Global hot spots: Iraq, Ukraine & Dubai:
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Wednesday, 25 June 2014
MIDEAST STOCKS-Dubai bounces back as Arabtec halts freefall | Agricultural Commodities | Reuters
MIDEAST STOCKS-Dubai bounces back as Arabtec halts freefall | Agricultural Commodities | Reuters:
"Dubai's stock index rebounded strongly on Wednesday from a plunge in the last session as Arabtec, which continued to dominate trading, turned around and other stocks recovered from a string of margin calls.
The Dubai index jumped 6.1 percent in active trade with blue chip Emaar Properties, the top property developer, up 7.1 percent.
Shares in construction firm Arabtec, which had tumbled their 10 percent limit for three sessions in a row, rose 5.1 percent to 3.28 dirhams after the company's chairman pledged it would keep expanding, despite recent management turmoil."
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"Dubai's stock index rebounded strongly on Wednesday from a plunge in the last session as Arabtec, which continued to dominate trading, turned around and other stocks recovered from a string of margin calls.
The Dubai index jumped 6.1 percent in active trade with blue chip Emaar Properties, the top property developer, up 7.1 percent.
Shares in construction firm Arabtec, which had tumbled their 10 percent limit for three sessions in a row, rose 5.1 percent to 3.28 dirhams after the company's chairman pledged it would keep expanding, despite recent management turmoil."
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UK sukuk bond sale attracts £2bn in orders - FT.com
UK sukuk bond sale attracts £2bn in orders - FT.com:
"Britain has become the first western country to borrow money through the sale of Islamic bonds, attracting orders of £2bn for a £200m debt sale on Wednesday.
London’s five-year “sukuk” cannot pay interest to investors, which is forbidden under Sharia law, and will instead pay out profits based on the rental income from three London properties owned by the government.
The bond will pay out “profit” of 2.036 per cent, with bankers on the deal pricing it flat to the yield of the UK’s equivalent five-year “conventional” gilt, compared with initial indications of a slight spread above that rate."
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"Britain has become the first western country to borrow money through the sale of Islamic bonds, attracting orders of £2bn for a £200m debt sale on Wednesday.
London’s five-year “sukuk” cannot pay interest to investors, which is forbidden under Sharia law, and will instead pay out profits based on the rental income from three London properties owned by the government.
The bond will pay out “profit” of 2.036 per cent, with bankers on the deal pricing it flat to the yield of the UK’s equivalent five-year “conventional” gilt, compared with initial indications of a slight spread above that rate."
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Mideast SWFs To Boost Emerging Markets Exposure, Invesco Says - Middle East Real Time - WSJ
Mideast SWFs To Boost Emerging Markets Exposure, Invesco Says - Middle East Real Time - WSJ:
"Buoyed by oil prices above $100 a barrel and a growing confidence in the global economy, sovereign wealth funds in the Middle East expect to receive more funding this year, providing them with extra financial firepower to raise their investments into emerging markets and asset classes such as private equity and real estate, according to an Invesco study.
Latin America, Africa and China are likely to be the main beneficiaries of the continuing shift towards emerging markets by the world’s sovereign funds despite their historical preference for developed markets such as the United Kingdom, Invesco said in its survey of 52 sovereign investors who collectively manage $5.7 trillion in assets.
“Is it just looking for short term gain? We think no, this is strategic and structural. This is partly driven by the fact they [SWFs] were underweight in these asset classes that produce high yields. Interest rates are low so infrastructure and real estate represent a really good opportunity,” said Nick Tolchard, head of Invesco Middle East."
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"Buoyed by oil prices above $100 a barrel and a growing confidence in the global economy, sovereign wealth funds in the Middle East expect to receive more funding this year, providing them with extra financial firepower to raise their investments into emerging markets and asset classes such as private equity and real estate, according to an Invesco study.
Latin America, Africa and China are likely to be the main beneficiaries of the continuing shift towards emerging markets by the world’s sovereign funds despite their historical preference for developed markets such as the United Kingdom, Invesco said in its survey of 52 sovereign investors who collectively manage $5.7 trillion in assets.
“Is it just looking for short term gain? We think no, this is strategic and structural. This is partly driven by the fact they [SWFs] were underweight in these asset classes that produce high yields. Interest rates are low so infrastructure and real estate represent a really good opportunity,” said Nick Tolchard, head of Invesco Middle East."
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Dead cat bounce in Dubai Financial Market is an opportunity to sell not buy back into overvalued stocks « ArabianMoney
Dead cat bounce in Dubai Financial Market is an opportunity to sell not buy back into overvalued stocks « ArabianMoney:
"After its worst session for a couple of years yesterday the Dubai Financial Market rebounded by six per cent today. That’s a classic dead cat bounce from a sell-off. It’s an opportunity to sell and not a signal to dive back into overvalued stocks.
Investors only have to look ahead a week and see that Ramadan is coming to know the writing is on the wall for this rally. In order for stocks to keep moving higher there need to be more and more buyers. How likely is that during the Holy Month when most people have other matters on their minds?"
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"After its worst session for a couple of years yesterday the Dubai Financial Market rebounded by six per cent today. That’s a classic dead cat bounce from a sell-off. It’s an opportunity to sell and not a signal to dive back into overvalued stocks.
Investors only have to look ahead a week and see that Ramadan is coming to know the writing is on the wall for this rally. In order for stocks to keep moving higher there need to be more and more buyers. How likely is that during the Holy Month when most people have other matters on their minds?"
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Etihad confirms 49% equity stake in Alitalia - bi-me.com
Etihad confirms 49% equity stake in Alitalia - Business Intelligence Middle East - bi-me.com - News, analysis, reports:
"UAE. Etihad Airways has issued the following statement regarding its equity investment in Alitalia.
"Alitalia and Etihad Airways today confirmed that they have agreed the principal terms and conditions of a proposed transaction whereby Etihad Airways will acquire a 49 per cent equity stake in Alitalia.
The airlines will now move to finalise the transactional documents, that will include the agreed upon conditions, as soon as possible. The conclusion of the investment is subject to final regulatory approvals." "
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"UAE. Etihad Airways has issued the following statement regarding its equity investment in Alitalia.
"Alitalia and Etihad Airways today confirmed that they have agreed the principal terms and conditions of a proposed transaction whereby Etihad Airways will acquire a 49 per cent equity stake in Alitalia.
The airlines will now move to finalise the transactional documents, that will include the agreed upon conditions, as soon as possible. The conclusion of the investment is subject to final regulatory approvals." "
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Dubai's Nakheel says to repay $1.5 bln debt early | Reuters
Dubai's Nakheel says to repay $1.5 bln debt early | Reuters:
"Dubai property developer Nakheel will repay all its outstanding debt to banks by August this year, four years ahead of the schedule mandated by its restructuring plan, the state-run company's chairman said on Wednesday.
The repayments will total 5.54 billion dirhams ($1.5 billion), and will be funded from Nakheel's own resources rather than support from the Dubai government, Ali Rashid Lootah told a news conference.
In February, Nakheel said it had initiated early repayment of 2.35 billion dirhams of bank debt 18 months ahead of maturity in September 2015."
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"Dubai property developer Nakheel will repay all its outstanding debt to banks by August this year, four years ahead of the schedule mandated by its restructuring plan, the state-run company's chairman said on Wednesday.
The repayments will total 5.54 billion dirhams ($1.5 billion), and will be funded from Nakheel's own resources rather than support from the Dubai government, Ali Rashid Lootah told a news conference.
In February, Nakheel said it had initiated early repayment of 2.35 billion dirhams of bank debt 18 months ahead of maturity in September 2015."
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Dubai Stocks Break Rout Led by Emaar on Bets Selloff Overdone - Bloomberg
Dubai Stocks Break Rout Led by Emaar on Bets Selloff Overdone - Bloomberg:
"Dubai stocks ended a three-day slump that pushed the gauge into a bear market, led by Emaar Properties PJSC (EMAAR) and Dubai Investments PJSC, as investors saw buying opportunities after the rout.
The DFM General Index (DFMGI) rose 2.9 percent, the most since June 12, to 4,123.93 at 11:40 a.m. in the emirate. Emaar, the property developer with the highest weighting on the index, climbed 3.2 percent. Dubai Investments rose 5 percent. Arabtec Holding Co. (ARTC), the United Arab Emirates’ largest-listed builder that fueled a selloff amid top-level dismissals, dropped 1 percent after declining almost the maximum permitted in each of the previous three days.
“The correction was severe enough to create new opportunities,” Akber Naqvi, an executive director at Dubai-based Al Masah Capital Ltd., which manages $545 million, said by e-mail. “Some valuations are much more attractive and some entry points are more appealing.”"
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"Dubai stocks ended a three-day slump that pushed the gauge into a bear market, led by Emaar Properties PJSC (EMAAR) and Dubai Investments PJSC, as investors saw buying opportunities after the rout.
The DFM General Index (DFMGI) rose 2.9 percent, the most since June 12, to 4,123.93 at 11:40 a.m. in the emirate. Emaar, the property developer with the highest weighting on the index, climbed 3.2 percent. Dubai Investments rose 5 percent. Arabtec Holding Co. (ARTC), the United Arab Emirates’ largest-listed builder that fueled a selloff amid top-level dismissals, dropped 1 percent after declining almost the maximum permitted in each of the previous three days.
“The correction was severe enough to create new opportunities,” Akber Naqvi, an executive director at Dubai-based Al Masah Capital Ltd., which manages $545 million, said by e-mail. “Some valuations are much more attractive and some entry points are more appealing.”"
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BBC News - Abu Dhabi United Group financing Manchester homes
BBC News - Abu Dhabi United Group financing Manchester homes:
"Abu Dhabi United Group, which owns Manchester City football club, will invest in a plan by Manchester City Council to build new homes.
The council plans to build at least 830 new homes in the Ancoats area of the city and neighbouring New Islington.
The plan will need to raise £1bn in the next 10 years and may need further investors to build the homes."
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"Abu Dhabi United Group, which owns Manchester City football club, will invest in a plan by Manchester City Council to build new homes.
The council plans to build at least 830 new homes in the Ancoats area of the city and neighbouring New Islington.
The plan will need to raise £1bn in the next 10 years and may need further investors to build the homes."
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Dubai Financial Market faces pre-Ramadan rush to the exit so when will the bounce back come? « ArabianMoney
Dubai Financial Market faces pre-Ramadan rush to the exit so when will the bounce back come? « ArabianMoney:
"The Dubai Financial Market fell by eight per cent overnight and the 25 per cent correction since mid-May could now turn into a rout as traders rush to the exit before Ramadan and margin calls accelerate the movement to the downside. Bargain hunters are premature and likely to get seriously burned.
If history is any guide then a post-Ramadan rally is possible. But that will depend on what happens in global financial markets in the interim. They are very overvalued too and facing an oil price spike. Could it be July 2008 all over again when $147 oil brought on the global financial crisis and stocks were crucified?"
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"The Dubai Financial Market fell by eight per cent overnight and the 25 per cent correction since mid-May could now turn into a rout as traders rush to the exit before Ramadan and margin calls accelerate the movement to the downside. Bargain hunters are premature and likely to get seriously burned.
If history is any guide then a post-Ramadan rally is possible. But that will depend on what happens in global financial markets in the interim. They are very overvalued too and facing an oil price spike. Could it be July 2008 all over again when $147 oil brought on the global financial crisis and stocks were crucified?"
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The Real Reason Shell Halted Its Ukrainian Shale Operations
The Real Reason Shell Halted Its Ukrainian Shale Operations:
"Royal Dutch Shell has blamed air strikes by the government in Kiev against its own citizens in southern Ukraine as the reason it decided to declare a halt to its shale oil projects in the troubled region.
In reality, the truth may be closer to the fact that company is disappointed with the economic viability of what it once thought was a large shale deposit and is looking for a way out.
After a series of dramatic statements and the signing of a $410-million letter of intent, a veil of uncertainty is being drawn around the myth of Ukrainian shale."
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"Royal Dutch Shell has blamed air strikes by the government in Kiev against its own citizens in southern Ukraine as the reason it decided to declare a halt to its shale oil projects in the troubled region.
In reality, the truth may be closer to the fact that company is disappointed with the economic viability of what it once thought was a large shale deposit and is looking for a way out.
After a series of dramatic statements and the signing of a $410-million letter of intent, a veil of uncertainty is being drawn around the myth of Ukrainian shale."
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Analysts reluctant to speculate on price outlook for Dubai builder Arabtec | The National
Analysts reluctant to speculate on price outlook for Dubai builder Arabtec | The National:
"UAE equity analysts yesterday refused to predict how much damage would be done to Arabtec’s share price, after another day on which its shares closed limit-down – effectively washing their hands of the builder’s prospects.
Arabtec’s share price lost 9.83 per cent yesterday, representing a loss of Dh1.4 billion of its value, and closing at Dh3.12, down from Dh3.46. Trading was stopped at 11:52am, as UAE regulations prevent trading in a company that has lost 10 per cent of its value.
It has now lost 59 per cent of its value since its May peak of Dh7.7 a share in a period in which it has lost its chief executive and shed senior management while remaining silent on the future of its ambitions to become a global top 10 construction company."
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"UAE equity analysts yesterday refused to predict how much damage would be done to Arabtec’s share price, after another day on which its shares closed limit-down – effectively washing their hands of the builder’s prospects.
Arabtec’s share price lost 9.83 per cent yesterday, representing a loss of Dh1.4 billion of its value, and closing at Dh3.12, down from Dh3.46. Trading was stopped at 11:52am, as UAE regulations prevent trading in a company that has lost 10 per cent of its value.
It has now lost 59 per cent of its value since its May peak of Dh7.7 a share in a period in which it has lost its chief executive and shed senior management while remaining silent on the future of its ambitions to become a global top 10 construction company."
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‘Blank cheques can land you in jail’: Dubai Police | GulfNews.com
‘Blank cheques can land you in jail’: Dubai Police | GulfNews.com:
"The long-standing practice of borrowers issuing blank cheques to lenders as guarantee of payment is one of the reasons people end up in prison, Dubai Police said on Tuesday.
“We want to change people’s and companies’ mentality about cheques. Cheques should be used to fulfil monetary transactions and not as a guarantee that a certain amount will be paid,” Colonel Abdullah Khadim Surour, Director of Al Barsha Police Station, said at a press conference on Tuesday.
The warning came as Dubai Police launched a new campaign to raise awareness about bounced cheques and cheques issued in bad faith. The campaign will run for two weeks."
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"The long-standing practice of borrowers issuing blank cheques to lenders as guarantee of payment is one of the reasons people end up in prison, Dubai Police said on Tuesday.
“We want to change people’s and companies’ mentality about cheques. Cheques should be used to fulfil monetary transactions and not as a guarantee that a certain amount will be paid,” Colonel Abdullah Khadim Surour, Director of Al Barsha Police Station, said at a press conference on Tuesday.
The warning came as Dubai Police launched a new campaign to raise awareness about bounced cheques and cheques issued in bad faith. The campaign will run for two weeks."
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Emirates to revisit A350 order | GulfNews.com
Emirates to revisit A350 order | GulfNews.com:
"Airbus is to get a second chance to sell its new A350 aircraft to Emirates Airline after the fast-growing Gulf carrier revealed it would take a fresh look at the case for buying the long-range passenger jet in a head to head contest with Boeing’s 787 Dreamliner.
Airbus suffered a serious blow earlier this month when Emirates cancelled an order for 70 A350 jets, worth $16 billion (Dh58.75 billion) at catalogue prices when the deal was announced in 2007.
Emirates was supposed to be a launch customer for the A350, due to enter service later this year, and the airline’s decision not to proceed with its order was the Toulouse-based aircraft maker’s largest ever cancellation. Airbus’ shares were hit, as were those of Rolls-Royce, which makes the jet’s engines."
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"Airbus is to get a second chance to sell its new A350 aircraft to Emirates Airline after the fast-growing Gulf carrier revealed it would take a fresh look at the case for buying the long-range passenger jet in a head to head contest with Boeing’s 787 Dreamliner.
Airbus suffered a serious blow earlier this month when Emirates cancelled an order for 70 A350 jets, worth $16 billion (Dh58.75 billion) at catalogue prices when the deal was announced in 2007.
Emirates was supposed to be a launch customer for the A350, due to enter service later this year, and the airline’s decision not to proceed with its order was the Toulouse-based aircraft maker’s largest ever cancellation. Airbus’ shares were hit, as were those of Rolls-Royce, which makes the jet’s engines."
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Gazprom to Build Gas Link to Austria Bypassing Ukraine With OMV - Bloomberg
Gazprom to Build Gas Link to Austria Bypassing Ukraine With OMV - Bloomberg:
"OAO Gazprom, Russia’s biggest company, moved forward on building a natural gas pipeline to the European Union to cut transit dependence on Ukraine, the same day Russian President Vladimir Putin asked lawmakers to revoke a right to use force in the smaller country.
Gazprom and OMV AG (OMV) agreed today to create a joint venture to build and operate the 50-kilometer (30-mile) section of the South Stream pipeline in Austria at a signing ceremony in Vienna. They approved a final investment decision for the link, with capacity to carry as much as 32 billion cubic meters of gas a year, Gazprom said in a statement. That is about 20 percent of Russian exports to Europe.
Russia has pushed for South Stream after years of disputes with Ukraine, which carries half of Gazprom’s Europe-bound gas through its pipelines. Russia cut deliveries to Ukraine this month over debts as tension between the former Soviet allies mounted. Pricing rows disrupted EU flows during cold weather in 2006 and 2009."
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"OAO Gazprom, Russia’s biggest company, moved forward on building a natural gas pipeline to the European Union to cut transit dependence on Ukraine, the same day Russian President Vladimir Putin asked lawmakers to revoke a right to use force in the smaller country.
Gazprom and OMV AG (OMV) agreed today to create a joint venture to build and operate the 50-kilometer (30-mile) section of the South Stream pipeline in Austria at a signing ceremony in Vienna. They approved a final investment decision for the link, with capacity to carry as much as 32 billion cubic meters of gas a year, Gazprom said in a statement. That is about 20 percent of Russian exports to Europe.
Russia has pushed for South Stream after years of disputes with Ukraine, which carries half of Gazprom’s Europe-bound gas through its pipelines. Russia cut deliveries to Ukraine this month over debts as tension between the former Soviet allies mounted. Pricing rows disrupted EU flows during cold weather in 2006 and 2009."
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World’s Best Stock Rally in Russia Fed by Putin Detente - Bloomberg
World’s Best Stock Rally in Russia Fed by Putin Detente - Bloomberg:
"Russian stocks are headed for the best performance among the world’s major equity markets for a second straight month as President Vladimir Putin pulls back from the confrontation in neighboring Ukraine.
The dollar-denominated RTS Index (RTSI$) has rallied 9.7 percent to 1,421.07 in Moscow this month after adding 12 percent in May. The measure has gained 16 percent this quarter, making it the best performer among 93 equity gauges globally over that time after benchmarks in Argentina and Peru. The Bloomberg Index of the most-traded Russian shares in the U.S. has climbed 7.8 percent in June.
Putin asked lawmakers to revoke his authority to use force in Ukraine, in a conciliatory move that follows his meeting with the Ukrainian president on June 6. Investors dumped Russian assets, pushing the RTS index into a bear market on March 3, as the annexation of Crimea prompted the U.S. and European Union to impose sanctions on Russian businessmen and companies linked to Putin’s inner circle. The gauge entered a bull market on May 19 as Putin ordered a troop pullback at the Ukrainian border."
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"Russian stocks are headed for the best performance among the world’s major equity markets for a second straight month as President Vladimir Putin pulls back from the confrontation in neighboring Ukraine.
The dollar-denominated RTS Index (RTSI$) has rallied 9.7 percent to 1,421.07 in Moscow this month after adding 12 percent in May. The measure has gained 16 percent this quarter, making it the best performer among 93 equity gauges globally over that time after benchmarks in Argentina and Peru. The Bloomberg Index of the most-traded Russian shares in the U.S. has climbed 7.8 percent in June.
Putin asked lawmakers to revoke his authority to use force in Ukraine, in a conciliatory move that follows his meeting with the Ukrainian president on June 6. Investors dumped Russian assets, pushing the RTS index into a bear market on March 3, as the annexation of Crimea prompted the U.S. and European Union to impose sanctions on Russian businessmen and companies linked to Putin’s inner circle. The gauge entered a bull market on May 19 as Putin ordered a troop pullback at the Ukrainian border."
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Arabtec Topples Fragile Dubai Market Fueled by Belief - Bloomberg
Arabtec Topples Fragile Dubai Market Fueled by Belief - Bloomberg:
"Arabtec Holding Co. (ARTC)’s sudden fall from grace is exposing a Dubai market that hasn’t come as far as investors thought.
The Dubai builder, whose shares quadrupled in 15 months, is losing value almost as quickly as the stock market legally allows and sparking a sell-off in the emirate’s benchmark index as confidence in a property-led rally evaporates.
Both Arabtec stocks and the Dubai Financial Market General Index (DFMGI) were soaring through June 5, when the construction company was rattled by speculation that state-owned investor Aabar Investments PJSC might be withdrawing support for the company. In the days that followed, Aabar confirmed that it reduced its stake, Arabtec Chief Executive Officer Hasan Ismaik resigned and people with knowledge of the situation said other top executives were dismissed or quit."
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"Arabtec Holding Co. (ARTC)’s sudden fall from grace is exposing a Dubai market that hasn’t come as far as investors thought.
The Dubai builder, whose shares quadrupled in 15 months, is losing value almost as quickly as the stock market legally allows and sparking a sell-off in the emirate’s benchmark index as confidence in a property-led rally evaporates.
Both Arabtec stocks and the Dubai Financial Market General Index (DFMGI) were soaring through June 5, when the construction company was rattled by speculation that state-owned investor Aabar Investments PJSC might be withdrawing support for the company. In the days that followed, Aabar confirmed that it reduced its stake, Arabtec Chief Executive Officer Hasan Ismaik resigned and people with knowledge of the situation said other top executives were dismissed or quit."
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Saudi bourse falls 37% in 2013 in debut disclosure | Economy | Saudi Gazette
Saudi bourse falls 37% in 2013 in debut disclosure | Economy | Saudi Gazette:
"Saudi Stock Exchange (Tadawul), the Middle East's largest bourse that is planning to go public, reported a 37 percent drop in 2013 net profit, its first ever financial disclosure showed on Tuesday.
The exchange made a net profit of SR152 million ($40.5 million) last year. It attributed the decline in earnings to lower revenues from reduced average daily trading volumes.
These fell to SR5.5 billion in 2013, from SR7.7 billion in the year earlier period."
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"Saudi Stock Exchange (Tadawul), the Middle East's largest bourse that is planning to go public, reported a 37 percent drop in 2013 net profit, its first ever financial disclosure showed on Tuesday.
The exchange made a net profit of SR152 million ($40.5 million) last year. It attributed the decline in earnings to lower revenues from reduced average daily trading volumes.
These fell to SR5.5 billion in 2013, from SR7.7 billion in the year earlier period."
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