Finance
Tips to small-scale investors:
Abdul Hamid Al Amari, writing in Al Iqtisadia, on Wednesday,
advised small-scale investors to rid their portfolios of unsold shares,
saying “take the appropriate investment decisions…you
have many investment opportunities.. don’t let the chance slip
between your fingers.” “Don’t listen to rumours which
could cost you your fortune” he added. In the same vein, Abduaziz
Al Suwiad, writing in Al Hayat, called the attention of his
readers to a previous suggestion to give individuals ample chance in
the Initial Public Offerings. “The IPOs should be opened for
companies and institutions, only after the subscriptions of individuals
have been completed,” he said.
Inma seeks $2.8bn in largest Saudi IPO:
Asharq al-Awsat: The Saudi Capital Market Authority
(CMA) announced on Tuesday the largest IPO in its history. Around
1, 050 billion shares, representing 70% of the bank’s value
would be floated in an initial public offering. Inma valued at 15
billion Riyals plans to raise 10.5bn Saudi Riyals (US $2.8 billion)
from the offering.
Increase of GDP Deflator:
Al Jazeera: On Tuesday, the Saudi Arabian Monetary Agency
SAMA – the central Saudi Bank - announced that the average
growth of Saudi Arabia's nominal gross domestic product (GDP), the
index of future inflation, is estimated to have grown by 21.6% in
November. According to the SAMA website, the available cash grew
by 21.1% in October.
External Investments:
Asharq al-Awsat: The Saudi Arabian Monetary
Agency (SAMA) - Central Bank- disclosed that the external assets
net recorded an increase of 32.1 percent in last 30 November to 1.07
trillion riyals ($ 285.3 billion), compared to the same period in
2006.
Energy
Oil production:
The Kingdom continues its oil production levels of last December, producing
9 millions barrels a day (mbd) according to an informed Saudi source,
adding that the current production capacity stands at 11.3 mbd. On
Wednesday, Asharq al-Awsat revealed that the Kingdom
is planning, in a twenty year plan, to launch a special strategy to ‘Saudi-ize’ the
oil and gas exploration and production sector.
Supplying gas to industrial zones:
Riyadh, Mohamed Haider: Suliaman Al Khulaifi, Chairman
of the Natural Gas Distribution LLC, Ministry of Petroleum and Mineral
Resources, called for industrial regions throughout the Kingdom to
be supplied with gas, arguing that this could lead to significant,
qualitative improvements. “Supplying industrial regions with
gas would cut manufacturing costs by millions of Riyals. It could
even boost small and medium scale industries and save troubled ones,” said
Al Khulaifi at the exhibition organised on the sidelines of the Saudi
conference on oil and gas exploration techniques that ended yesterday. ”The
benefits of natural gas not only cut costs, but have many technical
advantages in terms of equipment and production”.
Properties and developments
Properties and investment regulation:
Al Riyadh: Mohammad Abduraziq Al Said: Dr Shwaish
Bin Saud Al Mutairi, a member of the Economic & Energy Committee
of the Shura Council, dismissed any perceived overlap between the
activities of the real estate offices and the regulations of the
new Real Estate Law enacted recently under the Saudi Capital Market
Authority (CMA). “The issue is being taken into account” Al
Mutairi said to Al Riyadh, indicating that the regulation
has been very clear on this issue, in order to avoid conflict”. “This
was clarified in the regulation, namely. what is the role of the
Ministry of Commerce in the system and what is the role of the Capital
Market Authority. “The aim is to save the time and effort of
the investor,“ he added. “The committee in the Shura
Council has carefully examined the articles of the new Real Estate
Law. Voting in the 44th session was postponed pending further contributions.
Re-voting would take place after finalizing the necessary investigations”.
Commercial sector, including retail
Cost of living:
Consumers feel that the steps taken by the government to ease the high
cost of living are fruitless. Despite salary increases, the great
surplus last year and the expected 40 billion Riyal surplus in the
2008 budget, there is widespread frustration among government employees.
Perceived as an admission of the subsidiaries’ system failure
and weakness on the part of the Ministry of Commerce in controlling
prices, the government embarked on a new policy aimed at providing
long-term solutions to reduce prices. The Ministry of Commerce and
its regulatory bodies are often widely accused by consumers of overlooking
the actions of greedy business owners. At the same time, members
of the Trade Fraud Committee stressed that increases in prices are
driving consumers to procure fake commodities. In Al Riyadh on
Wednesday, Yousif Al Kwailait, voiced objections to the conglomerate
that it is proposed will import rice. “If the intention is
to establish a rice importing company, then it should not be monopolized
by a small group” he said. “The said company could be
a joint stock company including retirement funds, social funds and
individuals as shareholders supported by the government.”
Development of “Kafala” Financing program:
Asharq al-Awsat: Ahmad Al Ansari: Fahad
Al Shabibi, Team Leader of the Kafala programme (for the financing
of small and medium-size enterprises) revealed that the programme
is studying the possibility of involving Saudi Arabia-based, Gulf
and foreign bank branches in addition to local banks, indicating
that talks are currently underway. Al Shabibi predicted that the
programme funding will increase three-fold during 2008. “We
are in the process of inviting local banks and their foreign and
Gulf counterparts to join the programme,” Al Shbibi said to Asharq
al-Awsat. “However this is contingent on a decision by
the consultative council and the board of directors” he added.
Saudi Telecom to buy 25% stake in Malaysian mobile firm:
Al Jazeera: The Saudi Telecom Co, the largest Arab telecommunications
firm by market value, has agreed to buy a majority stake in Maxis
Communications, Malaysia's biggest mobile operator, sources familiar
with the matter said. Saudi Telecom Co. has received a $450m loan
from Al-Rajhi Bank to help fund the investment. Malaysia's Maxis
Communications’ 51 % stake in Maxis would be worth about $5.7
billion at the stock's last traded price.
Finance
Investment in Dubai:
According to Aswaq.net, the 2007 property boom has enabled three Dubai-based
businessmen to be added to the list of the richest Arabs. “Dubai
is opening chances for investors to reach the highest horizons,” said
the site that is used to interview developers and to publish success
stories. The most prominent figures of the year were; Husain Sajwani
of DAMAC, Omar Aish of Taameer, Al Sheihk Suliaman Al Majid of Tanmiat
and Moafaq Al Qadah of MAQ Properties. The wealth of the four was
estimated at $6.2bn, according to Arabian Business.
External UAE investments:
Dubai Ports World, the world's fourth-largest container-port handler,
said on Monday that it spent around $32 million to buy 48.5% of Portus
Indico-Sociedade de Servicos Portuarios, which manages the port of
Maputo in Mozambique. DP World won a concession to run this port.
Earlier, the company won a contract to invest more than US$134 million
in a future project at the Port Authority of Dakar. This is in addition
to a new development in the container terminal at Port du Futur.
On a different note, Al Maghari Al Saqal, Director General of Bouregreg
River Development Agency in Rabat, rejected reports suggesting that
Sama Dubai was withdrawing from Morocco.
Banking Sector:
Noor Islamic Bank, a new Sharia-compliant bank, was launched in Dubai.
The organisers promise to make the $865 capital bank the world's
largest Sharia-compliant lender within five years by pursuing international
acquisition projects.
Energy
Ruwais Green Diesel Complex:
MEED Business and Al Bayan: Abu Dhabi Oil Refinery (Takreer)
has awarded SK GS engineering and construction a $1.14bn contract to build
a diesel factory in Ruwais. GS was widely expected to win the engineering,
procurement and construction contract after submitting the lowest bid for the
work last year, beating competition from its compatriot SK Engineering & Construction
and Spain's TR. The contract covers the construction of a 37,000-barrel-per-day
(b/d) hydrocracker and a 42,000-b/d sulphur hydrocracker unit, as well as the
revamping of the existing gas oil hydrotreater. The scheme is the second phase
of a wider project to produce more low-sulphur gas oil. The USA's Mustang
Engineering is the front-end engineering and design contractor. The project
management consultant is Australia's Worley Parsons.
Properties and Development
Excellence ambitions:
Isla Moda, The world's first 'Fashion Island,' was launched in Dubai
by Dubai Infinity Holdings. The aim of the fashion island is to establish
Dubai as a global fashion hub. Renowned fashion designers from various
continents will take up the design of each element of the development.
Housing projects:
Al Bayan: The first half of this year sees RAK Properties,
Ras Al Khaimah's largest property developer’s plans to sell
up to $1bn of Islamic Sukuk to fund projects that could cost up to
$10bn. At present, RAK Properties is developing the Mina Al Arab
project that includes 200 villas, 150 housing units and 2,500 apartments,
in addition to 25,000 sq. meters of commercial land. The project,
estimated to cost 10 billion UAE Dirhams, was announced in May 2006
with a completion date of 2012. In Ajman, Kasp has launched its state-of-the-art
project, the Asalam tower, a 30 storey building costing 170
UAE Dirhams.
Finance
The Qatari Stock Market:
Al Rai: On Wednesday, the Qatari stock market witnessed
a great surge compared to its Gulf counterparts. The market recorded
its highest level in 13 months, reaping its biggest profits for one
day in more than a year. This comes as investors rush to buy shares
amid speculations of high profits. Doha stock market soared by 3.54%
to 10425 points, its highest value since 24 December 2006. Meanwhile
Oman, Dubai and Kuwait markets fluctuated and the Abu Dhabi, Saudi
Arabia and Bahrain markets slumped.
Properties and Development
Housing:
Al Rai’s economic editor said that at present, a study
is being carried out to find ways to reduce Qatari rents by 7%. A
registration body to register leases would be established, but non-registered
contracts would not be recognized. Government institutions would
be exempted from these rules.
Cost of building material:
Experts and investors estimated that the price of building materials
have increased by 100% in the last 5 years, particularly cement and
iron. The surge has been attributed to many local and international
factors including the boost in demand - particularly in Dubai and
Abu Dhabi -, the inflation resulting from the fall of the US dollar
and the rise in fuel prices and transportation costs around the world.
Al Abdulla, the properties businessman, explained that the rise in
building material prices has had a heavy toll on different sectors. “It
affects mostly contractors and developers,” he said. “The
high prices have driven rents up, which has forced companies and
corporations to increase their staff salaries to cope with the increases,” he
added.
Finance
Kuwaiti investments in Saudi Arabia:
Asharq al-Awsat, Tahani Mahran.:.Khalid Faraj Al
Said, a member and general manager of the Kuwait ITS, announced that the company
will sign new project contracts in Saudi Arabia, but he did not elaborate.
Al Said indicated that his company would increase its investments in 2008 to
$70 million from $60 million.
Development plans for the Kuwaiti stock Exchange:
Al Watan, Jamal Ramadan: An informed source in
the Kuwaiti stock market revealed that the aim of the market is no
longer restricted to regulations or trading controls. It is being
extended to include many initiatives currently being discussed with
consultants to transform the stock market, within the next five years,
into an international capital market. The proposed market should
allow trade in different financial products, including metals such
as gold and silver. The proposed plan will cover 2007 - 2012.
KAMCO’s IPO:
Al Watan, Al Ameer Yusri: Subscription rates in
the IPO issued by Araya Investment Company with the KIPCO Assets
Management Company waere estimated at 15% and the IPO was oversubscribed
by 400%. The director of the company’s founders’ committee
declared that the company’s capital increased from 17 to 25
million Kuwaiti Dinars during the IPO. Some rumours suggested an
unidentified investor as a main contributor. Subscriptions were kept
only for those invited by the Director of the IPO.
Properties and Development
Nasir Ali Al Attar, CEO Maydeen National Company said to al-Qabas that
the size of the company has jumped to $1bn in record time. “This
is after increasing the company’s capital and focusing on property
developments,” he explained. “The increase signals more
developments in the future,” he added, “and the most
prominent projects at present are Shams Abu Dhabi”. Maydeen is
a limited stock company listed in Kuwait Securities with a capital
of 1 million Dinars.
Inflation and its impact on the property market:
al-Qabas: Participants at the 6th Kuwait’s Properties Fair called
for the encouragement of non-nationals to own Kuwaiti properties. “Foreign
ownership,” they argued, “would transform Kuwait into a leading
financial hub in the region, and strengthen the competitiveness of the property
market.” They stressed that this would pave the way for more openness
and investments. It would also equip Kuwait with additional leverage ahead
of the launch of the Gulf common market this January.
Commercial sector including the retail sector
Loans violations:
The economic editor of al-Qabas said that the Kuwait Central
Bank is seeking explanations from other banks over violations. The
accumulation of violations prompted bankers to question the usefulness
of the credit bureau operated by Ci-Net. This company uses state-of-the-art
technology to provide accurate and secure information on-line to the
lending community in Kuwait.
Selling of the loss-making Kuwait Airways Corporation (KAC):
Kuwait's parliament on Wednesday approved a long-delayed government
plan to sell 40% of its embattled Kuwait Airways Corporation in IPO
and 35% to strategic investors within two years. The auction for
a 35% stake will be open to "specialist foreign firms" and
listed Kuwaiti firms but not to domestic aviation companies, the
bill stipulates. Kuwait will appoint advisers to value the carrier
ahead of the sale.
Finance
Bahrain Stock Exchange Extends its Trading
Session to 3 Hours:
The Chairman of the Board of Directors of the Bahrain Stock Exchange
(BSE) issued a resolution to set the trading hours at the Exchange.
According to this resolution, the official trading session on the Exchange
is to start at 9.30 am and close at 12.30 noon as of Sunday 13 January
2008, from Sundays to Thursdays while the pre-opening period will run
from 9.15 am until 9.30 am. Commenting on the resolution, the Director
of BSE Mr. Fouad Rashid expressed the hope that the new regulation
will add more momentum to the market.
Commercial sector including the retail sector
Personal loans:
Gulf News’ economic editor wrote: By the end of last
November, Bahrain’s money supply (N3) had increased by more
than 3.23% compared to end of January 2006, suggesting a rising inflation
rate. The inflation rate is reflected in the rise in import prices
in the Kingdom and the increase in cash traded outside banking channels.
Bank liquidity also witnessed a rise from 451 million Bahraini Dinars
to an estimated 549 million Dinars.
Subsidies to offset rise in prices:
Al Waqt’s: Officials at the Ministry of Industry
and Commerce estimated the governmental subsidies for foodstuffs
last year at 17 million Dinars, an increasing by 41% over the predicted
12 million Dinars. The value of government subsidies was expected
to reach 30 million Dinars. Participants in a workshop organised
by Al Waqt on the rise in prices said the current
year would be difficult in terms of prices and they called for mechanisms
be put in place, including distribution mechanisms to ensure the
delivery of subsidies to the needy.
Capital
Muscat securities index soared
Al Watan, Khalfan Al Rahbi wrote: Yahia Bin Said
Al Amri, Executive Director of the Muscat Securities Market (MSM)
Authority announced that the net profit of the companies listed in
MSM, had risen by the end of the third quarter of 2007 by 40% compared
to the same period in the previous year. The Listed net profit at
the end of the period exceeded 448 million Omani Rials compared to
320 million in the same period last year.
Omani markets:
On Tuesday, Omani Investors bought shares offered by Muscat Bank and
Raysout Cement. This boosted the index after Monday’s losses,
the highest for one day in seven months.
Muscat Securities Market:
Oman, Mahmood Al Mahrazi wrote - Following some decline
in profits early yesterday, MSM continues its upward trend, after
it had seen some regression. In the meantime, stock companies started
to disclose their financial results, showing profits. In a cautious
environment, investors focused on potentially profitable shares.
The MSM 30 share index closed up 65 points, or 0.68 per cent, at
9,696 points after dropping 224 points (2.27 per cent) on Monday,
closing on that say at 9,631 points. The banking index rose by 0.75%,
insurance and services by 0.72%, and the industry index closed up
by 1.14%.
Energy
Energy investments :
GulfCap Group has acquired Dalma Energy from Aabar for $446 million.
Oman-based Dalma is a wholly-owned, drilling services subsidiary
of Aabar. GulfCap is owned by a consortium of Saudi, Bahraini and
Omani investors. Dalma operates 22 land drilling rigs in Oman, Saudi
Arabia, Qatar, India and Algeria. The company's fleet comprises seven
light rigs of less than 1,000 horsepower (hp), four medium rigs of
1,500 hp and 11 heavy rigs of 2,000 hp. Last year average production
of the three Indonesian fields and the field in Thailand was 20m
barrels a day.
Finance
Unified Gulf currency
In an interview with Asharq al-Awsat, Dr. Nasir Al Saad, Senior Economist at Dubai Financial Center (DFC), urged the GCC to adopt more relaxed policies towards the exchange rates of its dollar-pegged, national currencies. He called on the member states to adopt a basket of currencies in which the dollar would be dominant. “The peg to the dollar has hampered the development of effective financial and capital markets in the region” he said. “It has also prevented central banks from acquiring the necessary financial instruments to mobilize the market,” added Al Saad, who was the former consultant at the Ministry of Economics in Lebanon at the time of Saleem Al Hus. “A commitment to the timing of the single currency by 2010 is vital”. “Any GCC’s common securities market would be international market,” he added. “The GCC single currency could be the third or fourth currency in the world. The GCC could become, within the next 20 years, the fifth economic power worldwide if the current growth rates continue” Al Saad concluded.
Sukuk repurchases Fatwa, aswaq.net
Bankers considers the Fatwa, issued by the Bahrain-based Accounting
and Auditing Authority, that the repurchase of bonds is Haram (the
Arabic word for ‘that which is forbidden’), could
cause a serious setback to the industry. With the absence of repurchase
agreements, at a certain price, the Sukuk returns would depend on
the performance of the Sukuk under the contract, which could drive
investors who are looking for stable revenues away. Al Sheikh Mohammad
Ali Al Qari, a member of the Accounting and Auditing Authority, has
said, in a report published in the Saudi Business newspaper,
that some Sharia compliant regulators, to allow for more expansion,
have turned a blind eye to the repurchase article, “but time
has come now for a revision.”
External GCC deals:
Asharq al-Awsat: An economic report
published on Tuesday revealed that the GCC will continue its acquisitive
trend and buy major stakes in western financial and economic organisations,
fuelled by the rise in the oil price. The report released by Zephry,
the Expert Merger & Acquisition firm, said that GCC countries
have spent $83 billion on foreign businesses, doubling the comparative
spending in 2006.
Properties and Development
Tourism Investments:
Reed Exhibitions, the world's leading organiser of trade and
consumer events, said the total tourism projects planned by the Gulf
till 2018, amounted to one trillion UAE Dirhams. The UAE’s share is 858
billion.
Commercial sector including the retail sector
Gulf business security:
Al Hayat’s: Abdulfatah Faid wrote
- International reports observed a steady increase in the sector
of security and safety in the GCC. This is considered an important
step in coping with the wide, economic development pace across different
business sectors. The annual average growth was estimated by these
reports at more than 25%, which means the region will double its
investments in this area in a short time. This record growth has
attracted international and regional investors who specialise in
security equipment, and fire control. The growth estimated by 27%
was apparent at the “Intersec Middle East” Security exhibition
and its conference that was attended by more than 800 exhibitors
and more than 2000 companies from 53 countries. In addition 13 countries
had national pavilions, including Germany, Austria, Singapore, Taiwan,
Italy, Spain, South Korea and Canada.
Islamic development bank’s new Fund:
Asharq al-Awsat, Kamal Idris, wrote.-.The
Islamic Development Bank (IDB), with its headquarters in Saudi Arabia,
on Thursday launched a $3 billion international fund for financing
and trade. The institution’s objectives are to develop and
increase business activities in the member states. The bank dedicated
$1 billion for the International Islamic Foundation to coincide with
the beginning of the new Hijri year. An insider said the amounts
aimed to increase the volume of trade between the member states.
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