GE, Bahrain: Shine the light on growth

June 11th, 2009 Posted in Industrial investment | No Comments »
clipped from finance.yahoo.com

GE inks $500M in power generation deals in Bahrain

The deal reflects the Fairfield, Connecticut-based conglomerate’s increased focus on the Middle East, where demand for electrical power is expanding rapidly as its population and infrastructure boom.
Under the terms of the deal, GE will provide equipment and long-term service to the Al Dur Independent Water and Power Project, which is slated to eventually produce 1,250 megawatts of power. That equals 30 percent of the country’s existing power output.
“The project is an example of the growing trend toward the integration of water and power production at a single site, especially in the Middle East where population and industrial growth rates exceed many other regions of the world,” Joseph Anis, GE Energy’s regional head, said in a statement.

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TF21 embraces President Obama’s unequivocal message in Cairo

June 4th, 2009 Posted in General, Industrial investment, Markets, News, Trade | No Comments »

In a commentary posted on the TradeFlow21 website in advance of President Obama’s speech, we wrote that necessity:

1)      demands the cessation of hostilities between Israel and its neighbors, including the creation of a sovereign Palestinian state as the only viable means of resolving the Palestinian question

2)      requires a U.S. policy that summarily rejects those in all quarters who use division and discord as a means of maintaining their “competitive advantage” in the region

3)      dictates that economic development, through investment and trade, be embraced as the preferred path to establishing a more stable, secure world for all

In his long-awaited speech on American-Muslim relations today in Cairo, President Obama responded, arguing that

1)      “America will not turn our backs on the legitimate Palestinian aspiration for dignity, opportunity and a state of their own”

2)      “as long as our relationship is defined by our differences, we will empower those who sow hatred rather than peace…conflict rather than cooperation…this cycle of suspicion and discord must end”

3)      “on economic development, we will create a new corps of business volunteers to partner with counterparts in Muslim-majority countries…I will host a summit on entrepreneurship this year to identify how we can deepen ties between business leaders, foundations and social entrepreneurs in the United States and Muslim communities around the world”

Thank you, Mr. President.  The partners of TradeFlow21 will join you in the cause to build a prosperous, secure Middle East through commerce and trade.  Let us now begin our work.

TradeFlow21 Commentary: Will President Obama finally turn the page in U.S. - Middle East relations?

June 3rd, 2009 Posted in General, Industrial investment, News, Trade | 1 Comment »

President Obama boarding Air Force One (Source: AFP)When President Barack Obama delivers his address tomorrow in Cairo to the wider Muslim world, he will do so at great political risk to himself and his administration.  But it is a risk that demonstrates the political courage of a first-term president who acts out of necessity, and not expediency.

Necessity demands the cessation of hostilities between Israel and its neighbors, including the creation of a sovereign Palestinian state as the only viable means of resolving the Palestinian question.

Necessity now requires a U.S. policy that summarily rejects those in all quarters who use division and discord as a means of maintaining their “competitive advantage” in the region.

Necessity dictates that economic development, through investment and trade, be embraced as the preferred path to establishing a more stable, secure world for all.

For over 60 years, the Middle East, which is comprised of over 20 nations spanning Northern Africa in the west to Southern Asia in the east, has been defined by conflict and oil. This is a new era. Real GDP non-oil growth in the region, which is projected to expand by more than 3.5 percent this year, suggests that Middle Eastern nations are actively pursuing commercial diversification as they seek to become full partners and competitors in the global economy. It also presents tremendous export opportunities for companies who want access to an emerging market of 500 million consumers.

The world is waiting for President Obama to signal a new turn in U.S. - Middle East relations where strategic alliances are built principally on commerce and trade. The partners of TradeFlow21 welcome such a change as both vital and necessary.

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What oil at $60 means

May 18th, 2009 Posted in Oil, Trade | No Comments »

oil tankerEarly last week, oil briefly traded above $60 for the first time since November. Hard to believe that last summer oil peaked at nearly $150/bbl, and subsequently collapsed to a multi-year low of $32/bbl in February. So while we’re way off last summer’s levels, we have witnessed a practical doubling in price in just a few months time. It goes without saying that consumers and producers are all impacted in some way by price, and even though comparatively lower prices are welcomed, the volatility and recent upside are sources of uncertainty.

The message from oil analysts and capital market participants is mixed. On one side, the picture is bleak, as unemployment and economic contraction loom, while so-called oil “fundamentals” are weak (weak demand and strong supply). These all suggest that the oil rally may have run its course for the time being. However, the bullish camp points to the now rhetorical “green shoots of recovery” theory, reports of stockpiling by China, short (seller) covering in futures markets,  and higher risk appetite among investors and traders — with all the aforementioned accompanied by a weakening dollar, which has an inverse relationship with oil and many other commodities.

Therefore, it truly is a mixed bag. For consumers and domestic U.S. manufacturers, an economic recovery at home and more broadly around the world has huge implications, but higher oil nibbles away at the purse and at margins, respectively. At the same time, as a weak dollar typically suggests a more favorable climate for U.S. exports, there is pressure on the input (or materials) side from rising commodities. Nevertheless, at current price levels, higher growth for higher oil is a bargain! For oil producers, higher oil is almost always welcome, although refining operations can cap the upside. Also, higher oil means more likelihood for investment and exploration, which eventually may lead to more revenues, and supply, but ultimately, perhaps somewhat of a damper on prices.

That being said, TradeFlow21 remains enthusiastic about the sustained growth prospects in the Middle East. In some cases, oil now accounts for a lower portion of GDP than in years past as Gulf economies seek economic diversification, but in terms of a source of foreign reserves, oil overwhelmingly remains the source of liquidity. In our opinion, the higher oil prices of late are not necessarily worrisome from the U.S. viewpoint. Reason being is that OPEC, and the Gulf producers in general, are sensitive. A recent guest on Bloomberg Radio made the point that the Gulf producers don’t want to be blamed for a prolonged global recession, and therefore, are willing to sacrifice near-term profits and even some budgetary shortfalls. Oil producing companies have a relatively low break-even price, perhaps as low as $30 or less, but oil producing nations that went on a spending spree in recent years tend to have budgets based on break-even oil in the $40-$60 range, with outliers such as Abu Dhabi in the low $30s and Bahrain in the $70s (Fitch Ratings). No doubt sovereign budgets have been, and will be further adjusted, but in order to sustain growth, significant amounts of money will continue to be spent within the region. For Connecticut manufacturers and exporters, the Gulf represents real opportunity (from everyday consumer products to building materials and beyond), and TradeFlow21 is here to help make the region more accessible to you.

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TradeFlow21 Hosts Inaugural Summit on Middle East Trade

May 5th, 2009 Posted in General | No Comments »

CT Lt. Gov. Fedele and Ambassador Donnelly at TF21 Apr. 24 2009

[Connecticut Lieutenant Governor Michael Fedele delivers opening remarks to summit
participants at the Graduate Club in New Haven on April 24th. Former United States
Ambassador, Shaun Donnelly, is seated at left
.]

On April 24, Connecticut business and industry leaders gathered in New Haven to hear former United States Ambassador and trade negotiator, Shaun Donnelly, reveal his 12-step program for successfully exporting to lucrative Middle East markets. (Ambassador Donnelly currently serves as Senior Director of International Business Policy at the National Association of Manufacturers in Washington, D.C.)

Spanning northern Africa in the west to southern Asia in the east, the greater Middle East represents a tremendous opportunity for Connecticut companies seeking access to a dynamic and emerging market of over 500 million consumers.

The Honorable Michael Fedele, Lieutenant Governor of Connecticut, opened the summit citing the state’s strong position as a leading exporter in key sectors such as transportation and machinery. The challenge, according to the Lieutenant Governor, is for Connecticut to continue expanding its export base, which grew by 11 percent last year.

Mr. Peter Gioia, vice president and economist at the Connecticut Business and Industry Association (CBIA), also released his 2009 Connecticut International Trade Survey at the summit.

In addition to providing value-added analysis and commentary on the Middle East market, TradeFlow21 is excited to announce the launch this June of Trade & Transactions—a monthly e-letter for business insiders and leaders who recognize that when exports rise, we all win.

See news coverage of the summit by the Hartford Courant.

CT releases ‘encouraging’ Q1 business filing data

April 21st, 2009 Posted in General | No Comments »

The Connecticut Secretary of the State’s office published first-quarter 2009 business filing data (business closings and start-ups) on Monday. The headline of the press release was “1st quarter of 2009 saw another record number of Connecticut businesses shut down.” Company shut downs totaled 3,477, with the pace picking up month-over-month into March (the figure was up 16% year-over-year). On the flip side, new start-ups totaled 6,941 (also increasing m-o-m into March), which is nearly double the number of companies that closed, but is still down 13% y-o-y and the lowest tally since 2001. At TradeFlow21, we unmistakably recognize the harsh economic climate. However, at the same time, we are very cognizant of the importance of entrepreneurial spirit (6,941 new businesses in Q1) and of the key role of small businesses: per the CT SOS press release, “Small businesses have created over 90% of all new jobs in Connecticut in the last 10 years and they are the backbone of our economy.”)

This Friday, TradeFlow21 is honored to host its first annual trade summit: Export Connecticut! Middle East Trade Summit. Thus far, approximately 40 Connecticut companies from a variety of industries have registered. We anticipate a lively and informative event: opening remarks by Connecticut Lieutenant Governor Michael Fedele, a keynote address by former U.S. Ambassador Shaun Donnelly (Sr. Director, National Assoc. of Manufacturers), the release of the state’s 2008 International Trade Survey by Peter Gioia, V.P. and Economist at CBIA, and a blue-ribbon round table panel discussion. We look forward to seeing your there. — TradeFlow21: Commerce | Prosperity | Security

Cessna parent shares fly, regain some altitude on report of ME deal

April 11th, 2009 Posted in Defense, SWF | No Comments »

Cessna aircraftOn Thursday, shares of Providence, Rhode Island-based Textron (NYSE: TXT) soared 49% to $13.56 on a report by a Kuwaiti newspaper that said investors from the UAE and Kuwait were eying a takeover at $21/share. Textron, the maker of Cessna Aircraft corporate jets and also a defense contractor (Bell Helicopters), traded as high as $65 last year, before spiraling down to as low as $3.50 last month.  The problem with Textron is two-fold, although neither issue is likely to ground Middle East investors. First, its financial arm has effectively turned Textron into another victim of the credit crisis — a JP Morgan analyst says it has a negative value. Second, there is no chance Bell Helicopter will find itself under non-US ownership given its defense ties. Textron - NYSE TXT - 1 year chartLong story short, the emergence of Middle East investors, as opposed to earlier rumors of a potential takeover by a US defense player, should be welcomed by stakeholders. Trading under $7.50/share before the rumors began, the stock has already doubled, and could basically triple at the reported takeout price. Textron Financial will likely be absorbed by the new investors, while Bell will be sold, leaving Cessna flying high. The alternatives of muddling through, or a takeout at a lower price (as would be the case in a domestic deal), are certainly less palatable.

Aeropostale opens in Dubai, the perfect platform

April 1st, 2009 Posted in JVs, Retail | No Comments »

Aeropostale logoAeropostale, the $1.8B (market cap; $1.6B annual sales) NY-headquartered teen retailer announced yesterday that it opened its first store in Dubai. In an earnings conference call last August when Aeropostale announced its plans to pursue Dubai, CEO Julian Geiger stated the company chose Dubai over many other options given its “growth and development,” calling it the “perfect platform” to launch the brand while learning and positioning for growth among the Asia region’s half a billion teenagers. In yesterday’s announcement, Mr. Geiger pretty much reiterated these points as Aeropostale plans to unveil more than 20 additional stores in the Middle East. While it is far from being the best of times, there are still opportunities, and the Middle East is clearly among the most promising. Hats off to Aeropostale. Also getting its foot in the door, Payless ShoeSource just announced store openings in Kuwait and Saudi Arabia.

Pay Less for Shoes? Stores Open in Kuwait, Saudi Arabia

March 31st, 2009 Posted in JVs, Retail | No Comments »

Payless ShoesourcePayless ShoeSource, the American retail footwear company, has opened stores in Kuwait and Saudi Arabia, reports Forbes. In a deal with M.H. Alshaya Co., which will support Payless’s expansion into the Middle East with construction and staffing, the company has achieved a “significant milestone” in its international strategy, said CEO Matthew Rubel. The new stores add to Payless ShoeSource’s existing 4,500 establishments in the Americas. 

Jordan + Sports = Touri$m!

March 27th, 2009 Posted in General | No Comments »

RunnersJordan has hosted five world sports events in the last four years and wants to build on their growing popularity as a host of international competition, the AFP reports. The upshot for the Middle East nation is a good chance of attracting lucrative tourism revenues during the global downturn and beyond. “It’s a great opportunity to showcase Jordan not only in terms of what we can do in providing a venue for world-class events but also for athletes, officials and fans to see the history and culture of our country,” said Prince Feisal. Jordan, he added, had been lucky in being able to host world triathlon, fencing and snooker events as well as a stage of the World Rally Championship over the last four years. This Saturday, Jordan will host the World Cross-Country Championships.

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