Archive for April, 2008

29
Apr

Oil prices off record highs

By C&N 1 Comment
Categories: analysis, commodities, economy, forex, gcc, global, investment, news reports, research and speculation
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Oil prices are easing towards $118 after the falling dollar coupled with the supply snags in Britain and Nigeria shut nearly 2 million barrels per day (bpd) of ’Atlantic Basin’ output. U.S. light crude futures were trading at $118.75 off a record high of $119.93. 2% of the world crude oil is effected by the Nigerian and North sea outages.

“The issues in Nigeria and North Sea are significant but these outages tend to be overcome pretty quickly, so I think the market is taking profit from record prices”

- Mark Pervan, Australian & New Zealand Bank

Nigeria: Niger Delta rebels attacked a pipeline shutting down 350,000 bpd of production by Royal Dutch Shell. A previous bombing raid had hit 169,000 bpd of the companys output.
Britain: A 700,000 bpd Forties North Sea crude pipeline, which carries nearly half of the country’s oil, is closed due to a stike over pensions at the 210,000 bpd Grangemouth refinery.

OPEC has reiterated that the market is adequately supplied and that this is only a temporary outage.

29
Apr

Kuwait Airways for sale

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Categories: investment, kuwait, news reports and research
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The government has begun the highly anticipated sales process for the loss-making Kuwait Airways Corporation (KAC). In January the government approved the plan to sell 40% of the carrier to the public, and 35% to a longterm investor within two years.

The cabinet has asked Kuwait Investment Authority (KIA) has been requested to set up an evaluation of the airlines by international consultancies as the primary objective in the selling process.

28
Apr

CBK to buy Bank of Baghdad

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Categories: analysis, banking, kuwait, news reports and research
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Commercial Bank of Kuwait (CBK) is in talks to buy a stake in an Iraqi lender and could finalize the acquisition this year. 

“We are in negotiations to buy a stake from an investment company that owns a large stake”

- Abdul-Majeed al-Shatti, Chairman

Some quick facts:

  • Iraq Holding Company (Kuwaiti Company) is planning on selling its 20% stake in Bank of Baghdad
  • United Gulf Bank (Bahraini Company) is in talks to sell its stake in Bank of Baghdad
  • CBK has been expanding in the region to avoid the over saturated Kuwaiti market
  • CBK confirmed earlier this month that its in the final stages of buying 70% of Yemen Gulf Bank
  • CBK plans to raise its stake in Syrian Islamic lender Cham Bank to 30% (from 10%)

 

27
Apr

3rd mobile operator IPO in June

By C&N 1 Comment
Categories: analysis, investment, kuwait, news reports, research, rumors and speculation
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An official at the Ministry of Commerce has stated that Kuwait could launch the anticipated IPO for the 3rd mobile operator as early as June. The overly optimistic remark also claimed that the firm may be operating as early as October. The 3rd telecommunications company in Kuwait had initially scheduled its IPO for February, later it was rescheduled with no date set.

“If all went as planned there is a possibility that the IPO will be before the end of June,”

- Daoud al-Sabej, Ministry of Commerce and Industry

Company ownership will be as follows:

  • 24% owned by the government
  • 50% will be offered to the public
  • 26% already sold to Saudi Telecom (for KD 248.7 million)

 

27
Apr

Gulf bourses gain $60 bln in April

By C&N 0 Comments
Categories: analysis, bahrain, economy, gcc, inflation, investment, kuwait, news reports, research, saudi arabia, speculation, stock markets and uae
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Gulf bourses shrugged off global market turmoil and surged ahead by more than $60 billion in April despite fluctuations in the previous month. The figures show that the UAE, Saudi Arabia, and Qatar were by far the best performers. Starting at $1 trillion during the first of April, the market caps in the GCC grew to $1.126 trillion by todays (Sunday’s) opening.

“This year is expected to be a good one based on the market and economic fundamentals. But you have to expect instability from time to time because of speculation in some markets, mainly in Saudi Arabia and UAE bourse.”

- In a report by the AMF

Here is a detailed list of the exchanges increases (by region):

  • Dubai’s International Financial Exchange (DIFX) - $8 billion
  • Qatar’s Doha Securities Market - $19.8 billion
  • Kuwait Stock Exchange - $1.2 billion
  • Oman Stock Exchange- $2 billion
  • Bahrain Stock Exchange- $1.5 billion

“All GCC markets have emerged as gainers so far this year and this shows their exposure to overseas markets is minimal… Another reason is that many foreigners are scared of volatile global markets and are finding a safe haven in this region… Since most of the listed companies are expected to make higher profits this year, the investors’ gains will be more”

- Ziad Dabbas, National Bank of Abu Dhabi.

27
Apr

Kuwait hits record inflation

By C&N 2 Comments
Categories: analysis, economy, inflation, kuwait, news reports and research

Annual inflation in Kuwait has reached an all time high of 9.5% spurred by strong housing and food costs. Inflation is on the rise across the Gulf region with Saudi Arabia and Qatar at all-time highs. In Kuwait, the recent parliamentary regulations and central bank reforms created to aid the economy’s inflationary dillema has yet to show progress. In the December 2007 index, housing was a major factor effecting the figures. 

“The currency basket will make a slight difference but not when you are facing such significant drivers… We hear about food prices rising by 60 and 70 percent for some items. It is a global issue”
 - Randa Azar-Khoury, National Bank of Kuwait

Previous inflation figures were as follows (chronological):

  • October 7.26%
  • November 6.68%
  • December 7.54%  (previous record)
  • January 9.5% (new record)
27
Apr

Kuwaiti living standards

By C&N 2 Comments
Categories: analysis, kuwait, news reports, research and speculation
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A previous study conducted by the Ministry of Planning states that a family of six with an income of:

  • up to KD720/month is considered under the poverty line
  • KD 720 - 1440/month is considered a low income family
  • KD 1440 - 2160/month is considered an average household
  • KD 2160 - 2880/month is considered a high income family

The living standards differ dramatically between geographical regions in Kuwait. A ’low’ and ‘average’ income household would heavily depend on government subsidies such as health care, education, and housing. If there is a plan in place for the post-oil era it must be slowly implemented today to decrease the dependency on oil by the citizens.

23
Apr

Euros rise & Arabs spending

By C&N 1 Comment
Categories: 1, analysis, banking, economy, forex, kuwait, news reports and research
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The Euro has been closely watched this week as signs that it was crossing the 1Eur = $1.60 (and it did this morning by hitting the $1.6002 mark). As for short-term expectations many Arab Gulf companies which import products from Europe are severely hurt by the sharp rise in the Euro.

As for today the price in the market for 1 Euro against Kuwaiti Dinar is approximately:

  • 1 Euro = .425 fils

It is trading between a range of .423 fils to .425 fils. based on many factors future Euro expectations are that it will come down to .415 - .417 fils/1 Euro levels by May 30th.

 

21
Apr

Quick Facts - Kuwait Investment Authority

By C&N 2 Comments
Categories: 1, analysis, investment, kuwait, news reports, research, sovereign funds and speculation
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Quick facts - Kuwait Investment Authority:

  • Kuwait’s soverign wealth fund is known as the Kuwait Investment Authority (KIA)
  • Manages the surplus wealth  of the world’s seventh-biggest oil exporter
  • Assets under managment: $213 billion (as of Mar 31st 200 8)
  • Invests between 76% and 86% of assets in United States & Europe
  • Asian & Japanese investment make up 13% to 17% of total holdings
  • Emerging markets comprise 4% to 6%
  • Invests between 55% and 65% in total assets in Global equities
  • Invests about 15% to 22% in Bonds
  • Invests roughly 8% to 12% in Real Estate
  • About 4% to 6% is invested in alternative investments
  • 3% to 7% is held in cash
  • Bought large portions Citigroup ($3 billion) and Merrill Lynch ($2 billion), 2008

… [KIA is] Interested in investing in financial services and real estate firms in the United States and Europe to benefit from lower asset prices…   - Managing Director Bader al-Saad

 

 

21
Apr

Investment Dar wins buyback approval

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Categories: 1
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The Investment Dar, a Kuwaiti Islamic investment firm, stated that it had won central bank approval to buy back up to 10% of its shares. The six-month buyback period begins on April 23 (Wednesday), Investment Dar said in a statement on the kuwaitse.com

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