Tuesday 29th July 2014
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TICKER: MONDAY July 28th 2014: The Union Bank of the Philippines (UBP) released a 49% drop in net earnings in the first half of 2014, as it came in to just PHP3.2bn, almost half of its net earnings in the same period last year. In the April to June period alone, net income fell 36% from PHP2.18bn in the second quarter of 2013 to PHP1.6bn in the second quarter of 2014. However, it is important to note that net interest income grew by 29% year-on-year, as it came in at PHP5.2bn in the half of 2014 – Rangold chief executive Mark Bristow will present the firm’s Q2 results at noon on Thursday this week at The Forum, London Stock Exchange Around 10.00 am today some traders on Moscow Exchange’s Derivatives Market reportedly experienced difficulties entering orders via the FIX protocol, with some valid messages rejected with an error code. The FIX protocol has been functioning as usual since 11:37 am says the exchange. Moreover, the exchange stresses other protocols to access the Derivatives Market’s trading system have been functioning as usual - Société Générale Securities Services in Luxembourg has been mandated by wealth manager Bedrock, with $6bn in assets under management, to provide custody, fund administration and registrar services for its range of UCITS funds - Moody's Investors Service has assigned a first-time provisional (P)B3 corporate family rating (CFR) to Empik Media & Fashion SA Group. At the same time, Moody's has assigned a provisional (P)B2 rating to the firm’s proposed senior secured notes due 2019 to be issued at EM&F Financing AB, a wholly owned and guaranteed subsidiary of EMF, reflecting its overall ranking within the debt capital structure. The outlook on the ratings is stable. This is the first time Moody's has assigned ratings to EMF - Lithuania will adopt the euro on January 1st next year. Lithuania will become the 19th member state to adopt the euro. "Lithuania's consistent efforts have paid off: today the eurozone has opened the door for us," said Algirdas Butkevičius, prime minister of Lithuania, on the announcement. The entry of Lithuania into the euro family is of great importance for the whole euro area. "It's a demonstration of the continuing attractiveness of the single currency project and its relevance for the future of our community," added Sandro Gozi, State Secretary for European Affairs of Italy and President of the Council of the EU. The conversion rate has been set at 3.45280 Lithuanian litas to the euro – Global macro hedge fund manager Atreaus Capital is now live with SunGard’s Hedge360 Risk Reporting Service. Delivered as a managed service, the Hedge360 Risk Reporting Service provides highly customized daily risk reports, offering transparency to investors and integrated internal risk management to hedge funds. Trading a broad range of products with an emphasis on FX and commodities, in the form of both OTC derivatives and futures - AnaCap Financial Partners LLP, the specialist European financial services private equity firm, together with HIG and Deutsche Bank, have completed the acquisition of a €495m portfolio of non-performing and sub-performing loans from Volksbank Romania. Under terms of the agreement, funds advised by AnaCap will jointly acquire the entire portfolio with HIG and Deutsche Bank. The portfolio of 3,566 loans in total is backed by a mix of primarily residential, commercial real estate and development land. APS Romania will be appointed as Master Servicer. The transaction is the largest of its kind in Romania to date, and came about as a result of the ongoing pressure on financial institutions across Europe to restructure and divest assets in order to clean up balance sheets and comply with new capital requirements. After a prolonged correction following the financial crisis, the property market in Romania is now showing strong signs of improvement. GDP and unemployment have recovered on the back of labour market reforms in 2011 and an IMF financing package. House prices, which declined 38% since their peak in mid-2008, are now on the rise, with the areas surrounding central Bucharest and other main cities increasing 4% for 2013.

Fortunes divide in infrastructure spending in the GCC

Monday, 03 October 2011
Fortunes divide in infrastructure spending in the GCC The growing disparity of fortunes in the GCC project segment was starkly exposed by a Citigroup report, which highlighted the fact that while some $170bn of projects in the United Arab Emirates have been put on hold or cancelled outright, the MENA region has seen a substantial uptick in infrastructure project spend. Who are the winners and runners up in the GCC project stakes right now? http://www.ftseglobalmarkets.com/

The growing disparity of fortunes in the GCC project segment was starkly exposed by a Citigroup report, which highlighted the fact that while some $170bn of projects in the United Arab Emirates have been put on hold or cancelled outright, the MENA region has seen a substantial uptick in infrastructure project spend. Who are the winners and runners up in the GCC project stakes right now?

Citigroup’s latest MENA construction tracker report holds that the value of projects either delayed or cancelled rose to $170bn in August alone; a signal indication that the construction segment, particularly related to real estate in the Emirates, is still suffering from the fallout of local construction firms overstretching their credit exposure in the early years of this century. The figure is significant; the value of projects cancelled or delayed accounts for 56% of the all stymied projects across the survey area and is up 13% on July’s figures.  The property boom in the Emirates has now been languishing for over 3 years, with some prices of private property estimated to have fallen by as much as 60% in Dubai. No wonder many developers have been forced to abandon projects.

Projects cancelled or on hold across the wider MENA region in contrast, fell slightly to $1.69bn, compared with $1.7bn in July.  However, key markets in the GCC continue on the fast track in terms of new project spend. Saudi Arabia added $81bn worth of projects to the already $100bn it intends to spend on infrastructure in general and $20bn it will spend on downstream petrochemical projects over the coming five years.  Saudi Arabia, the UAE, also Jordan and Egypt are reportedly now pushing forward the idea of building nuclear power capacity across the MENA region; with the estimated value of projects topping $400bn over the next 15 years.  Saudi Arabia will again dominate this segment, with a planned $350bn spend on the King Abdullah City of Atomic and Renewable Energy project, which aims to establish a zeroCo2 emissions city using a mix of nuclear and other renewal energy sources.  Around 16 separate nuclear units are planned.

Kuwait ($20bn) and Qatar ($2bn) also have projects that are in preliminary stages of construction. In contrast, the UAE also showed a $12bn decline in preliminary projects to $118bn.

It is a contrasting picture with the situation even two years ago. While the outlook for countries such as Saudi Arabia look strong in the near term, revised data issued by the Saudi Arabian Monetary Authority shows that the build up to the current construction pipeline was rather slow in 2009 and the first half of 2010. There was an uptick in growth in 2010, with the industry posting 3.7% year-on-year real construction industry growth, while an average growth in construction projects of some 4% a year over the next four years is expected, backed by a healthy project pipeline, strong government support, an ability to invest and local demand for infrastructure keeps the industry stable.

The country’s Ninth Development Plan announced a touch over a year ago sets out an investment spend on infrastructure of some SAR1, 444bn ($385bn) between 2010 and 2014. Then, in response to stirrings elsewhere in MENA, now called the Arab Spring, the government created two packages of social benefits worth $130bn to finance further investment in education, healthcare and housing projects. SAR250bn ($66bn) was pledged for housing alone, with 500,000 new units in the pipeline. Around 7% of development plan investment will be channelled into housing, encompassing some 1m new houses to be built on a public-private partnership basis.  Another 19% will be invested in healthcare, involving the build of some 117 hospitals and 750 so-called primary care units.  The government also has an $80bn 10-year investment plan for electricity infrastructure underway in parallel with the infrastructure investment plans, which run out to 2018. Some 20GW of electricity capacity is currently under construction, worth around $30bn.

In a boost to local construction firms, the Saudi Industrial Development Fund has announced it will finance up to 75% of costs for investment projects in under-developed regions.

The current crop of investments underway includes the SAR40bn expansion of the Grand Mosque, underscoring the Kingdom’s pivotal role in Islam. The expansion, in the northern part of the Grand Mosque will cover an estimated 356,000 square metres, ultimately accommodating up to 1.2m worshippers.  It includes the construction of four giant bridges allowing access to the northern courtyards inside the Grand Mosque. It is the largest expansion project within the Grand Mosque complex to date and will showcase the country’s move into the 21st century, while retaining its sacred role as protector of the Islamic faith.

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