Tres Vista Weekly Me 08 20 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. 2.3 MENA WEEKLY NEWS Week of August 14, 2009 – August 20, 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 5,623.1 7,844.4 1,813.7 589.1 6,115.5 2,462.5 Gold Spot 940.65 GBP 0.606 (3.8%) (1.0%) (5.7%) (2.4%) (0.7%) (2.8%) Silver Spot 13.93 EUR 0.702 distribution list, please LME 3 mth. Cu 6,049.00 SAR 3.750 visit our website … Morocco Bahrain Qatar Tunisia Lebanon Abu Dhabi LME 3 mth. Al 1,906.00 KWD 0.287 10,988.7 1,507.8 6,691.2 3,685.7 1,394.3 2,798.0 ICE Brent Crude 73.33 www.tresvista.com (0.0%) (1.2%) (5.0%) 0.1% (2.1%) (2.4%) MACRO ECONOMIC NEWS Saudi Arabia 1. Macro Economic ▲ Seven Contracts for King Abdul Aziz International Airport in Jeddah expansion issued by Saudi’s General Authority of News Civil Aviation. 2. Government ▲ Saudi Arabia's annual inflation rate fell to 4.2% in July, its lowest level in two years, mainly due to a slowdown in the rise of Regulations home rents, commodities, and food prices. A stronger US dollar also helped reduce import costs for the major oil exporter, 3. Sector News which pegs its riyal to the dollar. 4. Company News ▲ Dow Jones Indexes will add Saudi Arabian equities to its stock measures after rival MSCI Inc.(MXB) earlier threatened to 5. Liquidity pull the kingdom's stocks from its indexes over a licensing dispute. ▼ Saudi Arabia's exports to the U.S. plummeted 64.0% to USD 9.7 billion during the first half of the current year due to cuts in oil sales imposed by the Organization of Petroleum Exporting Countries. Market Buzz… UAE ▲ UAE’s oil output is up marginally in July to 2.3 million barrels per day. UAE's oil output in July was more due to higher output levels at offshore Lower Zakum. ▲ Dubai home prices fell 24.0% in Q2 2009. However, the number of sales and rental transactions has remained steady over the two quarters signaling a renewed confidence in the emirate’s real estate market also narrowing the gap between the owners asking and buyer’s prices. . ▲ The UAE's non-oil trade with 228 countries increased by 43.0% in 2008 compared with the previous year. ▲ A surge in oil prices to historical high levels allied with growing crude output to boost the UAE's GDP per capita income to a record AED 196,100.0 in 2008, one of the highest levels in the world. ▲ Trade between Malaysia and the UAE rose 21.0% to USD 6.0 billion by the end of 2008. Malaysia's exports to the UAE were valued at USD 3.7 billion, while its imports from the UAE were worth USD 2.3 billion. ▲ Despite an increase in imports of goods and services, heavy expatriate transfers, payments for foreign oil partners, and a sharp fall in investment income, UAE’s current account surplus widened by 13.5% to about AED 81.8 billion in 2008 from AED 72.1 billion in 2007. ▲ UAE sovereign wealth funds dominated the M&A market this year by accounting for more than 50.0% of the total value of deals. SWFs have entered into deals worth USD 17.5 billion (AED 64.2 billion) in 2009 so far. SWFs from the UAE dominate the listings, accounting for more than USD 9.3 billion, or 53.4%, of the total deals. Jordan ▲ Jordanian exports to Lebanon during the first half of 2009 rose by 16.0% to JOD 59.2 million compared with JOD 50.8 million for the same period of last year, according to figures issued by the Central Bank of Jordan. ▲ The value of Jordan's imports from Kuwait declined by 40.0% from JOD 48.2 million to JOD 28.8 million for the same period of 2009. ▼ Revenues of Jordan’s exports to Kuwait declined by one third during the first half of 2009 reaching JOD 21.7 million compared with JOD 32.0 million in the same period of 2008. Qatar ▲ Qatar paid Porsche slightly more than half the current market price for shares in Volkswagen in a multi-billion euro deal announced last week. Qatar is paying about EUR 80.00 per Volkswagen AG share. Qatar also has the option to purchase 50.0% of non-voting preferred shares in Volkswagen AG from Porsche Autombil Holding SE. ▲ Qatar's CPI (Consumer Price Index) dropped 2.6% in H1 2009 mainly due to decline in house rents. CPI fell 0.8% in June compared with the previous month. Oman ▲ The Oman Development Bank has granted 2,021 loans valued at OMR 9.0 million in the past seven months for various economic sectors in the country. The bank financed loans worth OMR 3.8 million to various projects in the fisheries sector. ▼ Government revenues fell by 21.3% by the end of June 2009 to OMR 3,235.1 million against OMR 4,108.5 million during the same period in 2008 mainly due to 33.3% decline in the Sultanate's net oil revenues and an 8.3% decline of gas revenues according to the Ministry of National Economy. … The Middle East will see 99 new hotels and Egypt 25,829 hotel rooms ▲ Moody's Investors Service revised the outlook on Egypt's sovereign ratings and ceilings back to stable from negative. This open in 2009, followed affects Egypt's Ba1 local and foreign currency government bond ratings, its Ba2 country ceiling for foreign currency bank by 110 hotels and deposits and its Baa2 country ceiling for foreign currency bonds. 31,725 rooms in 2010, with a majority of these GOVERNMENT REGULATIONS Saudi Arabia openings in Dubai and Abu Dhabi … ▲ The Capital Market Authority's (CMA’s) revokes license of Portfolio Brokerage and Financial Services Company for not fulfilling the requirements and conditions prior to commencing the business. TresVista Financial Services, Pvt. Ltd. © Page 1
  • 2. Issue No. 2.3 MENA WEEKLY NEWS Week of August 14, 2009 – August 20, 2009 Kuwait - Kuwaiti law makers have agreed to postpone the final vote on a new labor law for the private sector amid concerns from MPs in clashes between Kuwait's new female MPs and Islamist MPs over new articles in the law regarding women rights and also that Kuwaitis and expatriates equally, insisting that Kuwaitis should be given more benefits. SECTOR NEWS Saudi Arabia ▲ The Saudi Ministry of Agriculture has lifted the ban imposed on the imports of sheep, cows, camels and deer from all regions of the Sudan. ▲ Saudi's agricultural products have almost doubled as the Kingdom imported more than SAR 25.5 billion worth of agricultural products in 2008, an increase of 42.0% over the previous year. UAE ▲ Property market is starting to stabilize and signs are becoming apparent in Dubai's property market with the volume of transactions remaining consistent in the first half of 2009 ▲ Banks and lending agencies in the UAE are witnessing healthy growth in residential real estate mortgages, suggesting prices may reach levels at which end-users are once again interested in properties. The growth in Q2 over Q1 is more than 25.0%. ▲ Tourist movements and hotel occupancy levels in Dubai improved with Five-star beach hotels recording 97.0% occupancy, Five-star city hotels recording 76.0% occupancy, and Four-star hotels recording 81.0% occupancy during the second week of August. ▲ Dubai International Airport registers a 12.6% increase in passenger traffic in July, 10.3% in June, and 13.8% in May. The year to date traffic at the end of July stood at 23.1 million passengers, up 6.1% from the same period last year. ▲ Abu Dhabi airport sees rise of 10.0% compared to July 2008 passengers due to traditional increase in summer travel and the establishment of new airlines. ▲ An upsurge in domestic building activity at the height of the economic boom boosted the construction sector by 6.9% to a record high of AED 40.1 billion in 2008 from about AED 37.5 billion in 2007. ▼ Luxury realty prices in Ras Al Khaimah (RAK) and Royal Breeze apartments in Al Hamra Village fell up to 40.0% and Bab Al Bahar villas to 33.3%. - The total value of land transactions in Dubai last week reached AED 1.9 billion, of which sales exceeded AED 1.1 billion. The total value of mortgages during the week was AED 838.3 million. Oman ▲ The Sultanate of Oman, the largest Gulf oil producer outside OPEC, said that it pumped 6.6% more (from 743,400 barrels a day to 792,700 barrels a day) crude oil in the first six months of 2009 compared with a year earlier. ▼ The cargo traffic through Port Sultan Qaboos and Port of Slalah fell by 16.9% to 4,134.2 tonnes in June 2009, compared to 4,972.1 tonnes in 2008. Tunisia ▲ Tunisia's Technical Textile Centre (CETTEX) said that the textile and clothing industry posted a growth in its July 2009 exports 5.1%. The sector also recorded a 4.3% growth in imports promising improving exports prospects for the next months. Egypt ▲ The Government of Egypt signed agreements for oil and natural gas exploration that are expected to bring investments worth USD 2.3 billion. The agreements have been signed with BP Plc, IEOC, and Egyptian firm Tharwa for exploration in the Eastern Desert, Nile Delta, Gulf of Suez and North Sinai. COMPANY NEWS Saudi Arabia ▲ Saudi Aramco has invited bids for a contract to build new offshore jack-up oil rigs. It also has revised the scope of two of its largest planned gas plants as contractors prepare to bid for the schemes, which are intended to boost the kingdom's production. ▲ Riyadh compensates low-cost airlines (Nas Air and Sama) to receive interest-free loans of USD 53.0million each to cover losses made due to domestic fare cap. ▲ Saudi's largest insurer National Company for Cooperative Insurance or NCCI said it won a SAR 507.1 million (USD 135.2 million) contract to provide health insurance to Saudi Telecom Company's employees. ▲ Saudi Arabian Mining Company, or Maaden, signed an agreement with local firm Olayan Descon to set up a magnesite processing plant costing SAR 95.0 million (USD 25.3 million) and produces 140,000 tons of magnesite over the next 20 years ▲ The Asian Development Bank (ADB) is keen to expand its cooperation with the Jeddah-based Islamic Development Bank (IDB) following the launching in early July 2009 of their joint USD 500.0 million Islamic Infrastructure Fund, which will invest in the equity of infrastructure companies of member countries common to both the ADB and IDB. … According to the ▲ Al-Tuwairqi Holding will start production at a new steel complex in 2010 with a production capacity of 2.0 million tonnes, will Economist Intelligence raise to 3.0 million tons the steel billet production capacity of the group, which owns 76.0% of Al Ittefaq Steel Products Unit (EIU), the Gulf Company, one of Saudi Arabia's three largest steel producers. Cooperation Council ▲ Riyadh plans to upgrade its military air navigation and communication systems in two deals worth more than USD 2.0 billion. (GCC) countries are ▲ SABIC has gone into expansion mode in order to cope with escalating demands and has allocated more than SAR 30.0 billion for likely to invest as much current and planned investments in various projects. It is also going ahead with plans for joint ventures and acquisitions to face as USD 50.0 billion the challenges looming ahead acquiring international stature as it scouts for markets overseas to leverage its strength amid stiff (AED 184.0 billion) in competition. power projects between - The Capital Market Authority (CMA) announced that it has approved the amendment to the business profile of Rasmala 2009 and 2015… Investment Saudi to act as a principal, agent & underwriter in dealing activities. Managing, arranging, advising, and custody activities will be included in securities business. TresVista Financial Services, Pvt. Ltd. © Page 2
  • 3. Issue No. 2.3 MENA WEEKLY NEWS Week of August 14, 2009 – August 20, 2009 Kuwait ▲ Reliance Communications has started talks to buy Kuwaiti Zain’s African operations. The assets could fetch a price of about USD 10.0 billion, according to media reports. ▲ Kuwait's largest Islamic bank said it has signed an USD 450.0 million deal with a US real estate investment trust to buy high income residential real estate in major American major cities. The deal is between Kuwait Finance House and Denver, Colorado-based apartment building owner UDR Inc. is the second major foreign investment by a rich Gulf nation in the past few days. Under the deal signed in London, KFH's participation is 70.0% while UDR will shoulder a 30.0% share. ▲ Kuwait Energy, one of the largest private exploration and production Companies in the Middle East, announced the discovery of a new oil field, Al Zahraa, in East Ras Qattara (ERQ) in Western Desert, Egypt, with a daily production rate of 2,615 barrels of oil. Kuwait Energy’s share and working interest of the field is 49.5%. ▲ Combined Group Contracting Company announces that they have submitted the lowest bid in a two-year KWD 30.5 million tender offer as well as signed a two-year, KWD 14.8 million contracts with Kuwait Oil Company to construct crude oil and water pipelines in Al Manakish area in West Kuwait. ▲ Equate Petrochemical Company announced the beginning of commercial operations of the Kuwait Styrene Company's (TKSC) new Ethyl Benzene and Styrene Monomer (EBSM) production plant, with a capacity of 450,000 metric tonnes annually. ▲ The Central Bank of Kuwait (CBK) has approved a request for renewing a prior consent granted to Bayan Investment Company for purchasing no more than 10.0% of its own issued shares for six months until February 18, 2010. ▲ Global Investment House Corporate announced that it will sign debt rescheduling agreements with most of its creditors to extend loan payments for five years. UAE ▲ Dubai Holding to streamline operations and build on its strengths and core competencies in four major operational specializations, Dubai Holding is reorganizing its businesses into property, business parks, hospitality, and investments verticals. ▲ TAQA may use its cash reserves of AED 5.0 billion for acquisitions and retire some of its debt, according to its CEO. It may spend USD 1.0 billion on energy assets acquisitions in North America and Europe in H2 2009 ▲ Depa Limited, an international interior contracting company announced that its subsidiary, Depa Abu Dhabi, and its joint venture, Mivan Depa, have together won an AED 200.0 million contract for the complete fit-out works for Abu Dhabi's Ferrari World (world's largest indoor theme park, under a roof designed in the style of a classic double-curve body shell of a Ferrari GT car) on Yas Island opening in 2010. ▲ DBG wants to take majority control (more than 50.0%) of Shuaa as it looks to capitalize on the options it won following its bond dispute on June 25, settled by DBG taking a 48.4% stake (515mn shares) in Shuaa & making it its biggest shareholder. ▲ The sponsors of the Shuweihat 2 power generation and water desalination project in Abu Dhabi have arranged for 12 banks to provide USD 1.1 billion, 22 year loan to fund the scheme which bridges a USD 900.0 million loan that matures in September. ▲ OAO Gazprom and Abu Dhabi National Energy Co.(TAQA), the state-controlled oil and natural gas producer signed an agreement for gas storage services at the Bergermeer storage site in the Netherlands. Gazprom will deliver cushion gas for injection into the depleted field in return for working capacity and a participating interest in operating the facility. - The UAE's Dolphin Energy would finish building a cross-country pipeline to pump gas from Qatar to the east coast of the UAE in the third quarter 2010 Qatar ▲ Ras Laffan 3 announced the start-up of LNG Train (liquefaction and purification facilities in a liquefied natural gas plant) 6 at Ras Laffan Industrial City which will produce 7.8 million tonnes per year. Ras Laffan 3 is also constructing LNG Train 7 which will produce 7.8 million tonnes per year and is expected to start in late 2009. - Qatar Telecommunications Co's USD 1.5 billion loan will be increased to USD 2.0 billion after raising over USD 3.0 billion in syndication which is scheduled to close on August 21, 2009. Bahrain - Al Salam Bank and Perbadanan Tabung Amanah Islam Brunei (TAIB) have entered into a strategic partnership. Al Salam has agreed to sell 50.0% of its 18 year leasehold interest to TAIB through a 50-50 joint venture. - Eskan Bank, an independent state-owned entity plans to launch a building materials company before the end of 2009 with a capital of BHD 300.0 million (USD 795.8 million). Egypt ▲ Egypt's Beltone Private Equity and Kenana Sugar Company have signed an agreement to establish a company with the aim of deploying USD 1.0 billion in large-scale agriculture projects in Egypt and Sudan. LIQUIDITY Saudi Arabia ▲ Saudi Arabia has embarked on a major SAR 100.0 billion (USD 26.6 billion) project to attract Foreign Direct Investment (FDI) and transform the Saudi economy into a global economic powerhouse. ▲ The Asharqia Chamber in Eastern Province has announced that a financing facility of SAR 100.0 million which will be financed by the Saudi Credit and Savings Bank, will be available to fund small-and medium-sized enterprises (SMEs) established by young Saudis. ▲ ZAIN Saudi Arabia announced the closing of a USD 2.5 billion Murabaha financing facility for facilitating the mobile telecom … UAE central bank operation's ongoing network expansion and future growth. governor expects oil to average USD 60.00 – UAE USD 63.00 in 2009…. ▲ UAE Central Bank extends maturity of fixed-rate lending making borrowing cheaper. The banks will be allowed to borrow against certificates of deposit at the one per cent benchmark repurchase rate for up to a month. TresVista Financial Services, Pvt. Ltd. © Page 3
  • 4. Issue No. 2.3 MENA WEEKLY NEWS Week of August 14, 2009 – August 20, 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 TresVista Financial Services, Pvt. Ltd. © Page 4