Google+ Followers

Friday, 14 January 2011

Ancien Regimes in the Middle East | gideon rachman's blog – FT.com

Tunisia is a small country – but right now it is anything but insignificant. The way in which its government is being rocked by street protests is being watched right across the Middle East. (The street protests in Tunis are on the front pages of the papers here in Abu Dhabi.) That is because events in Tunisia could serve as a model – for better or worse – for other larger Arab nations, with similar political dilemmas.

President Ben-Ali of Tunisia, who has now magnanimously agreed not to run for re-election in 2014, is seventy-four years old and has been in power for more than twenty years. He runs an autocratic, pro-western government, with a young population angered by high unemployment, corruption and police brutality. Rising food prices are also contributing to unrest.

It is all strangely reminiscent of Egypt, where President Hosni Mubarak is now 82-years-old – and has not yet announced whether he will run for re-election later this year. Will his attitude be affected by developments in Tunisia?

MGM Boosts First-Lien Note Offering, Cuts Term Loan


MGM Resorts International, the biggest casino owner on the Las Vegas Strip, boosted the size of its offering of senior secured notes to $1.5 billion from $1.1 billion while cutting the size of a bank loan, according to a person familiar with the transaction.

MGM, which plans to issue the debt through CityCenter Holdings LLC and CityCenter Finance Corp. as soon as today, may sell $900 million of five-year, first-lien notes instead of $500 million, said the person, who declined to be identified because terms aren't set. The company cut the size of a first-lien term loan to $500 million from $900 million, the person said.

The first-lien notes may yield about 7.75 percent, the person said. The offering will also include $600 million of six- year, second-lien securities that may pay 10.75 percent to 11 percent, the person said. The interest rate may increase by 75 basis points if the company chooses to make payments on the second-lien notes in the form of more debt, the person said.

FT Tilt - Russia makes top 10 risk list(Registration)


This week Russia was named among the 10 countries with the riskiest political and business environments in the world. Does it deserve to be grouped together with Pakistan and Somalia?
Risk analytics firm Maplecroft, creators of The Political Risk Atlas 2011, which assesses risk areas including conflict, terrorism, the rule of law, and the regulatory and business environment, say yes.
Terrorism is a growing problem, they say:
Russia’s increased risk profile reflects both the heightened activity of militant Islamist separatists in the Northern Caucasus and their ambition to strike targets elsewhere in the country. Russia has suffered a number of devastating terrorist attacks during 2010, including the March 2010 Moscow Metro bombing, which killed 40 people. Such attacks have raised Russia’s risk profile in the Terrorism Risk Index and Conflict and Political Violence Index.

So is Russia’s business environment:

The country’s poor performance is compounded by its ‘extreme risk’ ratings for its business environment, corporate governance and the endemic nature of corruption, which is prevalent throughout all tiers of government.
Challenges for companies operating in Russia also stem from an ineffective legal and regulatory system, which includes a lack of judicial independence from the government. This was seen most recently in the politicised case against jailed Yukos oil tycoon Mikhail Khodorkovsky, which most commentators dubbed a show trial.

The worst of 2010:

Political Risk Index 2011 (Dynamic) - Maplecroft

French, Qatari sovereign funds invest in Altis - Maktoob News

French chipmaker Altis has received around 50 million euros ($65.70 million) in investment from French and Qatari sovereign funds, newspaper La Tribune reported on Friday.

Altis -- formerly owned by IBM and Infineon - was bought in August by French government official Yazid Sabeg, who also owns a small-cap IT consultancy called CS Communication.

According to La Tribune, the FSI has invested 20 million euros while the Qatari Diar sovereign real estate fund has invested around 30 million.

FT.com - Abu Dhabi in $5.2bn Aldar rescue

The Abu Dhabi government is set to step in with $5.2bn of assistance for Aldar by buying assets and issuing bonds as the developer struggles to meet debt repayments amid a weakening real estate market in the capital of the United Arab Emirates.

Just over a year after extending a $10bn lifeline to Dubai’s government-owned developer Nakheel and its parent Dubai World, oil-rich Abu Dhabi has been forced to channel its wealth back into its own struggling property sector.

Abu Dhabi stepped in with a significant capital injection into its banks in 2009, but the rescue of Aldar is the first major public bail-out of a state-linked entity in the emirate.

Dubai using key option to battle financial crisis

While Western nations have been spending hundreds of billions of dollars, euros and pounds on bailing out the financial system, Dubai has appeared to follow a take-it-or-leave-it option with its financiers.

That is the view of Insead Professor of Entrepreneurship and Family Enterprise Stephen Mezias at the international business school's Abu Dhabi campus.

'Instead of being hounded by creditors and haunted by the looming threat of forced bankruptcy, those that owe billions in Dubai are being chased by investment bankers who want to help sell assets and restructure payments,' he said.

Dubai overall debt at least $129.3bn, Credit Suisse says - Politics & Economics - ArabianBusiness.com

Dubai and its state owned companies carry at least $129.3bn of debt, of which $50.2bn is owed by Dubai World, the company that completed a loan restructuring in September, Credit Suisse Group said.

The second largest debt, $28.9bn, is owed by the government itself, the bank said in a research report emailed on Thursday. Investment Corporation of Dubai and Dubai Holding, two other holding companies, as well as other government related firms, account for the remaining $50.2bn, it said.

The number “comprises publicly disclosed debt of $111.1bn and debt on which disclosure is limited,” London-based analysts Mohamad Hawa and Anton Rozanov said in the research report. “The debt burden could be much higher than our final numbers owing to the lack of full disclosure.”

Weekly Market Analysis (Week 3) — GCC Index Analysis , Weekly Index Review — GCC Market Analytics

The weekly market analysis pages have been updated for trading week 2 (January 8th - January 13th). Use the links below to view the individual market analysis pages:


The table below shows the market outlook based on each study.
Stock Market Outlooks: Dubai, Abu Dhabi, Saudi, Kuwait, Qatar, Bahrain, Muscat
Visit the links above to view the full analysis reports for all GCC markets.

Turkcel owner makes late $8bn bid for Zain stake - The National

A Turkish company has made a US$7.89 billion (Dh28.98bn) bid for a 29.9 per cent stake in the Kuwaiti telecommunications operator Zain, just days before Etisalat was due to sign an agreement to buy a majority stake in the company.

Etisalat's and Zain's shareholders have until tomorrow to sign a "definitive transaction" agreement under which the UAE company would buy 46 per cent of the Kuwaiti operator for 1.70 dinars a share.

The transaction would ultimately give Etisalat a 51 per cent controlling stake of the company worth 3.36bn Kuwaiti dinars (Dh43.68bn).

Aldar and Government reveal funding plans - The National

Aldar yesterday revealed a funding framework with the Abu Dhabi Government including the sale of properties and the issuance of a bond.

The company will sell to the Government Dh10.9 billion (US$2.96bn) of infrastructure assets on Yas Island, including the Ferrari World theme park, along with Dh5.5bn of residential units and land. It will also issue a Dh2.8bn convertible bond to Mubadala Development.

Ahmed Ali al Sayegh, the chairman of Aldar, said the financial framework would "strengthen our capital structure and provide us with a stable and sustainable platform from which we can continue to capture commercial opportunities to deliver value to shareholders."

Damas nears Dh3bn debt restructuring deal - The National

Damas International, the largest gold and jewellery retailer in the Middle East, says it is close to finalising a restructuring agreement on debt worth more than Dh3 billion (US$816.7 million).

The deal would allow the company to repay Dh1bn over six years and use the rest as working capital, said Anan Fakhreddin, the company's chief executive.

The company, based in Dubai, is days away from signing the deal ahead of a January 31 deadline, Mr Fakhreddin said.

gulfnews : Interview of the week: Egypt, Levant are focus markets, says CEO of Majid Al Futtaim Properties

The retail experience is one of the pillars that defines the Dubai landscape and one that the emirate's largest companies are exporting across the Middle East and North Africa.

One of the prime movers in this landscape is Majid Al Futtaim Properties, which aims to be the region's shopping mall specialist. MAF Properties honed its skills on malls such as Deira City Centre and Mall of the Emirates and, under the stewardship of chief executive Peter Walichnowski, has expanded to Bahrain, Oman, Egypt, Syria and Lebanon, among other nations.

Hotels and mixed-use developments form the other pillars on which MAF Properties' revenues rest, but malls remain the main driver of growth. The company says it welcomes more than 107 million customers a year at its 10 City Centre malls across the region. This is expected to see a quantum leap as it opens more.

gulfnews : World Bank bullish on Mena growth

  • Image Credit: Gulf News

Dubai: Developing economies in the Middle East and North Africa (Mena) region are expected to grow at 4.3 per cent this year, after witnessing a modest upturn in growth of around 3.3 per cent in 2010, a latest World Bank report said.

"Higher oil prices in the year benefited oil exporters, while rebound in parts of the euro area — and growth in high-income Gulf Cooperation Council (GCC) countries helped to support a revival in exports, remittances and tourism," according to the World Bank's half-yearly Global Economic Prospects 2011, released yesterday, a copy of which was obtained by Gulf News.

"After an advance of 3.3 per cent in 2010, the region is expected to enjoy stronger gains of 4.3 per cent and 4.4 per cent in 2011 and 2012 respectively, as domestic demand growth continues, export markets firm, and oil prices remain at high levels," it said.

gulfnews : Abu Dhabi rides to Aldar's rescue

The Abu Dhabi Government yesterday came to the rescue of Aldar Properties with a multi-billion-dirham support package to help recapitalise the emirate's biggest developer so it can continue with its projects.

A company spokesperson said, "This deal is consistent with an element of Aldar's business model under which the company has supported the long-term objectives of the emirate of Abu Dhabi by building and developing strategic assets and transferring them to the government upon completion."

Aldar yesterday announced a series of steps, including a Dh10.5 billion asset value impairment charge it said was "designed to solidify the company's position for long-term, sustainable growth".

Etisalat likely to miss deadline for concluding US$12 billion Zain deal - bi-me.com

Emirates Telecommunications Corp. will probably miss the deadline for a final accord on its US$12 billion offer for control of Zain because it doesn’t have adequate commitments from shareholders of the Kuwaiti company, five people involved in the talks said.

The bid by Abu Dhabi-based Emirates Telecom, or Etisalat, to buy about 46% of Zain, will expire unless enough shareholders of Kuwait’s largest phone operator enter into a definitive agreement by January 15. Etisalat has commitments from Zain investors with about 40% of the company, three of the people said, declining to be identified because the talks are confidential.

Etisalat may extend the offer deadline, although the company’s bid could unravel altogether if it doesn’t get enough support from Zain shareholders or Zain fails to find a buyer for its stake in a Saudi Arabian unit, one of the people said.

Should Egypt be the next Bric? | beyondbrics – FT.com

Many people assume that if the Brics had a fifth member, it would be South Africa. Even the Brics themselves seem to think so: last month they agreed to invite the country to one of their summits in China this year.

According to Spanish bank BBVA, however, Egypt would be a far better candidate for Bric status. Egypt is expected not only to grow faster than South Africa over the next 10 years, but to overtake it as Africa’s largest economy as soon as 2013.

According to BBVA, South Africa is set to expand at around 4 per cent a year between now and 2020 – similar to its growth rate over the past decade – accounting for 0.7 per cent of global demand over the period.