Trendline broken. Is it the time to Long?

After the previous reading, DFM index as always went the other way. 1300 formed a support and previous resistance at 1340 was broken plus the trendline also broken with strong volumes. But i have seen something similar before and DFM index always tends to come back to the long term downtrend. Hopefully for a lot of the punters in this market 2012 will bring good tidings. But, i doubt it.

Greece Is Insolvent, Will Default on Its Debt, Fitch Says

Greece is insolvent and probably won’t be able to honor a bond payment in March as the country negotiates with creditors to cut its debt burden, Fitch Ratings Managing Director Edward Parker said.

The euro area’s most indebted country is unlikely to be able to honor a March 20 bond payment of 14.5 billion euros ($18 billion), Parker said today in an interview in Stockholm. Efforts to arrange a private sector deal on how to handle Greece’s obligations would constitute a default, he said.

Prime Minister Lucas Papademos is scheduled to meet tomorrow with a group representing private bondholders after a five-day break to hold talks on forgiving at least 50 percent of the nation’s debt in the euro area’s first sovereign restructuring. Greece’s official creditors begin talks Jan. 20 on spending curbs and budget cuts that will determine whether to disburse additional aid.

“The so-called private sector involvement, for us, would count as a default, it clearly is a default in our book,” Parker said. “So it won’t be a surprise when the Greek default actually happens and we expect it one way or the other to be relatively soon.”

‘Restricted Default’

Fitch in July downgraded Greece to CCC, seven levels below investment grade. The rating company in July also said Greece will be considered a “restricted default” after a European bailout plan was unveiled that included getting bondholders to assume part of the cost.

The yield on Greek benchmark debt maturing in October 2022 fell 45 basis points to 33.6 percent, after hitting a record of 36.14 percent on Dec. 21.

The proposed debt swap aims to slice 100 billion euros from the 205 billion euros of privately owned Greek debt, with the help of 30 billion euros in cash for incentives to reach a debt- to-gross domestic product ratio of 120 percent by the end of 2020. That will relieve Greece of some 4 billion euros in annual debt servicing costs. The ratio was 162 percent in 2011, according to IMF estimates.

The targeted ratio is a “realistic outcome” for the talks, European Central Bank President Mario Draghi said yesterday at the European Parliament in Strasbourg. Slower growth and a lack of progress on reforms since the Oct. 26 summit make it essential that the talks address how Greece will meet its debt obligations, Draghi said.

Debt Ratio Rising

The “government debt-to-GDP ratio is 160 percent and rising so it can’t pay its debts,” Parker said. “Plan A is for the PSI negotiations to resume and reach a voluntary agreement and if that isn’t possible, I would expect an involuntary debt exchange to be set up and for them to complete that by that date in March.”

Two days of talks in Athens between Greece and the Institute of International Finance, which represents the country’s private creditors, broke off on Jan. 13 without an agreement. Frank Vogl, an IIF spokesman, blamed the breakdown in talks on disagreement over the coupon, or interest rate, to be paid on new bonds and on discord among different authorities involved in the talks.

The country is surviving on the 8 billion-euro loan paid last month by the IMF and the EU, and proceeds from Treasury bill sales. Greece raised 1.6 billion euros in a sale of 13-week bills today at a yield of 4.64 percent, compared with 4.68 percent at the previous such sale on Dec. 20.

Standard & Poor’s last week downgraded nine euro area nations, including cutting France’s AAA rating. The downgrades by S&P suggest countries can fail to meet their debt obligations and Greece will prove to be the latest example, Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said in a Twitter post yesterday.

Europe’s debt crisis is likely to be “long and drawn out,” Parker said. “There is simply not enough political will to jump to some fiscal union, in the sense of joint and several guaranteeing of euro zone government debt.”

The Dubai Index could go down very far

The Dubai Financial Market Index tried over the last week to hold the 100% Fibo at 1338 but, unable to do so. The volumes in the past fews days with a downward bias strongly suggest we are moving south with initial support at the down trend channel bottom line which could be anywhere. But a likely target would be 1166 which is 138.2% fibo level also times well with downtrend channel bottom line and the fibo timezone line (vertical). We could see a lot of support there. For the impatient kind there might be some support at 1217 (yearly pivot levels)

I will review this next week to see how well this goes. Upwards 1338 is big resistance now. But the rising volumes in down moves strongly suggest we are heading south.

Emaar puts Dubai Mall as collateral

Emaar Properties has signed a new Islamic and conventional financing facility amounting to Dh3.6 billion ($1 billion).

The facility was signed with Dubai Islamic Bank, National Bank of Abu Dhabi and Standard Chartered Bank as mandated lead arrangers and bookrunners.

As part of the overall debt management for the company, the drawdown of the facility will convert the company’s debt’s maturity profile from short to longer term. This new facility will also assist in reducing the overall financing cost of Emaar due to the lower pricing achieved compared to existing borrowings.

Of the total facility, 50 per cent is repayable in a bullet repayment after five years, and the rest is amortised over eight years, said the statement.

The pricing on the facility is benchmark plus 350 basis points and is secured by The Dubai Mall. Initially, the facility will be utilised to repay the existing $300 million facility taken in 2010. Subsequent drawn downs will be made in 2012 as required, it said.

Mohamed Alabbar, chairman, Emaar Properties, said that the financing arranged is a further testament to Emaar’s ability to raise long term finance at competitive pricing even in tougher economic conditions.

“Emaar has again been amongst the first to raise an eight-year financing in the regional markets with the assistance of our core partner banks, which reflects the superior value Emaar has created for its stakeholders through its iconic developments.”

He added: “The prevailing financial climate also offers a strong opportunity for forward-looking organisations to strengthen their reserves and structure long-term growth plans.”

Emaar reported a net operating profit of Dh1.249 billion ($340 million) in the first nine months (January to September) of 2011. Revenue for the first nine months of this year reached Dh5.873 billion ($1.599 billion).

The nine-month performance of Emaar was underlined by the sustained growth of its hospitality and leisure and shopping malls and retail subsidiaries, the continued demand for homes and commercial space within its established communities such as Downtown Dubai, and the hand-over of prime real estate assets in international markets, including Turkey, Jordan and Syria.

Emaar is on track to hand over residential projects in Saudi Arabia, among other global markets, shortly.

Dubai Financial Market Close to MSCI but not classified this time

DFM had positive remarks and could be the next potential MSCI upgrade candidate. Sounds very positive, now we should have some focus on our markets. Qatar obviously doesn't care about MSCI listing.

UPP posts record loss of 1.1 Billion dirhams for Q32011

15/11/2011
Bloomberg

Union Properties PJSC (UPP), a Dubai-based developer, reported a record loss as costs rose and property values in the Persian Gulf emirate slumped.

The third-quarter loss widened to 1.1 billion dirhams ($289 million) from 452 million dirhams a year earlier, the company said in a statement today. Direct costs jumped to 726 million dirhams from 415 million dirhams.

Dubai’s property market went from being one of the world’s best-performing to the worst following the global credit crisis three years ago, with home prices slumping 64 percent since the mid-2008 peak, according to Deutsche Bank AG estimates. Emaar Properties PJSC (EMAAR), Dubai’s biggest developer, reported a 34 percent decline in third-quarter profit as revenue declined and property deliveries slowed.

Union Properties has been in talks with lenders to restructure debt, Chairman Khalid bin Kalban said in June. The developer is repaying borrowings this year with the 1.1 billion dirhams it raised from selling the Ritz Carlton Hotel and another 900 million dirhams from other property sales, he said.

Profit excluding changes in the value of Union Property’s real estate was 107 million dirhams, compared with a year- earlier loss of 32 million dirhams. Revenue increased 75 percent to 955 million dirhams. The company wrote down the value of its real estate by 1.17 billion dirhams in the quarter, compared with 420,000 dirhams the year-ago period.

Union Properties developed the 80-story Index Tower and the Limestone House apartment complex as well as villas and office buildings.

The shares were little changed in Dubai trading at 30.3 fils as of 1:02 p.m. They’ve declined 16 percent this year, cutting the company’s market value to 1.02 billion dirhams. The stock peaked in July 2007 at more than 5 dirhams.

DU get TRA nod for 4G

UAE's integrated telecom operator du has been allowed by the Telecommunications Regulatory Authority (TRA) to refer to its HSPA+ mobile network as 4G, a company statement said.

It said since March 2011, du has been providing 4G mobile data network in the UAE, covering 99.8 per cent of the country’s population.

However, du was temporarily refrained by the TRA from running advertisements claiming its mobile network was 4G till a review was done.

The company said that over the past few weeks it had submitted detailed information to the TRA in support of its claim and the TRA had carefully studied them.

'Du is committed to lead and continue to offer the latest telecom technologies and products to the consumers in the UAE,' it added.

Q32011 Results

Company	Net Profit (Q32011)	Net Profit (Q32010)	% change	EPS (FILS) 9months
ENBD	174.8 mil.	423.9 mil	-58.70%	41.9
DIB	298.0 mil.	269.6 mil.	10.80%	22.4
EMAAR	406.5 mil.	612.3 mil.	-33.60%	18
DU	244.4 mil.	163.1 mil.	49.60%	14.4
ARMX	48.0 mil.	46.7 mil.	2.80%	10.5
DIC	24.9 mil.	213.6 mil.	-88.20%	7.4
TAMWEEL	15.7 mil.	7.3 mil.	115.10%	7.1
AIRARABIA	99.3 mil.	135.2 mil.	-26.60%	4.1
DFM	(9.3) mil.	(3.0) mil.	-200.10%	1
DEYAAR	0.6 mil.	(145.5) mil.	-	0.8
TABREED	54.1 mil.	35.0 mil.	54.30%	0.23
ARTC	39.1 mil.	6.8 mil.	400.70%	0.06
GGICO	(155.8) mil.	48.8 mil.	-219%	-0.17
AJMANBANK	3.0 mil.	(3.3) mil.	-	-0.48
GULFNAV	(29.1) mil.	(15.3) mil.	-93.30%	-3.2

Emaar Third-Quarter Apartment Sales Plunge 86% Amid Weak Demand

Nov. 13 -- Emaar Properties PJSC, the developer of the tallest tower in
Dubai, said revenue from apartment sales plunged 86 percent in the thrid
quarter amid weak property demand in the Persian Gulf emirate.

Income from apartment sales dropped to 183.3 million dirhams from 1.34
billion dirhams a year earlier, according to Emaar's financial statement
posted on Dubai's stock market today. Revenue from sale of villas jumped
to 126.4 million dirhams from 30.4 million dirhams. Emaar posted
third-quarter earnings on Oct. 27 and provided a breakdown of revenue
today.

Emaar, United Arab Emirates' biggest developer by market value, was hurt
by a more than 60 percent slump in property prices in its home market as
speculative demand waned and banks tightened lending since mid-2008. The
company reported a 34 percent decline in third-quarter profit as revenue
declined and property delivery slowed.

Revenue from hospitality business advanced 14 percent 224.5 million
dirhams, while rental income increased 21 percent to 526 million
dirhams, according to the statement.

The developer plans to borrow $700 million and build a commercial center
in its Eighth Gate development in Damascus, Chairman Mohamed Alabbar
told Dubai TV on Oct. 24. The shares gained 0.4 percent to 2.67 dirhams
in Dubai trading today, paring its lose this year to 25 percent.

As per a news article in bloomberg....