#GCC and #MiddleEast Finance News: 18 Dec 2012

Tuesday, 18 December 2012

Egypt's fate in tourism and foreign investments - The National

The plight of restaurant workers in Sharm El Sheikh reflects the larger crisis of the economic stagnation that looms over Egypt, nearly two years after it fuelled a revolution against Hosni Mubarak.
Peter Macdiarmid / Getty Images

As protesters continue to flock to Tahrir Square in Cairo, Egypt's political establishment is urged to focus on addressing the economic grievances that fuelled the Arab Spring.

"We neglect the idea that those people rose up because there is a lack of development, and there are no jobs, or even means to create opportunities for young people," said Mohamed El Orabi, who was briefly the country's foreign minister last summer.

The country's opposition has called for renewed protests in Cairo and elsewhere, prolonging a crisis that flared up at the beginning of the month.

Industrial units to grow as UAE's construction sector matures - The National

The total number of factories and warehouses in the UAE is set to increase markedly in the next five years as new mega projects come on stream and the sector expands rapidly.

A report by the Abu Dhabi-based think tank Truth Economic Consultancy predicts that the number of industrial units in the country is set to expand from 4,960 at the end of 2010 to 7,142 by 2017.

The report, supported by the factory and warehouse provider Dubai Industrial City, found that the number of units in the country rose 63 per cent between 2004 and 2010, equating to an annual increase of 8.5 per cent. In 2004, total industrial stock in the country numbered 3,036 units.

Mena volatility makes for attractive opportunities - The National

Marino Valensise is chief investment officer of Baring Asset Management, the global investment institution. Based at BAM's London HQ, he has found himself a frequent visitor to Dubai, where the firm has based its growing Middle East business in the Dubai International Financial Centre.

The Top 5 Oil & Gas Plays for 2012

2012 has been a stellar year for oil and gas. From East Africa to North America, new technology, major new discoveries, an unparalleled appetite for exploration and a metamorphosing perception of risk have changed the playing field.

We’re looking at potential rather than existing production, and here are our Top 5 picks for this year:

Qatar To Invest $390m In Nigeria’s Transport Sector - Aganga | Leadership Newspapers

Qatar, a tiny Middle east country bordering the Persian Gulf and Saudi Arabia, has expressed interest to invest 390 million dollars in Nigeria’s transport sector in 2013.

Mr Olusegun Aganga, the Minister of Trade and Investment, who disclosed this on Tuesday in Abuja, said the two countries had concluded arrangements to sign a memorandum of understanding (MoU) on the new investment.

He said that the move would create thousands of employment for the nation’s teeming youths.

PRAGMATIC CAPITALISM – Saxo Bank’s 10 Outrageous Predictions for 2013

This has become an annual thing from Saxo Bank. These predictions are always a little out there, but they’re thought provoking if nothing else. Via PR Newswire:

1. DAX plunges 33 percent to 5000
China’s economic slowdown continues, putting a halt to Germany’s industrial expansion. This causes large price declines in industrial stocks and low consumer confidence. Approval ratings for Angela Merkel plunge ahead of the German election, and in a weak economy combined with political uncertainty as Germany moves closer to signing up for further EU debt mutualisation, the DAX stock market index declines to 5,000, down 33 percent for the year.

2. Nationalisation of major Japanese electronics companies
Japan’s electronics industry, once the glory of the country, enters a terminal phase after being outmatched by South Korea. With combined annual losses of USD 30 billion for Sharp, Panasonic and Sony alone, creditworthiness deteriorates greatly and the Japanese government nationalises key industry players, similar to the US government’s bailout of its automobile industry.

Exclusive - CDC, Abu Dhabi build jumbo consortium for Total's TIGF | Reuters

French state bank Caisse des Depots (CDC) has teamed up with Abu Dhabi investment fund ADIA ADIAIN.UL to form a powerful consortium to bid for Total's (TOTF.PA) TIGF gas network business, sources said.

The move increases pressure on rival contenders for TIGF, which sources say is worth 2.5 billion euros (1.98 billion pounds), as a late-January deadline for final bids approaches, people familiar with the situation told Reuters.

Electricite de France (EDF.PA) - through its nuclear fund - and Spanish utility Enagas (ENAG.MC) are also bidding for the gas network and storage business based in southwest France.

Illicit flows: the biggest losers | beyondbrics

Dodgy money is once again leaving emerging markets in large quantities: illicit flows out of 71 developing economies were worth $859bn in 2010, up from $776bn a year earlier. The latest figures is only slightly less than the all time high of $871bn recorded in 2008.

That is the conclusion of a report published this week by Global Financial Integrity and funded by the Ford Foundation

Illicit flows are the proceeds of tax evasion, crime and corruption. They are large in themselves and can add up to eye-watering figures over the long term. As beyondbrics reported in July, a study by the Tax Justice Network has estimated that since the 1970s wealthy individuals from low and middle income countries had accumulated between $7.3tn and $9.3tn in unrecorded offshore wealth, depriving governments and citizens of much-needed resources.

MIDEAST STOCKS-Saudi snaps pre-budget rally; Egypt highest since political crisis | Reuters

Saudi Arabia's bourse snapped a five-session winning streak on Tuesday as investors booked gains in petrochemical and insurance stocks, while most other regional markets rose.

The kingdom's index slipped 0.2 percent, easing from Monday's five-week high. Saudi Arabia's index rallied in recent sessions as bargain hunters lifted the market from an 11-month low hit in late November.

Expectations for increased spending that could be announced in the Saudi budget for 2013 during coming weeks have helped to spur buying.

Ma'aden signs landmark SAR9 billion Shariah compliant syndicated revolving credit facility - bi-me.com

Saudi Arabian Mining Company (“Ma'aden”), Saudi Arabia’s leading mining company, signed a landmark SAR 9 billion Syndicated Revolving Facility today in Riyadh.

This is the largest SAR-denominated revolving credit facility, the largest single-tranche syndicated corporate loan financing, and the second-largest syndicated SAR corporate loan financing ever concluded in Saudi Arabia.

The company was originally exploring a facility size of up to SAR 7 billion, but following an overwhelming response by the bank market, the management decided to upsize the facility to SAR 9 billion to accommodate the demand from the banks and also to further increase Ma'aden's financing flexibility.

ANALYSIS-Growing Saudi diesel output threatens Asian glut | Reuters

A huge increase in Saudi Arabia's capacity to produce cleaner diesel will reduce its reliance on fuel imports from next year, forcing current suppliers of the fuel to find new buyers in an over-supplied Asian market.

The majority of new refineries and upgrade projects in the Middle East are designed to produce ultra-low sulphur diesel that meets European environmental standards, so they can export some of it to Europe or Asia.

The multi-billion dollar investments are also likely to transform fuel trade flows in the Gulf as the extra capacity will allow OPEC heavyweight Saudi Arabia to reduce its diesel imports and even become a net exporter in winter when its own fuel needs are lower.

MENA stock markets close - December 18, 2012

Exchange

Status

Index

Change

TASI (Saudi Stock Market)

6858.24

-0.19%

DFM (Dubai Financial Market)

1589.48

-0.13%

ADX (Abudhabi Securities Exchange)

2611.35

0.02%

KSE (Kuwait Stock Exchange)

5985.44

0.49%

BSE (Bahrain Stock Exchange)

1048.73

0.24%

MSM (Muscat Securities Market)

5672.93

0.50%

QE (Qatar Exchange)

8350.74

0.18%

LSE (Beirut Stock Exchange)

1165.46

0.57%

EGX 30 (Egypt Exchange)

5320.95

0.61%

ASE (Amman Stock Exchange)

1930.53

0.18%

TUNINDEX (Tunisia Stock Exchange)

4585.02

-0.12%

CB (Casablanca Stock Exchange)

9637.44

-0.54%

PSE (Palestine Securities Exchange)

462.41

0.66%

STOCKS NEWS MIDEAST-Egypt hits 4-wk high; Saudi rally stalls - Yahoo! News Maktoob

Egypt's bourse recoups early-session declines as buying from Arab investors helps lift the bourse to a four-week
closing high.
Cairo's index climbs 0.6 percent to 5,320 points, its highest close since Nov. 22. It is up 47 percent in 2012.
Palm Hills Development rallies 7.3 percent and is the most traded stock on the market.
Large-caps are mixed, with Orascom Construction Industries slipping 0.8 percent and Telecom Egypt down
0.8 percent.

Habtoor Group scraps planned $1.6bn - IPO - IPO - ArabianBusiness.com

Khalaf Al Habtoor.

Al Habtoor Group, which had planned to list next year in what would have been one of the largest initial public offerings (IPOs) in the UAE’s recent history, has decided to postpone the move.
“After a thorough evaluation I have decided to postpone the IPO,” chairman Khalaf Al Habtoor said in a statement.
“It is a moral issue not taking the group public at this time. I will continue to focus on best practice and growing the company in a sustainable way.”

Saudi Arabia Enlists Boeing in Push to Create New Jobs - Bloomberg

Yazid al-Shammari has ambitions to land a job at Saudi Basic Industries Corp. (SABIC) when he finishes a two-year vocational training course. Asked what he expects as a starting salary, he names a figure that’s many times what foreign workers doing similar jobs earn now.
“I want to earn 10,000 riyals ($2,700) a month with my diploma,” the 21-year-old said, as he attended lessons with a crowd of fellow students at the Higher Institute for Plastics Fabrications in Riyadh. “The training will help me get a job where I want.”

Dan White: The economic return of Iceland has proved that the joke was on us - Irish, Business - Independent.ie

WAY back in the autumn of 2008, the joke in financial circles was that the only difference between Ireland and Iceland was a letter and six months. Now, with the Icelandic banks preparing to issue foreign currency bonds once again, it turns out that the joke was on us.

Remember when the Icelandics did the unthinkable and, unlike Ireland, told bank creditors to take a hike? They also imposed capital controls and allowed the value of their currency to fall – the Icelandic krona has lost almost half of its value against the euro over the past five years.

The "experts" queued up to assure us that these latter-day Vikings would be severely punished for their impertinence. While no one forecast that a hole would open up in the North Atlantic and swallow Iceland whole, some of the predictions came pretty darned close.

INTERVIEW-Saudi's Naimi says global oil supply plentiful, demand good - Yahoo! News Maktoob

Global oil supplies are plentiful and demand is good, while buyers and sellers are happy with current prices, top exporter Saudi Arabia's oil minister Ali Al-Naimi said on Tuesday.
"You know my desire is that people leave the market alone," Naimi told Reuters in an interview in Seoul. "You know why? Because everybody now is happy with where the prices are. Nobody is complaining about high prices or low prices." "They are no longer sky rocketing or falling down. So I will really leave the market alone."
The oil minister had identified $100 a barrel as a suitable price earlier in the year. Brent crude is currently
trading above $108 per barrel.

STOCKS NEWS MIDEAST-Profit-taking caps gains in UAE; Qatar ticks up - Yahoo! News Maktoob

Slight profit-taking weighs on bourses in the UAE, although some small-caps in Dubai respond well as they are
targeted by retail investors.
Mortgage lender Tamweel and National Central Cooling (Tabreed) climb 4.4 and 3.4 percent respectively. Both firms are often the target of retail traders.
Dubai's index eases 0.07 percent to 1,590 points, but is still up 17.5 percent year-to-date.
Abu Dhabi's benchmark slips 0.1 percent to 2,608 points, trimming 2012 gains to 8.6 percent. Dana Gas
and Abu Dhabi National Energy decline 2.2 and 3 percent respectively.

Sasol Betting Big on Gas-to-Liquid Plant in U.S. - NYTimes.com

Oryx

The Oryx natural gas processing plant in Qatar, where Sasol is converting natural gas to diesel fuel.

The compact assembly of towers, tubes and tanks that make up the Oryx natural gas processing plant is almost lost in a vast petrochemical complex that rises here like a hazy mirage from a vast ocean of sand.

But what is occurring at Oryx is a particular kind of alchemy that has tantalized scientists for nearly a century with prospects of transforming the energy landscape. Sasol, a chemical and synthetic fuels company based in South Africa, is converting natural gas to diesel fuel using a variation of a technology developed by German scientists in the 1920s.

BBC News - Gulf states face hard economic truth about subsidies

The security and stability of the six-member states of the Gulf Co-operation Council (GCC) rests on a basic assumption.

Their governments, run by royal families, have a social contract with the people that in its simplest terms effectively says: "In return for your acquiescence we will provide health, education, water, energy and other services virtually free."

But what happens if the governments are no longer able to fulfil their side of the contract?

Saudi Electricity Co's Islamic debt sparkles - The National

Saudi Electricity Company's Islamic debt has returned 50 per cent more than global peers since its debut almost nine months ago, boosted by the scarcity of corporate-bond investments in the region's biggest economy.

The state-controlled utility's dollar-denominated 2022 notes have handed investors 10 per cent since their sale at the end of March, according to data compiled by Bloomberg.

The Bank of America Merrill Lynch Global Utility Index returned 6.8 per cent over the same period.

Dubai stock investors eye dividend rise - The National

Dubai's shares rose yesterday as investors increased holdings in companies amid expectations of increased dividend payouts in the new year.

Emaar Properties, the developer behind the Burj Khalifa, gained 1.6 per cent to Dh3.71. Aramex, the region's biggest courier company, advanced 2.5 per cent to Dh2.02. The Dubai Financial Market General Index gained 0.9 per cent to 1591.54 points.

"The next catalyst will be the fourth quarter results," said Haissam Arabi, the chief executive at Gulfmena Investments in Dubai.

Egypt debt costs reflect political woe - The National

The cost of insuring Egyptian sovereign debt against default rose more than anywhere else in the world in the past month, indicating investors have little faith in president Mohammed Morsi's prospects of restoring stability.

Egypt's credit default swaps increased 79 basis points to 486 during the biggest and most violent clashes since Mr Morsi was elected into office, with protesters threatening to boycott the draft constitution.

"It's definitely not a good sign," said Wafik Dawood, the head of institutional sales at Mega Investments Securities based in Cairo. "The rise reflects the lack of confidence in Egypt's economy from international institutions."

Global network fuels UAE's nuclear ambitions - The National

Yesterday's agreement between the UAE and Russia rounds off an initial flurry of diplomatic activity aimed at securing nuclear fuel supplies for the Emirates' ambitious programme for alternative sources of energy.

The agreement underlines the global network of countries and corporations that will be needed if the UAE is to realise the first phase of these ambitions within the five-year timeline laid out by its leadership.

In August, the Emirates Nuclear Energy Corporation (Enec), which will own the finished reactors, awarded uranium supply contracts worth US$3 billion (Dh11.01bn) for 15 years' worth of nuclear fuel, or about 12,000 tonnes of uranium, to British, Canadian, Russian, French and United States companies.

Dubai free zone to focus on start-ups - The National

Dubai Internet City (DIC) is to focus on nurturing and attracting local start ups for future growth instead of multinational companies.

"Free zones in the last seven years focused on building the infrastructure. Now we have the buildings, the multinationals, so it is time to focus on the SMEs [small and medium-sized entreprenurs] to build the industry," said Malek Al Malek, the managing director at DIC and Dubai Outsource Zone.

"The time we spend to make sure entrepreneurs are guided and become sustainable, is the most crucial part now." This year, Facebook and LinkedIn joined the likes of HP and IBM to open up offices in DIC.

Times of Oman | Al Madina-led JV to form $50m SME fund

A joint venture between Al Madina Financial and Investment Services and Malaysia's ACA Amanie Al Madina ACA Amanie is planning to form a $50 million Sharia-compliant small and medium enterprise (SME) fund, as part of a major initiative to develop the market for Islamic finance. An initial memorandum of understanding (MoU) was signed between Al Madina Financial and Investment Services and ACA Amanie, which is a joint venture between Korea Finance Corporation and Malaysia's Amanie Advisors.

The fund will provide seed capital for small and medium sized firms in Oman, which use Korean technology. The fund is expected to be operational in the first quarter of next year. "It is a kind of a government-to-government fund. The objective of this fund is to promote Korean technology (in other countries)," Khalid Ali Saif Al Yahmadi, Chief Investment Officer of Al Madina Investment, told Times of Oman.

GAIL blocks LNG stake sale deal to Qatar Petroleum - The Times of India

State-run gas utility GAIL has blocked the Asian Development Bank's (ADB) bid to sell its stake in Petronet LNG Ltd to Qatar Petroleum Corporation, provoking Qatari energy minister Mohammed bin Saleh Al-Sada to seek petroleum minister M Veerappa Moily's intervention.

"QPI (Qatar Petroleum) and ADB, with PLL support, have engaged in preliminary evaluator discussions. I have personally endorsed QPI to move forward as it will be a milestone for strengthening mutual cooperation between our countries. In light of GAIL's stance, there could be a possibility that ADB will not be able to proceed further in selling its shares to QPI," Al-Sada wrote to Moily.

The bone of contention is ADB's 5.2% stake in India's biggest importer of liquid gas in ships. Petronet is registered as a private firm but is half owned by four state-run oil firms of IOC, ONGC, BPCL and GAIL. If any of these promoters raise their holding, Petronet would turn into a state firm in contravention of the basis for going public in May, 2004, and would require approval for majority shareholders to change the status.

Saudi Arabia’s oil policy: the challenges ahead

Saudi Arabia’s oil policy is facing internal and external challenges which could have a huge impact on its statute as a leader in the global oil market. Firstly, the kingdom is facing a significant shift in oil demand from the west (America and Europe) to east (Asia). Secondly, Saudi Arabia’s dominant role in the world oil supply could be altered by (a) large new unconventional oil reserves in North America. (b) Saudi Arabia’s place in the world oil market is threatened by unrestrained domestic fuel consumption. And, (c) increased Iraqi production with significant spare capacity could challenge Saudi Arabia’s dominance in OPEC, which we have seen small part of it in the last meeting of OPEC.