Saudi bourse to open to foreigners soon"
Saudi Arabia could shortly open its stock exchange to foreign investors, Deutsche Bank's head of Mena equities said, a move which would allow international capital to own shares outright on the Middle East's largest bourse for the first time. ""I do see it happening very soon,"" Ahmed Beydoun told Reuters in a telephone interview. ""The Saudis have been very vocal in the last month on that and their desire to be included in MSCI. They say they would like to open up but all the factors have to be considered."" Presently, international investors can only buy into Saudi shares through equity swap arrangements, where a licensed intermediary in the kingdom holds the stock on their behalf, or a small number of exchange traded funds (ETFs). However, there has long been foreign demand to have access to the Tadawul bourse, which had a total market capitalization of 1.2 billion riyals ($323.7 billion) at the end of September, according to bourse data. This is nearly on par with the combined bourse capitalization of the other six domestic exchanges in the GCC - including the Abu Dhabi and Dubai exchanges - of $331.4 billion, according to Thomson Reuters data. Saudi currently has no classification within the influential MSCI indices, but its size would likely gain it emerging market status if it were to join. Market estimates put the kingdom's potential weighting at 2.5 to 3%, which would be around double Turkey's current position. Emerging market status within MSCI is considered important because many international fund managers will only track stocks in countries that have achieved this mark. Source: Reuters"
Oman: Trading Up"
A new law in Oman that makes an exception for businesses hoping to list a smaller share of their companies on the Muscat Securities Market (MSM) will likely be passed by the end of the year. Current regulations in the Sultanate require companies that wish to go public to offload a minimum 40% stake on the market, but the new law would allow family-owned businesses to sell just 25% of their shares through initial public offerings (IPOs), a key aim of the new ruling. A similar exception was granted earlier this year, when the Omani cabinet and Capital Market Authority (CMA) allowed Oman Arab Bank to offload a 25% stake. At the Second Annual Oman Capital Markets Forum, held October 3-4 at the Al Bustan Palace Hotel in Muscat, MSM’s director-general, Ahmed Saleh Al Marhoon, indicated that additional exceptions could be made even before the law is passed. “If any family business wants to go public before the new law is passed, exemption to offload 25% can be given as it was in the case of the Oman Arab Bank,” he said. The new regulations will contribute to the MSM’s objective of encouraging the launch of more IPOs in a range of sectors. “The outlook is still limited, which suggests the need for more long-term planning by the government to encourage at least two to three new IPOs for different sectors to be launched each year,” Hassan Ali Jawad, the chairman of the board at MSM, told OBG. “High-networth individuals should also consider listing their family businesses. By going public, companies compete directly with international projects and contribute to the nation’s economic development.” Marhoon said the new law will encourage many more small businesses to go public and will likely bring about a number of IPOs in 2012, adding that many family businesses have already approached the CMA to express their interest in selling shares. “There is a lot of cash in the country, a lot of cash with banks,” he said. “Banks and investors are looking for opportunities to invest in the market.” Source: Oxford Business Group"
Mashreq 'may be interested in Denizbank'"
Mashreq Bank, Dubai's second-largest lender by market value, may be interested in Turkey's Denizbank if the price is right, Mashreq's chief executive Abdul Aziz Al Ghurair was reported by Turkey's Sabah newspaper as saying. Qatar National Bank, the Gulf state's largest lender, is also eyeing Denizbank, the fast-growing Turkish arm of euro zone debt casualty Dexia, in a deal potentially worth up to $6 billion. ""We are in Qatar, Kuwait, Egypt and Nepal but we are not in growing Turkey. We have been interested in Turkey for a long time. Denizbank could be an opportunity,"" Sabah quoted Mashreq's Al Ghurair as saying at a World Economic Forum meeting in Amman. ""The prices of banks in Turkey are a bit high. If an appropriate price is put to us we could buy it,"" he was reported as saying. Mashreq Bank was not immediately available for comment. Bank of America Merrill Lynch is evaluating strategic options for Denizbank. Sberbank, Russia's No.1 lender, has also said it was looking at the bank as a potential acquisition target but had yet to begin talks. Source: Reuters"
Turkey: Exchange growth on the horizon"
While Turkey’s stock market, like most around the world, has witnessed reversals over the year so far, especially in recent months, it has remained a solid long-term investment, out-performing its emerging market peers. A key sign of international confidence in the economy came in mid-September, when Standard & Poor’s upgraded Turkey’s local currency rating to BBB-. The upgrade led to a flurry of interest that saw Turkish stocks trading 5% higher than the days before the announcement. Steps taken by the authorities to curb short selling and recent decisions by major international banks to upgrade their assessments of the market’s prospects have also helped boost international confidence, while rising initial public offering (IPO) levels show signs of remaining strong into next year. Source: Oxford Business Group"
KFH Turkish unit launches $350m sukuk"
Kuwait Finance House's Turkish unit Kuveyt Turk has launched a $350 million five-year sukuk issue, according to a document issued by leads. The paper will carry an initial profit rate of 5.875 percent, which is inside the 6 percent area price whisper that was issued in late October. HSBC Bank, Liquidity Management House and Standard Chartered are lead managers on the deal. Source: Reuters"
Qatar: Boosting Islamic finance"
The first sale of an Islamic finance portfolio since Qatar’s decision to ban conventional lenders from conducting sharia-compliant banking operations is a harbinger of what’s to come as the Islamic finance sector begins to benefit from the ruling. The domestic segment, however, may have to contend with greater competition from foreign Islamic banks keen to enter the lucrative market. In August the International Bank of Qatar (IBQ) sold its Islamic banking retail operations to Barwa Bank in a sale that included IBQ’s Al Yusr retail loans and deposit account portfolios, the two Al Yusr branches and a transfer of employees to Barwa Bank. Several of Qatar’s other conventional lenders have already begun talking about what to do with their sharia-compliant operations. Ahli Bank is also considering selling off its Islamic banking arm, according to its chief executive, Salah Murad. Source: Oxford Business Group"
Dubai: Regaining confidence in capital markets"
Dubai’s capital markets are much better placed to handle the recent economic fall-out in the US and the Eurozone, having learned several lessons from the 2008 global crisis and its own downturn two years ago. Like stock markets around the world, the Dubai Financial Market (DFM) retreated in the wake of ratings agency Standard & Poor’s August 5 decision to downgrade the US’s credit rating. The DFM’s main index shed up to 3.7% in value on August 7, the first day of trading after the agency cut the US’s AAA rating, and almost as much over the two subsequent days of trading. However, the falls were nowhere near those posted in some other markets around the world, or even closer to home in the Gulf region. Part of the reason for this is that Dubai’s capital markets have emerged from their own recent slowdown in a better position than before. Having seen a correction last year, the DFM has been moving slowly upward and the general index is now close to where it was a year ago. Many of the high-profile and high-level debts held by Dubai public and private entities have been restructured and are in the process of being cleared, meaning that the emirate is less exposed than it was when the full impact of the international financial crisis hit in 2008 and 2009. Indeed, in what is being seen as a vote of confidence in Dubai’s economy and its debt market, in early August the state-owned Investment Corporation of Dubai (ICD) announced that it would repay all of the $4 billion in debt it had falling due last month, rather than clearing part of the amount owed and rolling over the balance, as had been widely expected. Source: Oxford Business Group"
Lebanon: Reforming capital markets"
Parliament has passed long-stalled legislation aimed at strengthening the regulatory framework for the country’s capital markets, increasing transparency and bolstering confidence in the financial sector, though it may take time for the full impact of these reforms to be felt. In early August the parliament ratified draft legislation laying out the roles and responsibilities of the National Council for Financial Markets in Lebanon, an oversight agency that will be tasked with updating regulations, implementing reforms and paving the way for the planned privatization of the Beirut Stock Exchange (BSE). The regulatory committee will be granted a high level of autonomy in setting its policies, playing a role similar to that of the US Securities and Exchange Commission, according to a statement issued by Banque du Liban (BDL), the central bank, under which the body will be established. It will have seven members, five of whom will be from the private sector, with the head of the BDL, Riad Salameh, acting as its chairman. Yassin Jaber, a parliamentary deputy for the Amal Movement and a former economy minister, said the legislation was a significant step towards revitalizing Lebanon’s capital markets. Source: Oxford Business Group"