Archive for October, 2009

See clips below from The National Newspaper’s coverage of James B. Smith’s (the recently appointed U.S. Ambassador to Saudi Arabia) poignant talk to approximately 100 U.S. company representatives in Riyadh. TradeFlow21 lauds Ambassador Smith for his timely and critical assessment — hopefully a wake up call for businesses.

For information on the latest global economic competitiveness ranking and how the GCC ranks (note Saudi Arabia moved up to #13 this year and is knocking on the door for a top-10 spot), see Doing Business 2010: Saudi Arabia nears goal; UAE climbs ranks.

clipped from www.thenational.ae Diplomat warns US firms are losing edge RIYADH // The new US ambassador to Saudi Arabia yesterday warned American businesses to wake up to the fact that they are losing their edge in an increasingly competitive Saudi market. Ambassador James B Smith, a retired air force general, also told his audience of about 100 US company representatives that it was time for both Saudis and Americans to “rethink some opinions” of each other forged in the wake of the September 11 terrorist attacks. Noting that many US companies are “on the sidelines waiting to see what’s going to happen in Saudi Arabia”, he added: “My message back to them is: What’s happening is the train has already left the station. You are losing market share to India, China, Russia and if you don’t move you’re never gonna catch the train.”

Hats off to Rothschild for its successful M&A advising in the Gulf; and it looks like the investment bank is far from finished. Rothschild recognizes Saudi Arabia (the Gulf’s largest economy and one that is poised for sustained solid growth) and Qatar (which is forecast to grow over 9% this year and a whopping 35%-plus next year thanks to an expansion of LNG capacity and exports) as the two places it most desires to grow its business. See clip from Reuters below.

clipped from www.reuters.com Rothschild busiest in Mideast M&A DUBAI (Reuters) – Rothschild ROT.UL has been the Middle East’s busiest advisor on mergers and acquisitions so far in 2009, data shows, underlining the growth potential for independent investment banks in the region. “Our strategy is long-term driven, our view remains that we expect this to be one of the fastest-growing regions,” said Michael Helou, co-head of investment banking in the Middle East for Rothschild. “The crisis didn’t change our plans, it’s been almost business as usual,” Helou said, adding that Qatar and Saudi Arabia are the regional markets where the investment bank sees more opportunities to expand its presence.

The Institute of International Finance (IIF) is forecasting a return to solid growth for Gulf Cooperation Council (GCC) states in 2010. The IIF expects current account and fiscal surpluses to remain “sizable,” driven by a recovery in oil prices. The partners of TradeFlow21 believe that while oil of around $70/bbl is less than half of last year’s peak, its more than doubling since the trough, not to mention the sizable domestic investments made by the GCC, make the soundness of their economies and finances all the more laudable. In fact, according the IIF, the Gulf’s non-hydrocarbon sector, which employs 95% of the labor force, avoided a recession in 2009 (with a growth forecast of 2% this year and 4% next year).

IIF GDP forecasts for the GCC:

Qatar — ’09: 9.3% and ’10: 35.5% (fueled by LNG exports and capacity expansion)
Oman — ’09: 5.2% and ’10: 9.7%
Bahrain — ’09: 1.9% and ’10: 4.1%
Kuwait — ’09: -1.9% and ’10: 4.0%
Saudi Arabia – ’09: -1.2% and ’10: 3.5%
United Arab Emirates — ’09: -1.5% and ’10: 3.4%