July 02 -
Kuwait parliament approves heavy debt budget
The Kuwaiti parliament approved Wednesday a
2001-2002 budget which projects a deficit of 5.95 billion dollars amid
criticism of the government for failing to carry out much-needed
The budget, approved by a vote of 35 to eight,
forecasts expenditures of 17.18 billion dollars and revenues of 12.48
billion dollars. Oil income is projected at 10.63 billion dollars, or
85 per cent of the total.
By law, 10 per cent of revenues, amounting to 1.25
billion dollars in this case, are deducted for the Kuwait Fund for
Future Generations, a 60-billion-dollar investment managed by Kuwait
That 1.25 billion dollars, added to the 4.70
billion dollar difference between revenues and expenditures gives the
deficit figure of 5.95 billion dollars.
"This budget does not reflect a government
policy for economic reforms.
The economy is still suffering from distortions ...
This is not a budget for development, it is only for spending,"
liberal MP Abdulwahab al-Haroun said.
Oil revenues in the budget were calculated on the
basis of a conservative price of 15 dollars a barrel and daily
production of about two million barrels. The price of Kuwaiti oil is
currently over 22 dollars a barrel.
"Yes, oil revenues have increased, but returns
on foreign investments have dropped. A dark future is awaiting us if
we do not implement appropriate economic reforms," said
opposition MP Mishari al-Osaimi.
"But this depends on political reforms,"
Egypt plans five-year and 10-yr bonds
Egypt is planning to offer two $500 million bonds
with five-year and 10-year maturities in its debut on the
international market, fund managers in France said on Tuesday.
Officials from Egypt visited Paris for investor presentations on
Monday. Minister of Economy and Foreign Trade Youssef Boutros-Ghali
has scheduled visits to Italy, Germany, Britain, Switzerland and the
Netherlands this week.
Only one bond of $500 million was originally
Merrill Lynch International and Morgan Stanely, the
lead managers for the bond, were not available for comment.
"What the leads are telling us is that demand
for the 10-years is in the US and demand for the five-years is in
Europe," said one French fund manager. "Dollar bonds of $500
million each should enter the EMBI," he said, adding that this
should increase demand.
J.P. Morgan Securities' Emerging Market Bond Index
plus is the industry benchmark tracked by the majority of emerging
market bond funds. If a bond is included in the index, fund managers
have to find a good reason to exclude the bond from their portfolios.
For bonds outside the index fund managers need to find a reason to
Egyptian officials have said the aim of the issue
was to lengthen government debt maturities and ease the budget
deficit, with some of the proceeds available for projects.
The initial price talk on the two bonds is some 250
to 275 basis points over US Treasuries on the five-year bond, and 325
to 350 basis points on the 10-year bond, said investors and a trader.
"I think it looks not bad value, compared to
South Africa or Mexico," said the fund manager. Mexico is the
clearest comparison because, like Egypt, it is split rated, he said.
For its external debt Egypt is rated BBB- by
Standard & Poor's Ratings Group, and Ba1 by Moody's Investors
Mexico is rated BB+ by S&P's and Baa3 by Moody's.
The Mexico segment of the EMBI+ was quoted at 315
basis points over Treasuries at 1512 GMT.
Oil prices hold firm as market eyes OPEC
Oil prices found solid support on Monday amid
concern that the Organisation of Petroleum Exporting Countries (OPEC)
would leave output quotas unchanged when it met next week.
Benchmark Brent North Sea crude for August delivery
rose to 26.87 dollars from 26.59 dollars on Friday evening.
New York light sweet crude August futures closed
Friday 27 cents higher at 26.83 dollars.
Crude futures clung to gains built up before the
weekend after the US naval fleet in the Gulf was ordered to put to sea
following what US officials described as a credible threat of attack
against US interests worldwide by forces linked to exiled Saudi
militant Osama bin Laden.
Prices also benefited from remarks over the weekend
from Qatari oil minister Abdullah al-Attiyah suggesting that there was
ample crude in the market even without Iraqi output, which raised
expectations that OPEC would hold output steady when it meets in
Vienna next Tuesday, analysts said.
Kuwaiti refinery shuts down after breakdrown
A Kuwaiti crude oil refinery in Showaiba was shut
down due to a technical problem Monday, the Kuwaiti National Oil
A company official, quoted by the official KUNA
agency, said the closure of the refinery, which has a capacity of
200,000 barrels per day, was decided on after partial congestion in
pipelines due to overheating in one of its boilers." He said
"work to clear the pipes would take between one week and 10
days" during which time the unit would remain closed.
The problem was discovered when the unit was
re-started after overhaul work at the refinery, some 80 kilometres (50
miles) south of Kuwait City, following a fire in February.
Japan to offer oil plan
Japan is expected in days to present Iranian oil
officials with its development plan for the Islamic republic's giant
Azadegan oilfield, Iranian sources said on Monday.
A Japanese delegation is now in Tehran and they are
due to submit the Azadegan development plan — which involves Royal
Dutch/Shell in less than a week, an Iranian source said.
Tehran gave Japanese firms exclusive negotiating
rights last November for development of part of the world's biggest
undeveloped oilfield, Azadegan, which has the potential to pump up to
400,000 barrels per day (bpd). The Yomiuri Shimbun daily said on
Sunday a Japanese unit — Japan National Oil Corp (JNOC), Indonesia
Petroleum Ltd, Japan Petroleum Exploration Co (JAPEX) and Tomen and
Shell had agreed to invest about a $8 billion into jointly develop the
onshore Azadegan field. But an official from Japan's Ministry of
Economy, Trade and Industry (METI) said on Monday that final agreement
had not been reached. Iran has yet to give Tokyo the official go-ahead
on Shell's participation which has already secured a deal to develop
Iran's Soroosh/Nowrooz oil fields.
Jordan: King allows Ghoshe to return
Jordan said on Thursday that King Abdullah allowed
a Jordanian leader of the Palestinian group Hamas to return to the
kingdom after he pledged to freeze his ties with the group.
A government source was quoted by the state news
agency Petra as saying the monarch had consented to a request by
Ibrahim Ghosheh to come back after the exiled promised in handwritten
appeal to freeze his political activity in Hamas.
"I hope to return to Jordan in the next few
days as I will freeze my political, media and organizational
activities that relate to Hamas movement,"
Ghosheh was quoted as saying in a signed letter to
the authorities. Petra said it had obtained a copy of the letter.
Ghosheh, 67, said in the letter he left of his free
will on a Royal Jordanian flight for Bangkok overnight to help defuse
the crisis that erupted after he was banned from re-entering Jordan
when he returned on a Qatari airliner on June 14.
Palestinian worker shot
A Palestinian worker was shot and seriously wounded
by Israeli troops Thursday in the Gaza Strip, a medical source said.
Fares Lafi, 22, was trying to go to work in the
Erez industrial zone between the Gaza Strip and Israel when he was hit
in the chest by a bullet, the source said.
Iraq rejects Russian counter-proposal
Iraq on Wednesday rejected a Russian
counter-proposal to the UN Security Council that would establish a
timetable for suspending UN sanctions against Baghdad.
"We will not accept any idea, any project that
does not have as its purpose the (unconditional) lifting of the
embargo," Information Minister Hoammed Said Al-Sahhaf was quote
by Qatari satellite television Al-Jazeera as saying.
Sahhaf, who was responding to a question on the
Russian proposal, added that "our position is not directed
against any country. It is dictated by the situation in a country that
suffers from an unjust embargo and daily crimes, while it fulfils all
of its commitments."
On Tuesday, Russia told the Security Council it
could not accept a US-backed British plan to revamp the UN's Iraqi
sanctions regime, and submitted a counter-proposal with a timetable
for suspending sanctions.
A Moroccan prince's rare public remarks about
politics led to a debate on Wednesday on whether a member of the royal
family had the right to openly criticize the government.
Prince Moulay Hicham Al-Alaoui, in a commentary
published by the French daily Le Monde on Tuesday, said Morocco was
facing a social crisis and was "in a state of political
Saying the situation "forbids me
silence," he said the time had come to speed up reforms to avoid
political unrest similar to that rocking neighboring Algeria.
Iran unveils its new national car
Iran's flagship automobile company, Iran Khodro,
has unveiled the Islamic republic's long-awaited national car at this
week's Tehran auto fair.
Six models of the car, whose working name is the
"X-7" and whose emblem is a horse, were on display at the
exhibition in which 26 foreign companies and 20 Iranian firms are
"The X-7 is a car with a new design, based on
European norms in matters of safety and environment," explained
Behruz Javadi, research and development chief at Iran Khodro, which
has 64 per cent of the Iranian automobile market.
Javadi stressed the importance of Iran developing
its own national car for the lucrative domestic market in which
300,000 cars are sold yearly.
West Bank city bans Israel mobile phone companies
Shopowners in the West Bank city of Jenin were
ordered on Thursday to stop selling Israeli mobile phones to try to
prevent the "assassination" of Palestinian activists, a
senior city official said.
Acting governor Haider Irsheid said Cellcom and
Pelephone mobile phones, Israel's two largest cellular companies, were
banned also to encourage Palestinians to boycott Israeli products.
"Cellcom and Pelephone mobile phones have been
banned for two reasons, first for security, second for the sake of
developing Jawal," Haider told Reuters, referring to the
Palestinian mobile phone company.
Telephones and mobile phones have been
booby-trapped in the past, killing several Palestinian activists,
including Hamas bombmaker Yahya Ayyash in 1996.
The biggest joint Arab shipping venture announced
Thursday net profits of 40.76 million dollars in 2000, a year that saw
it handle more than 820,000 tonnes of cargo.
KSE hit new 30-month high
The Kuwait Stock Exchange (KSE) hit on Wednesday a
new 30-month high, edging up despite widespread profit-taking sales.
The KSE index closed at 1,687.3 points, up 0.2 per
cent on the week and 25.2 per cent on the year, but was still down
40.5 per cent on its all-time high of November 1997.
The market has boomed over the past few months amid
heavy trading as investor confidence continues to climb on the back of
long-promised government reforms and compensation payments by Iraq to
many listed companies.
New Dubai-JFK service
Delta Air Lines, the only US carrier to serve the
UAE market, is offering passengers on its new thrice-weekly Dubai-New
York JFK service, bonus miles in its SkyMiles worldwide rewards
programme until the end of October.
"Our SkyMiles programme is one way of ensuring
customers share in the celebrations marking the launch of this new
service," said Richard Michaels, Commercial Director ñ UAE,
Delta Air Lines.
Saudi Prince's investment strategy pays off well
Forbes magazine has published its annual list of
the world's super rich for the year 2001. Prince Alwaleed Bin Talal
Bin AbdulAziz Alsaud, Kingdom Holding Company chairman came in sixth
this year with a $20 billion fortune.
The listing is for individuals running a business
or managing their own assets.
Separate listings are published elsewhere for those
who inherit their wealth.
This is Forbes' fifteenth year listing the fortunes
of the world's richest. The financial publication calculated net
worths based on personal asset valuation as of 21 May 2001.
Cheney oil firm had extensive Iraq dealings
The oilfield services company Dick Cheney headed
before he became US vice president had far more extensive financial
dealings with Iraq than
Cheney has acknowledged, The Washington Post
reported on Saturday.
Citing UN records and oil industry executives, the
newspaper said two subsidiaries of Halliburton Co. had contracts to
sell $73 million dollars in oil production equipment and spare parts
to Iraq while Cheney was chairman and CEO of the Dallas-based company.
The newspaper said, according to UN records, the
subsidiaries, Dresser-Rand and Ingersoll Dresser Pump Co., sold
material to Baghdad through French affiliates from the first half of
1997 to the summer of 2000.
Egypt says it's no haven for dirty money
Egypt, which has just been added to an
international money laundering blacklist, denied on Saturday it was a
haven for dirty money and said it was introducing news legislation to
combat illicit cash.
"An official source at the Ministry of Economy
and Foreign Trade affirmed today (Saturday) that Egypt is not and will
not be a place for laundering money," the official Middle East
News Agency (MENA) reported.
"Rather, it has strict procedures and
guidelines given by Egyptian regulatory authorities to financial
institutions working here which are designed to fight such
operations," it added.