By Nicolas Parasie

DUBAI (Reuters) – Dubai’s Mashreq, the bank owned by the billionaire Al Ghurair family, is pursuing growth in North Africa hoping to tap the business flow between that region and the United Arab Emirates, an executive said.

The lender is betting on Egypt and Libya, where it is still in the race to obtain a banking licence, to find new revenue sources beyond the UAE and Gulf region, John Iossifidis, Mashreq’s head of international banking, told Reuters in an interview.

“Our strategy is built around linking the geographies in which we operate in, our UAE home base, a strong GCC presence with Egypt and Libya also being compelling, the latter is more a long-term opportunity,” Iossifidis said.

“Egypt, the links the country has with the GCC are phenomenal, there are links in terms of trade and investment flows, as well as migration and labor flow. The other thing is that 2 million Egyptians are living and working in the Middle East,” he said.

“There’s a natural flow in trying to capture some of that business,” Iossifidis said.

Food and cotton from Egypt flow to the UAE, one of its biggest trade partners.

In Libya, Mashreq is one of six banks shortlisted for one of two new joint-venture banking licences.

HSBC, Standard Chartered, UniCredit, Emirates NBD and Qatar Islamic Bank are also on the list.

“We’ve been informed by the Central Bank of Libya there will be a decision by the end of the summer,” said Iossifidis. “As their economy further integrates, you will see benefits on the ground.”

Libya, which holds Africa’s largest oil reserves, in recent years has been opening up its banking sector to foreign investors as part of an economic reform programme.

Early entrants were France’s BNP Paribas and Jordan-based Arab Bank which bought stakes in local banks.

The licence would allow two foreign banks to own 49 percent of the new lenders with Libyan investors holding the rest.

“The way it works is to increase the capital to 250 million dollars over a 5-year period,” said Iossifidis, who in his spare time is an avid race car driver and participated in the UAE touring car championship.

Mashreq is 80 percent owned by members of the rich and influential Al Ghurair family.

Chief Executive Abdul Aziz Abdulla Al Ghurair, who himself has a 12-percent stake, is also speaker of the house at the UAE parliament.

Mashreq’s second-quarter net profit more than halved as it took provisions against bad loans.

It was also hurt by its exposure to two large Saudi Arabian defaults and the downturn of the UAE real estate market and indebted Dubai World’s restructuring.

“We can now see light at the end of the tunnel,” Iossifidis said.

He said the bank was conservatively managing its balance sheet and costs and might see some small loan growth.

“We will also see that the digestion of problems of the past having been dealt with by the end of the year.”

Elena Moya guardian.co.uk, Monday 24 August 2009 21.31 BST

Libya is preparing to pour millions of pounds into the London property market in the latest sign of burgeoning business links between the two countries. The Libyan Investment Authority (LIA), which manages the country’s $65bn (£40bn) oil wealth, has bought two buildings in recent months worth a combined £275m and instructed real estate advisers to look for more.
The Guardian has also learned that the Tripoli-based LIA, a so-called sovereign wealth fund which looks after long-term state reserves, is looking to open its first branch in London – paving the way for billions of dollars worth of investment to be channelled through the City. Existing British investments in Libya have raised questions about whether business interests are dictating the pace of diplomatic detente.
Libya is estimated to be the most oil-rich country in Africa, with around 44bn barrels of reserves, and companies such as BP and Shell have been investing heavily there since 2004, although Libyan investment in London has been largely absent for more than a decade. But commercial ties have strengthened over the past few months – including meetings held between the business secretary, Lord Mandelson, and Saif Gaddafi, son of the Libyan ruler, Muammar Gaddafi, at a villa in Corfu owned by the Rothschild banking family over the summer.
In July, LIA bought Portman House, on Oxford Street, for £155m from Land Securities. The 146,550 sq ft building hosts retailers, such as Boots and New Look, who pay an annual rent of £11.5m. In December, LIA also purchased an office building at 14 Cornhill – opposite the Bank of England in the heart of the City and occupied by firms such as Aviva Investors – for £120m.
“They are looking for more properties in London, mainly in commercial real estate, as they are not affected by the credit crunch,” said Jeremy Grey, a managing director at James Andrew, the property consultants that advised LIA over the purchase on Oxford Street. “They buy when prices are low and they don’t sell. They are long-term investors.”
The London commercial property market has plunged about 30% from its peak, as the recession has cut demand for shops and offices. The pound’s recent fall is also making UK investments more attractive to foreign investors.
“The LIA are serious investors who are looking for significant investments in London,” said Eric Shapiro, director of valuations at Chesterton and Humberts, which advised LIA on the purchase of the Cornhill building. LIA, which manages $65bn, according to the Sovereign Wealth Fund Institute, also owns some London properties bought in the 1990s, such as Jardine House, on Crutched Friars, in the City, according to Grey.
The fund is now looking for a building to set up an office in London. At the moment business is conducted via telephone calls and trips to and from Tripoli, or through LIA’s lawyers, Berwin Leighton, which has had staff on secondment at the LIA offices in Tripoli recently.
“Apparently they are going to open an office in London, but they haven’t found the right building yet,” Grey said. He added that he was looking for a suitable building, most likely in Mayfair, St James or Kensington.
LIA officials Mustafa Zarti and Mohammed Layas did not return repeated phone calls seeking comment, and the Libyan embassy declined to comment.
LIA has investments in Italy, including the Italian state-controlled defence and aerospace company Finmeccanica SpA, according to a press report posted on LIA’s website, which does not give details about its assets.

link: Libya pours millions into City investments | World news | The Guardian

HSBC appoints new global banking head for Mideast Middle East: Thursday, June 03 – 2010 at 08:38 HSBC has appointed Mohammad Al Tuwaijri as the new head of its global banking and markets division for the Middle East and North Africa. Al Tuwaijri, a Saudi national, will focus on key markets in Saudi Arabia, Egypt and Abu Dhabi. He joins HSBC from JP Morgan, where he was managing director and head of Saudi Arabia for the bank. Prior to that, Tuwaijri was treasurer at SABB, HSBC’s affiliate in the kingdom, HSBC said in a statement.

link: HSBC appoints new global banking head for Mideast | Banking | AMEinfo.com

Forum for expats working in Libya. Mostly full of spam, but a few useful posts.
http://www.alloexpat.com/libyaexpatforum/

(Source: Middle East Company News)
Small and medium enterprises in the Middle East continue to top the HSBC’s Small Business Confidence Monitor, with 49% reporting a positive economic outlook in the next six months and 50% looking to increase capital expenditure (capex) by the end of 2010. This is the sixth wave of the HSBC Small Business Confidence Monitor, which was conducted in May and June 2010 by research agency TNS for HSBC Commercial Banking.
The results were used to calculate an index ranging from 0 to 200 where 200 represents the highest confidence level, 0 represents the lowest, and 100, neutral. Please see the attached report Global Small Business Confidence Monitor – July 2010 for more information.

About HSBC in the Middle East:

HSBC is the largest and most widely represented international bank in the Middle East. HSBC Bank Middle East Limited has 48 branches throughout the United Arab Emirates, Oman, Bahrain, Qatar, Kuwait, Jordan, Lebanon, Pakistan and the Palestinian Autonomous Area.

In addition to the branch network, the bank maintains representative offices in Tehran, Iran and Tripoli, Libya. This extensive regional coverage is strengthened by another member of the HSBC Group, HSBC Bank Egypt SAE, and by its associated companies: The Saudi British Bank; HSBC Saudi Arabia Limited; SABB Securities Limited; SABB Takaful Co.; and Dar Es Saalam Investment Bank. Media contact: Aimee Peters Senior Manager – Corporate Communications HSBC Bank Middle East Limited Emaar Square, Building 5 PO Box 502601, Dubai, United Arab Emirates Tel: +971 4 4235608 (c) 2010 Middle East Company News. Provided by ProQuest LLC. All rights Reserved.

link: Middle East SMEs report high levels of business confidence

The UK Department of Trade and Industry have published a very useful guide for UK companies looking to do business in Libya (download here).
There’s also a wealth of related information on the UKTI website.

Source: ANIMA Business Network

http://www.animaweb.org/en/pays_libye_financesbanques_en.php

The banking sector is made up of the Central Bank of Libya (CBL), five state-owned commercial banks, one private commercial bank (Bank of Commerce and Development), and 48 national banks. The largest of the state-owned commercial banks, the Libyan Arab Foreign Bank (LAFB), has subsidiaries and affiliates in more than 30 countries. Other state-owned banks are the Jamahiriya Bank, the National Commercial Bank, the Sahara Bank (in the process of being privatised), the Umma Bank and the Wahda Bank.

A new banking law on banking restructuring, currency and credit (n°1 of January 12, 2005) has been passed. It aims to modernize and introduce market-based monetary instruments into the financial system in order to give the banking sector a more proactive role in redistribution of capital flows to the country’s most productive sectors.

This legislation gives the Central Bank of Libya (CBL) greater responsibility in the conduct of monetary policy, including the right to issue its own securities. In addition, authorities have lowered interest rates across the board in an effort to encourage private sector demand for credit and developed a strategy to modernize the payment system. An anti-money laundering (AML) law has also been adopted (law n°2 of 2005).

Commercial banks must assume the form of a Libyan joint-stock company with paid-up capital of at least LYD10 million. According to the new law (art. 67), the Central Bank of Libya can authorize the establishment of banks with foreign capital. It can also allow foreign banks to hold shares in domestic banks and to open branches or representational offices, although capital allocated for branch activities in Libya must be of least $50 million.

The Central Bank of Libya (CBL) was created in 1956 to maintain the stability of Libya’s currency and to promote sustained economy growth in line with overall economic policy. Under the new law of January 12, 2005, the CBL has a greater role and supervisory measures have been strengthened. The Central Bank controls money supply and credit, supervises commercial banks to ensure sound financial positions and protection of depositor and shareholder rights and to advise the State on the formulation and implementation of financial and economic policy.

In addition, the CBL issued a number of decrees to improve commercial bank operations, launched privatisation of the Sahara Bank and recapitalized three of the five state-owned commercial banks. The governor of the Central Bank announced that privatisation of major banks will continue at the beginning of 2006, with that of the Wahda Bank already scheduled. As of August 2005, banks were granted autonomy to freely determine interest rates on deposits and to set lending rates within a range of 250 base points above the discount rate (currently 4 percent).

In the area of foreign exchange controls, the Libyan dinar is used only for current operations within the country since it is not a convertible currency. However, foreign investors have the right to open an account in convertible foreign currencies at any commercial bank or the Libyan Arab Foreign Bank. There are two offshore banks: the Valetta Bank (Malta) and the British Arab Commercial Bank (UK). Bawag PSK (Austria) opened a representational office in 2005, as has HSBC. Other foreign banks such as the International Arab Bank (Egypt), the Swiss Bank Channel, and the Housing Bank of Amman have announced their intention to open offices in the near future.

The government has reduced its debt with commercial trade banks and the Central Bank to zero. The financial sector is underdeveloped and the payment system, no more than embryonic, is being modernized. Credit card facilities will soon be introduced.

Edward Hadas /  July 20, 2010, 0:08 IST

Source: http://www.business-standard.com/india/brv_storypage.php?autono=401881

BP/Libya: Corporate executives often struggle to keep their moral compass when dealing with wicked governments. The lure of profits can make them lose their bearings. But politicians who criticise corporate collusion with oppression are often guilty of rank hypocrisy. The latest American flap over BP and Libya provides a good example of both principles.

A year ago, the international political rehabilitation of Libya was well on track. The United States had pretty much made peace with the regime of Muammar Gaddafi, after the Brotherly Leader and Guide of the Revolution agreed to pay $1.8 billion to settle all terrorism-related claims in August 2008. The UK seemed to be falling behind. BP, which was making little progress on a 2007 exploration deal, encouraged the British government to complete a prisoner-transfer agreement with Libya although it denies specifically lobbying for the release of Abdel Basset al-Megrahi, who was convicted for his role in the Lockerbie bombing.

Megrahi was indeed repatriated on Aug. 20, 2009, by the Scottish authorises on compassionate grounds. And BP found its way cleared in Libya. Some American senators are now planning hearings on the matter.

New facts may emerge, but it is already clear the BP had reason to cheer Megrahi’s freedom. That puts the oil and gas producer in roughly the same moral position as the son who welcomes the news of his rich father’s death.

If BP were not already in trouble, it might want to run through the arguments in favour of dealing with objectionable authorities. Governments are rarely all evil, foreign investors can help the people’s lot and companies aren’t in the business of creating foreign policy. Besides, Libya was becoming less objectionable.

Moral purists can easily dismiss such claims, but it’s hard to create a global economy without making many unpalatable compromises. Businessmen can learn how from political leaders, who often find reasons to overlook, forget or forgive. The Macondo disaster may show that BP had unusual difficulty balancing two of its goals: safety and profits. The company’s relations with Libya look much more like normal corporate practice, for better or worse.

Age of the iron fist is over, says Gadaffi Jr Saif al-Islam, the son of Colonel Gadaffi, said the time for ‘military regimes, kings, crown princes’ had passed
Sara Hashash and Hala Jaber
Published: 27 June 2010
The Sunday Times

The 38-year-old Saif is widely seen as a potential successor to his father (Nick Cornish)

The son of Colonel Muammar Gadaffi, who has ruled Libya with an iron fist for more than 40 years, has declared that the country no longer needs a “great leader”.

In an interview last week,

Saif al-Islam Gadaffi said the time for “military regimes, kings, crown princes” had passed.

“The future is for managers – people will elect managers and not have kings or great leaders,” he said. “People should be free to elect their own leaders. The future is for democracy. There is no other way for Libya.”

The 38-year-old champion of reform, who is widely seen as a potential

successor to his father, warned that his country could face “very serious

trouble” if it failed to adopt a more liberal approach to relations with the

West.

Dressed in a T-shirt, jeans and trainers, he strolled into the flower garden of a friend’s villa on the outskirts of Rome and said: “Hi, I’m Saif.”

Sitting beneath a wooden gazebo near a pool surrounded by palm and cedar trees, he outlined his vision of Libya as a tolerant, 21st-century state enriched by tourism.

“I would like to make Libya the Vienna of north Africa,” he said passionately, referring to his favourite European city. Luxury hotels were already being built, he added.

We will create the right environment for tourism in Libya. If you have no drink, no visa, no hotels, nobody will come to Libya Gadaffi, who studied for his PhD at the London School of Economics, smiled as he claimed that tough visa restrictions for westerners would be abolished soon, starting with the British.

Measures had also been discussed to permit the sale of alcoholic drinks to foreigners in hotels, he said. “It will happen,” he added. “We will create the right environment for tourism in Libya. If you have no drink, no visa, no hotels, nobody will come.”

Gadaffi’s ambitious hopes to modernise his conservative, Muslim country

extend to lobbying his father’s government for a constitution that would

reflect “A to Z” reforms in a state whose relations with the West have

historically been fraught.

It would be a radical change of style for those serving the 68-year-old

“brotherly leader”, who has governed Libya for 41 years in accordance with the principles of the Green Book he wrote in 1975 to explain his socialist philosophy. It inevitably drew comparisons with Mao Tse-tung’s Little Red Book.

The confident, charismatic Saif Gadaffi, who is fluent in English, German

and French, has played a pivotal role in changing Libya’s international

image, facilitating the transformation of his country from a pariah state

into a prospective ally of the West.

It was he who persuaded his father to give up Libya’s nuclear, chemical and biological weapons programme in 2003, ending the country’s diplomatic isolation and paving the way for a visit by Tony Blair the following year.

Blair has since visited Libya repeatedly as a personal guest of Colonel

Gadaffi.

“Mr Blair was there only last week,” Saif Gadaffi said nonchalantly,

explaining that his father regarded the former prime minister as a “great

man with knowledge and experience”. He dismissed a report that Blair was working as a paid consultant.

More recently, Saif Gadaffi negotiated the release of Abdelbaset al Megrahi, who was convicted of the Lockerbie bombing that killed 270 people in 1988.

Gadaffi was at Megrahi’s side on his return to Tripoli last year, when he

was given a hero’s welcome. The staging was seen as a means of improving Gadaffi’s standing among critics who believe he is too close to the West.

Despite his aspirations for reform, a report by Amnesty International last

week criticised progress on human rights in Libya and suggested its internal security agency had free rein to abuse its power.

“I respect Amnesty International a lot, but their role is to be very

critical and ask for more reform and that is good,” Gadaffi said. “I am very

proud, very confident, that the facts in Libya today are different to the

reality 20 years ago.” He challenged Amnesty to name one political prisoner in Libya.

“There are people criticising my father, the country, the government and

they are living in Libya and they are free. This is happening for the first

time in our history … People are not afraid any more; there is no fear any

more.”

In contrast to his father, who has bankrolled terrorist groups, including

the IRA, he has channelled cash into humanitarian causes as chairman of the Gadaffi International Charity and Development Foundation. As a student in London he witnessed the contrast between the British police and Libya’s security forces, who have regularly been accused of arbitrarily detaining and torturing civilians.

“The British police for me are one of the most civilised police in the

world. Police should respect the citizens, be polite, be civilised. I want

to see the Libyan police like the British police,” he said.

He confirmed that British officers were already training his country’s

police, an initiative seen by some as an insult to the memory of Yvonne

Fletcher, the police officer shot dead outside the Libyan embassy in London 26 years ago. Her killer has not been brought to justice.

Gadaffi also admires the British system of local government. He aims to

establish similar municipal authorities in Libya.

“We rely very heavily on British institutions to train our people, to run

the local councils and municipalities … It’s very important,” he said.

His willingness to incorporate western ideas into his thinking is in stark

contrast to his father’s more reclusive style of government.

Yet the younger Gadaffi is critical of oil and gas deals that entail more

co-operation with the West. He believes “easy oil money” has discouraged

investment in other sectors, including tourism, that could help to create

the prosperous state he envisages. “Oil is a curse, it creates many problems in Libya,” he said.

http://www.btresourcesnewsletter.com/december09/marketData.aspx

We investigate whether consolidating market data distribution channels can reduce cost while improving market performance

When looking at reducing your market data costs through better vendor management, don’t forget to look at the underlying infrastructure.

With the majority of trades across all major markets now originating from fully-automated trading systems, and with Complex Event Processing (CEP) and Algorithmic trading applications implementing ever-more complex trading strategies, the mission criticality of low-latency, high-quality market data is increasing all the time.

As new trading venues such as dark pools and Multilateral Trading Facilities (MTFs) open to compete with exchanges, and with more and more trading taking place in emerging markets, firms are facing increasingly complex market data requirements. To fulfil this demand for data, most firms have to access a diverse portfolio of sources, ranging from direct exchange feeds and the “big two” market data providers to smaller specialist vendors. This has led to many firms signing multiple contracts and subscriptions with multiple vendors. Although this in itself is arguably good practice, it does invite inefficiency and makes accurate analysis of market data costs very difficult. Most firms have implemented some form of in-house market data management to identify cost inefficiencies within their procurement and realize savings accordingly, with varying degrees of success.

Multiple vendor networks add risk

Many market data sources tend to sell their own connectivity services for data delivery, claiming reduced latency and higher availability. This then requires the user to implement new connectivity to yet another external network. Therefore, over time, a firm’s market data infrastructure tends to become more complex as each new source is deployed.

This makes it increasingly difficult to build a holistic view of a company’s overall network infrastructure. Typically a firm’s network topology and strategy will go into great detail regarding its internal network, but will tend to be very light on detail when it comes to externals “clouds”. Lack of visibility of total infrastructure and the consequent dependencies is never good for business planning purposes.

Most market data providers delivering their data in any one country purchase their network connectivity from the same group of network vendors. Those network vendors are likely to use conventional infrastructure with the potential for common and hidden points of failure between vendors. Failure, in this context, could range from network breakdown to the less obvious problem of increased latency due to unusual patterns of network traffic. An effective way to mitigate against this risk would be to look at migrating collection and distribution of market data to a single network vendor, while still sourcing the data from a range of data sources.

Complex connectivity creates cost

Consolidating market data network connectivity can provide significant cost savings, both in terms of reduced connectivity charges and lower service costs.

Some leased lines connecting a firm’s core network to third-party networks are no longer required and can be removed, thereby reducing monthly network connection fees. Moreover the edge infrastructure of routers and switches that supported the connections can also be removed, simplifying network management, reducing rack space requirements, power and cooling costs. As a side effect of this simplification, latency may also be reduced.

Conclusion

In the current business climate, firms are firmly focused on cutting costs and reducing inefficiencies. By consolidating market data distribution with a single low-latency network provider firms can cut costs, while at the same time maintaining a well-managed portfolio of market data vendors. These changes can have the added benefit of improving the manageability of a firm’s infrastructure thereby reducing risk of failure, even improving performance.

Learn more about some of the 400 organisations that use the BT Radianz Shared Market Infrastructure to distribute financial applications and services to more than 14,000 financial industry customer locations.