Wednesday, Jun 13, 2012
Saudi SE 6727.83 -0.93%
Dubai FM 1468.82 -0.96%
Abu Dhabi SM 2447.57 -0.64%
Kuwait SE 6016.70 -0.92%
Doha SM 8280.58 -0.42%
Muscat SM 5714.11 -0.51%
Bahrain SE 1134.60 -0.04%
Cairo SE 4448.84 +1.24%
Amman 1878.08 -0.02%
ICE Brent $/bbl 97.04 -0.10%
Gold $/troy oz 1609.30 -0.54%
Euro-USD 1.25 -0.16%
DJIA 12573.80 +1.30%
By Tim Falconer
Of ZAWYA DOW JONES
DUBAI (Zawya Dow Jones)--Oil prices will be front and center for Persian Gulf investors Wednesday as the Organization of Petroleum Exporting Countries meets in Vienna this week amid a deteriorating economic backdrop and as the 12-member group pumps crude at levels not seen since 2008.
Analysts say declining oil demand and the negative impact this could have on crude prices as well as the spending plans of many governments in the Gulf Cooperation Council region remains a real risk for local markets. The price of Brent crude has dropped from about $128 a barrel at the start of the year to under $100 as Saudi Arabia has raised its output to 10 million barrels a day in a series of gradual increases since the start of the year. The front month ICE Brent crude contract last traded Wednesday 0.1% down at $97.04.
On Tuesday, OPEC's most recent production figures showed the group's output rising to its highest level this year, leaving the market amply supplied. In its latest monthly market report, the OPEC said its crude production was 32.964 million barrels a day in April, up 631,000 barrels a day from the previous month.
Saudi Arabia meanwhile softened its call for OPEC to boost its production ceiling amid criticism of overproduction in the face of economic weakness.
Asked if he would seek an increase in the production ceiling of one million barrels a day, oil minister Ali Naimi said: "Me? Why? I am happy the way things are." OPEC's official decision on output is due Thursday.
"Despite the recent 20% fall in crude oil prices, we think it unlikely there will be an official reaction at OPEC's meeting on June 14 in Vienna beyond statements for cohesion and calls to adhere to output quotas," analysts at UBS said in a note to clients.
Regional stocks will likely take some heart from Wall Street's performance overnight. The Dow Jones Industrial Average surged 162.57 points, or 1.3%, to 12573.80 on Tuesday, erasing Monday's 143-point slide. Meanwhile, Asian stocks were mixed on Wednesday, paring earlier gains, as worries grew ahead of Greek elections and as yields on Spain and Italy's sovereign debt climbed in Europe.
U.A.E.: Dubai's market closed 1% lower at 1468.82 Tuesday, while in Abu Dhabi, the benchmark index there finished down 0.6% at 2447.57.
Arabtec shares tumbled 1% to AED2.84. The U.A.E. market regulator has amended share ownership rules to ensure greater disclosure by investors accumulating a substantial stake in publicly-listed companies, a move that comes in the wake of Aabar Investments' increased shareholding in Arabtec Holding that raised concerns about the rules governing stake building and takeovers in the Arab Gulf country.
In Abu Dhabi, shares of Aldar Properties fell 3.5% to AED1.10, while Sorouh Real Estate lost 3.8% to AED1.02. Both companies said late Sunday that due diligence to assess a possible tie-up is now underway.
SAUDI ARABIA: The benchmark Tadawul Index closed 0.9% down at 6727.83 Tuesday, undermined by crude oil price weakness.
"We have seen the decline in the oil prices over the last five weeks," said Hisham Tuffaha, head of investment research, Bakheet Investment Group.
Market heavyweight Sabic dropped 2.7% to SAR89.75, while Sipchem lost 2.2% to SAR17.95. Petro Rabigh fell 1.3% to SAR19.50.
KUWAIT: The market finished 0.9% lower at 6016.70 Tuesday.
QATAR: Doha's market closed Tuesday down 0.4% at 8280.58.
In terms of stocks, Qatar National bank lost 0.1% to QAR131.40. People familiar with the matter told Zawya Dow Jones that the largest lender in the Arab Gulf state is one of a number of banks interested in buying BNP Paribas's retail banking franchise there.
"BNPP is looking to exit Egypt and QNB is interested in getting into Egypt," the person said.
BAHRAIN: The main gauge of stocks closed flat at 1134.60.
OMAN: Muscat's market ended 0.5% lower at 5714.11 Tuesday with banking and financial stocks pacing the decline.
EGYPT: The market closed 1.2% higher at 4448.84 Tuesday.
Egyptian investment bank EFG Hermes said its alliance with Qatari firm QInvest is legally binding and can only be broken through legal action, firming up its position against a potential bid mounted by Planet IB Ltd., the consortium of Arab investors. Its shares ended +2.1% at EGP10.21.
Shares of OTMT soared 9.3% to EGP1.29. The company named Karim Bichara as its new chief executive officer, while the company also plans to pay a dividend to shareholders of 1.05 Egyptian pound ($0.17) a share following the sale of its core telecoms asset Mobinil.
NEWS FROM AROUND THE GULF: Oman's economy is expected to continue to grow steadily during the second half of 2012 despite the ongoing euro-zone crisis, supported by the favorable oil prices, the country's central bank governor said.
Surging accommodation costs have seen Beirut leapfrog Abu Dhabi as the most expensive city for expatriates living in the Middle East, a study from consultancy firm Mercer showed Tuesday.
The Islamic Corporation for the Development of the Private Sector, or ICD, a multilateral financing body based in Jeddah, launched a $600 million food and agriculture fund on Tuesday to address food security concerns in the Islamic world.
Dubai-based Jebel Ali Free Zone, or Jafza, plans to issue a $650 million, seven-year Islamic bond, or sukuk, after meeting with investors in the Middle East, Asia and Europe, according to a banker aware of the deal.
Oman's National Gas Co., or NGC, said Tuesday that its indirectly-owned Malaysian unit NGC Energy has signed an agreement to sell 40% of its shares to Perangsang Oil and Gas Sdn. Bhd., or POGSB.
-By Tim Falconer, Dow Jones Newswires; +9714 446-1690; tim.falconer@dowjones.com
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
13-06-12 0454GMT
