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Tuesday, 21 December 2010

2010: the year of IPOs and more | beyondbrics | News and views on emerging markets from the Financial Times –

Bored of using the same adjectives to describe the rise of emerging markets? Money-trackers Dealogic have provided some statistical shock-and-awe to back up those superlatives – publishing their reports on the year’s buy-outs, share sales and debt issues.

Click through headline to review the activity.

MIDEAST STOCKS-Saudi hits high, but budget response muted | Reuters

Saudi Arabia's index .TASI hit a new seven-month peak on Tuesday, but bluechips were little moved in a muted response to the kingdom's record budget.

Saudi plans to spend 580 billion riyals ($155 billion) in 2011 as it tries to create jobs for its fast-growing population.

'Saudi Arabia is still expanding its spending, focusing on education, healthcare and infrastructure and the budget seems to also be aimed at stimulating the private sector,' said Haissam Arabi, chief executive of Gulfmena Alternative Investments.

Shell, Qatar Sign $6 Billion Petrochemical Plant to be Built in Ras Laffan - Bloomberg

Royal Dutch Shell Plc, the largest investor in Qatar, and state-run Qatar Petroleum agreed to “jointly study” an estimated $6 billion petrochemicals project in the Persian Gulf nation.

The 1.5 million-metric-ton monoethylene glycol plant may be built by 2016 in the industrial city of Ras Laffan, Oil Minister Abdullah bin Hamad al-Attiyah said today at the signing ceremony in Doha, the capital. Other olefin derivatives would boost the plant’s output to more than 2 million tons of finished products, Shell said in a statement.

Qatar, holder of the world’s third-largest gas reserves, is investing in petrochemical, aluminum and fertilizer factories as it diversifies its economy away from exporting liquefied natural gas and crude oil. The emirate aims to increase annual petrochemicals production to at least 18 million tons by 2015- 16, al-Attiyah said.

Gulf Stocks: Al Khaliji, Etihad Etisalat, Saudi Arabian Mining - Bloomberg

The Dubai Financial Market General Index retreated for a second day, losing 0.4 percent to 1,625.98 at 1:21 p.m. in the emirate. Abu Dhabi’s measure declined 0.6 percent, while Qatar’s gauge gained 0.4 percent.

Gulf Investment, Saudi International, GE: Islamic Bond Alert - BusinessWeek

The following borrowers are expected to sell Islamic bonds, which use asset returns to pay investors to comply with the religion’s ban on interest.

Global sales of sukuk fell 24 percent to $15.3 billion so far this year from the same period in 2009, according to data compiled by Bloomberg. Issuance totaled $20.2 billion last year, up from $14.1 billion in 2008.

GULF INVESTMENT CORP.: The Kuwait-based financial institution will set up a 3.5 billion ringgit ($1.1 billion) Islamic fund-raising program, or sukuk, in Malaysia in January, Reuters reported, citing a person it didn’t identify.

(Added Dec. 20. News: {120644Z KK CN }).

$1.5bn asset deal good for Dubai, Abu Dhabi - Stocks -

A reported deal that would see Abu Dhabi buy up key Dubai financial assets, including Borse Dubai’s 20 percent stake in the London Stock Exchange, would be a step towards easing Dubai’s debt concerns, a top economist said on Monday.

The $1.5bn deal outlined in an unattributed report in the Sunday Times would help Dubai repay around $25bn of debt acquired before the global financial crash, said John Sfakianakis, chief economist at Banque Saudi Fransi

“This is a step towards the right direction in the sense that Dubai is trying to accumulate extra revenue – revenue needed for the year to come – in order to accommodate its debt obligation repayment needs,” Sfakianakis said in an interview with Arabian Business. / Middle East - Media groups channel their energies

The media industry has arguably been one of the slowest to recognise the potential of the Middle East’s youthful demographics, growing affluence and appetite for western brands. But that is changing.

Some media conglomerates, such as Rupert Murdoch’s News Corp, are starting to target the region’s 250m Arabic speakers for the first time, while others, such as Viacom, aim to expand operations established in recent years.

Viacom is mainly present through MTV Networks International, which operates youth-centric channels such as the eponymous MTV, Comedy Central and Nickelodeon.

Middle East investors spark an overseas surge

Middle East investors helped to spark a 40 per cent increase in commercial property transactions in the past year in Europe, Middle East and Africa (EMEA), says a Jones Lang LaSalle report.

Total investment across EMEA is likely to reach €100 billion (Dh484.43bn) this year, led by surges in activity in Germany and the Nordic countries, according to an analysis released yesterday by the property consultant.

Cross-border investment, a key indicator of international interest, accounted for 50 per cent of activity, fuelled in part by Middle East equity buyers targeting 'trophy assets' in Europe, says the report.

Qatar must commit to spreading its major asset around - The National

When the Spanish conquered South America and its rich mines in the 16th century, their noblemen built so many churches it was said they had discovered the magic formula for turning gold into stone.

Qatar has celebrated two conquests of its own this month. The first was its groundbreaking win of the right to hold the 2022 FIFA World Cup. The second was the achievement of 77 million tonnes per year of liquefied natural gas (LNG) capacity, after output increased by five times since 2003.

Qatar is now the world's largest exporter of LNG, which is simply gas chilled to minus 162°C so that it becomes a liquid and can be easily transported by ship. It is, of course, the wealth from Qatar's North Field, the world's largest gas accumulation, that will bankroll the US$65 billion (Dh238.74bn) of World Cup construction - carbon-neutral stadia with solar air conditioning, a new bridge to Bahrain, a rail and metro network and 140 new hotels.

Ahram Online - Saudi Arabia stimulates the economy by spending $154 billion in 2011

The kingdom plans to spend the reserves accumulated during the oil price boom to upgrade infrastructure

Saudi Arabia is to spend SR 580 billion ($154.7 billion) in 2011 and expects a deficit of 40 billion riyals, the finance ministry said in a statement on Monday.

The largest Arab economy and top Opec exporter said the 2011 budget will again focus on education, health and infrastructure projects.

Mubadala, GE JV to buy into Oman's United Power Company |

Oman-based utility United Power Company (MSM:UEC), or UPC, said in a statement on Monday that Mubadala GE Capital, a financing joint venture of Mubadala, the investment vehicle of Abu Dhabi's government, and US diversified group General Electric (NYSE: GE | PowerRating), will buy 16.41% in it. Mubadala GE Capital is buying the UPC preferred shares from National Trading Company, WJ Towell and Zubair Corporation LLC, in a deal expected to close on 31 December 2010. The value of the transaction was not disclosed. UPC's operations will not be affected by this deal, the company said. UPC has a capital of OMR34.869m (USD91m/EUR69m), Reuters said citing bourse data. Mubadala GE Capital is a 50/50 financing joint venture between GE and Mubadala launched in 2009. Country: , Oman Sector: Utilities Target: United Power Company SAOG Buyer: Mubadala GE Capital Vendor: Zubair Corporation LLC, WJ Towell, National Trading Company Type: Stakebuilding Status: Agreed

CORRECTED-UPDATE 2-Nasdaq OMX in big share buyback; stock soars | Reuters

Exchange operator Nasdaq OMX Group Inc (NDAQ.O) kicked its buyback plan into high gear with a deal to repurchase 11.5 percent of its outstanding shares from Borse Dubai for $497 million, sending its stock up 6 percent.

The repurchase of 22.8 million shares will be funded by a proposed $370 million bond sale, the U.S.-based company said on Thursday.

The news boosted Nasdaq OMX shares to their highest levels in nearly two years, while options traders turned very bullish on the company.

Dubai World emphasizes desire to improve finances - BusinessWeek

Dubai World's new chairman on Monday underscored the indebted state conglomerate's commitment to repaying its creditors as it retools its business.

Sheik Ahmed bin Saeed Al Maktoum made the comments during the first meeting of the company's new board, according to a statement from Dubai's media office. He was picked to lead the sprawling state conglomerate following a shakeup of the company's leadership last week.

"Sheik Ahmed emphasized adopting a strategy that aims at optimizing Dubai World's performance along with that of its related companies, and fortifying its financial position, which in turn will enable the company to meet its financial and contractual commitments," the statement said.

Persian Gulf Debt Sales in Malaysia Hit Record on Demand: Islamic Finance - Bloomberg

Persian Gulf borrowers are selling ringgit-denominated Islamic bonds at a record pace in Malaysia to raise funds for expansion and take advantage of demand in the world’s biggest market for shariah-compliant bonds.

Issuance surged to 1 billion ringgit ($318 million) this year, the most since 2008 when Gulf companies started tapping the Malaysian market, data compiled by Bloomberg show. Last year, 100 million-ringgit of debt was sold. Dubai’s government is “likely” to sell bonds next year and a Malaysian offering is a possibility, Abdulrahman Al Saleh, the director general of the emirate’s Department of Finance, said Dec. 14.

“More ringgit sukuk from Gulf issuers will mean having more liquidity in the market,” Zamri Shariff, the head of asset management at Asian Finance Bank Bhd., the Kuala Lumpur-based unit of Qatar Islamic Bank SAQ, said in an e-mail response to questions yesterday. “That absolutely widens our scope for investment.” - Chevron builds up steam in the Middle East

At OPEC’s 50th anniversary summit in October, Ali Al-Naimi, Saudi Arabia’s powerful oil minister, was at pains to denounce the idea that the era of easy oil – that is, cheap to extract oil – has passed.

“How can you say that easy oil is over, when we still have over 88bn [barrels] in the Ghawar field? That is more than many countries in the world,” said Mr Naimi, referring to the world’s largest oilfield.

Mr Naimi’s analysis does not preclude, however, his own country’s investment in efforts to tap heavier crudes and extend the lives of older fields. - Saudi trading links revived by US groups

US companies have won a series of high-profile deals in Saudi Arabia during the past six months, underlining the confident return of US business to the kingdom.

The revival of trading ties that degraded markedly in the wake of the September 11 attacks of 2001 is being strongly supported by the US administration, with Saudi Arabia and other Gulf states seen as a key element of President Barack Obama’s initiative to double US exports in five years.

Saudi Aramco, the world’s largest oil company, last week purchased $500m worth of generators and compressors from General Electric to expand its Shaybah oil and gas field. Last month, Maaden, the Saudi mining company, signed a $1.9bn deal with US Alcoa for phase one of a $10.8bn aluminium project.