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					                                                                                                                                                                                                                      ARAB TIMES, THURSDAY, AUGUST 25, 2011
    BUSINESS                                                                                                                                                                                                                                                                  39

                                             Airbus to beat 2011 MENA forecasts: exec                                                                                       housing top priority, says Iraq investment chief

   Planemaker Airbus will exceed its           airlines to place orders at the Dubai      June, but instead ordered six air-                  New housing is Iraq’s top priority in       Chairman Sami al-Araji said in an              Araji noted that Baghdad was
   forecast for orders from the Middle         Air Show, Fekih told Reuters in an         craft from US competitor Boeing .                   terms of attracting foreign invest-         interview.                                  finalising a master plan to build
   East and North Africa (MENA) region         interview.                                    Fekih said the company was cur-                  ment, the country’s investment                 “We would like to do two things,”        100,000 homes in the Besmaya
   this year, helped by deals to be               “Discussions with Qatar Airways         rently not in discussions with other                chief told AFP on Wednesday, as             he said. “One, to prepare decent            area, east of Baghdad, in a $7.25
   finalised at the Dubai Air Show in          are underway and it is a continuous        regional carriers like Emirates and                 authorities seek to alleviate major         living (conditions) for the citizens of     billion deal with South Korea’s
   November, a senior executive said.          process. Yes, they could announce          Eithad Airways. Airlines in the Middle              residential shortfalls.                     Iraq and at the same time get the           Hanwha        Engineering        and
       Airbus, which had expected orders       something.... a small number of air-       East account for about 9.5 percent of                  Iraq is looking to build one mil-        economy moving because it is a              Construction, as part of a deal
   for 90 planes, will end the year with a     craft here or there,” he said.             Airbus’s orders, making it a key mar-               lion new houses nationwide in the           very job-oriented project.”                 announced in May.
   “triple-digit order book”, said Habib          The Doha-based carrier had              ket for the plane maker. The region,                coming years to help reduce                    Asked if housing was Iraq’s top             He said other agreements were
   Fekih, the European planemaker’s            been expected to buy five A380s            which has some of the youngest fleet                overcrowding and homelessness               priority in terms of attracting invest-     in the pipeline as part of efforts to
   president for Middle East.                  and 50 A320neo narrowbody air-             in the world, represents 15 percent of              and boost employment, National              ment from overseas, Araji said:             reach the one-million housing unit
       Qatar Airways may be one of the         planes at the Paris Air Show in            the firm’s backlog. (RTRS)                          Investment              Commission          “Exactly, at the present moment.”           goal. (RTRS)

                                                                                                  ‘Chinese, Russian contracts are safe’

Libya to honour all Gaddafi oil deals: Jehani
DUBAI, Aug 24, (RTRS): A Libyan               lion against Gaddafi’s 42-year rule.         of reviving production from the coun-          said.                                          Libyan envoys have told Rome that             the basis that it might lead to big-tick-
rebel government would honour all the            China urged Libyan rebels on              try’s oil fields after months of stagna-          Meanwhile, with Brent crude above           Libya will honour existing contracts in       et projects later. And there is a queue
oil contracts granted during the              Tuesday to protect its investments in        tion.                                          $100 per barrel, foreign entities invest-      the post-Muammar Gaddafi era. There           of oil players hoping to get their foot
Muammar Gaddafi era, including those          North Africa’s biggest oil producing            “Luckily, we don’t have much dam-           ed in Libya have a strong incentive to         is a long history between the two coun-       in the door in Libya.
of Chinese companies, Ahmed Jehani,           country.                                     age to the oil (installations) other than      get production back up and running             tries, and Italy’s Eni thinks oil and gas        Libya has a clear incentive to resume
a senior rebel representative for recon-         Jehani, who chairs the rebel’s Libya      what has been reported,” Jehani said.          quickly. Italy, one of the biggest             flows could resume before winter.             pumping oil and it needs foreign
struction told Reuters in an interview.       reconstruction team, said Chinese               “The most difficult part is how much        investors in the North African country,           Yet even the countries that support-       expertise. But it can afford not to rush
   “The contracts in the oil fields are       investment and financial assistance          pressure you have lost in the oil fields       is confident it will be back to business       ed or took part in the military inter-        into making decisions. The country’s
absolutely sacrosanct,” Jehani told           would be welcome to help rebuild the         and how do you bring it up again, how          as usual. But even once the fighting           vention are likely to be vulnerable.          net foreign assets, which should be
Reuters Insider TV on Tuesday night.          war-torn country.                            can you clean up the sludge that’s been        stops, oil companies can expect a              Rebel leaders have said contracts             released from the current freeze once
   “All lawful contracts will be hon-            “We are not making any discrimina-        created by the fact that you are not           bumpy ride.                                    would be reviewed for signs of cor-           Libya is officially deemed “liberated”,
oured whether they are in the oil and         tion,” he said. “There will be issues as     pumping oil.”                                     Oil majors don’t need much prod-            ruption. The transitional government          are estimated at around $150 billion -
gas complex or in the contracting... We       to how we’re going to have to pay for           Jehani said reconstruction efforts to       ding to return to a country where              may come under pressure to renegoti-          enough to cover 37 months’ worth of
have contracts that were negotiated ...       this and whether we have the money...        bring oil and other industrial infrastruc-     pumping oil was highly profitable,             ate contracts from a population feeling       imports. And even if oil companies
they were auctioned openly ... There’s        These are capacity issues in the non-oil     ture back to normal would take at least        thanks to low production costs. A more         it has not fully shared in the country’s      manage to hold onto their terms, there
no question of revoking any contract.”        sector, in the oil sector you have no        nine months.                                   stable and secure environment is key.          oil wealth. Libya has tightened terms         is no guarantee on the long-term solid-
   A spokesman for rebel-run oil firm         problem.”                                       “Going back to baseline before the          There must also be some sort of effec-         on production contracts in recent             ity of the Libyan government’s promis-
AGOCO warned on Monday Chinese                   He said the cost of repairing dam-        revolution, I would say if we get it all       tive, recognizable government.                 years. But there is scope for more            es. Oil companies hoping to soon get
and Russian firms could lose out on oil       aged oil installations would be less of a    right, we are probably going to be with-          The key question is how the oil             severity. Foreign investors were will-        back to business as usual may be too
contracts for failing to back the rebel-      problem than the technical challenges        in the nine months to one year,” he            majors will be received in Libya. Rebel        ing to accept tough terms in Iraq on          optimistic.

               Region seen as ‘safe haven’

   Low US rates tempt
                                                                                           EU’s embargo on Syrian oil
   Gulf bond issuers
   DUBAI, Aug 24, (RTRS): Low US              yield.
                                                                                           possible next week: diplomat
   interest rates and a need for dollar          The bid yield on Chile’s sover-
   funding will encourage borrowers
   in the Gulf to defy volatile global
                                              eign 2020 bond was 3.0884 percent
                                              on Wednesday. Abu Dhabi is rated
                                                                                                                                    ‘Syria economy hit by demos but not collapsed’
   markets and issue bonds after a            one notch higher than Chile.
   summer lull, as investors eye                 Dubai is a much more volatile             BRUSSELS, Aug 24, (Agen-
   decent returns for relatively low          market than the rest of the Gulf as          cies): European Union govern-
   risk.                                      the emirate is still to fully emerge
                                                                                           ments are likely to adopt an
                                                                                                                                                                Gulfsands moves to clarify Assad regime links
      Gulf bonds in recent weeks have         from a debt crisis and a property
   benefited from “flight to stability”       market slump. That has led to a              embargo against imports of
   trades and strong regional bids on
   local bonds.
      While developed economies face
   the risk of renewed recession, the
                                              selloff in Dubai corporate bonds,
                                              leading to widening spreads.
                                                 Dubai-based Emirates airline’s
                                              5.125 percent 2016 bond was
                                                                                           Syrian oil by the end of next
                                                                                           week to ratchet up pressure on
                                                                                           President Bashar al-Assad, an
                                                                                           EU      diplomat    said    on
                                                                                                                                          ‘Relationships at arms-length’
   energy-producing economies of the          yielding 5.446 percent on                                                                   LONDON, Aug 24, (RTRS): Oil com-               required by pertinent laws and regula-        payments and voting rights pertaining
   Gulf Arab region are forecast to           Wednesday, up from 4.839 percent             Wednesday.                                     pany Gulfsands Petroleum Plc moved                                                           to Makhlouf’s stake in the company
                                                                                                                                                                                         tions,” Gulfsands said in a statement.
   grow around 4 percent this year,           on Aug 1, but down from 5.643                  The bloc’s 27 governments agreed             to clarify its links with Syria’s Assad           The European Union put Makhlouf            following the imposition of sanctions.
   and Qatar is poised for a 16.7 per-        percent on Aug 11.                           last Friday to explore new sanctions           regime on Wednesday as it sought to            and 12 other Syrian officials on its             “Gulfsands is fully compliant with all
   cent expansion due to its gas                             Stuck                         against Assad in response to his five-         defuse media speculation and pres-             sanctions list on May 17 in response          applicable sanctions and is committed
   exports.                                       “Middle East/North Africa, Gulf          month crackdown on pro-democracy               sure group criticism about its activities      to a crackdown on pro-democracy               to continuing compliance with any
      Analysts say demand is particu-                                                      demonstrators, in which the United             in the conflict-torn country.                  protests against President Bashar al-         sanctions that may apply from time to
                                              debt have been stuck in an odd                                                                 In a statement Gulfsands said it            Assad’s authoritarian rule. Makhlouf          time,” the company said.
   larly strong for sovereign or state-       state of external fear and tentative         Nations says 2,200 civilians have
                                                                                                                                          was compliant with sanctions and had           owns Syria’s largest mobile phone                The company said it released the
   linked issues from Qatar and Abu           trading of late. The recent volatility       been killed.                                   kept its relations with Assad’s cousin                                                       statement in the light of recent sanc-
   Dhabi.                                                                                     A round of discussions was held in                                                         company, Syriatel, and several large
                                              creates opportunities for emerging                                                          Remi Makhlouf, who owns a 5.7 per-             construction and oil firms.                   tions against Syria and press specu-
      Both states — rated AA — are            market credit, though, with global           Brussels on Monday, the diplomat said,         cent stake in Gulfsands via his invest-                                                      lation over its relationship with
   seen as regional safe havens amid                                                       and EU capitals raised no objections.          ment company Al Mashrek, at “arms-                             Advice                        Makhlouf.
                                              growth estimates down and equi-
   political upheaval in the wider            ties markets struggling,” said John             “The whole process could be complet-        length”.                                          Other links detailed by Gulfsands             London-based campaign group
   Middle East, and offer attractive                                                       ed by the end of next week if all goes            London-listed Gulfsands said it had         include the rental of offices in              Platform called last week for an inves-
                                              Bates, head of fixed income at asset         according to plan,” the diplomat said,                                                        Damascus from a Makhlouf-owned
   yields compared to bonds in other                                                                                                      had “constructive commercial rela-                                                           tigation into Gulfsands’ relationship
                                              manager Silk Invest.                         speaking on condition of anonymity.            tionships” with interests linked to            firm and the payment of around $1             with the Assad regime.
   regions.                                       If the Gulf’s primary market                An oil embargo would constitute a           Makhlouf since it first entered Syria in       million in fees and milestone pay-               Shares in Gulfsands have more
      “I think with the expected              does re-open after the religious hol-                                                                                                      ments to Ramak, another Makhlouf
   pipeline of new issues in the                                                           major step for the EU, where several gov-      2000.                                                                                        than halved since March on worries
                                              iday of Eid in early September ,             ernments have been reluctant so far to            “All such relationships have been           company, for providing advice on              about its Syrian operations and the
   region, and the current low rates’         investors are likely to target sover-        target Assad’s oil industry because of         conducted on arms-length commer-               identifying and pursuing exploration          possibility that the EU could follow the
   environment in the US, regional            eign issues or top-tier financial            concerns over potential damage to their        cial terms, have been properly docu-           opportunities in Syria.                       United States by banning the import
   borrowers will still come to the           institutions’ or government-related          commercial interests.                          mented and have been disclosed as                 Gulfsands said it had suspended all        of Syrian oil products.
   market in the fall to take advantage       credits.                                        Syria produces about 400,000 barrels
   to tap the available liquidity,” said          “It depends on the names,” says          of oil a day, exporting most of about
   Adnan Haider, head of fixed                a Gulf-based analyst. “If you’ve             150,000 barrels per day to European            hard by five months of anti-government         economy will contract by three percent,       May, against 20,000 in March, and over-
   income at Abu Dhabi Commercial             good names, and companies that               countries, particularly the Netherlands,       protests, could survive unrest and sanctions   and tourism, which accounts for 12 per-       all imports have halved compared to last
   Bank.                                      are highly strategic for the govern-         Italy, France and Spain.                       into next year but experts and officials       cent of GDP and 11 percent of employ-         year, according to a European diplomat,
                 Pegged                       ment... foreign money will jump on              In its latest round of sanctions, the EU    warn of a sharp deterioration afterwards.      ment, is sharply down.                        who spoke on condition of anonymity.
                                                                                           imposed asset freezes and visa bans on 15         The protests, which have rocked much           The overall number of investment              By contrast, building materials are
      All Gulf currencies are pegged to       it. Money is looking at assets back-                                                                                                       projects, meanwhile, are down 47.84 per-
   the US dollar except the Kuwaiti           up.”                                         Syrians on Monday, including senior mil-       of the country since mid-March, have                                                         booming because, with police occupied
                                                                                           itary intelligence and police officials.       dramatically slowed economic activity,         cent in the first half of 2011 compared to    by widespread protests, unsupervised
   dinar, which is pegged to a basket             Sukuk, or Islamic bonds, and pri-                                                       with analysts predicting negative eco-         the same period of 2010, according to         construction is on the rise. Street vendors
   of currencies.                             marily short-dated paper, will also                           Banned
                                                                                                                                          nomic growth in 2011 as a result of a          official figures.                             are also doing well for similar reasons.
      So far this year bond issues by         be more successful than 10 year-                Five institutions, including military and                                                     To make matters worse, the population
                                                                                           air force intelligence agencies, were added    decline in tourism and investment.                                                              For the moment, the economic decline
   Abu Dhabi Investment funds                 plus tenors, driven by strong                                                                  “During the first three months of the       are now only buying the bare necessities      has not spread to the currency, as the
   Mubadala Development Co and                regional bids if global markets              to a list of entities that EU companies are                                                   because of a fear of the unknown, accord-
                                                                                           banned from doing business with.               revolt, everything stopped because con-                                                      Syrian pound is down just eight percent
   International Petroleum Investment         remain jittery.                                                                             sumers were stunned,” said Abdul Ghani         ing to Naji Shawi, who heads the Shawi        against the US dollar since mid-March.
   Co (IPIC) have been heavily over-              Abu Dhabi’s First Gulf Bank                 The EU diplomat said there was still                                                       Group.
                                                                                           no agreement among EU capitals on new          Attar, vice-president of Attar Group, a                                                         Syrian central bank governor Adib
   subscribed.                                attracted $3.8 billion in orders for a                                                      Syrian conglomerate with investments in                       Involved                       Mayalheh last week took increased steps
      In June, an Abu Dhabi debt offi-        $650 million sukuk at the end of             criteria that would allow the EU to broad-
                                                                                           en existing sanctions that target specific     hotels, finance, pharmaceuticals and              The turnover of the Shawi Group,           to limit foreign exchange transactions,
   cial said the emirate was likely to        July.                                                                                       office equipment.                              which is involved in food, pharmaceuti-       and the country still has around $17 bil-
   issue an international bond in the             Several Middle East issuers              companies in Syria with asset freezes.
                                                                                              Last week, governments agreed to dis-          “Since June, economic activity has          cals, cleaning products and finance, is       lion in reserves.
   next 6-12 months.                          decided to hold off selling bonds in         cuss ways to include sectors such as           resumed, but is down about 40 percent          down between five and 10 percent com-            “They are probably lower now but in
      Qatar Islamic Bank aims to raise        the run-up to Ramadan, as widen-             banking, telecoms and energy in EU             from a year ago.”                              pared to last year, he said.                  all cases we have no clear data on that,”
   up to $1 billion via an Islamic bond       ing spreads made issuing debt more           measures banning European companies               The 32-year-old continued: “For the            “Until now, the business sector is sur-    said Jihad Yazigi, editor of the Syria
   this year, and several Gulf compa-         expensive. Of these, Abu Dhabi’s             from doing business with targeted firms.       moment, the private sector, which repre-       viving, but if this crisis continues for      Report economic newsletter.
   nies have sought approval for bond         Dolphin Energy and its Tourism                  “There is uncertainty about the exact       sents 70 percent of GDP, has survived,         more than six months, there will be prob-        “Also, at least half of the budget goes
   programmes this year, including            Development and Investment Co                scope (of the new criteria),” the diplomat     but if the situation does not improve next     lems,” he said.                               to investment expenses, so the govern-
   Oman’s Bank Muscat and                     (TDIC), were in the market for 10-           said.                                          year, the economy will really suffer.             Syria’s main stock market has plunged      ment could very well decide to skip most
   Commercial Bank of Qatar.                  year paper.                                     Discussions have been hampered by           There is a risk of layoffs.”                   40 percent since mid-March and con-           investment expenses (actually it has
      Given limited primary issuance              Another was Dubai-based mall             concerns over how to structure the EU             Even now, Syria’s economic indicators       sumption is markedly lower, with cloth-       already partly done so) and use that for
   during Ramadan and summer holi-            developer Majid Al Futtaim (MAF)             sanctions without risking a legal chal-        paint a grim picture.                          ing and electrical stores in Damascus         current expenses, i.e. salaries, running
   days in Europe, secondary market           Holding, a first time issuer.                lenge by their targets.                           The Washington-based International          lying bare.                                   overhead,” he added in an emailed
   activity is an indication of investor          Daniele Vecchi, senior vice pres-           Meanwhile, the Syrian economy, hit          Institute of Finance predicts the country’s       The country imported just 2,000 cars in    response to questions.
   interest.                                  ident for group treasury at MAF
      “Middle East markets have held          Holding, said MAF would watch
   up on the whole — there have been
   ups and downs in Dubai names, but
                                              markets for an opening.
                                                  “We are always ready to go as
                                                                                                                                             Libyan rebel sees ‘normal output’ by 2012
   Qatar and Abu Dhabi have held              long as the market is favourable,”
   up,” said Haider.
      Prices on sovereign and govern-
   ment-related bonds in Qatar and
   Abu Dhabi have continued to rise,
                                              said Vecchi. “It is difficult to know
                                              where the market stands until way
                                              after Ramadan and when European
                                              investors are back.”
                                                                                           OPEC cut unlikely early in Libyan restart
   some to historical highs. These                Regional borrowers could also            LONDON, Aug 24, (RTRS): Opec’s Gulf            duction to be trimmed straight away once          Having provided extra barrels without      at Opec’s last meeting in June to increase
   bonds are also among the most liq-         tap bond markets to refinance debt           members are unlikely to reduce oil output      Libya returns.                                 a formal Opec decision, they are likely to    its output targets.
   uid in the region.                         and fund infrastructure and devel-           in the early phases of a restart of Libyan        “Let’s see when they completely come        reduce their output quietly if they decide       It has lifted Opec output to more than
      The 6.4 percent Qatar sovereign         opment projects.                             supplies, because it is unclear how long a     back with their output before the crisis.      there is too much oil in the market.          30 million barrels per day (bpd) in July,
   bond maturing in January 2040 was              The International Monetary               significant recovery will take, a delegate     And then, Opec will see whether it affects        Iran, Opec’s current president and a       the highest this year, according to Opec
   quoted at 123.50 on Wednesday              Fund estimates both Dubai and                from a Gulf Opec country said on               prices or stocks, and then it will take the    price hawk, also appears not to be wor-       estimates, entirely offsetting the loss of
   versus 102.50 on March 15. The             Abu Dhabi have refinancing needs             Wednesday.                                     right decision,” the delegate said.            ried about the health of the market. Its      Libyan oil.
   6.75 percent Abu Dhabi 2019 bond           of about $30 billion to 2012, and               While Muammar Gaddafi abandons                 “We can’t say now what Opec will do.        Opec governor Mohammad Ali Khatibi               Libya pumped 1.6 million bpd before
   was at 122.30 — yielding 3.409             Qatar will soon need to prepare for          his Tripoli stronghold and rebels hail the     Are they going to take one month, three        said on Tuesday Opec does not need to         the war, almost 2 percent of world supply.
   percent — up from 113.75 in                the 2022 soccer World Cup.                   end of his rule, the oil industry is weigh-    months, a year?”                               hold an early meeting for now.                Oil executives and analysts say some of
   March, according to Thomson                    “For any potential issuers from          ing the implications of a restart of Libyan       Opec may not make a decision until its         More views from Opec on the Libyan         that could resume within months after
   Reuters data.                              this region it is a very challenging         supplies, which have slowed to a trickle       next meeting in December, suggested the        restart are likely to emerge in early         peace is established, while reaching pre-
      Compared with other emerging            time and the timing of any bond              during the conflict.                           delegate, a government official who is         September. Many officials are away due        war output would take a year or more.
   debt, AA-rated South Korea’s 2019          issue will be key,” said Chavan                 Extra oil from Saudi Arabia and other       not authorized to speak on the record.         to the Muslim holy month of Ramadan,             A senior Libyan rebel representative
   maturity yields 3.341 percent cur-         Bhogaita, head of markets strategy           Gulf members of the Organization of the           The group’s Gulf members Saudi              which is expected to end around Aug 31.       for reconstruction, Ahmed Jehani, in an
   rently versus the 4.074 percent that       at National Bank of Abu Dhabi                Petroleum Exporting Countries has              Arabia, Kuwait, the United Arab                   The supply boost from Opec’s Gulf          interview with Reuters on Wednesday,
   Abu Dhabi’s Mubadala 2019s                 (NBAD).                                      helped to offset the loss and contained a      Emirates and Qatar are typically the 12-       countries came after other members            said efforts to bring oil and other infra-
                                                                                           surge in crude prices.                         member organisation’s most moderate on         including Iran, African countries and         structure back to normal would take at
                                                                                              The Gulf delegate saw no need for pro-      prices.                                        Venezuela blocked a Saudi-led proposal        least nine months.

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