Tres Vista Weekly Me 08 13 09

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Weekly MENA Newsletter by TresVista Financial Services (www.tresvista.com)

Weekly MENA Newsletter by TresVista Financial Services (www.tresvista.com)

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  • 1. Issue No. 2.2 MENA WEEKLY NEWS Week of August 7, 2009 – August 13, 2009 MENA MARKETS For additional MENA MARKETS information or requests Saudi Arabia Kuwait UAE Egypt Oman Jordan Commodity (USD) Currency (USD/) or to be added to the 5,845.7 7,920.8 1,924.0 603.5 6,156.7 2,534.0 Gold Spot 954.95 GBP 0.603 1.3% 2.2% 0.2% (0.4%) 0.6% (1.8%) Silver Spot 15.03 EUR 0.700 distribution list, please LME 3 mth. Cu 6,381.00 SAR 3.750 contact Morocco Bahrain Qatar Tunisia Lebanon Abu Dhabi LME 3 mth. Al 2,060.00 KWD 0.287 10,989.7 1,525.5 7,045.4 3,680.3 1,424.7 2,867.2 ICE Brent Crude 73.48 (1.2%) (0.1%) 2.5% 0.7% (1.0%) 0.8% Samir Tiwari VP – Sales & Marketing MACRO ECONOMIC NEWS +91 22 6156-7304 Saudi Arabia samir.tiwari@tresvista.com ▲ Saudi Arabia may boost heavy crude oil output over the next 12 months as global demand recovers, widening the price difference between more expensive, light crudes and cheaper, heavy grades. 1. Macro Economic ▲ S&P's Ratings Services announced that it has affirmed its 'AA-' long-term and 'A-1+' short-term foreign and local currency News sovereign credit ratings with a stable outlook on Saudi Arabia. 2. Government Kuwait Regulations 3. Sector News ▲ Kuwait and China have decided on a new location for a USD 9.0 billion mega refinery and petrochemical project in the 4. Company News southwestern Guangdong Province. 5. Mergers & ▲ Kuwait International Airport’s (KIA) official records point out to a marked increase in the number of flights in the first quarter of Acquisitions 2008 registering an 8.0% increase in the number of passengers and 21.0% in regular commercial flights. Irregular commercial 6. Liquidity / Capital flights have increased by 3.0% while cargo, regular, and irregular flights have increased by 20.0%. Raising ▲ Personal facilities for the purchase of securities maintained their growth in June at KWD 46.0 million, whereas other personal facilities raised KWD 65.0 million, their largest monthly increase since December 2007. (Personal loans are priced off of the discount rate). Market Buzz… ▲ Private resident deposits grew 14.8% during H1 2009, compared to the last year, growth rising to 22.0% in June. Meanwhile, private deposits from nonresidents dropped by a further KWD 243.0 million in June, falling 76.0% from August 2008 level. UAE ▲ Abu Dhabi recorded the lowest inflation rate 1.8% during January-May this year, in the UAE. ▲ Consumer confidence in the UAE has risen from record lows in March to the seventh highest globally. Optimism has risen four points from 89.0 in March to 93.1 points which is above the global average. ▲ Loan growth recovered in Q2 2009, although only slightly, averaging 4.0% over the last quarter. Bank managements have indicated that growth has been driven by both regional and domestic operations. ▼ Investment funds such as Permal, Markaz, and Jabre Capital, that extended redemption periods because of adverse conditions in the market have started to cut their notice periods. Jordan ▲ The trade deficit during the first half of 2009 stood at about JOD 2.4 billion, 31.6% lower than the JOD 3.5 billion during the same period of last year. ▼ The Kingdom's imports of fuel derivatives during the first half of 2009 dropped by 49.3% reaching JOD 737.0 million compared ...The Gulf Co- to JOD 1.5 billion during the same period in 2008, according to a statement by the Department of Statistics. operation Council, or ▼ The overall national exports dropped by 11.7% during the January - June period of this year to about JOD 2.3 billion compared to GCC, will need to JOD 2.6 billion during the same period of 2008. significantly increase its ▼ Direct foreign investments fell sharply to JOD 155.0 million during the first quarter of this year compared to JOD 652.7 million in workforce to keep pace the same period of 2008, according to the Central Bank of Jordan’s statistical bulletin. with development in the ▼ The volume of Jordanian exports to Arab states in the last six months had decreased by 2.7%, about USD 1.3 billion. next two years. There are many opportunities - Regarding imports, a sum of USD 1.0 billion worth of goods was received by Jordan from Arab states with the first quarter, a and attractive options 49.0% decrease from the USD 1.9 billion within the same period last year. for jobseekers in the Bahrain region; with the combined value of ▲ Between December 2008 and June 2009, total bank assets grew by USD 9.4 billion, the equivalent of 9.9%, 50.0% higher than the projects in the region growth reported over the corresponding period of 2008. being carried out this Oman year alone is already ▲ The annual inflation in Oman fell to 2.9% in June from 3.9% in May. worth more than USD 2.1 trillion. 73.0% of ▲ Oman has raised spending on infrastructure and oil production projects by 5.3% to OMR 3.2 billion in the first six months. companies across the GOVERNMENT REGULATIONS GCC aim to double their Kuwait growth this year ▼ The Ministry of Electricity and Water has informed companies as well as commercial and investment buildings that have compared to 2008… requested power supply across the country that it can not provide them with electricity until after the operation of major power grids in their respective areas. Product 2009. TresVista Financial Services, Pvt. Ltd. © Mumbai, India. www.tresvista.com. Page 1
  • 2. Issue No. 2.2 MENA WEEKLY NEWS Week of August 7, 2009 – August 13, 2009 Saudi Arabia …As GCC countries ▲ Saudi’s Council of Ministers has approved the creation of Saudi Electronic Information Exchange Co that will make investments continue to spend on commercial basis in IT, Telecom, and banking industries. heavily on the region's infrastructure, private Egypt sector infrastructure ▲ Egypt plans to introduce real estate taxes in January for all commercial and residential properties in the North African country. providers are expressing Properties valued at EGP 1 million (USD 180,831.0) will be taxed EGP 660,000.0 while houses valued less than EGP 450,000.0 concern about will be exempted. government effectiveness and a lack UAE of availability of people ▲ UAE scrapped minimum requirement for limited liability companies of AED 150,000.0 (USD 40,800.0) as start-up capital to and skills… boost growth. SECTOR NEWS Saudi Arabia ▲ Total deposits with Saudi banks grew to SAR 916.0 billion at the end of June 2009, since banks tried to attract more deposits as interbank lending tightened. ▲ Enhancing country’s status as a major regional agribusiness player, agricultural projects are expected to form 23.0% of KSA’s estimated SAR 181.0 billion private sector investments in 2009. ▲ The kingdom imported more than SAR 25.5 billion (USD 6.8 billion) worth of agricultural products in 2008, an increase of 42.0% over the previous year. ▼ Swine flu fears may subdue the number of pilgrims to Mecca this year, posing a challenge to Tourism and Airlines industries in the Kingdom. UAE ▲ The UAE private sector has more than quadrupled its investment to a record AED 217.3 billion in 2008. ▲ Dubai is likely to see a surplus of 31,000 residential units mainly due to the decline in the expatriate population, while the …Fund managers shortage of units in Abu Dhabi will rise to 28,000 by year-end. investing in the Middle ▲ Dubai hotels saw a 5.0% increase in the number of guests during the first half of 2009, after they cut prices and launched East and North Africa promotions. (Mena) region are ▲ Many foreign investors are showing interest in the Dubai hotel property market and could benefit from opportunities after united in expecting a Ramadan. The hotels, which all have more than 120 rooms, are in the range of USD 60.0 million (AED 220.0 million) to USD correction, according to 200.0 million each, depending on the location. the latest update on the sector from Standard & ▲ Abu Dhabi expects to welcome around 1.8 million business tourists this year, up 30.0% from last year in spite of the recession. Poor's Fund Services… ▲ Gulf cement companies sharply recovered in the second quarter of 2009 but ended the first half of the year down by nearly 24.4% because of slackening construction project. ▼ Average apartment rents have fallen by 29.0% since their peak in the fourth quarter of 2008. COMPANY NEWS Saudi Arabia ▲ Saudi's Kingdom Holding Co. (KHC) said the value of its available-for-sale investments increased 8.7% to SAR 4.89 billion (USD 1.3 billion) at the end of July from a month earlier as markets globally strengthened. ▲ Saudi Aramco and ConocoPhillips have awarded an engineering and procurement deal to KBR for work on its planned 400,000 bpd Yanbu refinery on the Red Sea coast. ▲ SABIC said it has signed an agreement with Japan's Mitsubishi Rayon to set up a USD 1.0 billion joint venture, despite the decline in global demand for petrochemicals. The plant will have an estimated cost of about USD 1.0 billion and is expected to start production in 2013. ▲ Zain Saudi Arabia, part of Kuwait's Mobile Telecommunications Co., said it secured a SAR 9.4 billion (USD 2.5 billion) Sharia- compliant loan to help cover its debts and expand. …Rival oil supplies and the sluggish pace of ▲ Saudi Electricity has added 2,300.0 MW to power generation capacity in the kingdom. The company plans to add 32,000.0 MW recovery in world of power and link the country's regional networks to meet the growing demand. consumption will shrink ▲ Alfanar Construction has been awarded 2-year contract to build a 380.0 KV substation at Jazan Economic City, for a value of demand for OPEC's SAR 254.0 million. crude oil next year. Demand for OPEC Kuwait crude will average 28.0 ▲ Gulf Finance House announced that it has received the approval of the Central Bank of Bahrain to increase its capital by USD million barrels per day 300.0 million to USD 500.0 million through a rights issue. (bpd) next year, down 480,000 bpd from 2009. ▲ Al Ahli Bank of Kuwait (ABK.KW), or ABK, said it has obtained an approval from the central bank to increase its capital by It previously expected a 25.0%. fall of 380,000 bpd… ▲ Kuwait Projects Company (Holding) announced that its 80.0% owned-subsidiary, Showtime Arabia (UAE), is planning to merge with Orbit Group (Saudi Arabia). Product 2009. TresVista Financial Services, Pvt. Ltd. © Mumbai, India. www.tresvista.com. Page 2
  • 3. Issue No. 2.2 MENA WEEKLY NEWS Week of August 7, 2009 – August 13, 2009 ▲ Zain Saudi Arabia said that the company has secured a two-year USD 2.5 billion Islamic loan facility, or Murabahah, from eight …OPEC total revenue banks. for last year hit USD 1.0 trillion. This historic UAE figure has been ▲ Shore Capital Group plc, has acquired a 5.0% interest in Full Circle Investments FZC, a corporate finance, consulting, and private achieved due to increase placement firm based in Dubai. in the oil prices. Oil ▼ Gulf Finance is slashing its lending by up to 70.0% this year in line with the current economic crisis. prices touched USD 147.0 in July 2008… Jordan ▲ Arab Bank has decided to lower prime lending rate by 0.25% to 8.0% as of September 1, 2009, the reduction is the second during the current year for all facilities customers. Oman ▲ OETC is implementing 64 projects in the next five years at an estimated OMR 610.0 million on account of huge electricity demand in the Sultanate. ▼ Oman Oil will delay bidding on its USD 300.0 - 500.0 million Musandam gas processing project because it has yet to complete the detailed engineering design. - National Biscuit Industries informed MSM that CMA allowed M/s Amfis Holdings Limited to hold and purchase shares to the extent of 70.0% of paid up capital of the company. Bahrain ▲ Bahrain-based Islamic investment bank Gulf Finance House (GFH) plans a capital increase of up to USD 500.0 million to beef up its balance sheet to weather the global crisis and make investments. … Middle East air ▲ Eastern Industrial and Oilfields Services (EiOS) has acquired a 10.0% in Regional Energy Services Holding (Resh), a subsidiary traffic demand has been of the Unicorn Investment Bank. gradually improving ▲ Bahrain-based Al Baraka Banking Group plans to spend about USD 100.0 million on acquisitions this year and expand its branch since the beginning of network despite concerns over rising provisions and a more cautious approach to new markets. the year, last month the region saw strong Qatar growth of 12.9% in ▲ Qatar Islamic Bank (QIB) is extending USD 200.0 million (QAR 728.3 million) financing to Qatar Petrochemical Company passenger traffic … (Qapco) for the latter’s new low density polyethylene (LDPE) project, whose total cost is estimated at QAR 2.0 billion. ▲ Qatar Petrochemical Company (Qapco) signed a deal with Qatar Islamic Bank (QIB) for a Shariah-compliant financing facility worth QAR 730.0 million at the Qapco site in Mesaieed Industrial City. The QAR 2.0 billion worth LDPE-3 project is part of Qapco’s expansion and development plans and will be using the excess ethylene produced by Qatofin and Qapco. ▲ Qatar-based Barwa Real Estate will build an EGP 50.0 billion (USD 9.0 billion) project in Egypt through its Barwa New Cairo for Real Estate Investments unit. Lebanon - Lebanon - chocolate chain Patchi planning a 49.0% listing in Dubai and London to raise funds for international expansion. LIQUIDITY Kuwait ▲ In its latest economic brief on monetary developments, National Bank of Kuwait (NBK) reports that credit growth accelerated in June, driven mainly by loans to personal facilities. ▲ The CBK cut its repo rate by 25 bps on July 21, 2009 aiming at supporting liquidity in the banking system. ▼ The money supply (M2) witnessed a 0.1% contraction in June 2009. - Kuwait’s central bank issued 100.0 million Kuwaiti dinars (USD 347.6 million) of one year treasury bonds with a coupon rate of 1.5%. Bids for the bonds amounted to 250.0 million dinars. …The combined Arab Saudi Arabia economy grew by 6.4% in real terms in 2008 to - SABB Takaful approved a rights issue valued at SAR 300 million (USD 80.0 million). The rights issue will be priced at a emerge as the best nominal value of SAR 10.00, plus a premium of SAR 2.50 per share, a considerable discount to its current trading price of SAR performer in the world. 38.30. The real gross domestic Morocco product of the Arab states recorded a high ▲ As of the end of June 2009, Commercial bank loans growth rate (main growth factor of M3) considerably decreased to 15.3% growth of about 6.2% in year to year at ends June 2009 compared to 28.5% a year earlier. 2007 and it maintained Bahrain that trend in 2008 to rise - Bahrain-based Gulf Finance House approved an USD 300.0 million rights issue. slightly to about 6.4%, thanks to strong crude Oman prices… - The Central Bank of Oman (CBO) announced issuing new government bonds worth USD 130.0 million, with three-year maturity period at a coupon rate of 4.0% a year. Product 2009. TresVista Financial Services, Pvt. Ltd. © Mumbai, India. www.tresvista.com. Page 3
  • 4. Issue No. 2.2 MENA WEEKLY NEWS Week of August 7, 2009 – August 13, 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. 2009 TresVista Financial Services ©. 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 4