Vimpelcom's KarTel

Haven't been following Eastern Europe lately..but we do have some news there as well.

Alex Izosimov has not wasted time in getting back a bigger stake in Kar-Tel. VimpelCom said it has increased its stake in the Kazakh subsidiary to 74.9 percent, VimpelCom bought a 24.9 percent stake from Cyprus-registered Limnotex Developments Ltd. The company previously held 50 percent plus one share in Kar-Tel.

It must be noted that VimpelCom had formerly owned 100% of Kar-Tel, the second largest cellular operator in Kazakhstan, which it acquired in September 2004 for US$350mn plus US$75mn in debt. It later sold a 50% minus one share to Crowell, a Cypriot company owned by shareholders of Kazakhstan's ATF Bank.

Mapletree and Arcapita form JV to hold JTC industrial portfolio

Mapletree Investments has formed a joint venture with Arcapita Bank of Bahrain to hold a portfolio of industrial properties bought from JTC Corp.
The assets are worth a combined 1.7 billion Singapore dollars.
Arcapita will hold a 56.5 per cent stake in the joint venture called Mapletree Industrial Trust (MIT).
Mapletree will own 25.1 per cent, while the rest will be held by Mapletree Industrial Fund, a pan-Asian private real estate industrial fund sponsored by Mapletree.
In a statement, Mapletree said the acquisition of JTC’s industrial property portfolio, which was announced in April, has been completed.
The properties include 39 blocks of flatted factories, 12 amenity centres, three multi-tenanted business park buildings and one warehouse building.
The assets have been officially transferred to MIT on July 1. Mapletree Industrial Fund Management will manage the properties. - CNA/vm

Banking & the Nationalization Agenda:

Nationalization has been part of most GCC states schedule, but implementing it by far has been a harrowing experience in most industries.

The issue is most problematic when it comes to the lower strata & the niche functional jobs with limited talent pool.
The UAE government for instance, has decreed that in all firms 40% of employees should be locals, which is no mean feat when you consider that only 20% of the population are Emiratis. Add niche banking skills to the mix and it becomes even harder to attract the right candidates.

As it is, HR divisions across most banks do not deny the fact that local candidates are provided better allowances than their expat counterparts in order to retain them.

Some countries like Bahrain have nationalization on their agenda but do not act on it as they do not have the obligation to fulfill it. Banks in other countries such as Kuwait increase the staffing as per the national agenda for about a quarter and then retract back to previous counts , as the locals do not fancy a 'day-job'.Meanwhile, salaries for locals in the UAE come in at around a third higher, or banks will reward them in other ways.

Talent is imperative specialized jobs .Having said that, it might also do the governments a world of good if they were to promote advanced training to their citizens and then bring them back to work for a minimum period. This would help them retain their cost as well.

The $2 Trillion Barrier..

Amongst the major developments ( or recessions) occuring across the world, what seemed to have gone by without notice is the estimated cost of projects planned in the countries of the Gulf Cooperation Council has for the first time broken the two trillion dollar barrier.

So why is this significant?The two trillion dollar event is an important watershed, marking not only a significant milestone in the development of the Gulf, but also demonstrating that the regional boom is far from over. The figure is more than double the combined gross domestic product of the six GCC economies.

It's a well known fact that the driving force behind this momentum is the construction sector,which roughly accounts for 59% of the total development costs.

The four biggest projects planned in the GCC are the City of Silk in Kuwait which is expected to cost 77 billion dollars, followed by the Bawadi Project in the United Arab Emirates at a cost of 55 dollars, while the Sudair Industrial City in Saudi Arabia and the Yas Island Project in the UAE are expected to cost 40 billion dollars each.

Palestinian Investment Fund

A few years back, S& P had done a report on the assets held by Palestinian authority which determined that approximately USD$ 600 million has been invested in various commercial ventures across the world.The report looked at investments in ten privately- and/or publicly-held companies, six in the telecommunications sector and the balance in biotechnology, insurance, the gaming industry, and cement.

While browsing through their official site however, one tends to wonder , just how much transparency exists ( the website shows only investments made locally). An audited report in early 2000 indicated investments included Israeli patronized ventures.

Unlike other funds in the region that have been more than generous to a depressed western economy, the PIF is now looking towards a future that will encompass investments that will benefit the people. Their books are currently audited by E&Y.

The challenge ofcourse lies in enticing foreign partnership and the team led by Mr Mustafa Mohammed,Cheif Executive of the PIF is trying make a difference by paving the way towards a private investment driven sustainable economy.

Visa IPO

It so happens that I'm pretty familiar with one of the lead managers for the gonna-make-me-rich (aka get rich quick ,aka im smokin washingtons from here to Kansas) IPO scheme that is Visa.

The bank is offering it to their private banking customers EXCLUSIVELY.Think thats bad , wait till you hear this..the minimum you need to put in is ..hold your breath ..a whopping USD 180k !!! Off to E-trade!

Totally understandable? Well..the demand for shares of Visa is expected to be strong because shares of top rival MasterCard have performed so well. Shares of MasterCard have soared more than 300% from their first day closing price of $46. That's a great return for an IPO that priced at $39 a share on May 24, 2006.

At a price band between $37- $42, the IPO is currently oversubscribed well beyond the projected 16 billion. Personally I'm hearing stories of folks in the US putting their houses on mortgage to get into the gig (no exaggeration here). We ll be here to keep you posted !

Goldman Sachs & Company, one of the banks arranging the Visa IPO, arranged a meeting with potential investors in Dubai to tap wealth in the Gulf, which is reaping a windfall from record oil prices. Infact the Kuwait Investment Authority is looking at a significant investment in Visa.

2 years from now, we oughta either see a few millionaires getting a whole lot richer or a whole load of people charging the gates of the card company.

Update: Kuwait Investment Authority has confirmed buying $800mn worth shares of Visa

What happened to the Sovereign Wealth Funds?

A couple of months ago, Mubadala this, Qatar Investment Authority, that. You couldn't hear enough of the Sovereign wealth funds. Now they've become yesterday's news. I'm going to see what they've been up to now that the "spotlight" appears off them again.

On a side note, did anyone read the article in Businessweek a couple of weeks back about buyout firm Abraaj Capital. They're the top buyout firm in the Middle East, with an AUM of $4.9 billion. This is the kind of company to follow, along with their founder, Arif Naqvi. Some of the deals under his name are the buyouts of logistics company Aramex, Egyptian Fertilizers and Saudi Airline National Air Services. He's since tripled his investment in Aramex through an IPO, made $800 million selling Egyptian Fertilizers to Orascom Construction and plans an IPO of National Air Services.

Most of the major US and EU private equity firms have approached Abraaj to acquire them but Naqvi refuses, understandably so. Abraaj has what they covet, a strong footing in the region. Mr. Naqvi's and Abraaj should be followed by anyone interested in Middle East finance.

Petro dollar future Article

Morgan Stanley has put up a very good analysis on where the petro dollar is headed [Share]