0.96 dirham on Tuesday, down more than 90 percent from its 2008 peak and well below this year's high of 2.48 dirhams, as the real estate sector in the United Arab Emirates continues to suffer from oversupply and falling prices.

Abu Dhabi's airline strategy lacks coherence | Reuters

Abu Dhabi has developed an unhealthy appetite for European airlines.

The UAE's official national carrier, state-owned Etihad Airways, is eyeing a tie-up with Virgin Atlantic -- which is bidding for Lufthansa's (LHAG.DE) bmi unit -- and mulling a 25 percent stake in Aer Lingus (AERL.I) being sold by the Irish government. Such deals may deliver tactical gains. But they would be a messy way to trying to catch up with rival Dubai-owned Emirates.

Etihad is in an awkward position, outdone by Emirates in terms of profile and passenger numbers. The eight-year-old Etihad flew 7 million passengers in 2010 with a 74 percent seat load factor. Emirates -- which is almost three decades old -- flew 31 million passengers at an 80 percent load over the same period. Its sheer scale means Emirates is often wrongly assumed to be the UAE national carrier.

Gulf will need regional financial regulation - FT.com

After the global financial crisis of 2008 and 2009, most banks accepted the need for higher capital levels with grim resignation. But with the ink barely dry on the Basel III accord that defines and enshrines the new levels, European banks are facing calls to show even higher capital ratios as a result of the European sovereign debt crisis.

José Manuel Barroso, the European Commission president, last week raised the possibility of a 9 per cent core capital ratio for some banks – far higher than the 7 per cent target under Basel III. The biggest European banks are also due to face the capital surcharge of between 1 and 2.5 per cent to be applied to all “global systemically important financial institutions”.

Concerns over the adequacy of European banks’ capital have led in recent months to a tightening of liquidity. Over the summer, US money market funds withdrew tens of billions of dollars from European banks and few institutions have been able to raise medium-term debt.

Emaar Q3 profits to drop 33%, reckons Rasmala - Emirates 24/7

The UAE property sector continues to undergo a price correction that began in late 2008, and there remains a downside risk to property prices in both Dubai and Abu Dhabi, according to Dubai-based regional investment bank Rasmala.

In a note outlining third-quarter results preview for the country’s real estate and construction firms, Rasmala said it expects property prices “in both Dubai and Abu Dhabi to fall about 20 per cent more to reach a sustainable trough.”

For market benchmark Emaar Properties, Rasmala analysts “expect a seasonally soft quarter, as we forecast revenue from both recurring income portfolio and property sales will decline 5-6 per cent quarter-on-quarter and pro forma earnings will decline 3.4 per cent quarter-on-quarter.” The bank is forecasting net profits of Dh408m for Emaar, a 33.4 per cent decline from comparable last year's actual results.

gulfnews : New index will help GCC firms attract investment and expertise

The stakes have just gotten higher for Gulf entrepreneurs. A new ranking regime is being created — the Gulf 100 — which will showcase companies where the entrepreneurial light is shining brightest.

A similar ranking has already been created in Saudi Arabia and the new one will cover businesses in the other Gulf states.

"The GCC 100 is not [about] membership — it's a ranking of the fastest growing entrepreneur-led companies in the region," said Atif Abdul Malek, chief executive officer of Arcapita, the Bahrain-based financial institution closely involved in the process.

Siraj Capital loses licence - The National

The Dubai financial free zone regulator has withdrawn the licence of the Saudi asset manager Siraj Capital for failing to maintain adequate capital requirements.

The Dubai Financial Services Authority, which oversees the Dubai International Financial Centre (DIFC) and Nasdaq Dubai, "will take appropriate action where firms fail to maintain adequate capital resources", the regulator said in a statement.

The news overshadowed a day of lacklustre trading on regional markets. Gulf markets declined yesterday, tracking global stocks, after Germany warned against hopes that the euro-zone debt crisis could be solved at a summit of world leaders next week. DFM Company, the name under which the Dubai Financial Market (DFM) is publicly traded, declined 2.8 per cent to 96 fils. Arabtec Holding, Dubai's biggest contractor, fell 2.3 per cent to Dh1.26. The emirate's main benchmark, the DFM General Index, fell 0.6 per cent to 1,356.86.

Etisalat feels the heat as profit falls - The National

Competition in the UAE and higher operating expenses resulted in Etisalat reporting its third consecutive decline in quarterly profit.

The UAE telecommunications company reported lower revenue in its home market, amid competition from rival du, although global operations have grown.

Shares in Etisalat fell beneath the Dh10 mark yesterday, after the company said its third-quarter profit amounted to Dh1.72 billion (US$468 million), a decline of 1 per cent on the same period last year. The operator failed to increase its UAE mobile-subscriber base, reporting 7.5 million customers. That was level with the figure reported in its second-quarter results, and a decline on its 7.8 million customers reported in the same period a year ago.

Confident Shuaa aims to rejoin banking elite - The National

Sheikh Maktoum Hasher Al Maktoum has been chairman of Shuaa Capital, the region's oldest investment bank, for four months. A couple of weeks ago, he put his stamp on the bank with the appointment of Michael Philipp as chief executive. Mr Philipp is a highly rated banker formerly on the executive board of Credit Suisse and Deutsche Bank.

Shuaa has had a couple of years of reorganisation and retrenchment. The effects of the global financial crisis hit the bank's core businesses hard, as trading activity and initial public offerings dried up in the region. It had a run-in with the financial regulator, and a messy wrangle with the Government over its equity structure.

Now, the bank's corporate structure has been resolved. It has also taken steps to address a legacy portfolio out of kilter with modern market conditions, reduce its cost base and refocus its business. That task has not been eased by the uncertainties caused by the financial fallout from the Arab Spring.

Oil Snaps Rally to Highest in a Month as U.S. Stockpiles Forecast to Rise - Bloomberg

Oil snapped a rally to the highest price in more than a month yesterday as forecasts of rising crude supplies in the U.S. countered speculation Europe may contain its debt crisis and prevent a slump in demand.

Futures were little changed after advancing 2.3 percent yesterday before the release of Energy Department data today that may show supplies climbed 2 million barrels. An industry report showed they dropped a third week. German Chancellor Angela Merkel said yesterday that a European Union summit on Oct. 23 will be an “important step,” though not the final one, in solving the euro-area sovereign debt crisis.

“The market’s just looking for some sort of price direction,” said David Lennox, a resource analyst at Fat Prophets in Sydney, who predicts prices will trade between $80 and $90 a barrel. “Traders aren’t willing to push prices higher given the weak economic outlook in the U.S. and what’s happening in Europe.”

Saudi Mobily Q3 profit misses forecasts | Reuters

Saudi Arabia's Etihad Etisalat (Mobily) posted a 7.6 percent increase in third-quarter profit, missing estimates as the telecoms operator sold fewer smart phone handsets and competition in data and international calling rose.

The company, an affiliate of UAE's Etisalat , made a net profit of 1.22 billion riyals, compared with a profit of 1.14 billion riyals in the same period a year ago.

Analysts polled by Reuters on average expected the firm to post a quarterly profit of 1.35 billion riyals.

Bombardier plans major investment to set up rail car factory in Qatar | CanadianBusiness.com

Bombardier (TSX:BBD.B) is poised to set up a plant in Qatar to fill a major railway contract launched by the Middle East emirate as it prepares to host soccer's World Cup in 2022.

Mickey Raviv, Bombardier Transportation's director of marketing and business development in the Middle East, told the Gulf Times the plant will be a huge investment for the transportation giant.

"But it will be a strategic decision that we will use for other projects too," he said at the Trans4 transportation conference which runs until Wednesday in Doha, Qatar's capital.

UAE's Alchemist eyes GCC healthcare investments - ArabianBusiness.com

Alchemist Healthcare, a UAE based investment company, has acquired 75 percent equity stake in Dubai's Mussalla Medical Centre as it looks to expand its interests across the GCC.

Having earlier invested in two healthcare assets in Abu Dhabi, Alchemist Healthcare said it is looking to become a regional leader in the healthcare sector and was planning to spend AED150m by the end of the year.

Mussalla Medical Centre has more than 20 doctors in 14 specialties treating about 300 patients a day, in addition to providing laboratory and diagnostic services.

WAM | Abu Dhabi Non-oil Foreign Trade totals AED 109.2 billion: SCAD

As the report finds, the volume of imports through Abu Dhabi ports during 2010 was 6.2 per cent higher compared with 2009.

Imports volumes by sea amounted to 8,196.3 thousand tonnes in 2010, an increase of 11.0 per cent compared with 2009. Imports by sea also accounted for the largest share contributing 64.2 per cent of total imports volumes in 2010, while imports by land declined by 1.6 per cent and contributed 35.3 per cent of total imports. In the meantime, imports by air increased by 6.6 per cent in 2010 compared with 2009, but contributed only 0.5 percent of total imports.

According to SCAD's report, the distribution of imports by geography shows that the bulk of imports came from three continents, namely, Asia, Europe and Northern America with a combined contribution of 93.4 per cent of total imports in 2010, down from 95.9 per cent in 2009.

Sabic posts record profit - FT.com

Saudi Basic Industries Corp, the world’s largest chemical producer by market value, posted a record net profit in the third quarter on the back of increased sales and reduced funding costs.

The company, 70 per cent which is owned by the Saudi government, posted a 54 per cent surge in net profit year-on-year of SR8.2bn ($2.2bn) in the three months ended September 30th, it said in a statement on Monday.

Mohamed Al-Mady, vice-chairman and chief executive, attributed the growth partly to Sabic’s ability to serve developing economies such as China and India “where it has maintained its competitive position and continued to succeed and grow”.

#GCC and #MiddleEast Finance News