TresVista Weekly MENA 12-11-09
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TresVista Weekly MENA 12-11-09

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The MENA Newsletter gives you a quick but incisive look at the events taking place in the business world in the Middle East. It is classified into sections such as Macro economic news, Government ...

The MENA Newsletter gives you a quick but incisive look at the events taking place in the business world in the Middle East. It is classified into sections such as Macro economic news, Government regulations, and Liquidity events amongst others. We aim to give you a broad overview of the factors influencing the MENA markets and an understanding of the newsworthy events across countries, sectors and companies in the region.

Your feedback is appreciated as we are always looking for ways to improve our Newsletter and enhance your experience. You can write to us at newsletter@tresvista.com

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TresVista Weekly MENA 12-11-09 TresVista Weekly MENA 12-11-09 Document Transcript

  • Issue No. 2.15 MENA WEEKLY NEWS Week of November 6, 2009 – November 12, 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 6,254.0 7,058.2 2,166.9 612.4 6,297.0 2,592.4 Gold Spot 1,103.80 GBP 0.603 (1.4%) (3.8%) 3.3% 2.7% (0.6%) 1.6% Silver Spot 17.22 EUR 0.673 distribution list, please LME 3 mth. Cu 6,501.50 SAR 3.750 contact… Morocco Bahrain Qatar Tunisia Lebanon Abu Dhabi LME 3 mth. Al 1,948.00 KWD 0.285 10,444.4 1,468.8 6,902.6 4,097.7 1,626.3 2,967.7 ICE Brent Crude 76.02 newsletter@tresvista.com (1.9%) (2.6%) (0.7%) 0.9% 3.2% 1.6% MACRO ECONOMIC NEWS 1. Macro Economic Saudi Arabia News ▲ Saudi Arabia has announced that it will provide USD 380.0 million loan to Pakistan, according to an agreement between 2. Government Pakistan's Economic Affairs Division and a Saudi Fund. Regulations 3. Sector News ▲ Saudi Arabia’s economy is to grow by 4.0% in 2010, while it is projected to register a contraction of 0.9% in 2009. According 4. Company News to National Commercial Bank, Non-oil GDP growth is projected at 3.3% in 2009 and is expected to improve marginally to 5. Liquidity 4.2% in 2010. ▲ The value of ongoing and planned projects in Saudi Arabia is estimated at USD 586.0 billion, representing around 128.0% of its GDP. Market Buzz… ▼ Saudi Arabia could face inflationary pressures during Q4 2009, mostly due to seasonal factors according to the Saudi Arabian Monetary Agency (SAMA). The inflation grew by 4.4% in September 2009, up from 4.1% seen in August 2009, which was lowest rate in more than two years, due to a decline in home rents. - Saudi private sector investments in the U.S. last year reached USD 426.7 billion, according to the chairman of the Jeddah Chamber of Commerce and Industry (JCCI). Kuwait ▲ Kuwait recorded a budget surplus of USD 17.5 billion as of September 2009 due to higher than forecasted oil revenue. The total revenues stood at USD 28.9 billion at the end of September 2009. Oil revenues stood at USD 27.1 billion and spending amounted to USD 11.3 billion. UAE ▲ UAE's economy will grow 1.5% in 2009 and rebound further in 2010 according to the Dubai International Financial Centre (DIFC). ▲ GDP is expected to post a growth rate of 6.1% in Q3 2009, against 5.4% in Q2 2009 according to High Planning Commission (HCP). This is due to a slight pickup in foreign demand and a similar upturn in non-agricultural activities. ▲ Abu Dhabi is targeting FDI of 23.0% of GDP by 2030 by attracting more foreign direct investment (FDI) and lift non-oil exports to boost their contribution to the emirate's GDP. FDI currently accounts for 14.0% of the GDP. - Net treasury debt increased by 15.1% to USD 21.8 billion in September 2009. Egypt - The Central Bank of Egypt said annual inflation rose to 6.5% in October 2009 from 6.3% in September 2009. Oman ▼ Oman's revenues declined by 27.0% in the first eight months of the year to USD 11.0 billion compared with USD 15.0 billion in the same period last year, mainly due to a decline in oil earnings. Oman's total expenditure through the eight-month period was USD 11.2 billion, leaving a USD 130.0 million deficit in budget, compared to a surplus of over USD 3.9 billion a year earlier. - Oman's annual inflation fell to 1.3% in September 2009. Jordan ▲ Income and sales tax revenue rose to USD 3.0 billion for 10 months ended October 2009 compared with USD 2.7 billion during the same period in 2008. Revenues in October 2009 amounted to USD 255.9 million compared with USD 214.6 million in October 2008. Bahrain ▼ Bahrain's domestic public debt increased by USD 437.6 million in Q3 2009 to reach USD 3.1 billion. Qatar …Global issuance of ▼ Qatar’s economy declined by 29.7% in June 2009 compared to June 2008 mainly due to the falling hydrocarbon prices. Islamic bonds, or Sukuk, has risen 40.0% GOVERNMENT REGULATIONS in the first 10 months of UAE the year, helped by - According to the new corporate governance regulations to come into effect in May 2010, company board members will be sovereign issues that prohibited from engaging in significant financial dealings with firms in which they have a controlling interest. The new rules will provide benchmark define a significant financial transaction as that which exceeds 5.0% of the paid capital of the company served by the board pricing to companies member, or AED 5.0 million (USD 1.4 million), whichever is less. still hesitant to launch... TresVista Financial Services, Pvt. Ltd. © Page 1
  • Issue No. 2.15 MENA WEEKLY NEWS Week of November 6, 2009 – November 12, 2009 SECTOR NEWS …UAE consumers Saudi Arabia remain the most ▲ The Government will shortly finalize plans to build the largest ever gas plant in Saudi Arabia to supply utilities and some optimistic in the Middle industries. The new gas plant is expected to process more than 1.8 billion cubic feet per day (cfpd) of gas. East and Asia Pacific region, posting 102 Kuwait index points higher than ▲ Total real estate investments shot up to USD 531.1 million in Q3 2009. the global average of ▼ Kuwait ends naphtha deals with Japan buyers for a period of 1 year leaving end users in Japan with no term supply for the first 86, according to the time. Mitsubishi Chemical Corp., Mitsui Chemicals Inc., Idemitsu Kosan Co., and Maruzen Petrochemical Co. ‫ ــ‬along latest Nielsen Consumer with traders Marubeni and Petro Diamond held a total of at least 575,000.0 tons of full range naphtha for the period. Confidence Index, which measures ▼ Kuwait's bourse house has warned it would suspend the trading of 25 companies if they fail to publish their third quarter consumer sentiments results by November 16, 2009. Commercial Bank of Kuwait, Burgan Bank, and Aref Investment Group are among the worldwide… firms whose stocks are facing a possible suspension. UAE ▲ The travel and tourism industry is expected to directly contribute 5.4%, or USD 12.9 billion, to the UAE's GDP in 2009, according to the World Travel and Tourism Council (WTTC). ▲ Abu Dhabi Terminals (ADT) handled in excess of 436,000.0 containers for the ten months ended October 2009, an increase of 42.0% compared to same period in 2008. ▲ The UAE civil building construction market has 1,845 ongoing projects worth USD 657.0 billion according to research firm Proleads. ▼ About 17,000 new companies have been registered during the period of January-July 2009, against 17,345 in the same period last year which representing a decline of 1.0%. ▼ Mergers and acquisitions (M&A) activity involving UAE firms declined by 29.0% to USD 14.8 billion for ten months ended October 2009 compared to the same period in 2008. Oman ▲ Oman’s oil and gas production rose by 10.1% to 158.3 million barrels during the first eight months of 2009. The total production of crude oil and condensates rose by 6.5% to 194.9 million barrels by the end of August 2009. Jordan ▲ Jordanian investments in the banking sector as of October 2009 amounted to USD 6.8 billion representing 42.2% of total investments. At USD 8.2 billion, Arab investments in the sector accounted for 51.4% while foreign investors had a 6.0% stake with USD 1.0 billion. ▲ Jordanian investments in the insurance sector amounted to USD 477.6 million for a 75.0% equity while Arabs held USD 112.3 million for a 17.6 % stake and foreign investors possessed USD 45.5 million or 7.3%. ▲ The contribution of Jordanian investors in the industrial sector reached USD 4.0 billion representing 48.3% of total investments, Arab investors held USD 1.7 billion accounting for 21.8% and foreign investor possessed USD 2.4 billion for 29.7%. COMPANY NEWS Saudi Arabia ▲ Rabigh Refining and Petrochemical Company announced that it will launch the USD 10.0 billion refinery and chemicals complex at Rabigh on the Red Sea, which will add 2.4 million tons of petrochemicals to the company's annual production capacity. ▲ The Islamic Development Bank (IDB) has decided to double the growth of its operation plan from 15.0% to 30.0% for the period 2009-11. ▲ Al Oula Mawarid, a subsidiary of Al Oula Real Estate Development Co., plans an industrial real estate project in the Kingdom's eastern region. The project, which will cost more than USD 133.3 million, will involve the construction of an industrial city on an area of 1.3 million sq. m. ▲ Almarai Company will invest USD 533.3 million to expand the business of Hail Agricultural Development Company (Hadco), a company it acquired recently. ▲ Saudi Aramco plans to raise its daily gas supplies by 30.0% within 5 years to 8.0 billion cubic feet, its CEO said. ▲ Saudi Aramco is expected to bring online a new 90,000.0 barrels per day clean diesel unit at its joint-venture refinery with Royal Dutch Shell by December 2010. ▲ Lulu Hypermarket, the retail arm of UAE based Lulu Group, will open its first hypermarket in Saudi Arabia at King Fahd Street, Alkhobar and is worth USD 37.3 million. ▲ Saudi Electricity Company announced that it plans to invest USD 10.1 billion in projects during the next 3 years to boost electricity production in the Kingdom. ▲ Saudi Telecom announced that its 25.0% stake in Maxis Communications Bhd will drop to 17.5% as a result of Maxis’s IPO. ▲ Ibn Hayyan Plastic Products Company (TAYF), an affiliate of Saudi Basic Industries Corporation (SABIC) and Albemarle Corporation, has signed an agreement to form a 50-50 joint venture, Saudi Organometallic Chemicals Company (SOCC), to build a world-scale organometallics production facility in Jubail. TresVista Financial Services, Pvt. Ltd. © Page 2
  • Issue No. 2.15 MENA WEEKLY NEWS Week of November 6, 2009 – November 12, 2009 ▲ Turkey-based TAV Airports Holding signed a 50-50 joint venture agreement with Saudi Arabia-based Al Rajhi Holding …Gulf Arab economies Group to maintain and manage various airports on a BOT (Build-Operate-Transfer) basis. will grow 5.2% by 2010 ▲ The board of directors of Al Jazeira Services decided to acquire 57.0% stake in Al Amana Building Materials Co. according to DIFC… - Saudi Aramco has awarded a five-year integrated turnkey drilling contract to Halliburton Corporation to develop wells in the world's largest oil field, South Ghawar - U.S. based Raytheon has been awarded a USD 59.2 million deal to manufacture and install 21 civil aviation radar surveillance systems for Saudi Arabia's General Authority of Civil Aviation. - Saudi Electricity awards Riyadh transmission deal worth USD 64.0 million to a consortium of KEC and Al-Sharif Group. - Saudi Electricity Company has awarded a USD 120.0 million project to ABB for power generation at the first women university in the Kingdom. Kuwait ▲ Wataniya Palestine Mobile will invest USD 700.0 million over a period of 10 years to develop and manage the network. ▲ The Combined Group Contracting Company announced that it has submitted the lowest bid in a 2-year USD 97.6 million tender offer from the Ministry of Public Works to build and maintain intersections on the main road. ▼ Zain expects the global financial crisis and currency market turmoil to cut USD 1.0 billion from its forecast revenue of USD 9.0 billion, its chief executive said. Zain also held talks to buy Syriatel, the top mobile company in Syria, but the plans have been put on hold. UAE ▲ Emirates Aluminum (Emal’s) USD 5.7 billion project will begin production in December 2009. ▲ Etisalat plans to spend USD 1.4 billion to boost its fibre optic coverage. The company plans to boost its fibre optics coverage to 90.0% from the current 60.0% by 2011. ▲ Emirates Airlines will increase its purchase of Airbus A380 aircraft beyond the 58 super-jumbos it has booked so far. ▲ National Marine Dredging Co. (NMDC) has won USD 0.6 billion contract by Zakum Development Co. to create 4 artificial islands offshore Abu Dhabi Island. - Shuaa plans to sell its shareholdings in a number of associates, according to a company document. Shuaa has appointed Bain & Company to help formulate future strategy. Egypt ▲ Aquatech has been awarded a USD 36.0 million contract to design and supply a seawater desalination system for the Abu Qir Thermal Power Plant in Egypt. ▲ Palm Hills Development said that the company has formed a joint venture with contractor Hassan Allam Sons to develop 238,560.0 sq. m of land. The venture's first project will be Park View, a 97,661.0 sq. m residential development in New Cairo. ▲ Pioneers Holding Company, an Egyptian brokerage company and local investment bank Beltone Financial Holding announced that their boards approved plans to merge by issuing 100.0 million shares through a share swap. The Pioneers Holding Company will have a 17.0% stake in the new merged entity and will create a company with assets worth USD 5.4 billion under management. Oman ▲ Sembcorp Utilities has been selected by the government to develop, finance, own, and operate the estimated USD 1.0 billion Independent Water and Power Project (IWPP) planned at Taqah. ▲ Bank Muscat has signed a Financial Advisory mandate agreement with Oswal Group Global to act as the exclusive financial Adviser for its USD 350.0 million caustic soda project in Salalah. ▼ Bank Muscat might write down a significant portion of its USD 61.0 million stake in Pakistan’s Silkbank in Q4 2009. Silkbank (35.0% holding) is planning for a rights issue but the Bank may not participate. - Salalah power project to complete financing on November 14, 2009 out of which Standard Chartered will be underwriting round USD 400.0 million of the USD 1.0 billion project. Bahrain ▲ Instrata Capital has joined a leading consortium of investors in the Al Dur Independent Water and Power Project, with an investment of USD 26.4 million. ▲ Investcorp has been appointed to manage two US hedge fund mandates worth a combined USD 310.0 million ▼ Gulf Finance House announced that it has signed an agreement to sell a 10.0% stake out of its 15.0% stake in QInvest to Qatar Islamic Bank at a total price of USD 50.0 million and incurred USD 7.0 million in losses. Qatar ▲ Qatar National Bank announced the launch of QNB Banque Privée (Suisse), a full private banking subsidiary of the QNB Group based in Geneva, Switzerland. ▲ Qatar Petroleum International signed an agreement with Shell Eastern Petroleum, under which it will buy stakes in two Shell Chemicals joint ventures in Singapore to be completed by December 2009. TresVista Financial Services, Pvt. Ltd. © Page 3
  • Issue No. 2.15 MENA WEEKLY NEWS Week of November 6, 2009 – November 12, 2009 LIQUIDITY Saudi Arabia - Saudi Arabia's Capital Market Authority (CMA) said Sunday it has approved Zamil Industrial Investment Co.'s plan to raise its capital by USD 40.0 million. Kuwait - Kuwait International Bank (KIB) increased its capital by 45.0% by issuing new shares. The shares will be issued at a nominal price of 100.00 fils with a premium of 70.00 fils each. - Investment Dar is close to a deal to restructure about USD 3.5 billion of debt. The company defaulted on USD 100.0 million Sukuk issue and a nine-member committee was set up to facilitate debt restructuring with creditors. - Kuwait's Commercial Real Estate Co. (Al Tijaria) secured USD 221.0 million 5.0 year credit facility from Commercial Bank of Kuwait to repay Shariah-compliant loans. - Kuwait’s money supply growth (M2) grew by 15.7% to USD 87.1 billion in October 2009 compared to September 2009. M1 rose 6.3% in October 2009 to USD 17.3 billion compared to October 2008. - Banks' total claims on the private sector, which also include their local investments, grew by 7.1% in the year to October 2009 to USD 94.8 billion. UAE - Abu Dhabi National Energy Co. (TAQA) is looking to rise up to USD 716.8 million in a Canadian bond offering in Q1 2010 to refinance a credit facility, and will continue to focus on consolidating its portfolio and control costs - The money supply growth rate stood weakened at 6.1% in September 2009, compared to 12.3% in September 2008 and 6.4% in August 2009. The growth rate in commercial banks loans decreased to 13.1% in September 2009 compared to September 2008 and 26.0% in September 2007. - Abu Dhabi National Hotels will complete an USD 408.0 million fundraising deal before the end of November. National Bank of Abu Dhabi (NBAD) is acting as lead arranger on the deal and will also be a lender, along with other local banks, United National Bank (UNB) and Abu Dhabi Commercial Bank (ADCB). Egypt - Sixth of October for Development and Investment Company (SODIC) said it will increase its capital by EGP 550.0 million (USD 101.4 million) by launching a rights issue to shareholders at EGP 70.00 per share (USD 12.9 per share). - GB Auto will issue EGP 15.0 million non-convertible bonds with a par value of EGP 100.00 each (USD 18.40 each). Bahrain - Gulf Finance House is in talks to launch a convertible Murabaha financing valued at USD 100.0 million. - Gulf International Bank has raised USD 533.0 million through a three times oversubscribed bond issue which was launched in Saudi Arabia. The bond was priced at 127.5 basis points over Saudi interbank offered rate. - Gulf Finance House announced that it has received the approval of the Central Bank of Bahrain to increase its capital by USD 300.0 million to USD 500.0 million through a rights issue. - Al Salam Bank shareholders gave its board the go-ahead to enter the market to raise money through the issue of Sukuk. Qatar - The Commercial Bank of Qatar announced that it will begin a global roadshow in the United States to test the market for a potential bond sale worth at least USD 500.0 million. 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