#GCC and #MiddleEast Finance News: 31 Oct 2011

Monday 31 October 2011

UAE property: tough times, fewer jobs | beyondbrics – FT.com

Aldar, the Abu Dhabi developer whose $5.2bn bailout became a signal of the outlandish UAE property bubble, has cut jobs again but remained stubbornly silent on how exactly it plans to end its woes.

A “strategic plan” announced by the company on Monday consisted of lay-offs of almost a quarter of its already pared-down 420 staff – but offered few other clues about what it would do to turn itself around.

With a $1.1bn bond repayment due in just ten days time, analysts are still scratching their heads on how exactly one of the UAE’s flagship state-owned companies is going to reinvent itself in tougher times.

Sharjah oil group sues UAE state utility - FT.com

In a rare public confrontation with the authorities, a family-owned oil company in Sharjah, one of seven sheikhdoms which make up the United Arab Emirates, has broken ranks to sue the local government.

Amid growing concerns over unpaid bills in the UAE, Fal Oil, a major independent oil supplier in the Gulf, is suing the Sharjah Electricity and Water Authority and its owner, the Sharjah government, for dues of up to Dh2.7bn ($735m), according to court documents seen by the Financial Times.

As a result, the company, which operates 45 tankers and is wholly-owned by the Al-Sari family, is having difficulty repaying loans of about Dh4bn and has already hired KPMG to act as advisers to restructure the debt, the company says.

Bahrain Says It Is Still Planning to Sell Islamic Bonds - Bloomberg

Bahrain is still planning to sell Islamic bonds, Sheikh Salman bin Isa Al Khalifa, executive director of banking operations at Bahrain’s Central Bank, said today.

“The issuance of the sukuk is still on track,” Sheikh Salman said in an e-mailed response to a question. He gave no further details.

Central Bank Governor Rasheed al-Maraj said in an interview last month that Bahrain has hired Citigroup Inc., BNP Paribas SA and Standard Chartered Plc to advise on the sale of $1 billion in bonds in October. He said the maturity of the sukuk may be between seven to 10 years and that the island kingdom plans to use the money to help finance a budget deficit of about 5 percent of gross domestic product.

Aldar Properties Cuts 24% of Workforce as Abu Dhabi Company Restructures - Bloomberg

Aldar Properties PJSC (ALDAR), an Abu Dhabi developer, said it will reduce its workforce by 24 percent as it restructures.

“Aldar’s new strategic plan takes into account the existing market environment,” the company said in a statement posted on the Abu Dhabi bourse today. It will “selectively target new developments where there is demonstrable demand, and increase Aldar’s large-scale fee-based development activities.”

The company will shed 105 jobs and “continue to concentrate on its core Abu Dhabi market,” according to the statement.

Dubai Leads U.A.E. Stocks Lower on Speculation Gains Overdone - Bloomberg

Dubai’s benchmark stock index led United Arab Emirates shares lower amid speculation yesterday’s gain was overdone and after Abu Dhabi-based Aldar Properties PJSC announced job cuts.

Arabtec Holding Co., the country’s biggest construction company, fell the most in almost two weeks after posting earnings. Aldar, Abu Dhabi’s largest real-estate developer by market value, lost 0.9 percent. The benchmark DFM General Index dropped 0.6 percent, the most since Oct. 18, to 1,408.06 at the 2 p.m. close in Dubai. The measure surged 2.6 percent yesterday, bringing its three-day advance to 4.6 percent. It has lost 1.7 percent this month. Abu Dhabi’s benchmark ADX General Index declined for the first time in six days, losing 0.3 percent and bringing its drop for the month to 1.3 percent.

“The drop is a mix of profit-taking and the correlation to international markets,” said Tariq Qaqish, deputy head of asset management at Dubai-based Al Mal Capital. “Medium-term investors would see this correction as an entry opportunity.”