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Wednesday, 9 September 2009

Mega liquefied natural gas facility starts up in Qatar

Qatar Petroleum and Exxon Mobil Corporation has announced the completion and start-up of Qatargas 2 Train 5, one of the largest operating liquefied natural gas (LNG) production facilities in the world.

This follows the start-up of the Qatargas 2 Train 4 in the second quarter of 2009. Each is designed with the capacity to produce 7.8 million tons per year, approximately 50% larger than any other global liquefaction facility currently operating outside of Qatar.

"The start-up of Qatargas 2 Train 5 represents another technological milestone in our effort to increase global supplies of clean-burning natural gas,” said Neil Duffin, president of ExxonMobil Development Company.

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GCC mulls regional investment bank

Oil-rich Persian Gulf states are considering a plan to set up a regional investment bank as part of a move to establish a common market for the six nations, state-run Kuwait News Agency (KUNA) reported on Wednesday, citing the secretary general of the Gulf Cooperation Council (GCC).

The plan was discussed during a Tuesday meeting in Jeddah between Gulf finance ministers in a move to revitalise efforts to establish a tighter economic bloc, KUNA quotes Abdulaziz al-Attiyah as saying.

Attiyah also said that a GCC interconnection grid - which links Kuwait, Bahrain, Qatar and Saudi Arabia - will be officially launched in December before the region's rulers meet in Kuwait, KUNA said.

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Dubai ‘Not Worried’ About Maturing Debt, Ruler Says (Update1)

Dubai ruler Sheikh Mohammed Bin Rashid Al Maktoum said he is “not worried” about the emirate’s ability to repay at least $4.52 billion of debt this year, boosting property developer Nakheel’s bonds to a year-high.

“I assure you we are alright, the U.A.E. is alright, and we are not worried,” Sheikh Mohammed told reporters late yesterday at his Zabeel palace in Dubai, when asked whether the emirate would be able to repay the loans. Sheikh Mohammed is also the prime minister of the United Arab Emirates, a union of seven states of which Dubai is the second-biggest after Abu Dhabi.

The Dubai government must repay a $1 billion Islamic bond maturing in November, while state-owned real-estate developer Nakheel PJSC has a $3.52 billion Islamic bond falling due in December. The emirate borrowed $80 billion to finance its transformation into an international logistics, tourism and finance hub, and the seizure of global credit markets sparked concern about its ability to repay the loans.

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Emerging market telecom M&A

Emerging market telecom deals, it has been said, are like shopping in a souk. Negotiations are often presaged by share-ramping rumours, then marked by half-deliverable promises and only eventually, maybe, sealed. So too with Wednesday’s crop: a putative $14bn offer from a mysterious Indo-Malaysian consortium to buy a 46 per cent stake in Kuwaiti-based Zain, and Vivendi‘s €2bn bid for Brazilian broad band operator GVT.

The Zain deal is the most opaque. The putative buyers include a Malaysian billionaire, little-known telecoms company Vavasi, and a state-controlled Indian company – which presumably requires government approval before it can move. At least Zain’s sellers - the Kharafi Group, with some 20 per cent, and unspecified other minorities representing another 26 - are keen. And why not, given the price? At around 11 times forecast earnings before interest, tax, depreciation and amortisation, Zain is being valued at almost twice the multiple of low-growth European telecom companies. Corporate governance niceties will be swept aside: Zain’s other minorities not only forego a premium they also lose effective control. The Kuwait Investment Authrority, with a 25 per cent stake will have to look after itself.

Vivendi, looking over its shoulder at these shenanigans, can afford a wry smile. Having abandoned talks with Zain in July, it aims to buy into Brazil instead. The catalyst for its offer is, again, two major shareholders that want to sell. Still, Vivendi’s deal is conditional on a waiver of anti-takeover provisions. And, at 9 times forecast ebitda, it is offering a rich price.

Both deals show the heights telecom companies are prepared to scale to buy growth. That will up the pressure on Bharti Airtel to improve its offer for South Africa’s MTN, another blockbuster emerging markets telecoms deal that may happen. Or not.END

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US to prosecute bank over Iran links

Robert Morgenthau, Manhattan’s elderly district attorney, said on Tuesday he planned to take action within a month against a big financial institution over illicit links with Iran.

Mr Morgenthau also signalled that he was investigating Venezuelan banks for possible illegal ties with Tehran.

Speaking to the Financial Times, Mr Morgenthau, 90, said he was following up a prosecution of Lloyds TSB over the illegal transfer of $300m in Iranian cash with another case against a mainstream bank involving a larger sum of money.

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BNP Paribas may raise $300m for Gulf PE fund

French bank BNP Paribas may raise up to $300 million (Dh1.10 billion) for a private equity fund active in the Gulf Arab region to tap opportunities arising from the financial crisis.

BNP is looking to raise $150m in the first phase by mid-October and possibly a further $150m later, its regional Chief Executive, Jean-Christophe Durand, told reporters.

Private equity in the Middle East is expected to pick up again by the year end, as banks become more willing to lend.

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Moody's downgrades three Kuwaiti banks

Moody's Investors Service yesterday downgraded three Kuwaiti banks due to rising impairment charges and weakening credit conditions in the country over the past 12 months.

It downgraded bank financial strength rating (BFSR) of Commercial Bank of Kuwait (CBK) to C- from C and that of Al Ahli Bank of Kuwait (ABK) and Bank of Kuwait and the Middle East (BKME) to D+ from C-.

CBK's long-term global local currency (GLC) and long-term foreign currency deposit ratings were also downgraded to A1 from Aa3, respectively. The bank's short-term GLC and short-term foreign currency deposit ratings were affirmed at Prime-1. All ratings now carry a negative outlook.

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Dubai should take China’s property market medicine

It was a very Dubai moment, except that it happened in Shanghai. A few years back I was on a rooftop terrace in the heart of China’s commercial capital in the company of Sir Rod Eddington, then the chief executive of British Airways.

Rod, an affable host, was expounding on the dynamism of Shanghai’s business culture.

Beverage in hand, he swept his arm the length of the vista in front of us, taking in the Huangpu river and the eye-boggling vision of Pudong at night.

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Who will pay $14 billion for half of Zain? (Re-post)

The future of Zain, the Arab world's second-largest telco, has been under the spotlight for months now.

After weeks of rumours, it emerged yesterday that the Kharafi Group, a big Kuwaiti family company, has managed to amass 46 per cent of Zain's shares. It may not own them all directly, but it has them for sale. When you take out the KIA, a sovereign fund that owns 25 per cent, and Zain itself, which holds 10 per cent of the company in treasury shares, that means Kharafi have managed to rope up about 70 per cent of all the Zain shares in free float on the market.

That's pretty incredible in and of itself, especially when, as pointed out in The National today, at no point has the Kuwaiti stock market, Zain, or Kharafi actually made a disclosure about any of this. That the second-largest telco in the Arab world - and Kuwait's largest public company - can effectively be bought out without disclosure is a pretty amazing story.

Read here for investors: http://rupertbumfrey.blogspot.com/2009/09/malaysian-indian-group-inks-zain-stake.html

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A View From Cairo: The Case for Investing in Egypt (Re-post)

CAIRO, EGYPT - JUNE 2:  The sun sets behind mo...Image by Getty Images via Daylife

Crossing the Kasr el Nil Bridge that spans the Nile in central Cairo at eleven o’clock at night is like walking down 42nd Street in New York at rush hour, only more crowded. Cairo is the real city that never sleeps, and never more so than the current month of Ramadan, when Muslims refrain from eating, drinking, and smoking from dawn to dusk and then pass the nighttime hours eating, smoking the shisha water pipe, and relaxing with friends and family. The streets are thronged: families having picnics on tiny patches of grass beside roaring four-lane roads; older men in serious conversation, smoking and playing backgammon in sidewalk cafes; groups of adolescent boys roaming around looking for adventure; and courting couples sitting chastely on park benches or standing together on bridges, whispering to each other and watching the lights of Cairo reflected on the water.
It’s not easy to get work done during Ramadan. People who may have snatched a couple of hours of sleep after the pre-dawn sohour meal roll into the office late. Government workers get off at two in the afternoon, and in the private sector everyone is gone well before five, in order to make it home in Cairo’s fiendish traffic in time for the iftar meal to break the fast at sundown. In Egypt, a land of heavy smokers, nicotine deprivation makes people absent-minded and forgetful, unable to focus on the task at hand.

Without meaning to, I have found myself on working visits to the Middle East at Ramadan three years running: last year in Cairo and the year before in Ramallah, on the West Bank. I’ve been coming to the region for more than 20 years, and first started visiting Egypt about eight years ago. The changes during that short time have been amazing.


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Kuwait central bank appoints monitor for Investment Dar

Kuwait's central bank appointed a temporary supervisor to monitor debt restructuring and compilation of financial results at Islamic firm Investment Dar, the state news agency said on Monday.

The decision to appoint a monitor was due to a request from a committee of lenders to Investment Dar for central bank intervention to ensure transparency of the firm's restructuring process and financial results, according to a statement.

Dar, which owns half of British luxury carmaker Aston Martin, has said it may sell some assets to meet its obligations as it seeks to restructure its debt after saying it was seeking to borrow up to US$1 billion to refinance debt.

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UAE denies $40 bln nuclear contract award imminent

The United Arab Emirates denied on Tuesday that it was days away from awarding the largest ever energy contract in the Middle East for the development of a nuclear power plant.

The denial came after industry sources told Reuters that the UAE was on the verge of naming a winner for the contract to build at least four reactors, which consultancy Eurasia Group estimates may cost as much as $40 billion.

A government official familiar with the negotiations said "the UAE is not days away from awarding this contract. The process is still ongoing."END

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Missing funds mystery stuns Shia community

The leisurely chit-chat over sweet tea that usually follows the iftar , the breaking of the fast every evening during the Muslim holy month of Ramadan, has been replaced by heated discussions at the home of the mayor of Toura, a hilltop village in south Lebanon.

The topic of conversation is the spectacular bankruptcy and detention of a prominent businessman from the area, who is close to Hizbollah, the powerful Shia militant movement.

Salah Ezzedine, who has been dubbed "the Lebanese Madoff" by the country's media after Bernard Madoff, the convicted US fraudster, may have lost hundreds of millions of dollars of his investors' money. Like countless others among the Shia Muslim community in Lebanon and in the Gulf, many people in Toura have lost their life savings.

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Malaysian-Indian group inks Zain stake

Leading investors in Kuwait's Zain telecom signed an agreement with a Malaysian-Indian consortium on Tuesday for the sale of a 46 percent stake in Kuwait's largest mobile phone company.

The consortium consists of Malaysia's al-Bukhari Group and India's Bharat Sanchar Nigam Ltd., India's largest communications service provider, Mahanagar Telephone Nigam and Vavasi Group.

Bader al-Khorafi, a top executive of Kuwait's Al-Khorafi Group, the largest private shareholder in Zain, told a press conference late Tuesday that the sale would be carried out within four months.

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Dubai to Be More Careful In Wake Of Crisis, Ruler Says

Sheikh Mohammed bin Rashid Al Maktoum, Prime M...Image via Wikipedia

Dubai will consider small changes to its development strategy and be more careful in the future as a result of the financial crisis, the ruler of the emirate said on Tuesday.

Ruler Sheikh Mohammed bin Rashid al-Maktoum said the global crisis had yet to run its course but that financial headwinds were easing on the cash-strapped state and that Dubai was sound.

"I don't think we made any mistakes," he told reporters at a briefing. "Our strategy will be really the same but things will change a little bit because of this crisis and we will be more careful now."

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