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TheStreet Open House

Middle East Roundup: Virgin Mobile Forays Into UAE

NEW YORK ( TheStreet) -- A roundup of major happenings in the Middle East this week.

Virgin Group chief Richard Branson has expressed interest to expand the Virgin Mobile brand across Arab countries, initially targeting the United Arab Emirates (UAE) for new services, Arabian Business reports. Earlier in May, the company entered the Middle East by pairing with Qatar Telecom. Following a good flag off in Qatar, Branson now wants to launch operations across the region. Virgin Mobile Qatar, a wholly owned unit of Qatar Telecom, is the eighth Virgin Mobile branded operation in the world after launches in the U.K., Australia, U.S., Canada, France, South Africa and India. Branson further added that the company's winning formula of an affordable, user-friendly handset has always worked well and it would follow the same strategy in the future. In addition, the suggestion for building a spaceport in the UAE is under consideration, but may be at a future date.

S&P keen to issue UAE credit rating

S&P said it is keen and would be happy to issue a sovereign credit rating for UAE with transparency and disclosure being the key requisites, Gulfbase reports, citing the head of sovereign ratings for Europe, the Middle East, and Africa (EMEA). In fact, the absence of a sovereign credit rating has remained an obstacle for expanding investor base, subsequent to the Dubai credit crisis. Broadly, a debt issue is a trigger for governments to request a rating to attract additional interest from investors. Meanwhile, S&P has an AA rating for Abu Dhabi, a stronger credit rating based on the emirate's oil revenues, and an A rating for the emirate of Ras al-Khaimah (RAK). Local banking sources revealed in October that the RAK government was planning a bond issue worth $500 million. Moritz Kraemer, head of EMEA sovereign ratings, said lack of transparency and regulation are issues that hamper credit ratings in the country. The quality, depth, and timeliness of data continue to remain below par.

China's biggest bank in Abu Dhabi

The Industrial and Commercial Bank of China (ICBC), the world's largest by market capitalization, has launched operations in Abu Dhabi to capitalize on the growing trade relations between the UAE and China, Khaleej Times reports. This is ICBC's third branch in the Middle East, after Dubai and Qatar, and is poised to enhance Sino-Middle East banking cooperation. The license to operate in the UAE is the first of its kind awarded to a Chinese bank and the bank will provide comprehensive financial services for funding local and regional projects to its existing commercial and institutional clients. The bank believes that the economies of China and the UAE complement each other and this will act as the synergy for success. The governments of both countries are keen to forge close trade ties and China is overtaking the U.S. and the UAE as Abu Dhabi's major importer. China believes that this license will aid Chinese investments in the region.

Kuwait China to support refinery JV

Kuwait and China have agreed to raise bilateral relations to a higher dimension and step up efforts for a proposed refining and petrochemical joint venture in China, which is now awaiting final approval from Beijing, Gulfbase reports. Both countries are determined to expand business between state-run Kuwait Petroleum Corporation and China-based Sinopec Shanghai Petrochemical (SHI). The project, with a capacity of 300,000 barrels per day is estimated to cost $9 billion and includes a 1 million-tonne per year ethylene plant. Kuwait will supply feedstock for the integrated plant, which could be China's biggest joint venture. Notably, Kuwait is the first Arab country to invest in China with investments across sectors like energy and oil refining. Moreover, the Kuwait Investment Authority is a shareholder in ICBC, China's biggest commercial lender.

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