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/ / 2018, May 2018, Newsletters

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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