Finance

Moody's says could cut Kuwait rating

Moody's Investors Service said it may downgrade Kuwait's sovereign rating due to a political crisis that led to dissolution of parliament after the resignation of the government. The agency said it had placed Kuwait's Aa2 rating on review for possible downgrade, citing the political situation in the OPEC member. Kuwait's ruler dissolved parliament on Wednesday, setting elections within two months after the government quit following attempts by several deputies to question the prime minister. The cabinet had quit for the same reason in November.

Gulf Islamic finance sector seen growing at 15%

The Sharia-compliant finance sector in the UAE and across GCC member-states is expected to grow by between 10 and 15 percent during this year, despite the weight of the global financial crisis. Credit rating house Moody’s stated that the Islamic financing industry manifested an annualized average growth of 25 percent over the last three years, seen receding to between 10 and 15 percent in 2009.

Nasdaq Dubai in talks on state firm IPOs, eyes reform

Nasdaq Dubai is in "serious" talks with Dubai government-linked entities to boost initial public offerings on the exchange and aims to revise listing requirements to attract more local investors. Speaking to Reuters, Nasdaq Dubai's Chief Executive, Jeff Singer, said the Gulf emirate's international exchange was likely to witness a "flat" year after the collapse of the global and regional financial markets in the last quarter of 2008.

S&P affirms Oman's credit ratings

Standard & Poor's Ratings Services has affirmed its 'A' long-term and 'A-1' short-term sovereign credit ratings on the Sultanate of Oman. The outlook remains stable. At the same time, S&P's Transfer & Convertibility risk assessment was affirmed at 'AA-'. "The ratings on Oman are supported by the government's strong fiscal position, together with the country's solid external finances and increasing wealth levels," said Standard & Poor's credit analyst Luc Marchand. The agency said the government has prudently and transparently managed the windfall from a sustained period of high oil prices, leading to a general government surplus it estimates at 8.8% of GDP in 2008.

Kuwaiti investment firm cites progress on debt

Kuwait's largest investment company says it has made significant progress in restructuring its debts, estimated at almost $3 billion. Global Investment House has been facing major difficulties after it said last month that it was in default on most of its debts and was in negotiations with its creditors. It cut workers and saw its credit rating cut by two international agencies. The firm said that it has been able to present comprehensive restructuring plans to its creditors and was confident a sustainable long-term financing solution can be achieved in the coming months. A $5.15 billion stimulus plan to help Kuwaiti companies grappling with the global meltdown is still before parliament.

EFG-Hermes 2008 net profit down 27.7 pct

EFG-Hermes, Egypt's largest investment bank, reported a 27.7 percent drop in 2008 net profit to 933.5 million Egyptian pounds ($166 million), as turmoil in Arab stock markets hit its revenues. The investment bank said in a statement it was unrealistic to assume it would not continue to be affected "in the coming months" by the global financial crisis which has hit trading volumes and asset values in the Middle East. Total revenue fell 15.3 percent to 2.21 billion pounds, the bank said in a statement. To cut operating costs, EFG-Hermes said it took measures at the end of 2008 that included redundancies, pay cuts for the top 200 staff members and the relocation of some activities to Egypt.

NoozzVIEW; Islamic banking boosted by downturn

While the current global financial cloud has perhaps not gone so far as to provide a silver lining to Islamic banking, it has at least given the practitioners – including those centred in the Gulf – a chance to showcase their product as a healthy alternative to the more conventional system that has got bankers, and banking in general, such a bad name. That in a nutshell was the central message to emerge from the Muslim presidents, prime ministers and prices who attended the opening of the fifth World Islamic Economic Forum (WIEF) in Jakarta, capital of Indonesia, the largest Islamic country in the world. At the opening session of the conference attended by over 1,500 delegates from a total of 36 countries, the call went out loud and clear that the world at large should consider adopting Islamic financial practices in order to overcome the current global crisis.

Mashreq Makaseb Arab Tigers Fund maintain AA rating by Standard and Poor's

Standard and Poor's, a global leader in providing fund ratings, has reaffirmed its AA very high quality rating of the Mashreqs Makaseb Arab Tigers Fund (MATF) for the second consecutive year. Standard and Poors assessment report highlights the funds "well defined investment approach" and "clear commitment to transparency and best practices" for maintaining its "AA" rating of the fund."The reaffirmation of AA rating reflects our extensive investment experience in difficult markets and solid track record. Our focus and priority remains dedicated to ensuring investor confidence during these turbulent times.

Emirates NBD to seek $3.4 bn equity boost

Emirates NBD will seek shareholder approval to convert 12.6 billion dirhams ($3.43 billion) in emergency federal deposits it received last year into equity. The move would fortify the Tier 2 regulatory capital base and increase equity at the bank, one of the top three in the United Arab Emirates, by around 50 percent. The bank received 12.6 billion dirhams as part of a larger programme sponsored by the Ministry of Finance in 2008 to boost liquidity in the banking system in the UAE, which has suffered a liquidity crunch during the credit crisis.

Oman Insurance Co. (PSC) 'A-' Ratings Placed On CreditWatch Negative In Line With Those On Its Parent, Mashreqbank

Standard & Poor's Ratings Services said it placed its 'A-' long-term counterparty credit and insurer financial strength ratings on United Arab Emirates (UAE)-based composite insurer Oman Insurance Co. (PSC) on CreditWatch with negative implications. The CreditWatch placement follows the placement of the long-term counterparty credit rating on Oman Insurance's parent, UAE-based Mashreqbank (A/Watch Neg/A-1), on CreditWatch with negative implications on March 17, 2009 (see "Four Dubai-Based Banks Long-Term Ratings Placed On Creditwatch Negative On Deteriorating Operating Environment").

Qatar govt to buy investment shares from banks

Qatar launched new measures to support its banking sector with a government plan to buy banks' investment portfolios in a bid to revive lending and support the economy, sending financial shares soaring. "The government is studying a system to take these shares from banks, which will help increase lending," Qatari Prime Minister Sheikh Hamad bin Jassem al-Thani said. The emergency measure underscores how the global financial crisis has smashed hopes that the energy-exporting Gulf Arab region would escape due to its petroleum revenues and massive sovereign savings.

Kuwait to issue $678 mn in bonds amid strong demand

Kuwait's central bank said it would issue 200 million dinars ($678 million) of one-year treasury bonds on March 18, having received bids worth six times that amount as banks search for ways to soak up excess liquidity. Central bank data showed it received 1.26 billion dinars of bids for the bonds, which carry a coupon of 2.25 percent and mature March 17, 2010. The move came days after the Gulf Arab state issued 107 million dinars worth of treasury bonds with the same coupon on March 11, having received bids worth 602 million dinars.

S&P downgrades Emaar, other Dubai cos on slowdown

Standard & Poor's downgraded the credit ratings of seven Dubai companies, including Emaar Properties and said it was worried about the health of banks as the former boomtown faces a sharp slowdown. Dubai's economy could shrink between 2 and 4 percent in real terms this year, S&P said, as a collapse in oil prices and the global financial crisis take their toll on real estate prices and equities. S&P said it had downgraded Emaar to BBB+ from A- with a negative outlook, taking the developer almost below investment grade, while it also slashed ratings of other companies, including DP World by one notch each. Four Dubai-based banks covered by the ratings agency were also placed on ratings watch, with negative implications, partly because S&P was concerned about the banks' exposure to the emirate's real estate sector.

BBK eyeing fresh Gulf acquisitions

Bahraini lender BBK will pursue acquisition opportunities in Bahrain and the Gulf region after a planned merger with Shamil Bank was put on hold, its chief executive said. "We will continue to look into opportunities, if something comes across our way, we will pursue it very aggressively," chief executive Abdulkarim Bucheery said. Bahrain-based Islamic lender Ithmaar said it put on hold the planned merger of its fully-owned unit Shamil Bank and BBK, in which it owns 25 percent, due to market uncertainty.