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IMF upbeat on GCC’s prospects

admin — Fri, 23 Jul 2010 16:37:29 +0000

The International Monetary Fund (IMF) said on Wednesday that the GCC member states should plan to exit their high fiscal spending policies in light of their US dollar pegs and exposure to oil cycle volatility, as they have successfully weathered the financial crisis and are poised to continue to grow their economies despite ongoing economic uncertainty. See clip from RTTNews below.

clipped from www.rttnews.com

(RTTNews) - The six-member Gulf Cooperation Council should prepare an exit strategy from current high spending levels, to ensure long term fiscal sustainability, which would be implemented once conditions allow, the International Monetary Fund said Wednesday.

According to IMF, the impact of spillovers from financial developments in Dubai and Greece should continue to have a limited effect on the GCC nations and substantial foreign assets are available to mitigate the impact of new shocks. GCC states include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates.

Banks’ capital adequacy ratios remain strong and there are positive indications on profitability.

Further, the IMF said supported by strong fiscal spending and the global recovery, growth is projected to strengthen in 2010. Non-oil growth is estimated to strengthen to around 4.3%. In line with global recovery, oil output is projected to rebound by approximately 4.8% this year.

Look at Libya! From isolation, to the future

admin — Wed, 09 Jun 2010 12:32:29 +0000

In addition to the wealthy Gulf Cooperation Council member states, there are other compelling growth stories, places like Tripoli (Libya), that are soaking up investment capital, particularly in infrastructure projects — the focus of a Financial Times special, see clips below.

clipped from www.ft.com

At a time of global gloom when most governments are tightening their belts, Libya is a rare source of light. The north African oil exporter is splurging on massive building projects in an attempt to make up for 40 years of underinvestment that have left it with poor services and its infrastructure in tatters.

Tripoli, the once-shabby, low-rise capital, is being spruced up with new roads and elegant, modern towers along the waterfront, and cranes dot the cityscape – all part of a drive to build new office blocks, housing and hotels.

“In the development cycle, Libya is sort of where Abu Dhabi was 15 years ago, with the same goals and same initiatives to develop tourism and industry,” Mr Thompson says.

GCC poised for strong 2010 fiscal position

admin — Tue, 11 May 2010 01:41:37 +0000

Emirates Business 24|7 reports that strong crude oil prices, currently at around $75/bbl and exceeding Gulf Cooperation Council (GCC) forecasts, will greatly improve members’ fiscal and current accounts. It is debatable whether surpluses will reach the levels of the boom years of the recent past, but it seems certain the situation will be a solid improvement over 2009. Although Saudi Arabia is expected to run a small deficit, this is in fact due to its heavy capital investments, which TradeFlow21 has long recognized as critical to the Kingdom’s economic sustainability and at the same time offering an unprecedented opportunity for U.S. businesses. See clip from Emirates Business below and for more detailed information see hyperlink.

clipped from www.business24-7.ae

Record budget surplus likely for the bloc. Manageable deficit for some members due to public spending. (AFP)

Strong crude prices will bolster the fiscal position in Gulf oil producers in 2010, but some of them could still record a manageable budget deficit because of counter-crisis high public spending, according to analysts.

While the combined budgets of the six-nation Gulf Co-operation Council (GCC) would likely record a surplus, as was the case in the previous nine years, some of them could suffer a relatively small shortfall despite an upsurge in their hydrocarbon earnings, they said. The experts believe four GCC members – the UAE, Kuwait, Qatar and Oman – would record surpluses while the budgets of Saudi Arabia, the largest Arab economy, and Bahrain would remain in a deficit.

ICANN approval means big tech opportunity, more in Middle East

admin — Mon, 10 May 2010 02:17:39 +0000

On Friday, the Associated Press reported that ICANN, the California-based nonprofit body which oversees management and assignment of internet domains, approved Egypt, Saudi Arabia, and the United Arab Emirates as the first non-Latin domain names. While not readily apparent to the Western eye, make no mistake, this is big news for the Middle East and represents serious opportunity particularly in the e-commerce and relevant hardware spaces. Overall, the ICANN approval has profound implications for the region given the comparatively fewer number of people connected to the internet. See clip of AP report below.

clipped from www.google.com

Domain names in Arabic for Egypt, Saudi Arabia and the United Arab Emirates were added to the Internet’s master directories on Wednesday, following final approval last month by the Internet Corporation for Assigned Names and Numbers, or ICANN. It’s the first major change to the Internet domain name system since its creation in the 1980s.

“Introducing Arabic domain names is a milestone in Internet history,” Egyptian Communication and Information Technology Minister Tarek Kamel said in a statement. “This great step will open up new horizons for e-services in Egypt” as well as boosting the number of online users and enabling Internet service providers to enter new markets by “eliminating language barriers.”

ICANN, which cleared the way for non-Latin suffixes in October after years of debate, said the Mideast shows growth potential, with just a fifth of the populations online, on average.

Abu Dhabi’s entertainment arm takes 10% stake in UFC

admin — Wed, 13 Jan 2010 05:21:32 +0000

Zuffla LLC’s Ultimate Fighting Championship (UFC) is potentially a billion dollar-plus company, based on reported prior buyout offers of similar amounts. Abu Dhabi’s 10% stake thus, while undisclosed, could be upwards of $100 million. UFC is the largest grossing PPV franchise in history, having beaten its own record in 2009 at $349 million. With seemingly plenty of growth still possible in the U.S., the UFC and Abu Dhabi have their eyes set on international growth — and of course on some MMA action in Abu Dhabi. See the clip (and link) from Yahoo! Sports below for more details.

clipped from sports.yahoo.com

Zuffa LLC, the parent company of the Ultimate Fighting Championship, announced on Tuesday the completion of a deal in which a 10-percent interest in the company to the Abu Dhabi government-owned Flash Entertainment.

Flash Entertainment was formed two years ago by the Abu Dhabi government’s Executive Affairs Authority, which brings big-name entertainment and sporting events to the United Arab Emirates and the city, including big-name concerts, Formula 1 racing, and in recent weeks, a Rihanna New Year’s Eve concert and the Capitala World Tennis Championship.

Sheikh Tahnoon Bin Zayed Al Nahyan, who is affiliated with Flash Entertainment, is an MMA fanatic who promoted early world submission grappling championship events through the Abu Dhabi Combat Club. He was attending college in the U.S. and saw the first UFC event live in 1993.

Abu Dhabi extends $10B lifeline to Dubai

LN — Tue, 15 Dec 2009 17:46:04 +0000

The Dubai Exchange rallied 10.4 percent yesterday in the wake of a $10 billion credit line from Abu Dhabi, coagulating some of the recent hemorrhaging. A portion of the funds will reportedly be used to meet a $4.1 billion bond payment owed by Nakheel–a real estate subsidiary of Dubai World. Though seen as a positive step in restoring fiscal balance, the process, in the view of one market analyst, “is far from over.” (See Financial Times coverage and also read TF21 Managing Partner Lew Nescott’s take on the viability of Dubai.)

Qatar wasting no time deploying capital, linking people and goods

admin — Mon, 23 Nov 2009 03:58:01 +0000

A $25B joint venture was announced earlier today between Qatari Diar Real Estate Investment Co. and Deutsche Bahn AG, to build a railway system in the very liquid Gulf state of Qatar — the world’s largest producer of liquefied natural gas and the issuer of $7B of 4x oversubscribed bonds last week. Qatari Diar is a real estate company owned by the state’s sovereign wealth fund. It owns 51% of Qatar Railways Development Co., while Deutsche Bahn owns the remaining stake. The three phase project has an expected completion date of 2026, but Reuters reports that a major section will be done by 2022, when Qatar hopes to host the FIFA World Cup. The project includes passenger and freight trains, as well as connections to Saudi Arabia and Bahrain.

As Gulf states continue to spend tens (make that hundreds) of billions of dollars on infrastructure and other domestic projects, TradeFlow21 believes that it is a terrible mistake, for whatever reason, for American businesses and politicians to miss opportunities to do business and deepen ties with the Gulf. Qatar’s GDP is expected to grow over 9% this year and upwards of 35% next year, both clips by far the fastest among the GCC.

Growing sense of optimism in Dubai — FT

admin — Wed, 04 Nov 2009 16:00:36 +0000

clipped from www.ft.com

Signs of revival for Dubai property

Dubai property prices have risen for the first time since the market crashed last year , up 7 per cent in the third quarter as demand revived and lending conditions eased, consultancy Colliers International said.

The figures reflect a growing sense of optimism in Dubai, which was badly hit by the credit crunch as its vast debts combined with the puncturing of the real estate bubble a year ago.

However, Colliers warned that an upcoming surge in completed properties would drag down average prices next year, although not across the board.

“Well-planned mature developments in good locations, supported by facilities and community infrastructure, will receive relatively higher demand,” said Mr Albert.

Rothschild sees opportunity, to expand in Saudi Arabia and Qatar

admin — Sat, 10 Oct 2009 17:19:59 +0000

Hats off to Rothschild for its successful M&A advising in the Gulf; and it looks like the investment bank is far from finished. Rothschild recognizes Saudi Arabia (the Gulf’s largest economy and one that is poised for sustained solid growth) and Qatar (which is forecast to grow over 9% this year and a whopping 35%-plus next year thanks to an expansion of LNG capacity and exports) as the two places it most desires to grow its business. See clip from Reuters below.

clipped from www.reuters.com

Rothschild busiest in Mideast M&A

DUBAI (Reuters) – Rothschild ROT.UL has been the Middle East’s busiest advisor on mergers and acquisitions so far in 2009, data shows, underlining the growth potential for independent investment banks in the region.

“Our strategy is long-term driven, our view remains that we expect this to be one of the fastest-growing regions,” said Michael Helou, co-head of investment banking in the Middle East for Rothschild.

“The crisis didn’t change our plans, it’s been almost business as usual,” Helou said, adding that Qatar and Saudi Arabia are the regional markets where the investment bank sees more opportunities to expand its presence.

IIF forecasts solid growth for GCC in 2010

admin — Sat, 03 Oct 2009 14:55:58 +0000

The Institute of International Finance (IIF) is forecasting a return to solid growth for Gulf Cooperation Council (GCC) states in 2010. The IIF expects current account and fiscal surpluses to remain “sizable,” driven by a recovery in oil prices. The partners of TradeFlow21 believe that while oil of around $70/bbl is less than half of last year’s peak, its more than doubling since the trough, not to mention the sizable domestic investments made by the GCC, make the soundness of their economies and finances all the more laudable. In fact, according the IIF, the Gulf’s non-hydrocarbon sector, which employs 95% of the labor force, avoided a recession in 2009 (with a growth forecast of 2% this year and 4% next year).

IIF GDP forecasts for the GCC:

Qatar — ’09: 9.3% and ’10: 35.5% (fueled by LNG exports and capacity expansion)
Oman — ’09: 5.2% and ’10: 9.7%
Bahrain — ’09: 1.9% and ’10: 4.1%
Kuwait — ’09: -1.9% and ’10: 4.0%
Saudi Arabia – ’09: -1.2% and ’10: 3.5%
United Arab Emirates — ’09: -1.5% and ’10: 3.4%