Standard & Poor’s Ratings Services said today that issuers in the Gulf Cooperation Council (GCC) countries face rising refinancing risks over the next three years because the amount of debt maturing in the region will increase significantly between 2012-2014.

Industry experts estimate bonds and sukuk of about $25 billion will mature in 2012, rising to about $35 billion in 2014. Standard & Poor’s believes the region is therefore entering a challenging loan and bond refinancing cycle, especially given the ongoing volatility in capital markets and fears that slowing global economic growth is already curbing corporate debt issuance and heightening refinancing risk in the region.
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The EU and the US economies are not the only headaches for Middle East economies. China’s faltering economy could also hurt the region’s growth prospects.

As the advanced economies were contracting and falling behind earlier in the year, the Gulf and the wider MENA states were hoping Chinese and wider Asian demand to ensure their oil production finding eager buyers. READ MORE HERE
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The regional stock markets may be sending negative signals, but the Middle East listed companies are expected to see a 38% rise in earnings in the third compared to the same period last year, according to EFG-Hermes estimates.

“Materials sector earnings are driven by higher oil prices, lower provisioning and loan growth will likely drive earnings growth for the Saudi banks, and the UAE’s real estate sector will likely see a Y-o-Y turnaround after heavy losses from UP and Aldar in 2010, in our view. (Excluding UP and Aldar reduces earnings growth expectations to 16.8% Y-o-Y and 2.6% Q-o-Q). We believe Q-o-Q growth will be driven by Emaar and UP showing strong earnings growth, seasonally high earnings from SEC and Air Arabia due to the summer period, and OCI, which should benefit from strong fertiliser prices,” notes EFG.

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The Arab Petroleum Investment Corporation (Apicorp) expects MENA energy capital investment to reach $525-billion over the next five years.

But the Dammam-based lender estimates that the figure is at least $90-billion short of the ‘investment potential’. The company examined nearly 200 energy projects planned and announced in the public and private sectors. READ MORE HERE

The UAE which is more aligned than other regional states to global economic cycles, saw its PMI fall from 57.5 in April to 51.0 in July, suggesting that that any further deterioration in global economies will be felt more in the UAE compared to other Gulf states, says Deutsche Bank. READ MORE HERE

A Booz Allen Hamilton report surveys 415 young nationals aged 15 to 24 in Saudi Arabia, the UAE, and Qatar to get a sample of what the youth of these countries think of their future and their countries’ key challenges:

Here are the results in a snapshot.

Surprisngly, more young people think high cost of living is a bigger concern than finding a job. Nationals,, especially in Qatar and UAE enjoy subsidies and benefits from governments but they still appear to think that the cost of living is their biggest concern.
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Robust and timely support from the Gulf central banks have made the region’s key financial institutions secure and safe powerhouses.

Their strength is in sharp contrast to the banks of the OECD, especially the European banks which are facing a calamitous future especially if the sovereign debt from Greece and other EU states blows up in their faces. READ MORE HERE

Gulf states have pledged $150-billion in response to the regional unrest, according to Bank of America Merrill Lynch estimates. But it may not be enough. READ MORE HERE

Lebanon’s Riad Salameh is ranked as one of the world’s best central bankers. But which Mideast bank governor fares worse than Ben Bernanke and Jean-Claude Trichet? Surprising answer! READ MORE HERE

As the global economy lurches from one crisis to the next, we look at the prospects for the regional economies in troubling global conditions which could slash domestic growth.

Another quarter, another headache. Gulf governments have suffered a tumultuous first two quarters of the year and were hoping for some semblance of sanity in the third quarter. At the very least, regional governments were hoping that tragic developments within the Middle East had remained isolated - Syria, Yemen and Libya - leaving other countries in relative safety and peace.
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