Dar Al Arkan: Real Estate Development Company's Islamic bond yields surged to a record last week on investor concern. Saudi Arabia's biggest property company by assets may struggle to pay its debt amid a slump in profits.
The yield on the 10.75 per cent sukuk due February 2015 gained 96 basis points, or 0.96 of a percentage point, last week to 14.45 per cent on Friday, Bloomberg prices show. "The market is speculating about Dar Al Arkan's capacity to repay its debts," Jitendra Garg, a Riyadh-based financial analyst at The Investors Securities Company, said in an e-mailed response to questions on September 25.
Investors are concerned the company may resort to "asset liquidation, which may result in sales of assets below market price". The developer, which planned to sell residential properties and land this year to help raise money, has seen a decline in profit for 10 consecutive quarters after demand for land in the kingdom fell.
Dubai's Shuaa Capital and savings scheme National Bonds formed a strategic alliance under which the investment bank will offer advisory and brokerage services to the sharia-compliant firm, the two companies said yesterday.
The partnership is also aimed at expanding the customer bases of both companies and promoting a savings culture in the UAE, the companies said in a statement. The tie-up will "help some of our clients shift from risk exposure investments to risk control," Khalifa Al Daboos, chairman of National Bonds, said.
Qatari liquefied natural gas (LNG) producer Rasgas plans seven LNG plant maintenance shutdowns in 2012, a company official said yesterday.
"The first will be in January. We will also shut AKG 2 (Al Khaleej gas two) in March. Trains 1 and 2 will be shut in May and Train 7 will be down in October," he said at a conference in the Qatari capital Doha. In June, Rasgas said it would shutdown its Train 7 for maintenance in January 2012. The plant, which has the capacity to liquefy 7.8 million tonnes of natural gas per year, started production last year.
Maridive & Oil Services SAE, an Egyptian marine and oil support services company, was raised to "buy" from "neutral" at EFG-Hermes Holding SAE, which cited a decline in the company's shares.
"Maridive's shares have come under significant pressure, falling 40 per cent since mid-July, on concerns over the company's weak backlog beyond this year," analysts Abid Riaz and Nadine Hassouna said in the note.
Arab Cotton Ginning, an Egyptian textiles producer, said its fiscal year profit advanced 10 per cent.
Net income for the year that ended in June was 226.1 million Egyptian pounds compared with 205.4 million pounds a year-earlier, the Cairo-based company said in an advertisement in Al Mal newspaper.
Coca-Cola Icecek AS, the bottler of Coca-Cola drinks in Turkey, was downgraded to "sell" from "hold" at UniCredit SpA on a short foreign currency position that threatens profits.
The bottler's target price was cut to 23 liras from 25.30 liras, according to a report by UniCredit analysts Aysegul Gokce Baykal and Cuneyt Demirgures in Istanbul. Coca-Cola Icecek's short foreign currency position of $336 million and €61 million ($81 million) "poses a threat to the third-quarter bottom line" due to the depreciation of the Turkish lira, the report said. The company may post a net financial loss of 78 million liras ($42 million) in the third quarter, the analysts said. Coca-Cola Icecek shares dropped 80 kurus, or 3.2 per cent, to 24.50 liras at the 12:30 break in Istanbul.
Rabigh Refining & Petrochemicals Co., a Saudi Arabian fuel producer, aims to gain market share in Europe by benefitting from access to low-cost natural gas and by expanding output, Chief Executive Officer Ziad Al Labban said.
Oil prices have hurt profitability for petrochemical makers that rely on naphtha, a product of the crude refining process, as feedstock, Al Labban said yesterday in an interview in Dubai.
Middle East chemical companies that buy ethane, a type of gas used to make chemicals, at fixed prices have an advantage over producers located in the US and Europe, he said.