With huge sums generated by the oil price rise and more competition in some sectors, Middle Eastern companies are increasingly considering mergers and acquisitions. At the same time, regionally based funds are flexing their financial muscles overseas and targeting major companies. A fledgling M&A market appears to be developing in the Middle East, with significant deals in the financial, telecommunications and oil and gas-related sectors this year. Despite these transactions, the market is s

The Kingdom Holding Company IPO dominated the Saudi market, with an issue size of more than US$2bn met by just local demand as Saudi Arabia remains a closed market. It was 50% larger than any previous IPO in the country. Despite fears that it would be unpopular because of Sharia compliance issues, it nevertheless rocked the Tadawul. IPOs are a form of popular capitalism in Saudi Arabia, with many Saudi citizens buying shares in some of the Kingdom's most prominent companies. It has become the vo

In the project, MPCL, a joint venture set up by Marubeni, Qatar Petroleum and Qatar Electricity & Water Company is to construct a 2,000MW natural gas-fired combined-cycle thermal power plant in Mesaieed Industrial City, located to the south of Doha, and sell its power to Qatar General Electricity & Water Corporation (Kahramaa) based on a BOT scheme. The power purchase agreement (PPA) runs for 25 years and it is expected that there will not, therefore, be a need for a merchant tail on the asset f

And with Middle Eastern investors looking to deploy their capital abroad and leverage up their investments through borrowing – some price increase notwithstanding – the market shows few signs of slowing. Sabic is the latest corporate to illustrate the depth of liquidity now available to Middle East borrowers with its US$6.655bn loan that supported its acquisition of GE Plastics. The loan was initially aimed at both banks and funds, but due to a collapse in the fund bid on the back of the US sub-

The Middle East is often cited as a potential growth region for securitisation, but so far the number of deals has remained frustratingly small. There are certainly some obvious drivers to suggest such potential. There is the inflow of expatriates needing suitable housing; pro-active government policies, and a high projected level of GDP growth. But up to the end of Q1 2007, there had been just a handful of deals, such as the US$925m Blue City financing from Oman that was led by Bear Stearns and

Double-digit growth rates for Sharia-compliant assets over the past decade have naturally driven Islamic financiers to look beyond historical boundaries to explore new territories, both within and outside the Arab world. In response to the increasing competitive pressure stemming from the entrance of new players into the market, existing Islamic banks have started to leverage on their natural competitive advantages, which include customer loyalty, sensitivity to religious practices, and stable b

No development company is more active in the fastest growing city in the world than Nakheel. It currently has 16 major projects under way, including the Palm developments, Dubai Waterfront and The World development. Part of the world's biggest holding company, Dubai World, which manages and supervises businesses and projects of the Dubai Government, the property developer is chaired by Sultan Ahmed bin Sulayem. The developments will add more than 1,500km of beachfront to the coastline and are sp

The first survey was carried out in February 2005 (PFI issue 307) and showed the dollar volume of projects was US$74.5bn and the number of projects 55. Then, in February 2006, the dollar volume jumped to US$118bn from 57 projects (PFI issue 331). Now, in the latest survey, the dollar number has leapt to US$167.5bn, but from a similar number of projects, 56. Once again, the major reason for the dollar increase is simply rising EPC costs. This is now a significant issue in the region's projects ma

Islamic banking is clearly a rapidly accelerating market. But does this fast moving juggernaut have adequate brakes and headlights in terms of sound asset/liability and liquidity management tools in the event of a downturn? The Islamic financial market is flush with liquidity and issue after issue of sukuk have recently been launched, but paradoxically, there is a potentially destabilising and dangerous lack of liquidity in the global Islamic financial market. "Islamic banking in the Middle East

To-date, there have only been a few sovereign or quasi-sovereign issues predominantly made to promote Islamic banking or finance in local markets, but by far the largest issuers fall within what one might describe as the real estate or property developer category. There are numerous drivers to the development of the sukuk sector and there are, in our view, many parallels that can be drawn with the development of international markets such as the Eurobond market, the swap market and the CDS marke

The facilities comprised a US$1,053m term loan and revolver facility, and US$347m of Islamic facilities. A total of 19 leading international, regional and local commercial and Islamic banks acted as mandated lead arrangers for this landmark financing in Kuwait. The aromatics project is a key pillar in the development of the Kuwaiti petrochemical industry as it enhances integration and creates synergies among the various petrochemicals and refining facilities in Kuwait, including process technolo

What it demonstrates is that project development, including financing, can be successfully achieved if there is a combination of pronounced sponsor and other stakeholder/advisors support and clear, consistent objectives demonstrated through clear decision making structure and a willingness to sometimes replicate tested and well accepted structures. Marafiqand the Kingdom of Saudi Arabia have now set a standard for themselves in this respect and will no doubt continue to build on this success for

Could you explain the role of Sharia scholars in Islamic finance? Discussing the role of Sharia experts in the development of Islamic economics and Islamic finance calls for a look at the nature of economics and the focus of Sharia. The chief concerns of economics over the ages have been efficiency and equity. Sharia in its broader sense that gives primacy to objectives over rules and regulations shares these concerns. However, the same may not apply to Sharia meaning fiqh: ie, laws codified at

The deal involved more than US$6bn in debt. It was a major test of the ability of the GCC markets to raise such massive sums on a non-recourse basis. Several years ago, a deal like this simply would not have got done. Not only was it a monster acquisition financing, but it also occurred at a time when the markets were reeling from a series of credit crunches, meaning the deal was also a test of the resilience of the Gulf. GE put the plastics unit up for sale because rising crude prices had cut i

Properties announced by government owned developers such as Emaar and Nakheel were sold in a matter of hours. Fully fledged banking institutions initially stayed away from the nascent mortgage market that followed, presenting an opportunity for non-banking finance companies to build the market. Non-banking financial institutions such as Tamweel PJSC and Amlak Finance PJSC were set up to fill the void. Backed by strong institutional shareholders and the government, they built large portfolios ove