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Saturday, 4 April 2009

KFH to open investment branch in Riyadh

The Kuwait Finance House (KFH) is set to open an investment bank in the Saudi Kuwait Finance House in Saudi Arabia with a capital of 500 million Saudi riyals (USD 133.3 million), a KFH official said here Saturday.

The new office is part of the KFH's strategy to expand investments in the Gulf region, particularly Saudi Arabia which is the largest and fastest growing market in the Gulf, Abdelnaser al-Subeeh, assistant director-general of the KFH for the investment sector.

The Saudi market has promising opportunities in the field of real estate development and mega projects in light of the country's increasing public spending, which is expected to grow up by 30 percent this year, he said.

GCC economies expected to slip into recession in 2009 -- NBK

GCC economies are expected to slip into a recession in 2009 as a result of the severe deterioration in the global economic scene, said the National Bank of Kuwait (NBK) in a report on Saturday.

The report entitled "GCC: Fiscal stimulus and reforms are optimal choice under current circumstances," said however, that it was fortunately that GCC economies were "well positioned to face the storm."

"The dominance of their public sectors in economic activity should provide a measure of stability, including on the employment (of nationals) front. More importantly, all GCC countries have the capacity to pursue expansionary fiscal policies without putting pressure on their financial positions, thanks to the large surpluses of previous years," it said.

MGM Explores Casino Sales

MGM Mirage has hired Morgan Stanley to handle the potential sales of two of its steadiest cash cows — MGM Grand Detroit and Biloxi's Beau Rivage casino — according to people with knowledge of the matter.

The news comes after a person familiar with the matter said Australian billionaire and gambling magnate James Packer is weighing a stake in City Center, the troubled $8.6 billion Las Vegas development owned by MGM and Dubai World.

The Las Vegas-based MGM Mirage is under intense pressure to raise cash in order to meet looming obligations on its $13.5 billion in debt as well as to salvage an $8.6 billion real-estate project that still needs billions in funding. The company is also grappling with a dramatic decline in gambling revenues as consumers cut spending and companies cut back on travel to Las Vegas.

A PROGRESS REPORT ON THE JURISDICTIONS SURVEYED BY THE OECD GLOBAL FORUM IN IMPLEMENTING THE INTERNATIONALLY AGREED TAX STANDARD1 (PDF)

Jurisdictions that have substantially implemented the internationally agreed tax standard

Argentina; Australia; Barbados; Canada;China2; Cyprus; Czech Republic; Denmark; Finland; France; Germany; Greece; Guernsey; Hungary; Iceland; Ireland; Isle of Man; Italy; Japan; Jersey; Korea; Malta; Mauritius; Mexico; Netherlands; New Zealand; Norway; Poland; Portugal; Russian Federation; Seychelles; Slovak Republic; South Africa; Spain; Sweden; Turkey; United Arab Emirates; United Kingdom; United States;
US Virgin Islands.

Kuwait Economic and Strategic Outlook - March 2009 (PDF)

"Overall the year 2008 was good for Kuwaiti economy, though towards the end of the year the economy started to show the signs of slowdown. Real GDP continued its northward journey, estimated to have grown by around 4.8% in 2008. This growth came on the top of estimated 4.7% growth reported in the previous year. Rise in oil prices during 2008, especially during the first half, supported the GDP growth rate. Despite the significant fall in the oil prices in the second half of the year, average price of Kuwait Export Crude (KEC) was US$91.2 per barrel, up around 37.3% from 2007. Looking forward, we believe that Kuwait economy will be significantly impacted by economic crisis in 2009 and will post much lower growth for the year. For the year 2009, we expect the real GDP growth for Kuwait will be marginal. The oil prices, which are the significant drivers of Kuwait economy, are expected to remain in the range of US$40 to US$50 per barrel for the year 2009. However there are chances of higher oil prices in the second half of the current year if the global economic condition stabilizes. This will be helpful for Kuwait’s economy. Looking further forward to 2010, we believe that economic growth will be higher than 2009 as expect to see stabilization in the world economic order by then."

Global's Kuwait Weekly Market Report - April 02, 2009 (PDF)

Iran, Syria Endorse Plan for Iranian Gas Export Pipe, Refinery

Iran and Syria yesterday endorsed a plan for laying a “Persian Pipeline” to export Iranian natural gas to Europe via Iraq, Syria, the Mediterranean, Greece and Italy, the state-run Islamic Republic News Agency reported. The two sides also plan to build a refinery in Syria’s Homs province and a pipeline project for transfering Iranian gas to Syria via Turkey, IRNA said.

The joint statement from Iranian Oil Minister Gholamhossein Nozari and Syrian Oil Minister Sufian al-Alao said they are prepared to hold a meeting with Iraq to examine the feasibility of transferring Iranian gas to Europe and exporting Iraqi gas to Syria.

‘Alternative’ fund managers face rule change

Sweeping new rules would require all hedge fund and private equity managers in Europe to detail their activities to financial regulators and meet minimum capital requirements.

A draft of a proposed European Union directive, seen by the Financial Times, makes clear that the new regulatory emphasis for “alternative” funds will be on managers, rather than funds directly. It will apply equally to hedge fund and private equity managers, as well as those handling other vehicles such as commodity and real estate funds.

The new rules, the first of their kind in the world, are being drawn up following heavy pressure from world leaders – most recently at the G20 – to extend the regulatory net to all players in the financial markets. But while hedge funds seemed relatively sanguine about the EU’s approach on Friday, the proposals were immediately attacked as “illogical and disproportionate” by the private equity industry.

Qatar approves QR94bn budget to face crisis

Qatar yesterday joined neighbouring states the UAE and Saudi Arabia in approving a budget aimed at supporting its economy against the pressure of the global financial crisis and low oil prices.

The emirate, the world's largest LNG exporter, forecast expenditure at QR94.5 billion (Dh95.5bn), slightly lower than its record budget of QR95.9bn in the previous fiscal year 2008-09.

But revenues were slashed to a projected QR88.7bn from QR103.3bn due to a steep fall in oil prices and the country's production, according to Qatari newspapers.

Finsbury flies to the aid of Dubai Inc

And so it came to pass. As The National revealed a few weeks ago, Dubai has decided to take professional advice to counter what it regards as “negativity” in the international media’s coverage of its economic situation, and appointed the London firm Finsbury to help it change that perception. It is an interesting appointment from several angles.

Finsbury was founded and is run by Roland Rudd, a former Financial Times journalist who quit hackery to make fuller use of his skills of personal interaction, which he had previously honed as president of the Oxford Union. His business was a great success – business journalists in London liked having somebody from their own background who could explain issues in a common language, rather than the “I’ll get back to you” brigade. The clients in turn appreciated the access and influence.

So successful was he that he was able to sell Finsbury to global communications WPP for £50 million (Dh270m) a few years later, retaining executive control of the company via a lucrative earn-out package. Since then, he has gone from strength to strength and Finsbury was recently voted “most influential PR firm” in London’s Square Mile.

Role for Dubai as gas trading hub

A plan to import liquefied natural gas (LNG) from Qatar could do more for Dubai than just ease its electricity shortage. It could also help establish the emirate as an international LNG trading centre.

To advance that aim when the imports start two years from now, the Dubai Multi Commodities Centre (DMCC) is planning to develop a gas storage centre for the Gulf.

It could enable gas traders to take advantage of seasonal and regional trading opportunities by providing the basis for a futures market. A gas storage centre could act as the entrepot for traders to deliver physical gas and settle their futures markets positions when these contracts expire.

UAE client scraps bln dlr order with SKorean firm

South Korean construction firm Samsung C and T said Friday that a real estate developer in the United Arab Emirates has scrapped a 1.08 billion dollar order.

Samsung said Dubai-based Nakheel cancelled the deal to build apartments, shopping malls and other commercial structures by October 2013.

"The cancellation came via unilateral notification by the contractor," the firm, a unit of South Korea's biggest business group, said in a statement. It declined to give details.

DLA Piper Lays Off Eight Dubai Associates

DLA Piper has laid off eight associates in Dubai, equating to around 8 percent of the office's fee earners.

The firm blamed the cuts on reduced demand from clients, with the job losses affecting lawyers in the corporate, finance and projects practices.

Regional managing partner for the Middle East David Church said: "We have been working with our colleagues on a number of alternative solutions in order to minimize the total number of job losses, however we still need to realign our employee headcount in this market."

A Reprieve for Project in Vegas?

Australian billionaire and gambling magnate James Packer is weighing a stake in City Center, the troubled $8.6 billion Las Vegas development owned by MGM Mirage and Dubai World, according to a person familiar with the matter.

Mr. Packer, whose Melbourne-based gambling company, Crown Ltd., has casinos in Australia and China, is discussing the possibility of an investment in the project with Colony Capital LLC, a Los Angeles-based investment firm, the person said.

Colony and Crown "would step in and take over the funding requirements. The idea is to keep City Center going," said the person. MGM Mirage shares spiked 48% to $4.65 in 4 p.m. New York Stock Exchange composite trading on Friday.

GCC bankers under pressure over currency

Gulf Arab central bankers will face pressure at a meeting this week to specify an alternative timetable for rolling out a single currency as markets become increasingly sceptical about the project's viability.

The Gulf Cooperation Council (GCC) last month gave its first official acknowledgement that issuing common notes and coins will take longer than the 2010 target agreed on eight years ago.

However, as regional policymakers focus on the more pressing concern of shoring up their economies and banks against the global financial crisis, some analysts wonder if the project could be left to languish for many more years.

GCC to experience sharpest dip in capital flows


About a year ago the Gulf economies were concerned of dealing with extensive capital inflows.

Until mid-2008, capital was pouring in regional markets on the back of possible revaluation of GCC currencies and by means of portfolio investments that were directed to stock market and real estate investments. Cross-border bank lending also soared, and most importantly the price of oil was higher by historical standards. Now capital flows have reversed.

From its peak of nearly $1 trillion (Dh3.67 trillion) in 2007, net private capital flows to emerging economies (including GCC countries) are now projected to be just $110 billion in 2009, down from $411 billion in 2008. While the fall in capital flows will adversely affect the emerging countries in varying degree, according to the Institute for International Finance (IIF), the GCC region will experience the sharpest fall in capital flows (see Table).

Dubai World Cup



It is three hours before the start of the 2009 Dubai World Cup, the richest race meeting in the world (total prize money $21.5m (£14.2m)) and climax of the Arab emirate’s annual two-month racing carnival. At the Nad Al Sheba racetrack, thousands of spectators are already installed, and in the free public enclosures people are shedding their shoes and spreading carpets on any spare patch of terrace or grass.

Women in black abayas, some wearing veils that cover all but their eyes, dish out family picnics of curry and flatbread. Groups of men in white dishdashas squat down to pore over newspaper form sheets. Others, in rope-circled keffiyehs, stride up and down the concourse discussing the prospects of local trainers and riders against the invaders from the US and Britain, from Hong Kong and South Africa, from Australia and Japan.

Along the track at the 300m mark, the atmosphere among paying customers – at what is regarded as Dubai’s social event of the year – is a cross between Ascot and Cheltenham. In the “Irish village”, young male expats enjoy a Guinness or three, while in the “Bubble Lounge” girls in floaty mini-dresses and high heels drink champagne before teetering off for a photoshoot with Hello!-style magazine Ahlan! If, as economic commentators have suggested, Dubai’s bubble has burst, there is little sign of it here.