Tres Vista Weekly Me 17 09 09


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Weekly MENA Newsletter by TresVista Financial Services (

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Tres Vista Weekly Me 17 09 09

  1. 1. Issue No. 2.7 MENA WEEKLY NEWS Week of September 11, 2009 – September 17, 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 5,947.8 7,800.2 2,127.6 637.8 6,653.1 2,647.8 Gold Spot 1,013.60 GBP 0.608 4.1% 1.0% 4.3% 2.2% 1.6% 0.2% Silver Spot 17.27 EUR 0.678 distribution list, please LME 3 mth. Cu 6,385.00 SAR 3.750 visit our website … Morocco Bahrain Qatar Tunisia Lebanon Abu Dhabi LME 3 mth. Al 1,966.00 KWD 0.286 10,900.3 1,538.9 7,296.6 3,948.1 1,424.9 3,100.1 ICE Brent Crude 71.55 0.3% 1.2% 2.8% 2.4% 3.1% 1.3% MACRO ECONOMIC NEWS 1. Macro Economic Saudi Arabia News ▲ Saudi Arabia's annual inflation rate inched down to 4.1% in August from 4.2% in July, due mainly to a slowdown in the rise of 2. Government home rents. The cost of living index stood at 122.7 points in August, up from 122.2 points in July. Regulations ▲ The Chairman of the Royal Commission for Jubail and Yanbu said that the commission has awarded utility contracts totaling 3. Sector News USD 373.0 million. 4. Company News 5. Liquidity ▼ Saudi Arabia's non-oil exports in June fell 22.0% to SAR 8.1 billion from a year earlier. The kingdom's imports in June also fell, dropping 25.0% to SAR 26.8 billion, compared with SAR 35.6 billion from a year earlier. - Custodian of the Two Holy Mosques King Abdullah ordered the payment of SAR 1.2 billion in emergency aid in order for poor Market Buzz… families to cover their Ramadan and Eid Al-Fitr expenses. Kuwait ▲ Kuwait is likely to post a healthy budget surplus of up to KWD 6.2 billion this fiscal year on the strength of higher oil prices although the government has projected a huge deficit. The budget surplus is expected to range between KWD 1.1 billion and KWD 6.2 billion depending on the oil price. ▲ The Civil Aviation Authority said that the number of flights increased by 6.0%, commercial flights by 33.0%, cargo by 41.0% from and to Kuwait International Airport during August. Non-commercial flights dropped by 33.0%, the total number of passengers during the past month reached 840,000 passengers. ▼ The latest official figures from the NBK report show Kuwait's inflation at 5.9%. UAE ▲ Food and beverage prices rose by 2.1% during January-July this year compared with 13.6% in the same period of 2008. ▲ Dubai’s total exports grew 6.5% to AED 46.5 billion in the Q2 2009 compared to Q1 2009. ▲ The UAE's inflation rate has plunged to between 3.5% and 4.0% this year, according to the Minister of Economy. ▲ The Ministry of Economy showed inflation in other components of the consumer price index (CPI) sharply dropped in the first seven months of this year to drive down the general index to 2.9% from 10.8%. ▲ Housing services grew by only about 2.3% in the first seven months of 2009 compared with a record 12.3% in the corresponding period last year following a steep fall in the real estate market in Dubai and other emirates. ▼ The UAE's federal budget for 2010 may remain unchanged from this year, according to the Ministry of Finance. The Ministry of Finance asked ministries to prepare their proposed budgets without exceeding the approved budgets of fiscal year 2009 and excluding funds that were expired. Jordan ▲ The Kingdom's trade deficit between January and July narrowed by 27.4% to JOD 3.0 billion compared to JOD 4.1 billion during the same period last year. The Kingdom's total exports and re-exports dropped by 15.6% during the first seven months of this year to JOD 2.6 billion compared to JOD 3.1 billion ▼ Remittances from Jordanians working abroad dropped by 3.7% in the first seven months of this year to JOD 1.5 billion, compared with JOD 1.5 billion registered during the same period last year. According to the Central Bank of Jordan, remittances from expatriate workers in July amounted to JOD 254.0 million, the same figure recorded in July 2008. ▼ The unemployment rate rose to 14.0% during Q3 2009 compared to 13.0% during Q2 2009 and 12.1% in Q1 2009, according to the Department of Statistics. ▼ Jordan’s budget deficit climbed to JOD 763.2 million (USD 1.08 billion) in the first eight months of the year, finance ministry sources said. Bahrain ▲ Foreign direct investment (FDI) to Bahrain increased by 2.0% last year despite the global credit crunch. …The World Bank is in talks with some Gulf Oman countries in a bid to ▲ Oman will see an increase of 11.0% in tourists this year, taking it to the 2.0 million mark, thanks to Gulf residents looking for secure their cheaper holiday in the region. contributions to its planned capital hike… ▲ Oman wants to attract OMR 3.0 billion worth of foreign investment to its industrial and free trade zones as part of efforts to diversify its oil-based economy. TresVista Financial Services, Pvt. Ltd. © Page 1
  2. 2. Issue No. 2.7 MENA WEEKLY NEWS Week of September 11, 2009 – September 17, 2009 GOVERNMENT REGULATIONS …Arab states have the UAE right to use nuclear ▲ The Cabinet is finalizing the industry law that will allow 100.0% foreign ownership in industries. It is also considering raising energy for development, the foreign ownership ceiling from the current 49.0% to boost foreign investment. and the Arab strategy for nuclear energy will SECTOR NEWS be implemented Saudi Arabia between 2010 and ▲ Doosan Heavy Industries & Construction Co., South Korea’s leading power equipment maker, said that it has won a USD 1.0 2020… billion deal to build a power plant in Saudi Arabia. Kuwait ▲ Kuwait signed a USD 1.5 billion contract with General Electric and Hyundai Heavy Industries to build and operate a power station in Al-Subbiya Area which will produce 2,000 megawatts, or 20.0% of the current electricity output. The contract includes importing and assembly of six gas turbines that will produce 1,320 megawatts in addition to six steam turbines generating 700 megawatts. UAE ▲ From about AED 150.7 billion at the end of 2007, deposits by the government and other public institutions with the country's 24 national banks and 28 foreign units leaped to nearly AED 272.0 billion at the end of March this year, an increase of AED 121.3 billion, showed the figures released by the Central Bank. ▲ International passenger traffic at Dubai airports is projected to grow 13.6% in 2010, according to updated forecast by Dubai Airports Company. ▲ The total value of land transactions in Dubai last week reached AED 1.8 billion, of which sales exceeded AED 956.1 million. The total value of mortgages during the period was AED 798.9 million, according to the Land Department. A total of 39 sale transactions were registered with the department by the end of the week. ▼ Cement and concrete prices in Abu Dhabi fell this week by 3.0% and 6.0% compared to the previous week. ▼ The UAE Government has pumped more than AED121.0 billion into the banking sector in 15 months and the bulk of the funds were channeled following the eruption of global financial crisis, official figures showed yesterday. ▼ The number of vacant offices in Dubai will continue to rise until mid-2010, while the pace of decline of office rents will slow to 15.0% in Q3 2009, according to a realty analyst. The rate of decline has eased off from 45.0% in Q1 2009 to 25.0% in the Q2 2009, according to Jones Lang LaSalle. ▼ Selling prices for properties in Dubai are not expected to see any strong recovery before second half of 2010, according to EFG Hermes report. With relatively low buyers' confidence in Dubai, together with the view that demand will continue to focus on the rental market as supply is absorbed, they do not anticipate any strong recovery in Dubai selling prices. Oman ▲ Oman awards solar power deal to Worley Parsons. The Public Authority for Electricity & Water to develop plant as independent power project. Qatar ▲ Qatari national banks have increased their allocations for risk reserves by 76.0% to QAR 3.3 billion in the first half of 2009 from QAR 1.9 billion a year earlier. COMPANY NEWS Saudi Arabia ▲ Saudi Arabia's government has decided to renew a ten-year reprieve on receiving dividends from Saudi Electricity Co. ▲ A Saudi government panel has brokered a deal between Saad Group and local creditors that excludes international banks. Saad and another Saudi family conglomerate are at the center of an estimated USD 22.0 billion debt implosion. ▲ Saudi Public Transport Company announced that it has signed a five year, SAR 124.0 million contract with King Saud University to provide its students with transportation services. ▲ The Public Pension Agency bought a 2.2% stake in SAMBA Financial Group to increase its existing stake to 12.4%. ▲ Etihad Etisalat has signed a MoU with Qualcomm Incorporated, in which it has agreed to cooperate in several projects and issues regarding the wireless telecommunications sector. ▲ ArcelorMittal will complete a mill in Saudi Arabia to make pipes for the oil industry in 2011. The plant, initially slated to start …The Middle East and production in 2009, will have a capacity to produce 600,000 metric tons a year. North Africa's equity ▲ Saudi Cables announced that it has received orders for medium voltage power cables worth SAR 74.0 million from Saudi markets outperformed Electricity. the emerging markets ▲ Saudi Arabia’s Public Pension’s Agency has increased its stake in Samba to 12.4%. PPA has purchased an additional 2.2% but have stake in the firm in a deal worth a total of SAR 841.5 million. underperformed the US markets for the month… ▲ Barclays Plc plans to set up a private banking operation in Saudi Arabia to tap the market for wealthy individuals. TresVista Financial Services, Pvt. Ltd. © Page 2
  3. 3. Issue No. 2.7 MENA WEEKLY NEWS Week of September 11, 2009 – September 17, 2009 ▲ Mohammad Al Mojil Group announced that it has received the approval of Saudi Aramco to finalize the construction work …Airlines in the Middle for 355 residential units at the King Abdullah University of Science and Technology. The contract is worth SAR 183.0 million East are likely to and the company expects to deliver by the end of November 2009. witness a cumulative 8 ▲ The owner of Saad Group, the debt-laden Saudi conglomerate, has reached a deal to settle all debt with local banks, Al per cent growth in Arabiya TV said. passenger volume in 2009, but they are set to ▲ Maan Al Sanea, the chairman of Saad Group, has cut his stake in Samba Financial Group by 2.8%. Al Sanea held a 7.8% incur an estimated USD stake in Samba. 500.0 million loss this ▲ Premco, a subsidiary of Construction Products Holding Company, signed an agreement for supplying precast concrete to year due to the impact Princess Noura University in Riyadh. The deal is valued at SAR 100.0 million and will be implemented in 24 months. of the global financial crunch, Giovanni Kuwait Bisignani, International ▲ NBK has raised its stake in Islamic lender Boubyan Bank to 40.0% by buying Securities Group Co’s 7.2 % stake in the Islamic Air Transport lender as it seeks to boost its Sharia compliant business. Association (IATA) director-general… - National Investments Company has announced the mechanism for the participation of small shareholders and the arrangements for the gathering led by Al‫ـ‬Khair National for Stocks and Real Estate regarding the necessary preparations to sell 46.0% of shares of Zain. UAE ▼ Negotiations between Dubai-based private equity firm, Abraaj Capital, and DP World have collapsed. Abraaj Capital has been engaged in talks to acquire 15.0% stake in DP World. However, both firms failed to agree on the terms of the deal. - Government-owned conglomerate Dubai World is folding hotel and real estate assets from its Nakheel property unit into its Istithmar World investment arm, as part of the group’s restructuring. Several senior Nakheel executives have been transferred to Istithmar World as well. Dubai World has at least USD 59.0 billion of liabilities, a large proportion of the emirate’s total debt. Bahrain ▲ India's Corporation Bank is linking up with Bahrain Finance Company to offer financial services to NRIs in the kingdom. ▲ Bahrain-based First Energy Bank (FEB) has acquired a 9.0% stake in the Al Dur Independent Water and Power Production (IWPP) project in Bahrain. ▲ GPIC's export of granular urea to the US has exceeded 50.0% in the third quarter of this year. - Bahrain-based International Investment Bank (IIB) has started the conversion of AmrahBank, a conventional retail bank based in Azerbaijan, to a Sharia compliant bank. - General Trading and Food Processing Company clarified media reports and announced that Trafco Tourism (Egypt) has entered a joint venture with Air Arabia to establish a private airlines company. Oman ▲ The government will sign an OMR 80.0 million loan agreement with local banks for the construction of two docks for mining major Vale’s steel project at the Sohar Industrial Port by the end of this month. - Makyol a Turkish firm will build the first phase of Batinah carriageway. Qatar ▲ Black Cat Engineering & Construction has been awarded a major contract from Qatar Petroleum for the Engineering, Procurement, Installation, & Commissioning (EPIC) of Sweet Fuel Gas Supply with an approximate contract value of QAR 400.0 million to Dukhan consumers. ▲ State-owned Qatar Petroleum has awarded a QAR 109.0 million construction services deal to Halul Offshore Services Co. ▲ Barwa Real Estate Co. said it has completed 85.0% of its Barwa Village project under construction in Al Wakra to the south of Doha at a total cost of QAR 1.5 billion. ▲ Qatar Shipping Co. said its board has approved the sale of its Qatar Engineering & Construction Co. unit to a consortium led by Qatar America Asia Consortium for USD 110.0 million. ▲ Bahrain-based Islamic lender Al Baraka plans to sell 3.5 million shares in its Syrian unit for 1.8 billion Syrian pounds, or 500 pounds per share. ▲ Barwa Real Estate Company is planning to launch a QAR 1.5 billion residential and retail development project under the name of "Barwa Village Project" in Al Wakra Municipality. Egypt ▲ Dabur, which is currently hunting for acquisitions in the African continent, is setting up its second manufacturing facility in Egypt as part of its expansion plan in the region. ▲ Orascom Development Holding announced that it has entered an alliance with Imerys to establish a 6.8 million square meters Eco - Town in Cornwall, United Kingdom. The company will have a 75.0% stake in the project. TresVista Financial Services, Pvt. Ltd. © Page 3
  4. 4. Issue No. 2.7 MENA WEEKLY NEWS Week of September 11, 2009 – September 17, 2009 LIQUIDITY …The estimates of Saudi Arabia combined losses to be ▲ Islamic Development Bank launched its latest capital markets offering, a USD 850.0 million fixed-rate sukuk under its USD incurred by airlines this 1.5 billion MTN issuance program. The issuance was 2.4 times oversubscribed. year have been increased by IATA to Kuwait USD 11.0 billion from ▲ Kuwait central bank to issue USD 262.0 million of one year treasury bonds on September 16th with a coupon rate of 1.5 %. USD 9.0 billion Bids for the bonds amounted to KWD 391.5 million. Kuwait’s central bank has been increasing the number of bond issues this previously, due to year to absorb excess liquidity. declining yields, increasing fuel costs and UAE slump in business travel… ▲ The UAE's central bank will keep interest rates low to spur growth. The UAE's overnight repurchase rate stands at 1.0%. In contrast, interbank lending rates stand at 2.1% for three months, 2.4% for six months and 2.6% for one year. Bahrain ▲ Bahrain's Gulf Finance House, shareholders approved the increase of the bank's authorized and paid-up capital as the lender is gearing up to seize opportunities created by the economic downturn. ▲ Albaraka Banking Group’s subsidiary Al-Baraka Bank-Syria will offer 35.0% of its shares through an initial public offering starting October 4, 2009, at a price of USD 10.85 per share (SYP 500 per share). ▲ The Central Bank of Bahrain moved to pump prime the economy by cutting interest rates. It reduced its lending rate and repo rate by 0.5% from 2.75% to 2.25% in a move seen as an attempt to encourage bank lending and economic growth. ▲ Bahrain is auctioning a three-year BHD 165.0 million sukuk at a fixed rate of 3.75%. Oman ▲ Bank Muscat targets to raise OMR 40.0 million in Certificates of Deposit (CDs) auction on 15 September. ▲ CBO allotted OMR 682.0 million during the Certificates of Deposit tender held last week. The average interest rates for 28 day certificates were 0.03% while the maximum accepted rate was 0.04%. Repo rate was held stable at 2.0%. Qatar ▲ Qatar Telecommunications Co is in the process of signing a USD 2.0 billion forward start loan. Egypt ▲ Weather Capital Finance SA, a fully owned subsidiary of Weather Investments SpA, a unit owned by Egyptian entrepreneur Nagiub Sawiris, said that holders of EUR 744.6 million worth of bonds have tendered to sell their bonds to Weather as part of a buyback program. ▲ El Saed Contracting Company announced that it will sell 15.0 million of its treasury shares. ▲ General Company for Ceramic and Porcelain Products announces the increase in the authorized capital from EGP 100.0 million to EGP 150.0 million and 75.0% rights issue. 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