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Tres Vista Weekly Me 07 09 09
 

Tres Vista Weekly Me 07 09 09

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TresVista Financial Services MENA Newsletter

TresVista Financial Services MENA Newsletter

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    Tres Vista Weekly Me 07 09 09 Tres Vista Weekly Me 07 09 09 Document Transcript

    • Issue No. 1.12 MENA WEEKLY NEWS Week of July 3, 2009 – July 9, 2009 MENA MARKETS For additional Saudi Arabia Kuwait UAE Egypt Oman Jordan information or requests 5,413.2 7,490.6 1,681.9 508.4 5,420.2 2,581.4 Commodity (USD) Currency (USD/) (3.3%) (7.6%) (7.6%) (7.8%) (4.8%) (5.9%) or to be added to the Gold Spot 912.35 GBP 0.612 Silver Spot 12.87 EUR 0.713 distribution list, please Morocco Bahrain Qatar Tunisia Lebanon Abu Dhabi LME 3 mth. Cu 4,895.00 SAR 3.750 11,309.1 1,555.7 6,016.8 3,570.5 1,389.9 2,589.1 contact (0.8%) (2.2%) (7.1%) (2.4%) (5.7%) (3.1%) LME 3 mth. Al 1,585.00 KWD 0.288 ICE Brent Crude 61.10 MACRO ECONOMIC NEWS Samir Tiwari Saudi Arabia VP – Sales & Marketing ▲ Saudi petrochemicals producers said they would seek duties on imports from China after Beijing began a dumping probe on +912261567304 petrochemical products from Saudi Arabia and three other countries. Abdulrahman Al-Zamil, chairman of the Council of Saudi stiwari@tresvista.com Chambers, said China had no grounds to pursue the dumping investigation it launched in late June 2009 on imports of methanol and butanediol. 1. Macro Economic ▲ The Saudi government has signed a SAR 10.0 billion (USD 2.6 billion) contract for the 6,000.0 km. second phase of the News national border fence and security system. 2. Government ▲ The Saudi Ministry of Finance has approved 1,255 contracts with a combined value of SAR 94.6 billion, representing a 48.0% Regulations growth, during H1 2009 from the same period in 2008. 3. Sector News ▼ Saudi businessmen's defaulting debts to local banks are estimated at SAR 150.0 billion (USD 40.0 billion), according to 4. Company News economists who blamed flawed lending procedures and the kingdom's central bank for the problem. 5. Mergers & Acquisitions ▼ Riyadh may delay the USD 7.0 billion land bridge rail project amid speculation that the government will step in to fund the 6. Liquidity / Capital entire plan instead of opting for an initial 50 year build – operate – transfer deal financed through debt. Raising Kuwait ▲ Kuwait is set to spend up to USD 3.1 billion on building eight new hospitals by 2016. Market Buzz… ▼ The volume of Kuwait’s foreign trade decreased by 46.0% to reach KWD 4.1 billion during Q1 2009 due to a decline in the oil prices. UAE ▲ According to the Dubai Statistics Center, Dubai has recorded a significant drop in inflation rate as it reduced to 5.4% during January to May 2009 compared to 8.7%. during the same period last year mainly because of a sharp fall in property rents . … IPO activity in the MENA declined by a ▲ Ras Al Khaimah has started investor meetings to sell Islamic bonds worth USD 2.0 billion. Standard Chartered Plc and 87.0% during the H1 BNP Paribas are managing the sale. The Ras Al Khaimah Government sold AED 1.0 billion of Islamic bonds in its first rated 2009 compared to the sale of the securities in May 2008. The five – year floating – rate sukuk was priced to yield 1.2% more than the three – month corresponding period of Emirates interbank offered rate. 2008. MENA markets ▲ Non – oil exports from companies in Dubai that are based outside the Emirate’s free zones increased by 2.0% in H1 2009 collectively raised USD compared to H1 2008 in spite of the worldwide economic slowdown. Dubai’s main non – oil exports include gold and diamond 1.2 billion (AED 4.4 jewellery, primary aluminium, beverages, chocolate, and other food products such as sugar and canned food. Dubai exported billion) in H1 2009, goods worth AED 42.6 billion in 2008, up 57.2% from exports valued at AED 27.1 billion in 2007. down from USD 9.3 ▲ According to Department of Economic Development (DED), the average monthly income of UAE national households in billion during the same Abu Dhabi was AED 47,066.0 in 2008 compared with AED 15,000.0 for expat households. Abu Dhabi is home to more than period in 2009… 50.0% of the country's 880,000 citizens. In 2008, they represented 18.5% of the population. ▼ According to Centre for Global Energy Studies (CGES), a sharp decline in crude prices will ally with lower production to cut UAE's oil export earnings by about 43.0% in 2009. From a record USD 81.0 billion in 2008, the UAE's crude export revenues are projected to plunge to about USD 46.0 billion in 2009. Oman ▲ National Economy Minister Ahmed bin Abdulnabi Macki said the non – oil sectors had been behind the Omani economy's strong growth in 2008 as compared to 2007. The GDP at current prices of non – oil sectors rose from OMR 6.4 billion in 2007 to about OMR 8.6 billion in 2008, a growth of 32.6%. ▲ The Muscat Municipality signed five agreements worth OMR 200.0 million to construct waste water disposal projects. Haya Water aims to provide clean sewerage services to 80.0% of residents in Muscat by 2014. Jordan ▲ Kuwait’s contributions to Jordan are estimated to be around USD 5.0 billion, presented by both the private sector and the Kuwaiti government. ▲ Actual revenues received by the Income and Sales Tax Department during H1 2009 was 10.0% higher than those recorded during H2 2008, amounting to around JOD 1.4 billion. At the end of June 2009, the collected revenues accounted for 51.0% of the JOD 2.7 billion estimated in the state budget law for 2009. ▲ Foreign investments at Amman Stock Exchange during the H1 2009 rose by JOD 67.5 million compared to an increase by JOD 185.8 million during H1 2008. The value of shares purchased by non Jordanian investors amounted to JOD 1,530.1 million, representing 25.4% of overall trading volume while stocks sold stood at JOD 1,462.6 million. Product 2009. TresVista Financial Services, Pvt. Ltd. © Mumbai, India. www.tresvista.com Page 1
    • Issue No. 1.12 MENA WEEKLY NEWS Week of July 3, 2009 – July 9, 2009 …Deal making in the Bahrain Middle East continued ▲ The volume of Bahraini investments in Egypt has topped USD 500.0 million. to contract in the first ▲ A recent report by the IMF predicted that Bahrain's economy would grow by 2.6% in 2009, twice that of the regional average. six months of 2009 as the credit crisis Qatar impacted companies ▼ Thailand is keen on reaching bilateral agreements with Qatar on various economic investments from agriculture particularly active in this area. In on food, oil and gas and tourism sectors. the Middle East, PE investments plummeted Tunisia in H1 2009, with value ▲ The World Bank has approved a USD 55.0 million loan to fund an renewable energy investment project in Tunisia. slumping 79.0% to USD 314.0 million and Lebanon volumes sinking 41.0% ▲ Capital Intelligence, the international credit rating agency, upgraded ratings of Lebanon and six of the country's banks mainly to 13 deals from the due to improved liquidity position. The agency raised Lebanon's long – term foreign and local currency ratings to "B" from strong gains posted in "B-" with stable outlook. The long – term foreign currency ratings of six Lebanese banks that were constrained by the H2 2008 of 22 deals at a sovereign's rating – Bank Audi – Audi Saradar Group, BBAC, BLOM Bank, Byblos Bank, Credit Libanais, and total value of USD 1.5 Fransabank – have also been raised to "B" with a stable outlook. billion… SECTOR NEWS Saudi Arabia ▲ Saudi Arabia accounted for over USD 5.9 billion in outbound tourism expenditure from around 4.0 million Saudi tourists in 2008, underlining the significant importance of the tourism sector in the Kingdom's economic growth. ▲ Saudi Arabia's banks netted about SAR 14.2 billion (AED 13.9 billion) in profits in the first five months of 2009 despite a sharp slowdown in their domestic credits due to slackening domestic demand and their focus on foreign markets. ~SAR 2.9 billion were netted in May 2009 and bankers said the kingdom's 12 commercial banks could still make higher profits in 2009. ▲ Saudi Arabia will slash gasoline imports by 40.0% in July 2009 as new domestic production capacity comes online. The Kingdom is expected to import around 34,100.0 bpd of the motor fuel in July 2009, because of the start – up of a gasoline production unit at its USD 10.3 billion Rabigh Refining and Petrochemical Company. Saudi Arabia typically imports between 60,000.0 to 70,000.0 bpd of gasoline monthly. Kuwait ▲ Kuwait's investment plan involves increasing gas production to 1.5 – 2.0 billion cubic feet a day by 2015, as well as boosting oil production capacity above the current 3.1 million barrels a day. ▲ Kuwait, having one of the highest per capita consumption rates in the globe will link its power grid with Saudi Arabia, Qatar and Bahrain in one of the biggest electricity networks worldwide worth more than USD 1.4 billion in July 2009. ▲ The gross leasable area in Kuwait’s retail sector is expected to hit 1.2 million square meters by 2010, according to latest industry reports. ▼ The volume of Kuwait’s foreign trade decreased by 46.0% to KWD 4.1 billion during Q1 2009 due to a decline in oil prices. ▼ Real estate sales volume in Kuwait declined by 17.0% during May 2009 compared to April, falling to its second weakest level in five months. A total of 314 sales transactions were registered at a value of KWD 80.1 million. ▼ The debts of the 42 investment companies totaled KWD 5.0 billion (USD 17.4 billion) at the end of Q1 2009 which represents 37.5% of the overall debts of the listed companies that disclosed their results, excluding banks. The average debt to equity ratio of 42 investment companies listed on the Kuwaiti bourse amounted to 145.0%. UAE ▲ According to Abu Dhabi Tourism Authority (ADTA), the second edition of the month – and – a – half family carnival – Summer in Abu Dhabi – is expected to attract more than 150,000 visitors which will help boost the emirate's revenues and keep hotel occupancy rates high during the off – peak season. At the inaugural 2008 edition, Summer in Abu Dhabi attracted more than 135,000 visitors. …According to ▼ Landlords in Dubai are incorporating a "non-renewable" clause in the yearly rental leases so they are not bound to adhere to International Monetary the rent cap of the Dubai Government. Rents are continuing to fall in Dubai as a number of developments have come on – Fund, Middle East stream this year. This practice, however, is mostly followed by single unit owners, who need to rent their units to meet their debt economies will expand obligations. by 2.0%, compared to 5.2% in 2008. The ▼ Steel imports to the UAE have dropped by almost 75.0% compared to last year. About 800,000.0 tons of steel were imported growth forecast for every month into the UAE during the peak months of July and August 2008. The numbers today stands at about 200,000.0 tons. 2010 was raised to Industry sources have said that import prices for rebar have crossed the USD 500.0 mark. 3.7%. It now sees world economic growth Oman of 2.5% in 2010, ▲ Electricity and desalinated water production grew significantly in 2008 in trend with projected demand growth, the Oman compared with an April Power and Water Procurement Company stated in its 2008 Annual Report issued. According to OPWP’s Annual Report, projection of 1.9%... electricity production rose 11.0% to 14,017.0 GWh during 2008 compared to 2007’s tally. Product 2009. TresVista Financial Services, Pvt. Ltd. © Mumbai, India. www.tresvista.com Page 2
    • Issue No. 1.12 MENA WEEKLY NEWS Week of July 3, 2009 – July 9, 2009 ▲ Omani crude exports during the first four months of 2009 were quoted at 79.680 million barrels compared to 71.365 million …According to during the same period in 2008, an increase of 11.7%, according to the national economy ministry. At the end of April 2009, National Bank of total crude production reached 94.335 million barrels compared to 89.936 million during the same period in 2008, the Kuwait (NBK), of the ministry's monthly statistics report showed. current USD 2.1 trillion ▲ According the Central Bank of Oman, the combined balance sheet of commercial banks continued to register growth in assets of projects in the GCC, and liabilities at the end of May 2009. Total assets increased by 15.4% in May 2009 to reach OMR 13.7 billion in comparison some 29.0% (USD to its level in May 2008 driven by the growth in credit of 23.6%. 610.0 billion) are already under way, with ▲ Oman seeks to produce 804,000.0 bpd of oil by the end of 2009, according to its economy minister. The country is currently the remainder at the producing 784,000.0 bpd. planning stage. The majority – some 73.0% Jordan – of all developments ▲ The insurance sector is looking to welcome regulatory changes in a new era of business growth and competition, with the motor are civil construction – segment in particular likely to benefit from the reforms. Gross insurance premiums rose 10.6% to JOD 123.2 million (USD type projects. This 174 million) in the first four months of 2009 compared to JOD 111.4 million (USD 157.3 million) in the same period of 2008. emphasizes the sector's ▲ The government will sign an agreement with British Petroleum (BP) for development of Al Risheh gas field by the end of July crucial role, not just in 2009. The deal provides for a 3 year exploration phase, extendable for a fourth year, during which BP will spend USD 237.0 developing the region's million and offer a down payment of USD 20.0 million for the state treasury. future, but in the GCC's ▼ Exports from Irbid to Arab and global markets dropped during H1 2009 by 19.0% to USD 181.8 million compared the same recent economic period of 2008. The drop reflects the continued impact of the global economic crisis, which has caused a drop in demand, in performance as well… different global markets including those of the US. ▼ Real estate trading during 1H 2009 fell by 38.0%, reaching JOD 1.9 billion compared to the same period of 2008. The Land and Survey Department’s revenues stood at JOD 125.0 million, compared with JOD 201.0 million in the same period of 2008. Lebanon ▲ Despite years of political instability, wars and domestic unrest, tourists are flocking to Lebanon this summer for what is expected to be a bumper year for the small Mediterranean country. The Lebanese Tourism Ministry expects two million Arabs – not including Syrians – and other nationalities by the end of 2009. Lebanon, with a population of about 4.0 million, hosted 1.3 million tourists last summer. The rate of hotel occupancy in Beirut has already reached 85.0%. COMPANY NEWS Saudi Arabia ▲ Fitch Ratings has rated Saudi Electricity Company’s SAR 7.0 billion Sukuk as AA-. ▲ Saudi Aramco and France's Total signed 13 agreements with contractors to build a USD 9.6 billion JV refinery in the kingdom. The two companies awarded the contracts for the 400,000 bpd refinery in June 2009. Spain's Tecnicas Reunidas and France's Technip won three of the biggest contracts offered. ▲ Saudi Arabia's Jadwa Investment is looking at U.S.A. and the U.K. real estate markets and targeting a deal worth GBP 700.0 million pounds (USD 1.1 billion) with European property investor CIT. ▲ Samsung won a USD 1.6 billion contract for two refinery plants from SATORP, a JV between Aramco and Total, which will be constructed in Al – Jubail. The company will provide the engineering, procurement and construction on a lump sum turnkey basis, with completion scheduled for August 2012. ▲ Saudi Arabia's oil refining and petrochemical plant, Rabigh Refining and Petrochemical Co has started exporting small quantities of polymers. PetroRabigh, an export – oriented JV between Saudi Aramco and Japan's Sumitomo Chemical, started partial operations of its facilities in Q4 2008. ▼ Saudi Aramco lowered its official selling prices for exports of all crude oil grades to the U.S. in August 2009. Saudi Arabia decreased the price of its heavy crude to all destinations. Aramco cut heavy crude prices to the U.S. the most, by USD 0.75 a barrel to USD 5.50 below the cost of West Texas Intermediate crude. Kuwait ▲ Agility Defense & Government Services announced that the U.S. Army awarded a one year option on the Army’s Heavy Lift VI contract. The value of this extension is estimated to be up to USD 91.0 million. ▲ Burgan Bank has been recertified with an ISO accreditation across all its banking businesses for the third time. The Bank is the only banking institution in Kuwait to be certified with ISO 9001:2008 up to 2012 in all its banking businesses. Foreign exchange UAE reserves in the GCC are ▲ Abu Dhabi National Energy Company (Taqa) plans to spend USD 1.5 billion on acquisitions in the next six to nine months, still low in relation to and investment targets include Iraq's power sector. Taqa is 75.0% owned by the government of Abu Dhabi and is one of the GDP. At the end of vehicles the Emirate uses to invest oil money. 2008 there were still ample buffers, in ▲ The UAE will establish a railway company with a capital of AED 1.0 billion to build a countrywide network of railways particular in the UAE, following a decree by President His Highness Shaikh Khalifa Bin Zayed Al Nahyan. The new entity – Etihad Trains Company Saudi Arabia, and – will be wholly owned by the UAE federal government. Its mandate includes building a modern network of trains connecting Kuwait. all parts of the UAE to carry passengers and cargo. ▼ Standard & Poor's has revised its ratings on four Dubai – based banks, saying a sharp correction in real estate has increased Product 2009. TresVista Financial Services, Pvt. Ltd. © Mumbai, India. www.tresvista.com Page 3
    • Issue No. 1.12 MENA WEEKLY NEWS Week of July 3, 2009 – July 9, 2009 risks to the economy and hurdles for the banks. S&P revised the counterparty credit ratings on Emirates Bank International, …The Gulf economies National Bank of Dubai and Mashreq bank down by one notch to A – minus from A. It also revised down the counterparty are expected to grow by rating on Dubai Islamic Bank by one notch to BBB – plus from A – minus. 3.7% in 2010, but this year the rates will stand Egypt at 1.3%, lower than ▲ London-based private equity firm Actis will pay USD 244.0 million for a 9.3% stake in Egypt's Commercial International what was projected at Bank, or CIB, making it CIB's largest single investor. the beginning of the ▲ Egypt's Orascom Telecom Holding S.A.E. announced that it has dropped its case against France Telecom (FT) over ownership year… rights in Mobinil, the largest mobile phone operator in Egypt. ▼ The number of companies listed on the Egyptian Exchange is expected to fall during the 2009 due to delisting of shares that aren't actively traded. The number of listed companies is likely to drop to less than 250 companies in 2010 from 333 companies at present. Qatar ▲ A joint venture between Qatar Petroleum and ExxonMobil plans to sell up to USD 2.3 billion in bonds to finance the expansion of LNG. facilities ▲ Qatar’s largest financial institution QNB has posted a half yearly net profit of QAR 2.1 billion, up 11.3% on the same period in 2008 ▲ Fitch Ratings assigned an expected ‘A+’ rating to the proposed new issue of up to USD 2.2 billion in senior secured bonds by RasGas 3. ▲ Vodafone Qatar, part of the Vodafone Group (VOD), saw its USD 928.6 million IPO for 40.0% of its shares fully subscribed. Jordan ▲ Dubai Islamic Bank announced that Jordan based Industrial Development Bank received a preliminary banking license by the Central Bank of Jordan to operate as an Islamic financial institution. ▲ Jordan Petroleum Refinery Company received a proposal from Infra Mena to become a strategic partner in the refinery’s expansion project. The international consortium is an investment fund registered in Jersey with a capital of USD 500.0 million. MERGERS AND ACQUISITIONS - Kuwait Finance and Investment Co. (KFIC) is seeking to buy 5.0% in Dana Al Safat Foodstuff Co. on behalf of its customers amid expectations that Dana Al Safat will announce good Q2 2009 profits. KFIC bought a 2.5% stake in Dana Al Safat through transactions on the local bourse and will buy the remaining stake in a similar way. - Kuwait’s Aref Energy Holding Co is considering selling a share in its gas joint venture in Texas by 2010, in a bid to diversify its investments. In 2007, Aref Energy established DeWitt Tract Co, which is a wholly owned unit with a 50.0% stake in a 20 year oil and gas drilling and production concession in 75,000.0 acres of land in Texas. - Jordan's United Arab Investors Co., an affiliate of Kuwait's Global Investment House sold its 15.0% stake in Kingdom Electricity Co. for JOD 9.5 million (USD 13.4 million). UAIC booked a profit of JOD 2.9 million on the divestment and that it will hold to its right to buy back this stake within two years. - UAE’s International Petroleum Investment Company (IPIC) has completed the acquisition of Canada’s NOVA Chemicals Corporation for USD 2.3 billion. IPIC has agreed to a USD 250.0 million credit backstop facility to provide NOVA Chemicals with sufficient liquidity. LIQUIDITY - The retail tranche of Saudi Steel Pipe Co.'s IPO was more than three times covered and the company will start reimbursing surpluses to individual subscribers. About 1.300 million subscribers have injected SAR 657.2 million (USD 175.2 million) in the seven – day IPO that closed July 3, 2009, according to Khaled Al Ghamedi, head of financial consultancy at GIB Financial Services Co. – the IPO's lead manager and financial advisor. - A'ayan Leasing and Investment Co. is currently renewing its outstanding debts worth KWD 370.0 million (USD 1.3 billion) for periods ranging from one to six months. A'ayan is completing a plan to reschedule all its debts for periods ranging from three years to five years and it is also awaiting the response of local banks for a syndicated loan of KWD 150.0 million to repay part of its debts. - According to the Omani Ministry of National Economy said that the Sultanate's M2 money supply growth, an indicator of future inflation, slowed to an annual 10.5% in May 2009 from 10.9% in April 2009. M1 money supply growth, a narrower measure that excludes longer – term deposits and money – market funds, rose to 4.5% in May 2009 from 3.5% in April 2009. - Dubai based National Central Cooling Company (Tabreed), a provider of air conditioning systems for large – scale property developments, has raised AED 1.1 billion in debt to help pay for its role in the Dubai Metro and other large projects. The company has borrowed a two – year, AED 750.0 million loan from First Gulf Bank. Product 2009. TresVista Financial Services, Pvt. Ltd. © Mumbai, India. www.tresvista.com Page 4
    • Issue No. 1.12 MENA WEEKLY NEWS Week of July 3, 2009 – July 9, 2009 About Us: Headquartered in Mumbai, India, TresVista Financial Services Pvt. Ltd provides research, analytics, advisory, investor relations, and other customized services for asset managers, private equity funds, investment banks, operating companies, and other institutions. This document is provided for assistance only and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this document should make such investigation as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult his own advisors to determine the merits and risks of such investment. This newsletter is provided for information purposes only. The information is believed to be reliable and is based on publicly available information, but TresVista does not warrant its completeness or accuracy. Opinions, estimates, and assumptions constitute our judgment as of the date hereof and are subject to change without notice. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Additional information is available upon request. TresVista Financial Services Premier House, Plot No.38, 2nd Floor, New Wing, Central Road, MIDC, Andheri (East), Mumbai 400 093 Product 2009. TresVista Financial Services, Pvt. Ltd. © Mumbai, India. www.tresvista.com Page 5