This document is a weekly newsletter covering markets, macroeconomic news, government regulations, sector news, and company news for the MENA region for the week of July 10-16, 2009. Some of the key highlights include Saudi Arabia emerging as a major medical tourism destination, declines in non-petroleum exports and crude oil imports for several countries, falls in property and material prices in the UAE, and various company deals and earnings announcements across the region.

1. Issue No. 1.50
MENA WEEKLY NEWS
Week of July 10, 2009 – July 16, 2009
MENA MARKETS
For additional Saudi Arabia Kuwait UAE Egypt Oman Jordan
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contact (2.3%) (3.8%) 6.1% 0.8% 3.1% 3.4%
ICE Brent Crude 63.75
MACRO ECONOMIC NEWS
Samir Tiwari Saudi Arabia
VP – Sales & Marketing ▲ Saudi Arabia is fast emerging as the high – growth market for USD 60.0 billion global medical tourism industry offering
+912261567304 specialized healthcare services, according to a leading hospitality group in the Kingdom.
stiwari@tresvista.com
▲ Saudi authorities have indicated that 35.0% of the USD 1.8 billion Mecca monorail project will be completed in time for the
2009 Hajj pilgrimage.
1. Macro Economic
News Kuwait
2. Government ▲ National Bank of Kuwait expected a fiscal surplus for FY 2009 – 10 in the range of KWD 4.2 to KWD 7.3 billion, provided
Regulations that oil prices averaged USD 63.00 to 71.00 per barrel.
3. Sector News - The Kuwait Trade Union Federation Chairman issued a warning against the consequences that may occur as a result of the
4. Company News private sector dismissing Kuwaiti employees. The formation of a committee in order to study the issue and develop solutions
5. Mergers & was a step on the right direction.
Acquisitions
6. Liquidity / Capital UAE
Raising
▲ According to the Governor of the UAE Central Bank, the bank may buy a part of Government of Dubai’s second tranche of
five – year USD 20.0 billion bond programme. In February 2009, the central bank fully subscribed to the first tranche of USD
10.0 billion bond issued by the Dubai Department of Finance at a rate of 4.0% per annum.
Market Buzz…
▼ The UAE unemployment rate increased to ~4.0% in 2008 from 3.5% in 2007 and is expected to record another small rise in
2009 because of a slowdown in the economy. The figures by the Ministry of Economy showed the country's population is
projected to maintain its high growth in 2009, rising by 6.3% to 5.1 million from 4.8 million at the end of 2008.
▼ According to official US figures, a sharp decline in crude prices allied with output cuts to reduce the UAE's oil export revenues
by nearly USD 40.0 billion (AED 146.8 billion) in H1 2009 while Opec lost a whopping USD 415.0 billion. From nearly USD
61.0 billion in H1 2008, the UAE's oil export income plunged to about USD 21.0 billion in H1 2009.
- The UAE imported more than USD 16.0 billion (AED 58.8 billion) worth of goods and services from its main economic partner
India in 11 months to become the world's second – largest market for the South Asian giant. The UAE's exports to India were
… Arab equity investors
also close to USD 17.0 billion between April 2008 and February 2009, emerging as the second – largest exporter to that market
entered the first week of
after Saudi Arabia. The increase boosted the share of the UAE's imports from India to a record 10.8% of the South Asian
July 2009 less wealthy
country's total exports of nearly USD 153.0 billion during April 2008 – February 2009.
by more than USD 22.0
billion (AED 83.0 Egypt
billion) as an
improvement in oil ▼ The Central Bank of Egypt stated that its net foreign exchange reserves went down by USD 3.4 billion or 9.7% to USD 31.3
prices last month failed billion at the end of June. The net value of foreign assets at the local banks has dropped also to USD 10.9 billion, down by
to impress and markets 20.2% in the year ending in June.
awaited quarterly results Oman
by listed firms…
▲ The Transport and Communication Ministry has awarded the local Desert Line Projects, an OMR 23.0 million (USD 59.4
million) contract to build the road between Argoutt and Sorfait in the Dhofar governorate near the Yemeni border in the
south of the Sultanate.
Jordan
▲ The trade deficit registered during the first five months of 2009 narrowed by 32.2%, reaching JOD 1,878.4 million compared
with the same period of 2008.
Bahrain
▲ The volume of Bahraini investments in Egypt has topped USD 500.0 million. Bahrain's presence in the Egyptian markets will
…A report issued by be boosted further with new projects worth USD 100.0 million in the pipeline.
IDC showed that IT
The official rate of unemployment remained stable last month standing at 3.8%. According to June's updated figures, 5,508
spending in the GCC
Bahrainis are jobless out of a national workforce of 145,000.
countries is forecast at
USD 12.2 billion in SECTOR NEWS
2009, a decrease of Saudi Arabia
5.8% compared to USD
▼ The non – petroleum exports of the Kingdom of Saudi Arabia declined during Q1 2009, compared to the same period in 2008,
12.9 billion in 2008…
by 21.0%. The exports dropped from SAR 30.1 billion in 2008 to SAR 23.7 billion, according to a latest report issued by the
Central Department of Statistics and Information.
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2. Issue No. 1.50
MENA WEEKLY NEWS
Week of July 10, 2009 – July 16, 2009
▼ The international oil cartel, OPEC, expects demand for crude oil produced by its member states to fall by 2.3 million bpd in
…International Air 2009.
Charter (IAC), one of
the world's largest Kuwait
independent private jet ▲ The Kuwait Stock Exchange (KSE) issued an administrative decision on following up the settlement of trading obligations.
charter brokers, is The decision, which consists of nine legislative items aiming to tackle all the aspects of settlements, is chiefly meant to prop up
consolidating its stability at the stock market and to regulate its affairs.
network in the Middle
▲ Kuwait Investment Authority or KIA prepared a draft plan to inject more liquidity to support the local bourse and local
East as it predicts the
regional market will banks. KIA, the country' sovereign wealth fund, is awaiting the approval of the government's development program and then
expand 15.0% to 20.0% it will start implementing its own plan keeping it in line with the government's program.
this year. This growth
UAE
will be driven strongly
by the increasing use of ▲ Prices of building materials have fallen by 61.3% in May and June, according to Statistics Centre Abu Dhabi (SCAD).
charter jets by the ▲ Business Monitor International (BMI) in its UAE Infrastructure Report Q3 2009 has revised the real growth value for the
region's wealthy who UAE infrastructure industry upwards to 6.8% for 2009 against its original 0.9%. Industry value is expected to reach AED 86.7
favor it over billion. A similar level of growth is expected for 2010, with value climbing up to AED 95.9 billion.
commercial airline
▼ According property consulting firm, Asteco, people locating to Abu Dhabi are now looking for apartments at 50.0% lower rents
services…
than current levels. There is a pent – up demand for more affordable homes as people locating to Abu Dhabi are looking for
apartments at 50.0% lower rents than current market levels.
▼ Land prices and rents for residential and commercial units in new developments outside the capital have fallen by up to 40.0%
since the start of the year. The drop has been seen in areas such as Khalifa City A, Khalifa City B and Mohammed bin Zayed
City. Rents are likely to decline by at least a further 10.0% over the next two months due to an over – supply of villas.
▼ Average rents for apartments in Dubai declined by 16.0% to 26.0% in Q2 2009 compared to Q1 2009, while office rents fell on
an average by 20.0% during the same period. Studios saw the maximum decline of 26.0% with average rentals coming down to
AED 45,500.0 from AED 61,500.0 in Q1 2009.
Oman
- The real estate business in Oman touched OMR 131.9 million in June 2009 while the government collected total transaction
fee of OMR 3.0 million during the month.
Jordan
▲ Jordan’s imports of crude oil during the first five months of 2009 dropped by 64.7% to stand at JOD 312.0 million compared
to the same period in 2008.
▼ Despite a two week downward trend in oil prices on international markets, the Jordanian government raised the prices of fuel
derivatives by increments ranging between 2.3% and 6.6%.
COMPANY NEWS
Saudi Arabia
…Moody's Investors ▲ Saudi Basic Industries Corp. received official approval from China's National Development and Reform Commission to
Service said the sector participate with China Petroleum and Chemical Corp. in a USD 3.0 billion industrial complex currently under construction
outlook for almost all in China's Tianjin city.
Residential Mortgage – ▲ Aramco has awarded USD 745.0 million engineering, procurement and construction deal to Petro Steel to build a tank farm
Backed Securities for its 400,000.0 bpd Jubail refinery on the Kingdom's Gulf coast.
(RMBS), Commercial
▲ A consortium led by Al Inma Bank will provide a USD 2.5 billion financing for the Rabigh power plant being built by Saudi
Mortgage – Backed
Electricity Co.
Securities (CMBS) and
Asset – Backed ▲ Saudi Electricity Company signed a 15 – year, SAR 2.6 billion loan agreement with the Public Investment Fund to finance
Securities (ABS) its newly established power plants in Riyadh.
structured finance asset ▲ Banks have begun to receive invitations to commit financing to the USD 9.6 billion Jubail Refinery, with documentation
classes in Europe, the indicating that the project will require debt financing of over USD 6.0 billion.
Middle East, and Africa
▲ US – based consultant Aecom has been appointed as the project manager for the USD 8.0 billion Knowledge Economic City
remains negative. The
at Medina in Saudi Arabia.
rating agency's
expectation is that Kuwait
further quarters of GDP
contraction and rises in ▲ Agility, along with DynCorp International and CH2M Hill, was granted a USD 6.5 billion U.S. army contract for the support
unemployment in all the of the latter's operations in Afghanistan.
countries covered in this ▲ Kuwait’s Al – Themar International Holding Co won central bank approval to buy 20.0% in Islamic lender Boubyan Bank.
study lie ahead and that Securities Group Co said it also had won approval to buy ~10.0% in Boubyan Bank.
asset performance will ▲ Australia's Lihir Gold Ltd. awarded Agility a freight services contract for its Lihir Gold Mine upgrade. The contract, which is
continue to react to expected to be in excess of 50,000 freight tons, will be worth up to USD 21.0 million.
macroeconomic trends
with a delay…
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3. Issue No. 1.50
MENA WEEKLY NEWS
Week of July 10, 2009 – July 16, 2009
UAE
…According to credit ▲ Economic Zones World, through its flagship entity Jafza, and Dubai Aviation City Corporation are entering into a
rating agency Fitch collaboration that could result in the doubling of Dubai's top notch industrial and logistics infrastructure. The agreement sets
Ratings, the credit out to create ‘The Dubai Logistics Corridor’ a transport and logistics corridor, linking sea, land and air, bringing together for the
outlook for GCC first time in the Middle East all of the components needed to create multi – modal logistics platform.
property and
construction issuers ▼ Tameer Holding, a Dubai – based developer, expects to complete refunds to all investors in Al Salam City, an AED 30.0 billion
remains broadly stable project in Umm Al Quwain, by September – end. The project has not been cancelled, but has been put on hold. Tamweer has
due to varying degrees refunded about 70.0% to their investors and will complete the process by the end of September 2009.
of state ownership.
Demand for Egypt
construction and ▲ Arab Contractors has won a USD 1.1 billion contract to build a 1,200-bed hospital in Kuwait. The 16 – storey Jaber Al-Ahmad
property is falling Al-Sabah hospital will be the largest in the Middle East and represents the biggest contract won by the company
across the GCC, and
access to finance Bahrain
remains difficult… ▲ Bahrain Islamic Bank made an operating profit of BD 16.0 million in the first half of the year. The bank's assets grew by
5.0% since December totaling BD 919.0 million.
Qatar
▲ Qatar Islamic Bank, the country’s biggest lender complying with Islamic banking rules, said 1H 2009 profit dropped 5.0%
from 1H 2008, without giving a reason for the decline. Profit for 1H 2009 was QR 812.6 million compared with QR 853.5
…The global Islamic million in 1H 2008
finance industry is now
worth more than USD Oman
1.0 trillion (AED 3.7 ▲ Octal, an Oman – based packaging leader, aims to achieve sales of USD 1.0 billion by 2011 as its exports to global markets are
trillion) in terms of expected to triple over the next two years. According to Octal chairman, Sheikh Saad Suhail Bahwan said total sales of
assets, having polyethylene terephthalate (PET) were USD 25.0 million in June 2009 and would reach USD 100.0 million per month by the
quadrupled in the last mid – 2011.
three years, as it
concentrates more on Jordan
diversification.
▼ Jordan's central bank has taken over the management of Capital Bank after disputes within its board that would have
Unsurprisingly perhaps,
threatened the bank's solid financial position.
nine of the top ten
Shariah – compliant MERGERS AND ACQUISITIONS
financial assets by
country, are based in the - Saudi International Petrochemical Company (Sipchem – Saudi Arabia) signed a MoU with Hanwha Chemical (South Korea)
Middle East and Asia… to set up a SAR 4.0 billion (USD 1.1 billion) petrochemicals complex in Jubail Industrial City. Sipchem will own 75.0% of
the new venture, while Hanwha Chemical will own 25.0%. The complex will have an annual production capacity of
200,000.0 metric tons of phenol ethylene and 125,000 metric tons of polyphenols, and is expected to start production by the
year 2013.
- Kuwait’s KIPCO, said it will merge its satellite broadcast company Showtime with Orbit, one of the region's largest television
companies. The deal follows statements by KIPCO and Orbit Group calling for a consolidation of the region's pay TV industry.
- Kuwait Finance and Investment Co. said it has exited its 4.7% investment in Qatar's Al Rayan Bank for QAR 87.7 million
(USD 24.1 million).
- Oman Air's 'Sindbad' Frequent Flyer Programme has announced a partnership with Shangri – La Hotels and Resorts, Asia
…A recent survey of Pacific's leading luxury hotel group. With this partnership, Sindbad members are entitled to 500 miles for every qualifying stay
more than 600 at any of the 62 Shangri – La or Traders hotels within the family of hotels around the world.
executives in the GCC
- A joint venture between Qatar Petroleum and ExxonMobil plans to sell up to USD 2.3 billion in bonds to finance the
countries revealed that
expansion of LNG facilities. S&P assigned an A rating, Moody's AA2 and Fitch A+.
53.0% intend to hire
more staff in the next 12
LIQUIDITY
months. Only 13.0%
said they will be - Qatar Telecommunications Co is launching syndication of its USD 1.5 billion loan in order to increase the facility amount.
reducing staff levels Existing lenders to the company, plus a small number of other banks, are being invited to commit either USD 50.0 million or
over the same period, USD 25.0 million to the deal. One of them added that upfront fees of 110 basis points (bps) and 90 bps are on offer,
while 34.0% will respectively.
maintain current staff - UAE’s Abu Dhabi National Energy Co (Taqa) has started investor meetings to raise at least USD 1.0 billion in bonds to
levels until Q2 2010… finance investments and repay debt due next year. Taqa is 75.0% owned by the government of Abu Dhabi and is one of the
vehicles the Emirate uses to invest oil money.
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Mumbai, India. www.tresvista.com
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4. Issue No. 1.50
MENA WEEKLY NEWS
Week of July 10, 2009 – July 16, 2009
About Us:
Headquartered in Mumbai, India, TresVista Financial Services Pvt. Ltd provides research, analytics, advisory, investor relations, and other customized services for asset
managers, private equity funds, investment banks, operating companies, and other institutions. This document is provided for assistance only and must not alone be taken
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investigation as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits
and risks involved), and should consult his own advisors to determine the merits and risks of such investment.
This newsletter is provided for information purposes only. The information is believed to be reliable and is based on publicly available information, but TresVista does not
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information is available upon request. © 2009 TresVista Financial Services.
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