Even if Saudi Arabia was aware of the IEA’s move to draw from its oil reserves, all parties appear to have lost face, without really upsetting the trend of stubbornly high oil prices. Goldman says buy the oil dip.
The International Energy Agency (IEA) followed through on its threat of releasing oil supplies into the global markets, after OPEC had failed to raise output in its last meeting in early June. READ MORE HERE

Iraq’s energy sector is its economy’s lifeblood. But while Noor Al Maliki’s government has laid out an ambitious energy development programme, almost no one expect any of those production targets will be met. Can Iraq fulfill its potential and create jobs, ensure security and become one of the most important oil suppliers of the future? READ MORE HERE

Jones Lang LaSalle, the world’s leading real estate investment and advisory firm, today published its 2011 Middle East and North Africa (MENA) Real Estate Investor Sentiment Survey. The report indicates that although investment appetite exists, the region is missing out on significant regional and global capital flows because of the shortage of investment grade product and the lingering price gap between buyers and sellers.

While the survey is now in its sixth year, this is a newly launched institutional edition, which focuses on understanding the perspectives of the top 30 financial institutions investing in regional real estate markets. This latest version highlights two clear trends.

First, the amount of overseas capital allocated to investing in MENA real estate is negligible.

Second, although local investors are seeking to increase exposure within the region – particularly in those countries considered stable like the UAE and Qatar – activity is limited by type of product available and asset pricing that does not fully incorporate local market risks. In a region awash with liquidity, the lack of tenable investment opportunities leads investors to deploy capital overseas.

Clearly, the MENA real estate markets have the potential to capture a much higher proportion of capital flows from both international and regional buyers. Unlocking this potential, however, will require a few adjustments: an increase in the product available; willingness of owners to transact with greater transparency; and realistic pricing that is benchmarked against global markets.

Andrew Charlesworth, Head of Capital Markets for the MENA region at Jones Lang LaSalle, said: “Whilst recent events have created some uncertainty across MENA, there are areas within the region, particularly the GCC, where there remains a reasonable level of demand among local investors. The problem is one of finding and securing the right product at a price that makes sense.”

The report also indicates that investors continue to be frustrated by the lack of bank finance and the cost of financing when it is available. Increased risk aversion is leading investors and developers to adjust their corporate strategies and focus on building stable income generating portfolios.

Lack of product, mispricing, and limited finance availability thwarts transaction, portfolio restructuring and rebalance of portfolio risk. Even for investment grade commercial properties (buildings in central locations of high demand with long term leases and strong tenant covenant) available in the region, institutional investors are simply not willing to purchase at yields available in mature markets like London. Together with limited transaction activity, the custom of privately conducting local investment deals discourages international investment and inadvertently stifles recovery of the regional real estate markets.

The 2011 Institutional Edition of the MENA Real Estate Investor Sentiment Survey focussed on understanding the perspective of 30 key regional – primarily institutional – investors, but the sample also includes some international investment groups to provide a global perspective.

Other key findings:

• Buyers outnumber sellers in all markets with a distinct polarisation occurring between those countries perceived as stable, like the UAE and KSA, and those still characterised by political uncertainty.
• In the prevailing atmosphere of risk aversion, factors like political stability and security of income are at the forefront of investment decisions.
• The majority of respondents indicated plans to increase investment in the MENA real estate market over the next 12 months. Actual transaction activity will remain constrained by the lack of suitably priced product.
• In terms of yield spread, the lack of differentiation between cities and asset classes suggests investors are focussed on achieving a specific return threshold and thus are focussed on the strength of the tenant covenant rather than the asset risk.
• Driven primarily by supply concerns in almost all sectors, investors anticipate further capital declines in many MENA markets.
• Office assets remain the most attractive investment class for this investor base, but this preference is not necessarily in line with short term market conditions.

Donald Trump’s recent hysterical comments on the Organization of the Petroleum Exporting Countries (OPEC), Saudi Arabia and Kuwait are set to put more pressure on President Obama. Expect more pressures on Mideast states as the race for the White House heats up. Read More Here

Ratings agencies have an uncanny knack of turning up at morgues and pronouncing the death of the deceased, so it should have been no surprise that Standard & Poor’s did the ‘unthinkable’ and downgraded the United States’ long-term outlook to negative from stable. Read More Here

There is no doubt that Saudi Arabia has extended itself with its latest domestic spending programme. So much so that sustained dips in oil price could turn its budget surplus for the year into a deficit. Read More Here

Without a robust and diversified power strategy, much of Saudi Arabia’s economic ambitions will fall by the wayside. Here is a look at the country’s key power and electricity challenges. Read More Here

Oil prices will rise 36% in 2011, denting global economic recovery, warns the IMF. But that also means Saudi’s GDP will rise 7.5% - one of the highest among G20 nations. Read More Here

Egypt will surpass Saudi Arabia as the region’s largest economy by 2050 and emerge as the 19th largest economy in the world, according to an HSBC report. Read More Here

Reading McKinsey’s Urban World: Mapping The Power Of Cities convinces us that the world will belong to China by 2025 - we will just be living in it. Forget the Middle East and its oil wealth, or Latin America with its flair, charm and commodity-fuelled brilliance, or even India with its bursting economic ingenuity and labour power - China will dominate the proceedings. Read More Here

Everything you ever wanted to know about Saudi demographics, but were afraid to ask. Read More Here

Everyone knows there is a housing shortage in Saudi Arabia, and the lack of a clear mortgage law is hindering growth, but what are the other dynamics impacting on Saudi real estate? Read More

HSBC’s energy outlook for 2050 forecasts that we may have as little as 49 years of oil left and we will have to radically alter our energy consuming ways to avoid a massive energy crunch. Read More

Here is the leaked Wikileak cable that shows a former Aramco executive saying Saudi Arabia has over-estimated its oil reserves.

Read More

While oil inflation fears in emerging markets are warranted, these risks are being mitigated as Gulf oil-exporting states buy emerging market products and services as part of their fiscal spending spree.

Read More

The GCC has around $40bn of debt coming due each year over the next five years, says Standard Chartered Bank (SCB). Plus a chart that neatly shows SCB’s forecasts returns on each country’s bonds. Read More Here

Read More

Dubai retains its position as the regional financial centre, but Doha is fast catching up as an alternative centre, according to the latest survey of global financial service managers. But Both are losing to Asian rivals. Read More

Read More

Mark Mobius’ Franklin Templeton can see clear opportunities in the haze of Middle East turmoil.
Read More
Read More

The Middle East crisis will see capital flowing out of the region, especially the vulnerable financial hub of Bahrain, according to a poll.

Read More

Here are the 21 orders announced by the Saudi authorities on March 18, 2011: Read More

The Saudi King’s speech had 21 royal orders but very little to comfort reformists. It appears that the authorities have used its biggest political crisis to launch an economic bailout. Read More

Read More

As Japan’s nuclear meltdown puts the brakes on yet another power source, the world is looking at ME energy to fill the gap. Luckily, there is plenty coming on line, despite the region’s shot-term problems. Read More

Read why EFG-Hermes is worried about Omani and Bahraini growth. And the bank’s insightful regional heat map that neatly highlights problem areas. Read the full story here

Read More

Just when analysts were giving up on a truly unified GCC, the six states have closed ranks with the unmistakable presence of Saudi tanks and soldiers on Bahraini soil. Read More
Read More

The only Middle East country in the Ciitbank list (Also read full report Regional Dynamos) is Saudi Arabia which is expected to emerge as the sixth largest economy in the world, rising above Canada, United Kingdom and Switzerland. Read More

Find out which Middle East countries make it to Citibank’s list of the fastest growing economies in the world. Hint: it’s not Qatar. Read More

Recent economic data shows that the Saudi economy is on song and on the way up. But that tells us only half the story. Read More

Oil prices are poised to hit the magical $100 per barrel once again and economists, analysts have taken out the proverbial calculators to see what it means for oil-based economies of the Middle East. Read More