Bahrain real estate market

The Bahrain real estate market is not in as bad shape as the UAE. Buyers do not want to commit right now and the market is in mild decline. That said, the majority of homes in the Kingdom have been bought by owner-occupiers and speculator activity has been restrained, although it does exist. One aspect that has helped the Bahrain market so far is he presence of the U.S. Navy’s Fifth Fleet. Despite falling house prices, there is a shortage of housing and that makes the long term picture look brighter.

In the north, various new developments are being constructed on reclaimed land. This does not help the increasing demand in low cost housing, so investors are keenly watching demand.

Misr National Steel - Ataqa takover

Misr National Steel - Ataqa is to be aquired by Red Sea Steel for LE 370.6 million ($67 million). The takeover values in Ataqa at LE 247.09 a share. Ataqa is listed on the Egyptian stock exchange but few will benefit from the massive premium as there have been no transactions in the shares throughout 2008!

Iraq announces 100 bps interest rate cut

Iraq's central bank will cut interest rates by one percentage point to 14 percent on Jan. 4. The good news is that Iraq's core inflation fell to 12.7 percent rate in November, from 13.6 percent in October.

Maridive and Oil Services

Maridive has begun work on the the EPC contract with Aramco Saudi Arabia to develop the Manifa oil fields (a US$400 million deal). Although the Egyptian economic environment is not great and oil price weak, the company claims the offshore support market is still healthy and that demand of offshore support services is supported by short supply. Indeed, the 3 new AHTS support vessels it bought were instantly hired to new clients at daily charter rates!

One to watch when oil prices recover...

Arabtec Holding predicts impressive full year

Arabtec, a UAE construction firm, predicted a net profit of $272.3 million and announced a one for one bonus issue (in lieu of a dividend). This represents an 87 per cent above last years figure. The gloomy talk about the credit crunch, however, saw the shares fall 9.93 per cent on Tuesday before rebounding 14% today.

UAE Christmas sell off.

Not much Christmas cheer in the UAE as the stock market ended the 25th Dec lower, following six trading days of losses. There are few bids for stocks at the moment and there are sellers who want to get out of the market before the end of the year.

Saudi Arabia moves into deficit

BMI has just produced a piece of research downgrading Saudi Arabian growth. As can be ssen, government spending is taking a dive into fiscal deficit(of 1.2% of GDP). This is the first time since 2002 and will force the country to forcing it to use the sovereign wealth fund or build up public debt to match the gap. Still, most ountries would die for problems like that right now. The economy is still growing and should weather the storm.

Olympic group

Producing economically sensitive goods like washing machines, refrigerators, electric water heaters and gas cookers is going to be a tough business in the next few quarters. Egyptian Olympic group will face some tough times. Indeed, its third-quarter profit already fell 60 percent, mostly on cost increases on its marketing and salary side. Still, things may not be that bad as it has just announced it will buy back up to 3 million shares representing 5 percent of the company's capital. The shares in jumped 17.46 percent on the news!

Qatar Islamic Bank raises more capital

In an all too familiar pattern the Qatar Islamic Bank issued shares worth 3.8 billion riyals to Qatar´s sovereign wealth fund. Qatar Islamic shareholders the issue of about 39.38 million new shares at a price of 97 riyals to the Qatar Investment Authority. This is part of Qatar's $5.3 billion plan plan shore up investor confidence in the banking sector.

Emaar buyback cancelled?

The UAE stock market regulator cancelled Emaar Properties' 10 percent share buyback licence after the firm failed to buy shares in time. Emaar only bought 200,000 shares, or 0.003 percent of its capital. It is not clear why the cmpany did not buy the shares. It apparently has cash on its balance sheet and was recently rated by a credit agency (see earlier report on this blog). The stock is not that illiquid, so 200,000 shares is fairly pathetic. Seems the company may be having cash flow issues.

Merry Christmas

In Akan (Ghana) Afishapa
In Arabic Milad Majid
In Zimbabwe Merry Kisimusi
In Afrikaans (South Africa) Geseënde Kersfees
In Zulu (South Africa) Sinifisela Ukhisimusi Omuhle
In Swazi (Swaziland) Sinifisela Khisimusi Lomuhle
In Sotho (Lesthoto) Matswalo a Morena a Mabotse
In Swahili (Tanzania, Kenya) Kuwa na Krismasi njema
In Amharic (Ethiopia) Melkam Yelidet Beaal
In Egyptian (Egypt) Colo sana wintom tiebeen
In Yoruba (Nigeria) E ku odun, e hu iye' dun!

Columbia cuts interest rates 50bps

Colombia's central bank cut 50bps cut from its benchmark interest rate taking it from 10.00% to 9.50. This is the start of monetary easing, despite world wide cuts and inflationary pressures.

Etisalat wins Iranian license

UAE telecom Etisalat, as part of a consortium, won the bid for Iran's third mobile telephone licence.

Etisalat was the first telecom operator in the Gulf to introduce a mobile phone service, and was one of the early adopters of GSM technology. Since then it has established itself as a regional pioneer by introducing both 3G and MMS, and most recently, a BlackBerry service in 2006

Guinea coup

Guinea's constitution has been suspended following the death of President Lansana Conte in a military coup. The self styled National Council for Democracy and Development claim they will put in place a government of national unity.

The military officers criticized the government’s inability to revise contracts with mining companies. Guinea is a big Bauxite producer. Guinea is a member of the West African Economic and Monetary Union (UEMOA) established in January 1994, and comprising eight West African countries (Benin, Burkina Faso, Côte d’Ivoire, Mali, Niger, Senegal, Togo, including Guinea) and capital markets are covered by the Regional Stock Exchange (BRVM) in Abidjan.

Reuters poll predicts GCC GDP growth

A new poll of 11 economists shows that economists expect real economic growth in Saudi Arabia, the United Arab Emirates and Kuwait to slow - but remain positive!

The good news is that the sconomies are still expected to expand. What is clear, however, is that the Gulf is sensitive to the oil price. Obviously, a fall in oil prices from $147 a barrel to $34 a barrel has an impact.

The forecasts are for real growth of 2.4 percent in Saudi Arabia, 2.7 percent in the UAE and 3.5% in Bahrain. Qatar, the world's top exporter of liquefied natural gas, is expected to see the fastest GDP growth next year at 9.5 percent!

We will monitor the extent of the slowdown in the non-oil sectors. across the Gulf will be a key element to monitor," said Giyas Gokkent, chief economist at National Bank of Abu Dhabi.

Al-Rajhi Bank

Al-Rajhi Bank, the largest Gulf Arab bank, has fallen 70% so far this year. The concern is that last years record profitablity will suffer the same fate as happened to its net profit in December 2006. At that time the bank had a run of negative results on the back of a 2006 regional stock market crash which slashed its brokerage and fund management revenue.

Although the bank continues to develop its investment and banking side, unfortunately(market rumours are that) its subsidiary, Bakheet Financial Services, boosted lending when interest rates were low and there were record oil receipts. In other words, they may face the same problem again.

Emaar Properties rating downgraded

Standard & Poor's Rating Services revised its outlook of the Middle East's largest development company from stable to negative. The good news is that it reaffirmed the 'A-' long-term corporate credit ratings!

The revision is natural in the current environment and obviously reflects a rapid weakening of the real estate markets in Dubai. A prolonged downturn could hurt Emaar's development model. Right now, the company has a healthy financial position.

Emaar Properties made headlines around the world for building the world's tallest tower in Dubai.

MSCI Arabian Markets Real Estate Capped Index

A new property index has just been launched that should help gauge what is going on in GCC's market. The MSCI Arabian Markets Real Estate Capped Index is a free float-adjusted, market capitalization index, and contains more than 60 leading real estate securities of the largest and most liquid companies from 11 Arab countries. The Index will be calculated daily.

Zain in Ghana

Zain has now launched the services that were developed as part of its investment of $420 million (the cost of rolling out its network across Ghana). Its new commercial services are supported by a 3.5G backbone. Zain's new Ghana network will offer its customers ultra high-speed internet access and the ability to make video-calls and use rich multimedia content including the ability to send video clips, music and pictures

Botswana cuts interest rates 50bps

The Central Bank of Botswana has reduced interest rates by half a percent from 15.5 to 15 percent.

Although inflation remains above the bank’s medium-term objective range of 3 – 6 percent and the country has price stability is projected there is a chance that the impact of the increase in the alcohol levy would outweigh the effect of the recent decrease in fuel prices. It is therefore possible to see a temporary rise in inflation at the same time as a monetary easing.