Your SlideShare is downloading. ×
Tresvista Monthly Me June 2009
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Saving this for later?

Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime - even offline.

Text the download link to your phone

Standard text messaging rates apply

Tresvista Monthly Me June 2009

650
views

Published on

TresVista Financial Services MENA Newsletter

TresVista Financial Services MENA Newsletter

Published in: News & Politics, Travel, Business

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
650
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
5
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Issue No. 1.10 MENA MONTHLY NEWS Month of June 2009 MENA MARKETS For additional 1 Month Inde x Pe rformance Country Close % Change information or requests 115.0 Saudi Arabia 5,596.5 (5.0%) or to be added to the Kuwait 8,080.3 (0.9%) UAE 2,631.3 (1.8%) distribution list, please 110.0 Egypt 529.0 (2.8%) contact Oman 5,612.2 2.0% Jordan 2,735.2 (4.5%) 105.0 Samir Tiwari Morocco 11,588.5 5.1% VP – Sales & Marketing Bahrain 1,581.7 (2.5%) 100.0 Qatar 6,491.7 (7.0%) +912261567304 Tunisia 3,677.5 7.8% stiwari@tresvista.com Lebanon 1,429.9 21.4% 95.0 Abu Dhabi 2,631.3 (1.8%) 1. GCC Overview 2. Saudi Arabia 90.0 3. Kuwait 31-05-09 05-06-09 10-06-09 15-06-09 20-06-09 25-06-09 30-06-09 4. UAE Kuwait UAE Egypt Saudi Arabia 5. Egypt GLOBAL MARKETS 6. Oman Country Index Close % Change 1 Month Index Performance 7. Jordan 108.0 USA Dow Jones 8,447.0 (0.6%) 8. Morocco USA S&P 500 919.3 0.0% 9. Bahrain 106.0 USA NASDAQ 1,835.0 3.4% 10. Qatar 104.0 EURO DJ Euro Stoxx 2,398.0 (1.6%) 11. Tunisia 102.0 London FTSE 100 4,249.2 (3.8%) 12. Lebanon 13. M&A 100.0 Japan NIKKEI 225 9,958.4 4.6% China HANG SENG 18,378.7 1.1% 98.0 Market Buzz… 96.0 94.0 31-05-09 05-06-09 10-06-09 15-06-09 20-06-09 25-06-09 30-06-09 Dow Jones Industrial S&P 500 NASDAQ Composite FT SE 100 DJ Euro Stoxx Nikkei 225 Hang Seng COMMODITIES / CURRENCIES Commodity Open Close % Change Currency (USD/) Open Close % Change LME Crude $63.32 $69.99 10.5% GBP 0.618 0.608 1.6% Gold $979.15 $926.60 (5.4%) EUR 0.706 0.713 (0.9%) Silver $15.74 $13.61 (13.6%) SAR 3.750 3.750 0.0% LME Steel € 375.00 € 375.00 0.0% KWD 0.287 0.288 (0.2%) GCC Snapshot - Four Gulf Arab states signed a pact creating a pared – down monetary union with Saudi Arabia at its centre, after the …According to the United Arab Emirates became the second country to abandon the project last month. It comes as a confidence – building measure International Air after the shock decision by the UAE, the second – largest Arab economy, to leave the plan in protest after a May 5 decision to Transport Association base the joint central bank in the Saudi capital Riyadh (IATA), airlines based in the Middle East stand - Plans by Gulf Arab states to launch a single currency could be delayed by three years to 2013. It is impossible for the single to lose a total of USD currency to be launched within six months 1.5 billion in 2009, in - Demand for gas in the GCC is forecast to grow at 6.7% annually from 2007 to 2012, compared to a roughly 3.0% growth in spite of strong oil demand during the same period, according to the organizers of OGS 2009, the 16th edition of the oil, gas, renewable energy, passenger traffic growth and automation event in the region. Middle - Professional expatriates would be able to hold dual residency in GCC countries under a move recommended by the ‘Gulf Eastern carriers as a nations’ immigration heads at a meeting in Abu Dhabi. The dual residency applies to ‘first – degree’ professionals, such as group last showed a doctors, engineers, accountants, PR agents, and businessmen. The new system would make it easier for companies with branches combined profit in in any GCC country to deploy their professionals 2005. IATA’s updated estimate marks a 50.0% - GCC investors invest an estimated USD 45.0 billion in currency trading monthly and the UAE has a share of 30.0%, or USD increase from the USD 13.5 billion. The number of individual investors in the currency trading since the beginning of 2009 is expected to be 4,500 in 1.0 billion loss that the region, including 1,350 UAE nationals and UAE – based foreign investors regional carriers showed - According to Economic Intelligence Unit, the Middle East and Africa region is expected to grow at a modest 1.0% in 2009 and a in 2008… more robust 4.4% in 2010. The UAE and other GCC countries would be among the first to emerge from the global meltdown thanks to oil revenues Product 2009. TresVista Financial Services, Pvt. Ltd ©. Mumbai, India. www.tresvista.com Page 1
  • 2. Issue No. 1.10 MENA MONTHLY NEWS Month of June 2009 Saudi Arabia Sectors % ▼▲ Company % Change 1 Month Inde x Performance CAGR (5.0%) Telecom (3.4%) Top 5 Gainers: 6,200.0 Banking (8.1%) Weqaya Takaful Insurance 182.0% 5,900.0 Cement (1.3%) Saudi Ceramics 34.9% SASEIDX Index Insurance 1.0% Abdullah Al Othaim Markets 31.4% 5,600.0 Fitaihi Group Holding 29.4% Mediterranean And Gulf Cooperative 28.7% 5,300.0 Top 5 Losers: 5,000.0 Jarir Mareting (26.8%) Saudi Industrial Export (20.0%) 5-31-09 6-3-09 6-6-09 6-9-09 6-12-09 6-15-09 6-18-09 6-21-09 6-24-09 6-27-09 6-30-09 Sahara Petrochemical (19.8%) Saudi Investment Bank (19.0%) Al Gassim Agricltural (17.2%) Macro Economic News ▲ Saudi Arabia is offering USD 500.0 billion in investment opportunities over the next five years, according to the Council of Saudi Chambers of Commerce and Industry secretary general, Dr Fahad Saleh A. AlSultan. The sectors that need development are education, health, telecommunication infrastructure, agriculture, and railways. ▲ A sharp rise in oil revenue boosted Saudi Arabia’s budget surplus to a record high level in 2008 and decreased Saudi Arabia’s public debt to only 13.5% at the end of 2009. This means the Kingdom's public debt fell to SAR 236.0 billion at the end of last year. ▲ The Saudi Shura Council has approved modernizing the state – run Real Estate Development Fund and increasing of its capital to SAR 200.0 billion, from the current SAR 91.0 billion. ▼ Inflation in Saudi Arabia rose for the first time in 2009 to 5.5% in May, compared with 5.2% in April. Rising rents and house – related services continued to drive inflation in the Kingdom, increasing 17.7% and 33.6% respectively from the same period …The MENA equity in 2008. markets continued their ▼ Saudi Arabia's foreign assets continued to decline for the sixth straight month in May 2009, but at a slower pace, after almost a upward trend in May decade of steady growth driven by rising oil prices. Foreign assets controlled by the Saudi Arabian Monetary Agency, the 2009, with the broad kingdom's central bank, declined 1.1% to ~SAR 1.5 trillion (USD 395.5 billion) in May 2009, compared to a month earlier. regional index gaining 12.4%, thanks to Government Regulations resurgent oil prices, - The Saudi market regulator has told shareholders owning stakes of 10.0% or more in local companies that they should receive improving investor its authorization before they sell or transfer the ownership of these stakes. The Capital Market Authority has also instructed sentiment and positive shareholders that they should inform it and inform the company in which they own the stake of any change in their purpose for corporate news. Last holding a stake in the company. month’s gains brought the total gains in the Sector News MENA stock markets ▲ Saudi Arabia's banks made ~SAR 11.3 billion (USD 3.0 billion) in net profits in the first four months of 2009 despite a sharp since January 2009 to slowdown in their lending activity because of the global credit crunch, according to official figures. ~SAR 3.1 billion in net 15.0%... earnings were recorded in April 2009, the second highest profits after the SAR 3.6 billion achieved in January 2009, showed the figures by the Saudi Arabian Monetary Agency ▲ Mobile broadband is presenting an astounding subscriber growth in Saudi Arabia, according to figures released by Etihad Etisalat. After 24 months of operations, Mobily said it has 600,000 mobile broadband subscribers presenting 126.0% uptake on 2008 year end results of 266,000 subscribers and 445.0% growth compared to Q2 2008 results. ▲ At a symposium of the Chamber of Commerce in Dammam, Saudi Arabian General Investment Authority expects investments, in the Saudi power and energy sector as well as economic cities, could reach SAR 300.0 billion. ▼ Non – performing loans at Saudi banks are likely to peak by 2010 – 2011 while the asset quality is expected to deteriorate further, according to a Bank of America – Merrill Lynch report. NPLs at the top three Saudi banks are projected to double from 1.1% to 2.5% by 2010 as the full extent of the poor macro economic scenario feeds through. The Saudi banking sector will see deterioration in asset quality in line with the cyclical downturn but this will not be part of a systemic problem. Company News ▲ State oil company Saudi Aramco is inviting contractors to bid for the main construction packages on its second USD 10.0 billion-plus export refinery project in 2009, following the award of a raft of contracts on its Jubail refinery in the third week of June 2009. ▲ Saudi Aramco and Dow Chemical have decided to go ahead with their JV to set up a petrochemical complex and expand the Ras Tanura refinery at a total cost of more than USD 22.0 billion. ▲ Saudi Electricity Co. plans to spend USD 28.0 billion in the next three years to meet rising demand in the Saudi Arabia. Saudi Electricity also plans to invest USD 70.0 billion by 2018 to add 25,000.0 MWs and match demand spurred by a USD 400.0 billion, five – year government – spending programme and a growing population. The kingdom’s electricity use may quadruple to 140.0 GWs a year by 2032. ▲ Saudi developer Al – Rayadah Investments has invited contractors to prequalify for an infrastructure contract at its SAR 36.0 billion (USD 9.6 billion) King Abdullah Financial District development on the outskirts of Riyadh. Product 2009. TresVista Financial Services, Pvt. Ltd ©. Mumbai, India. www.tresvista.com Page 2
  • 3. Issue No. 1.10 MENA MONTHLY NEWS Month of June 2009 Liquidity / Capital raising …Gulf oil producers are - Saudi Arabia’s Capital Market Authority approved Dar Al Arkan’s request to increase its capital by 50.0% to SAR 10.8 still hopeful the UAE billion. will eventually join the monetary union they - Saudi Arabian Monetary Agency, Saudi’s Central Bank, has lowered its overnight reverse repo rate by 25 bps to 0.25%, in plan to launch, possibly an attempt to spur lending by local banks. next year, despite the - The annual growth of M3, the broadest measure of money circulating in the Saudi Arabian economy, was 16.9% in May 2009 country's decision last down from 18.3% in April 2009. month to withdraw… - Saudi Electricity Company sold SAR 7.0 billion Islamic bonds, priced at 160 bps over the three – month Saudi interbank offered rate. The company also announced that its sukuk was three times oversubscribed. - Saudi Arabia is unlikely to cut its benchmark lending rate in Q3 2009; the kingdom's central bank sought to boost lending by halving the rate it pays to commercial banks for deposits. Product 2009. TresVista Financial Services, Pvt. Ltd ©. Mumbai, India. www.tresvista.com Page 3
  • 4. Issue No. 1.10 MENA MONTHLY NEWS Month of June 2009 Kuwait Sectors % ▼▲ Company % Change 1 Month Index Pe rformance CAGR (0.9%) 8,600.0 Insurance 0.7% Top 5 Gainers: Banks (2.1%) Gulfinvest International 193.3% KWSEIDX Index 8,400.0 Food (0.6%) Advanced Technology 45.9% Service (1.2%) Hayat Communications 42.2% 8,200.0 Real Estate (3.7%) Boubyan Bank 40.7% Industries 2.6% Ifa Hotels And Resorts 35.6% 8,000.0 Investment (1.6%) Top 5 Losers: 7,800.0 Arab Insurance Group (47.5%) 5-31-09 6-3-09 6-6-09 6-9-09 6-12-09 6-15-09 6-18-09 6-21-09 6-24-09 6-27-09 6-30-09 Gulf Rocks (30.3%) Al Mowasat Holding (28.0%) Palms Agro Production (24.1%) Future Kid Enertainment And Real Estate (19.5%) Macro Economic News ▼ Moody’s affirmed Kuwait's sovereign rating, but with a negative outlook due to the political feud in the country that sparked worries about its ability to deal with the economic crisis. ▼ Kuwait is predicted to stay in surplus in 2009 but at levels of about 40.0% of those in 2008, according to National Bank of Kuwait. According to the Central Bank of Kuwait, oil exports in Q4 2008 dropped 41.0% from their level in Q4 2007, and further by 56.0% in Q1 2009. ▼ The National Assembly approved the FY 2009 – 2010 state budget which projects revenues of KWD 8.1 billion (USD 27.9 billion), down 36.0% from USD 43.8 billion of budgeted income previously. Projected spending is slashed by 36.2% to KWD 12.1 billion (USD 41.7 billion) from USD 65.4 billion previously. – Kuwaiti citizens are expecting new initiatives from the government to help diversify the economy. With Kuwait's GDP being heavily dependent on oil revenues, the economy might post its largest decline in 2009, according to the International Monetary Fund. With oil prices approaching USD 70.00 recently, a budget surplus of 12.3% of GDP should be possible. Sector News …With investors ▲ Kuwait's local real estate business went up by 10.0% in May 2009. The housing sector witnessed a notable rise of 20.0% in globally holding more supply in May at suburbs adjacent to the capital city, according to a report, released by a local property company. than USD 1.5 trillion in ▲ A Kuwaiti governmental committee that supervised projects built on state property gave preliminary approval for the creation Shariah – compliant of an electric power plant at a total cost of KWD 300.0 million (USD 1.0 billion). The project is expected to be launched in investments, there is a mid 2010 and the plant, which will have a production capacity of 1,000.0 megawatts. need to create adequate ▼ The huge losses sustained by the investment sector resulted in aggregate corporate earnings in Kuwait declining by 50.0% for and straightforward 2008 and resulted in a 25.0% decline in aggregate GCC corporate earnings on an annual basis. regulation for Islamic investment instruments - The board of the Central Bank of Kuwait (CBK) approved the implementation of the amended capital adequacy ratio (Basel that industry players can II) on local Islamic banks starting from June 30, 2009. Local Islamic banks will continue complying with the minimum capital use to grow their adequacy ratio applied by the CBK, which is 12.0%, while the ration proposed by Basel Committee on Banking Supervision is activities… 8.0%. Company News ▲ Agility Defense & Government Services announced that the U.S. Defense Logistics Agency exercised the third option period on the Subsistence Prime Vendor contract for the supply and distribution of food and non – food products to U.S. forces in Iraq. The total maximum value for the 18 month contract extension period is USD 1.4 billion. ▲ Kuwait Investment Authority, (KIA) plans to offer its 20.0% stake in Boubyan Bank for sale at an initial total price of about KWD 128.3 million (USD 445.3 million). It will hold the auction to sell its shares in Boubyan Bank on July 22, 2009. National Bank of Kuwait (NBK), officially applied to the local bourse asking to buy the three tranches of the offered shares consisting of 77.000 million shares each offered by KIA. ▲ National Bank of Kuwait stated that the central bank renewed its approval for it to buy up to 40.0% in Boubyan Bank. The new three month approval period started on June 28, 2009. Liquidity / Capital raising - Kuwaiti money supply growth slowed to 17.7% in May 2009 from 20.1% in April 2009, as funds in savings and time deposits slowed down. National Bank of Kuwait reported that in May 2009 monetary developments in Kuwait witnessed a slight improvement, as money supply (M2) growth accelerated to 1.1% m – o – m. - Kuwait's Zain Group is in the final stages to reschedule a USD 2.5 billion two year murabaha loan agreement signed in 2007. The loan is destined for Zain Saudi Arabia and aims to finance the development of its infrastructure and the expansion of its subscribers' base. The murabaha is being renewed by a group of banks that includes Al Rajhi Bank, Banque Saudi Fransi, and France's Calyon Bank. Product 2009. TresVista Financial Services, Pvt. Ltd ©. Mumbai, India. www.tresvista.com Page 4
  • 5. Issue No. 1.10 MENA MONTHLY NEWS Month of June 2009 UAE Sectors % ▼▲ Company % Change 1 Month Index Pe rformance CAGR (1.8%) 3,000.0 Insurance Index (2.8%) Top 5 Gainers: Health Care Index (11.1%) Abu Dhabi Aviation 65.5% 2,900.0 Telecomm Index 1.2% Oman And Emirates Investment Holding 46.6% ADSMI Index 2,800.0 Construction Index (10.1%) Union Insurance 32.2% Energy Index (13.1%) Abu Dhabi National Hotels 25.0% 2,700.0 Real Estate Index (8.6%) Foodco Holding 17.9% Bank&Finance Index 2.2% 2,600.0 Top 5 Losers: Industrial Index 13.1% 2,500.0 United Insurance Comapany-Uae (36.9%) Consumer Index 7.8% Internatonal Fish Farming Holding (24.5%) 5/31/09 6/3/09 6/6/09 6/9/09 6/12/09 6/15/09 6/18/09 6/21/09 6/24/09 6/27/09 6/30/09 Fujairah Building Industries (22.8%) Aabar Investments (18.9%) Gulf Medical Projects -Sharjah (18.3%) Macro Economic News ▲ Abu Dhabi’s foreign trade grew by 37.5% in 2008 on the back of significant rise in the value of imported commodity goods. The total size of foreign trade that includes non – oil exports, re – exports and imports expanded to AED 102.8 billion in 2008, up from AED 74.8 billion in 2007. The phenomenal growth in the foreign trade is linked to the 42.5% rise in the value of commodity imports in 2008. The exports and re – exports grew by 7.8%, and 11.1% respectively. ▲ The UAE economy has bottomed out and most sectors are on the path to recovery. Standard Chartered Bank said the three – month Emirates Inter Bank Offered Rate (Eibor) has eased to 2.46%, from a peak of 4.78% in November 2008. Rasmala, an investment bank, said UAE equity markets continued their recovery and gained a further 11.0% over the month amid increased interest from foreign investors. Kuwait's Markaz said the UAE markets are trading with the lowest PE multiple of 6.59x LTM earnings. ▲ The UAE is planning its first sovereign bond issue. According to the Undersecretary in the Ministry of Finance, a law will come out soon and it will specify where the debt must be spent. The Ministry of Finance is planning a new public debt law to govern the distribution of funding from bond sales by the federal government. ▲ The UAE took the first step to reduce public debt and limit state – owned enterprises' exposure to the debt market by enacting the Public Debt Law at the Federal National Council (FNC). According to the public debt draft law passed by the FNC, the total value of the country's public debt should not be more than 45.0% of GDP or Dh 300.0 billion whatever less of both at the …Gulf investors and time of issuing the public debt bonds. The legislation stipulates that total local public debt should be not more than 15.0% of sovereign wealth funds GDP are pouring more cash ▼ Prices in the UAE rose by just 1.9% in April 2009 compared to April 2008 – the lowest annualized rate of inflation since into regional projects in 2000. If the downward price trend continues, the overall rate of inflation could turn negative – a phenomenon called deflation. renewable energy, farmland, and ▼ Though the credit default swap (CDS) spreads of Dubai has fallen by about 50.0% from the levels of 1000 basis points (bps) infrastructure as focus to about 500 bps since February, indicating a substantial fall in the risk perception on the Emirate, this has failed to reflect on turns to home, a PwC Dubai bond yield so far. While Abu Dhabi bond is currently trading at about 5.0% yield, the Dubai bond, launched in 2008 and partner said… maturing in 2013, is trading at yields as high as 8.5%. During the same period, the Abu Dhabi CDS has dropped from 450 bps to just about 230 bps. Government Regulations ▲ A legislation approved by the Federal National Council (FNC) will allow the Ministry of Finance (MoF) to guarantee bank – issued bonds, medium – term notes, and Islamic sukuk. The legislation allows public and private sector banks operating in the UAE to apply to the MoF for its backing of bonds issued until October 11, 2011. The law stipulates a maximum five – year duration of the financial instruments to be covered and gives the government wide powers in the approval process. Sector News ▲ Higher interest rate offers boosted the combined deposits of the UAE's banks by nearly AED 56.0 billion to AED 961.6 billion in the first four months of 2009 while there was a slight increase in credits. Assets also climbed by AED 40.0 billion to allow the UAE to maintain its position as having the largest banking sector in the Arab World while their combined capital and reserves swelled to its highest ever level. ▲ Dubai oil retailers will increase the price of diesel at the pumps by 50 fils a gallon, following a sharp increase in international oil prices in recent weeks. The price of diesel will subsequently rise to AED 9.90 per gallon, from AED 9.40 per gallon. The three oil retailers – Enoc, Eppco and Emarat – will be closely monitoring oil prices in the international market to determine whether diesel prices locally are to be increased or lowered. ▲ Cement prices in the UAE have dropped by around 13.0% or Dh 40.00 per ton since April 2009. However, the prices are expected to go higher post – Ramadan. ▲ According to the Dubai Civil Aviation Authority, Dubai's investment in airport development could surpass USD 17.2 billion including the USD 7.2 billion invested so far. During Q1 2009, Dubai Airports recorded 2.1% passenger traffic growth. ▲ Bank loans and advances in the UAE topped Dh 1.0 trillion at the end of May 2009. Of this, Dh 207.6 billion comprised personal loans in May 2009. Personal loans totaled Dh 201.7 billion. However, while the number of loans appears to be increasing, banks are still not out of the woods as a portion of these loans may have to be written off due to defaults. ▼ Steel prices in the UAE could further rise next month as prices of billets have increased. Meanwhile, Middle East steel Product 2009. TresVista Financial Services, Pvt. Ltd ©. Mumbai, India. www.tresvista.com Page 5
  • 6. Issue No. 1.10 MENA MONTHLY NEWS Month of June 2009 production in May declined by about 0.6% in contrast to global figures. Steel prices in the UAE have been going up with the destocking almost coming to an end. Prices have already increased USD 50.0 - USD 100.0 in May 2009 compared to April 2009. − The total value of land transactions in Dubai last week reached Dh 2.2 billion, of which sales exceeded Dh 1.4 billion. The total value of mortgages during the period was Dh 736.9 million. A total of 81 sale transactions were registered. During the period under review, 63 mortgages worth Dh 524.9 million were registered. Company News …M&A activity in the Middle East totaled ▲ Dubai launched its first low – cost carrier – Flydubai – with an inaugural flight to Beirut. Flydubai currently operates just two USD 24.5 billion during aircraft but has ordered an additional 48; all of them are 737-800s. the past 12 months, with ▲ Abu Dhabi Airport Company has said it has opened the door for foreign investors and big international companies in the the UAE topping the list new Al Ain Airport. ADAC started work on the infrastructure of the new airport compound with a cost of USD 25.0 billion with USD 5.3 billion. (AED 91.8 billion). Qatar came second with ▲ Etihad Airways announced a USD 14.0 billion (Dh 51.5 billion) aircraft engine order at the Paris Air Show, which could M&A value totaling become the largest engine order in commercial aviation history if the Abu Dhabi – based airline exercises all options and USD 4.2 billion, purchase rights. Etihad chose GE Aviation, Rolls – Royce, Engine Alliance and International Aero Engines (IAE) to power followed by Saudi the new Airbus and Boeing fleet that the UAE's national carrier ordered at last year's Farnborough air show. Arabia at USD 3.8 billion and Kuwait at ▲ Amlak Finance, which faces a liquidity gap of more than AED 12.0 billion as per the contractual asset – liability mismatch USD 2.1 billion. The calculated for Q2 2009, hopes to resolve this soon. Discussions directly with banks as well as through the Merger Steering M&A value in the Committee on a long – term sustainable funding plan for Amlak are on and the results are expected to be announced soon by the region in the previous government. 12 months totaled USD ▲ The Cabinet approved establishing Emirates Development Bank with a capital of AED 10.0 billion. It was decided that AED 34.7 billion, a decrease 5.0 billion of the capital will be paid completely by the UAE Government. of 29.0%... Liquidity / Capital raising - UAE’s state owned IPIC will raise USD 3.5 billion to refinance recent acquisitions. It will include a 2 – year loan at Libor + 350bps and a bond at 250bps. - Abu Dhabi Government – owned International Petroleum Investment Company (Ipic) has signed a USD 5.0 billion (Dh 18.4 billion) syndicated loan, increased from a launch amount of USD 3.5 billion. The loan, which will be used to finance Ipic's recent acquisitions, as well as for general corporate purposes, was launched in May 2009. - Emirates NBD, the UAE's largest bank by assets, announced the issue of a Dh 4.0 billion in debt securities to Investment Corporation of Dubai (ICD), the investment arm of the Dubai Government, and majority shareholder in the bank. The capital will be used to boost the bank's Tier 1 capital ratio, which the Central Bank mandates to be a minimum of 11.0%. Earlier this year, Emirates NBD disclosed its Tier 1 capital to be 9.4%, requiring a boost of over USD 1.0 billion (Dh 3.7 billion) to meet the Central Bank's requirement. Product 2009. TresVista Financial Services, Pvt. Ltd ©. Mumbai, India. www.tresvista.com Page 6
  • 7. Issue No. 1.10 MENA MONTHLY NEWS Month of June 2009 Egypt 1 Month Inde x Pe rformance CAGR 2.8% Company % Change 600.0 Top 5 Gainers: 580.0 United Arab Shipping (Egypt) 44.0% Hermes Index El Nasr Clothing And Textile 36.1% 560.0 National For Housing For Professional Syndicat 35.8% 540.0 Credit Agriole Eygpt 35.7% 520.0 Export Development Bank Of Egypt 30.9% Top 5 Losers: 500.0 Egypt Poultry (32.1%) 5-31-09 6-3-09 6-6-09 6-9-09 6-12-09 6-15-09 6-18-09 6-21-09 6-24-09 6-27-09 6-30-09 Industrial And Engineering Nterprises (27.5%) Memphis For Pharmaceuticals And Chemical In (25.3%) Prime Holding (24.6%) Egyptian Saudi Finance Bank (22.7%) Macro Economic News ▲ Egypt’s production of crude oil, condensates and biogas hit 2.955 million tons in April 2009, up 7.1% from April 2008. April’s numbers were down slightly from March 2009 production levels, which reached 3.033 million tons, but up from February levels of 2.759 million tons. ▲ Egypt’s Shoura Council approved 13 agreements for the excavation of petroleum and gas involving 31 wells at investments worth at least USD 2.5 billion. Egyptian companies will be excavating for oil in Iraq, Libya, and Gabon, both independently …Only one of the oil – and in cooperation with foreign companies, said Petroleum Minister Sameh Fahmi. rich Gulf nations' 11 ▲ Egypt Hydrocarbon Corporation is planning to construct a new complex for petrochemical industries with investments sovereign wealth funds estimated at USD 3.0 billion. has improved its transparency score in Government Regulation Q1 2009 compared to the previous quarter ▲ The Egyptian government created a new regulatory authority to oversee all non – banking financial markets as part of a long based on the Linaburg – term process to reform and develop the nation’s financial sector. General Authority for Financial Supervision was established Maduell Transparency incorporating various oversight committees into a single umbrella organization that will account for recent growth and the Index developed by the development of new, more complicated financial instruments in the Egyptian market US – based Sovereign - Egypt’s Industrial Development Authority approved the temporary exemption of 67 products from sales taxes. The Wealth Fund Institute. exempted products include electric transformers, vacuum systems used in vacuum cleaners, air conditioners, packaging machines Saudi Arabia's SAMA and equipments used in the textiles industry. Foreign Holdings, the fund operated by the Sector News kingdom's central bank ▲ Egyptian textile exports to the USA witnessed a 10.7% y – o – y increase in Q1 2009, amounting to USD 237.7 million. This with assets worth USD came despite the 12.7% decline in total American imports. 431.0 billion, improved its transparency score Company News from two in Q4 2008 to ▲ The National Bank of Egypt is preparing to offer loans worth EGP 14.0 billion starting from Q3 2009. They are expected to three in Q1 2009, but is be distributed as follows: EGP 4.8 billion to the industrial sector, EGP 3.5 billion to the aviation sector, EGP 2.5 billion to still far below the the fertilizers sector, EGP 1.4 billion to the electricity sector, EGP 900.0 million to the real estate and tourism sectors, EGP highest score of 10 600.0 million to the petroleum sector, and EGP 300.0 million for the contracting sector. globally… ▲ EFG-Hermes, Egypt's largest investment bank by market value has a solid balance sheet with capital in excess of $400.0 million and does not need a capital hike. ▼ The Ministry of Investment announced that it would either liquidate or sell state – owned El Nasr Automotive Manufacturing Company because it had long since ceased generating revenue. Furthermore, the company had begun acquiring debts, which, officials announced, topped over EGP 2.0 billion − France Telecom will not raise its offer of EGP 237.00 (USD 42.28) per share to buy out the minority shareholders at Egypt’s largest mobile phone operator Mobinil, after Egyptian market authorities rejected it, a senior France Telecom official said. Liquidity / Capital Raising - The Egyptian central bank accepted offers worth EGP 3.0 billion (USD 535.5 million) in an auction of seven – year bonds at rates of between 10.6% and 11.5%. - Agrium Egypt is currently negotiating with a number of banks to obtain a USD 1.0 billion credit facility. The loan will be used to finance its new fertilizers factory that is jointly owned with Misr Oil Processing Company, and to refinance a USD 120.0 million loan received several years ago. Product 2009. TresVista Financial Services, Pvt. Ltd ©. Mumbai, India. www.tresvista.com Page 7
  • 8. Issue No. 1.10 MENA MONTHLY NEWS Month of June 2009 Other Countries Oman ▲ Oman posted a surplus of OMR 101.0 million in the first four months of 2009, compared to an OMR 1.16 billion surplus in the January 2008 – April 2008 period, according to the Ministry of National Economy. The country posted a 50.5% drop in net oil revenues in the first four months of 2009, but increased spending by 7.2%. ▲ Oman's money supply grew 10.9% in the four month period to April 2009 from the same period in 2008 with central bank foreign assets climbing by 12.0%, CBO data showed. Money supply measured as M2 stood at OMR 7.6 billion on April 30, 2009, compared with OMR 6.8 billion in April 2008. The central bank's foreign assets, including gold holdings, rose to OMR 4.4 billion in April 2009 from OMR 3.9 billion in April 2008. ▲ The consumer price index figures released by the National Economy Ministry pointed out to a decline in inflation index for May 2009 to reach 3.9%; the least recorded since 31 months. ▲ The new tax law specifically provides for a deduction for loan loss provisions established by banking companies as defined in the banking law. The new tax law provides that loan loss provisions to the extent required by Central Bank regulations would be allowable for all banks as defined in the banking law. ▲ Bank lending in Oman rose 26.0% in the first four months of 2009 but its growth rate dropped by nearly half compared to the …Major national oil same period in 2008 due to less credit to the public sector. The combined credit extended by the local banks climbed 26.0% companies, in the to OMR 9.5 billion. The total lending of local financial institutions increased 49.7% to OMR 7.5 billion in the first four Middle East, are months of 2009 compared to 2008. Deposits at Omani banks rose to OMR 6.3 billion in the four months to April 2009 from planning to invest USD OMR 5.9 billion. 29.0 billion in oil and ▲ The Sultanate’s total crude oil exports in the first four months of 2009 rose 10.8% to 79.680 million barrels, against 71.360 gas industries in 2009, million barrels during the same period in 2008. The monthly statistical bulletin published by the National Economy despite ongoing Ministry showed that the Sultanate’s total production of crude oil and condensates stood at 94.330 million barrels by the end concerns around oil of April 2009, against 89.930 million barrels during the same period in 2008. demand… ▲ Oman’s tax rates are now the lowest in the region amongst countries which impose taxes with the promulgation of Royal Decree No. 28/2009, according to KPMG. An important change is that the new tax law removes the disparity in rates between foreign and local companies. Tax rates for branches of foreign companies have now been reduced to 12.0%. ▼ The preliminary estimates of the National Economy Ministry indicated that the GDP during Q1 2009 fell by 19.8% to OMR 4,087.3 million as compared to OMR 5,096.5 million during the same period of 2008. Oman posted a 56.0% drop in net oil revenues in Q1 2009 from the same period in 2008, as oil prices weakened, forcing the government to turn a deficit to sustain 10.0% growth in spending. − Oman's economy is expected to grow at ~3.0% in 2009 as a result of lower hydrocarbon export revenue because of the global financial distress, according to Arab Monetary Fund. It also said that inflation could also dip below its 2008 level. − Oman plans to issue bonds worth between OMR 50.0 million to OMR 80.0 million during H2 2009 to help finance development programs, according to the CBO. This is the first and only bond issue from the Government of Oman during 2009. An earlier bond of OMR 80.0 million is maturing in H2 2009. − Lending in Oman recorded a slow growth rate in the first four months of 2009, rising from about OMR 9.3 billion at the end of 2008 to OMR 9.5 billion at the end of April 2009. In contrast, deposits rose from OMR 6.4 billion at the end of 2008 to OMR 6.5 billion at the end of January 2009 before declining to OMR 6.4 billion at the end of February 2009. Jordan ▲ Jordan Investment Board signed a cooperation agreement with Kuwait's Foreign Capital Investment Bureau. Kuwaiti investments top the list of foreign investments in the Kingdom, at around USD 7.5 billion in various economic sectors. ▲ A proposed income tax law by the Ministry of Finance is set to overhaul the tax regime in Jordan. Under the new regime, firms in the banking, financial, insurance, leasing, and telecommunication sectors would see their income tax rates reduced to 25.0% from the current rate of 30.0% – 35.0%. Companies operating in lower bracket sectors, including industry and agriculture, would have their tax rate reduced from 15.0% to 12.0%. ▲ The impact of the financial crisis on the insurance sector has been minimal, mostly affecting companies’ investment portfolios. Insurance premiums grew by 11.0% during Q1 2009 and by 14.0% during 2008, despite the crisis. ▲ The value of crude oil imported into the Kingdom dropped during Q1 2009 by 62.2% to reach JOD 227.8 million. According to the Central Bank of Jordan, the drop resulted from a decline in fuel prices by 49.3%, during Q1 2009. ▲ Jordanian banks enjoy sound financials that have allowed them to escape the worst of the global financial crisis, but property market downturns threaten to dent their bottom line. Non-performing loans of banks however fell as a portion of the banking sector’s total loans to 4.2% in 2008 from a high of 16.0% in 2001. Banks saw loan growth outpacing that of deposits during a boom period that saw rapid credit expansion with loans growing by 15.5% in 2008. ▼ Jordan’s revenues from potash exports fell by 1.2% during Q1 2009 compared to Q1 2008, with exports securing JOD 64.5 million. According to the Central Bank of Jordan, potash prices went up by 142.7% but exported quantities were 59.3% less during Q1 2009. ▼ Pharmaceutical exports dropped by 22.6% to JOD 71.9 million during Q1 2009 compared to Q1 2008. ▼ Jordan’s trade deficit between January 2009 and April 2009 narrowed by 35.0% to JOD 1.5 billion compared to the same Product 2009. TresVista Financial Services, Pvt. Ltd ©. Mumbai, India. www.tresvista.com Page 8
  • 9. Issue No. 1.10 MENA MONTHLY NEWS Month of June 2009 period of 2008. ▼ Budget deficit reached JOD 348.0 million during January to May 2009, an increase of 258.8% compared to the same period in 2008. The Finance Secretary General attributed the deficit to the 17.0% increase in public spending and to weak growth in domestic revenues, which registered a slight increase of 4.5%. ▼ Unemployment in Jordan rose to 13.0% in Q2 2009, up from 12.1% in Q1 2009, according to the Department of Statistics. ▼ GDP grew by 3.2% during Q1 2009 at fixed market prices compared to 8.6% in 1Q 2008, according to the Department of Statistics. Bahrain ▲ Annual inflation rose to 3.5% in May 2009 from 3.1% in April 2009 as housing and utilities prices posted an increase. ▲ Revenues from the telecommunications sector in Bahrain reached the BHD 300.0 million (USD 796.0 million) mark in 2008. Employment in the sector continued to grow and broadband subscribers surged by 50.0% in 2008, the Telecommunications Regulatory Authority report said ▲ Bahrain's insurance market posted its strongest ever annual growth in 2009, with gross premiums surging by 34.0% to BD 183.3 million (USD 486.3 million). The number of people employed in the industry rose from 1,224 to 1,394, of whom 62.0% are Bahrainis. A significant part of this increase is attributed to a surge in life insurance from BD 37.7 million in 2007 to BD 52.0 million in 2008, a 38.0% increase, according to the Central Bank of Bahrain. ▲ Investcorp said it planned to buy stakes in homegrown Middle Eastern luxury goods companies as part of a wider plan to invest USD 650.0 million in the region in the next two years. - Bahraini money supply growth fell to 13.9% in April 2009, the slowest rate in more than two years, central bank data showed. M3, the broadest measure of money circulating in the economy, stood at BD 8.0 billion (USD 21.2 billion) on April 30, 2009 compared with BD 7.0 billion a year earlier. Growth in money supply has decelerated rapidly since peaking at an annual rate of almost 37.0% in June 2008. April's annual money supply growth was the slowest since March 2007. - The Central Bank of Bahrain announced that the latest Sukuk issuance of the government of Bahrain was successfully placed. The initial size of the sukuk offering was USD 500.0 million, but the issue was oversubscribed by almost eight times. As a result, the value of the sukuk was raised to USD 750.0 million. - Bahraini annual money supply growth fell to 8.8% in May 2009 to the slowest rate since December 2004. M3 stood at BHD 8.0 billion (USD 21.3 billion) on May 31, 2009 compared with BHD 7.4 billion in the same period in 2008. Growth in money supply decelerated rapidly since peaking at an annual rate of 37.0% in June 2008. The central bank's net foreign assets dipped to BHD 1.3 billion from BHD 1.4 billion in April 2009, its fourth straight month of declines. Qatar ▲ M2 money supply declined 5.7% to QR 176.9 billion in April compared with a year earlier. Total domestic credit of commercial banks rose 1.0% in April from March to QR 20 9.9 billion. ▲ Qatar Statistical Authority (QSA) reported that the estimate of the country's Gross Domestic Product (GDP) at current prices for the 1Q went down by 17.5%. ▲ Qatar’s inflation inched up 0.6% month – on – month in May 2009 mainly on higher entertainment and medical expenses as well as rents and transportation costs. The average price level rose for the second consecutive month after an increase of 0.2% in April 2009. ▲ The government bought real estate loans of local banks and disbursed QR 15.0 billion which it allocated recently for the purpose. ▲ Qatar’s total cement production is expected to more than double to 6.52 million tonnes per annum (mtpa) in 2009 but will still not be enough to satisfy the local demand, thus making imports imperative. ▲ Industries Qatar, the second – largest Gulf chemical producer by market value, said the government approved a total of QR 1.2 billion (USD 318.8 million) in settlement for steel prices caps. Industries Qatar said earlier in May it had asked for QR 1.8 billion in compensation for the government’s capping of steel prices in 2008. ▼ Nakilat Inc, a wholly owned subsidiary of Qatar Gas Transport Company Ltd, raised USD 950.0 million of debt under its existing Programme Financing from a group of 17 international and regional banks. The completion of this financing will keep Nakilat fully funded and solidly on track to complete its acquisition of a fleet of 25 LNG vessels. Tunisia – Servicom will list 1.000 million shares on Tunis Stock Exchange starting June 25, 2009. Mergers & Acquisitions Announced Completion Transaction Value (In TV/LTM TV/ LTM No. Target Acquirer Industry date date USD mn) Revenues EBITDA 1 Baharaini Saudi bank Bsc Al-Salam Bank Commercial banks Non-US 04/21/09 07/12/09 66.4 2.06x NA 2 Hail Agriculture Almarai Co. Ltd Agricultural Operations 11/08/08 05/09/09 209.4 2.14x 5.1x 3 Egyptian Glass Co. American Guardian Co. Containers-Metal/Glass 06/15/09 09/15/09 138.7 NA NA 4 RSH Ltd. Emaar Properties PJSC Retail-Sporting Goods 06/19/09 Pending 192.9 0.35x 4.5x Product 2009. TresVista Financial Services, Pvt. Ltd ©. Mumbai, India. www.tresvista.com Page 9
  • 10. Issue No. 1.10 MENA MONTHLY NEWS Month of June 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