#GCC and #MiddleEast Finance News: 9 Oct 2013

Wednesday 9 October 2013

Dubai headed for another slump within 18mths says Abu Dhabi chief - Property - ArabianBusiness.com

Dubai headed for another slump within 18mths says Abu Dhabi chief - Property - ArabianBusiness.com:

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The head of an Abu Dhabi real estate firm backed by the Mubadala Group has predicted Dubai’s property sector will hit another slump in 18 to 24 months, saying the change was inevitable in an emerging market.
Speaking on a debate panel on the first day of Cityscape Global, Faris Mansour, director of Mubadala Pramerica Real Estate Investors, which is 50:50 joint venture between the Abu Dhabi investment vehicle and Pramerica Real Estate Investors, said “there’s no reason why as an emerging market we should expect there to be 10-year real estate cycles”.
He said emerging markets, moved in short, sharp cycles, reflecting the movement of capital, as proven over the years around the world.
“We should expect that to happen here as well,” he said.
“And that’s not to say it will fall necessarily as it did before. But it will fall, it will correct and this is something we should all expect to happen and I expect it to happen in the next 18 to 24 months… as capital becomes more expensive globally.”"

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Gazprom to Supply Gas To Ukrainian Tycoon | Business | The Moscow Times

Gazprom to Supply Gas To Ukrainian Tycoon | Business | The Moscow Times:

"Gazprom has agreed to supply gas at a discount to a Ukrainian tycoon, whose past role in gas deals ended after a price row in 2009, a company source said Wednesday, as concerns mount over Ukraine's ability to foot its import bill.

Dmytro Firtash's Ostchem holding will purchase 5 billion cubic meters of gas to put into underground storage, at a 30 to 36 percent discount to the price Ukraine pays for Russian gas, the source added, confirming newspaper reports.

Gazprom CEO Alexei Miller has said the transit of Russian gas exports to Europe is at risk again due to low levels of gas in underground storage in Ukraine ahead of winter, when cold weather pushes up demand.

Ostchem declined to comment. Gazprom had no official comment."

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Envoys Near Deal to Free Ex-Premier of Ukraine - NYTimes.com

Envoys Near Deal to Free Ex-Premier of Ukraine - NYTimes.com:

"European diplomats appear close to negotiating the release of Yulia V. Tymoshenko, the former prime minister of Ukraine, whose imprisonment by the government under her political rival has strained ties with the West and threatened to derail a trade agreement with Europe scheduled for signing in November.

Under the agreement, Ms. Tymoshenko would be pardoned by the rival, President Viktor F. Yanukovich, in exchange for a commitment from Ms. Tymoshenko to leave the country, at least initially by traveling to Germany for medical treatment.

European envoys, led by a former president of the European Parliament, Pat Cox, and a former president of Poland, Aleksander Kwasniewski, made the offer to both the government and Ms. Tymoshenko, her lawyer and political ally, Sergey Vlasenko, said."

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Gap between rich and poor in Russia among the world's biggest — RT Business

Gap between rich and poor in Russia among the world's biggest — RT Business:

"Wealth inequality in Russia is one of the highest in the world. A report by Credit Suisse says 35% of Russian household wealth controlled by just 110 billionaires. Worldwide, billionaires collectively account for 1 to 2 percent of the total wealth.

“Russia has the highest level of wealth inequality in the world, apart from small Caribbean nations with resident billionaires,” Credit Suisse’s annual global wealth report says.

According to the study there’s one billionaire for every $11 billion in household wealth in Russia. This compares to a 1 billionaire to $170 billion in the rest of the world.

An earlier report by Forbes showed the number of billionaires in Russia has increased 13 fold since the turn of the century – from 8 in 2000 to 110 people in 2013."

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Central Bank Change Currency Policy | Business | The Moscow Times

Abu Dhabi's NBAD Plans Asia Push For Debt Markets Business » Gulf Business

Abu Dhabi's NBAD Plans Asia Push For Debt Markets Business » Gulf Business:

"National Bank of Abu Dhabi plans to expand its debt capital markets (DCM) business into Asia to help companies secure funding from the Middle East & North Africa (MENA), a senior bank official said on Tuesday.

NBAD, the largest lender by market capitalisation in the United Arab Emirates and the most active in debt markets, will hire staff to drive the Asia business and be based in Singapore, which will be the bank’s wholesale banking hub for the region.

“We have a large number of clients in Asia who are looking for liquidity from the MENA region and we have access to investors in MENA,” Mark Yassin, senior general manager, global banking told Reuters at a conference in Abu Dhabi.

The lender is positioning itself to be a global bank by building international franchises and hubs in some of the fastest growing economies under its new group CEO Alex Thursby."

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MIDEAST STOCKS-Gulf markets little changed; Egypt unworried by U.S. aid cut | Reuters

MIDEAST STOCKS-Gulf markets little changed; Egypt unworried by U.S. aid cut | Reuters:

"* Turnover modest as long Eid holidays approach

* Saudi Fransi, Almarai sink after earnings

* Bank Muscat fails to rise on strong profit

* Sembcorp Salalah falls back on second day of trade

* Egypt rises despite expected U.S. military aid cut

By Andrew Torchia

DUBAI, Oct 9 (Reuters) - Gulf stock markets mostly edged up on Wednesday but stayed in small ranges with modest turnover as the crisis over the U.S. debt ceiling made it more risky to hold shares over the week-long Eid holidays that will start on Sunday.

Some mediocre third-quarter earnings also deterred buying. For example, Banque Saudi Fransi posted a 3.5 percent rise in net profit to 685 million riyals ($182.7 million), but missed analysts' average forecast of 758.2 million riyals. The stock dropped 2.5 percent.

Saudi Arabian dairy producer Almarai, which dropped 1.9 percent on Tuesday after its profit missed analysts' forecasts by a small margin, fell a further 1.9 percent to 52.00 riyals on Wednesday. That brought it near technical support at 51.67 riyals, the August low."

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Asia: learning the lessons of 1997 | beyondbrics

Asia: learning the lessons of 1997 | beyondbrics:

"There is much worry among emerging market investors – and policy makers – that it is 1997 all over again. EM currencies have plunged since May. Investors have piled capital into these countries since 2008 and some now fear capital will rush the other way.

Is it 1997 redux? Not in East Asia, according to the World Bank’s East Asia And Pacific Economic Update: most economies here “are in a relatively strong position to face this shock, with significantly lower vulnerabilities than in the run-up to the 1997–98 Asian crises”.

Most notably, the exchange regimes are more flexible. A fixed exchange rate in 1997 meant East Asian central bankers raised interest rates to keep exchange rates pegged. This led to a vicious circle of asset sales, defaults and further pressure to raise rates. Nowadays, Bank Indonesia can let the exchange rate move."

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Warsaw exchange: hello China | beyondbrics

Warsaw exchange: hello China | beyondbrics:

"The Warsaw Stock Exchange has long been hunting for new listings far beyond Poland’s borders, but if it looks much further than its latest new IPO it will fall into the Pacific Ocean.

The exchange’s newest listing comes from China – Peixin International Group, a manufacturer of paper products like sanitary napkins and diapers.

The Netherlands-registered company floated 16m zlotys ($5m) worth of shares on the WSE’s main market, which will be the only venue where the company’s shares are traded. In trading Wednesday, Peixin was one of the bourse’s strongest performers, soaring by 20.25 per cent from its opening price of 16 zlotys a share."

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Gradual recovery in Eastern Europe: bank

Gradual recovery in Eastern Europe: bank:

"SEB: Eastern European Outlook: Gradual recovery - major economies will diverge

This autumn nearly all countries in Eastern (including Central) Europe have begun an economic recovery after growth bottomed out during the second quarter of 2013, consistent with the pattern in Western Europe. Their recovery over the next two years will be modest. Latvia and Lithuania will continue to grow fastest in the region and in the European Union. The three largest economies will diverge: with relatively strong fundamentals, Poland will regain its starring role after an unexpectedly deep growth slump; Russia, increasingly in need of reforms, has downshifted to slower growth than it enjoyed before the global economic crisis; and a pressed Ukraine will devalue its way out of an acute crisis, writes SEB in the latest issue of its twice-yearly Eastern European Outlook."

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UPDATE 2-Ukraine's Naftogaz pays blocked bond coupon, averts damaging default | Reuters

UPDATE 2-Ukraine's Naftogaz pays blocked bond coupon, averts damaging default | Reuters:

"* $21.7 mln frozen by London court in suit by unnamed party

* Non-payment could have resulted in debt default

* Naftogaz panic hits Ukraine amid trade threats from Russia

By Natalia Zinets

KIEV, Oct 9 (Reuters) - Ukraine's state oil firm Naftogaz has paid a delayed $21.7 million coupon to bondholders after its first payment was frozen by a London court, the finance ministry said on Wednesday, narrowly averting a damaging debt default.

The company, whose bond was fully guaranteed by the Ukrainian government as part of an older 2009 debt restructuring, had until Oct. 10 to make the payment originally due on Sept. 30 as part of a $75.8 million bond coupon.

Failure to pay within the 10-day grace period could have triggered so-called cross default, not only on Naftogaz's entire outstanding debt but eventually on billions of dollars of Ukrainian sovereign bonds, in what would have been a major blow for a country that is already facing deep financial stress."

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Egypt’s Misguided Liberals | tks @REBELECONOMY

Egypt’s Misguided Liberals | REBEL ECONOMY:

"Questions were already being raised about Egypt’s new liberals and whether they really were as democratic as they claimed to be.
But, as Sharif Abdel Kouddous wrote in the Nation recently, “the turning point came on August 14, when the military and security forces brutally cleared the two mass sit-ins in Cairo that formed the epicenter of support for the ousted president”.
For critics of Egypt’s liberals, the killings of hundreds of people confirmed that this collection of non-Islamist groups were out for blood and their sole objective was to suppress the Muslim Brotherhood and banish them from the political sphere."

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RAK and Sharjah lead Northern Emirates property revival - Business Intelligence Middle East

RAK and Sharjah lead Northern Emirates property revival - Business Intelligence Middle East - bi-me.com - News, analysis, reports:

"The property markets in the Northern Emirates have performed positively over the last 12 months, with Ras Al Khamiah and Sharjah leading the way, according to a special Cityscape Global, Northern Emirates report from leading UAE property management company, Asteco.

Residential rental rates in the Northern Emirates were directly affected by the property downturn in Dubai and experienced overall average declines of 33% compared with Q3 2008. However correlating to Dubai’s continuing upturn rental rates have now recovered by 21% on average since last year.

“The revival in property rates is particularly apparent in Ras Al Khaimah and Sharjah with both emirates pro-actively fuelling the economy and consequently their respective real estate markets,” said John Stevens, Managing Director, Asteco Property management."

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Defence groups fear UAE investment penalties - FT.com

Defence groups fear UAE investment penalties - FT.com:

"Defence company executives fear they have exposed themselves to millions of dollars of penalties in the United Arab Emirates after signing investment agreements that may now prove difficult to fulfil.
Early in September executives of US and European defence companies and officials of the Gulf state’s offset agency held secret emergency talks in London to tackle the issue. Despite having resolved past problems with a quietly arranged gentleman’s agreement, this time such an outcome is less assured.

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Citi, Qatar bank hold up Abu Dhabi firm's $4.5 bln debt talks - sources | Reuters

Citi, Qatar bank hold up Abu Dhabi firm's $4.5 bln debt talks - sources | Reuters:

"* Al Jaber debt talks ongoing for nearly three years

* Citi planning to sell loan exposure at discount - source

* Conglomerate in talks with banks holding up talks - source

By Stanley Carvalho and Regan Doherty

ABU DHABI, Oct 9 (Reuters) - Citigroup Inc and International Bank of Qatar (IBQ) are holding up negotiations to restructure $4.5 billion in debt of Abu Dhabi conglomerate Al Jaber Group, further complicating drawn-out talks, three sources familiar with the matter said.

Al Jaber is one of the most prominent private sector firms in Abu Dhabi, which has generally suffered fewer corporate problems than neighbouring Dubai since the financial crisis.

With operations in construction, aviation and retail, Al Jaber set up a five-bank creditor committee in 2011 to negotiate a restructuring after it became difficult for the firm to service its debt on maturity."

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REFILE-Qatar's streamlined QInvest says to focus on three key areas | Reuters

REFILE-Qatar's streamlined QInvest says to focus on three key areas | Reuters:

"* QInvest to concentrate on three core lines - CEO

* Seeks to provide access to Qatar capital

* No urgent need to do acquisitions

* To work more closely with shareholder Qatar Islamic Bank

* Streamlining discontinues some business lines

By Dinesh Nair

DOHA, Oct 9 (Reuters) - Qatar's QInvest will focus on three core business lines - investment banking, asset management and investing its own capital - while working more closely with top shareholder Qatar Islamic Bank, the firm's chief executive said.

Tamim Al-Kawari took over last year after working with Goldman Sachs for five years, most recently as Goldman's local managing director and chief executive for Qatar.

"My experience at Goldman was invaluable and I have brought that with me to QInvest. We are sticking to our core competencies and continue to focus on providing innovative Islamic finance solutions," the Qatari national told Reuters at the firm's headquarters in Doha."

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Bahrain's Al Salam Bank to issue new shares as part of BMI merger | Reuters

Bahrain's Al Salam Bank to issue new shares as part of BMI merger | Reuters:

"Shareholders in Bahrain's Al Salam Bank have approved a plan to raise the bank's capital by 100 million dinars ($265 million) by issuing new shares as part of a merger with fellow Bahraini lender BMI Bank, Al Salam said on Wednesday.

Shareholders also approved the acquisition of all of BMI's 58.5 million shares through a share swap in exchange for 643.8 million shares in Al Salam, it added.

The new shares would be offered to BMI shareholders at a rate of 11 for each BMI share to create the kingdom's fourth-largest commercial bank."

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Saudi Arabia: End Of Road For Illegals Eurasia Review

Saudi Arabia: End Of Road For Illegals Eurasia Review:

"The Saudi Arabian Labor Ministry announced on Tuesday that it has drawn up a plan along with the Interior Ministry to track down and punish illegal workers and their employers.

“We have formed inspection teams and given them the authority to conduct raids on firms employing undocumented workers,” said Abdullah bin Nasser Abuthnain, deputy labor minister for inspections and developing work atmosphere.

He said each team would have at least two qualified inspectors, adding that security officers would back them. Interior Ministry officers have been given the authority to arrest undocumented workers in the street, he added.

The minister’s statement comes ahead of the Nov. 3 deadline, when the six-month amnesty announced by Custodian of the Two Holy Mosques King Abdullah for expats to legalize their labor and residency status ends."

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Saudi Gazette - APICORP acquires 5.62% stake in TAQA

Saudi Gazette - APICORP acquires 5.62% stake in TAQA:

"THE Arab Petroleum Investments Corporation (APICORP), the multilateral development bank owned by the Organization of Arab Petroleum Exporting Countries (OAPEC), announced Tuesday that it has acquired a 5.62 percent equity stake in Saudi-based The Industrialization and Energy Services Company (TAQA) from Arabian Pipes Company (APC). The government of Saudi Arabia owns a 17 percent stake in APICORP.

APICORP is now the joint third largest shareholder in the company with over 11.2 million shares. A Closed Joint Stock Company established in 2003 as part of Saudi Arabia’s privatization strategy, TAQA is owned 45 percent by the Saudi Government, with the reminder owned by several institutional, private and industrial investors. "

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Fake Plastic Souks: Dubai Real Estate Boom Bubble Flashback

Fake Plastic Souks: Dubai Real Estate Boom Bubble Flashback:

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(Photo credit: Wikipedia)

"Ah, there you are! Come in! Come in! Have a seat. Fancy a Fanta? Teem? Mirinda? Sprite?"
"I'll have a water please."
"Sure. Masafi do you? Sorry about the bottle, it's one of those annoying flimsy new ones that's worse than a paper bag. There, see? You've got water all over yourself now. Those skinny lids don't fit too well, I know."
"That's fine, thanks. Look, it's about this new Shiny you're selling."
"Oh, yes. Shiny 2.0! It's brilliant. You can dare to dream of a fulfilment of your desert lifestyle as you tantalise your ultimate desires with an abundance of urban satisfaction.""

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Fake Plastic Souks: Dubai Real Estate Boom Bubble Flashback

Fake Plastic Souks: Dubai Real Estate Boom Bubble Flashback:

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(Photo credit: Wikipedia)

Ukraine speeds up winter sowing to profit from warm, dry spell - The Western Producer

Ukraine speeds up winter sowing to profit from warm, dry spell - The Western Producer:

"Ukrainian farms have speeded up winter grain sowing, taking advantage of a sudden spell of good weather, and have already sown 50 percent of the planned area, the agriculture ministry said on Tuesday.

Warm and dry weather set in at the weekend after a month of heavy rains across most of Ukraine which had made fields too wet for seeding machines and threatened the 2014 winter grain harvest.

Agricultural minister Mykola Prysyazhnyuk has said the wheat harvest could fall by seven million tonnes to 15 million tonnes next year and analysts say Ukraine’s exportable wheat surplus could be down to three million tonnes in 2014-15 from 9-10 million tonnes this season.

Weather forecasters say dry and warm weather could dominate most Ukrainian regions in the next 10 days, giving farmers the chance to complete the sowing."

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Evraz Sees European Steel Market Stalled Even as U.S. Recovers - Bloomberg

Evraz Sees European Steel Market Stalled Even as U.S. Recovers - Bloomberg:

"Evraz Plc (EVR), Russia’s largest steel producer by output, expects the European market to stall for at least two to three years even as U.S. demand recovers.
“Europe didn’t solve fundamental problems with its economy during the current crisis,” Pavel Tatyanin, its international business chief, said in an interview. “The U.S. deleveraged its companies, allowed the dollar to drop against major currencies, reduced labor costs and took measures to boost labor mobility.”
Evraz is cutting European operations, including the sale of its Czech Vitkovice Steel unit bought in 2005, while completing an expansion of its North American rail-manufacturing capacity. European steel demand declined 9 percent last year and may drop 3 percent this year, while North America grew 8 percent in 2012 and may gain 1.5 percent this year, according to Morgan Stanley. (MS)"

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▶ IMF: More upbeat but still cautious - YouTube

▶ IMF: More upbeat but still cautious - YouTube:

"The International Monetary Fund's global economic outlook might be somewhat upbeat, but its tone remains extremely cautious, says FT leader writer Ferdinando Giugliano.

"

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DIFC plans $4.1 billion expansion | The National

DIFC plans $4.1 billion expansion | The National:

"Dubai International Financial Centre (DIFC) announced plans on Tuesday for a Dh15 billion expansion, as the tax-free business zone looks to attract more global firms.

DIFC Properties, which oversees the property development of the DIFC zone, is looking for investors to develop about 10 million square feet of property through joint ventures, DIFC Properties’ chief executive Brett Schafer said in an interview.

“Of the total 25 million square feet of development, only 15 million has been completed so far,” said Mr Schafer.

“We are inviting proposals from top developers and investors to develop this expansion in joint venture with ourselves,” he added."

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DFSA warning on fraudulent emails | The National

DFSA warning on fraudulent emails | The National:

"The Dubai Financial Services Authority (DFSA) yesterday issued two warnings on scams in response to fraudulent emails purported to be from the Dubai International Financial Centre governor Abdullah Saleh, and from Hussain Al Qemzi, a member of the DIFC’s board.

The first scam email was sent from Gmail and zbavitu.net email addresses, purporting to originate from Mr Saleh.

The emails claim that the DIFC is looking to expand and relocate its business outside Dubai across a number of sectors. The emails offer to provide finance for any private sector projects outside the Arabian Gulf region, in the form of a five-year “renewable” loan with an annual interest rate of 3 per cent."

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Abu Dhabi Global Market to have its own judicial system, legislative infrastructure | GulfNews.com

Abu Dhabi Global Market to have its own judicial system, legislative infrastructure | GulfNews.com:

"Abu Dhabi Global Market (ADGM), the newly-created financial free zone in Abu Dhabi will have its own judicial system and legislative infrastructure under three independent ADGM authorities, its Chairman Ahmad Ali Mohamamad Al Sayegh said yesterday.
Speaking at an industry conference in the capital, Al Sayegh said there would be a registration bureau and a financial services regulation bureau, besides ADGM’s own court system.
“The formation of these authorities is currently underway. ADGM will include commodities trading, storage and transport, derivatives trading, custody, settlement, clearing, depository service, forex and wealth management,” Al Sayegh added."

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Dubai lists first new stock in four years, draws no trade | GulfNews.com

Dubai lists first new stock in four years, draws no trade | GulfNews.com:

"Dubai listed its first new stock in more than four years on Tuesday but the shares drew no trade, underlining the limits of the market’s recovery from its 2008 crash.
Bank of London and The Middle East (BLME), Britain’s largest stand-alone Islamic bank, was listed on Nasdaq Dubai, the smaller of the emirate’s two stock exchanges.
The bank said its choice of Dubai showed its commitment to expanding its business in the Middle East. Earlier this year, Dubai announced plans to become a top centre for Islamic finance.
But the stock did not trade on its first day, apparently because the size of the share float was modest and investors were not yet familiar with the bank. The Nasdaq Dubai website showed 100,000 shares in BLME offered at $2.20 (Dh8) each, below its price at listing of $2.61, but there were no takers."

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Bagfuls of Cash Show Iran Currency Squeeze Behind Nuclear Thaw - Bloomberg

Bagfuls of Cash Show Iran Currency Squeeze Behind Nuclear Thaw - Bloomberg:

"When Mohammad-Reza needed parts for his heater company in Iran last month, he carried a bagful of 500-euro notes on a plane to Dubai and paid his German supplier over coffee in a hotel lobby. Often, he says, he has to use even riskier channels.
Mohammad-Reza, who declined to give his surname for fear of reprisals, says he uses informal currency transfers called hawala to get around the sanctions that cut Iran off from the global banking system. “Everything’s based on mutual trust,” he said in an interview in his Tehran office, describing a widely used network of unofficial middle-men. “The currency shops in Tehran don’t give you a receipt, and it’s not clear when the supplier in Germany, the Czech Republic or South Korea will receive it. Sometimes money gets lost in transmission.”"

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