MORSi ROAStS IRAN - Kuwait Times

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FRIDAY, AUGUST 31, 2012 ABU DHABI: BP losing the chance to bid to maintain its major role in the United Arab Emirates oil sector may signal not just irritation with the British flagship company, but a more serious rift caused by frustration with UK policies and even broadcasts from London. Perceived BP haughtiness, anger over the West’s support for the Arab Spring and a growing sense that the UAE’s future lies in stronger ties with Asia, may have all driven the decision to block the oil major from bidding to run its biggest onshore oil fields, several well-placed sources in the UAE said. British business has basked in the Gulf sun since a protection deal with local rulers in 1820. BP has played a role in the development of its oil from the start in the early 1930s. But the West’s support for revolutions that toppled Arab leaders in 2011 and concern in Gulf states it is too welcoming of the Islamists who replaced them, has worn Britain’s centuries-old ties particularly thin, sources close to the matter say. “There was some tension between the two governments,” an industry source in Abu Dhabi told Reuters, without elaborating. “BP is looking for ways to mend this relationship,” he said, adding that attempts by the company to repair the rift with top UAE officials had been rebuffed. Three other sources close to the matter said BP had been frozen out from the pre-qualification stage for the onshore fields in part due to “tensions” between the UAE and London. UAE foreign ministry officials were not available for comment. A spokesman for Britain’s Foreign Office said only that he was aware of reports that BP has been sidelined. The UAE is Britain’s largest export market in the Middle East with construction, defence and education among the key sectors, according to UK Trade & Investment. In 2011, civil exports came to around 4.7 billion British pounds. A further factor cited by several sources in the UAE and London, is that a BBC Arabic report earlier this year on a government crackdown on Islamists in the UAE angered Abu Dhabi. It contributed to a growing feeling among Gulf leaders that London and Washington were too welcoming of the Muslim Brotherhood which swept to power in Egypt. Abu Dhabi Crown Prince Mohammed bin Zayed al-Nahayan last met British Prime Minister David Cameron in London in June. It is not clear whether the BP role or BBC report was discussed or how the meeting went. Sources in the region also said that BP’s assumption that it would automatically be invited to bid irritated some in the UAE elite. Others have said BP executives may have angered one of the key decision makers by questioning the UAE’s plan to invite staterun Asian companies to take part, or the tight terms offered under the concessions. In addition, BP may have been sidelined because it is no longer a top three global oil giant and was left out to make room for Asian companies, which buy nearly all the UAE’s oil. UAE oil industry executives will be wary of shutting out all western oil company technology, decades of experience working on the fields that provide most of the country’s wealth, or alienating long-time western ally governments. But they may have judged that they can afford to exclude BP without doing serious harm to either, with top US oil giant Exxon and second placed Anglo- Dutch Shell still in the running along with France’s Total. “The problem with BP is that they are living in the past... other companies, Asian ones, are more competitive,” onewell-connected Business BP’s UAE rebuff shows British lustre faded in the Gulf BERLIN: A display of oled TVs is seen at the Samsung booth during the 52nd edition of the “IFA” (Internationale Funkausstellung) trade fair in Berlin yesterday. — AFP Barclays picks Antony Jenkins as new CEO LONDON: British bank Barclays yesterday named retail and business banking head Antony Jenkins as its new chief executive, replacing Bob Diamond who resigned last month over the interbank rate-rigging scandal. “Barclays announce that Antony Jenkins has been appointed as a director and as group chief executive of Barclays with immediate effect,” the group said in a statement. The Briton’s appointment comes the day after Barclays revealed that the Serious Fraud Office (SFO) has launched a probe into the 2008 investment deal between the bank and Qatar’s sovereign wealth fund. Jenkins declared that his top priority would be to repair the bank’s damaged reputation in the wake of the Libor affair. “We have made serious mistakes in recent years and clearly failed to keep pace with our stakeholders’ expectations,” he said in the statement. “We have an obligation to all of those stakeholders-customers, clients, shareholders, colleagues and broader society-and a unique opportunity to restore Barclays’ reputation by making it the ‘go to’ bank in all of our chosen markets. “That journey will take time, we have much to do, and I look forward to getting started immediately.” Jenkins, 51, was head of Barclays’ Retail and Business Banking (RBB) business. He has been a member of the group executive committee of Barclays since 2009. — AFP CAIRO/DUBAI: Egypt’s benchmark stock index rose yesterday to its highest close since March on renewed investor optimism towards the country’s political and economic stability, traders said. The index climbed 0.5 percent to 5,332 points, bringing it closer to major technical resistance at this year’s intra-day peak of 5,473. “The political front is looking somehow pretty stable. That’s what’s encouraging the retail investors,” said Amr Mostafa of Pharos Securities. “The main force driving the market is retail investors.” Financial stocks were the top gainers, with Citadel Capital gaining 5.4 percent and EFG-Hermes up 5.1 percent. The market has been buoyed by signs that President Mohamed Mursi is consolidating the authority of his new government and by Egypt’s request last week for a $4.8 billion loan from the International Monetary Fund, larger than the $3.2 billion originally envisaged. Egyptian officials said they hoped the loan would be signed by November or early December. “After the International Monetary Fund visit, the whole market will benefit but financials will definitely benefit the most,” said Mostafa. “The whole market is looking positive and looking to target the 5,500 level.” Technically, the index’s rise in August has triggered a reverse head & shoulders formation, a classic sign of the start of an uptrend; the measuring objective of the formation is about 6,000 points, which could be hit by the end of October if the uptrend line from the June low holds.SODIC fell 1.2 percent while Orascom Construction lost 1.2 percent. United Arab Emirates bourses closed lower for the week as investors booked recent gains ahead of US Federal Reserve Chairman Ben Bernanke’s speech today, which may signal further monetary stimulus. Other Gulf bourses were generally lacklustre. Trading activity has generally been quiet in the region in the last week of August, with investors sitting on the sidelines waiting for buying opportunities, and some still away on summer and post- Eid holidays. Dubai’s index finished 0.5 percent lower at 1,548 points, continuing its retreat from a 16-week closing peak of 1,587 hit on Aug. 23. Bellwether Emaar Properties declined 0.9 percent, Dubai Financial Market slipped 2.5 percent and Drake and Scull fell 1.3 percent. Abu Dhabi’s benchmark shed 0.5 percent, losing 1.3 percent for the week. “Barring economic disaster, any action out of the Fed in the next two-three weeks will not be a prudent move,” said Rakan Himadeh, equity portfolio manager at Al Mal Capital. “At best we’re likely to see continued hints of potential QE3. In the immediate term, risk-reward on stocks is not there for the bulls.” Elsewhere, Kuwait’s index eased 0.1 percent, down for only the second session in the last 11. The market has rallied 3.2 percent from an eight-year low hit on Aug. 12. Despite the continuing political deadlock in Kuwait, investor confidence has partially returned because companies have posted second-quarter earnings by the deadline, removing fears they could be suspended for failure to do source in Abu Dhabi said. “The British media was also one of the reasons. They take a small thing and blow it out of proportion and take it as an excuse to write all the bad things about the country. They are very sensitive here about such things.” A spokesman for BP declined to comment on the tender process, saying it was for Abu Dhabi to say why it had not been invited. The London-based oil company still enjoys good relations in its other UAE operations, he said. BP also has a stake in an offshore concession which expires in 2018. “(BP’s exclusion) was unexpected, especially because of BP’s pioneering position in the region and given the vast interests and historical relationship,” said Kamel al-Harami, an independent oil analyst based in Kuwait. “This is very strange to us. It’s unhealthy bearing in mind the ties and Abu Dhabi’s interest in investing in the UK.” The concessions system in the UAE allows oil and gas producers to acquire equity hydrocarbons from the OPEC member in return for investing in projects. State-run Abu Dhabi National Oil Co (ADNOC) currently partners with Royal Dutch Shell, Total, ExxonMobil, BP and Partex Oil and Gas, in the Abu Dhabi Company for Onshore Oil Operations (ADCO) concession. — Reuters Egypt index climbs, UAE falls before Fed signal Kuwait market rallies 3.2% from an eight-year low so in time. Thousands of Kuwaitis took part in a rally late on Monday to protest any changes to the electoral law which they said could harm the prospects of opposition lawmakers in upcoming elections. The opposition bloc will meet on Sept. 2 to discuss its next steps. “A lot of investors don’t like holding positions over the weekend due to uncertainties, so retails jump out,” said a Kuwait-based trader. Shares in Wataniya rose 1.6 percent to 2.56 dinars. The telco said Qatar Telecom’s offer to buy the remaining 47.5 percent stake at 2.6 dinars per share is “appropriate to shareholders interested in accepting the offer and selling their Wataniya Telecom shares”. The tender offer will start on Sept. 4 and end on Oct. 4, Wataniya said in a bourse statement. Traders believe the second-largest holder in Wataniya, Kuwait Investment Authority, has approved Qtel’s offer but KIA has not responded to queries by Reuters on plans for its stake. In Qatar, the index bucked the regional trend. It gained 0.5 percent, halting a three-day slide from Sunday’s 15-week high. Doha’s market is the second-worst performing Gulf market after Oman this year, with year-to-date losses at 3.4 percent. But some analysts and investors argue selling earlier this year was unjustified and that Qatari firms have strong fundamentals which benefit from clarity on government policy and economic growth. Heavyweight Industries Qatar gained 0.7 percent and Qtel climbed 1.3 percent. Qatar National Bank rose 0.5 percent. — Reuters
FRIDAY, AUGUST 31, 2012 BRASILIA: Brazil’s central bank cut its benchmark interest rate for the ninth straight time to a record low 7.5 percent, signaling that a year-long easing cycle may be over as the world’s No. 6 economy starts to recover. The rate decision came hours after the government unveiled stimulus measures to boost consumption and investment, a move that shows that officials remains worried about the pace of recovery. The bank’s monetary policy board, known as Copom, unanimously decided to lower the so-called Selic rate by half a percentage point, as expected. However, the central bank hinted in its post-decision statement that an extra rate cut may not be needed, or it could be smaller. “The Copom considers that, if future conditions were to allow for an additional adjustment of monetary conditions, that movement should be conducted with maximum parsimony,” the bank said in the statement. It is the first time the central bank has clearly signaled in a post-decision statement that it might end the easing cycle that began in August 2011. After a year of aggressive rate cuts and more than a dozen government stimulus packages the Brazilian economy is finally showing some signs of life. Even with that massive stimulus, the Brazilian economy is seen growing less than 2 percent this year, much slower than the growth pace of its major emerging-market peers. The prospect of a stronger recovery in the second half has stoked fears of inflation becoming a problem next year after a jump in global food prices reversed the downward trend of 12- month inflation in July and mid- August. Higher annual inflation, which at 5.37 percent is slightly above the official target midpoint of 4.5 percent, could add pressure on the central bank to end the rate-cutting cycle. “The easing cycle may have ended today, but the Copom is not altogether closing the door to a potential one last iteration in this cycle, which if it takes will be within the confines dictated by ‘maximum parsimony,’” Alberto Ramos, chief Latin American economist with Goldman Sachs, said in a note. In the past, the central bank used the word parsimony to communicate to markets it planned to reduce the size of future rate cuts. The central bank has hinted before in meeting minutes it was near the end of its easing cycle, only to dismiss its own guidelines as the recovery Business Brazil cuts rate, hints easing cycle may be over MANILA: Workers are seen at a construction site in Manila yesterday. The Philippines said yesterday the economy grew a better-than-forecast 5.9 percent in the three months to June, largely due to a strong services sector. — AFP Philippine economy grows 5.9% in Q2 MANILA: The Philippines economy grew a better-thanexpected 5.9 percent in the second quarter, boosted by increased investment and a drive against corruption, the government said yesterday. The strong figure for April-June helped the country achieve 6.1 percent growth in the first half, with officials confident the good times would be sustained for the rest of the year. Socio-economic Planning Secretary Arsenio Balisacan credited President Benigno Aquino’s anti-corruption reforms for part of the growth, saying they had boosted the confidence of local and foreign investors. “We obviously would not have achieved (this growth) without the substantial improvement in the way people perceive the government... and the way we do business,” Balisacan told reporters. The economy grew a better-than-expected 6.3 percent in the January-March quarter, the government said, revised slightly up from an earlier estimate of 6.4 percent. Balisacan expressed confidence the momentum would continue, with 2012 growth settling at the “upper end” of the government’s target range of 5.0 to 6.0 percent. The second quarter gross domestic product (GDP) figure exceeded the 5.4-5.8 percent forecasts of independent analysts. Financial institutions also widely tipped growth to range from 4.8 to 5.4 percent. Balisacan said the second quarter figure was the third highest in the region, exceeding Malaysia, Thailand, Vietnam and Singapore. He credited the higher growth to stepped up government spending on infrastructure, low inflation, improved exports, rising tourist arrivals and the earnings sent home by about 10 million Filipino working abroad. — AFP TOKYO: Japan Airlines said yesterday its relisting on Tokyo’s stock market could raise as much as $8.4 billion-a sum that would make it the secondbiggest share sale globally this year after Facebook’s IPO. It is nearly double the amount of public money spent to keep it afloat during a massive restructuring and would represent a dramatic turnaround for the company less than three years after being forced into bankruptcy. The proceeds would allow JAL to pay back the government bailout with its sale on track to be the secondbiggest globally behind Facebook following the social networking giant’s $16.0 billion initial public offering in May. The new shares in JAL, which went bankrupt in January 2010 and saw its shares delisted the following month with debts totalling 2.32 trillion yen, were scheduled to start trading on the Tokyo Stock Exchange on September 19. Yesterday, the carrier said it would sell 175 million shares at a price between 3,500 yen and 3,790 yen. The airline, which continued to fly during its time off the stock exchange, implemented massive job and route cuts as part of its overhaul. The airline underwent an aggressive cost-cutting plan guided by charismatic businessman Kazuo Inamori, who was brought in by the government to help turn the firm around. This month, the airline pointed to its improved financial health, saying net profit in the April-June quarter more than doubled to 26.9 billion yen. Cost-cutting and improved productivity were credited by the company for the result, which was up from a 12.7 billion yen net profit a year ago. Revenue climbed 12.5 percent on the back of a pickup in international travel demand as a strong yen, which hit record highs against the dollar late last year, prompted more Japanese holidaymakers to venture overseas. Sales from domestic operations also improved as the market recovered from slumping demand after last year’s quake and tsunami disaster in northeast Japan. The carrier kept its annual forecast unchanged, expecting a net profit of 130 billion yen in the fiscal year through March 2013. The quarterly results were a major turnaround for the carrier, which exited bankruptcy proceedings in March last year. When the carrier announced its latest financial results, JAL president Yoshiharu Ueki apologised to credi- failed to pick up speed. Most economists expect the bank to slash rates by 25 basis points in October before ending the cycle that has brought some of the world’s highest interest rates closer to that of other emergingmarket giants like India and Russia. Economists widely expect the Selic rate to remain in single digits for the foreseeable future, no small feat in a country with a long history of runaway inflation and where interest rates nearly hit 30 percent less than a decade ago. Lower rates are a top priority for President Dilma Rousseff, who has not bowed to pressure by thousands of striking public workers to raise spending. Higher government costs could stoke inflation and force the central bank to raise rates in the near future. — Reuters JAL to raise up to $8.4bn in share sale Second-biggest share sale globally tors and former shareholders who took a hit when the airline sought bankruptcy protection. He also said the airline would be able to return the 350 billion in bailout money through the share offer. Earlier this year, JAL said it had ordered 10 new Boeing 787 Dreamliner aircraft as it looks to build on its recovery and fight off the threat from an emerging domestic budget sector. The announcement, part of a five-year plan, was in addition to an earlier order for 35 of the planes. Built largely with lightweight composite materials, Boeing said the Dreamliner is about 20 percent more fuel efficient than similarly sized aircraft and was the first mid-size airplane able to fly long-range routes. — AFP TOKYO: Japan Airlines jets seen at Tokyo’s Haneda airport on August 3, 2012. JAL said yesterday, its relisting on Tokyo’s stock market could raise as much as $8.4 billion, as it continues a return to strength less than three years after being forced into bankruptcy. — AFP
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