$84.5 billion in Investments Needed for Regional Energy Sector

According to a study published by the Organization of Arab Petroleum Exporting Countries (OAPEC), the regional energy sector should raise nearly $84.5 billion for future expansions. Up to end-2006, the gas industry is expected to account for the majority of investments at $43 billion. In addition, $21 billion should be allocated for boosting crude production capacity, $19bn for petrochemical industries and the remaining $1.5 billion for the oil refining sector. OAEPC expects that 42% ($35 billion) of needed funds would be financed by Arab and foreign commercial financial institutions, while 13% would be extended by commercial financiers.  

Bahrain’s Ahli United Bank Reports 27% Growth in H1-2004 Profits

Bahrain-based Ahli United Bank (AUB) released its first-half 2004 results, reporting a 27% year-on-year growth in net profits to $62.8 million. The bank’s net interest income rose by 15% over the same period, while cost-to-income ratio slightly increased from 34.6% to 36.1%. AUB’s total assets stood at $6.4 billion, while shareholders’ equity amounted to $931 million. In addition, the bank’s capital adequacy reached 19.9% at end-June 2004.

Country Profile: Saudi Arabia

Emerging markets rating agency Capital Intelligence (CI) raised Saudi Arabia’s long and short term foreign currency ratings from A- to A and from A1 to A2 respectively. In addition, CI assigned an A long-term local currency debt rating with a “Stable” outlook. The upgrade reflected improvements in the country’s external balance sheet. Saudi Arabia’s gross external debt remained low at around 30% of current account receipts (14% of GDP), coupled with a strong net creditor position. On the fiscal side, CI expected the government’s budget to reach a surplus of 8.5% of GDP in 2004 (excluding sale of mobile licenses), thus enabling the accumulation of foreign assets and the partial settlement of domestic debt. However, Saudi Arabia’s ratings are still constrained by a weak budget structure (75% to 80% of revenues are oil dependent) and long-term demographic challenges associated with a young and growing population. CI advised Saudi Arabia to accelerate the pace of structural reforms aimed at increasing economic diversification and private sector growth in order to avoid potential social and fiscal pressures