Finance

Bahraini investors hail Oman’s investment environment

Bahraini investors and businessmen hailed the excellent investment environment provided by the Public Establishment for Industrial Estates (PEIE). This was marked at the "Invest in the Sultanate of Oman" Symposium held in Bahrain and organized by PEIE in collaboration with the Sultanate's Embassy in the Kingdom of Bahrain, under the auspices of Sheikh Mohammed bin Essa Al Khalifa, Chief Executive of the Bahrain Economic Development Board (EDB). The event was attended by HE Abdullah bin Mohammed Al Amri, the Sultanate's Ambassador to Bahrain, and Hilal bin Hamad Al Ahsani, CEO of (PEIE). Addressing the audience, Al Amri emphasized the depth of relations between the Sultanate and the Kingdom of Bahrain and the development of these relations in various fields. "Thanks to the patronage of His Majesty Sultan Qaboos bin Said and His Majesty King Hamad bin Isa Al Khalifa of Bahrain," he noted. Al Amri added that the main purpose of the symposium is to promote the development and prospects of bilateral cooperation between the two countries and strengthen ties to wider horizons of cooperation in different areas. He added that the symposium is one way to support the positive joint efforts between the two sides so as to strengthen and increase cooperation and partnership between the business sectors in both countries. "Organizing such events is an active step towards creating harmonizing economic partnership between the business sectors in the two countries," Al Amri pointed out. "It is a true privilege to organize a symposium in the Capital of Bahrain, Manama, to meet elite of businessmen and industrialists to inform them of the investment opportunities available in the Sultanate of Oman," Hilal bin Hamad Al Ahsani noted, adding: "This symposium comes as an initiative of the Omani Embassy in Bahrain in line with the investment growth witnessed by the Sultanate's various economic estates." Highlighting the remarkable efforts undertaken by PEIE, Al Ahsani commented: "The Public Establishment for Industrial Estates manages and supervises more than 71 million square meters of industrial estates, in addition to new three estates under study with an area of more than 16 million square meters. Therefore, we are managing nine industrial estates namely; Rusayl, Sohar, Nizwa, Sur, Al Buraimi, Raysut, Sumail, Ibri and Musandam. It should be noted that the volume of the national, Arab and foreign investments has touched more than 10 billion U.S. dollars." A number of papers were presented by senior officials from PEIE, Special Economic Zone Authority in Duqm, Public Authority for Investment Promotion and Export Development (PAIPED) and the free zones in Salalah, Sohar, Al Mazunah, Sohar Industrial Port and Golden Hala Company. While throwing light on PEIE's role in providing an excellent economic and investment climate in the Sultanate in general and in the economic and industrial zones in particular, Bassim bin Ali Al Nassri, Director General of Marketing and Media at PEIE, said: "At PEIE, we work towards achieving certain objectives which include implementing informative programs at the national and regional levels in order to introduce the organization, its activities and the vital role it plays in serving the business community; implementing promotion programs on the Public Establishment for Industrial Estates with an attempt to convey our mission and objectives to the business community, which is known as the investment incubator; implementing marketing programs to highlight the various investment opportunities available in the economic areas, which are being supervised by PEIE; designing and implementing awareness campaigns to promote the Omani product and further advance the competitiveness of the product in the local markets." Speaking about Al Mazunah Free Zone, Said bin Ali Al Mashani, Director General, Raysut Industrial Estate and Al Mazunah Free Zone, said: "Al Mazunah Free Zone offers a distinguished commercial and investment dimension, where it can be deemed a worldwide investment gate for Yemen and Oman, especially with the great investment facilities offered by the Sultanate to the non-Omani investors." Al Mashani said, "Al Mazunah project offers a wide range of investment opportunities that start with launching the work in the project, develop with the progress of the work therein and increase with every accomplished utility and every run service. These investment opportunities are divided into the commercial sector, light industrial sector and assistant services sector." Haura Al Wahaibi, economic researcher at Public Authority for Investment Promotion and Export Development (PAIPED), briefed the audience on the role played by PAIPED in creating opportunities through the promotion of investment projects in Oman, and developing non-oil domestic exports. Saleh Hamood Al Hasani, investor relation in Duqm (SEZ) Authority, stressed on the significance of the strategic location of Duqm Special Economic Zone, which offers an opportunity to be close to the Asian and GCC markets, with the availability of large spaces of lands. "The national objectives of Duqm Special Economic Zone include developing the Wusta governorate, offering new opportunities for the national workforce, diversifying income sources, and resettling modern techniques in the business management through foreign investments," Al Hasani said. A presentation on Port & Free Zone Sohar was delivered by Faisal Al Balushi from Sohar Free Zone, who underlined the expansion of the Port of Sohar and investment opportunities in the Free Zone which will further put emphasis on the industrial port's prominence as a driver of economic growth in the Batinah region. Another presentation on Shumookh Investment & Services SAOC, the investment Arm of the Public Establishment for Industrial Estates, was delivered by Engineer Musallam Al Hudaifi, Director General of Shumookh Investment & Services SAOC. Shumookh is an Omani closed shareholding company, incorporated in 2010 in an initiative from the Public Establishment for industrial Estates and as an investment arm, for encouraging and development of investments and projects infrastructure in the industrial Estates in Oman. A presentation highlighting Salalah Free Zone was presented by Matthew Greks, advisor at Salalah Free Zone, who highlighted Salalah as a global hub, attracting major shipping lines and within reach of large major markets. "Salalah Free Zone offers a comprehensive ecosystem to meet the needs of companies in distribution, material processing, and assembly," the speaker stressed. Source: AME Info

Project Finance selects Baker Botts Client’s transaction as Middle East Power Deal of the Year for 2011

Baker Botts L.L.P. advises the Saudi Electricity Company (SEC) on all aspects (international and Saudi) of its IPP program, including the Qurayyah IPP. Nigel Thompson, a partner in the firm's Dubai office, led the Baker Botts team advising SEC on financing for the Qurayyah IPP, which included Keith Bullen, an Associate in Dubai and Omar al Saab, an Associate in Riyadh. This is the third consecutive year the SEC, with Baker Botts as its lead outside counsel for the company's IPPs, has secured Project Finance's "Middle East Power Deal of the Year." The company's $2.1 billion "groundbreaking" financing for Saudi Arabia's PP11 power project in 2010 earned this distinction from the magazine last year and Raqbigh IPP, the first in SEC's program, in 2009. "Creativity by the ACWA consortium in securing financing for Qurayyah IPP was critical to moving this project forward," said Baker Botts' Thompson. "This is an example of how our firm continues to work with clients to develop new modules for financial matters -- particularly with respect to power projects such as the SEC's." In announcing the Qurayyah IPP transaction as "deal of the year" for 2011, Project Finance editors said that the multi-sourced financing for the project by ACWA was notable for two reasons: pricing and competitive bidding. Pricing for Qurayyah "came in significantly lower" than Shuweihat 3, the other benchmark independent power deal in the region last year. And, Project Finance editors said, "The ACWA Power-led bid for the project was equally as competitive on tariff, and ultimately wrong-footed the competition by enabling the grantor Saudi Electricity Company (SEC) to only have to tender once for what was originally to be two projects -- Qurayyah 1 and 2." The ACWA Power Consortium -- comprised of ACWA Power International, Samsung C&T and the MENA Fund -- was established specifically for the development of the Qurayyah Independent Power Project (IPP) in the Kingdom of Saudi Arabia. The project, the third and largest plant in SEC's IPP Program, is being developed by SEC to help meet the rapidly rising power demand in the Kingdom and the region, via the newly completed GCC interconnectors. Source: Zawya

Islamic Finance in the Middle East prepares for new growth surge

The Islamic finance industry is becoming one of the fastest growing components of the global financial system, with experts projecting growth rates of 15% to 20% per annum. The Middle East region, which has played a pivotal role in the development of the Islamic banking and finance industry internationally, is witnessing a rapid expansion in the market share of its Islamic financial institutions with billions of dollars moving from the conventional banking system to the Shari'ah model. The World Islamic Banking Report, which was developed by Ernst & Young and launched at the 18th Annual World Islamic Banking Conference (WIBC) in Bahrain last November, noted that Islamic banking assets in the Middle East and North Africa (MENA) region increased to US$416 billion in 2010, representing a five year CAGR of 20% compared to less than 9% for conventional banks. The report also said that as new geographies open up to Islamic banking, the MENA Islamic banking industry is expected to more than double to US$990 billion by 2015. Held under the theme "Room to Grow: New Directions in the Next Growth Phase for Islamic Banking in the Middle East", the 2nd Annual Middle East Islamic Finance and Investment Conference (MEIFIC 2012), which is set to be held on the 18th of April 2012 in Dusit Thani, Dubai, will gather more than 250 regional and international Islamic finance leaders in a powerful dynamic platform to explore the emerging the opportunities for Islamic finance and investments in the Middle East. Speaking to the media ahead of the event, David McLean, Chief Executive of the Middle East Islamic Finance and Investment Conference said that, "with oil prices back on the rise, increased cash-flows, liquidity and average per capita income, the major markets in the Middle East continue to be a place of significant interest for regional and international investors. The Middle East has also seen an unprecedented increase in public spending in the recent past. This denotes significant potential for the Islamic finance industry in the region as the leading Islamic financial institutions have strong balance sheets and are well positioned to fund these large-scale developmental projects at a time when the global liquidity pool is shrinking. It is against this dynamic background that we are launching the 2nd Annual Middle East Islamic Finance and Investment Conference (MEIFIC 2012). Co-located with the 7th Annual World Takaful Conference, MEIFIC 2012 will focus on the opportunities and challenges that are forging the Islamic banking, finance and investment landscape in the region", he added. MEIFIC 2012 will be inaugurated by a special keynote inaugural session featuring Hussain AlQemzi, Chief Executive Officer, Noor Islamic Bank and Group Chief Executive Officer, Noor Investment Group; and Dr. Saleh Malaikah; Chairman, Rusd International Holding Group, Vice Chairman & Chief Executive Officer, Salama Group. Confirming his participation at the event, Mr. AlQemzi said that "it is heartening to see a significant increase in the market share of Islamic financial institutions not only in the Middle East region but internationally. The global financial crisis has given the Islamic banking and finance industry a great opportunity - an opportunity to tap into the growing interest in the Shari'ah-compliant finance model resulting from the obvious flaws in the conventional model. This will provide a solid foundation for the future growth of the Islamic finance industry. The growth opportunities are especially strong in the Middle East as the region has been the least affected by the financial crisis." He also said that "given the strong growth in the Middle Eastern economies combined with better regulatory reforms and secure foundations that the industry has laid in the region, Islamic finance in the Middle East is poised to enter its next growth phase. We are delighted to be supporting the 2nd Annual Middle East Islamic Finance and Investment Conference and we see this event as a unique platform for industry leaders to discuss the way forward for the regional Islamic banking and finance industry." A similar view was expressed by Moinuddin Malim, Chief Executive Officer, Mashreq Al Islami who said that "the global Islamic banking and finance industry has been on a steady and consistent growth path with the Middle East being its nerve center. Though the industry has built a wealth of opportunities and options for investors over the last decade, a lot more still has to be done in order for the industry to successfully compete with their conventional counterparts. The Islamic finance industry in the Middle East is at a crucial evolutionary phase. Regardless of the current socio-political concerns facing some markets in the Middle East, there is large untapped liquidity available at the disposal of investors in the region and it is critical that the Islamic finance industry realizes this potential and utilizes the opportunity to ensure stronger growth for the industry in the region. The theme for this year's Middle East Islamic Finance and Investment Conference, "Room to Grow", points at this tremendous opportunity and we hope that the discussions at this important event will seek to build a new growth path for Islamic banking and finance in the Middle East." A key highlight of MEIFIC 2012 will be the exclusive industry leaders' power-debate session. The session featuring Moinuddin Malim, Chief Executive Officer, Mashreq Al Islami; Geert Bossuyt, Chief Executive Officer, Dar Al Istithmar; and Oscar Silva, Chief Executive Officer, Global Banking Corporation B.S.C. (c) (GBCORP) will analyze strategies for building a sustainable high-growth trajectory for Islamic banking in the Middle East and strengthening regional and international connectivity. The session will also assess new opportunities for Islamic finance in the aftermath of the Arab Spring. Source: Zawya

Moody’s: New gas terminal bypassing Hormuz Strait credit-positive for UAE

Moody's Investors Service said Monday a recent decision by state-owned entities in Abu Dhabi to build a new liquefied natural gas import terminal that bypasses the strategic Strait of Hormuz is credit-positive for the United Arab Emirates. Mubadala Development Company and the International Petroleum Investment Company, a pair of Abu Dhabi government-owned development and investment vehicles, last week said they would form a joint project called Emirates LNG to develop an import facility on the U.A.E.'s east coast in Fujairah. "The new terminal has positive economic and strategic implications for the United Arab Emirates," Moody's said in an emailed note, adding that the country has been a net importer of natural gas since 2008 even though it has the seventh-largest reserves in the world and produces 51 billion cubic meters of the hydrocarbon annually. Imports of gas to the U.A.E. currently come principally through the Dolphin Gas pipeline from Qatar--a project in which Mubadala has a 51% stake. The 17 billion cubic meters of gas imported annually from Qatar has helped satisfy demand growth averaging 7.6% over the past five years, Moody's said, but Qatar "faces significant opportunity cost in exporting natural gas to the UAE at a price lower than that of LNG," making a diversification of the U.A.E.'s gas imports a prudent move. Demand for gas in the U.A.E. is rising as electricity needs increase along with the country's growing population and the expansion of energy-intensive industries such as petrochemicals and aluminum smelting. The new LNG import terminal will add 12 billion cubic meters per year to the U.A.E.'s import capacity when it becomes operational in 2014, Moody's said. Its position on the country's east coast beyond the Strait of Hormuz was also a tactical advantage, the agency said. "If traffic was disrupted, the U.A.E. would be able to avoid the repercussions of power cuts on the non-oil economy and credit metrics would be less affected," Moody's said. Moody's currently rates the U.A.E. Aa2 with a stable outlook. Source: Dow Jones & Co.

Abu Dhabi fund takes 9.9% stake in Thames Water

Abu Dhabi Investment Authority (ADIA), the emirate’s sovereign wealth fund, has bought a 9.9 percent stake in Thames Water from a consortium led by Australian bank Macquarie. The acquisition was made by Infinity Investments, a wholly-owned subsidiary of ADIA Macquarie said in a statement on its website on Tuesday. The company declined to reveal the value of the sale of the stake in Kemble Water, the parent company of Thames Water. The UK utility is the country’s largest water and wastewater services company. ADIA is one of the world’s largest wealth funds with estimated assets of $400-$600bn, ranging from stakes in London’s Gatwick Airport to Hyatt Hotels. A spokesperson for the wealth fund declined to comment on the deal. The Macquarie-led consortium acquired its stake in Kemble in 2006 from the German utility group RWE for £8bn ($12.5bn), beating competition from several bidders including one led by the Qatar Investment Authority. Thames Water on Dec 5 announced an underlying profit after tax for the six months ending September 30 of £117m ($182m). The results were broadly in line with the same period the previous year. ADIA in August restructured its external equities department and named Sheikh Mohammed bin Khalifa Al Nahyan, son of the President of the United Arab Emirates and ruler of Abu Dhabi, as the head of its newly-created indexed funds department. Source: Arabian Business

Islamic banking to boost loan growth in Oman – NBK capital

The introduction of Islamic banking in Oman will lead to loan growth of 15 percent this year said NBK Capital, as it upgraded the sultanate's largest lenders, Bank Muscat SAOG and National Bank of Oman. The country reversed its secular approach to finance last year after seeing a steady trickle of investment flow to nearby countries with well-established Islamic banking. In December, Bank Muscat said it will set up a sharia-compliant banking arm operating. Nearest rival National Bank of Oman said it will launch Islamic banking between the second and third quarters. NBK Capital said Islamic banking is expected to capture 10 percent to 15 percent of the Omani market share in the next three to five years. Bank Muscat's net profit is likely to grow 15 percent and National Bank of Oman's 16 percent during the year, driven by strong loan growth, the brokerage wrote in a note dated March 22. NBK raised its rating on Bank Muscat to "buy" from "hold" and National Bank of Oman to "accumulate" from "hold," but said the two banks may lose market share to the new entrants which have been granted Islamic banking licenses. Source: Arabian Business

EFG Hermes, QInvest eye major investment bank

EFG Hermes Holding and QInvest have announced a deal to explore a potential strategic alliance aimed at creating a leading investment bank with operations in the Arab world and beyond, covering the Middle East, Africa, Turkey, and South and South East Asia. Both institutions will immediately begin assessing potential synergies and proceed with discussions, following which an announcement as to whether an agreement has been reached or not will be made, said a statement. In the case of an agreement, the parties will announce the general framework of a joint venture and a timetable for its implementation, subject to the appropriate regulatory approvals, it said. The businesses included within the scope of discussions will be Securities Brokerage, Asset Management and Investment Banking. EFG Hermes Private Equity will be excluded from the scope of discussions, it said. QInvest said: “We look forward to establishing a potential alliance with EFG Hermes that would position our firms to leverage continuing economic growth and play a pivotal role in the long-term development of the region. “The alliance would enable us to bring the expertise necessary to capitalize on the desires of many regional and foreign investors who are seeking to play a significant role in the region’s economic development and are willing to invest across the Arab region, Africa and Asia. By bringing together our own capabilities at QInvest, with EFG Hermes’ position as the region’s largest investment banking presence across the Arab markets, we are confident we can create the leading investment banking platform of choice across Africa, the Arab world and South / South East Asia,” QInvest added. EFG Hermes said: “We share a common vision with respect to the future prospects of various markets including Egypt and other high-potential economies in Africa and Asia. A potential alliance with QInvest through which we can combine our expertise in our chosen businesses would be a significant turning point in supporting investments in the Arab world. Our primary objective in these discussions will be to create an investment banking platform that will play a vital role in the flow of foreign capital into the region while enabling Arab investors to participate in future investment opportunities in the regions that will fall under the umbrella of this new platform,” EFG Hermes said. Source: TradeArabia News Service

Morocco eyes first Islamic bank launch in 2013

Foreign Islamic banks will be allowed to take up to 49 percent of Morocco's first fully-fledged Islamic bank in 2013, as the country aims to become a regional financial hub, a minister said. The government will submit to parliament a draft bill with a set of regulations for the introduction of Islamic finance products in the country within the next few weeks, General Affairs and Governance Minister Najib Boulif told Reuters. "We expect parliament to approve the bill before the end of this year. The current plan is to allow a gradual introduction of Islamic banks to preserve the competitiveness of existing (conventional) banks," said Boulif. The draft bill will be added as a chapter to the country's Banking Law, providing a set of regulations on all Islamic finance products which specialized lenders will be able to offer from Morocco, Boulif said. It is the first time that the Moroccan government, led since December by the moderate Islamist Justice and Development Party (PJD) has detailed how it intends to develop Islamic finance in the country of 34 million. Morocco does not allow fully-fledged Islamic institutions but started in 2010 allowing conventional banks to offer a limited set of Islamic financial services products although customers complain they are subject to higher fees than conventional banking products. So far only AttijariWafa, the country's biggest bank which is indirectly controlled by a holding company owned by Morocco's ruling monarchy, offers four such services based on Murabaha financing but only for personal finance. Immediately after parliament approves the law, Moroccan authorities will allow local banks and foreign Islamic banks to set up the first Morocco-based Islamic lender, Boulif said. "Local banks will be allowed to take at least 51 percent of its capital and as much as 49 percent will go to foreign Islamic lenders. There is a very strong demand from abroad for such a project," said Boulif, himself a member of the PJD. Traders in Casablanca cite Qatar's International Islamic Bank as one of the likeliest foreign Islamic banks to want a foothold in Morocco. Source: Reuters