Signs that rising borrowing costs were affecting AAA-rated
France stirred fears that even core euro zone members may not
escape contagion from the region’s debt crisis.

World shares were generally lower with the MSCI all-country
world index off half a percent.

“The global backdrop is slightly negative and so markets in
the Gulf are flat to marginally lower,” said Shahid Hameed from
Global Investment House.

Qatar Telecom ended 0.4 percent higher after it
said it acquired a further 7.45 percent of StarHub,
Singapore’s second biggest telecom company.

That helped lift Qatar’s index, which, along with
Bahrain, were the only markets to gain. Qatar’s benchmark
rose 0.1 percent and Bahrain’s measure advanced 0.7 percent.

In the UAE, both the Dubai and Abu Dhabi measures
retreated slightly. Emirates NBD weighed, down
0.3 percent and Dubai Islamic Bank fell 0.5 percent.

National Bank of Abu Dhabi retreated 0.5 percent
while Union National Bank fell 0.7 percent and First
Gulf Bank slipped 1 percent.

“The low volumes in the last two trading sessions in the
United Arab Emirates goes to suggest that markets do not have
enough power to break resistance levels technically,” said
Mohammed Ali Yasin from CAPM Investment.

Oman’s benchmark fell for a fourth consecutive
trading day easing 0.1 percent to 5,532 points. Bank Muscat
declined 1.1 percent.

In Egypt, the index ended 0.2 percent lower as
investors waited to see if the government would back down on a
proposal to lay down principles for a new constitution in the
face of opposition from many political parties.

“If the outcome is not favourable and the protest goes
ahead, this will be a blow to the equity market,” said Ahmed
Abutaleb of Pharos Securities. “We are approaching the elections
and Friday’s protest might cause them to be delayed.”

WEDNESDAY’S HIGHLIGHTS

DUBAI

* The index slipped 0.1 percent to 1,387 points

ABU DHABI

* The main measure eased 0.2 percent to 2,476 points

SAUDI ARABIA

* The index declined 0.1 percent to 6,220 points

QATAR

* Doha’s bourse rose 0.1 percent to 8,749 points

OMAN

* The measure fell 0.1 percent to 5,532 points

KUWAIT

* The index fell 0.1 percent to 5,871 points

BAHRAIN

* The benchmark advanced 0.7 percent to 1,159 points

EGYPT

* The benchmark fell 0.2 percent to 4,171 points

(Additional reporting by Tamim Elyan in Cairo; Writing by
Rachna Uppal; Editing by Firouz Sedarat)

Gulf markets opened slightly higher tracking Asian stocks
which rose earlier in the day on hopes that technocrat leaders
in Italy and Greece would push for radical reform to contain the
euro debt crisis, before easing slightly.

Abu Dhabi’s Dana Gas was in focus after the energy
firm said its third-quarter net profit more than quadrupled
buoyed by a 20 percent increase in total production and higher
oil prices.

The stock closed 1.8 percent higher.

“I believe UAE markets are moving up gradually and nicely as
they are building on a rebound that started before Eid
holidays,” said Mohammed Ali Yasin, chief investment officer at
CAPM Investment.

“We are benefiting from a slight improvement in investor
confidence helped by third quarter earnings. Although there
weren’t many surprises, however, it demonstrated that certain
sectors, especially real estate and banking, are moving in the
right direction.”

Abu Dhabi Commercial Bank fell 0.7 percent.

The lender has picked four banks for a potential Islamic
bond, or sukuk, which could be launched this week, a document
from arranging banks showed on Monday.

Abu Dhabi’s index fell 0.2 percent while Dubai
eased 0.4 percent with construction firms Arabtec
and Drake & Scull slipping 0.7 percent and
0.6 percent respectively.

Dubai’s Union Properties fell 2.2 percent.

Qatar and Kuwait were the only markets to end in positive
territory rising 0.3 percent and 0.03 percent respectively.

Heavyweight Industries Qatar also advanced 0.3
percent while Qatar National Bank and Qatar Islamic
Bank rose 0.9 percent and 0.4 percent.

Saudi Arabia’s bourse eased 0.3 percent after two
days of gains.

MONDAY’S HIGHLIGHTS

DUBAI

* The benchmark eased 0.4 percent to 1,388 points

ABU DHABI

* The main measure slipped 0.2 percent to 2,487
points

SAUDI ARABIA

* The kingdom’s bourse fell 0.3 percent to 6,238
points.

OMAN

* Muscat’s measure fell 0.1 percent to 5,559 points

KUWAIT

* The index advanced 0.03 percent to 5,870 points

BAHRAIN

* The bourse eased 0.4 percent to 1,150 points

EGYPT

* Cairo’s bourse fell 2.7 percent to 4,181 points

(Reporting by Jason Benham; editing by Sami Aboudi)

Construction and real estate stocks boosted bourses in the
United Arab Emirates with Dubai’s Arabtec climbing 3.7
percent and leading the emirate’s bourse 0.7 percent
higher.

“We’re taking the good news from global markets,” said
Haissam Arabi, chief executive and fund manager at Gulfmena
Investments.

“There is positive sentiment in most GCC markets and Saudi
got off to a good start yesterday after Eid but the markets are
being careful and we are not seeing huge volumes.”

Dubai’s Drake & Scull International advanced 1.7
percent after reporting a 76-percent increase in third quarter
net profit earlier on Sunday.

“Until now you don’t have a lot of reaction on results, even
if they are far above consensus — the price action is limited,”
said Sebastien Henin, portfolio manager at The National
Investor.

“I don’t see from where we can have a positive catalyst in
the UAE.”

Abu Dhabi’s main index rose 0.6 percent to 2,492
points driven by Dana Gas — the usual target of
retail investors — which increased 3.8 percent.

Saudi Arabia ended higher for a second day following the
Muslim Eid holiday, rising late in the day to recover from
earlier weakness.

Heavy weight Saudi Basic Industries Corp (SABIC)
edged 0.3 percent higher.

Oman and Kuwait both fell but losses were modest.

Muscat’s main measure slipped 0.1 percent with Galfar
Engineering easing 2.2 percent.

Oman Telecommunications Co (Omantel) ended flat
after reporting a 25-percent rise in third quarter net profit
which fell slightly short of analysts estimates.

Egypt’s main index fell 1.9 percent to 4,299 points
as some investors sold ahead of a planned mass rally by
Islamists in Cairo on Friday to protest at a government attempt
to lay down rules for a new constitution.

SUNDAY’S HIGHLIGHTS

DUBAI

* The index climbed 0.7 percent to 1,393 points

ABU DHABI

* The measure rose 0.6 percent to 2,492 points

QATAR

* The benchmark increased 0.4 percent to 8,742 points

SAUDI ARABIA

* The benchmark edged 0.1 percent higher to 6,257
points

OMAN

* The index eased 0.1 percent to 5,566 points

EGYPT

* The index fell 1.9 percent to 4,299 points

KUWAIT

* The benchmark eased 0.7 percent to 5,868 points

BAHRAIN

* The measure was unchanged at 1,154 points.

(Reporting by Jason Benham; Editing by Firouz Sedarat)

However, the developer’s earnings marginally beat an average
analyst forecast for a 36 percent drop in profits, as recurring
income from its malls and hotels business grew.

The United Arab Emirates’s largest developer by market value
made a net profit of 406 million dirhams ($110.5 million),
compared with 612.3 million in the same period last year, it
said in a statement on Dubai’s bourse website.

In the first nine months as a whole, recurring revenue from
Emaar’s hospitality and shopping malls accounted for nearly 41
percent of total revenue, with its malls business generating 1.6
billion dirhams in revenue, it said.

“This goes to show that Emaar’s hotel and malls portfolio is
the main value driver,” said Ahmed Badr, head of MENA real
estate and construction research at Credit Suisse.

Among Emaar’s assets is Dubai Mall, the world’s largest
shopping centre. It also has a joint venture with Italian
fashion house Georgio Armani to develop luxury hotels.

The developer’s total revenue dropped to 1.86 billion
dirhams in the third quarter compared with 2.8 billion a year
before.

Emaar, around 30 percent owned by the Dubai government, took
no impairments this quarter, unlike in the second quarter when
it wrote off its investment in Dubai Bank that was valued at 172
million dirhams.

The developer is still to write off its exposure to troubled
Islamic mortgage provider Amlak .

HOME SALES SUFFER

Dubai’s once-booming property market hit a wall in 2008 and
the decline worsened after the global financial crisis, ending
a massive building spree. Prices are down 60 percent from their
2008 peak.

House prices in Dubai are expected to fall another 10
percent before stabilising, a Reuters poll showed this month.

Emaar said it handed over a total of 201 residential and
commercial units in the third quarter and 712 in the first nine
months of the year.

“The main reason behind the revenue shortfall versus our
expectations were lower revenues from property sales,” said Roy
Cherry, lead real estate and construction analyst at SHUAA
Capital in Dubai.

Emaar’s earnings from apartment sales fell by 85 percent, it
said in its last quarterly earnings.

The developer’s Chairman Mohamed Alabbar said earlier this
week it is in the process of raising around $700 million from
banks.

The developer appointed a core management team in the
second quarter for a strategic review of its global operations,
sources revealed.

In a bid to revive the battered real estate sector and
restore investor confidence, Dubai launched a real estate
investment fund this week worth up to $1 billion with Canada’s
Brookfield Asset Management (BAMa.TO: Quote, Profile, Research, Stock Buzz).

Shares of Emaar ended 4.8 percent higher, along with other
property-related stocks, after the fund was announced.
($1 = 3.673 UAE Dirhams)

(Editing by David Holmes)

House prices in Dubai soared after the emirate — which overstretched itself building extravagant real estate projects — opened its real estate sector to foreign investors in 2002, granting them freehold ownership rights at many developments.

From start-2007 to mid-2008, prices rallied almost 80 percent, Morgan Stanley estimates showed.

But the bubble burst when global economic woes and a debt crisis at home led to billions of dollars worth of projects being put on hold or canceled while house prices plummeted some 60 percent from their peaks.

“When you look at Dubai, yes the market is oversupplied on the residential side,” Martin Kohlhase, senior analyst, EMEA Corporate Finance at Moody’s, told the Reuters Middle East Investment Summit in Dubai.

“We don’t see recovery over the next five years. New construction, new projects are unlikely to happen and the same would hold true for the commercial market,” he added.

Dubai’s housing market will plummet another 10 percent before it stabilizes, a Reuters poll showed earlier on Monday, adding the market is oversupplied by about 25 percent.

Brokerage AlembicHC said last month it would take at least three years for supply and demand to reach equilibrium, while Rasmala Investment Bank’s Saud Masud said it would be 2020 when property prices get back to 2008 levels assuming five or six years of recovery.

The situation in Abu Dhabi, the capital of the United Arab Emirates, is no better with as many as 11,000 homes expected to flood the property market in the next quarter, a report by property consultants Jones Lang laSalle said this month.

House prices in Abu Dhabi are expected to fall another 14 percent from here, or 60 percent from their peak, Reuters property poll showed, while rents are expected to slump 14 percent this year and 10 percent next year.

In June this year Moody’s downgraded Abu Dhabi’s largest property developer Aldar Properties ALDR.AD credit ratings to B2 from Ba3 with outlook changed to negative, citing uncertainty over future government support for the struggling developer.

“There is a higher chance of revisiting the credit rating over a 12- to 18-month period with negative pressure,” Moody’s Kohlhase said at the summit.

DUBAI SAFE HAVEN

While the outlook for Dubai’s property sector remains gloomy, the emirate has been seen as a safe haven during turmoil that has gripped the Arab world and toppled leaders in Tunisia, Egypt and Libya.

The Gulf emirate’s retail sector has benefited from the unrest, Iyad Malas, chief executive of mall developer Majed Al Futtaim (MAF) Holding, told the Reuters on Monday.

“Arab spring benefit to Dubai has been evident in the summer because people in the GCC didn’t travel elsewhere in the region,” he said.

“Mall traffic continues to be very strong. We’ve seen drops of about 20 percent in sales from top to bottom but since then (the turmoil) we’ve seen an upturn.”

The uprisings cost the most affected countries more than $55 billion but the resulting high oil prices have strengthened other producing countries, a report by political risk consultancy Geopolicity showed earlier in October.

Major oil producers such as the United Arab Emirates, Saudi Arabia and Kuwait avoided significant unrest and saw their GDP grow during the turmoil. Oil prices rocketed from around $90 a barrel of Brent crude at the start of the year to just short of $130 in May. [ID

(Editing by David Cowell)

A military court also sentenced 15 others to 15 years in prison each for the attempted murder of a soldier, vandalizing buildings at the University of Bahrain and “inciting hatred of the ruling system,” the agency said.

Another six received 15 years each for intent to murder several people at the university, while a seventh was given 18 years. They were charged with setting a building on fire to kill those on an upper floor.

Bahrain’s Sunni Muslim rulers quashed the protests in March, with the help of troops from fellow Sunni neighbors Saudi Arabia and the United Arab Emirates. At least 30 people were killed, hundreds wounded and more than 1,000 detained — mostly Shi’ites — in the crackdown.

Pakistani national Abdulmalik Ghulam Rasool — killed in March — was assaulted with wooden planks and metal bars as he left his home in Manama, BNA said, adding that the 14 were also charged with intending to cause riots and commit other crimes.

Those jailed in all three cases were convicted for “spreading terror,” BNA said.

The court rejected requests by lawyers in the three cases for an independent medical committee to investigate allegations that the defendants had been tortured, Mattar Mattar, a member of the largest Shi’ite opposition group Wefaq, told Reuters.

“The lawyers said that a lot of the detainees were forced to give confessions,” he said. “This brings the focus on the importance of having a progressive and independent judiciary system in Bahrain.”

The United Nations said Friday that sentences handed down to 20 Bahraini doctors followed flawed trials that failed to meet international standards of transparency and due process.

The World Medical Association also condemned as “totally unacceptable” the jail terms imposed by a military court.

A military court sentenced the doctors to jail Thursday for between 5 and 15 years for occupation of a medical complex, using ambulances to transport protesters, storing weapons and other charges.

Bahrain faces almost daily protests by Shi’ites, angry over a crackdown in which thousands lost their jobs and over government reform plans that fall short of giving the Gulf state’s elected parliament full legislative powers.

Last week a military appeals court upheld life sentences for eight of 21 opposition leaders, rights activists and online activists accused of leading the uprising earlier this year.

(Reporting by Jason Benham; Editing by Alistair Lyon)

The Arab Spring, which has resulted in the downfall of
leaders in Tunisia, Egypt and Libya, has confirmed Dubai’s
position in the region, property consultancy Jones Lang LaSalle
said.

“This stimulus has helped push the hotel and retail sectors
into the recovery stage of their market cycle over the past six
months, while selected sectors of the residential market are now
recovering,” the report said, adding that the office sector had
seen the least benefit.

Dubai’s property sector was hit hard by the global financial
crisis, with residential prices plummeting as much as 60 percent
while billions of dollars worth of projects were put on hold or
cancelled.

Jones Lang LaSalle said that although residential rents and
prices are not increasing across the board, some areas are
approaching stability.

“Interest from those displaced by the Arab Spring or looking
for safe-haven residential properties in Dubai is reported to be
particularly strong for upmarket villas in iconic projects such
as Palm Jumeirah,” it said.

Recovery in demand however could be delayed by slowing
growth in the United States and Europe and further supply
increases.

Jones Lang LaSalle said a further 5,000 homes expected by
the end of 2011 and as many as 27,000 next year could exaggerate
oversupply and delay a price recovery.

FURTHER DECLINES

An increase in villa prices seen in some areas in the
emirate is unlikely to spill over into the broader residential
market in 2011 and the chance of any recovery in 2012 will
depend on the rate of economic growth and end-user demand for
Dubai residential property.

Prices continue to see further declines in many parts of
Dubai, it added.

For office space, caution among occupiers will have a
negative impact, but demand should increase over coming months
if economic turmoil does not turn into a double-dip recession,
the report said, adding that some firms had already started to
increase headcount.

Office vacancy rates remained unchanged in the third quarter
at 44 percent on a city-wide average basis, it said.

More than 1.3 million square meters of office space is under
construction and could be delivered by the end of 2013, adding
to a total stock of around 5.9 million square meters by year
end, it added.

Tenant-favourable conditions in Dubai’s retail sector –
such as shorter leases and rent-free periods — are likely to
continue for the remainder of 2011, the report said.

Dubai, famed for its lavish hotels, is expected to see
rising tourist numbers in the short term after a 10 percent rise
in 2010, it said.

“During 2011, Dubai has experienced heavy visitation in the
wake of the socio-political uncertainties that has made such
destinations as Egypt and Lebanon less attractive.”

Hotel occupancy rates have begun to increase after remaining
relatively stable at 71 percent on average during 2010, it
added.

(Editing by David Holmes)

Nearby, sweat-drenched volunteers hastily scoop the
deep-fried vegetables and the rice-based dishes of stewed meats
from huge metal urns on to plates for the last of their weary
guests, as they count down the final minutes until the sun
disappears from the horizon, the moment they can break their
daily dawn-to-dusk fast in the Muslim holy month due to end as
August closes.

The mosque, situated downtown just yards from Dubai’s creek
– the location of the emirate’s original trading hub when it
was just a small trade and fishing centre — provides a free
iftar for the poor every day during the holy month, cooking
enough rice, mutton or chicken to feed some 1,500-1,800 workers
in one sitting.

The Fatima Hassan Mosque’s waste bins may be empty, but
Ramadan brings a huge incease in food waste across the city and
the Gulf as leftovers from more lavish banquets attended by the
well-to-do are thrown out in a region where soaring summer
temperatures mean that fresh food goes off quickly.

“We hardly have any waste. Whatever is left over we serve to
people. We call the people over and give it to them,” said Nour
Mohammed, a sales coordinator who volunteers to serve food.

But not all iftars in Dubai are simple meals provided for
the poor — many of whom are migrant workers, paid less that
1,000 dirhams ($272) a month and often have large debts.

Dubai has transformed itself over the last 50 years into a
regional business and tourism hub renowned for extravagant real
estate projects, flashy living and the luxurious banquets at
hotels and restaurants to accommodate the demands of wealthy
consumers who want the best fresh food at their iftar feasts.

The emirate boasts the world’s tallest tower, man-made
islands in the shape of palms visible from space, and a number
of luxurious hotels — including the sail-shaped Burj Al Arab –
many of which lay on massive iftars for those who can afford it.

Iftars at the top end venues are often pricey, with some
charging as much as 200 dirhams ($55) per person.

“They see Ramadan as a possibility to squeeze a
non-alcoholic consuming demographic and the economy has been
slow for a while,” said Mishaal al-Gergawi, a current affairs
commentator in the United Arab Emirates.

WHAT A WASTE

Despite the hours of preparation put into the often vast
displays of food, waiters at top hotels in Dubai say much of the
food left over goes straight into the waste bins.

The amount of food thrown out in the emirate jumps
considerably in the holy month — by as much as 20 percent
according to Dubai Municipality, with most of the waste
comprising rice and non-vegetable foods.

Around 1,850 tonnes of food were thrown out on average per
day during Ramadan in 2010, roughly 20 percent of total waste in
the emirate during the holy month, it said.

In neighbouring Abu Dhabi, the capital of the United Arab
Emirates, at least 500 tonnes of food were thrown out on a daily
basis during the month Abu Dhabi-based daily the National
reported in August last year.

“Hot and cold — all the food on the buffet gets thrown
out,” said a waiter at a five star hotel in Dubai who gave his
name only as Nazir, through fear of losing his job, as he went
around topping up dishes on the iftar buffet, while businessmen
hovered around him, eyeing the vast spread of food on offer.

“If people order room service then we’ll make it fresh
again. But sometimes we have a lot of waste,” Nazir said.

Food experts at top hotels JW Marriott and Hilton in Dubai
however say they plan so that no food is thrown out despite
preparing up to 15 percent more food during the holy month.

“We have control systems that help us avoid excess,” said
Simon Lazarus, senior area director of food and beverage, Hilton
Worldwide, Middle East and Africa.

“Even if there is a little bit left over the staff all eat
it. We never recycle food and we have our own strict policy not
to.”

SPIRIT OF FASTING

The large increase in food waste during the holy month has
drawn criticism from religious scholars who say that it goes
against the spirit of fasting.

“Wasting the blessing of Allah, like food, particularly at a
time when you see people starving in Ethiopia, Somalia and other
places, does not fit in the Islamic notion of moderation. God
says in the Koran that those who waste the blessing of God, they
are the brethren of the devils,” said Sheikh Muddassir Siddiqui,
an Islamic scholar in Dubai.

“Hotels should cut back on the amount of food they provide.
It should not be a matter of prestige. Iftars at hotels should
not be intended just for rich people but for everyone -
particularly the less fortunate and there are many of them.”

One charity that has been looking to help the poor and needy
is Hefth al-Ne’ma — Arabic for “Saving Grace”. Set up in 2004,
the Abu Dhabi-based organisation collects leftover food from
large gatherings such as weddings, banquets and iftars at hotels
in the UAE capital to distribute food that is safe to eat.

The charity is hoping to set up operations in Dubai and
other emirates later this year its manager Sultan al-Shehi told
Reuters.

“There are a lot of people who are in need in the UAE and
this is an interesting way to bridge the disparity,” said
commentator Gergawi.

(Editing by Paul Casciato)

Abu Dhabi’s second-largest developer by market value made a
net profit of 125 million dirhams compared with 31 million in
the same period last year as it delivered more units and reduced
bad debt provisions.

Analysts had forecast, on average, profit of 157.17 million
dirhams in a Reuters poll.

“We plan to invest another 1.4 billion dirhams (in the
second half). Our focus is on project delivery and we are
expecting good results for the year-end,” Richard Amos, chief
financial officer, said in a conference call on Thursday.

Sorouh invested 1.4 billion dirhams in its projects in the
first six months and plans to deliver some 1,000 homes by the
year-end, he added.

Profit for the first half rose 33 percent to 202 million
dirhams, Sorouh said in an earlier statement.

Revenue for the second quarter reached 1.22 billion dirhams,
most of which was derived from the ongoing handover of units in
Sun and Sky Towers, revenue from housing projects awarded by the
government and income from rental portfolio.

Sorouh’s year-ago revenue stood at 189.8 million dirhams.

Provisions for doubtful debts fell sharply to 6.2 million
dirhams for the quarter, down from 41 million during the same
period last year.

Sorouh trimmed staff by 17 percent over the last year as
part of cost cuts and more jobs could happen as projects are
completed, Amos said.

The company has no immediate borrowing plans due to its
strong cash position, he added.

Sorouh’s shares dipped 1.6 percent to 1.2 dirhams,
underperforming Abu Dhabi’s bourse which edged 0.1
percent higher.

The developer said in June it would continue to focus on the
delivery of existing projects in its home market in 2011 and has
no plans to expand abroad yet.

Most Abu Dhabi developers have been focusing on completion
and delivery of existing projects after suffering big losses
during the global financial crisis, which put an end to a
six-year construction boom.

($1 = 3.673 UAE Dirhams)

(Editing by David Hulmes)

(Reporting by Stanley Carvalho & Jason Benham; Editing by David
Hulmes)

The builder has no need for funds and has adequate access to capital if needed. But nonetheless its chief financial officer Ziad Makhzoumi is watching the region’s increasing capital raising activities with interest.

“I don’t think we need any funding whatsoever… As a CFO I have to look at all the options all the time,” he told the Reuters Middle East Investment Summit in Dubai on Monday.

Convertible bonds are an attractive way to raise funds for listed companies, he said, highlighting Emaar Properties’ recent issuance plans.

Earlier this month, Emaar, the builder of the world’s tallest tower in Dubai, outlined plans for a $500 million convertible bond issue.

Makhzoumi said he saw more convertible bonds coming to the market, but there was no mention at all of Arabtec.

Arabtec has expansion plans which include a push into Central Asian states like Kazakhstan and Uzbekistan, which could be funded from internal resources, he said.

“Any company needs working capital. Usually it’s in the form of equity or some form of borrowing. In our case our gearing is very, very low. Any process takes time, the decision has to be made first. And I don’t think we are at this stage to consider.”

So Arabtec is not considering a convertible bond issue. For now at least.

(Writing by Jason Benham in Dubai)