NL/28.05.2018

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CRIF GULF WEEKLY INSIGHTS


Country Risk Update – Kuwait
Risk Indicator – DB4b
Risk Level – Moderate
Ratings Trend – Stable

Business opportunities should increase as the government targets a more diverse economy with its national development plan. A pending resolution of the Divided Zone dispute with Saudi Arabia will boost oil production capacity.The disintegration of the GCC as a result of the Qatar crisis leaves Kuwait in a difficult position and could harm market opportunities.

Market Overview

Oman Arab Bank And Alizz Islamic Bank Mulls Merger
Oman Arab Bank and Alizz Islamic Bank have announced they are exploring a merger—a potential tie up that would add to the growing consolidation trend that’s playing out among Gulf banks.Oman Arab Bank, which is a subsidiary of Oman International Development and Investment Company (Ominvest), sent a letter this week to Alizz Islamic Bank that raised the topic of a potential strategic collaboration “that may lead to an eventual merger of the two entities,” according to a statement posted on the Muscat Securities Market (MSM). Muscat-headquartered Alizz Islamic Bank, which was founded in 2012 and is listed on the MSM with a market capitalization of $200 million, has agreed to proceed with the proposal. The deal is subject to final approvals from the respective boards, shareholders and regulators, according to the statement.

Middle East’s Real Estate Market To Grow As Private Debt Increases
The Middle East’s real estate market is expected to see major growth within the next decade as diversified capital sources become available. This growth, however, might be very closely linked to the major hike in private debt, which is expected to grow within the coming years. According to investment management firm JLL, private debt in the Middle East is growing as an alternative to commercial bank lending. As stated in their report, the Middle East has historically seen less use of debt than overseas markets, primarily due to cultural beliefs, a lack of mortgage and bankruptcy laws and transparency of risk and reward metrics. Use of debt in the Middle East has been slow in recent years despite continued growth of the global private debt market.​In JLL’s report, private debt will make way for the the availability of financing to smaller and less well established borrowers without providing a high level of collateral as security and will provide more flexible loan terms for the general public as well.​

SABB-Alawwal Merger To Help RBS Exit Its Operations In Saudi Arabia
A merger of two Saudi lenders – Alawwal Bank and Saudi British Bank – is likely to help Royal Bank of Scotland Group PLC (RBS) sell its stake in Alawwal Bank and wrap up its operations within the Kingdom, according to a report by S&P Global Market Intelligence. RBS, which has a 40% stake in Alawwal Bank, will have a 5% share of the combined entity. S&P predicts that a smaller share in the merged company will make it easier for RBS to find a buyer. The British lender, which is still majority owned by the British government, has been looking to retreat from its international operations as it looks to privatize.​The deal will free up capital which RBS holds against the Alawwal stake and will pave the way for RBS’ privatization, S&P said. SABB will acquire Alawwal in a stock transaction that values the latter at about SAR 18.6 billion ($5 billion) and will lead to a combined company with assets of SAR 271.43 billion as of March 31, according to S&P Global Market Intelligence calculations.It is the first merger of two Saudi banks since the creation of Samba Financial Group, which resulted from the union of Saudi American Bank with United Saudi Bank in 1999. Samba had assets of SAR227.61 billion as of 2017-end.

U.A.E.’s New Investment Law To Positively Impact Its Property Market
In one of the major announcements made by the U.A.E. government, it is now planning to allow 10-year residence visas for skilled workers and investors. This comes as the Gulf nation takes off the foreign ownership limit, allowing 100% foreign ownership in the country.The decision to enhance the economic outlook of the country was welcomed by several expats. Commenting on the new reform Samer Abdin, General Manager of dubizzle Property said, “The new long-term visa for international investors and specialist professionals will have far-reaching impacts on the property market in the U.A.E.”​ We applaud this decision from the U.A.E. government that will undoubtedly give more confidence to investors and, in particular, property owners.This change will help boost the real estate sector and encourage more foreign investment in the market, resulting in a more vibrant property industry and less transient expat population who are now more likely to purchase their homes in the U.A.E.” 

Arabtec Wins $43 Million Project From Emaar Misr In Egypt
Construction giant Arabtec Holding has announced that its wholly-owned subsidiary Arabtec Construction has won a contract worth $43 million (AED 157 million) from Emaar Misr to build two new phases of Village E Levana in the Uptown Cairo Master Project. Arabtec Construction has won the contract to build 128 villas along with the surrounding roadworks and infrastructure in Phase III & IV of Village E Levana in the Uptown Cairo Master Project.​ Uptown Cairo is an integrated development located in Cairo and the total built-up area of both phases is approximately 61,000 square meters.“The Uptown Cairo Project award marks one of the first projects we have been awarded outside the U.A.E. in over a year,” said Hamish Tyrwhitt, Arabtec Holding’s Group Chief Executive Officer. After the announcement, Arabtec Holding’s share price rose 3% to reach AED 2.06, meanwhile, Emaar Misr’s share price went up 2% to EGP 3.95. Arabtec Holding generated revenues around $2.4 billion and the company’s net profit reached $33.5 million in 2017, compared to a net loss of $929 million in 2016.

Commodity Tracker

Business Events this Week In UAE


The Indian Property Show
@ Sheikh Rashid Hall, Dubai World Trade Centre
21 June 2018 To 23 June 2018
 
Business Updates


Introducing you to our latest offering; D&B’s Industry Insider
This report will be of significant interest to individuals and organizations who would like to identify opportunities, evaluate partnerships and investment decisions in these sectors.

 

 
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CRIF GULF DWC LLC · 48 BURJ GATE, DOWNTOWN BURJ AREA, SHEIKH ZAYED ROAD · Dubai · United Arab Emirates

NL/21.05.2018

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CRIF GULF WEEKLY INSIGHTS


Country Risk Update – Oman
Risk Indicator – DB4d
Risk Level – Moderate
Ratings Trend – Deteriorating

The government introduces measures to boost job creation in the public and private sectors amid rising discontent over unemployment. The government is targeting high-end tourism as an area for growth. Oman’s intangible wealth is low due to the limited education and skill-sets of its labour force. The ports of Sohar and Salalah are emerging as regionally competitive infrastructure facilities, soon to be joined by Al Duqm.

Market Overview

Naguib Sawiris’ Beltone Financial To Acquire Significant Stake In Oragroup
Egypt-based investment bank Beltone Financial Holdings (BTFH) – owned by the Egyptian billionaire Naguib Sawiris – is looking to acquire a significant interest in Oragroup, a regional bank in Africa.The transaction comes as Beltone Financial looks to grow its investments and expand within the financial services industry in the African continent. Oragroup has a strong presence in Africa with its 143 branches that serve over 400,000 clients in 12 African countries in western and central Africa.​While BTFH didn’t disclose the value of the potential deal, it noted that it seeks to sign a non-binding offer to set out the indicative terms for a possible transaction, BTFH intends to conduct a preliminary financial feasibility study for the transaction before commencing a comprehensive and non-exclusive due diligence process to reach an agreement with respect to the possible transaction and the execution of the relevant implementation agreements.​

UAE approves 100% ownership of companies, new ten-year visa
The UAE has approved a new long-term visa system aimed at attracting international investors and high-skilled professional workers. In a major announcement, the UAE cabinet also approved 100% foreign ownership of companies in the country, which has previously been limited to those companies based in freezones. The ten-year visa will be made available to investors in the UAE, as well as those who are specialists in medical, scientific, research and technical fields, as well as for all scientists and innovators. A separate five-year residency visa will be made available to students studying in the UAE, and 10-year visas for “exceptional students”, news agency WAM reported.

Abraaj’s alleged misuse of money said to go beyond health fund
Two separate examinations into the alleged misuse of money at embattled Middle Eastern investment firm Abraaj Group found potential irregularities in its $1 billion healthcare fund as well as its other vehicles, according to people with knowledge of the matter.An audit commissioned some months ago by four high-profile investors including the Bill & Melinda Gates Foundation suggested that money from the healthcare fund was being diverted elsewhere, said the people, asking not to be identified because the matter is private. Preliminary findings from a separate review by Deloitte – at Dubai-based Abraaj’s request – also threw up potential discrepancies in the accounting at some of the other pools, they said.Deloitte, whose review is still underway, is discussing its findings so far with the Dubai Financial Services Authority, the people said. The markets regulator has yet to decide on a course of action, they said​.

SAAB And Alawwal Bank’s Merger To Create Third-Largest Listed Bank In Saudi Arabia
After a year of talks, Saudi British Bank (SAAB) and Alawwal Bank have reached a preliminary, non-binding agreement to merge through the share exchange ratio. Based on this agreement, Alawwal Bank shareholders would receive 0.485 SABB shares for each Alawwal Bank share depending on this exchange ratio and the closing price of SAR 33.5 per SABB share at the last trading day prior to the date of this announcement. SAAB, which is backed by HSBC, will offer to pay 28.5% premium to the Alawwal Bank, by valuing Alawwal Bank’s share price at SAR 16.3 and by valuing Alawwal Bank’s existing issued ordinary share capital at approximately SAR 18.6 billion (around $5 billion). The proposed merger between SABB and Alawwal Bank would create the kingdom’s third-largest listed bank in terms of assets, profits and revenues. The two banks generate collectively $76.7 billion in total assets, while revenues around $3.4 billion, and profits about $1.4 billion, according to the financial statements of the two banks in 2017.

ADNOC Inks Deal With Spain’s Cepsa To Develop Manufacturing Facility In Ruwais
The Abu Dhabi National Oil Company (ADNOC) is moving ahead with plans to create a new linear alkylbenzene (LAB) facility at its refining and petrochemicals complex in Ruwais, after signing a project development agreement with Spain’s Cepsa. The new agreement with Cepsa came a day after ADNOC revealed plans to invest $45 billion alongside partners over the next five years to enhance and expand its refining operations and capabilities as it works to become a global player in the downstream sector.Through its investment strategy, ADNOC will create the world’s largest integrated refining and petrochemicals complex in Ruwais and pursue highly targeted overseas investments to secure greater market access. These investments are expected to add more than 15,000 jobs by 2025 and contribute an additional 1% to GDP per year.

Commodity Tracker

Business Events this Week In UAE


The Indian Property Show
@ Sheikh Rashid Hall, Dubai World Trade Centre
21 June 2018 To 23 June 2018
 
Business Updates


Introducing you to our latest offering; D&B’s Industry Insider
This report will be of significant interest to individuals and organizations who would like to identify opportunities, evaluate partnerships and investment decisions in these sectors.

 

 
We would like to hear from you write to us at [email protected] for
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48 BURJ GATE, DOWNTOWN BURJ AREA, SHEIKH ZAYED ROAD

Dubai

United Arab Emirates

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CRIF GULF DWC LLC · 48 BURJ GATE, DOWNTOWN BURJ AREA, SHEIKH ZAYED ROAD · Dubai · United Arab Emirates

NL/14.05.2018

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CRIF GULF WEEKLY INSIGHTS


Country Risk Update – Bahrain
Risk Indicator – DB5b
Risk Level – High
Ratings Trend – Stable

Dun & Bradstreet upgrades its rating outlook for Bahrain due to the discovery of huge oil and gas deposits which could be economically transformative. A giant oil and gas find off the west coast offers the promise of vast wealth if it proves commercially viable to extract.
Saudi Arabia’s strong support for Bahrain provides a backstop to the economy in the event of a crisis, such as reserves depletion.

Market Overview

Virgin Mobile Middle East And Africa Closes $30 Million Pre-IPO Exchangeable Sukuk
Regional mobile virtual network operator Virgin Mobile Middle East and Africa says it has closed a $30 million pre-IPO exchangeable sukuk, which the company plans to use to fund growth and expansion.Investment management firms Franklin Templeton Investments Middle East and Sancta Capital Group acted as anchor investors in the transaction, while Arqaam Capital acted as the lead arranger and book runner. In the event of an IPO, the sukuk certificates will transfer into an exchangeable sukuk, maturing 2 years from the IPO date.​Headquartered in Dubai, Virgin Mobile Middle East and Africa is part of the Virgin group of companies and has had a presence in the region since 2007. The company has two consumer brands, Virgin Mobile and FRiENDi Mobile, and operates in the U.A.E., Saudi Arabia, South Africa, Oman and Malaysia. As a mobile virtual network operator (or MVNO), it does not own network infrastructure, instead leasing capacity from traditional operators and then reselling services to customers. ​

Oman Inks Energy Deals With Shell, Total And Occidental Petroleum Corporation
Oman’s Ministry of Oil & Gas has signed deals with several oil and gas companies including Shell, Total and Occidental Petroleum Corporation to develop the energy sector in the country.Signed by the Minister of Oil & Gas Mohammed Bin Hamad Al Rumhi with Shell Gas & Power Developments B.V. (Shell) and Total, the first MOU will cover proposed energy development projects in Oman. The agreement covers upstream gas exploration and development, gas-to-liquids (GTL), liquified natural gas (LNG) and renewable energies.​Under the agreement, Shell is to operate an upstream project with Total and Oman Oil Company (OOC) as partners. It will also operate a GTL project with OOC as a partner.Total and Shell as operators will develop several natural gas discoveries located in the Greater Barik area on onshore Block 6, with respective shares of 25% and 75%, as per the agreement between both companies and before possible State back-in, with the objective of an initial gas production of around 500 MMcfd and a potential to reach 1 bcf/d at a later stage.Shell has a 30% share in Oman LNG LLC, 49% ownership of Shell Oman Marketing Company SAOG, and 34% of Petroleum Development Oman.

Dana Gas Strikes Deal With Creditors On $700 Million Sukuk Restructuring
The U.A.E-based firm Dana Gas announced today that it has reached an agreement with creditors to restructure $700 million Sukuk, ending long drawn out legal disputes in multiple courts in the U.A.E and British Virgin Islands and England. The company said last June that the issued Mudarabah Sukuk is unlawful within the U.A.E law and Sahri’a principles due to many issues including that Sukuk guarantees a fixed rate of return to certificate holders and it makes the company responsible for any loss of capital. So the company said that it is very important to comply with the laws through restructuring the Sukuk.​Dana Gas said in a statement today that it has reached agreements with the Ad-Hoc committee of Sukuk holders on terms and conditions of an offer for the restructuring and refinancing of its Sukuk Al-Mudarabah with two options. The first one is to give the shareholders who are wishing to exit their principal, an opportunity to tender their claims at 90.5¢ per $1 of the face value of their holdings, which includes an early participation fee of 2.5¢ (if elections are received within 7 days from the date of launch of the Tender Offer).

ADNOC To Invest $45 Billion In Downstream
The Abu Dhabi National Oil Company (ADNOC) revealed plans to invest $45 billion alongside partners, over the next five years to become a major global downstream player, enabling it to further stretch the value of every barrel it produces.As part of its investment strategy, ADNOC will create the world’s largest integrated refining and petrochemicals complex in Ruwais and undertake a highly targeted overseas investments to secure greater market access. These investments are expected to add more than 15,000 jobs by 2025 and contribute an additional 1% to GDP per year. Following the dip in oil prices, ADNOC has undertaken a significant group transformation program over the last two years. The company has improved its operational efficiency, enhanced performance and realigned the management of its portfolio of assets and capital to create a new and expanded partnership and investment model.

Emirates Group’s Revenues Up By 67% While Profits Grow
Emirates Group announced that its revenues rose by 67% in the last financial year ended March 31 as it netted around $27.2 billion. The group’s profits touched $1.1 billion, up 8% over last year’s results. The Dubai-headquartered firm said that the group collectively invested $ 2.5 billion in purchasing new aircraft and equipment, in acquiring companies, modern facilities, the latest technologies, and to carry out staff initiatives. Emirates –the main subsidiary of the group- reported a profit of $762 million, 124% higher than the previous year while revenues fell by 9% to $ 25.2 billion. Emirates’ total passenger and cargo capacity crossed the 61 billion mark at the end of 2017-18. The airline carried a record 58.5 million passenger, up 4% from the last year. The Dubai carrier, which is the world’s largest operator of the Boeing 777 and A380, received 17 new aircraft bringing its total fleet count to 268 at the end of March.

Commodity Tracker

Business Events this Week In UAE

Run The Track – 18 May
@ Dubai Autodrome
18 May 2018
 
Business Updates


Introducing you to our latest offering; D&B’s Industry Insider
This report will be of significant interest to individuals and organizations who would like to identify opportunities, evaluate partnerships and investment decisions in these sectors.

 

 
We would like to hear from you write to us at [email protected] for
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CRIF GULF DWC LLC

48 BURJ GATE, DOWNTOWN BURJ AREA, SHEIKH ZAYED ROAD

Dubai

United Arab Emirates

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CRIF GULF DWC LLC · 48 BURJ GATE, DOWNTOWN BURJ AREA, SHEIKH ZAYED ROAD · Dubai · United Arab Emirates