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Friday, 2 May 2014

Mitsui and sovereign wealth funds of Qatar, Abu Dhabi and Oman keen to buy stake in Petronet - The Economic Times

Mitsui and sovereign wealth funds of Qatar, Abu Dhabi and Oman keen to buy stake in Petronet - The Economic Times:

"Japan's Mitsui and cash-rich sovereign wealth funds of Qatar, Abu Dhabi and Oman are keen to buy Asian Development Bank's 5.2 per cent stake in Petronet LNG LtdBSE 0.07 %, India's largest natural gas importer.

ADB had in 2011 decided to sell its 5.2 per cent stake in Petronet but could not go ahead as promoter PSUs like gas utility GAILBSE 0.19 % refused to waive off their first right of refusal.

However, with the Oil Ministry refusing permission to public sector oil companies to buy the stake on ground that such a move will alter the character of Petronet, the promoters have fallen in line and all of them including GAIL giving consent. "

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Gulf Labor calls on Abu Dhabi to pay off museum workers’ debts -

Gulf Labor calls on Abu Dhabi to pay off museum workers’ debts -

"An artists’ pressure group on Friday called on Abu Dhabi to give workers building the oil-rich emirate’s high-profile museums – which include the Guggenheim and the Louvre – a one-time fee of $2,000 to help them pay off recruitment fee debts as controversy grows over migrant labour rights in the Gulf.

Gulf Labor, a group of international artists campaigning for the protection of migrant labourers working on academic and cultural institutions in Abu Dhabi, said such payments “would help relieve workers of the immediate burden of debt . . . which underpins their extreme vulnerability”."

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Don’t cry for the Nabucco pipeline | The Great Debate

Don’t cry for the Nabucco pipeline | The Great Debate

"It is too late for regrets. With Europe worried that Moscow could cut off gas deliveries to Ukraine, which would trigger price volatility and supply risks throughout the continent, the failure of the Nabucco pipeline project stands out.

Created to carry Caspian gas into Europe by bypassing Ukraine, Nabucco would have given Europeans and Americans a much-needed sense of supply security — though the pipeline would have carried its capacity of 31 billion cubic meters of gas annually only near the end of this decade. Instead, Europeans are left scratching their heads and searching for alternative energy supplies.

Russia, meanwhile, is likely to remain Europe’s chief natural gas supplier through at least 2020, despite the anticipated growth of diversified gas shipments to Europe, including liquefied natural gas (LNG) from the vast U.S. shale-gas resources."

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EconoMonitor : EconoMonitor » Stabilizing Ukraine

EconoMonitor : EconoMonitor » Stabilizing Ukraine:

(Version in Русский)
Even before geopolitical tensions unleashed currency flight, bank deposit withdrawals and surging risk premiums, Ukraine faced serious challenges. The crisis there has been years in the making, reflecting deep structural problems that left it vulnerable to periodic funding shortfalls and near the bottom of transition country league tables. Thus, any program to tackle the immediate crisis in Ukraine must inevitably come to grips with this legacy.

figure one

Priorities in a difficult setting
Ukraine’s recently unveiled economic adjustment program, with financial support from the Fund and the wider international community, takes as given that output will contract and inflation will remain high in the initial phases of the program. This is not a choice. It is the best that can realistically be expected in exceedingly difficult circumstances.

figure two

The program consists of five main elements to stabilize the immediate situation and strengthen the prospects for growth in the medium to long term:

  • Exchange rate flexibility. The hryvina has been allowed to float—a radical departure after years of exchange rate rigidity, falling foreign exchange reserves, currency controls, and high devaluation expectations. A flexible exchange rate is crucial for Ukraine to restore competitiveness and support exports and growth, avoid a destabilizing loss of reserves, and provide a shock absorber for the economy. The central bank will henceforth focus on controlling inflation, initially by targeting the money supply and later by shifting to inflation targeting.

figure three

  • Banking stability. Recent events have shaken confidence in the system and prompted deposit withdrawals. The central bank will continue to provide liquidity to solvent banks, while working to ensure that banks are well capitalized. This will entail a series of measures to strengthen regulatory and supervisory oversight, facilitate the resolution of nonperforming loans, and––after proper diagnostics of balance sheets––recapitalize banks as needed.

figure four

  • Fiscal policy. Without measures, the combined deficit of the government and energy utility would have reached an impossible-to-finance 12% of GDP. So a substantial fiscal effort is required to buttress confidence in public finances. Even so, given the weak economy and the effect of the political turmoil on revenue, that planned effort will still imply a higher combined deficit in 2014 than last year, and the deficit will decline only gradually thereafter.

  • Energy policy. Given the government’s precarious financial situation, its capacity to supply energy to the population at some of the lowest prices on the continent has become untenable. The price increases for heating and gas are eye-catching—40%-55% in 2014, and a further 20-40% in each of the next three years. But because these price hikes start from a low level, are spread out over time, and include provisions to protect the most vulnerable 25-30% of the population, their impact is less stark than the headline figures suggest. Overall, they raise heating and gas expenditures moderately from 3-7% of household budgets to 5-11%, reduce the deficit of the energy utility by only 1% of GDP by 2016, and recover costs starting only in 2018.

figure five

  • Transparency and business environment. An important part of the reform effort is to finally come to grips with the lack of transparency that has allowed distortions and rigidities to survive. Thus, Ukraine has committed to diagnostics and actions covering, among other things, the anti-money laundering framework, procurement law, anti-corruption actions, the recovery of stolen assets, and tax administration.

A promising start
No one can predict how the political turmoil will play out or what new forces will be brought to bear on the situation. The risks are manifold, and from both outside (e.g., the conflict with Russia) and within (e.g., the reform effort yielding to entrenched interests). But if Ukraine is to stand any chance of coming through this economically, it will need to muster every last measure of political unity and determination to implement its ambitious economic program. The current government and leading candidates in the upcoming elections have indicated their support for key program objectives and policies, and major elements of the program have been implemented up front. This is a promising start to a still difficult and complex situation.
This piece is cross-posted from iMFdirect with permission.

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Ukraine energy sector: Big Oil swarms Ukraine and makes investments

Ukraine energy sector: Big Oil swarms Ukraine and makes investments:

"Simmering conflict with Russia has not stopped a number of U.S. and European energy giants from recently investing or exploring investments in Ukraine's fledgling energy sector, according to a former Ukraine government minister who plays a key role in negotiating energy deals in the region.

Yuriy Boyko, an ethnic Ukrainian and former energy minister under ousted President Viktor Yanukovich, told CNBC that he has met with senior executives of Chevron, ExxonMobil, Royal Dutch Shell and Halliburton about investments or potential investments in the country.


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Egypt's richest man on the country's outlook - Your Middle East

Egypt's richest man on the country's outlook - Your Middle East:

"Though Nassef Sawiris predicts Egypt’s turbulence will continue until the summer, he says there are sectors right now that are still attracting investors. 

What is your outlook on the situation in Egypt, and what does it mean for foreign direct investment?

Sawiris: I’m quite positive on Egypt. I think we’re going to have a few more months of turbulence until there is an election and we have a new president and a new parliament. But a timeline has been set for three to four months. I expect that by July all this will be accomplished. And then people will have an address to talk to and all that. So in the short term, these are the next milestones for Egypt. In general, I think the political situation will converge. Obviously there will be some negative implications for some of the court rulings that made the news. What people don’t understand is that, regrettably, the first round of court rulings in Egypt is almost immaterial. It’s such a junior court; it’s almost like a traffic court."

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Times of Oman | News :: Orpic inks $2.8b loan deal with consortium

Times of Oman | News :: Orpic inks $2.8b loan deal with consortium:

"Oman Oil Refineries and Petroleum Industries Company (Orpic) signed a $2.8 billion loan agreement with a consortium of 21 international and national financial institutions yesterday for its projects including the Sohar Refinery Improvement Project (SRIP), which will be 65 per cent debt financed.

The loan agreements were signed on behalf of Orpic by Dr Mohammed bin Hamad Al Rumhy, minister of oil and gas and chairman of Orpic, and Musab Abdullah Al Mahruqi, chief executive officer of Orpic. The agreements were also signed on behalf of Orpic shareholder by Nasser bin Khamis Al Jashmi, undersecretary of the Ministry of Finance and Mulham bin Basheer Al Jarf, deputy chief executive officer of Oman Oil Company.

"This is a significant moment for both Orpic and the nation on two counts. It demonstrates the considerable appetite there is for international investment in Oman's oil and gas sector, and at the same time a step further in maximising the added value of the Omani crude," Rumhy said."

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How to invest in equities - YouTube

How to invest in equities - YouTube: ""

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Abu Dhabi's Senaat shelves IPO plans - sources | Reuters

Abu Dhabi's Senaat shelves IPO plans - sources | Reuters:

"Abu Dhabi government-owned General Holding Corporation (Senaat) has shelved plans for a stock market debut, four sources aware of the matter said, as the emirate takes a cautious line on financial commitments in the wake of its bailout of Dubai.

Despite enjoying significant hydrocarbon wealth, the largest of the seven United Arab Emirates has been wary of its financial position since providing Dubai with a $20 billion bailout to avoid a full economic crisis at the end of the last decade.

That action prompted a widespread review of Abu Dhabi's economy and financial commitments, a process which has continued ever since, and while this has yielded institutional benefits - such as the setting up of a central debt management office - it has also stymied capital markets activity, such as bond issues from sovereign and state-linked entities."

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Trump buys Turnberry course from Leisurecorp |

Trump buys Turnberry course from Leisurecorp |

"Donald Trump expanded his golf empire with his biggest acquisition yet — Turnberry. Trump announced Tuesday that he has agreed to buy the picturesque links course and resort on the west coast of Scotland, which has hosted the British Open four times. The most recent was in 2009, when Stewart Cink won a playoff over 59-year-old Tom Watson. The most famous was in 1977, the “Duel in the Sun” that featured Watson defeating Jack Nicklaus.

“It is an honour and privilege to own one of golf’s greatest and most exciting properties,” Trump said.

Terms of the deal were not disclosed. The Independent in London reported that Trump paid Dubai-based Leisurecorp just over $63 million (Dh231.2 million, £37.5 million)."

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Jumeirah Group’s 2013 operating profit up 8% |

Jumeirah Group’s 2013 operating profit up 8% |

"Jumeirah Group, luxury hotel company and a member of Dubai Holding, saw operating profit and consolidated revenue grow by eight per cent last year over 2012, according to a statement on Thursday. It, however, did not disclose the actual numbers.

Revenue under management, meanwhile, was up 11 per cent.

Occupancy and average room rates across Jumeirah’s owned and leased portfolio was up five per cent, which led to a growth of 11 per cent in revenue per available room. Consolidated room revenue grew by 11 per cent."

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