tradeflow21.com

Growing sense of optimism in Dubai — FT

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

Signs of revival for Dubai property

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

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

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

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

New US Ambassador to Saudi Arabia addresses the facts

admin — Mon, 26 Oct 2009 02:52:44 +0000

See clips below from The National Newspaper’s coverage of James B. Smith’s (the recently appointed U.S. Ambassador to Saudi Arabia) poignant talk to approximately 100 U.S. company representatives in Riyadh. TradeFlow21 lauds Ambassador Smith for his timely and critical assessment — hopefully a wake up call for businesses.

For information on the latest global economic competitiveness ranking and how the GCC ranks (note Saudi Arabia moved up to #13 this year and is knocking on the door for a top-10 spot), see Doing Business 2010: Saudi Arabia nears goal; UAE climbs ranks.

clipped from www.thenational.ae

Diplomat warns US firms are losing edge

RIYADH // The new US ambassador to Saudi Arabia yesterday warned American businesses to wake up to the fact that they are losing their edge in an increasingly competitive Saudi market.
Ambassador James B Smith, a retired air force general, also told his audience of about 100 US company representatives that it was time for both Saudis and Americans to “rethink some opinions” of each other forged in the wake of the September 11 terrorist attacks.

Noting that many US companies are “on the sidelines waiting to see what’s going to happen in Saudi Arabia”, he added: “My message back to them is: What’s happening is the train has already left the station. You are losing market share to India, China, Russia and if you don’t move you’re never gonna catch the train.”

Rothschild sees opportunity, to expand in Saudi Arabia and Qatar

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

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

clipped from www.reuters.com

Rothschild busiest in Mideast M&A

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

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

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

IIF forecasts solid growth for GCC in 2010

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

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

IIF GDP forecasts for the GCC:

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

Doing Business 2010: Saudi Arabia nears goal; UAE climbs ranks

admin — Sun, 13 Sep 2009 18:52:48 +0000

Doing Business 2010: Reforming through difficult times, which features the latest ranking of economic competitiveness (published on Thursday by the International Finance Corporation - The World Bank), contains some especially positive news for The Kingdom of Saudi Arabia and the United Arab Emirates.

As for Saudi Arabia, the Kingdom moved up two spots to number 13, surpassing Iceland and Japan, respectively, while inching closer to a coveted top-10 spot. The Kingdom is striving to become a top-10 competitive economy by 2010 (which coincides with next year’s Doing Business). TradeFlow21 managing partners Lewis Nescott and Steven Towns recently met with officials at the Royal Embassy of Saudi Arabia and had a very productive discussion — including the unequivocal significance of the Kingdom’s “10 x 10″ goal. See the next edition of Trade and Transactions, TradeFlow21’s monthly e-newsletter, for more details. (Contact us for a free subscription.)

Meanwhile, the United Arab Emirates continued its impressive climbing of the rankings in recent years, moving up 14 spots to number 33. Among Gulf Cooperation Council (GCC) members, only Saudi Arabia and the UAE improved their competitiveness in the ranking. While other GCC members also instituted reforms, the global landscape is quite competitive and therefore, on a relative basis, they lost some ground.

Following is a list of select countries with their 2010 rankings and year-over-year change.

Top-10
1. Singapore
2. New Zealand
3. Hong Kong, China
4. United States
5. United Kingdom
6. Denmark
7. Ireland
8. Canada
9. Australia
10. Norway
* Among the top-10, all were unchanged except a switch in places between the U.K. and Denmark.

GCC
13. Saudi Arabia (+2)
20. Bahrain (-2)
33. United Arab Emirates (+14)
39. Qatar (-2)
61. Kuwait (-9)
65. Oman (-5)

“BRIC”
89. China (-3)
120. Russian Federation (-2)
129. Brazil (-2)
133. India (-1)

IMF signs off on Saudi Arabian economy, outlook

admin — Wed, 26 Aug 2009 13:07:09 +0000

The IMF issued a very positive report on Saudi Arabia last week, especially in light of the recency of the global financial crisis and ongoing global economic uncertainties. All systems are a go in the Kingdom, even as lower oil production is expected to pull down GDP to -1% this year. More importantly, the financial sector is “solid” and non-oil GDP growth is forecast at 3.3%, a solid figure in its own right.

clipped from www.google.com

Saudi economy, banking system solid: IMF

RIYADH — Saudi Arabia’s economy remains solid and its banks have weathered the global crisis, the IMF said in a report on Tuesday which also commended the world’s leading oil exporter for helping stabilise oil prices.”The outlook remains broadly positive” despite a projected one percent contraction in GDP this year due to lower oil production, the International Monetary Fund executive board said in the report.

It noted that non-oil GDP, which points to the ability of the economy to create jobs, is expected to grow 3.3 percent this year on the back of a massive government capital spending programme.

The IMF also said the country’s banking system remains on firm ground.

“The banking system has weathered the global crisis. It remains profitable and well-capitalised with low non-performing loans.”

Yahoo! recognizes opportunities in Middle East

admin — Wed, 26 Aug 2009 12:44:48 +0000

Although the value of the deal was not disclosed, it appears the acquisition of Maktoob is a timely one for Yahoo!, as it positions itself to grow its emerging markets segment fueled now by one of the world’s youngest, most dynamic, and highest-growth regions. A surge in internet usage in the Middle East is driving annual growth in on-line advertising of 25-50%, according to Yahoo’s Sr. VP of Emerging Markets.

clipped from online.wsj.com

Yahoo Buys Maktoob Arabic Portal

DUBAI (Zawya Dow Jones)–Yahoo Inc. (YHOO), said on Tuesday it agreed to buy Arabic online portal Maktoob.com as it seeks to add the Middle East to its expanding strategy for the fast-growing emerging markets.

Yahoo has 44 million users a month in the North Africa and Middle East region, Nilsson said. Maktoob.com has over 16 million users, according to the company.

Yahoo and rival Google, which already has Arabic internet services, are competing to tap the Arab World’s fast-growing population of over 320 million and high per capita gross domestic product, one of the highest in the world. “Saudi Arabia and Egypt offer tremendous size and growth opportunities that we will be looking at in addition to other countries in the Middle East,” Nilsson said.

Qatar, a real green shoot

admin — Fri, 07 Aug 2009 12:49:49 +0000

clipped from www.themedialine.org

Covering an area larger than Beirut and with almost half a million people – two ways that the Qatari developer is describing Lusail - a brand new city is being constructed in the northern part of the Gulf nation.

On completion, the Lusail development project will cover almost 6,800 acres (compared to 5,000 for the Lebanese capital Beirut). It will cater to 455,000 people – including 200,000 permanent residents, 165,000 people working in different parts of the city and an additional 90,000 visitors for various recreational purposes.

“Qatar has been favored as a safe haven so far for its expanding gas story and the government’s market-friendly support of the economy,” Turker Hamzaoglu, Economist with Bank of America-Merrill Lynch, told The Media Line.

Sovereign wealth funds update: GCC $700B+

admin — Fri, 07 Aug 2009 12:27:59 +0000

In a recent blog post at the Council on Foreign Relations, economist Brad Sester and a counterpart at Roubini Global Economics made their best estimate of the size of sovereign wealth funds (SWFs). The financial crisis of 2008 put a dent in Gulf funds, but collectively they are still sizable, exceeding $700 billion (easily $1 trillion-plus when including Saudi Arabia’s conservatively managed reserves), and growing, albeit slower — ultimately contingent on the price of crude and domestic financing needs. See the table below (accessible by clicking the link at the end of the post to continue reading) and take note of the first two listings, both of the UAE and the total figure for the GCC (Gulf Cooperation Council), as well as the SAMA (Saudi Arabian Monetary Agency), although again the latter is said to be predominately invested in traditional reserves as opposed to riskier assets. Finally, see also a post from last summer by TradeFlow21’s Steven Towns, which briefly explains the importance of SWFs and takes a look at top funds’ assets per capita. (more…)

‘Dr. Doom’ finds bright spots; Egypt, Qatar and Lebanon

admin — Thu, 06 Aug 2009 04:02:06 +0000

In the Wednesday (8/5) edition of RGE Monitor, the analysts at Roubini Global Economics (headed by Nouriel Roubini, aka Dr. Doom), suggested that there are in fact some regional and national bright spots despite a global oversupply of overwhelmingly uninspiring economic indicators. Since we at TradeFlow21 are primarily interested in accessing markets in the Middle East and North Africa, we’ll re-post a summary of what RGE had to say about the region:

Overall, countries in the Middle East and North Africa (MENA) region were relatively sheltered from the financial spillovers, but suffered from reduced demand. Expansionary fiscal policies throughout the region and effective – if belated in some cases - financial sector support offset the export and investment weakness. The GCC countries most reliant on foreign financing to fund credit expansion, such as the UAE, are suffering the sharpest effects. However, past savings provide a cushion. In the long-term the region’s growth outlook depends on the price and effective deployment of its hydrocarbon endowments.

Among the countries that RGE specifically mentioned in its regional summary include Egypt, Qatar, and Lebanon. Egypt seems to be managing quite well partially thanks to its counter-cyclical monetary and fiscal policies. Cylicality (pro-cylicality in particular) is something that was discussed as a feature in the July edition of our own Trade & Transactions. (See our About Us page for contact information if you’d like to subscribe). Meanwhile, Qatar is expected to be one of the fastest growing economies in the world, according to RGE. The Qatari government has made the right moves thus far to shore up the domestic banking and property sectors, while its sovereign wealth fund is eying outbound opportunities. Finally, Lebanon, one of the few positive exceptions among so-called frontier markets (along with Morocco and Tunisia) has had sustained success in attracting capital inflows. At the same time, stability has allowed for growth in real estate and tourism, says RGE.