Tuesday, Mar 27, 2012
Saudi SE 7782.85 +0.31%
Dubai FM 1655.46 -0.82%
Abu Dhabi SM 2577.40 -0.40%
Kuwait SE 6208.50 -0.21%
Doha SM 8726.50 +0.25%
Muscat SM 5826.22 -1.52%
Bahrain SE 1154.16 -0.13%
Cairo SE 4908.43 -1.09%
Amman 1991.16 -0.11%
ICE Brent $/bbl 125.40 -0.20%
Gold $/troy oz 1686.70 -0.48%
Euro-USD 1.34 +0.00%
DJIA 13241.63 +1.20%
By Tim Falconer
Of ZAWYA DOW JONES
DUBAI (Zawya Dow Jones)--Consolidation in the Middle East financial sector will remain front and center for Gulf investors Tuesday after Egypt's EFG Hermes and Qatar's QInvest said they are in talks to create what could become one of the region's largest investment banks, while some dovish words from the U.S. Federal Reserve chairman should also keep a floor under stocks.
EFG and QInvest are exploring "a potential strategic alliance" whose aim is to "create a leading investment bank with operations in the Arab world and beyond," according to a joint statement issued Monday.
"This could set the trend for others to follow and to take advantage of the markets bouncing back," said Haissam Arabi, chief executive at Gulfmena Alternative Investments. "This puts competitive pressure on others in terms of forced consolidation, as you don't want one huge monopoly," he added.
On top of the EFG, QInvest discussions, Oman's central bank has approved in principle the much-awaited merger between Oman International Bank and the Omani subsidiary of HSBC (HBC) in the sultanate.
Overnight, global stocks advanced after Federal Reserve Chairman Ben Bernanke emphasized low interest rates are still needed to support the labor market in the world's biggest economy. The Dow Jones Industrial Average advanced 160.90 points, or 1.2%, to 13241.63. In Asia Tuesday, Japan's Nikkei Stock Average, Australia's S&P/ASX 200 and New Zealand's NZX-50 all rose.
Front month Nymex crude futures last traded flat at $107.25 a barrel.
U.A.E.: Dubai's market closed 0.8% lower at 1655.46 Monday.
Depa Ltd., a Dubai-based interior contracting company, said Monday it continues to pursue a diversified client and project base to boost growth, after making a net profit of 59.1 million U.A.E. dirhams ($16.10 million) last year in difficult operating conditions due to the global economic environment.
Dubai-based ports operator DP World said it will repay a $3 billion credit facility six months early with existing cash, while the government-controlled firm has no pressing need to draw on a new, soon-to-be completed, five-year loan worth $1 billion as it continues its focus on fast growing emerging markets. Its shares ended up 0.1% at $11.
In Abu Dhabi, the benchmark index there finished down 0.4% at 2577.40.
SAUDI ARABIA: The benchmark Tadawul Index closed 0.3% higher at 7782.85 Monday, a new 42-month high as investors snapped up banking stocks.
A Riyadh-based trader noted recent data that indicates that profits of Saudi banks sharply increased year-on-year during the first two months of 2012, most likely driven by a normalization in the cost of risk.
In terms of stocks, SABB gained 2.6% to SAR35.70, while Al Rajhi jumped 2.2% to SAR81.50.
KUWAIT: The market finished 0.2% down at 6208.50 Monday.
Kuwait's International Investment Group, or IIG, said Monday it expects to sign an agreement soon with creditors to reschedule its debt, which mainly consists of sukuk maturing this year.
QATAR: Doha's market closed Monday +0.3% at 8726.50.
BAHRAIN: The main gauge of stocks closed down 0.1% at 1154.16.
OMAN: Muscat's market ended 1.5% lower at 5826.22 Monday.
Oman's central bank has approved in principle the much-awaited merger between Oman International Bank and the Omani subsidiary of HSBC (HBC) in the sultanate. Oman International Bank shares fell 0.4% to OMR0.281.
Oman Investment and Finance Co., or OIFC, Monday said it has received the central bank's approval to raise its stakes in each of the two local firms Bank Sohar and Tageer Finance Co. to 15% from 9.9%. Bank Sohar shares dropped 1.3% to OMR0.147.
EGYPT: The market closed 1.1% lower at 4908.43 Monday amid continued concerns about the country's deteriorating fiscal position.
Shares of EFG Hermes bucked the wider trend, rallying 5% to EGP13.43, after saying it is in talks with Qatar's QInvest to create a possible joint-venture investment bank.
A possible merger is being viewed positively, said one trader at Cairo-based Beltone Financial. "Investors are speculating on a possible change in shareholder structure for EFG, with QInvest taking a big stake," he added. "This will give EFG access to Qatar's fast growing economy."
NEWS FROM AROUND THE GULF: Deciding on a fair wholesale price for operators has been the major cause of delays for infrastructure sharing between the U.A.E.'s two telecom firms taking place, but network cooperation should still happen by the middle of the year, a Telecom Regulatory Authority, or TRA, official said Monday
Abu Dhabi's government-controlled investment firm Mubadala Development Co. took its first step into Brazil, with an "initial investment" Monday of $2 billion in companies owned by Brazilian billionaire Eike Batista.
Moody's Investors Service said Monday a recent decision by state-owned entities in Abu Dhabi to build a new liquefied natural gas import terminal that bypasses the strategic Strait of Hormuz is credit-positive for the United Arab Emirates.
The United Arab Emirates will revisit the number of telecom companies that currently operate in the country by 2015, but only after conducting a study to explore the logic of such a move, an official at the Telecoms Regulatory Authority, or TRA, said Monday.
Kuwait plans to launch "in coming weeks" a tender for the construction of the last phase of the second terminal at its international airport, estimated to cost between 700 and 800 million Kuwaiti dinars ($2.5-$2.9 billion), state-run Kuwait news agency, or KUNA, reported Monday, citing the undersecretary for the Ministry of Works.
-By Tim Falconer, Dow Jones Newswires; +9714 446-1690; tim.falconer@dowjones.com
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
27-03-12 0457GMT
