Today's Front Pages

Front pages of major Newpapers in the Middle East

Iran's officials pledge 'total change' to oil sector (FT.com)

The new Iranian President-elect has said that his Gov. will make sweeping changes to the Oil Industry.
International Oil Executives are viweing this as positive as the move will eliminate a major obstacle in negotations that is the on-going ranglings between the liberals and the hardliners in Iran.

Middle East population dynamics (EIU)

EIU reported that the population in the Middle East and North Africa (MENA) region is on average growing faster than in most other areas of the world, according to World Bank. The Bank’s forecast of an average yearly expansion of 1.7% is exceeded only in Sub-Saharan Africa, where growth is expected to average 2% annually over the 12 years ending in 2015.
Highlights of the report:
· Palestinian Territories and Yemen are the fastest population growth with 3.1% and 2.9% respectively and with Youth Population (15 years of age) make up in excess of 45%. This will be problematic due to lack of resources (water) and increased dependency that may require increased taxes to support young population
· Saudi Arabia, Oman, Jordan and Sudan expected growth rate of 2% with Saudi expected to double population by 2015. Youth will make quarter of the population in UAE and Kuwait.

Iran hardliner hails poll victory (BBC)

Iran woke up to new President, Mahmoud Ahmadinejad, the mayor of Tahran. A suprise overwhelming victory with 62%. BBC reports reaction of US and good insight from bloggers

Iran's new President, Mahmoud Ahmadinejad 

Libya Guide (Times Online)

AIL pays $185m for Aramex (AMEinfo)

Arab International Logistics Company has agreed acquisition of Aramex, the regional courier firm, for a total consideration of $185m in its effort to become the largest regional logistics provider.

Iraq opens up mobile contracts to Europe (The Times)

The Times reported that Iraq will invite European Telecom operators to bid for existing licenses rather than automatically renewing existing ones.
The Government says that the licences could sell for up to $1 billion (Pounds 550 million) each.
Demand for mobiles has been strong since the war ended. Experts say there is huge potential in the market. Iraqna, Orascom's Iraq unit, has one million subscribers and plans to reach 1.5 million this year.
Comments: Telecom operators will still be reluctant to bid for licenses given the security situation in Iraq. Nevertheless, this may be a catalyst in extracting larger bids from exisiting operators.

Etisalat has its sights set outside Gulf (FT)

Conference on Iraq will seek to approve large write-off for iraqi debt. Alquds Newspaper القدس العربي

Conference on Iraq will seek to approve large write-off for iraqi debt as well as increase pledges of aid. Iraq still owes $7.8 billion to Paris Club after they wrote off $ 31 billion. In addition, Iraq owes $ 200 billion (Damages re Gulf War) and US$ 10 Billion to financial institution. Total outstanding debt is approx US$ 500 billion.

Oil Price close to $60 

Egyptian company spooks Tata Chem (Business Standard)

Tata group's plan for the biggest overseas buy by an Indian company in Egypt has run into rough weather with Egypt Kuwait Holding (EK Holding), a financial services firm, offering $110 a share more than what Tata Chemicals' had bid for Egyptian Fertiliser Company (EFC).
Tata Chemicals initially made an open offer to buy EFC at $305 per share (or at total cost of $450 million). After EK Holding made a counter bid at $350 per share, Tata Chemicals had increased its price to $352 per share.

Iraq mobile licences up for grabs (AMEinfo)

Iraq plans to issue international tenders by the end of the year to replace the country's three expiring mobile phone licences, according to Communications Minister Jowan Masoum.
Comment: most likely existing operators will be the winners of the licenses.

Arabian Might (Newsweek)

The Upside Of High Oil Prices? A golden era of wealth, and possibly real economic reform, in the Middle East.

Etisalat Wins Bidding For Pakistan Telecom (WSJ)

Emirates Telecommunications Corp., bid $2.6 billion for a 26% management stake in Pakistan Telecommunication Co. in Pakistan's largest privatization deal ever.
WSJ reported that analysts were as surprised by the size of Etisalat's bid, which was almost double the reserve price fixed by the Pakistani government, as they were by the laggard bid submitted by SingTel, widely seen as the front-runner before the sale.
Last year, Pakistan received $1 billion in foreign investment. This year, the government expects to garner $5 billion to $8 billion through privatizations alone which should reduce government's fiscal deficit and enhance foriegn exchange reserves.

Iraq's Central Bank builds credibility with rock-steady dinar value (Zawya.com)

Iraqi Dinar stable due to prudent policies of making Central bank independent and issue of new banknotes in 2004.
CBI governor Sinan al-Shabibi was quoted by Reuters as forecasting that the inflation rate, estimated at 30 per cent in 2004, could fall to 20 per cent this year. The CBI currently estimates annual inflation at around 17 percent. As a result, Economist predict currency appreciation to 1,000 dinars to the dollar and even 500 if Gov. continue to pursue prudent policies.

Arab airlines alliance (Khaleej Times)

Article about the formation of ARABESK, first pan-arab airlines alliance that encompass Saudi Arabian Airlines, Royal Jordanian, Gulf Air, Middle East Airline, Oman and Egypt Air.

'Chicago Ten' plan $500m Gaza company (FT)

IMF urges oil data transparency (Aljazeera)

Three Groups Sign Up for Turk Telekom Sale (Reuters)

Three groups, Oger Telecom, part of the Saudi Oger group, Turkish conglomerate Koc Holding and Turkey's leading GSM company Turkcell, threw their hats into the ring for the sale of a 55 percent stake in Turkey's main fixed-line operator, Turk Telekom.
Etisalat as well as Saudi Telecom were expeced to participate but did not.

Mubarak vows to name vice-president (FT)

President Mubarak will name a vice-president after the September presidential election, a post that many Egyptians assume is reserved for the president’s heir-apparent. Move is welcomed by opposition.
Gamal, Mubarak's son, dampens speculations about his own presidential ambitions.

Lebanon Sells $500M Bond Ahead Of Election End (Zawya.com)

Market watchers reported a difficult passage for the transaction, which priced at the widest end of initial guidance. The shorter tranche, maturing in 2008, offered a yield of 7.5%, while the 2013 issue paid 8.75%. Lead managers were Credit Suisse First Boston and Lebanon's Blom Bank.
The government was pressured to come to market ahead of the June 30 rollover of roughly $350 million of borrowing, the trader said. At $14 billion, Lebanon is the largest issuer from the Middle East in the Eurobond market.
The civil war that began in 1975 and lasted 15 years left deep divisions in Lebanon, and the country's economic progress since has been halting. The Paris II donor conference in 2002, which restructured around $9.5 billion of Lebanon's debt, helped spare the economy a relapse towards default. But at around 174% of gross domestic product, Lebanon's public debt ratio is one of the highest of all countries rated by international credit agencies.
Lebanon is rated B- by Standard & Poor's Corp., B3 by Moody's Investors Service Inc. and B- by Fitch Ratings.

The General' seeks to be Lebanon's kingmaker (FT)

Former Lebanese Army commander Michel Aoun is making a bid to hold the balance of power between the anti-Syrian opposition and pro-Syrian groupings in Lebanon's new parliament, following elections last Sunday.

ALAFCO Signs $2.9 Bln Deal for Airbus A350s (Reuters)

ALAFCO plans to grow its current fleet of 11 Boeing and Airbus jets to 50 planes in the next three years, ALAFCO Chairman and CEO Ahmad al-Zabin said. ALAFCO operates under Islamic Sharia rules. Kuwait Finance House holds a 89 percent stake while national carrier Kuwait Airways Corp owns the rest.

Desperate to pump more crude, Iraq risks permanent damage to its oilfields (FT)

FT reports that Iraq's oil fields are at risk of permanent damage due to over production. Some traders have indicated that Basra light has become more dense and sulphuric due to damage to fields stemming from over-production and lack of reserve management. Heavier crude will lead to reduced value of Iraqi crude as it becomes more difficult and expensive to refine. What is needed is investment but security situation is still keeping oil & gas players away.

Abraaj, 40% Maktoob stake (AMEinfo)

Dubai-based private equity house Abraaj Capital has taken a 40% stake in Arab web portal Maktoob.com. The acquisition was made through the $116m Abraaj Buyout Fund, which is now fully invested.

Mitsubishi Renews Crude Term Contract With Iraq - Traders (Noozz.com | IRAQ)

Japanese trading house Mitsubishi Corp. has renewed a six-month term contract with Iraq's State Oil Marketing Organization, or SOMO, to purchase Basra crude oil, crude traders based in Tokyo said Monday. According to the traders, Mitsubishi is expected to buy 2 million to 3 million barrels of Basra crude on a quarterly basis.

Italcementi to Buy Stake in Egypt Firm (Reuters)

Egypt's Arab-Swiss Engineering Co. (ASEC) said on Sunday it had initialled a deal for Italy's biggest cement firm Italcementi (ITAI.MI: Quote, Profile, Research) to buy its 68 percent stake in ASEC Cement Co. (ASIC).
The deal valued ASEC Cement's assets at 4.6 billion pounds ($793 million), Khalifa said, adding Italcementi was due to complete due diligence within 45 days.

Malaysia's Petronas in talks on Iraqi oil dvlpt (Reuters)

JP Morgan Chase sells stake in Gulf Int'l Bank ( Reuters)

J.P. Morgan Chase said on Monday it sold its 5.3 percent stake in Gulf International Bank to the Saudi Arabian Monetary Agency (SAMA).
"As one of three global banks recently granted a license to open a Saudi Arabian branch, we decided to sell our stake in Gulf International Bank to eliminate the potential for any conflicts of interest between our business and that of GIB," J.P. Morgan said in a statement

Paying homage to their murdered colleague, Samir Kassir, Lebanese journalists hold pens as a symbol of press freedom during a mourning sit-in in Beirut's Martyrs Square
 

Gulf Base is an excellent stock site for GCC stock markets. The site is being utilized by the likes of SAMBA to provide timely and accurate company informations and stock prices to Saudi Investors. 

Nymex seen inking agreement for Dubai Exchange on Friday (Khaleej Times)

New York Mercantile Exchange and Dubai Government will launch Dubai Mercantile Exchange that will provide exchange for futures for gold and high-sulfur crude oil as early as this year.
"They’re shooting to launch this year, probably starting with electronic trading and open outcry about three months after” said one person close to the matter.

UAE's Union National Bank to Issue Euro Notes-Paper (Reuters)

Union National Bank of Abu Dhabi said it was establishing a euro medium-term note program valued at $1.5 billion and would also increase its share capital, Gulf News reported on Thursday.

EGYPT Headlines - Reuters

US shifts toward caution on reform in Egypt

Following earlier comments in March by Secretary of State Condoleezza Rice, US has shifted approach in favor of school of thought that advocate cautious and limited reforms as opposed to previous policy of supporting substantial reforms. Shift in policy is due to pressure by groups close to US administration.

IMF says Egypt economic recovery to keep rolling

IMF forecast Egypt's economy would grow 5.0 percent in real terms in 2005/06 ending June 30, after a 4.8 percent expansion in 2004/05 and 4.1 percent growth the year before.
Inflation is likely to slow in 2005/06 to a 8.0 percent annual rate from 9.6 percent in 2004/05
While generally upbeat in its outlook, the IMF warned Egypt's growth rate still lagged what was needed to keep up with the country's labor force growth and said government borrowing and debt remained too high.

The new centre of attention (Gulf Business)

The message from the Qatar Government is clear: if international financial institutions wish to take a slice of the country’s big-ticket projects with a combined price tag of $100 billion, then they must set up camp in Doha. And the newly launched Qatar Financial Centre (QFC) is just the platform to bring all the financial institutions interested in its future.
Interview with Philip Thorpe chairman and chief executive of the Qatar Financial Centre Regulatory Authority (QFCRA).
Nothing new. Emphasises that all three financial centres would be have room to grow (see previous blog).

Taking stock (Gulf Business)

The stampede following the long awaited launch of the Dubai Financial Markets did not materialized. The building blocks are there (transparency, regulation etc) but the volume is paper thin (approx US$ 1 m daily). Brokers hope that launch of sister exchange, Abu Dhabi Securities Market, which will house Etisalat, the telecom giant which accounts for 50% of the total UAE market capitalization, will provide the catalyst in lifting volume on the DFM. Nevertheless, high liquidity and banks eagerness to lend is a major obstacle in the investor diversification in sourcing finance such as going to the equity market.

New telco start-up on the horizon (Gulf Business)

Lightspeed Communications, a startup, will become the first in the region to break a telecom fixed line monopoly (bahrain) when it launches its competitive voice services later this year. LSC will offer voice, video and high-speed Internet.

Runaway petrol smuggling is big business in Iraq (Zawya.com)

Although Iraq has second largest oil reserves in the Middle East, its refinaries are producing low margin products such as fuel oil due to decades of underinvestment.
Iraq now imports US$ 200 m a month on petroleum imports, but nearly half of that, some analysts estimate, is quickly smuggled out of the country.

Qatar's Rasgas, ExxonMobil to build 1 bln usd Italy gas terminal with Edison Gas

The name of the game is to secure markets. Rasgas with its partner Exxon is building US$ 1 billion LNG gas terminal in Italy.

From The Economist print edition 

Egypt - Something is brewing but nobody knows quite what (Economist.com)

“THE problem is not that you're heading the wrong way, but that you've got one short leg and one long leg.” When a keen observer of Egypt said this ten years ago, he was referring to its halting steps at economic reform. The words could just as well describe current moves towards political reform.

Banks' bad loan provisions soar to RO452m - Oman (MENAFN)

Kurds meet to pave way for unified self-rule area (FT.com / In depth )

Iraqi Kurdistan's newly elected regional parliament convened for the first time on Saturday in the northern city of Irbil, paving the way for the unification of a Kurdish self-rule area divided between two rival parties.

Dubai oil group eyes £600m float (Telegraph | Money)

Thani Investments, the Dubai oil, property, mining and power group, is considering listing oil assets worth up to £600m in London in a stock market flotation. Thani Emirates (subsidiary of Thani Investments) has a 5pc share in Petrodar, a partnership with Chinese oil groups CNPC and Sinopec and Petronas of Malaysia, to develop five oil fields in Sudan.

Brown urges US to join new 'Marshall Plan' (The Independent)

Gordon Brown is appealing to the world's oil-producing states, including Saudi Arabia, the United Arab Emirates and Kuwait, to use some of their wealth from rising oil prices to contribute to the aid to Africa. He wants the oil revenues to plug an estimated $20bn shortfall between the $80bn so far committed to the world's poorest countries by 2010 and the $100bn UN target.

Orascom & Sawiris Family - Top listed companies in the Middle East (Business Today)

Good general article about Orascom and profile of Orascom Industries by Emerging Egypt 2003

Libya needs to compromise to attract big oil-Woodmac

under recent EPSA IV, majors such as Shell found themselves outbid by smaller companies that were able to be more flexible and aggressive. "They (the majors) were less inclined to compromise the hurdle rates that they've established," Millan (consultancy Wood Mackenzie) said.
Majors will bring in major investment in E&P but "NOC would have to meet them somewhere in the middle in the actual terms that they offer."

More Than Just Another Bubble - Saudi Arabia's market capitalization is now $450 billion, larger than China's or India's. (Newsweek)

Co-head of global emerging markets at Morgan Stanley Investment Management writes in Newsweek that high oil prices have spilled into the equity markets across the Middle East rather than fleeing the region as usual. There is a new sense of confidence pinned by genuine economic reforms especially in countries such as Egypt & Morocco where there's at least an element of rationality in the exuberance on the region's trading floors.
The writer concludes that as there are so many citizens involved in regions markets, governments could face serious discontent if they don't follow through on their reforms.

Comparative Statistics: Saudi Banks (Standard & Poor's)

Bank says Saudi's top field in decline (Aljazeera.Net)

Don Coxe, oil analyst with the Bank of Montreal, re-ignited the debate over Saudi Arabia's Oil reserves. The analyst says that Gharwar's (Saudi Arabia largest oil field) days are fated. "The combination of the news that there's no new Saudi Light coming on stream for the next seven years plus the 27% projected decline from existing fields means Hubbert's Peak has arrived in Saudi Arabia," says Coxe

He Specifically points to:

- KSA promise to increase production by 500,000 barrels was only satisfied by “heavy, sulphurous oil that only a few refineries had the spare capacity to use" and not “benchmark Saudi Light, the high-end product that any oil refinery can process”

- Declining field will cut target additional production of 5 m barrels by 2012 to 2.5 m

- Lack of transparency over Reserve calculations especially as there is an incentive under old OPEC rules to inflate these in order to obtain a higher country quota

- Poor management of Gharwar : Pumping large amounts of oil at the maximum rate can damage the geological structure of the field, usually referred to as "rate sensitivity". Basically the hole falls in on itself, making large amounts of oil within it un-extractable.

- Utilization of water injection on new and old fields in Saudi : “..Water flooding on newborn Saudi wells? Isn't water flooding [the] Viagra of ageing wells?"

Saudi has responded by saying that it will meet its production targets by the utilization of new technology and pointed out that some parts of the Kingdom remain unexplored.

Coxe concludes a bleak future for Saudi Oil and energy supply. "With Opec's excess capacity ... tapped out, oil consumers have lost their security blanket against petro-chills. Free markets ... can be messy and unpredictable, little people can get hurt."

Capital flight to Doha - Zawya.com

The rivalry between the three Financial Hubs in the Gulf is set to become heated following QFC hiring of the ex-head of the DFSA (the Regulator of the Dubai International Financial Centre). The pragmatist say that Bahrain will emerge as the Islamic Banking Centre, Qatar for project financiers and Dubai for asset management and Investment Banking. The skeptics points to an immense fight by the three financial centers for every license and talent.

World Economic Forum - Arab World Competitiveness Report 2005

Country Ranking :
1. Qatar
2. UAE
3. Bahrain
4. Oman
5. Jordan
6. Tunisia
7. Saudi Arabia
8. Morocco
9. Egypt
10. Algeria
11. Lebanon
12. Yemen

Libya court delays verdict on foreign medics AIDS case - Reuters

Libya's Supreme Court on Tuesday delayed until November 15 a ruling on an appeal by five Bulgarian nurses and a Palestinian doctor sentenced to death for deliberately infecting hundreds of children with the HIV virus. Ruling is seen as positive sign in Libya - EU - Bulgaria relations