A look at today’s important financial news and business updates from the Middle East region:
Qatargas said on Monday it has entered into a new long-term agreement with its largest Japanese LNG buyer, Tokyo Electric Power Company (TEPCO), to provide liquified natural gas (LNG). Under the first long-term bilateral agreement, signed by Dr Mohammed Bin Saleh Al-Sada, Minister of Energy and Industry and chairman of Qatargas, and Takao Arai, managing director of TEPCO, 1.0 million tonnes per annum (MTA) of LNG will be delivered on a long-term basis starting from this year.
Iraqi Oil Minister Abdul Kareem al-Luaibi said the latest decline in crude price has been severe despite “tremendous” surplus in the market.
“It is very clear that there are tremendous surplus quantities that led to this severe decline in the prices,” al- Luaibi said Monday in Vienna, where he is attending the meeting of the Organisation of Petroleum Exporting Countries (OPEC). “This would not serve anyone.”
The OPEC chief told a news conference that oil prices at $100 to $120 are “a reasonable and acceptable price index.” Brent crude oil futures traded around $99 on Monday in London.
International airline association said Middle East airlines are expected to post profits of $400 million this year, down from the March projection of $0.5 billion. Speaking at the International Air Transport Association (IATA) annual general meeting in Beijing, executives said projections are expected to register a significant drop compared with 2011, when the region’s carriers returned a profit of $1 billion.
Egypt witnessed an imbalance of payments during first nine months of 2011-2012 with a $11.2 billion deficit compared to a shortfall of $5.5 billion a year earlier, amid political turmoil, investment flight and tourism downturn. The country’s economy is yet to recover from the uprising that toppled Hosni Mubarak in February 2011. Tourism and investment, two of Egypt’s main sources of foreign currency, have suffered massive blows due to constant unrest.
The World Bank said it hopes to raise a $500m fund to invest in the Middle East and North Africa (MENA) region in the wake of the Arab Spring. International Finance Corp, a unit of the World Bank, announced it is setting up the fund in addition to the $2.2-$2.4bn it expects to invest in the region over the next year, its regional director said on Monday.
The United Arab Emirates’ public finances swung into a surplus of 2.9 percent of economic output in 2011 after two years of deficits as robust oil income offset an increase in government spending, a report by the International Monetary Fund showed. The world’s No. 3 oil exporter booked a consolidated fiscal surplus of 38.6 billion dirhams ($10.5 billion) compared with a deficit of 23.0 billion, or 2.1 percent of gross domestic product, in 2010, according to Reuters calculations based on IMF estimates and government data.
The Middle East’s largest textiles factory opened in Fujairah on Monday and will target markets in Europe and the US. Sheikh Hamad bin Mohammed Al Sharqi, ruler of Fujairah, opened the United Textiles factory in the Fujairah Free Zone. The factory was built at a total cost of AED225m, funded by the Fujairah government-owned Fujairah Investment Company and a number of investors from Azerbaijan, state news agency WAM reported.
Bahraini islamic banks Capivest, Elaf Bank and Capital Management House are set to vote on a potential three-way merger later this month. Kuwait Finance House-Bahrain, acting as transaction advisor, said the vote would take place at shareholder meetings to be held by the end of June. If approved, the newly created entity will have a shareholders’ equity of almost $350m and assets in excess of $400m, a statement said.
Kingdom Holding, the investment vehicle of Saudi billionaire Prince Alwaleed bin Talal, has picked two banks to manage its maiden debt issue, a local currency bond, two sources said on Monday. No date has been set for the issue, which is not seen as imminent. The firm, which is 95-percent owned by Prince Alwaleed, a nephew of Saudi Arabia’s king and a shareholder in Citigroup Inc., has mandated Banque Saudi Fransi and Deutsche Bank to arrange the riyal-denominated transaction, the sources said.
Iraq has awarded contracts worth nearly $300 million to Indian and Danish firms to set up factories to manufacture oil and gas pipelines in the country’s south. Khalaf al-Badran, chairman of the Investment Commission in the southern city of Basra, says Indian steel company Jindal SAW Ltd. on Monday won the $198 million contract to build and operate a factory in al-Argeli. The plant will manufacture pipelines that could one day be used to transport Iraq’s vast petroleum reserves.