Mena social unrest effects uneven across GCC corporate: S&P | Alrroya

The effects of the recent social unrest and political upheaval in the Middle East and North Africa are uneven across the corporate and infrastructure sectors in the Gulf Cooperation Council states, said Standard & Poor's Ratings Services in a report published April 28, 2011, titled "Despite unrest GCC credit quality outlook in infrastructure is broadly stable and corporate prospects are mixed."

"Across the corporate spectrum, we anticipate generally stable credit quality for companies in the telecommunications and commodities sectors, whereas we foresee continued negative creditworthiness trends in real estate and construction," said Standard & Poor's credit analyst Tommy Trask, "and our overall outlook on the credit quality of GCC infrastructure companies and transactions is stable."

Of Standard & Poor's 29 public corporate and infrastructure ratings across the GCC, five are currently on CreditWatch with negative implications or carry a negative outlook, with the remainder on stable outlook. The real estate sector accounts for three negative outlooks: Emaar Properties PJSC (Emaar; BB/Negative/--), DIFC Investments LLC (DIFC; B+/Negative/B), and Jebel Ali Free Zone (FZE) (JAFZ; B/Negative/B). Although these three property companies are all headquartered in the Emirate of Dubai (not rated), Emaar and DIFC bear some exposure to markets currently undergoing social unrest and political transition, while JAFZ is exposed to risks related to its parent company Dubai World (not rated). We recently downgraded Bahraini sovereign wealth fund Bahrain Mumtalakat Holding Co (BBB/Watch Neg/--) and placed it along with one utility, Oman Power and Water Procurement Co SAOC (OPWP; A/Watch Neg/--), on CreditWatch negative following our similar respective actions on the sovereign ratings on the Kingdom of Bahrain (BBB/Watch Neg/--) and Sultanate of Oman (A/Watch Neg/--).