Dubai stocks gain strength; Abu Dhabi index dips

Updated 20 February 2013
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Dubai stocks gain strength; Abu Dhabi index dips

DUBAI: Dubai telecom operator du made its largest one-day gain in 10 months, surging to a four-year high and boosting the broader index after it posted quarterly results that beat analysts’ estimates.
Most regional markets in the Gulf Arab region declined.
Shares in du jumped 11.7 percent to AED 4.12 in its biggest gain since April 2012.
Du’s fourth-quarter profit more than doubled to AED 994 million ($ 270.6 million) as it wrote back tax provisions.
UAE telecom operators are taxed via royalties under license agreements with the federal government. The latter announced a new formula in December that includes a levy on revenues as well as profits. Du had provisioned to pay 50 percent of its profit in royalty fees through the year, but the new formula means it pays less tax as a percentage of profit than 2011, enabling it to write back some of the provisions it set aside in the first nine months of 2012. The firm also proposed a cash dividend of AED 0.3 per share.
“The surprise was on earnings as well as dividend yield, which at 8 percent is very attractive,” said Ali Adou, portfolio manager at The National Investor. “The royalty fee restructuring will be negative for du after three years, but for the time being, the stock looks very attractive.”
Dubai’s measure ose 1.7 percent to its highest close since November 2009. It has risen 16 percent year-to-date.
Stocks have rebounded following tentative signs of recovery in Dubai’s property sector, but the share index remains about 70 percent below a 2008 peak. Abu Dhabi’s index eased 0.2 percent, down from Monday’s 39-month high.
Elsewhere, Egypt’s index fell 1.2 percent to its lowest level in February as political uncertainty spurred foreign investors to cut risk exposure.
Egypt’s constitutional court earlier rejected five articles of a draft election law and sent the text back to the country’s temporary legislature for redrafting in a ruling that may delay a parliamentary poll due in April. Investors are worried about the economic uncertainty caused by the delay, including a $ 4.8 billion loan from the International Monetary fund, seen as crucial to support the country’s battered economy and to stabilize a currency crisis.


“The law debate makes it very difficult to expect when the elections will be held,” said Ahmed Kheir El Din, a Cairo-based trader.
“We don’t know what will happen with the IMF (International Monetary Fund) loan or the appointment of a new government.”
Non-Arab foreign were net sellers, while Arab were net buyers, bourse data shows.
Commercial International Bank is the main drag, falling 3.2 percent. Orascom Telecom and Media sheds 1.4 percent and EFG-Hermes dips 2.8 percent.


British court dismisses charges against Barclays over 2008 Qatar deal

Updated 6 min 7 sec ago
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British court dismisses charges against Barclays over 2008 Qatar deal

LONDON: A British court has dismissed charges brought by the Serious Fraud Office (SFO) against Barclays over its 2008 capital raising, the bank said on Monday, suspending for now the threat of regulatory sanctions on its business operations.
The SFO was however not prepared to let the case drop.
“We are likely to seek to reinstate the charges by applying to the High Court,” an SFO spokesman said. It was not clear when that application would be heard.
Barclays denied the SFO’s allegation that a $3 billion loan it made to Qatar in November 2008 was connected with a Qatari investment in the British bank which ultimately helped it avoid a British government rescue during the financial crisis, unlike its rivals Lloyds and Royal Bank of Scotland.
An end to the SFO’s case against Barclays and its operating subsidiary would remove the biggest remaining legal headache facing Barclays over its conduct during the financial crisis.
The collapse of one of its most high-profile corporate prosecutions would also represent a major setback for the SFO, with the prosecutor’s office under fire from politicians in recent years.
Qatar, which is a major investor in Britain, has not been accused of wrongdoing itself, but public companies in Britain are normally prohibited from lending money for the purchase of their own shares, known as “financial assistance.”
The SFO had been pursuing charges that Barclays unlawfully received such financial assistance, and that it had conspired with former senior executives to commit fraud over two so-called ‘advisory services agreements’ between Qatar and the bank which facilitated the fundraising.
NOT OVER YET
Even if the SFO were to fail in its efforts to reinstate the charges, Barclays still faces other legal and regulatory problems related to the 2008 fundraising.
The US Department of Justice and the Securities and Exchange Commission are investigating the advisory services agreements.
Separately four former Barclays bankers face a charge of conspiracy to commit fraud by false representation when they negotiated a capital injection for the bank from Qatar, in a trial due to start next January.
The four are former chief executive John Varley, and senior executives Roger Jenkins, Tom Kalaris and Richard Boath.
Barclays said the dismissal of the charges against itself should not be taken to have any bearing on whether other people may have committed a criminal offense.
Lawyers representing Boath and Jenkins declined to comment, while lawyers for the other two did not immediately respond to requests for comment.
British businesswoman Amanda Staveley has a separate $1 billion civil lawsuit against Barclays over the same fundraising.
Staveley’s private equity group PCP Capital Partners is claiming damages for alleged fraudulent misrepresentation in a row over whether Barclays offered Qatar and Abu Dhabi investors the same deal terms for participating in a fundraising in 2008.
Barclays has called the PCP lawsuit “misconceived.” Staveley declined to comment.
Barclays shares were up 0.7 percent by 1300 GMT, in line with the FTSE 350 British banks index.