IFR Mid East 2006

Data from Thomson Financial released for the first time (see tables at the end of this article) show the strength of the boom in the bank loan and bond/sukuk markets. In the first half of the year, international banks raised more than US$50bn in loans for the region. The bond/sukuk figure topped US$10bn. At a time when there are plenty of petrodollars in the region, this figure represents a big extra infusion of funds from outside the region. And after the numbers were put together, in January to June, July saw a further US$5bn in project...

It may be too soon to be sure that they will all have a ball, indeed current political turbulence may postpone many of the best laid exit plans, but partners have linked arms, and the music has started. The new-found buoyancy has two roots. First, investor confidence in the region’s long-term prospects is growing. Second, local businesses and entrepreneurs, especially the younger ones, look on with interest at global trends and opportunities. They see how private equity allows them to maximise their investments. Arif Naqvi, the CEO of Abraaj...

The steady flow of Middle East IPOs is creating volume exceeding that of European emerging markets, excluding Rosneft. Much of this activity is unrecognisable as the companies that IPO and the method of listing are very different from those of any other region. Stock exchanges across the Middle East traded strongly through 2005 and the IPO pipeline looked strong for 2006, but the fall in markets since March has led to some lengthy delays. This has since been compounded by instability in the region, but some companies are confident investor...

The stock markets of the GCC, and in particular the United Arab Emirates, look set for strong expansion over the next few years as the GCC builds on recent high oil prices, increasing wealth and the opening up of capital markets. To tap into this growth and develop its own capital markets and position in the GCC, the United Arab Emirates has recently established a new free economic area, the Dubai International Financial Centre (DIFC) to entice Western-style capital markets and investment. Although takeovers of listed companies are second...

Measures to strengthen the licensing framework for banks operating in Bahrain came into affect on July 1 2006. They follow similar licensing reforms implemented for the insurance and investment business sectors, in April 2005 and April 2006 respectively. Licence categories are defined, under the new measures, by regulated activity, rather than institution type. The five basic licensee categories under the integrated new framework are conventional bank, Islamic bank, insurance, investment business and specialised licensees. Onshore and...

High global oil prices are driving rapid economic growth in the wealthiest countries in the Middle East that make up the Gulf Co-operation Council (Saudi Arabia, UAE, Kuwait, Oman, Qatar and Bahrain), yielding substantial external surpluses and stimulating an investment boom. GCC private equity has never been more bullish and the region is awash with such liquidity, with plenty of it seeking a profitable, and in some cases lucrative, home abroad.Gulf countries' economies The region has been expanding massively in recent years, as everyone knows...

This growth has been primarily demand-driven. That demand has been greatly assisted by the perennial difficulty for Islamic financial institutions to transform their short-term liabilities, ie, deposits, into long-term assets. The difficulty arises because Islamic banks are unable to leverage their balance sheets through trading in debt. Accordingly, one of the significant factors for the development of the sukuk market is the creation of an Islamic money market, rather than temporarily housing excess liquidity into short-term commodity...

East Cameron Partners holds leasehold interests in a producing gas and condensate field in federal waters of the United States, 20 miles offshore the State of Louisiana, referred to as EC 72 and EC 71 (the properties). The leases in which the originator holds its interests are federal oil and gas leases and administered by the Minerals Management Service of the US Department of the Interior (the MMS). As of January 2006, the properties were estimated to contain 61.7bn cu ft of proved gas reserves and 1.06m barrels of proved crude and condensate...

While banks are gearing up for a major regulatory change from Basel I to Basel II impacting on the capital requirements for virtually all assets held, the expanding base of credit assets pose a new set of requirements that would require attention sooner rather than later. This is especially relevant to the GCC banks, particularly the Saudi local banks. In most, if not all, cases, credit financing is a trade-off between risk management and relationship management. Usually, the management of credit portfolios entails addressing the growing...

On March 29 2006 PETRORabigh (a 50:50 joint venture between Saudi Aramco and Sumitomo Chemical) closed financing facilities totalling US$5.84bn to fund the development of an integrated refinery and petrochemicals complex at a cost of approximately US$9.9bn at the site of the existing refinery at Rabigh. On completion, Rabigh will be one of the world's largest refinery and petrochemical complexes, producing 17.2m tons per annum (tpa) of high-value petroleum products and 2.4m tpa of ethylene-based and propylene-based petrochemical derivatives....

The deal closed on June 18 2006 with 19 local, regional and international banks participating along with two ECAs and the Public Investment Fund (PIF). Yansab is the fruit of the SABIC's strategic plan to increase its olefins (and polyolefins) profile and take advantage of the favourable market outlook for these products. When Yansab comes into full operation, SABIC will become the largest ethylene glycol producer in the world (currently the second largest). Yansab is a US$5bn grass root integrated petrochemical complex to be built in Yanbu...

The financing is linked to a series of four interlinked complexes being developed in Saudi Arabia by the private sector. SEPC, which comprises a mixed feed gas cracker and two polyethylene lines, is the largest of the complexes that together comprise an investment of approximately US$5bn, representing the bulk of the latest round of private investment in the Kingdom's petrochemical sector, which has been actively encouraged by the government since the late 1990s. Development of these plants is being spearheaded by three of the leading Saudi...