Cypriot parliament agree on controversial bailout deal
Mar25

Cypriot parliament agree on controversial bailout deal

The Cypriot parliament, the EU and the IMF have agreed to a €10bn bailout after a tense week of negotiations. The deal will spare depositors from a controversial levy, but will force substantial losses for large-scale depositors in two of the country’s biggest lenders. The last minute aims at preventing a collapse of the island’s banking system and protecting Cyprus’ EU membership. The deal, which does not require approval from the local parliament, involves the closure of Laiki Bank, the country’s second largest financial institution. It banks current €4.2bn worth of deposits over €100,000 will go into a ‘bad bank’ and could be lost entirely. Smaller deposits will be transferred to the Bank of Cyprus, the country’s largest, which will undergo a vigorous restructuring. Deposits over €100,000 in the Bank of Cyprus will be frozen and could also face losses after the bank has been restructures and recapitalised. In an unprecedented move by the EU, both junior and senior bondholders will be wiped out. The Bank of Cyprus will also take on the €9bn Laiki owes to EU creditors that has been the bank’s lifeline over recent months. None of the €10bn bailout money will go to recapitalising the Bank of Cyprus and officials still face the task of determining how much of the large deposits will be required to ‘bail in’ the bank back to health, and EU mandated capital levels. “I’m happy because we shall have a programme and it’s in the best interests of the Cyprus people […]

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When Real Estate Agents Become Their Own Clients
Mar19

When Real Estate Agents Become Their Own Clients

When real estate agents decide it’s time to find a new place, they have a unique advantage: they can work for themselves.  Luckily for home-seeking real estate agents, there aren’t many stringent laws designed to prevent them from selling their own homes.  They are simply required by the National Association of Realtors’ code of ethics to disclose that they own their listings.  Most agents choose to list their own homes so that they won’t have to pay commission fees and because they have the expertise to handle it on their own. According to Freakonomics authors Steven D. Levitt and Stephen J. Dubner, real estate agents who choose to sell their own homes earn 3% more than the actual sale price.  Self-listed homes take about 10 more days to sell than the average home but agents are able to sell them at an overpriced listing.  In some cases, agents have difficulty setting an objective listing price for their home because “It it’s your home, it’s almost impossible to be objective,” as associate broker Janice Leis points out.  While selling one’s own home can be advantageous, some real estate agents still choose to work with a colleague to sell their home.  As anyone who has gone through the process before knows, selling a house is an extremely stressful process.  This is no different for agents.  As Leis explains, “Having someone else to keep you on track and help you maintain perspective is really important, because there are a million little details that […]

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Fundamental profitability comes full circle
Mar13

Fundamental profitability comes full circle

The year 2012 began with multiple headwinds for the Gulf Cooperation Council (GCC) markets, which raised concerns over provisions pertaining to the financial sector, corporate growth and profitability. The equity markets remained under the dark shadow of geopolitical situations which were persistent in the Middle East, especially Iran and the on going unrest across other countries. Uncertain times From the figures pre and post the financial crisis, we can see that earning prospects have been constantly improving since 2008. A pool of 585 listed entities across the seven GCC markets demonstrates that earnings in 2007 – which rose to $62.95bn and fell drastically to reach a mere $34.68bn in 2008 – went on to remain stagnant in 2009. However, a series of constructive measures from various governments provided comfort to corporate companies, in a bid to encourage trade and start various projects as many marked better profitability from 2010. In the past three years GCC has added $17.6bn to its bottom line, where its total earnings reached $52.15bn by the end of September 2012. On the contrary, investors continued to receive fragile news on the global economic development, which was specifically sourced through Europe and the US. The fiscal situation in Greece and the election in the US, together with the reduction of Asia’s economic powerhouses in China and Japan, and unending political unrest in a few MENA countries, forced investors to refrain from building new positions. Sustainability in earnings remains a primary cause among investors, because of which GCC […]

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Kirchner’s diminishing returns
Mar13

Kirchner’s diminishing returns

First elected as Argentinian President in 2007, Cristina Fernández de Kirchner began her term riding a wave of popularity. The election wasn’t even close, with Kirchner winning 45.3 percent of the vote, over double that of her nearest rival. Her husband, the late president Néstor Kirchner, had appeared to successfully steer the country through the fallout from its 2001 default, and the economy grew at an impressive 7.7 percent average between 2003 and 2011. Things were looking good. But behind the Perónist populism and official statistics, trouble was brewing. Under Néstor Kirchner, public spending had soared and the economy was overheated. A large primary fiscal deficit had developed and with Argentina unable to raise credit in external markets without paying steep interest rates, the central bank took to printing pesos instead. Inflation took off, with unofficial estimates placing it as high as 25 percent; although the government officially reported a lower figure of about nine percent. Much of the government’s spending was just plain wasteful; it had instituted a freeze on energy tariffs which artificially lowered prices – Argentines pay 70 percent less than their neighbours – and put stress on the treasury. Kirchner had also nationalised a series of businesses including the postal service, railways, a water company and a shipyard, resulting in dismal financial results. Kirchner’s policies have been spooking investors and the government’s lavish spending is now becoming unstable Despite his popularity, Kirchner had effectively laid an economic minefield, and if the new President were to get […]

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Burj Bank cement strong reputation
Mar13

Burj Bank cement strong reputation

Founded in 2007, Burj Bank – formerly known as Dawood Islamic Bank – has a distinguished history, spanning more than five years, as a central pillar of Pakistan’s Islamic Banking landscape. In 2011, Burj Bank’s board of directors became concerned about the slow growth and concentration of the bank’s financing portfolio in areas of the economy that were showing signs of strain. At this time, the major shareholders of the bank initiated a re-profiling of ownership and subsequently a rebranding. On 11th July 2011, the bank was renamed and launched as ‘Burj Bank Limited’, following a massive capital injection by some Middle Eastern investors of the bank. At present, almost 85 percent of Burj Bank’s shareholding stems from the Middle East, with majority ownership belonging to the ICD, Jeddah (Group Company of the Islamic Development Bank). Other primary shareholders are Bank Al Khair from Bahrain, Gargash Enterprises from the UAE and Al Romaizan from Saudi Arabia. Making a difference In November 2011, Ahmed Khizer Khan – the former Chief Operating Officer of ICD (Islamic Corporation for Development of the Private Sector) and the Chief Executive of Barclays Global Retail and Commercial Banking for Emerging Markets – was brought in as the President and Chief Executive Officer of Burj Bank to turn it around. Mr Khan, who had been closely governing the bank as the Chairman of the Board’s Executive Committee for nearly three quarters, brought with him thorough experience of various markets, combined with immense turnaround expertise. [Burj Bank’s] operations […]

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