Global's GCC Weekly Market Report - May 28, 2009

Qtel Establishes $5 Billion Bond Program on London Bourse

Qatar Telecom QSC said it established a $5 billion global medium-term note program on the London Stock Exchange to fund the company’s general corporate operations, including refinancing existing debt.

“The company is holding meetings with global fixed income investors to ascertain investor interest,” the telecom operator said in a statement to the Doha bourse today.

Fitch Ratings last week assigned an “A+” rating to the bond program, while Standard & Poor’s Ratings Services assigned it an “A-” rating.END

UAE cenbank says nothing can replace the dollar

The central bank chief for the United Arab Emirates said he saw weakness in the dollar as a "temporary situation" and expressed support for the greenback, saying nothing could replace it as a reserve currency.

"There is no other currency to replace the dollar, not the euro," Central Bank Governor Sultan Nasser al-Suweidi told reporters on Sunday. "It is the currency for investment."

The comments echo those made several days earlier when Suweidi said the UAE was not diversifying its reserves away from the dollar after the country's decision to drop plans to join a Gulf Arab currency union fanned speculation it could alter its dollar peg.

Saudi Billionaire With HSBC Stake Has Accounts Frozen

Saudi Arabia’s central bank ordered the country’s banks to freeze the accounts of Maan al-Sanea, the Saudi billionaire who owns a stake in HSBC Holdings Plc, people familiar with the instructions said.

The Saudi Arabian Monetary Agency sent circulars to the legal departments of Saudi-based banks on May 28 and May 30 telling the lenders to freeze the accounts, including credit cards, of al-Sanea, his wife and four family members, according to one person who read the documents. SAMA didn’t say why it took the action, according to the person, who declined to be identified because the information is confidential.

Al-Sanea, who is chairman of the Khobar-based Saad Group, also manages The International Banking Corp. B.S.C., a unit of Ahmad Hamad Algosaibi & Brothers Co., according to an Algosaibi official who spoke on condition of anonymity. Algosaibi said last week that TIBC’s creditors weren’t paid “pending a debt restructuring exercise.” The bank has $2.2 billion of short-and medium-term debt, according to a May 16 report by Capital Intelligence, a credit analysis and ratings company.

Global's Egypt Weekly Market Report - May 28, 2009 (PDF)

PIF eyes stake in mortgage lenders

The Public Investment Fund (PIF), the Saudi finance ministry's investment vehicle, plans to take stakes of up to 40 per cent in new mortgage lenders, industry sources said on Saturday.

PIF, which is already one of the biggest investors in the Saudi stock market, said in March that it plans to venture into mortgage financing in anticipation of a mortgage law expected to come into effect this year.

The new law could open up home ownership to more of the 25 million population in the most populous Gulf Arab country, less than a third of whom currently own property.

Global financial crisis speeding up process of structural shift in Dubai

The composition of Dubai's economy will undergo a structural shift over the next few years toward sustainable long-term sectors such as transportation, healthcare, education, tourism and financial services.

The global financial crisis has speeded up this process, Dr Omar Bin Sulaiman, Governor of the Dubai International Financial Centre (DIFC), told members of the Dubai Chamber of Commerce and Industry on Thursday.

"This shift in the relative importance of various sectors of the economy is, in fact, a central component of the Dubai Strategic Plan 2015, but it's happening more quickly than envisioned by the plan, largely due to the impact of the global crisis," said Bin Sulaiman during the Dubai Chamber's quarterly Business Breakfast, its second of 2009.

Saudi funds way ahead of Gulf peers

Saudi-focused funds dominate Zawya's top 10 best performing funds year to date. Nine out of the top ten funds are focused on the Saudi market as the Tadawul has galloped ahead of other Gulf markets, rising 23 per cent this year.

With oil rising 50 per cent this year, stocks such as Sabic (up 31 per cent), Sipchem (up 39 per cent) and Saudi Kayan (up $44 per cent) have led the way. No wonder Saudi Petrochemical Funds, managed by HSBC Saudi Arabia, has risen 46 per cent this year, making it the best performing fund in the region, tracked by Zawya.

"The performance of the HSBC Saudi Petrochemical Equity Opportunities Fund has improved over the past month due to improved performance in the Saudi petrochemical sector on the back of rising oil prices," says the fund's manager Khalid Al Judaie.

Demand for financial professionals increasing

Head hunters are reporting the first signs of hiring among banks and private equity firms in the GCC since the economic crisis hit the Gulf last autumn, although financial professionals are reportedly having to accept salaries up to 30 per cent lower than they may have commanded six months ago.

The Dubai-based recruitment firm IQ Selection, part of the global Premier Group, says inquiries from potential employers have increased by about 60 per cent in the past month.

“We’re seeing hiring happening mainly in the front office for private equity and investment banking capital markets,” said Jonathan Gould, a financial services consultant at the recruitment firm. “Before, the hiring market was a shut shop, with redundancies and rate cuts. Now, firms are coming to us with live vacancies and wanting us to supply them with talent.”

Competition to build UAE’s first nuclear reactors

“It’s going to be a very long summer,” says an executive of one of the companies short-listed for a contract to build the UAE’s first nuclear reactors.

The massive contract, due to be awarded on Sept 16, is described as one of the biggest opportunities in the global nuclear market, as it is likely to be the first in a series to build a fleet of reactors worth tens of billions of dollars over the next two decades.

A tight three-way race has emerged among consortiums of firms from four countries.

Iraq ex-trade minister arrested

Police on Saturday detained Iraq’s former trade minister in connection with graft allegations involving food rations, ordering a plane in which he was flying to Dubai to turn back, witnesses and officials said.

An Iraqi judge issued an arrest warrant for former Trade Minister Abdul Falah al-Sudany on Saturday, but he had already boarded a plane to Dubai, parliament’s anti-graft watchdog said.

A passenger travelling on the same plane as Mr Sudany said it was turned around about half an hour into the flight.