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Saudi Al-Ittefaq Steel eyes Q4 IPO |
Sunday, 14 September 2008, Al-Ittefaq Steel Products Co, one of Saudi Arabia's three largest steel producers, hopes to sell a 30 percent stake in an initial public offering in the fourth quarter of 2008, its top financial executive said.
"We will float 30 percent stake... We will decide after the valuations whether to go for a capital increase or sell only existing shares," Chief Financial Officer Shabir Rafiqi told Reuters in a telephone interview.
The firm has mandated Gulf International Bank as lead manager and financial adviser for the IPO. The bank holds a 2.3 percent stake in the company.
The Al-Tuwairqi family holds a stake of about 77 percent in Ittefaq through a holding company.
The company had a turnover of 2.9 billion riyals ($773.3 million) in 2007 and its net margin stood at about 8-9 percent, Rafiqi said.
The IPO could take place in the fourth quarter, subject to regulatory approval, he added.
"We want to use proceeds of the IPO to help fund projects in the pipeline and our expansion plan in the years to end-2012. We have identified expansion projects worth approximately $2 billion," Rafiqi said.
The projects consist mainly of melt shops, direct reduction plants and flat products plants, he said.
Source: Reuters
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Dar Al-Arkan eyes bonus share sukuk |
Wednesday, 03 September 2008,the board of Dar al-Arkan Real Estate Development Co, the largest Saudi developer by market value, has proposed to issue one-for-three bonus shares to existing stockholders, the company said on Wednesday.
The issue of 180 million shares worth 1.8 billion riyals ($480 million), which will raise Arkan's capital by 33.3 percent to 7.2 billion riyals, will be funded from profits, the company said in a statement on the bourse website.
The board also proposed to ask shareholders to approve a plan to issue local or international Islamic bonds, or sukuk. It gave no financial details of the plan.
Dar al-Arkan posted a 44.9 percent rise in second-quarter profit to 687.53 million riyals, beating a forecast, as sales growth picked up pace amid growing demand for property in the world's top oil exporter.
Dar al-Arkan sold $1 billion worth of five-year sukuk last year.
Source: Arabianbusiness.com
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Trading thin on first day of Ramadan |
Monday, 01 September 2008, Saudi Arabia’s benchmark index inched down in thin trade as the Muslim fasting month of Ramadan started on Monday.
The index closed 0.06 percent lower at 8,751.87 points.
A total of 56.64 million shares were traded, the lowest in two years according to al-Riyadh newspaper, and below the 79.5 million shares traded on Sunday.
Saudi Basic Industries Corp led trade in terms of value and closed 0.39 percent down.
“It’s a psychological war. Investors want blue chips but there is reluctance to sell because people believe prices ought to go higher and major buyers are using Ramadan to give potential sellers the impression that there is no demand,” a senior trader said.
Source: Arabianbusiness.com
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Non-Saudis allowed to buy shares through locals |
Tuesday, 02 September 2008, The stock market, Tadawul, has been the least open among Gulf Arab bourses to foreign investors, up to now giving foreigners access to stocks only through select funds.
As part of plans to diversify the market's investor base, the Capital Markets Authority (CMA) said foreign investors are now entitled to buy shares through certain licensed Saudi investors, who would be the legal owners of the shares.
Under the measure, potential foreign investors would be entitled to returns related to their share purchases and must take on all of the economic exposure, the CMA said in a statement on the bourse website.
"The authority... approved that licensed individuals sign swap agreements with non-resident foreigners - institutional or individual - for the purpose of transferring the economic benefits of shares in Saudi listed companies to those persons," it said.
The move was part of "continued efforts of the authority to develop the financial market", the CMA added, without saying when the decision would be take effect.
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Ramadan Kareem |
Ramadan Kareem
May Allah bless you and your loved ones this holy month
Gulf Advisors Team
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Gulf finance firms 'struggling to keep best staff' |
Wednesday, 20 August 2008, the Gulf’s booming financial sector is struggling to keep its most skilled employees, despite a strong supply of candidates from Wall Street and the City of London in the wake of the global credit crunch.
According to Manpower Middle East, new registrations from candidates in the UK banking sector rose by 250 percent in the last six months and by 100 percent in the last two weeks.
But not everyone is finding that the Gulf is able to match the benefits they enjoy at home.
“There are a lot of people reaching out from these places around the world, but they’re not finding that the composition of remuneration and benefits completely matches what they have today,” Varina Nissen, managing director of Manpower Middle East, told Arabian Business on Wednesday.
“The people who are leaving their own communities to come here are leaving because they think they can accelerate their career by going overseas, and they really want to know that their aspiration is going to be fulfilled,” Nissen added.
“At the moment we have a lot of interest from candidates in the region who are looking to change jobs,” Nissen said.
Many are looking for jobs outside their own organisation because they believe promotions and other long term incentive plans are not based on fairness and merit.
Companies in the region are taking steps to address a lack of transparency on career advancement but still have a long way to go.
Source: Arabianbusiness.com
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Kuwait invests $27bn in Asia |
Monday, 18 August 2008, Kuwait has inked more than $27bn of investment agreements with nine Asian countries, including Brunei and the Philippines during its Asian tour. The agreements involve the economic, oil, health and foreign affairs sectors. The country is looking into investments in South Korea, Thailand and the Philippines in the health sector.
Source: Reuters
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IMF - 'Saudi should drop peg' |
Sunday, 17 August 2008, The International Monetary Fund has said that Saudi Arabia should drop the dollar peg and consider 'alternative exchange rate regimes' if inflation continues and the GCC single currency is delayed, Bloomberg has reported. Inflation in the kingdom grew to 10% in April after averaging under 1% from 2003 to 2007.
Source: ameinfo.com
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Tasi rises in transparency rule |
Saturday, 16 August 2008, Saudi Arabia's stock market rose as Tasi began naming investors holding 5% stakes or more in order to boost transparency on the largest Arab bourse, Arab News has reported. The Tasi surged 1.75%, which closed at 8,331.63 points. Meanwhile, Saudi tycoon Prince Al Waleed Bin Talal Bin Abdul Aziz is named as the top shareholder with the market value of his shares amounting to about SR47.4bn, Gulf News has reported.
Source: ameinfo.com
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KSA to invest $90b in power network |
Saturday, 2nd August 2008, the Kingdom of Saudi Arabia will invest $90 billion to expand and enhance its power network.
the government is also studying a plan to complete its natural grid which will connect all the provinces by 2011.
Source: www.menafn.com
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Saudi bourse to name investors with 5% stakes |
Wednesday 30 July 2008, the names of investors with stakes of 5 percent or more in firms listed in Saudi Arabia are to be published starting next month to boost transparency, the market operator said on Wednesday.
Saudi Arabia's stock market, the largest in the Arab world, is dominated by day traders and has been trying to improve transparency and gain more institutional investors since a market crash in 2006.
Like other Gulf Arab exchanges, the Saudi market - the worst performer in the Gulf Arab region this year - has been tainted by allegations of insider trading and manipulation of stock prices.
A list of the largest shareholders in publicly traded Saudi firms would be updated at the close of trading each day beginning on Aug. 16, the operator, Tadawul, said in a statement on its website.
Source: www.arabianbusiness.com
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Mubadala, GE in landmark partnersh |
Monday, 21 July 2008, Abu Dhabi investment agency Mubadala Development Co has entered into a landmark partnership with US corporate giant General Electric (GE) that includes the establishment of an $8 billion commercial finance venture.
Mubadala also plans to become one of GE's top ten shareholders through stock purchases in the open market, the companies said they will set up the Abu Dhabi-headquartered commercial finance venture over the next 12 months, committing $4 billion in equity each over the next three years.
“This is one of the biggest transactions we’ve ever done,” Mubadala Chief Executive Khaldoon Khalifa Al Mubarak told reporters on a conference call.
The fifty-fifty joint venture will have assets in excess of $40 billion within the next 14 to 18 months, and will be based in the UAE capital due to the emirate’s strategic location and attractive tax environment, Al Mubarak said.
It will initially invest in the Middle East and Africa, but may invest elsewhere eventually, he added.
Al Mubarak said Mubadala’s investment in GE was completely separate from the partnership and that the company is currently attractively valued. He declined to comment on when the company would achieve its targeted shareholding.
The deal is based on “the long term prospects this company has", he said. Mubadala currently holds no shares in GE.
Source: Arabianbusiness.com
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Sukuk issuance grows 17% to $17bn |
Tuesday, 22 July 2008, Islamic corporate bond (sukuk) issuance in the Gulf jumped 17 percent in the last year to $17 billion, dispelling fears that lending to companies in the region would be hit by the credit crunch.
Western institutions were the majority purchasers of Islamic debt, now accounting for around 60% of take up, according to research by London-based law firm Trowers & Hamlins.
“Appetite for Islamic debt has been remarkably resilient to the credit crunch and shows just how low-risk investing in Gulf corporates is now seen by Western institutions,” Trowers & Hamlins partner Neale Downes said.
Rising yields from US corporate bonds has recently fuelled fears that Islamic bonds would be under-subscribed.
“A few banks in the region have taken sub-prime write downs, but there is so much liquidity in the Gulf with the high price of oil, that recapitalising these institutions has not been a major challenge,” Downes said.
He said doubts voiced over the compatibility of some Islamic bonds with Sharia law have now largely been put to rest.
The value of Islamic bonds issued in the Gulf over the past year was almost a third greater (30%) than the amount of conventional paper debt, which rose marginally to US$11.2bn in 2007/08 from US$11.1bn.
Source: Arabianbusiness.com
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High H1 profits for Gulf Hotels Group |
Wednesday, 23 July 2008, Bahrain-based Gulf Hotels Group's (GHG) posted first half net profits up 55.4 percent to 5.4 million dinars ($14.3 million) compared with the same period in 2007, it was reported on Tuesday.
The company, which owns and operates the Gulf Hotel, Gulf Convention Centre, Gulf Executive Residence and Gulf Brands International, saw gross operating revenue ahead by 23.1 percent, to 14.8 million dinars, Bahrain's Gulf Daily News reported.
Earnings per share increased to 40 fils compared with 26 fils during the same period last year.
GHG chairman Farouk Almoayyed attributed the increase in profits to renovation work at the hotel as well as the significant growth in the economy of the region due to high oil prices.
Source: Arabianbusiness.com
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Increasing Demand for Islamic Finance |
Wednesday, 16 July 2008, Dubai-based Millennium Finance Corporation is set to launch its first sharia-compliant hedge fund as it seeks to tap rising international demand for investments that comply with Islamic law.
The fund will be in partnership with the world's largest publicly traded hedge fund manager, the Man Group, Ahmad Atwan, managing director of Millennium Finance Corporation told Arabian Business, declining to give further details.
“It is something that is going to sit very well in the marketplace...we plan to do a few more sharia-compliant hedge funds after that,” he said.
The Islamic finance industry is worth approximately $800 billion worldwide and is growing at an annual rate of 10-15%.
Demand for Islamic finance has increased globally, fuelled by Gulf countries where growth has doubled since 2002 on the back of soaring oil. Sharia law forbids Muslims from receiving or paying interest.
Source: Arabianbusiness.com
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Saudi to approve $5.3 bln investment firm |
Tuesday, 15 July, 2008, The Saudi government said it had approved the setting up of an investment firm with capital of 20 billion riyals ($5.3 billion) that will invest in stocks, bonds, real estate, foreign currencies and commodities.
The government-owned Sanabil al-Saudia will also manage investment portfolios for other parties, state-run Saudi Press Agency reported late on Monday, quoting a cabinet statement.
The statement did not clearly say whether Sanabil would make investments abroad.
Saudi Finance Minister Ibrahim al-Assaf said in remarks published on Tuesday that Sanabil will invest both in Saudi Arabia and other countries.
Source: By Reuters
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Southern Cement profit up 19.5% |
Monday, 14 July 2008, Southern Province Cement Co, Saudi Arabia's second-largest cement maker by market value, posted a 19.5 percent rise in second-quarter net profit, according to figures published by a local newspaper on Monday.
Southern Province, which began operating a third plant in February, made profit of 465 million riyals ($124 million) in the six months to June 30, up 32.5 percent from a year earlier, Al-Watan newspaper reported, quoting the company's board.
That would give Southern Province second-quarter profit of 230 million riyals, according to a calculation by newswire Reuters based on previous financial data. Southern Province made 192.5 million riyals in the same period of 2007.
The second-quarter profit came below a 237-million riyal forecast of Saudi Investment Bank in a Reuters net profit survey last month.
Source: Arabianbusiness.com
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Emaar poised to post record profit |
Sunday, 13 July 2008, Emaar Properties, the Middle East's largest real estate developer, is poised to post record quarterly profit this month, analysts have said.
Net income at the Dubai-based developer probably rose 13 percent to $480 million in the second quarter from a year earlier, according to the median estimate of five analysts, newswire Bloomberg reported.
Dubai residential property prices rose 40 percent in the year to May, according to the Al Mal Dubai Real Estate Price Index. Emaar, which is building the world's tallest tower in its home city, can book revenue from projects once they are 20 percent complete, the newswire said.
Profit will be driven by higher UAE apartment and office space sales and the continued rise in rental and hospitality revenue, Bloomberg said, citing Stefan Schurman, a Dubai-based analyst at EFG-Hermes.
Source: Arabianbusiness.com
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Banks to invest $9bn in technology |
Saturday, 12 July 2008, Global banks are expected to spend $9 billion (Dh33bn) on business intelligence technology by 2012, says a report by market analyst Datamonitor.
Investment in operational risk technology is expected to witness a 12 per cent average annual increase from $754 million in 2007 to more than $1bn in 2010.
Financial institutions in the Middle East are moving forward on the technology front. The sector's IT investment has increased by 15 per cent and is set to reach $1.8bn in 2008.
Another report by Chartis Research's Credit Risk Management Systems 2008 has ranked SAS Credit Risk Management for Banking as the top IT solution for retail banks globally.
The report examines the demand and supply side of the market for credit risk management systems and covers key market and regulatory requirements, implementation challenges and the competitive landscape.
"The growing regional demand for financial analysis, customer intelligence systems and risk management continues to fuel the popularity of our solutions among leading banking organisations," said Harry Pretorius, Business Development Director and Head of the Regional Risk Practice for MEA and Pakistan.
Source: Zawya.com
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New Investment Trends in GCC |
Wednesday, 9 July 2008, Investcorp's President and COO, Gary Long has predicted that several emerging investment trends will shape how an estimated $5 trillion to $9 trillion in cumulative GCC oil revenue generated over the coming decade will be invested.
Speaking alongside Mr. Ramzi AbdelJaber, Head of Investcorp's Business Development Unit in front of members of the Harvard Private Equity Roundtable at the Harvard Club of New York, Long predicted that the oil boom will translate into an investable asset pool in excess of $10 trillion by 2020.
However, unlike previous oil booms, an emerging set of investments trends will have a significant impact on how capital will be deployed.
Long and AbdelJaber outlined the main trends: increased investments on shore in the MENA region and in Asia; a shift in allocation to alternative investments and more direct investment strategies; the increased sophistication and institutionalization of the Gulf region including the growing importance of corporate governance; a booming demand for Islamic products and the rapidly growing importance of Sovereign Wealth Funds.
They emphasized the new and increasing tendency of GCC investors' to make local investments. For example, in 2002, nearly 85% of the Gulf's wealth was invested abroad in financial instruments mostly linked to the U.S. Dollar. However, by 2007, this had fallen to 75% due to the rising investment within the Gulf region itself. Increasing investment in the MENA region and Asia had in turn led to an amplified demand for alternative investments such as private equity and hedge funds.
Source: Zawya.com
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CMA licenses three security firms |
Monday, 7 July 2008, In continuance with its efforts to develop and support investors in the capital markets, the Capital Market Authority (CMA) authorized the following three firms on Monday 4/07/1429H, corresponding to 7th July, 2008:
1. Adeem Financial Company has been authorized to conduct Managing and Custody in the Securities Business.
2. ِAjeej Capital Limited has been authorized to conduct Advising in the Securities Business.
3. UBS Saudi Arabia has been authorized to conduct securities business of Dealing (as principal, agent & underwriter), Managing, Advising, Arranging and Custody, which has subsequently resulted in CMA approving the request of Development and Management House for Investment Company to cancel its authorization license.
Source: Saudi Capital Market Authority
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Shura Council approves draft mortgage law |
Tuesday, 8 July 2008, In a move that paves the way for the country’s first mortgage law to be approved, Saudi Arabia’s advisory council has passed the four components of the mortgage law with the next stage as approval by the Council of Ministers.
Expediting the approval of the mortgage law was part of the government’s 17-point plan announced to combat inflation earlier in the year with greater access to
mortgages expected to take pressure of rental prices.
Source: Gulfbase, Zawya
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Mega project set for Makkah |
Sunday, 6 July 2008, Jabal Omar Company on Saturday signed a $3.3 billion agreement with Jadwa Investment to finance a major real estate project in front of the Grand Mosque in Makkah.
The agreement was signed at Jeddah Hilton by Abdul Rahman Faqeeh, chairman of Jabal Omar Company, and Ahmed Al-Khateeb, managing director and CEO of Jadwa, Saudi daily Arab News reported on Sunday.
Prince Faisal bin Salman, chairman of Jadwa, said his company’s efforts to win the financing of the project reflected its importance, as the project was located at the holiest place for Muslims across the world, and would serve pilgrims who come for Haj and Umrah from different parts of the globe.
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Gulf's largest mining IPO kicks off |
Saturday, 5 July 2008, State-owned Saudi Arabian Mining Co (Maaden) launched on Saturday an initial public offering to raise 9.25 billion riyals ($2.47 billion) in the Middle East's biggest mining IPO, valuing the firm at $4.9 billion.
Maaden plans to sell 462.5 million of stock - equivalent to 50 percent of its share capital - at 20 riyals each with subscriptions closing on July 14, according to the bourse regulator, the Capital Market Authority (CMA).
The IPO is to cover some of the costs of projects led by the company, mainly a 740,000-tonne aluminium smelter with Rio Tinto and a three-million tonnes phosphate and by-products plant with Saudi Basic Industries Corp (SABIC).
By Reuters.
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Iran threat hits Saudi stocks |
Sunday, June 29 2008, Saudi Arabia's main index closed down almost 3 percent, making its biggest one-day decline in almost four months, as comments by Iran on a possible disturbance of Gulf oil maritime route weighs on market sentiment.
"The news about Iran indeed has impacted the sentiment in the market although most investors are confident enough an attack is not imminent," says Abdulla al-Aqil, trader at Samba Financial.
Iran's Revolutionary Guards said the country would impose controls on shipping in the vital Gulf oil route if the oil producer was attacked, according to a newspaper report on Saturday.
The index posted its sharpest single-day decline since March 2, closing down for its third straight session after a three-day rally at the beginning of last week.
By Dylan Bowman and Reuters
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High oil prices to continue |
Tuesday, 1 July 2008, Oil prices would not ease even if production were raised because speculation and taxes are behind the soaring market, Saudi Arabia's King Abdullah was quoted as saying in a Kuwaiti newspaper on Tuesday.
"People who think that oil prices will go down once production is raised are wrong because there are indications the prices will remain high," the Arab Times quoted the ruler of the world's largest oil exporter as saying.
He added that speculators and duties on fuel in some countries were among reasons for the high prices.
"Starting from the establishment of OPEC, we have always been keen on keeping the price of oil at a normal level to reduce the burden on both the producers and consumers...We have nothing to do with the rising prices of oil in the world," he said.
Saudi Oil Minister Ali al-Naimi said on Monday top exporter Saudi Arabia stands ready to pump as much oil as its customers require, but supply for now was adequate.
Riyadh, the Saudi Arabi Capital, has already promised to pump 9.7 million barrels per day (bpd) in July, marking an increase in output of 550,000 bpd since May.
The kingdom summoned the world's energy powers to an unprecedented meeting in Jeddah in June in response to record price moves.
By Reuters
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Marsh gets Qatar Financial Centre licence |
Monday, 30 June 2008, The Qatar Financial Centre Regulatory Authority (QFCRA)Qatar Financial Centre Regulatory Authority (QFCRA) granted authorisation to MarshMarsh, one of the world's leading insurance brokers and risk advisors. MarshMarsh will be allocated Qatar Financial Centre Licence No/ 085.
Welcoming MarshMarsh to the QFCQFC, Phillip Thorpe, QFCRAQFCRA Chairman and Chief Executive, said: "We are pleased to see that the QFCQFC legal and regulatory framework continues to attract the world's leading financial services firms. We now have 85 financial institutions licensed in the QFCQFC and a strong group of applicants under active consideration."
By Zawya.com
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Dollar pegs spur global inflation |
Saturday, 28 June 2008, Inappropriately low interest rates in some countries that peg their currencies to the dollar are helping to fuel commodity price inflation, Bank of England Governor Mervyn King said on Thursday.
Worries over inflation have trumped concerns about the prospect of slowing growth this year, as food and fuel prices soar on global markets, leading to concerns that a weaker dollar is exacerbating price pressures.
"A very important part of the world economy has decided to peg their exchange rates to only one of the exchange rates - namely the US dollar," King told parliament's Treasury Select Committee.
"What it's doing is leading that part of the world economy to have a much more expansionary monetary policy than would be desirable. That is one of the factors that has lain behind some of the upward pressure on commodity prices."
A weakening dollar and falling US borrowing costs have forced many developing economies in Asia to keep their interest rates lower than may be needed to maintain pegs with the dollar.
Such accommodative monetary policies are helping to spur economic growth and boost demand for commodities, with severe inflationary consequences for the rest of the world.
King said the US Federal Reserve had very good cause to slash interest rates to 2 percent, given risks to growth from the credit crunch and a housing market downturn, but said Far Eastern exchange rates had become distorted as result.
"The linking of the exchange rates of the countries in the Far East to the dollar at a time when the dollar interest rate has been cut very sharply... has led to a level that is not appropriate to those countries," he said.
King's comments came hot on the heels of strong words from European Central Bank policymaker Christian Noyer who on Wednesday said action was now required to help address global imbalances.
"A greater flexibility in the exchange rate regimes appears moreover to be in the interest of the emerging countries themselves," Noyer said.
Europeans are concerned that a weak dollar will hurt demand for exports from the euro zone, after the euro hit record highs against the dollar.
The US authorities have in recent weeks appeared to shift policy and tried to stem the fall in the dollar by ramping up anti-inflation rhetoric.
Reference: Reuters
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Merrill shifts top banker to Dubai |
Dubai, 24 June 2008, Merrill Lynch is to move one of its London bankers out to Dubai to head up its regional wealth management division.
The US-based investment bank has appointed 15-year banking veteran Amir Sadr as managing director of the division, with the 36-year-old expected to relocate to the region's financial hub next month.
Sadr told reporters on Tueday he had worked in Merrill's wealth management from London since 2004, during which time he had taken on a number of responsibilities relating to the Middle Eastern market.
Before 2004 Sadr said he had focused on investment banking and institutional sales.
"The Middle East has shown tremendous growth over the past year and I’ve been spending a lot of time in the region over the past four years as I took on additional responsibilities here,” Sadr said.
Merrill is one of many major Western financial institutions shifting staff to Dubai as the Gulf continues to grow in importance on the world financial stage.
"Source: Arabianbusiness.com"
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Gulf to earn $1.3tn from oil in 2 years |
Jeddah, 22 June 2008, The oil-rich Gulf states are projected to earn close to $1.3 trillion in oil revenue in 2008 and 2009, a Kuwaiti economic report said on Saturday.
The six GCC states earned $364 billion from oil in 2007, the Al-Shall Economic Consultants said in its weekly report.
GCC oil revenues are projected to reach $636 billion in 2008 and $657 billion in 2009, Al-Shall said.
Oil powerhouse Saudi Arabia's earnings in the two years will be just under $700 billion. The kingdom posted $194 billion in oil revenues in 2007.
The six states, which boast just less than half of the world's crude proven reserves, produce around 16 million barrels per day (bpd), or just under one-fifth of the world's consumption.
"Source:ArabianBusiness.com"
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Saudi Maaden initial public offering |
Jeddah, 21 June 2008, Saudi state-owned mining company Maaden announced details on Saturday of a 9.25 billion riyal ($2.47 billion) initial public offering it will hold next month.
Maaden said in May it would offer Saudi institutional and retail investors 462.5 million shares, representing 50 percent of its capital, at 20 riyals per share, during the July 5-14 subscription.
"The allocation to retail subscribers will take place in two stages. In the first stage, each subscriber will get a minimum of 25 shares," Maaden President and CEO Abdullah Dabbagh said, according to a statement sent to newswire Reuters.
"During the second stage, up to 2,000 shares will be allocated to subscribers who have applied for more than 25 shares as long as the total shares allocated do not exceed total shares offered to retail subscribers. The balance of the offer shares, if available, will be allocated on a pro-rata basis."
He did not say when the prospectus for investors with financial statements and other information about the company would be released.
Dabbagh valued Maaden's total investments at 60 billion riyals, including phosphate, bauxite, gold and industrial minerals.
Maaden said this month it had secured loans worth several billion dollars from Saudi and Korean institutions for its phosphate project in cooperation with Saudi Basic Industries Corp. (SABIC). The IPO is to cover some of the costs.
Maaden said last year the bill for the phosphate venture had soared to 21 billion riyals, 62 percent more than it had expected, due to a rise in labour and material costs. (Reuters)
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Inflation raises revaluation pressure |
Jeddah, 21 May 2008, Saudi Arabia could face internal pressure to revalue its dollar-pegged currency as inflation in the world's largest oil-exporter soars to a 30-year peak this year, a Saudi investment bank said on Monday.
Inflation in the largest Arab economy, home to 25 million people, almost doubled in the six months to March to a three-decade peak of 9.6%. A Reuters poll this week showed Saudi inflation averaging 9% this year, more than double its 2007 level.
"With all sectors of the population suffering from inflation and the weak exchange rate, there will be pressure on the government to respond," Jadwa Investment said. The riyal has been fixed at 3.75 to the dollar since 1986.
Source: Arabianbusiness.com
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Bahrain cuts spending to tackle inflation |
Jeddah, 22 May 2008, The Shura Council in Bahrain has approved a draft law to roll back government spending and use the savings for measures to tackle rising inflation create facilities and to attract more investment into the country. The Council also called for salary rises in the private and public sectors to help staff cope with high inflation. It wants the government to monitor prices and transparently monitor consumer price index statistics. The council said the government should invest in regions where it can get cheaper food stables, such as farms in Sudan. The Dubai government recently signed deals with several supermarkets in the emirate to fix food commodity prices at 2007 levels, to ease price rises. (Source:ameinfo.com)
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More Funds Injected in Real Estate Sector |
Jeddah, 19 May 2008, It is expected that the repatriation of funds from abroad into the Kingdom will target the Real Estate sector. Coupled with rapid population growth rates and overall optimism, real estate has moved to the forefront of the non-oil sectors.
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More Investment in Manufacturing Sector |
Jeddah, 20 May 2008, Manufacturing industry is likely to be one of the fastest, non-oil, growth sectors over the next five years. Industrial estates located in Riyadh, Jeddah, Dammam, Jubail and Jazan are being developed. Currently, non-oil manufacturing provides 10 per cent of Saudi GDP and less than 6 per cent of total employment. The development of this industry sector is expected to generate foreign direct investment totaling $56bn and provide direct employment for 55,000 people as well as another 330,000 indirect job opportunities.
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KSA Leads for an $18 billion Steel Project |
Jeddah, 9th June 2008, The price of structural steel has recently risen by between 15 and 25 percent for instance in Dubai despite of exemption of steel and cement from customs duties. The trend of increase prices on this sector can be seen not only in Dubai but throughout the GCC countries, and which is driven by the real estate boom and the recycling of surplus petrodollars, much of which is taking place in the real estate sector, the safest and fastest growing investment channel in the regional markets.
To addressed the situation, the GCC countries have started addressing this issue, with more than USD18 billion being invested in 46 steel manufacturing plants throughout the Gulf , attempting to close the widening gap between supply and demand for steel, a major component for the construction industry. These projects indicate aggressive growth in the industrial sector, in line with the five-year real estate boom
Leading the way in these steel plant projects are KSA ,with 17 plants, and the UAE, with 16. Six of the remaining 13 plants are to be located in Oman, four in Bahrain and three in Qatar. The estimated cost required to establish a steel factory with full production capacity varies between USD15 million and USD2 billion, while the estimated cost to establish ten manufacturing plants, studies for one of which are currently underway, is USD10 billion.
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$180bn in Real Estate investment |
Jeddah, 15 June 2008, More than $180 billion (Dh660 billion) will be invested in Saudi Arabia's real estate sector, as demand for residential units will cross 1.3 million units in the next seven years, according to a new report.
"The top four provinces of Makkah, Riyadh, Madinah and Eastern Province would require a housing investment of more than $160bn by 2015," NCB Capital said in a report titled "Kingdom under construction."
Besides, the mortgage market will grow five fold to $23.1bn by 2012, a mortgage to GDP ratio of 4.4 per cent.
"We expect the Saudi Government will expedite the proposed mortgage law, which is already part of its inflation mitigation plan, which in turn will unlock significant demand. This will drive real estate prices higher, thus putting pressure on rental yields."
Source: Zawya.com
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STC Transformation Plan towards Private Enterprise |
JEDDAH, 10th June, 2008-Dr. Humood Al-Kussayer, VP regulatory affairs of STC presents a presented a case study about the transformation from a public to a private enterprise of the company during the recently held Private Public Partnership Forum, organized by the Islamic Foundation for Developing the Private Sector. According to Dr. Khuyaser STC gained a wealth of experience in external investment and studies many investment opportunities entering many serious competitive negotiations and dialogues and based on his point of view this effort will represents a quantum leap for STC in transforming the company into an international operator in par with other global companies that specialized in mobile telecommunications.
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Common Gulf Currency at the Beginning of 2010 |
JEDDAH,8th June 2008-GCC countries have decided to introduce a common Gulf currency at the beginning of 2010. All member countries except Oman have agreed to establish the currency union as scheduled but Oman wants more time. The currency union will reduce inflation rates in GCC countries.
According to Fitch, a leading international rating agency, the Gulf common currency, expected in 2010, will help reduce prices of essential commodities in the Gulf Cooperation Council states. The use of a common GCC currency will reduce the member states’ cost of global trade transactions to a great extent, adding that companies and consumers would benefit as a result of fall in prices.
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SAGIA to Promote the Largest Private Equity Fund Launched in GCC |
JEDDAH, 7th June 2008-SAGIA will assist in the promotion of KTIC Jasper Asia Gulf Horizons Fund technology center planned in Saudi Arabia.
The expansion of the SR1.1 billion Asia-centric technology fund is the largest private equity initiative to be launched in the GCC with the aim of driving technology development and commercialization from Asia to the GCC region that will allow almost 10-15 Asian & European technology companies to establish research, commercial and development operations in the Kingdom over the next 3 years.
The focus of the companies will be in information and communication technology, energy, transportation, health and life sciences and education sectors, which are considered essential to Saudi Arabia's long-term technology development plan.
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SR220bn Retail Sector Investments in Saudi |
JEDDAH, 7th June 2008-Total investment in the Saudi retail sector is estimated at around SR220 billion.
Across the two largest cities, Riyadh & Jeddah, more than 2.8 million sqm or 57% of commercial space for rental is available for shopping centers.
The projected increase in population and tourists arrivals annually, 12 per cent & 5 per respectively is an indicator of an investment volume in the commercial centers sector.
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$4 Trillion Capital Available for Middle East investment |
JEDDAH, 3rd June 2008- According to AT Kearny Report,a global strategic management consulting firm, there will be a total amount $4 trillion capital available for investment in Middle Eastern, in both private and public sectors. This high investment power is largely linked to Sovereign Wealth Funds.
The assets under management of these funds have, at a global level, risen by 18 per cent between 2006 and 2007 to reach $3.3 trillion with Middle East SWF accounting for 50 per cent of it and the SWFs are expected to reach $5 trillion in 2010 and $10 to $15 trillion in 2015.
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GA Preparing to Launch a Company to Develop 10 Thousand Houses |
JEDDAH, 31 May 2008-Gulf Advisors has announced that it is in the final stages of launching a new company specializing in residential housing construction with an initial capitalization of SR 300,000,000. The company is scheduled to complete some 10,000 housing units to meet the growing demand for affordable housing in the Kingdom. Dr, Said Al Martan, Chairman of Gulf Advisors, announced that he list of the company founders included a number of strategic investors in the Real Estate sector in the Kingdom. Dr. Said estimated that the sales will reach some SR 12 Billion in the initial 10 years with the company probably seeking to have an initial public offering within the first 5 years of operation.
Posted by Asharqalawsat Newspaper
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Saudi Commercial Banks Forecasted Total Assets Growth of 15% per Year |
JEDDAH, 1st June 2008 - Saudi Arabia's banking sector growth increased by 25 % in terms of local currency terms, 20% in total assets and 21% total loans & deposits according to the 'Saudi Arabia Commercial Banking Report Q2 2008. The loan/deposit and the loan/asset ratios fell, while the loan/GDP ratio rose. With 65.0 Saudi Arabia's Commercial Bank Business Environment Rating (CBBER) this means that Saudi Arabia is a fairly attractive country, given that the CBBERs are higher in each of Bahrain, Israel, South Africa and the United Arab Emirates.
The scores for the banking elements of the risks to potential returns are the third highest in the region (after United Arab Emirates and Libya). The ratings score for the market structure the most important component of the assessment of the limits to potential returns is 56.3.
In a country with per capita GDP of $15,708, deposits per capita are $7,875 it is envisaged that total assets, total loans and total deposits would rise by 15 per cent , 12 per cent and 7 per cent annually through the 2007-2012 forecast period.
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Saudi Stock Market 2nd Busiest Market for IPO |
JEDDAH, 1st June 2008-The Saudi Stock Exchange surpassed London to be the world's second busiest market for initial public offerings in the first five months according to Thomson Reuters data. The total of Saudi Stock Exchange IPOs jumped 322 per cent from a year earlier to $8.5 billion as it welcomed Alinma Bank, which raised $2.8 billion in the country's biggest IPO last month. The Saudi Exchange also benefited from the $1.87bn listing of mobile phone company Zain Saudi Arabia, an affiliate of Kuwait's Mobile Telecommunications Company (Zain), and Petrochemical firm PetroRabigh's $1.2 billion float.
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Shoura Council Review Real Estate Regulations |
Riyadh, 26th May 2008-The Shoura Council in Saudi Arabia is scheduled to discuss on Sunday a number of draft regulations affecting real estate financing, control of financing companies, leasing, and mortgaging of notarized real property. The Council is to examine one of the most important economic portfolios in the real estate business. A report released by the Financial Affairs Committee pointed to the existence of a large discrepancy between supply and demand in the real estate business as the former is estimated at 570,000 housing units and the latter at 1.1 million units. The gap was ascribed to the paucity of mechanism for financing of the housing sector and scarcity of large companies operating in the area of real estate development.
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Inflation had Stood at 10.5% Last April |
JEDDAH,26th May 2008-Annual inflation in Saudi Arabia accelerated to at least a 27-year high of 10.5 per cent last month (April 2008). The cost of living index for the largest Arab economy was 115.2 points on April 30, compared with 104.3 points a year earlier. The rental index which includes rents, fuel and water surged 16.9 per cent, with rents soaring 20.4 per cent attributed to growth in money supply, while the cost of food and beverages rocketed up 16 per cent.
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African Investment Opportunities |
RIYADH, 24 May 2008--During the “Investment Forum” hosted by Prince Faisal Bin Salman, Chairman of Jadwa Investment, announced the launching of the new Jadwa Africa Equity Freestyle Fund. The fund is the first Shariah-compliant Africa fund offered by any institution in the region.
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Jubail Projects to Boost Investment in the Region |
JUBAIL, 24 May 2008 -- Custodian of the Two Holy Mosques King Abdullah launched 29 projects in the Industrial city of Jubail with a total investment of more than SR68 billion yesterday, the farsighted vision of the king has enabled the Industrial City in Jubail to be the largest engineering project of its kind in the world.
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