TresVista Weekly MENA 26-11-09


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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 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.

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TresVista Weekly MENA 26-11-09

  1. 1. Issue No. 2.17 MENA WEEKLY NEWS Week of November 20, 2009 – November 26, 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 6,355.8 6,933.7 2,093.2 585.5 6,357.2 2,583.5 Gold Spot 1,188.38 GBP 0.605 0.6% 2.7% (1.7%) 2.1% (0.4%) 0.4% Silver Spot 18.67 EUR 0.666 distribution list, please LME 3 mth. Cu 6,821.00 SAR 3.750 contact… Morocco Bahrain Qatar Tunisia Lebanon Abu Dhabi LME 3 mth. Al 2,009.00 KWD 0.285 10,313.0 1,438.3 7,193.4 4,107.9 1,560.5 2,910.2 ICE Brent Crude 76.99 (0.2%) (0.3%) 0.1% 0.3% (0.4%) (0.5%) MACRO ECONOMIC NEWS 1. Macro Economic Saudi Arabia News ▼ Saudi Arabia has removed subsidies on rice imports as foreign exporters have been taking advantage of them to increase prices. 2. Government Regulations Kuwait 3. Sector News ▲ Kuwait's Finance Ministry said that it has posted a preliminary budget surplus of USD 20.0 billion in the first seven months of 4. Company News the fiscal year ending in March 2010 as oil income exceeded forecasts. 5. Liquidity ▼ Dubai has shocked investors by asking for a debt standstill at Dubai World, the government's flagship holding company. Dubai's surprise move angered some investors who had been reassured by local officials for months that the city would meet all Market Buzz… obligations on its USD 80.0 billion of gross debt in spite of recession and a real estate crash. After this announcement, it raised USD 5.0 billion from two Abu Dhabi banks. - Iraq and Kuwait are engaged in technical negotiations to strike a deal over production from border oilfields that have been at the heart of previous conflicts. UAE - Annual consumer inflation averaged 1.9% year to date but prices fell 0.1% in October 2009 compared to September 2009. Oman ▲ The Omani Ministry of Economy said that the Sultanate plans to boost government spending by 9.0% to USD 18.7 billion next year as it seeks to revive the economy after the global economic crisis. ▲ As part of implementing the government's development projects, the Finance Ministry approved 16 agreements and 5 Change Orders worth USD 161.2 million. Jordan ▲ Governor Umayya Toukan expects local banks to ease lending measures soon and to increase credit extension gradually. ▲ Jordan's Finance Minister, Bassem Al-Salem, said that 2010 budget will focus curbing on state spending, in order to curb the country's budget deficit to as much as USD 966.0 million. ▲ Jordan's trade deficit narrowed 22.9% to USD 5.5 billion from January to September in 2009, compared with the same period in 2008, mainly due to a lower bill for Saudi oil imports. ▼ Jordan’s domestic debt from January to October rose by 17.2% as it reached USD 8.2 billion at the end of October in 2009 compared to USD 7.0 billion at the end of last year, according to Ministry of Finance figures. Qatar ▲ The Qatari Prime Minister and Foreign Minister and German Federal Minister of Transport signed a deal to establish the Qatar Railways Development Company with investments of USD 25.0 billion. SECTOR NEWS Saudi Arabia ▲ Saudi Basic Industries Corp.’s Chief Executive Officer Mohamed al-Mady said global demand for basic chemicals is improving. ▲ Saudi Arabia's infrastructure sector is forecasted to achieve a real growth of 2.9% in 2009, with the construction industry's value to reach USD 20.7 billion, according to 'Saudi Arabia Infrastructure Report Q1 2010'. ▼ Saudi Arabia's non-oil exports in September fell 19.0% to USD 2.0 billion from a year earlier period amid weak demand for petrochemicals, data from the Central Department of Statistics and Information. Saudi's imports in September also fell by 34.0% according to CDSI data. - Riyadh plans to tender light rail construction contracts in early 2010 for design and build contracts. …Current account surpluses in the oil-rich Kuwait GCC region have ▼ NBK noted that local banks witnessed an increase of USD 2.3 billion in total deposits in October, however, credit growth dropped by USD 50.0 remained slow and did not match the rise in deposits. billion to USD 350.0 ▼ Investment companies alone posted a loss of USD 1.4 billion as they have been hard-hit by the global financial crisis. billion, due to the fall in oil prices, and will ▼ Property trade in Kuwait is predicted to fall by 40.0% to USD 5.8 billion this year compared to last year, with a supposition shrink further by USD that fluidity is to last in the remaining two months of this year. 150.0-USD 200.0 UAE billion next year… ▲ The UAE has pumped nearly USD 27.2 billion into the real estate sector over the past 5 years, more than double the total capital channeled into property projects in the previous five years. TresVista Financial Services, Pvt. Ltd. © Page 1
  2. 2. Issue No. 2.17 MENA WEEKLY NEWS Week of November 20, 2009 – November 26, 2009 ▲ Turkey, one of the largest suppliers of building and construction materials to the UAE, is seeing a slow but gradual recovery in …Expatriates comprise the demand for construction material in the Emirates, after a sharp decline this year. as much as 58.0% of the GCC's workforce and ▲ Dubai expects to see 50,000 residential units added to the real estate market in 2010, of which only half will be made available 87.0% of the UAE's for rent. workforce, increasing ▲ Steel prices would start rising again by December 2010, according to a senior official of Zamil Steel. the gap between local ▼ Ex-factory cement prices in Dubai have dropped between 8.0% and 13.5% since October and by 33.0% since March, and expatriates, according to a senior industry official. recruitment company ▼ The average price of concrete fell 11.0% in October, with the price of standard UAE ready mix concrete falling to USD 86.30 said… per metric tonne and the price of UAE sulphate resistant ready-mix concrete lowering to USD 87.80 per metric tonne, according to the Statistics Centre of Abu Dhabi. Oman ▲ Prepaid subscribers continued to dominate the mobile market in Oman garnering 91.0% of the total mobile. ▲ Minister of Housing has signed in the Wilayat of Nizwa 30 agreements to construct 500 housing units in a number of wilayats of the Sultanate at a cost of around USD 48.2 million. COMPANY NEWS Saudi Arabia ▲ Al Babtain Power and Telecommunications announced that its 51.0% owned subsidiary, Al Babtain LeBlanc Telecommunication Systems, has signed an exclusive supplier agreement with Afridi Company (South Africa) for the latter to supply wind power generation equipment known as "Kestrl". ▲ Jabal Omar Development Company announced that it has signed an agreement with Al Rajhi Capital to act as a financial advisor, lead manager and underwriter for its 25.0% rights issue. ▲ National Water Company plans to tender a water storage project worth USD 373.4 million in the Jeddah province. ▲ Saad Group has agreed to sell a 19.0% stake in Petra Diamonds Limited, a UK-based mining company focusing on diamond resources, for USD 100.0 million in a private placement. ▲ Saudi Steel Pipe Company announced that it had increased its stake in Global Pipe Company from 25.0% to 35.0%. ▲ Private Saudi conglomerate Aujan Industries, will invest around USD 200.0 million over the next two years to expand its beverage business in Saudi Arabia, Iran, and Iraq. ▲ A US maker of industrial air conditioners has formed a USD 200.0 million joint-venture with Saudi Arabia's Alessa group. ▲ SABIC’s subsidiary, Gulf Petrochemical Industries, is expected to start trial operations of a carbon dioxide extraction project in which it has invested more than USD 50.0 million by the end of next month. ▲ Ethiopian mines and energy minister said that the government has signed a deal with a Saudi firm, Saudi Arabia's Midroc Gold Co., to extract an estimated 20.0 tons of recoverable gold found in the Horn of African country last month. ▼ Petro Rabigh's fluid catalytic cracking (FCC) unit is not operating at full capacity due to non-scheduled maintenance. ▼ Emaar, the Economic City, has canceled a USD 173.3 million contract it signed with UAE-based City Cool to build, own, and operate two cooling stations at the residential and commercial buildings within Bay La Sun Village on the Red Sea. ▼ Dar Al-Arkan plans to put 319 villas up for sale before year-end after a drop in land prices and slower unit sales hurt its earnings. - Saudi Electricity has set 20 December, 2009, as a new deadline for bids to build a USD 2.0-2.5 billion 2,000 MV power plant in Riyadh which was extended due to technical issues. Kuwait ▲ Gulf Finance House announced that Deutsche bank has converted part of its USD 100.0 million Murabaha facility into 78.950 million shares, for a total value of USD 30.0 million. - Kuwait's Kharafi Group, which is leading a consortium of investors selling a 46.0% stake in Mobile Telecommunications Company, has appointed BNP Paribas SA as advisor to the deal, which could be worth a potential USD 13.7 billion. - AREF Investment Group announced that the court ruled in its favor in the lawsuit filed against The Investment Dar company and obliged the latter to pay USD 44.5 million. UAE ▲ The National Marine Dredging Company (NMDC) has been awarded USD 373.4 million contract by the Abu Dhabi Urban Planning Council (UPC) to construct the Mussafah canal. ▲ Abu Dhabi Airports Company recorded a 7.0% increase in passengers over the course of 2009 to date, and during the month of October, it saw a 2.8% increase in passenger numbers and 24.3% increase in cargo compared to the same period last year. ▲ Union Properties is currently in talks with two investors to sell its 50.0% stake in Emirates District Cooling (Emicool), according to the vice-chairman of Union Properties. ▼ Tamweel has declined to take delivery of the 200 villas it financed in Al Mazaya Holding's The Villa development in Dubailand, citing non-completion of infrastructure. ▼ Emirates NBD have exposure of up to USD 350.0 million to two Saudi conglomerates now restructuring their debt, Emirates NBD Chief Executive Rick Pudner said. TresVista Financial Services, Pvt. Ltd. © Page 2
  3. 3. Issue No. 2.17 MENA WEEKLY NEWS Week of November 20, 2009 – November 26, 2009 ▼ Dubai International Capital, a unit of Dubai Holding, is offering lenders a 40.0% stake in aluminium products maker Almatis …3,398 civil building in a debt-for-equity swap. projects worth USD 1.4 trillion are currently ▼ Aldar is limiting construction to avoid the housing glut and price declines that battered the real-estate market in neighboring active in the Gulf Dubai, CEO said. region… Oman ▲ Hydrochem has won a USD 68.6 million contract for the design and supply of a desalination facility for the Salalah Independent Water and Power Project in Oman. ▲ Muscat Electricity Distribution Company (MEDC) has announced plans for a number of projects to expand and enhance their current network and accommodate the growing demand for electricity in Muscat. - Oman Oil Co Ltd will invest USD 262.3 million to buy additional equity shares in Bharat Oman Refineries Ltd (BORL) at a 50.0% premium. Oman Oil will buy the additional equity in BORL at USD 0.30 per share as against its face value of USD 0.20 per share. Bahrain ▲ Nass Corporation announced that it’s fully owned subsidiary, NASS Contracting Company, has been awarded a USD 79.6 million contract from the Arab Shipbuilding and Repair Yard Company. ▼ Batelco, which owns Umniah, has been fined USD 13.3 million by the Bahrain Telecommunications Regulatory Authority (TRA) for not allowing licensed operators direct access to the FALCON sub-marine cable system. Qatar ▲ Qatar telecom Nawras along with Bahrain Internet Exchange, Mobily and Etisalat signed an agreement with Tata Telecommunications to build a new cable system for the region which will connect the region to the world's major business hubs through the existing Tata Global Network. ▲ Qatar Petroleum International signed an agreement with Thailand's largest industrial conglomerate, Siam Cement, to invest up to USD 4.0 billion in a Vietnam petrochemical complex. LIQUIDITY Saudi Arabia - Saudi bank credit growth edged up 0.1% in October compared to September, which stood at USD 192.7 billion in October, the Saudi Arabian Monetary Agency said. Kuwait - Gulf Finance House is planning to borrow up to USD 200.0 million through a three-year tenor unsecured and convertible Murabaha agreement. - Kuwait's Investment Dar, which owns half of British luxury carmaker Aston Martin, has received a favorable response from creditors to a proposed restructuring plan for USD 3.5 billion of debt under which Dar will make debt repayments to creditors over a five-year period, with the first payment expected by the end of 2010. UAE - Abraaj Capital Holdings Limited announces that it has completed a USD 375.0 million capital increase to existing shareholders, strengthening its balance sheet to capitalize on strategic buying opportunities, expand its geographic and product coverage, and consolidate its market-leading position. - Aabar Investments raised USD 1.6 billion, 6 month loan from a group of local and foreign banks for general corporate purposes. - The Government of Dubai, acting through the Department of Finance, has raised a further USD 5.0 billion as part of its USD 20.0 billion long term bond programme launched at the beginning of 2009. - First Gulf Bank's USD 500.0 million three-year bonds were priced at 250 basis points over mid-swaps, representing a coupon of 4.0%. - Union Properties has put on hold the USD 680.8 million non-convertible bond issue, citing lack of liquidity in the market. Bahrain - Esterad Investment Co. said its shareholders will discuss plans to issue medium-term debt instruments and bonds convertible into shares worth up to USD 42.6 million. TresVista Financial Services, Pvt. Ltd. © Page 3
  4. 4. Issue No. 2.17 MENA WEEKLY NEWS Week of November 20, 2009 – November 26, 2009 About Us: Headquartered in Mumbai, India, TresVista Financial Services Pvt. Ltd provides research, analytics, advisory, investor relations, and other customized services for asset managers, private equity funds, investment banks, operating companies, and other institutions. This document is provided for assistance only and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this document should make such investigation as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult his own advisors to determine the merits and risks of such investment. This newsletter is provided for information purposes only. The information is believed to be reliable and is based on publicly available information, but TresVista does not warrant its completeness or accuracy. Opinions, estimates, and assumptions constitute our judgment as of the date hereof and are subject to change without notice. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Additional information is available upon request. 2009 TresVista Financial Services © TresVista Financial Services Premier House, Plot No.38, 2nd Floor, New Wing, Central Road, MIDC, Andheri (East), Mumbai 400 093. TresVista Financial Services, Pvt. Ltd. © Page 4