Tresvista Monthly Me Aug09


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Tresvista Monthly Me Aug09

  1. 1. Issue No. 1.12 MENA MONTHLY NEWS Month of August 2009 MENA MARKETS … For additional 110.0 Country Index Close % Change information or requests Saudi Arabia SASEIDX Index 5,660.9 (2.2%) or to be added to the 105.0 Kuwait KWSEIDX Index 7,914.3 3.1% distribution list, please UAE DFMGI Index 1,914.3 5.3% visit our website … 100.0 Egypt HERMES Index 624.5 7.8% Oman MSM30 Index 6,345.1 8.5% Jordan JOSMGNFF Index 2,564.5 (2.1%) 95.0 Morocco MOSENEW Index 11,048.7 0.7% Bahrain BHSEASI Index 1,517.0 1.0% 90.0 Qatar DSM Index 7,117.3 6.1% 1. MENA Overview Tunisia TUSISE Index 3,774.1 4.0% 2. Saudi Arabia Lebanon BLOM Index 1,398.0 (5.0%) 3. Kuwait 85.0 Abu Dhabi ADSMI Index 2,897.2 3.4% August-01 August-16 August-31 4. UAE Saudi Arabia Kuwait U.A.E Egypt 5. Egypt 6. Other Countries GLOBAL MARKETS 7. Mergers and 115.0 Acquisitions Country Index Close % Change 110.0 USA Dow Jones 9,496.3 3.5% USA S&P 500 1,020.6 3.4% 105.0 USA NASDAQ 2,009.1 1.5% EURO DJ Euro Stoxx 2,775.2 5.2% 100.0 London FTSE 100 4,908.9 6.5% Japan NIKKEI 225 10,492.5 1.3% 95.0 China HANG SENG 19,724.2 (4.1%) Market Buzz… 90.0 August-01 August-16 August-31 Dow Jones Industrial S&P 500 NASDAQ Composite DJ Euro Stoxx FT SE 100 Nikkei 225 Hang Seng COMMODITIES / CURRENCIES Commodity Open Close % Change Currency (USD/) Open Close % Change NYMEX Crude 69.45 69.96 0.7% GBP 0.598 0.614 2.6% Gold 954.00 951.25 (0.3%) EUR 0.701 0.698 (0.5%) Silver 13.92 14.90 7.0% SAR 3.750 3.750 0.0% LME Steel 385.00 405.00 5.2% KWD 0.287 0.287 (0.1%) MENA Overview - Middle Eastern airlines continued a steady upward trend in August with overall capacity going up by 13.3%. Flights and capacity for travel to and from the Middle East were up by 13.0% and 14.0% respectively. - The Middle East will see 99 new hotels and 25,829 hotel rooms open in 2009, followed by 110 hotels and 31,725 rooms in 2010, with a majority of these openings in Dubai and Abu Dhabi. - The UAE is leading the GCC countries in terms of construction activity with the projects underway amounting to USD 930.0 billion or 45.0% of the total amount of projects in the region. - According to the Economist Intelligence Unit (EIU), the Gulf Cooperation Council countries are likely to invest as much as USD … UAE central bank 50.0 billion in power projects between 2009 and 2015. governor expects oil to - A trend of real estate industry consolidation is building in GCC countries, to the benefit of long-term investors and respective average USD 60.0 – national economies. Most property markets in the Gulf suffer from significant oversupply. With developers, lenders and owners USD 63.0 in 2009…. under financial pressure, past experience in other parts of the world suggests that mergers and acquisitions in the regional real estate business should become more common, according to AT Kearney. TresVista Financial Services, Pvt. Ltd. © Page 1
  2. 2. Issue No. 1.12 MENA MONTHLY NEWS Month of August 2009 Saudi Arabia Company % Change …Despite 30.0% of 1 Month Index Performance CAGR (2.2%) Sectors % ▼▲ Top 5 Gainers: Moody's corporate 5,950.0 Telecom (3.4%) National Petrochemical Company - Saudi Arabia 38.0% Banking (1.3%) SABB Takaful 30.2% issuers in the GCC 5,900.0 Saudi Arabian Cooperative Insurance Company 23.7% Cement 2.6% being on a negative 5,850.0 Aldrees Petroleum and Transport Services Company 20.1% Insurance (5.3%) SASEIDX Index 5,800.0 Al Sagr Company for Cooperative Insurance 17.7% outlook watch, a Top 5 Losers: 5,750.0 majority of them in 5,700.0 Alahli Takaful Company (33.4%) ACE Arabia Cooperative Insurance * (24.8%) Dubai, the agency 5,650.0 Fitaihi Group Holding Company (22.6%) believes the emirate is 5,600.0 Saudi United Cooperative Insurance Company Sanad Insurance and Reinsurance Cooperative Company (18.6%) (16.9%) the best placed economy 5,550.0 in the region to come Aug-01 Aug-16 Aug-31 out of the current crisis Macro Economic News due to the absence of a ▲ A group of Saudi Arabian Investors, including the Islamic Development Bank (IDB), will launch a seven-year plan worth sovereign wealth USD 1.0 billion in Africa to reduce dependency on rice imports and supply the Middle East region. fund/oil fund… ▲ The Saudi Real Estate Development Fund (REDF) has delivered 52,536 loans worth USD 3.9 billion to finance the construction of 63,080 residential units in various parts of the Kingdom. ▲ 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 home rents, commodities, and food prices. A stronger US dollar also helped reduce import costs for the major oil exporter, which pegs its riyal to the dollar. ▼ 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. Government Regulations ▲ Saudi’s Council of Ministers has approved the creation of Saudi Electronic Information Exchange Co. that will make investments on commercial basis in IT, Telecom, and banking industries. Sector News ▲ Saudi banks’ core banking income increased by 12.6% SAR 38.4 billion, driven by strong corporate loan growth through out most of the year. ▲ Total deposits with Saudi banks grew to SAR 916.0 billion at the end of June 2009, since banks tried to attract more deposits as interbank lending tightened. ▲ The kingdom imported more than SAR 25.5 billion (USD 6.8 billion) worth of agricultural products in 2008, an increase of 42.0% over the previous year. ▲ 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. ▲ The combined sales of Saudi cement companies grew 19.0% in the first seven months of 2009, from the comparative period last year, to 22.2 million tons. ▼ Saudi Arabia's Q2 2009 gold jewellery demand fell 17.0% from a year earlier as high prices and the global economic downturn dampened sales. ▼ Prices of construction materials declined, with steel and cement prices dropping 55.0% and 7.0% respectively from their prices last year. ▼ Saudi poultry producers have asked the government to halt imports saying their losses rose to SAR 600.0 million (USD 80.0 million) due to the flood of imported poultry, mainly from Brazil ▼ The combined profit of banks operating in Saudi Arabia dropped 6.4% in the first seven months of 2009 to SAR 18.9 billion. Company News ▲ Saudi Aramco and the UK/Dutch Shell Group have discovered gas from the Kidan structure in Saudi Arabia's Rub al-Khali (Empty Quarter) following drilling work. ▲ Mayfair Wealth Management, has launched Ameerah, a bespoke service for women which is the first bespoke wealth management service targeting female investors in Saudi Arabia. ▲ Saudi Electricity Company announced that it plans to add 32,000.0 MW of power, link the country's regional networks, and increase electricity reserves to 10.0% within the next two years. ▲ SABIC said it has signed an agreement with Japan's Mitsubishi Rayon to set up a USD 1.0 billion joint venture, despite the decline in global demand for petrochemicals. The plant is expected to start production in 2013. ▲ Zain Saudi Arabia, part of Kuwait’s Mobile Telecommunications Co., said it secured a SAR 9.4 billion (USD 2.5 billion) Sharia-compliant loan to help cover its debts and expand. ▲ Saudi's largest insurer National Company for Cooperative Insurance (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 TresVista Financial Services, Pvt. Ltd. © Page 2
  3. 3. Issue No. 1.12 MENA MONTHLY NEWS Month of August 2009 ▲ Al-Tuwairqi Holding will start production at a new steel complex in 2010 with a production capacity of 2.0 million tonnes, will ...The Gulf Co- raise to 3.0 million tons the steel billet production capacity of the group, which owns 76.0% of Al Ittefaq Steel Products operation Council will Company, one of Saudi Arabia's three largest steel producers. need to significantly ▲ Riyadh plans to upgrade its military air navigation and communication systems in two deals worth more than USD 2.0 billion. increase its workforce to ▲ Sahara Petrochemical Company’s shareholders have approved a 56.0% rights issue. keep pace with ▲ The Capital Market Authority (CMA) announced that it has approved the amendment to the business profile of Rasmala development in the next Investment Saudi to act as a principal, agent, and underwriter in dealing activities. two years. There are many opportunities and ▲ Aramco has pre-qualified Iranian Offshore Engineering and Construction Company (IOEC), to develop a Saudi Arabian attractive options for offshore oil project. jobseekers in the region ▲ Saudi Telecom Company (STC) is to invest USD 340.0 million in Bahrain, with USD 240.0 million spent to obtain Bahrain’s with the combined value third mobile license, and USD 100.0 million to be spent on infrastructure development. of projects in the region ▲ Saudi Arabia's National Contracting Company (NCC) has won three contracts worth SAR 204.0 million (USD 55.0 million) to being carried out in build electricity transmission networks in the Kingdom. 2009 is already worth more than USD 2.1 ▼ Italian foundry equipment maker Danieli has signed a deal with Al Rajhi Steel to build a 1.0 million tonne per year, steel rebar trillion. 73.0% of plant in Saudi Arabia worth SAR 800.0 million (AED 783.5 million). companies across the ▼ A Cayman Islands court has frozen USD 9.2 billion of assets belonging to Saad Group, the Saudi Arabian investment firm at GCC aim to double their the centre of a financial storm, including some of its equity stakes outside the Gulf. growth this year ▼ Holders of a USD 650.0 million Islamic bond issued by a unit of SAAD have been asked to vote on dissolving the Sukuk. compared to 2008… Liquidity / Capital raising ▲ Domestic credit expanded by 4.0% for the year ending June 2009, from 35.0% a year earlier with most of the pull from private sector which accounts for 75.0% of the total domestic credit. ▲ SABB Takaful approved a rights issue valued at SAR 300 million (USD 80.0 million). The rights issue will be priced at a nominal value of SAR 10.00, plus a premium of SAR 2.50 per share, a considerable discount to its current trading price of SAR 38.30. ▲ 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 operation's ongoing network expansion and future growth. ▼ Saudi Arabian M3 money supply growth slowed to 15.3% in July, down 1.1% since June, while M1 supply grew to 14.2%, up 3.3% over the same period. TresVista Financial Services, Pvt. Ltd. © Page 3
  4. 4. Issue No. 1.12 MENA MONTHLY NEWS Month of August 2009 Kuwait …As GCC countries Sectors % ▼▲ Company % Change 1 Month Index Performance CAGR 3.1% Top 5 Gainers: continue to spend 8,000.0 Insurance (2.7%) National Investments Company 110.2% heavily on the region's 7,950.0 Banks 1.0% Coast Investment and Development Company 58.6% Kuwait Syrian Holding Company 55.6% infrastructure, private 7,900.0 Food 9.8% Contracting and Marine Services Company 52.0% sector infrastructure KWSEIDX Index 7,850.0 Service 2.0% Gulf Cable and Electrical Industries Company 49.2% Top 5 Losers: Real Estate (3.1%) providers are expressing 7,800.0 Dar Al Thuraya Real Estate Company (33.1%) Industries 16.0% Ajial Real Estate Entertainment Company (32.7%) concern about 7,750.0 Investment 2.0% Equipment Holding Company (27.4%) government 7,700.0 Nafais Holding AREF Investment Group (25.4%) (22.6%) 7,650.0 effectiveness and a lack 7,600.0 of availability of people Aug-01 Aug-16 Aug-31 and skills… Macro Economic News ▲ Kuwait and China have decided on a new location for a USD 9.0 billion mega refinery and petrochemical project in the southwestern Guangdong Province. GOVERNMENT REGULATIONS ▲ Laid‫ـ‬off Kuwaitis will receive financial aid (KWD 220.0 plus 60.0% of the salaries), as of September and this will be made permanent to address any cases which might occur in future. Sector News ▲ Kuwait International Airport’s (KIA) official records point out to a marked increase in the number of flights in the first quarter of 2008 registering an 8.0% increase in the number of passengers and 21.0% in regular commercial flights. Irregular commercial flights have increased by 3.0% while cargo, regular, and irregular flights have increased by 20.0%. ▲ Personal facilities for the purchase of securities maintained their growth in June at KWD 46.0 million, whereas other personal facilities raised KWD 65.0 million, their largest monthly increase since December 2007. (Personal loans are priced off of the discount rate). ▲ Private resident deposits grew 14.8% during H1 2009, compared to the last year, growth rising to 22.0% in June. Meanwhile, private deposits from nonresidents dropped by a further KWD 243.0 million in June, falling 76.0% from August 2008 level. ▼ Kuwaiti real estate sales plunged 47.0% in Q2 2009 as a result of the global financial crisis. Investment property sales fell by 55.6%, while commercial property sales were down by 64.1 % in Q2 2009. Company News ▲ Agility has announced the opening of a new logistics hub close to Kuala Lumpur, boosting the company’s total warehousing capacity in Malaysia to over 34,000.0 sq. m. ▲ Al Ahli Bank of Kuwait said that it has obtained an approval from the central bank to increase its capital by 25.0%. ▲ Kuwait Projects Company (Holding) announced that its 80.0% owned-subsidiary, Showtime Arabia (UAE), is planning to merge with Orbit Group (Saudi Arabia). ▲ The US Securities and Exchange Commission (SEC) came to an agreement with UGB and its parent, Kuwait Projects Company (Kipco), to limit the scope of the asset freeze to enable the bank to resume trading activities in the US on behalf of their clients who have no connection with the action. Liquidity / Capital raising ▲ In its latest economic brief on monetary developments, National Bank of Kuwait (NBK) reports that credit growth accelerated in June, driven mainly by loans to personal facilities. ▲ The Central Bank of Kuwait cut its repo rate by 25 bps on July 21, 2009 aiming at supporting liquidity in the banking system. ▲ 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. ▲ Zain Saudi Arabia said that the company has secured a two-year USD 2.5 billion Islamic loan facility, or Murabahah, from eight banks. ▼ The money supply (M2) witnessed a 0.1% contraction in June 2009. - Kuwait’s central bank issued KWD100.0 million (USD 347.6 million) of one year treasury bonds with a coupon rate of 1.5%. Bids for the bonds amounted to KWD 250.0 million. TresVista Financial Services, Pvt. Ltd. © Page 4
  5. 5. Issue No. 1.12 MENA MONTHLY NEWS Month of August 2009 UAE …Fund managers 1 Month Index Performance CAGR 5.3% Sectors % ▼▲ Company % Change Top 5 Gainers: investing in the Middle 2,000.0 Insurance Index 0.2% Emaar Properties 26.6% East and North Africa 1,950.0 Health Care Index 12.4% SHUAA Capital 24.5% Emirates NBD 15.1% (MENA) region are 1,900.0 Telecom Index 5.9% Takaful Al Emarat - Insurance 12.3% Construction Index (6.6%) united in expecting a Arab Insurance Group 11.1% ADSMI Index 1,850.0 Top 5 Losers: Energy Index 9.9% correction, according to 1,800.0 Al Mazaya Holding Company (33.3%) Real Estate Index 15.9% Dubai Refreshments Company (31.0%) the latest update on the 1,750.0 Bank&Finance Index (0.1%) Mashreq (26.4%) sector from Standard & 1,700.0 Industrial Index 4.2% Global Investment House Union Properties (14.2%) (12.3%) Poor's Fund Services… 1,650.0 e Consumer Index 2.6% Aug-01 Aug-16 Aug-31 Macro Economic News ▲ The volume of foreign direct investment in Abu Dhabi reached AED 31.5 billion in 2007 and the real estate sector attracted the largest chunk of AED 11.8 billion, or 37.5%, while water and electricity industry received 21.0% share amounting to AED 6.6 billion. ▲ The UAE's non-oil trade with 228 countries increased by 43.0% in 2008 compared with the previous year. ▲ 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. ▲ Inflation in the UAE cooled to 3.4% for the first six months, a 7.7% drop compared with the same period of last year. ▼ Dubai home prices fell 24.0% in Q2 2009. ▼ Interbank offered rates in the UAE fell to 2.8%, after the Central Bank said it was concerned current rates did not reflect the market and was in talks to create a new benchmark mechanism, under its remit. - According to the global Bailout/Stimulus Tracker published by Grail Research, the UAE announced bailout packages amounting to USD 52.6 billion (AED 193.2 billion) between July 1, 2008 and July 17, 2009. Government Regulations ▲ The UAE Central Bank will set up a new 11 - bank panel for the interbank offered rate with four extra local banks and two fewer international lenders and also announced a new mechanism to determine the rates. Sector News ▲ Spending on Information Technology in the UAE is expected to grow from USD 3.1 billion (AED 11.4 billion) in 2008 to ~ USD 4.7 billion by 2013. ▲ The total value of land transactions in Dubai last week reached AED 1.2 billion, of which sales exceeded AED 798.1 million. ▲ The UAE private sector has more than quadrupled its investment to a record AED 217.3 billion in 2008. ▲ Gulf cement companies sharply recovered in the second quarter of 2009 but ended the first half of the year down by nearly 24.4% because of slackening construction project. ▲ 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%. ▲ 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. ▲ 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. ▲ The total value of mortgages issued in Dubai rose during the second quarter by 14.3% to AED 8.0 billion, up from AED 7.0 billion in the first quarter, as banks made its easier for real estate buyers to get credit. ▼ Building material companies in the UAE continue to post losses and do not expect positive growth until end of the year, as several projects have been either put on hold or cancelled. - Total loans and advances by UAE banks declined by 0.2 % in July to AED 1.0 trillion, while bank deposits rose by 0.2% to AED 964.1 billion, compared with corresponding figures for June. The gap between loans and deposits narrowed by AED 4.4 billion to AED 42.9 billion over the month of June. - Cement, concrete, and wood prices fell 1.7%, 5.5%, and 0.1% respectively, while steel went up 1.7% in July over June, according to a monthly bulletin by the Statistics Centre-Abu Dhabi (Scad). TresVista Financial Services, Pvt. Ltd. © Page 5
  6. 6. Issue No. 1.12 MENA MONTHLY NEWS Month of August 2009 Company News …Rival oil supplies and ▲ A Saudi arbitration authority has issued a ruling, ordering UAE.'s Emaar Properties to pay USD 228.0 million to Saudi's the sluggish pace of Jadawel International following a dispute over projects in the kingdom. recovery in world consumption will shrink ▲ Emaar Properties will sell a 10.0% to 15.0% stake of its India MFG joint venture in an USD 800.0 million Initial Public demand for OPEC's Offering (IPO). crude oil next year. ▲ Dana Gas, the Middle East's first and largest private sector natural gas company, has announced two more gas discoveries at its Demand for OPEC concessions in the Egyptian Nile Delta: Sharabas-1 and Sama-1. crude will average 28.0 ▲ Shore Capital Group plc, has acquired a 5.0% interest in Full Circle Investments FZC, a corporate finance, consulting, and million barrels per day private placement firm based in Dubai. (bpd) next year, down 480,000 bpd from 2009. ▲ 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 It previously expected a spend USD 1.0 billion on energy assets acquisitions in North America and Europe in H2 2009 fall of 380,000 bpd… ▲ 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. ▲ Ishraqah, a real estate development firm owned by the Saudi-based Al Zahran and Bin Mahfouz Groups, awarded an AED 687.0 million contract for the construction of Onyx Towers to Arabtec Construction, a subsidiary of Arabtec Holding. ▲ Emke Group, which operates the biggest hypermarket chain in the Middle East under the LuLu and Al Falah brands, is to invest AED 4.3 billion to expand its network of 75 supermarkets and hypermarkets to 100 within the next three years. ▲ DP World is to operate Brazil's largest private multi-modal seaport after joining hands with Brazilian conglomerate Odebrecht. DP World and Odebrecht together acquired a majority stake in Embraport. Phase one development of the project is valued at around USD 500.0 million (AED 1.8 billion). ▼ Property consultants Colliers report 8.0% decline in Dubai Real Estate prices in Q2 2009. ▼ The cost of building the Dubai Metro has soared by AED 12.5 billion to AED 28.0 billion due to major design changes and the extension of the network. - Shuaa Capital said that it would issue 515 million shares to Dubai Banking Group (DBG), implementing an agreement to resolve a long-running bond dispute. - UAE's Dolphin Energy will finish building a cross-country pipeline to pump gas from Qatar to the east coast of the UAE in the third quarter 2010 - Dubai Holding announced that it has merged with its troubled real estate units Dubai Properties, Sama Dubai, and Tatweer. Liquidity / Capital raising ▲ The Central Bank of the UAE has extended the application of the official repo rate of 1.0% from one week to one month and has also amended the eligibility requirement for repo transactions of Certificates of Deposits of 14 days remaining maturity in order to create more liquidity. ▲ Abu Dhabi investment entity EPIC closes USD 5.0 billion syndicated loan from 16 international banks. ▲ Abu Dhabi Commercial Bank has approved a Mudaraba Medium Term Facility worth AED 300.0 million for Dubai Silicon Oasis (DSO), to part finance the development of facilities within the technology park. ▼ M1 money supply contracted by 13.5% last month in a sign of reduced consumer spending, according to UAE Central Bank. TresVista Financial Services, Pvt. Ltd. © Page 6
  7. 7. Issue No. 1.12 MENA MONTHLY NEWS Month of August 2009 Egypt …Qatar and the UAE 1 Month Index Performance CAGR 7.8% Company % Change Top 5 Gainers: are likely to see 640.0 Saudi Egyptian Investment and Finance 71.6% negative inflation this 630.0 Arab Land Reclamation Assiut Islamic Trading 65.4% 62.8% year due to falling house 620.0 Wadi Kom Ombo for Land Reclamation 61.4% prices, while inflation Acrow Misr 60.1% Hermes Index 610.0 Top 5 Losers: rates will slow sharply 600.0 Sharkiah National Food Company Ismailia National Company for Food Industries (43.4%) (34.9%) in Saudi Arabia and 590.0 Egyptian Real Estate Group (25.9%) Kuwait. Inflationary 580.0 Delta Rasmala Securities Arab Drug and Chemical Industries Company (19.8%) (16.0%) pressures have dropped 570.0 off rapidly across the Aug-01 Aug-16 Aug-31 oil-exporting region as Macro Economic News crude prices fell from ▲ Pakistan and Egypt agreed to enhance their bilateral cooperation in various sectors of defense, particularly in training peaks of USD 147.0 a courses and intelligence and other related matters. barrel in July last year and the dollar ▲ Moody's Investors Service revised the outlook on Egypt's sovereign ratings and ceilings back to stable from negative. This strengthened, easing affects Egypt's Ba1 local and foreign currency government bond ratings, its Ba2 country ceiling for foreign currency bank import costs for states deposits and its Baa2 country ceiling for foreign currency bonds. that peg their currencies ▲ Egypt's Minister of Economic Development stated that the government is considering another USD 2.7 billion stimulus to the US currency… package, but has yet to decide how to finance it. - The Egyptian Minister of Electricity and Energy said that the government is reviewing bids from six international companies, to provide service-related and technical consultancy for the nuclear safety department in the Egyptian nuclear program. Government Regulations ▲ Egypt plans to introduce real estate taxes in January for all commercial and residential properties in the North African country. Properties valued at EGP 1.0 million (USD 180,831.0) will be taxed EGP 660,000.0 while houses valued less than EGP 450,000.0 will be exempted. Sector News ▲ 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 ▲ 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. ▲ Egypt's Ezz Steel received a loan to establish a new Direct Reduced Iron plant with an annual capacity of 1.9 million tons in Suez. - The Egyptian Financial Supervision Authority will make a decision regarding a complaint by France Telecom regarding its offer to buy 100.0% of the shares of the Egyptian Company for Mobile Services, for EGP 237.00 per share. - Egypt-Kuwait Holding Company established a USD 267.0 million firm to produce fertilizers and petrochemicals. - Pioneers Holdings signed a final contract with the shareholders of Bankers Securities Co. to acquire 75.0% of the latter's capital. TresVista Financial Services, Pvt. Ltd. © Page 7
  8. 8. Issue No. 1.12 MENA MONTHLY NEWS Month of August 2009 Other Countries …The combined Arab economy grew by 6.4% Oman in real terms in 2008 to ▲ The annual inflation in Oman fell to 2.9% in June from 3.9% in May. emerge as the best ▲ The Omani government said that the Sultanate's inflation rate has slowed to a four year low of 1.8% in July down 1.1% from its performer in the world. June levels. The real gross domestic ▲ Oman has raised spending on infrastructure and oil production projects by 5.3% to OMR 3.2 billion in the first six months. product of the Arab states recorded a high ▲ Oman will allocate USD 7.8 billion over the next few years to boost power supply. growth of about 6.2% in ▲ Oman will privatize existing power stations and invest OMR 3.0 billion (USD 7.8 billion) in new projects in a bid to boost the 2007 and it maintained economy and narrow the budget deficit as electricity demand grows. that trend in 2008 to rise ▲ The Oman Development Bank has granted 2,021 loans valued at OMR 9.0 million in the past seven months for various slightly to 6.4%, thanks economic sectors in the country. The bank financed loans worth OMR 3.8 million to various projects in the fisheries sector. to strong crude prices… ▲ Oman 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. ▲ Oman registered a 9.4% increase in mobile phone subscribers to 3.5 million subscribers, till June this year compared to the corresponding period last year. ▲ Ahli United Bank (AUB) is set to repay USD 400.0 million of USD 1.2 billion syndicated loans by the end of August, well ahead of its final maturity date. ▲ Ahli United Bank announced that it has received the approval from the Central Bank of Iraq to increase its stake in Commercial Bank of Iraq from 49.0% to 75.0%. ▲ Ahli United Bank announced that it has received the preliminary approval from the Central Bank of Egypt to increase its stake in Ahli United Bank of Egypt from 35.3% to 90.0% ▲ Oasis Capital Bank plans to invest USD 63.3 million to develop three student accommodation facilities in London. ▲ Gulf Finance House (GFH) intends to establish a joint Islamic financial services venture in the Middle East with Macquarie Group and will invest USD 100.0 million out of USD 200.0 million in a convertible murabaha investment as part of the deal. ▲ Eskan Bank and Seef Properties have signed a joint venture agreement for the development of a BHD 25.0 million (USD 66.3 million) shopping complex in the Saar area. ▼ 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 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. ▼ Moody's Investors Service downgraded the bank financial strength rating of HSBC Bank Middle East to C from C+. ▼ Oman's oil export revenues for the first five months of the year fell more than 47.0% compared to 2008 despite a 7.0% increase in output, MEED estimates. ▼ Oman’s official crude oil selling price would be USD 65.2 a barrel in September, down 6.0% from August, based on the average of daily settlement prices. - The Central Bank of Oman (CBO) announced issuing new government bonds worth USD 130.0 million, with a three-year maturity period at a coupon rate of 4.0% a year. - Central Bank of Oman allotted Certificates of Deposit worth OMR 632.0 million; the interest rates for 28 day certificates were 0.04% while the repo rate was held stable at 2.0%. Jordan ▲ The trade deficit during the first half of 2009 stood at about JOD 2.4 billion, 31.6% lower than the JOD 3.5 billion during the same period of last year. ▲ Arab Bank has decided to lower prime lending rate by 0.25% to 8.0% as of September 1, 2009, the reduction is the second during the current year for all facilities customers. ▲ 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. ▲ Jordan and Iraq signed an agreement to ease land transport of passengers and goods besides signing a memorandum of understanding (MoU). Moreover, the two sides agreed to form a joint committee to facilitate transport and trade. ▲ On land transport issues, Jordan and Iraq agreed to reach appropriate mechanisms to guarantee the entry of Jordanian trucks into Iraq and ensure that the downloading process takes place without any impediments or delays. ▲ Jordan and Iraq agreed to run logistical and administrative transport-related operations, either by setting up a joint company for that purpose or by amending the liquidation decision of the Jordan Iraqi Land Transport Company. ▲ General insurance premiums increased by 10.0% to USD 277.9 million and life insurance premiums by 7.0% to USD 31.7 million, according to the insurance regulator. Gross claims went up by 19.0% to USD 195.3 million. TresVista Financial Services, Pvt. Ltd. © Page 8
  9. 9. Issue No. 1.12 MENA MONTHLY NEWS Month of August 2009 ▲ The Natural Resources Authority is finalizing an agreement with Eesti Energia for an oil shale project. The Estonian firm is expected to invest an estimated USD 7.0 billion in the project which is expected, to produce 35,000 barrels per day. …The latest GCC Fund Market Insight Report ▲ Arab Bank announced that the lending interest rate on housing loans will be lowered by 0.5% to 8.3%. from Lipper has ▼ Remittances from Jordanians working abroad dropped by 4.4% during Q1 2009 to reach JOD 1.2 billion. revealed that equity ▼ Lawmakers differ over agricultural income tax by returning an article of the income tax draft law to the Lower House Finance funds registered for sale Committee following a dispute over agricultural tax exemptions. The income tax draft law exempts real estate companies from in GCC markets moved taxation, rejecting proposals by both the government and the Lower House Finance Committee to impose this tax. into positive territory for the first half of 2009 ▼ The overall national exports dropped by 11.7% during the January - June period of this year to about JOD 2.3 billion (YTD 30th June) compared to JOD 2.6 billion during the same period of 2008. recording an increase of ▼ Direct foreign investments fell sharply to JOD 155.0 million during the first quarter of this year compared to JOD 652.7 21.1%... million in the same period of 2008, according to the Central Bank of Jordan’s statistical bulletin. ▼ Zuhair Omari, president of the Housing Investors Society said that sale transactions for apartments greater than 150.0 square meters were down by 30.0%. - Central Bank of Jordan (CBJ) Governor Umayya Toukan expects the Kingdom's economy to grow 3.0% - 4.0% in 2009. - The average CPI in July 2009 rose by 0.3% compared to the previous month of June, due to the increase in transportation, fuel, vegetables, and meat and poultry prices. The CPI, dropped by 0.1% during the first seven months of this year compared to the same period of 2008. - Liquidity in the domestic money market stood at JOD 3.7 billion including overnight deposits. - The Central Bank of Jordan (CBJ), offered three-year treasury bonds in an offering worth JOD 100.0 million (USD 141.0 million). Bahrain ▲ Bahrain based Investcorp said it raised more than USD 500.0 million from regional investors through a preferential share issue to reduce its debt. ▲ Between December 2008 and June 2009, total bank assets grew by USD 9.4 billion, the equivalent of 9.9%, 50.0% higher than the growth reported over the corresponding period of 2008. ▲ Bahrain-based Islamic investment bank Gulf Finance House (GFH) plans a capital increase of up to USD 500.0 million to beef up its balance sheet to weather the global crisis and make investments. ▲ Bahrain's food consumption is likely to increase by 25.5% in the next four years with total volumes of food trade reaching a record BHD 172.0 million (USD 456.5 million). ▼ A new regulation capping Bahraini banks' real estate financing in their gross financing portfolio at 30.0% will come into effect. Bahrain-based Gulf Finance House approved an USD 300.0 million rights issue. - Al Salam Bank and 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). Qatar ▲ Qatar Islamic Bank (QIB) is extending USD 200.0 million (QAR 728.3 million) financing to Qatar Petrochemical Company (Qapco) for the latter’s new low density polyethylene (LDPE) project, whose total cost is estimated at QAR 2.0 billion. ▲ Qatar Petrochemical Company (Qapco) signed a deal with Qatar Islamic Bank (QIB) for a Shariah-compliant financing facility worth QAR 730.0 million at the Qapco site in Mesaieed Industrial City. The QAR 2.0 billion worth LDPE-3 project is part of Qapco’s expansion and development plans and will be using the excess ethylene produced by Qatofin and Qapco. ▲ Qatar-based Barwa Real Estate will build an EGP 50.0 billion (USD 9.0 billion) project in Egypt through its Barwa New Cairo for Real Estate Investments unit. ▲ Qatar paid Porsche slightly more than half the current market price for shares in Volkswagen in a multi-billion euro deal. 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 Tasweeq has sealed a term contract with four to five buyers for shipments of a total 120,000.0 - 150,000.0 tonnes of naphtha a month, or 60.0% - 75.0% of output from its new Ras Laffan condensate splitter. ▼ Qatar's CPI dropped 2.6% in H1 2009 and 0.8% in June mainly due to decline in house rents. - Qatar Telecommunications Co's USD 1.5 billion loan will be increased to USD 2.0 billion after raising over USD 3.0 billion.. Tunisia ▲ Inflation rate reached 3.3% on average, till Q1 2009, against 5.6% during the same period of 2008. ▲ Money supply (M3) and financing to the economy went up over Q1 2009 by 5.6% and 4.7% respectively. TresVista Financial Services, Pvt. Ltd. © Page 9
  10. 10. Issue No. 1.12 MENA MONTHLY NEWS Month of August 2009 ▲ Tunisia's Technical Textile Centre (CETTEX) said that the textile and clothing industry posted a 5.1% growth in its July 2009 …OPEC total revenue exports. The sector also recorded a 4.3% growth in imports promising improving exports prospects for the next months. for last year hit USD 1.0 ▲ Qatari Diar Real Estate Investment Co. will increase its investment in the Al-Houara tourist project in Morocco to USD 1.2 trillion. This historic billion from USD 170.0 million. The additional funds will finance a 234.0 hectare seaside resort along Tangiers southern figure has been coastline. achieved due to increase in the oil prices. Oil ▼ Day-to-day interest rates on the money market fluctuated between 4.1% and 4.5%. prices touched USD 147.00 in July 2008… Lebanon - Chocolate chain Patchi is planning a 49.0% listing in Dubai and London to raise funds for international expansion. Morocco ▲ As of the end of June 2009, Commercial bank loans growth rate decreased to 15.3% compared to 28.5% a year earlier. Mergers & Acquisitions Announced Completion Transaction Value (In TV/LTM TV/ LTM S. No. Target Acquirer Industry date date USD mn) Revenues EBITDA 1 Dhofar Power Co Multiple Acquirers Utilities 07/20/09 08/05/09 34.9 0.96x 4.93x 2 North Sea Assets Abu Dhabi National Energy Co Energy 08/04/09 08/04/09 NA NA NA 3 Full Circle Investments Fzc Shore Capital Group Plc Financial 08/05/09 08/05/09 NA NA NA 4 Dante Llc Coffee Planet Food and Beverage 08/13/09 08/13/09 NA NA NA 5 Nw Gemsa Licence Sea Dragon Energy Inc Oil 08/19/09 08/19/09 12.5 NA NA 6 Dubai Festival City Dubai Holding Retail 12/31/08 12/31/08 1,511.0 NA NA 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 10