The courts in Dubai’s international financial center could become a lot busier in the years ahead, thanks to a little-noticed change in the way banks and other firms in the region are drafting new contracts.
Lawyers say that many agreements signed this year involving Middle Eastern counterparties have clauses which specify that any future contractual disputes should be resolved in the Dubai International Financial Centre’s court system. Prior to the change, which followed a law approved by Dubai’s ruler in late 2011 allowing parties anywhere in the world to choose the DIFC as their jurisdiction, complex contracts typically called for those disputes to be heard in London.
“I would say that it will increase the case load [in the DIFC courts] quite significantly over time,” said Graham Lovett, the regional managing partner at global law firm Clifford Chance in Dubai.
Tuesday, 25 September 2012
MENA stock markets close - September 25, 2012
| Exchange | Status | Index | Change | ||||
 | TASI (Saudi Stock Market) | 6977.67 | 0.24% | ||||
 | DFM (Dubai Financial Market) | 1591.62 | 0.22% | ||||
| ADX (Abudhabi Securities Exchange) | 2606.23 | 0.06% | ||||
 | KSE (Kuwait Stock Exchange) | 5927.11 | -0.01% | ||||
 | BSE (Bahrain Stock Exchange) | 1085.51 | 0.58% | ||||
 | MSM (Muscat Securities Market) | 5563.25 | 0.14% | ||||
 | QE (Qatar Exchange) | 8549.3 | -0.28% | ||||
 | LSE (Beirut Stock Exchange) | 1115.13 | -0.08% | ||||
 | EGX 30 (Egypt Exchange) | 5956.44 | 2.15% | ||||
 | ASE (Amman Stock Exchange) | 1899.92 | -0.03% | ||||
 | TUNINDEX (Tunisia Stock Exchange) | 4993.67 | -0.19% | ||||
 | CB (Casablanca Stock Exchange) | 9518.67 | -0.55% | ||||
 | PSE (Palestine Securities Exchange) | 428.68 | 0.60% | ||||
STOCKS NEWS MIDEAST-Doha at 2-wk low ahead of Q3; Dubai up - Yahoo! News Maktoob
Qatar's index slumps to a two-week closing low as investors cut positions ahead of quarterly earnings, while Dubai's bourse ends higher for a first session in four.
Doha's benchmark ends 0.3 percent lower at 8,549 points, down 1.1 percent from Sept. 17's fourth-month high.
Heavyweight Industries Qatar slips 0.6 percent, Qatar National Bank sheds 0.4 percent and Qatar Electricity and Water slips 0.2 percent.
"Market volumes are softening and people are waiting to see results before pouring money back in," says Yassir Mckee, wealth manager at Al Rayan Financial Brokerage. "I don't anticipate major moves until earnings start coming out, which I don't think will be out of the ordinary."
Doha's benchmark ends 0.3 percent lower at 8,549 points, down 1.1 percent from Sept. 17's fourth-month high.
Heavyweight Industries Qatar slips 0.6 percent, Qatar National Bank sheds 0.4 percent and Qatar Electricity and Water slips 0.2 percent.
"Market volumes are softening and people are waiting to see results before pouring money back in," says Yassir Mckee, wealth manager at Al Rayan Financial Brokerage. "I don't anticipate major moves until earnings start coming out, which I don't think will be out of the ordinary."
UPDATE 1-UAE lender FGB plans benchmark bond sale - sources | Reuters
First Gulf Bank (FGB), the second-largest lender by market value in the United Arab Emirates, has hired five banks for a new benchmark-sized bond sale, three sources familiar with the matter said on Tuesday.
FGB picked Citigroup Inc, HSBC Holdings, National Bank of Abu Dhabi, Deutsche Bank and Standard Chartered Plc for the deal, which is expected to be at least $500 million in size.
Strong demand for high-rated regional names and narrowing spreads in recent weeks is prompting firms like FGB to tap bond markets as they look to bring their borrowing costs down.
FGB picked Citigroup Inc, HSBC Holdings, National Bank of Abu Dhabi, Deutsche Bank and Standard Chartered Plc for the deal, which is expected to be at least $500 million in size.
Strong demand for high-rated regional names and narrowing spreads in recent weeks is prompting firms like FGB to tap bond markets as they look to bring their borrowing costs down.
Dubai airport August passenger traffic jumps 20 pct - Yahoo! News Maktoob
Passenger traffic at Dubai International Airport jumped 20 percent from a year earlier in August, while the volume of cargo freight rose 4.4 percent, Dubai Airports said on Tuesday.
The airport, one of the world's busiest, handled 4.85 million passengers last month. Dubai Airports said the unusually big rise was largely due to the timing of the Ramadan holy month this year and in 2011, which affected many people's travel patterns.
In the first eight months of this year, passenger traffic rose 13.4 percent from a year earlier to 37.78 million. Freight volume totalled 190,770 tonnes in August. Between January and August, it expanded 3.0 percent to 1.48 million tonnes.
The airport, one of the world's busiest, handled 4.85 million passengers last month. Dubai Airports said the unusually big rise was largely due to the timing of the Ramadan holy month this year and in 2011, which affected many people's travel patterns.
In the first eight months of this year, passenger traffic rose 13.4 percent from a year earlier to 37.78 million. Freight volume totalled 190,770 tonnes in August. Between January and August, it expanded 3.0 percent to 1.48 million tonnes.
StanChart: what price a sale? | beyondbrics
Shares in Standard Chartered, the emerging markets-focused bank, fell nearly 3 per cent in Hong Kong on Tuesday.
Anything to do with the FT reporting the possible sale of Temasek’s 18 per cent stake, worth around $6bn? Possibly. Temasek isn’t just a large shareholder – it has been seen as akin to a guardian of the bank too.
Anything to do with the FT reporting the possible sale of Temasek’s 18 per cent stake, worth around $6bn? Possibly. Temasek isn’t just a large shareholder – it has been seen as akin to a guardian of the bank too.
STOCKS NEWS MIDEAST-Dubai halts 3-session dip as bluechips rebound - Yahoo! News Maktoob
Dubai's bourse edges higher, with buyers targeting bluechip stocks following three sessions of declines.
The index climbs 0.3 percent to 1,593 points, extending its gains to 17.7 percent in 2012.
Emirates NBD rises 2.3 percent, Emaar Properties climbs 0.3 percent and budget carrier Air Arabia adds
1.7 percent.
"The DFMGI broke through key resistance at 1,600 and the uptrend is intact," says Sleiman Aboulhosn, assistant fund manager at Al Masah Capital. "Any short-term weakness should be considered a buying opportunity at the moment."
The index climbs 0.3 percent to 1,593 points, extending its gains to 17.7 percent in 2012.
Emirates NBD rises 2.3 percent, Emaar Properties climbs 0.3 percent and budget carrier Air Arabia adds
1.7 percent.
"The DFMGI broke through key resistance at 1,600 and the uptrend is intact," says Sleiman Aboulhosn, assistant fund manager at Al Masah Capital. "Any short-term weakness should be considered a buying opportunity at the moment."
MIDEAST DEBT-Banks hope for clarity as UAE lending limit looms - Yahoo! News Maktoob
Commercial bank executives in the United Arab Emirates will meet central bank officials later on Tuesday to discuss a deadline for obeying new limits on lending to state-linked firms, with the lenders desperate for information after weeks of silence from the regulator.
With under a week until the curbs are due to take effect, banks in the UAE are in the dark over whether the rules will be enforced or if their pleas for more time have been heard. "Bank chiefs will meet the central bank today and there will be lots of ranting and raving about this Sept. 30 deadline," said a senior commercial banker who is aware of the meeting, declining to be named because of the sensitivity of the issue.
The rules, announced in an early April circular to commercial banks, are apparently designed to prevent any future repeat of Dubai's corporate debt crisis, which erupted in 2009 as the real estate market crashed; the crisis was worsened by local banks' excessive exposure to state firms.
With under a week until the curbs are due to take effect, banks in the UAE are in the dark over whether the rules will be enforced or if their pleas for more time have been heard. "Bank chiefs will meet the central bank today and there will be lots of ranting and raving about this Sept. 30 deadline," said a senior commercial banker who is aware of the meeting, declining to be named because of the sensitivity of the issue.
The rules, announced in an early April circular to commercial banks, are apparently designed to prevent any future repeat of Dubai's corporate debt crisis, which erupted in 2009 as the real estate market crashed; the crisis was worsened by local banks' excessive exposure to state firms.
New challenges for foreign investors in Saudi ArabiaSaudi Arabia - Zawya
The World Bank recently ranked the Kingdom of Saudi Arabia 12th among 183 countries on the ease of doing business. This reflects the huge efforts that the kingdom has made in recent years to improve its business environment and develop some of the most liberal foreign investment laws in the region. Nevertheless, private equity investors have voiced concerns about how these laws are applied in practice.
Unlike in other Gulf Cooperation Council countries, there is no general limit on the amount of foreign investment that can be made in a Saudi company and the establishment of 100% foreign-owned companies is permitted. The only exceptions are strategically significant sectors such as defence, oil exploration and media.
When licensed under the investment laws, a foreign-owned entity enjoys all the privileges and incentives offered to wholly Saudi-owned companies, including the right to own freehold property in connection with its licensed activity. KSA has also entered into numerous international treaties granting relief from double taxation and offering guarantees as to repatriation of profits and compensation in case of expropriation.
Unlike in other Gulf Cooperation Council countries, there is no general limit on the amount of foreign investment that can be made in a Saudi company and the establishment of 100% foreign-owned companies is permitted. The only exceptions are strategically significant sectors such as defence, oil exploration and media.
When licensed under the investment laws, a foreign-owned entity enjoys all the privileges and incentives offered to wholly Saudi-owned companies, including the right to own freehold property in connection with its licensed activity. KSA has also entered into numerous international treaties granting relief from double taxation and offering guarantees as to repatriation of profits and compensation in case of expropriation.
Tidal wave of Middle East contract awards held back by US presidential election and Israeli threats « ArabianMoney
One of the UAE’s largest contractors complained to ArabianMoney last night about the holding back of a ‘tidal wave’ of new construction contracts as investors are worried by a change of US president and the possibility of a war between Israel and Iran.
Most of the investors involved are, of course, the governments of the Oil States under their many corporate pseudonyms. Oil revenues have been high again this year and these countries have plenty of money to spend on infrastructure.
Most of the investors involved are, of course, the governments of the Oil States under their many corporate pseudonyms. Oil revenues have been high again this year and these countries have plenty of money to spend on infrastructure.
Libya targets oil output rise, no new deals for a year | Reuters
Libya aims to raise its oil production to 1.8 million barrels per day (bpd) next year, overtaking the output before last year's war, as it banks on the return of foreign companies even though security in the country remains precarious.
But no new exploration and production contracts are expected for at least a year before a clearer landscape emerges in the North African producer's democratic transition after the war that ousted ruler Muammar Gaddafi.
Oil output has returned close to pre-war levels of around 1.6 million bpd from a virtual standstill during the fighting.
But no new exploration and production contracts are expected for at least a year before a clearer landscape emerges in the North African producer's democratic transition after the war that ousted ruler Muammar Gaddafi.
Oil output has returned close to pre-war levels of around 1.6 million bpd from a virtual standstill during the fighting.
Steel mill signals further confidence boost - The National
The construction industry in the UAE received a much needed vote of confidence yesterday when the Saudi Arabian steel manufacturer United Steel Industries announced it was resuming work on what will be the largest steel mill in the country.
The Al Fozan Group subsidiary has appointed the construction consultancy Turner & Townsend as project manager to build the stalled 145,000 square metre steel rolling-mill project in Fujairah to cater to the needs of construction companies restarting work in the emirates.
Seen by many as a key bellwether for the sector, when complete the factory will produce the type of steel used to fortify concrete structures used in towers and roads.
The Al Fozan Group subsidiary has appointed the construction consultancy Turner & Townsend as project manager to build the stalled 145,000 square metre steel rolling-mill project in Fujairah to cater to the needs of construction companies restarting work in the emirates.
Seen by many as a key bellwether for the sector, when complete the factory will produce the type of steel used to fortify concrete structures used in towers and roads.
Debts weigh on Jebel Ali free-zone operator as profit slips - The National
Earnings sank by a fifth at Jebel Ali Free Zone Authority (Jafza) during the first half of the year as the higher cost of servicing its debts weighed on income after it was thrown a lifeline by banks this year.
The free-zone operator, a unit of Dubai World, dodged a showdown with creditors by successfully refinancing a Dh7.5 billion (US$2.04bn) sukuk due for repayment in November.
But following the debt deal, net profits for the first half of the year fell to Dh212.2 million, a decline of 19.8 per cent compared with the same period a year earlier.
The free-zone operator, a unit of Dubai World, dodged a showdown with creditors by successfully refinancing a Dh7.5 billion (US$2.04bn) sukuk due for repayment in November.
But following the debt deal, net profits for the first half of the year fell to Dh212.2 million, a decline of 19.8 per cent compared with the same period a year earlier.
Real estate arbitration at risk in Dubai | GulfNews.com
The Dubai Court of Cassation (the Supreme Court) has issued a both surprising and at the same time shocking ruling that may have far-reaching implications on the arbitration of real estate matters in the emirate.
In Cassation Appeal No 14 Year 2012 Real Estate, the court ruled that rules relating to registration of properties in the real estate registry in the emirate are matters of public policy and, thus, may not be subject to arbitration.
The case involves a dispute between a developer and a purchaser of a number of units. The purchaser instituted arbitration proceedings before the Dubai International Arbitration Centre (DIAC) against the developer for failing to meet its obligations, inter alia, of registering the units in the real estate registry and demanded a refund. The developer brought a counterclaim and an award was issued granting the purchaser part of his claims.
In Cassation Appeal No 14 Year 2012 Real Estate, the court ruled that rules relating to registration of properties in the real estate registry in the emirate are matters of public policy and, thus, may not be subject to arbitration.
The case involves a dispute between a developer and a purchaser of a number of units. The purchaser instituted arbitration proceedings before the Dubai International Arbitration Centre (DIAC) against the developer for failing to meet its obligations, inter alia, of registering the units in the real estate registry and demanded a refund. The developer brought a counterclaim and an award was issued granting the purchaser part of his claims.
Sabic bonds gain on scarcity of Saudi dollar notes | GulfNews.com
Saudi Basic Industries Corp.’s bond yield dropped to a record as a scarcity of dollar-denominated securities in Saudi Arabia draws investors seeking exposure to the country with the Middle East’s lowest credit risk.
The yield on the world’s biggest publicly traded chemicals maker’s 3 per cent securities due November 2015 is down 30 basis points since hitting a four-month high on August 21. It reached a record 1.988 per cent on September 21. It was little changed today. The yield on investment-grade Middle East debt has fallen 19 basis points in the period to 3.36 per cent, HSBC/Nasdaq Dubai’s Middle East Investment Grade U.S. Dollar Sukuk/Bond Index shows.
Two Saudi issuers, including Saudi Electricity Co., sold $2.5 billion of dollar bonds this year, compared with $9.6 billion raised from 14 sales in the UAE, a fellow member in the Gulf Cooperation Council, data compiled by Bloomberg show. Sabic, whose shares are underperforming the Saudi index, benefits from this dearth in dollar notes even as revenue is hurt by declining global chemical product prices.
The yield on the world’s biggest publicly traded chemicals maker’s 3 per cent securities due November 2015 is down 30 basis points since hitting a four-month high on August 21. It reached a record 1.988 per cent on September 21. It was little changed today. The yield on investment-grade Middle East debt has fallen 19 basis points in the period to 3.36 per cent, HSBC/Nasdaq Dubai’s Middle East Investment Grade U.S. Dollar Sukuk/Bond Index shows.
Two Saudi issuers, including Saudi Electricity Co., sold $2.5 billion of dollar bonds this year, compared with $9.6 billion raised from 14 sales in the UAE, a fellow member in the Gulf Cooperation Council, data compiled by Bloomberg show. Sabic, whose shares are underperforming the Saudi index, benefits from this dearth in dollar notes even as revenue is hurt by declining global chemical product prices.
Dewa to tap debt markets in 2013 | GulfNews.com
The Dubai Electricity and Water Authority (Dewa) will tap into debt markets by 2013 raising Dh4 billion to upgrade its infrastructure and complete its current projects.
Speaking to Gulf News on the sidelines of the Arab Water and Power Forum, Saeed Al Tayer, Managing Director and CEO of Dewa said the authority is evaluating whether it may need to raise cash by selling sukuk, securitising assets, or borrowing from export credit agencies to pay for what it will owe next year and to complete its ongoing projects.
“Next year Dewa is intending to issue sukuk, securitisation and export credits worth Dh4 billion. The fund will go towards water and power projects,” he said.
Speaking to Gulf News on the sidelines of the Arab Water and Power Forum, Saeed Al Tayer, Managing Director and CEO of Dewa said the authority is evaluating whether it may need to raise cash by selling sukuk, securitising assets, or borrowing from export credit agencies to pay for what it will owe next year and to complete its ongoing projects.
“Next year Dewa is intending to issue sukuk, securitisation and export credits worth Dh4 billion. The fund will go towards water and power projects,” he said.
Dubai Mercantile Aims to Tap Gulf Markets to Fund Oil Trading - Bloomberg
The Dubai Mercantile Exchange’s new chief executive officer said he aims to tap Persian Gulf financial markets and banks for capital to help fund and expand trading in crude oil and refined products.
Christopher Fix, a former BNP Paribas SA executive who joined the DME last month, said the exchange has spoken with “half a dozen” regional lenders about ways to facilitate funding for energy trading. The aim is “to get Arab banks to finance Arab oil,” he said at an energy forum in Dubai today.
The DME, the platform for trading in the Oman crude futures contract, does about $1.5 billion in oil transactions a month, mainly financed by European or U.S. lenders, Fix said. European and U.S. banks tightened lending after the global financial crisis, adding to constraints on some trading companies at the same time as higher commodity prices made it more expensive to purchase oil and refined products.
Christopher Fix, a former BNP Paribas SA executive who joined the DME last month, said the exchange has spoken with “half a dozen” regional lenders about ways to facilitate funding for energy trading. The aim is “to get Arab banks to finance Arab oil,” he said at an energy forum in Dubai today.
The DME, the platform for trading in the Oman crude futures contract, does about $1.5 billion in oil transactions a month, mainly financed by European or U.S. lenders, Fix said. European and U.S. banks tightened lending after the global financial crisis, adding to constraints on some trading companies at the same time as higher commodity prices made it more expensive to purchase oil and refined products.
Business - UAE third in global sukuk
The GCC sukuk market has reached an “inflection point” in terms of new issuance, propelled by a fast growing appetite for infrastructure finance as the UAE emerged as the third global growth market for Islamic bonds, Standard & Poor’s said on Monday.
In the GCC, the UAE has become the second market for sukuk in the year to July with $5.3 billion. Saudi Arabia now leads the GCC ranks with $8.8 billion, replacing Qatar, which is currently in third with $4 billion. The kingdom is currently the second-largest global issuer behind Malaysia at $51.6 billion, after the government made moves to support Islamic finance.
“The GCC market crossed $19 billion in issuance as at July 2012, about the same as for all of 2011. Of that, infrastructure represented 30 per cent, compared with just seven per cent the previous year, said S&P credit analyst Karim Nassif. “The reasons for the surge are low yields, relatively high liquidity, large capital expenditure needs, and strong investor appetite,” he said at a media roundtable on Monday.
In the GCC, the UAE has become the second market for sukuk in the year to July with $5.3 billion. Saudi Arabia now leads the GCC ranks with $8.8 billion, replacing Qatar, which is currently in third with $4 billion. The kingdom is currently the second-largest global issuer behind Malaysia at $51.6 billion, after the government made moves to support Islamic finance.
“The GCC market crossed $19 billion in issuance as at July 2012, about the same as for all of 2011. Of that, infrastructure represented 30 per cent, compared with just seven per cent the previous year, said S&P credit analyst Karim Nassif. “The reasons for the surge are low yields, relatively high liquidity, large capital expenditure needs, and strong investor appetite,” he said at a media roundtable on Monday.
France to accept Qatari millions for troubled suburbs | Reuters
France's Socialist government will let gas-rich Qatar invest millions of euros to foster business creation in depressed suburbs, a move critics say is an admission of defeat and grants far too much influence to the Gulf state.
Plans for a 50 million euro fund to stimulate economic activity in urban suburbs proved divisive when they were first floated last year, prompting former president Nicolas Sarkozy to put them on hold until after the May election.
Now President Francois Hollande's government, under pressure to create jobs in suburbs where unemployment sometimes exceeds 40 percent, plans to unblock the funds thanks to a compromise it hopes will soothe concerns from both left- and right-wing critics.
Plans for a 50 million euro fund to stimulate economic activity in urban suburbs proved divisive when they were first floated last year, prompting former president Nicolas Sarkozy to put them on hold until after the May election.
Now President Francois Hollande's government, under pressure to create jobs in suburbs where unemployment sometimes exceeds 40 percent, plans to unblock the funds thanks to a compromise it hopes will soothe concerns from both left- and right-wing critics.
MARKET REPORT: Qatar's mega-rich investors shop for Sainsbury deal | This is Money
Mega-rich Qatari investors have been creating quite a stir with their aggressive stakebuilding of mining giant Xstrata during the Glencore International bid saga, but their activity in that controversial situation could soon pale into insignificance.
Growing speculation suggests that the Arabs want to clear up the longstanding major 26 per cent shareholding in J Sainsbury once and for all and have appointed a team of advisors to do so.
Shares of the UK’s third biggest supermarket rose a further 2.9p to 347.8p to close within a fag paper of the 52-week peak amid red hot gossip that the Qataris, along with financial adviser Lazards, bankers Citibank and lawyer Allen & Overy, are currently talking turkey with Sainsbury family interests, who sit on around 8 per cent of the equity. If successful, the talks could lead to an agreed £9billion-plus or £5 a share cash offer.
Growing speculation suggests that the Arabs want to clear up the longstanding major 26 per cent shareholding in J Sainsbury once and for all and have appointed a team of advisors to do so.
Shares of the UK’s third biggest supermarket rose a further 2.9p to 347.8p to close within a fag paper of the 52-week peak amid red hot gossip that the Qataris, along with financial adviser Lazards, bankers Citibank and lawyer Allen & Overy, are currently talking turkey with Sainsbury family interests, who sit on around 8 per cent of the equity. If successful, the talks could lead to an agreed £9billion-plus or £5 a share cash offer.