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Wednesday, 24 August 2011

Eurasia Review: The GCC And Kazakhstan: Security, Energy And Economics – Analysis

Outside of Central Asia, the GCC states are important to Kazakhstan as the country continues reaching out to escape being squeezed between its two large and popular neighbors, Russia and China. Kazakhstan’s bilateral ties with the GCC states are deepening in such economic sectors as agriculture and energy. For Kazakhstan’s relations with the countries of the Gulf are increasingly important and fit well into this balanced approach to foreign policy. Kazakhstan and the GCC states are continuing to develop robust economic and trade relations in the spheres of energy, trade, agro-investments, and commerce. Islamic financing banks and norms are also becoming more popular in Kazakhstan. These relations are further consolidated by good personal relations between the leaderships of both sides. Members of GCC royal families increasingly go to Kazakhstan to pursue hunting, particularly in the southern parts of the country. Kazakhstan is specifically seeking to attract GCC royals by apparently building exquisite hunting lodges for visitors from the Arabian Peninsula. It should not be overlooked that the tribal and traditional nature of the GCC states and Kazakhstan appear, at least on the surface, to be very similar, and this signals a trans-regional security prerogative. Significantly, the tribes on the Arabian Peninsula, and the Zhuz (clans) in Kazakhstan, share many attributes towards family, finance, and power. One should always remember that upon their independence, the Central Asian states looked towards the Arabian Peninsula for ways to emulate life and to develop similar state models.

Kazakhstan

Kazakhstan

Kazakhstan’s relationship with Saudi Arabia is probably the most important of any GCC state on the bilateral level. Kazakhstani officials and Saudi officials travel to each others’ countries frequently and a Saudi based company ‘Central Asia Investment’ with a collective investment fund of 50 million USD is operating in Kazakhstan and has already built several socio-economic and industrial projects including part of the Kazakhstani parliament, hospitals, and mosques. In 2011, Saudi Arabia and Kazakhstan signed an agreement for the avoidance of double taxation and prevention of tax evasion with respect to taxes on income and also began discussion on Saudi Arabia’s desire to import grain and other agricultural products from Kazakhstan as part of Riyadh’s food security plan.

Other GCC states, such as Qatar, developed relations with Kazakhstan early after the collapse of the Soviet Union in areas of energy as well as participation in Doha’s many cultural and socio-political discussion forums. In early 2011, Qatar expressed interest in the North-South railway link to the Arabian Gulf. The planned north–south railway line has two parts: (i) the Uzen–Bereket line (596.0 km) in the north (466 km through Turkmenistan from Bereket to the Kazakhstan border and 130 km through Kazakhstan from its border to Uzen) to be financed by the governments of Turkmenistan and Kazakhstan for the sections located in their territories; and (ii) the Bereket–Atrek–Gorgan line (338.5 km) in the south from Bereket (256.5 km through Turkmenistan and 82.0 km through Iran) The 620-mile railway line will initially be used by Kazakhstan and Turkmenistan to transport goods across Iranian territory to the Arabian Gulf ports and out to world markets. This is also the same route that Saudi Arabia and Kazakhstan discussed for agricultural support which is likely to be the same as Doha’s intent in terms of food security. However, it is notable that securing food security through Iranian territory from Central Asia to the GCC is fraught with potential blockades and trade disputes given the current regional environment. Kuwait is also pursuing relations with Kazakhstan in bilateral trade and economic activity including banking in order to improve roads, railways, ports and airports via the Kuwait Fund for Arab Economic Development (KFAED) and the Kuwait Investment Authority (KIA). Oman was one of the first GCC states to invest heavily in Kazakhstan’s emerging oil industry and was major partners in several projects via the Omani Oil Company (OOC). Muscat also financed a number of different infrastructure projects. Finally, the UAE is heavily involved in bilateral issues with Kazakhstan. Many Kazakhstani families who benefit from the UAE’s ambiance are purchasing property and part of a growing segment of the travel industry to the UAE’s seven emirates. Branches of Emirates Islamic Bank “Al-Hilal” were opened in the cities of Astana and Almaty in March 2010. The projects “Abu Dhabi Plaza” and “Aktau-city” are being built in Astana and on the banks of the Caspian Sea respectively, as well as the joint funds of direct investments of “Falah” for banking purposes. Wheat imports are also under discussion just as with Qatar and Saudi Arabia.


UAE: Up $700 mln in Libya assets could be released | Reuters

As much as $700 million in Libyan assets is held in the United Arab Emirates and could be released as soon as the United Nations gives approval, the UAE foreign minister said on Wednesday.

"I am not sure of about the amount of assets, it is in the range of $500 million to $700 million. The only way to unfreeze those assets is through a Security Council resolution," UAE Foreign Minister Sheikh Abdullah bin Zayed al-Nahyan told a news conference. "Definitely the UAE wants to see it as soon as possible and welcomes such a thought."

The minister said the Arab League would discuss whether to grant Libya's incoming government a seat at a meeting of foreign ministers in Cairo on Saturday. He will travel to the insurgent bastion Benghazi next week.

MENA stock markets close - August 24, 2011

ExchangeStatus IndexChange
TASI (Saudi Stock Market)
5979.30.99%
DFM (Dubai Financial Market)
1457.34-0.11%
ADX (Abudhabi Securities Exchange)
2582.130.18%
KSE (Kuwait Stock Exchange)
5781.90.25%
BSE (Bahrain Stock Exchange)
1261.72-0.25%
MSM (Muscat Securities Market)
5516.560.49%
QE (Qatar Exchange)
8109.24-0.18%
LSE (Beirut Stock Exchange)
1296.20.08%
EGX 30 (Egypt Exchange)
4664.610.71%
ASE (Amman Stock Exchange)
2027.730.24%
TUNINDEX (Tunisia Stock Exchange)
4476.940.59%
CB (Casablanca Stock Exchange)
11304.9-0.60%
PSE (Palestine Securities Exchange)
487.24-0.08%

Jobs and houses are key Saudi priorities - The National

High youth unemployment and a lack of affordable housing are the biggest challenges for Saudi Arabia, the IMF says. But the kingdom has the fiscal power to meet the social priorities.

"Over the last few decades, Saudi Arabia has achieved substantial gains in social development indicators which are now close to G20 averages," the executive board of the IMF wrote in a report released on Tuesday.

"Important challenges still remain, particularly the high level of youth unemployment for nationals and pressures in the housing market."

Rebels welcome oil partners from Qaddafi regime - The National

The Libyan rebels have been seeking to welcome back business partners of Muammar Qaddafi's regime, part of a strategy to restart oil production quickly.

The National Transitional Council, the rebel government, plans to honour old contracts and has held talks with all oil companies that were pumping in Libya before the conflict, a rebel leader said in Dubai late on Tuesday.

"Oil companies and contractors and anyone who has a stake in this country is welcome to come back," said Ahmed Jehani, the council's minister of infrastructure and reconstruction. Those companies would be instrumental in helping to lift international sanctions, he added.


Egypt Bad-Loan Levels Signal Lenders Defy Economic Slowdown: Arab Credit - Bloomberg

Egypt’s banks are withstanding the nation’s worst political crisis in three decades after the central bank eased rules on provisions and kept interest rates at a five-year low.

The National Bank of Egypt, the country’s biggest lender by assets, didn’t book any non-performing loans in the first half of this year, Chairman Tarek Amer said. The ratio of non- performing loans to gross loans at the country’s three biggest publicly traded lenders --Commercial International Bank Egypt SAE (COMI), National Societe Generale Bank and Credit Agricole Egypt SAE (CIEB) -- declined or remained unchanged in the second quarter, beating analyst forecasts, according to AlembicHC Securities and Naeem Holding.

“The increase in non-performing loans is less than we expected and the quality of the loan book is deteriorating less quickly than we anticipated,” Jaap Meijer, head of the bank team at Dubai-based AlembicHC, said in a telephone interview Aug. 21. “It’s pretty resilient. Probably the impact on the corporate clients is less than expected.”

Unrest hits Middle East bond sales - FT.com

Bond sales in the Middle East have declined the most in the world so far this year as political unrest in the region and global economic uncertainty halted issues.

The total value of bond sales in the region has dropped 30 per cent so far this year compared with the same period a year earlier, according to a Reuters report this month. That compares with an 8 per cent increase year-on-year of bond sales in the Bric countries of Brazil, Russia, India and China.

The unrest that swept the Middle East early this year badly rattled its bond markets. Qatari, Abu Dhabi and Dubai sovereign debt performed well as regional investors sought a haven, but sales slowed overall.


Property stocks drag Dubai down; Qatar large-caps fall - ArabianBusiness.com

Dubai's property stocks dragged down the index despite news from developer Nakheel on a sukuk issue that was expected to lift investor sentiment.

Dubai's Nakheel will issue the first tranche of a AED4.8bn ($1.31bn) Islamic bond to trade creditors on Thursday, its chairman said, as part of a complex debt restructuring underway since 2009.

Contractor Arabtec , one of Nakheel's trade creditors, weighed on the index with a 1.5 percent fall and Emaar Properties slipped 0.4 percent.

Economic reform required to heal Arab world - FT.com

Economic reforms are as important as constitutional and political reforms. However, the popular anger in the Arab world over corruption and high unemployment have not yet translated into credible changes of economic policies.

On the contrary, policymakers have reacted to unrest by expanding subsidies and increasing public sector employment.

But increased subsidies and creating jobs in a bloated government sector do not address the structural problems facing youth unemployment. If prospects of fundamental economic change and improved standards of living remain dim there will be a high risk of more protests in the months ahead.


UAE makes slow progress towards democracy - FT.com

The United Arab Emirates, one of the Middle East countries to avoid social unrest in recent months, is preparing for the upcoming elections of its Federal National Council, a government advisory body without legislative powers.

Despite increasing the number of people eligible to vote to 129,000 from fewer than 8,000, the number of candidates who have presented themselves was little changed from the previous election in 2006, to the disappointment of some analysts. Last week, 469 Emiratis were accepted as candidates for the September 24 election compared with 453 five years ago.

The UAE has boosted those eligible to vote to include more women and young people after pro-democracy protests rocked other countries in the region. However, the 40-member council with limited powers remains only half-elected, the other half being selected by the seven emirates’ rulers.

Nakheel payouts 'this week' - The National

Nakheel will begin a five-year restructuring plan today that includes the issuance of a Dh4.8 billion (US$1.3bn) Islamic bond to contractors, the Dubai property giant's chairman confirmed yesterday.

Ali Rashid Lootah was quoted as saying on the Dubai Media Office's official Twitter feed that Nakheel was going ahead with the plan and would issue the Islamic bond, or sukuk, this week. The sukuk shares would be released all at once, but full distribution to hundreds of Nakheel contractors could take between two and three months, he said. Deutsche Bank is acting as the lead arranger. The Islamic bond, or sukuk, is a central part of Nakheel's bid to settle unpaid dues to contractors after its business ran aground during Dubai's property slump.

Under a recapitalisation plan announced last March, all contractors with claims against the company were to get Dh500,000 cash payouts.

The Associated Press: Libyan rebels' Gulf allies poised for payday

When Libyan rebels first called out for international aid, the wealthy Gulf was quick to answer: Warplanes from Qatar and United Arab Emirates joined the NATO-led military coalition against Moammar Gadhafi and critical aid and diplomatic support were funneled to opposition fighters.

Now the rebels' Gulf allies could be quickly shifting from uprising backers to deep-pocket patrons of reconstruction in what would mark another step in the region's transformation from political bystander to front-line player.

Aref Ali Nayed, ambassador to UAE and spokesman for the rebel "stabilization team" currently working out of Dubai, said Tuesday that Gulf expertise would be key in areas such as construction and port operations.

Oman regulator sees merit in broker mergers - Maktoob News

Oman's regulator, Capital Market Authority, is encouraging consolidation of brokerages in the small non-OPEC producer and expects at least three to four initial public offerings next year, its executive president said.

"At CMA we are seriously considering... possible steps like encouraging the merging of the brokerage companies, addressing the issue of reducing trade commissions and observing and insisting (companies) follow a strict corporate governance code," CMA's Yahya al-Jabri told Reuters in a written response to questions.

The Omani market has more than 20 brokerages, some of which are divisions of banks such as Bank Muscat , National Bank of Oman , or Bank Dhofar . Like most other markets in the Gulf, slumping volumes and a sharp drop in market valuations have hampered the local capital markets.


UAE's Etisalat names Ahmad Julfar group CEO - Maktoob News

UAE telecoms operator Etisalat appointed Ahmad Abdulkarim Julfar to a newly-created group chief executive role, it said in a statement on Wednesday.

Julfar was most recently the chief operating officer at the Abu Dhabi-listed former monopoly and the move was part of the telco's new global expansion strategy, the company said.

Etisalat, which dropped plans to buy a controlling stake in Kuwait's Zain earlier this year, currently operates in 18 countries.

Chinese bank ICBC heads to UAE - The National

The world's biggest bank wants a high street presence in the Emirates to capitalise on growing trade between the UAE and China.

Industrial and Commercial Bank of China (ICBC) more than doubled its profits from the Middle East as more companies settled business deals using accounts in yuan. The Chinese currency has been offered as a means to settle transactions by the bank since March.

Now the bank, valued at US$240 billion (Dh881.5bn) by market capitalisation, wants to build a retail franchise in the Emirates. That would put it in direct competition with Standard Chartered and HSBC, said Shabbir Malik, a financial analyst at EFG-Hermes.

Let's implode the tower! - Las Vegas Political Buzz | Examiner.com

In a letter to Clark County Director of Development Services Ron Lynn,MGM detailed plans for the Harmon Towersat the City Center Complex in Las VegasNevada.

MGM and Dubai World executives handed their report to the Director last week stating their engineers agreed the best solution would be to implode the building. The HarmonTowerstands prominent on the Las Vegas Strip empty due to colossal building defects deeming it uninhabitable. Both companies feel the best way to address the problems with the complex would be to destroy it as only Las Vegascan by demolishing it.

Perini Construction Company should not be paid any monies due them according to MGM due to the massive building defects that render it useless. MGM still has outstanding debt of up to 200 million dollars and hope they will not have to pay any of the contractors still owed since they believe the building can not be repaired to a standard that the county would sign off on.