#GCC and #MiddleEast Finance News: 14 Feb 2012

Tuesday, 14 February 2012

Emaar MGF to launch IPO

Emaar MGF, one of the leading real estate developers in the country, said it was planning to launch its initial public offering (IPO) in the next 90 days. The company plans to raise Rs 3,500 crore through the IPO.

“The market is quite stable now and if this trend continues we will be launching our IPO in the next three months,” said Emaar MGF Executive Vice-Chairman and Managing Director Shravan Gupta.

The company received the approval of the Securities and Exchange Board of India (Sebi) for the IPO last month.

ENBD to pay for exposure to state-linked firms

Emirates NBD, Dubai's largest bank, will see its quarterly results hit again by its exposure to state-linked companies, in the latest sign of the toll taken by its status of the emirate's lender of last resort.

The bank, formed at the behest of Dubai's ruler in 2007 through the merger of Emirates Bank and National Bank of Dubai, reports fourth-quarter results on Wednesday.

Its exposure to government-related entities (GREs) -- which accounted for 24 percent of total assets as of September 30, up from 17 percent at the end of 2009, according to Moody's -- has raised concerns in the market.

MIDEAST STOCKS-UAE's Aldar soars after surprise dividend; Gulf mixed | Reuters

Abu Dhabi's Aldar Properties hit a three-month high on Tuesday after it proposed a surprise dividend, helping sentiment in United Arab Emirates markets, while small-cap Kuwaiti stocks lifted the index to a five-month high.

Aldar's shares rose 5.1 percent to their highest finish since Nov. 16. The developer, bailed out twice by Abu Dhabi with rescue packages of about $10 billion, swung back into profit in 2011 on the back of land sales to the government and increased home sales.

It posted a net profit of 642.5 million dirhams ($170 million) and proposed a 0.05 dirham dividend.

UPDATE 1-UAE's TAQA 2011 profit hit by charge, UK taxes | Reuters

Abu Dhabi National Energy Company, which owns assets in Canada and Europe, reported a 26-percent drop in yearly profits on Tuesday due to a one-time charge and UK taxes on oil and gas producers.

TAQA, which is 75-percent owned by the government of Abu Dhabi, said 2011 net profit was 752 million dirhams ($204.74 million), down from 1.02 billion dirhams in 2010. It did not provide quarterly figures.

The firm said it booked a one-time impairment charge of 528 million dirhams at its Taqa North unit. In December, Taqa North said it reached an agreement to sell some of its Canadian oil and gas assets for an undisclosed amount.

MENA stock markets close - February 14, 2012

Exchange

Status

Index

Change

TASI (Saudi Stock Market)

6816.49

-0.22%

DFM (Dubai Financial Market)

1539.23

1.16%

ADX (Abudhabi Securities Exchange)

2489.5

0.95%

KSE (Kuwait Stock Exchange)

6009.5

1.07%

BSE (Bahrain Stock Exchange)

1142.43

-0.06%

MSM (Muscat Securities Market)

5606.88

0.32%

QE (Qatar Exchange)

8694.77

0.09%

LSE (Beirut Stock Exchange)

1184.24

0.00%

EGX 30 (Egypt Exchange)

5066.04

-0.65%

ASE (Amman Stock Exchange)

1954.29

-0.74%

TUNINDEX (Tunisia Stock Exchange)

4648.34

-0.22%

CB (Casablanca Stock Exchange)

11321.5

-0.25%

PSE (Palestine Securities Exchange)

481.21

0.23%

Emaar Rises to Six-Month High on Dividend Bets: Dubai Mover - Bloomberg

Emaar Properties PJSC (EMAAR) advanced to the highest level in more than six months amid investors’ bets the builder of the world’s tallest tower may follow Abu Dhabi- based Aldar Properties PJSC (ALDAR) in paying a dividend.
The shares rallied as much as 2.7 percent to 3.02 dirhams before paring gains to 2.98 dirhams, the highest since Aug. 4, at the 2 p.m. close in Dubai. The benchmark DFM General Index (DFMGI) climbed 1.2 percent. Emaar, which reported a more than doubling in fourth-quarter profit after trading hours, has the biggest weighting on the index.
Aldar, the developer bailed out twice by the Abu Dhabi government last year, fueled speculation on Emaar’s dividend after it recommended a 2011 dividend of 5 fils a share, said Haissam Arabi, Dubai-based chief executive officer at Gulfmena Investments. Emaar’s earnings statement didn’t mention a dividend recommendation.

Emaar profit lifted by shift from Dubai realty | Reuters

Emaar Properties, builder of the world's tallest tower, more than doubled quarterly profit thanks to sharply lower provisions and gains in hospitality and retail units following a shift away from the bleak Dubai property market.

Net profit was 716 million dirhams for the fourth quarter ended December 31, up from 274 million a year before and ahead of an average analyst forecast of 475.7 million in a Reuters poll.

"The strong growth was mainly driven by the development business but the performance of Emaar's hospitality segment also surpassed our expectations by 15 percent in terms of quarterly revenues," said Jan Pawel Hasman, associate vice president for equity research at EFG-Hermes in Cairo.

Turkey sticks with Iran oil after Saudi talks

Turkey has no plans to cut its imports of Iranian oil, remaining a rare loyal customer of Tehran despite rising pressure from international sanctions and initial signals it may buy more Saudi oil, Turkish and Saudi sources told Reuters.
The sources said Ankara's intentions became clear after a high level delegation travelled to Riyadh over the weekend and decided against requesting additional supplies from top oil exporter Saudi Arabia, the only producer in the world that has spare volumes to offer to replace Iranian barrels. The development will help Iran avoid extra pain from reduced sales of crude as the European Union seeks to ban Iranian oil imports from July 1 and major Asian customers are signalling they might cut purchases under pressure from Washington.

EU and US sanctions against Iran over its nuclear plans are already hitting oil production in the Islamic Republic and a fall in its output and exports is likely to accelerate if more customers walk away from its oil. This could squeeze the budget and increase internal tensions ahead of parliamentary elections next month.

UAE stocks at last catch the final leg of the global equity rally as it turns back down « ArabianMoney

A UAE stock market investor’s lot is not a happy one. The Dubai Financial Market hit a seven-year bottom in mid January and for the past few weeks seemed to have finally caught the upturn that has sent global equities higher since March 2009.

But the timing was not good. The global stock market rally is on its last legs, feelng tired and could be about to drop off a cliff again. It is a shame because UAE companies have some good news to report and it is not all reflected in their stock prices.

Qatar National Bank Said to Raise $1 Billion From Bond Sale - Businessweek

Qatar National Bank SAQ, the Doha- based lender bidding to buy Dexia SA’s Turkish unit, raised $1 billion from the sale of five-year bonds, according to three people familiar with the deal.

The bond may be priced to yield 235 basis points above the benchmark mid-swap rate, said the people, declining to be identified because the details are private. Barclays Capital, Citigroup Inc., HSBC Holdings Plc, Standard Chartered Plc and QNB Capital arranged the transaction, the people said.

The bank, rated Aa3 by Moody’s Investors Service, the fourth-highest investment grade, last sold bonds in November 2010, raising $1.5 billion in five-year notes at a coupon of 3.125 percent. That offering received $6 billion in bids.

Repsol shares in $3 bln deal for Algeria gas field | Reuters

Algeria has awarded a $3 billion concession to develop its gas fields, Spanish oil and gas company Repsol said on Tuesday, adding it had a 29.25 percent stake in the project.

The North Reggane project covers six gas fields in the Sahara desert and includes a pipeline for the export of gas, which is due to begin pumping in mid-2016, Repsol added in a statement.

Production is expected to stabilise at 8 million cubic metres a day for the first 12 years the project is in operation. That is equivalent to about 2.9 billion cubic metres a year and compares with Spanish demand of 36 bcm.

Kuwait's ALAFCO orders 35 more A320neo jets - bi-me.com

A Kuwait-based leasing firm has ordered 35 more Airbus A320neo planes for US$3.4 billion based on catalogue prices, the European aircraft maker said on Tuesday.

The purchase will be in addition to 50 A320neo aircraft ordered by the Aviation Lease and Finance Company (ALAFCO) at the Dubai Airshow last year, Airbus said in a statement.

The new deal was announced at the Singapore Airshow that kicked off Tuesday and lasts until the weekend.

Record Redemptions Loom Amid Akbank $1.3 Billion Loan Talks: Turkey Credit - Bloomberg

Turkish companies have a record 307 billion liras ($174 billion) of debt maturing this year just as their domestic borrowing costs rise to the highest in almost three years and HSBC Holdings Plc predicts foreign bank loans will shrink.
Companies from Citigroup Inc.’s Akbank (AKBNK) TAS to Yapi & Kredi Bankasi AS must repay an average 56 percent more local and international obligations than in 2011, according to 386 earnings statements on Bloomberg. Lira loan rates climbed to an average 15.7 percent on Feb. 3 from 8.2 percent a year ago after the currency fell the most in emerging markets last year, central bank data show. The cost of overseas loans to Turkish companies jumped to 125 basis points above the London Interbank Offered Rate yesterday from 115 on Sept. 30. The rate for Russian companies is 251 basis points, the data show.

Dubai Shares Rally to 6-Month High on Dividend Bets; Emaar Rises - Businessweek

Dubai’s benchmark stock index advanced to the highest level in more than six months on investor speculation corporate earnings may beat analysts’ estimates, spurring bigger dividend payouts.

Emaar Properties PJSC, the builder of the world’s tallest skyscraper, climbed to the highest level since Aug. 4 before reporting fourth-quarter profit that beat analysts’ estimates. Deyaar Development PJSC, a real-estate developer, jumped 7.3 percent. The DFM General Index climbed 1.2 percent to 1,539.23, the highest since Aug. 4, at the 2 p.m. close in Dubai. In Abu Dhabi, Aldar Properties PJSC rose after the company bailed out by the emirate recommended a cash dividend of 5 fils a share.

Aldar’s dividend plan helped boost investor sentiment for property developers in the United Arab Emirates, said Tariq Qaqish, deputy head of asset management at Dubai-based Al Mal Capital. “It was a big surprise for a company which was bailed out by Abu Dhabi government and suffered from serious negative cash flow to distribute cash dividends,” Qaqish said.

Abu Dhabi acquires stake in North Sea oilfield - Energy - ArabianBusiness.com

TAQA Bratani, the UK arm of the state-backed Abu Dhabi National Energy Company, has reportedly bought a 50 percent stake in an oilfield off the coast of Scotland.
The oil and gas firm’s acquisition of a stake in three licences will give it access to the Darwin oilfield, a recent discovery located off the north-east coast of the Shetland Islands.
"These licences are located adjacent to our core infrastructure and represent an excellent opportunity for TAQA to expand its footprint in the Northern North Sea,” Leo Koot, managing director of TAQA Bratani, is quoted as saying by The Herald newspaper in Scotland.

Persian Gulf Stocks: Emaar, Etisalat, Abu Dhabi Islamic, Sorouh - Businessweek

Dubai’s DFM General Index rallied for a fifth day, gaining 1.2 percent to 1,539.23 at the 2 p.m. close in the emirate. Kuwait’s gauge gained 1.1 percent.

IEA downgrades Saudi’s output capacity - FT.com

The latest monthly report of the International Energy Agency contained the usual update on oil supply and demand numbers, but it also revealed a striking fact: the maximum production capacity of Saudi Arabia is lower than we thought.

In its February report released last week, the Paris-based watchdog reduced its estimate of the kingdom’s maximum output to 11.88m barrels a day, a notch below the previous assumption of 12m b/d, which the IEA used in its January report.

Saudi Aramco, the country’s oil company, puts its maximum output at 12.5m b/d.

Another weak year for IPOs in the GCC as issuers and investors remain wary of volatility in the Capital Markets | Al Bawaba

Initial public offerings (IPO) in the six nation Gulf Corporation Council (GCC) markets continued spiralling downwards in the fourth quarter of 2011 summing up a difficult year for IPOs on the regional exchanges. The three IPOs in Q4 2011 raised a total of USD 212m, with offering values falling marginally by 3% compared to the third quarter of 2011 but down significantly by 79% year on year, says PwC, a leading international professional services organisation.

Saudi Arabia continued to lead the GCC markets with two IPOs in the last quarter of 2011 contributing USD 148m or 70% of the total amount raised on the GCC exchanges. The only other IPO in the GCC during Q4 2011 was Oman’s SMN Power Holding which raised USD 63.8m. Although the number of IPOs in the last quarter of 2011 remained the same as Q4 2010, the average IPO size decreased significantly from USD 343m to USD 71m in Q4 2011.

Dubai property pain - UAE - Zawya

While Dubai's economic environment is improving rapidly, the real estate sector is likely to go through more pain and fall by a further 15-20% before bottoming out, says Dubai-based Rasmala.

"We believe the Dubai residential market may see delivery of 30,000-35,000 units of apartments and villas combined in 2H11-2013, upon an existing supply base of roughly 322,000 units," said Rasmala analysts in a note. "This translates into roughly 10% incremental supply, which we believe would further depress real state asset values."

The investment bank believes that Dubai residential sales may fall from their current levels of AED750 per square feet to AED600-650 - or 15-20%.

Egypt prepares to sell $2 bln Islamic bonds: scholar | Reuters

The Egyptian government, seeking to head off a funding crisis, is preparing to raise about $2 billion through its first issue of Islamic bonds, an Islamic scholar familiar with its planning said on Tuesday.

"The Egyptian government is convinced that a foreign currency sukuk will fund the country's development projects and can also bridge the gap in its currency reserves," Sheikh Hussein Hamid Hassan told Reuters.

"The sukuk will be in dollars or euros or maybe a combination. It will be around $2 billion, issued in several tranches targeting mainly Egyptians living outside Egypt."

Egypt bourse suspends EFG-Hermes, awaits details on CEO | Reuters

Egypt's stock exchange said it had suspended trading in EFG-Hermes shares on Tuesday, saying that it was seeking more details about the firm's Chief Executive Yasser El Mallawany who faces a travel ban.

Airport authorities prevented Mallawany from traveling to the United Arab Emirates last week when officials found his name on a list of people banned from leaving. The company said Mallawany was still carrying out his duties and that no charges of any form had been levelled against him.

TEXT: S&P Rpts Assess Economic And Credit Impact Of Tensions In Gulf | Reuters

Rising tension between Iran and the West is increasing political and economic risks for sovereign and corporate issuers in the Middle East and focusing attention on the key role of the Strait of Hormuz in trade for the Gulf, says Standard & Poor's Ratings Services in a series of three new reports (see list of publications below).

In response to tougher sanctions, including a boycott of Iranian oil exports by the EU, Iran has threatened retaliation, notably in the form of a blockade of the Strait of Hormuz, a conduit for the flow of oil and gas out of the Gulf.

So far, these threats have been verbal, but analysts are not ruling out the possibility that the current exchanges of rhetoric could spark disruptions to trade flowing through the Strait, or even in an extreme scenario, military confrontation.

Abu Dhabi fund eyes sale of $1.3 bln Malaysia bank stake - sources | Agricultural Commodities | Reuters

An Abu Dhabi sovereign wealth fund is exploring the sale of its $1.3 billion stake in Malaysian lender RHB Capital Bhd, six months after buying the shares, sources familiar with the matter told Reuters.

The fund had engaged in early talks with Japan's Sumitomo Mitsui Banking Corp (SMBC), they said.

The sources declined to be identified as they were not authorised to speak to the media.

gulfnews : Emirates Islamic Bank suffers Dh448m loss as expenses soar

Emirates Islamic Bank (EIB), which belongs to the Emirates NBD Group, reported a full-year net loss Monday due to significantly higher impairments on financing and investment activities and a surge in expenses.
The bank posted a net loss of Dh448.55 million compared to a net profit of 59.34 million in 2010, the bank said in a statement to the Dubai Financial Market.
The bank's total assets fell more than 32 per cent to Dh21.48 billion from Dh32.74 billion in 2010. While the income from financing activities declined from Dh919.88 million in 2010 to Dh699.95 million last year, the bank reported a loss of Dh45 million from investment in securities.

Kuwait teco Zain posts 2011 profit of $1.03 bln-agency | Reuters

Kuwait's Zain posted a net profit of $1.03 billon in 2011, up from $1.02 billion in the previous year, the state news agency KUNA reported on Monday.

The telecom firm made a fourth-quarter net profit of $268 million, Reuters calculated, based on the nine-month earnings report of the company. KUNA did not provide any quarterly figures.

Analysts polled by Reuters on average expected the firm to post a quarterly profit of 72.5 million dinars ($261.3 million).

MGM Resorts says CityCenter will have $45 million operating loss in fourth quarter - Business - ReviewJournal.com

MGM Resorts International said Monday that its CityCenter development had a net operating loss of roughly $45 million in the fourth quarter, but saw revenues increase roughly 4 percent.

The company, which owns the 67-acre Strip complex in a 50-50 partnership with Dubai World, pre-announced quarterly earnings for CityCenter Monday when it unveiled plans to refinance $240 million in debt.

In a statement, MGM Resorts said it plans to refinance the debt through a private placement and said the funds, along with cash on hand, would be used to pay off $300 million of CityCenter's $2.5 billion debt.

Jobs at risk again at Dubai's Shuaa Capital after latest losses - The National

Shuaa Capital reported its fourth consecutive year of losses and announced a further round of layoffs as its withdrew from retail brokerage operations around the Middle East.

The Dubai-based investment bank's loss for the full year was Dh293.8m, widening 31 per cent from the year earlier.

The bank's losses for the fourth quarter totalled Dh111.8m, a decrease of 40 per cent compared with the same period a year earlier.

UPDATE 1-UAE developer Aldar books 2011 profit on govt sales | Reuters

Aldar Properties' full-year net profit jumped to 642.5 million dirhams ($175 million) in 2011, boosted by land sales to the government and increased residential sales.

Abu Dhabi's largest developer by market value, returned to black after it posted a loss of 12.7 billion dirhams in 2010 on massive writedowns on its assets.

The company's board has proposed a dividend for the first time since the ailing company was rescued by Abu Dhabi in 2010 with a $5.2 billion bailout.

Kuwait central bank governor resigns - FT.com

Kuwait’s long-serving central bank governor resigned on Monday, ending his 25-year run at the lender with sharp criticism of what he said were “unprecedented” increases in government spending.
Sheikh Salem Abdulaziz Al-Sabah, a member of Kuwait’s ruling family, resigned after elections that gave Kuwait’s loose-knit opposition a majority in the country’s parliament.