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Monday, 13 December 2010

FT.com / World - Contractors eye Qatar’s $86.5bn party

Gas-rich but conservative Qatar may be maligned by some as a johnny-come-lately to the football scene, but Doha’s successful bid to host the World Cup in 2022 has transformed the emirate into a promised land for contractors.

Official estimates put the planned spending on infrastructure, hotels and 12 eco-friendly stadiums at about $55bn. Shuaa Capital, a regional investment bank, estimates that the final cost of the month-long sporting festival could be as much as $86.5bn.

Much of the forecast expenditure is made up of existing long-term projects that will now be accelerated, but it will nonetheless provide a welcome fillip to the region’s construction sector.

MIDEAST STOCKS-Pipe makers lift Saudi; Qatar rally falters | Metals & Mining | Reuters

Pipe-making firms lifted the Saudi index on Monday as traders bet on likely infrastructure spending ahead of the kingdom's 2011 budget, while petrochemical shares rebounded following renewed oil price gains.

But most Middle East markets fell, with few new catalysts to spur investors to increase risk as the year-end nears.

Saudi Arabian Amiantit Co (2160.SE: Quote) climbed 5.3 percent and Arabian Pipe (2200.SE: Quote) jumped 10 percent.

Battle heating up between Dubai and Qatar financial centres | News | www.efinancialcareers-gulf.com

In another sign that there's something of a battle heating up to become the Gulf's preeminent financial centre, the DIFC has drastically slashed its operating fees at a time when Doha is looking to aggressively develop its financial sector.

From January next year the DIFC will implement a revised set of operational fees for companies base din the business park – charging AED160 a square foot, down from an estimated AED400 for the same space previously.

The DIFC's sky-high costs have seen it flounder this year. Earlier this year, it embarked on a second round of redundancies, as new registers slowed to a snails pace and existing firms were reluctant to expand their presence during such austere times.

PIC Seeking to Buy Cape Town's V&A Property as Growthpoint Says in Talks - Bloomberg

Public Investment Corp., which manages South African state pensions, is in talks to buy the Victoria & Alfred Waterfront in Cape Town, which was sold to Istithmar World PJSC four years ago for $1 billion.

“We have not secured a transaction,” Wayne van der Vent, the general manager of real-estate investment for the Pretoria- based PIC, said in a mobile-phone interview today. “We have always been involved in the V&A Waterfront discussions since day one, four years ago. We have never left those negotiations.”

Istithmar World in 2006 teamed up with London & Regional Properties and a group of local investors to buy South Africa’s most popular retail center in the country’s biggest property transaction. The PIC, Growthpoint Properties Ltd. and Absa Group Ltd. have together signed an agreement to buy the V&A for 10 billion rand ($1.5 billion), Johannesburg-based newspaper Mail & Guardian newspaper reported on Dec. 10.

Etisalat to Borrow $12 Billion for Zain; Plans $6 Billion Bond Refinancing - Bloomberg

Emirates Telecommunications Corp. plans to raise $12 billion of loans to fund its bid for a stake in Kuwait’s biggest phone operator, three people familiar with the situation said.

Etisalat, as the United Arab Emirates’ largest phone company is known, is seeking $6 billion in a one-year loan that can be extended by six months, said the people, who declined to be identified because terms are private. The debt will be refinanced with bond sales, following Etisalat’s creation of an issuance program in November for as much as $8 billion.

Etisalat said on Sept. 30 it offered about $12 billion for a 46 percent stake in Mobile Telecommunications Co., or Zain. The Abu Dhabi-based company also plans to raise $3 billion in a three-year loan, and another $3 billion for five years, the people said.

Growthpoint in talks that could affect shares | Reuters

South Africa's largest listed property group Growthpoint said on Monday it is in talks that could impact its shares, amid reports that it is part of a group that bought the nation's top tourist spot.

The Mail & Guardian newspaper, citing two people briefed on the deal, said on Friday Growthpoint was part of the group that bought Cape Town's V&A Waterfront in a 10 billion rand deal.

Absa and government pension fund, the Public Investment Corporation, were also cited as buyers of the real estate, sold by Britain-based London & Regional Properties and Dubai-based investment firm Dubai World.

Growthpoint declined to comment, with chief executive officer Norbert Sasse saying: "Nobody is in a position to comment at this stage.

V&A Waterfront is South Africa's biggest tourist attraction, situated in the heart of Cape Town under Table Mountain, with its shops and hotels that lure millions of visitors.

Castles in the sand | Features | The Lawyer

Saudi Arabia is investing heavily in infrastructure to cope with a booming population, but international firms looking to make a fast buck may have to temper their ambitions for a while yet,

The Riyadh skyline is dotted with cranes these days, as artists’ impressions of grand futuristic buildings become reality.

The building boom in Saudi Arabia is just part of a huge, government-led initiative to modernise and expand the kingdom’s infrastructure. Saudi Arabia’s ­demographics are skewed towards the young, with recent estimates putting the proportion of Saudis aged 14 or under at around 40 per cent of the 27 million-strong population.

MGM investor Dubai World changes leadership - Inside Gaming - ReviewJournal.com

The Persian Gulf emirate of Dubai changed leaders of its Dubai World investment arm, which owns nearly 10 percent of MGM Resorts International and half of the CityCenter development.

Egypt's growth seen at 7 pct next year: minister | Reuters

Egypt's finance minister said on Monday he expected growth to hit 7 percent next year and 8-8.5 percent the year after.

Finance Minister Youssef Boutros Ghali said the budget deficit goal for this year was 7.9 percent, but was likely to be 7.5 percent. He said he expected a budget deficit of 6.5 percent in the next year.

Egypt's financial year runs from July 1 to June 30.

FT.com - Etihad chief hits back over export financing feud

Western airlines are trying to divert attention from their structural failings by deepening a dispute over the funding advantages of fast-growing Middle Eastern carriers, said James Hogan, chief executive of Abu Dhabi’s Etihad Airways.

Mr Hogan’s remarks hit back at Willie Walsh, chief executive of British Airways, who says European export credit agencies are unfairly subsidising the growth of airlines such as Etihad and Emirates.

Mr Hogan argued that this was misleading, saying western airlines were falling behind because of agreements with unions, outdated infrastructure and hubs that were poorly located to tap Asia’s booming economies.

ConocoPhillips Says Qatar at `Top of List' of Places Where It May Invest - Bloomberg

ConocoPhillips sees Qatar as being “at the top of the list of countries” where the company is likely to invest, Chief Executive Officer James Mulva said.

ConocoPhillips “continues to look for opportunities” to cooperate with the Persian Gulf state in areas such as petrochemicals, oil and gas infrastructure, Mulva said in an e- mailed statement today.

The Houston-based company this year pulled out of two projects in the region, one in Saudi Arabia and the other in Abu Dhabi in the United Arab Emirates, and in 2007 withdrew from a U.A.E. refinery project.

FT.com - Dubai names new chair for troubled group

Dubai’s ruler Sheikh Mohammed bin Rashid al Maktoum has replaced Sultan bin Sulayem, the chairman of the troubled Dubai World conglomerate, with Sheikh Ahmad bin Saeed al Maktoum, the head of Emirates Airlines.

Mr Sulayem, a childhood friend of Sheikh Mohammed, was one of the last remaining lieutenants that presided over Dubai’s boom and turned it into the Middle East’s pre-eminent business hub, but incurred more than $100bn of debt.

Dubai World shook global markets when it announced a shock debt restructuring in November last year and the replacement of Mr Sulayem had long been predicted. He was removed as chairman of Nakheel, Dubai World’s flagship property developer, earlier this year.

Sheikh Ahmed replaces Bin Sulayem as chairman of Dubai World « ArabianMoney

Emirates Airline boss and chairman of the Dubai Supreme Fiscal Committee Sheikh Ahmed bin Saeed Al Maktoum has replaced long standing Dubai World chairman Sultan Ahmed bin Sulayem whose father once occupied the same position.

This is the biggest shake-up in the leadership of Dubai since the global financial crisis struck two years ago and comes as the emirate faces up to the challenge of refinancing more than $30 billion in maturing loans over the next two years.

Abu Dhabi signs oil and gas deal with Yemen

Mubadala Oil and Gas and the Yemen Company for Investments in Oil and Minerals (YICOM) have signed an agreement to co-operate on oil and gas exploration and production in Yemen.

The two state-owned companies signed the agreement yesterday in Sana'a, the capital of Yemen, in the presence of Amir al Aydarus, the country's oil and minerals minister. It covers information sharing and a plan to assess potential joint projects including the redevelopment and expansion of Yemeni fields plagued by declining oil and gas output.

"The Yemeni government has created an attractive investment environment in the upstream sector, and we believe Mubadala can use its ability to act as a powerful catalyst, working with YICOM, to open up new oil and gas opportunities in Yemen," said Suhail al Mazrouei, the deputy chief executive of Mubadala Oil and Gas.

Saudi budget to revert to surplus in 2010 - Emirates24|7

Strong oil prices will allow Saudi Arabia to bask again in a budget surplus this year despite a sharp increase in public expenditure as part of the country’s counter-crisis fiscal measures, according to local analysts.

One scenario projected the surplus at around SR44 billion but another more optimistic forecast put it at as high as SR164 billion.

The surplus is against a budgeted deficit of SR70 billion assumed by the world’s dominant oil power in its 2010 budget and compares with an actual shortfall of nearly SR87 billion in 2009, its first in seven years.

Investing in the myth of America’s Middle East oil “addiction” - markpmills - Energy Intelligence - Forbes

A chart of the planned increases in oil produc...

Image via Wikipedia

“America lacks leverage in the Middle East because we are addicted to oil. … When we import $28 billion a month in oil, we can’t say to the Saudis … [pound sand]” – so says Tom Friedman in a recent New York Times column. This common narrative frequently underpins energy policy proposals and investment macros. (I can’t count the number of times it shows up in energy tech business plans I’ve seen.) The problem is that the narrative doesn’t hold up to scrutiny. Nonetheless, there are directionally useful lessons if you unbundle this oft-repeated narrative, and two other closely related macros appearing in the same Friedman column.

First, regarding U.S. dependence on Saudi Arabia: about 5 percent of what we burn, and thus about 10 percent of what we import, comes from the Saudis. America’s number one (and rising) source of imported oil is Canada – over double the amount we get from Saudi Arabia. It’s hard to sustain a good rant about depending on Canada. (Although it is true that Canadians do rant about depending on the American entertainment industry, but that’s another story.) America could stop importing every drop of oil from the Saudis without much difficulty, by ramping up imports from elsewhere (or even ramping domestic production, if we really wanted to). It’s not the U.S. that is particularly dependent on the Saudis per se, but the world. To the extent that we make the world’s problems ours, well then so be it. But facts are facts.

QInvest debut sukuk opens door for more Qatari corporates - Arab News

Following the successful closure in October by Qatar Islamic Bank (QIB), the largest Islamic bank in Qatar, of its debut $750 million fixed-rate Wakala Sukuk issued on its behalf through a special purpose vehicle (SPV), QIB Sukuk Funding Limited, more Qatari corporates are coming to the market to raise funds through the issuance of Shariah-compliant commercial papers.

Qatari corporates have been slow in joining the global Sukuk origination market, especially in the Gulf Cooperation Council (GCC) market. It remains a moot point whether this was due to uncertainty relating to sukuk structures from a Shariah-compliance point of view, or whether the economic impact of the financial crisis has paved the way for raising funds from the market, or whether it is merely an exercise in benchmark issuances to set the price for a Qatari risk at least in the Islamic capital market space.

The fact that the QIB issuance was oversubscribed to the tune of $6 billion indicates huge latent demand for "A" rated sukuk. The QIB issuance, which was jointly lead arranged by QInvest, HSBC and Credit Suisse, is the first international issuance by QIB and the first sukuk by a Qatari financial institution. The three institutions were also the book runners, while the Islamic Development Bank and National Bank of Abu Dhabi were the co-managers.

Persian Gulf Banks' Debt Is Poised for Record Yearly Gain: Islamic Finance - Bloomberg

Islamic bonds issued by financial services companies in the Persian Gulf are heading for their best year on record on prospects of debt restructuring and demand for higher-yielding assets in emerging markets.

Shariah-compliant debt from financial institutions in the six-nation Gulf Cooperation Council returned 15.7 percent so far in 2010, HSBC/NASDAQ Dubai GCC Financial Services US Dollar Sukuk Index shows, the most since HSBC started tracking their performance in July 2005. DIFC Investments LLC’s floating-rate note maturing in June 2012 gained 29 percent in price terms to 82.8 cents on the dollar, according to Bloomberg data. The 3.172 percent sukuk due September 2014 sold by Islamic Development Bank, a Jeddah-based multilateral lender, returned 9.9 percent, prices provided by Royal Bank of Scotland Group Plc show.

State-owned Dubai World reached an agreement with creditors in September to alter terms on $24.9 billion of borrowings, reducing the risk the state-owned company will default and bolstering investor appetite for debt from the region. Economic growth in the GCC will accelerate to 4.5 percent this year and 5.9 percent in 2011, from 0.4 percent last year, the International Monetary Fund said in its October Regional Economic Outlook report.

Dubai Ruler Replaces Dubai World Managers With Emirates Head

Dubai named Sheikh Ahmed bin Saeed Al Maktoum, head of Emirates airline, as chairman of Dubai World a year after the company rocked global markets with plans to freeze loan payments.

Sheikh Ahmed replaces Sultan Ahmed bin Sulayem, who led Dubai World, one of the emirate's three main state-owned holding companies, when property unit Nakheel built palm-shaped islands off the emirate's coast. The company built up $40 billion in debt as he turned DP World Ltd. into the world's fourth-biggest port operator and bought stakes in companies including the U.S. casino group MGM Mirage.

Dubai roiled emerging market stocks last year after it announced that it would to seek a delay in repayments on $24.9 billion of loans as the global credit crunch hurt Dubai's property and trading businesses. The emirate and its state-owned companies ran up total debts of $112 billion, according to Barclays Plc estimates, pushing it to restructure some of its groups. Dubai World's more than 70 creditor banks agreed in October to new debt terms that include repayments of $4.4 billion over five years and another $10 billion in eight years.

gulfnews : Dubai can meet $18b debt due next year

The combined debt maturities of Government of Dubai and the government-related entities (GREs) for next year is estimated at $18 billion (Dh66.20 billion) and the emirate has ample options to meet its obligations on time, said economists of Standard Chartered on Sunday.

"We estimate the total debt maturities of sovereign and quasi-sovereign entities of Dubai at $18 billion. With the most challenging of the debt issues restructured, we expect the government and the GREs to manage the debt maturities through market funding sources," said Shady Shaher, an economist with Standard Chartered in Dubai.