Biz - Private in MENA Archives
May 23, 2011
A remarkably naive note, A Strong Dollar Isn’t Always a Good Thing - Economic View - NYTimes.com
AT a recent news conference, Ben S. Bernanke, the Federal Reserve chairman, was asked about the falling dollar. He parried the question, saying that the Treasury secretary was the government’s spokesman on the exchange rate — and, of course, that the United States favors a strong dollar.
Listening to that statement, I flashed back to one of my first experiences as an adviser to Barack Obama. In November 2008, I was sharing a cab in Chicago with Larry Summers, the former Treasury secretary and a fellow economic adviser to the president-elect. To help prepare me for the interviews and the hearings to come, Larry graciously asked me questions and critiqued my answers.
When he asked about the exchange rate for the dollar, I began: “The exchange rate is a price much like any other price, and is determined by market forces.”
“Wrong!” Larry boomed. “The exchange rate is the purview of the Treasury. The United States is in favor of a strong dollar.”
For the record, my initial answer was much more reasonable. Our exchange rate is just a price — the price of the dollar in terms of other currencies. It is not controlled by anyone. And a high price for the dollar, which is what we mean by a strong dollar, is not always desirable.
Come now, I think the whole world understands the USGov's Kabuki theatre regarding the dollar. Say that they're in favour of a strong dollar, but take no such action. the reason it is not stated straight out is of course that would be interpreted as a signal of active devaluation, which could launch some major unruliness in the markets, particularly chez sovereign buyers.
July 17, 2010
Interesting reflexion on Credit & Inequality
Interesting comment worth reflexion also relative to emerging markets (and the naive obsession of the development community with expansion of credit to any and all):
Credit Drives Income Inequality Drives Credit - Business - The Atlantic
Jul 17 2010, 10:15 AM ET | Comment
As economists continue to sort through the causes of the financial crisis (even though Congress already fixed the problem), there's one cause you don't hear very often: income inequality. Economist Raghuram Rajan explains this point in a recent article at Project Syndicate. He says that income inequality was growing prior to the housing bubble, which is part of what drove policymakers to champion subprime mortgages. Since these individuals couldn't actually afford as much as more affluent Americans, they could now tap into credit to feel just as wealthy. The corollary to his point is what too much credit can do: help to mask income inequality and cause it to further grow.
Empirically something to be studied.
July 11, 2010
Deals vs Rule: Good obs on how it works in emerging mkts
This speaks to me.
Deals vs. rules - PSD Blog - The World Bank Group
Over on the All About Finance blog, Mary Hallward-Driemeier has an excellent post on the "deals" that firms have to make in countries with excessive regulations. Money quote:
For countries with lengthy requirements...almost no firm actually faces the formal burdens on the books.
This does not mean that lengthy formal practices are costless. Rather, firms ‘pay’ through other channels. This variation in implementation is associated with greater activities on the part of firms to influence the actions of officials (e.g. paying bribes or spending time with officials). Rather than coping with the application of (more or less favorable) rules, firms face deals. And the larger the gap between the de jure and de facto outcomes, the greater the potential space for deals, and indeed, the more prevalent are bribes.
Spot on comment actually.
November 28, 2009
Funny side item on Dubai
Perhaps none of this should surprise us. Dubai is a place where investors fell for trick advertising a few years ago that said the emirate would build a “bubble city”, a development of restaurants and museums suspended above ground by helium balloons and surrounded by a transparent enclosure.
This fantasy was never meant to get off the ground. But maybe it secretly did? And maybe that is where some of the decision-makers have been living.
August 17, 2009
Egypt as Multilingual Outsourcing Destination, Well I'll be bugered
Frankly given my experience with Egyptian non-mastery of accents, of course anecdote I must confess, this FT.com arty Egypt invests in outsourcing industry raised me eyebrows. Nevertheless it appears to be working, doubtless for reasons similar to why the Tunisian and Moroccan outsourcing industries have worked - a pool of otherwise unemployable university graduates with useless degrees, but reasonable language skills. If one is willing to train them up (which is not such a bad option given the way university tracking works in most of MENA, there may well be among the French and English Literature students perfectly fine IT Response Tele-Monkies or Tel-Services Monkies who merely did not have the cash to go for private coursework (of suspect quality anyway). Of course, the flip side to this is that the depth of the pool of talent is not that great, and if one does not price in the training, bad results will happen.
Gulf Stymies Entreprenurial Behaviour!!!!!
I was amused by this article and shall come back to it: FT.com Gulf stymies the start-up spirit
Powered by ScribeFire.
July 25, 2009
Algeria, a small step in being less pointlessly contrarian (Weekend change to Friday-Sat)
Le "week-end" en Algérie réaménagé à vendredi et samedi
About bloody time. The current system - if it can be called that - in Algeria of "most but not all of private and public sector" on a Thurs-Fri weekend, but Financial Sector on Fri-Sat is retarded. The change in weekend some years back for the sole purpose of showing how Algeria was going to be more "Arab" (fuzzily meaning Islamic / Middle Eastern / Not French!!!!) was rather stupid.
April 29, 2009
Iraq, investors... Pipes.
“What is risky these days? If you think about the people who were investing in AAA guaranteed paper only a few years ago, the concept of risk has changed fundamentally,” says Richard Blakesley, managing director of Fairfax, a London private equity fund planning to invest as much as $200m (€153m, £136m) in Iraq this year. With its eye on plastic pipes, concrete, asphalt and food production businesses – all areas where Iraq needs investment for import substitution – Fairfax plans to increase its Iraq fund to $1bn.
Aghhhhhhhhhhhhhhhhhhhhh. My beautiful pipes.
Powered by ScribeFire.
April 28, 2009
Populist Parliament proposes fines for runaway workers leaving jobs without permission
A populist parliament has attempted to derail the government’s reforms on several occasions. This week, Bahrain’s labour minister quashed a law drafted by deputies that would impose a BD500 fine on “runaway workers” who leave their jobs without permission
Sorry this deserves more serious comment, but the propo is just too delicious.
Powered by ScribeFire.
April 20, 2009
Winning Pyrrhic Professional Battles
Positive item. My empire has been increased, and I am now in charge of a rather large chunk of my firm's overall portfolio of business.
Negative item: same as positive item, we are now in major economic crisis and rather than being a bit player in the portfolio....
By bad luck if this is fucked up - if I fuck up - I can take the firm down and a lot of people lose with me.
Powered by ScribeFire.
April 14, 2009
Observation: Any Blog with the title "Watch" in it has a high liklihood of being a hysteric conspiracy mongering nutjob site
Case in point: Shariah Finance Watch
Terribly deranged by the concept of needlessly complex financial transactions which pious but economically naive Muslims use to pay more money for the exact same economic transaction one can do straight.
This is somehow a threat to the writer of the blog, whose weak-minded panic is possibly slightly more droolingly idiotic than declarations that Islamic Finance (sic) will replace conventional finance.
Powered by ScribeFire.
April 13, 2009
Algeria: Monkey’s Salary
It would be unfair to mock the English here (it being simply an awkward translation)Ennahar Online - Algeria: Monkey’s Salary, but the thinking as well amuses me.
Powered by ScribeFire.
April 06, 2009
For me that is.
Today I got a call from a friend of a friend, long located in the Gulf, in a certain Gulf city... ahem. Nameless to protect the guilty. Has been in real estate promo, popping between UK and the Gulf, all was great.
Now he's coming on vac to my end of the world, wants to know what the opportunities in my speciality region.
Suspecting the drunken sot thinks that the whole of the MENA region is just like that certain city (years and years of going there, I doubt he bloody went even to certain other states nearby), I enquired innocently as to what he was thinking. Property, investments, getting hired by a promoter in this region, because absolutely things are coming back, if less hype hype and he wants to be positioned. Yes, positioned I think was the word.
I sadly had to gently inform him of the pay scales, which rather cooled his ardour. Seemed genuinely surprised the whole MENA region is not like the Gulf.
I suppose he could have been thinking of my firm, but I have a strong sense we're driving off a cliff no matter what I do with my numbers (which suddenly are not looking so charming, and if not stomach churning quite as yet, are requiring more and more hours).
Powered by ScribeFire.
March 24, 2009
The ongoing silence
AFraid both IT and my scramble to keep my offices alive during the crisis are conspiring against blogging, although I am beginning to get the twitch again. It may soon by fun to blog.
Of course, I need to start doing posting now and again, but that seems to work best when I am annoyed.
Powered by ScribeFire.
February 06, 2009
And just because I can, pondering new laptop
This is a purely self indulgent post, but I am also experimenting with new blog features.So, my trusty Thinkpad is giving signs of giving up to ghost.
Well, not precisely, it's really not bad, but the battery is quite shot, the many Gigs are fullish, and it is showing signs of slows.
This is somewhat giving me an excuse to think about a new road laptop, and retire this one to home duties, for which it should be fine.
I have to say, I love Thinkpads (this is a first edition Lenovo Thinkpad, and has been fine, given my kind of wear and tear and constant usage). I think I am going for another one. The challenge is lining one up. The pain in the ass with Thinkpads is that they're not seen in show rooms too often, and the most convenient way to order if via internet. However, given my loco, that's a bloody nightmare since some cretin in customs will smack me with an outrageous payment, and given shipping, cost doubles. Pain in the ass. Of course there are local buys, but I don't like or trust the bastards, esp. as they sell screwed up furrin keyboards.
Powered by ScribeFire.
February 05, 2009
MENA Melts: the Dubai & Abu Dhabi show
FT's arty "Focus on Dubai as Abu Dhabi looks to its own": something to watch, the ongoing slow-motion melt-down of Dubai Land. Pity really, after doing things right for a good decade, for the past five or seven years Dubai went overboard on a speculative binge and now has to contend with commentary like this "Bankers warned on Thursday that Abu Dhabi’s go-it-alone attitude could
mean that the federal government may not be as willing as expected in
rescuing Dubai entities which face default."
That's a nice whiff of early stage panic.
Powered by ScribeFire.
That February thing (the waning new month tradition)
There is no point in apologizing for my growing habitual absence. Working on a start up project, plus a familial expansion, plus expanding the footprint of my normal work empire (and hopefully defending keeping my full on team, I believe in the last quarter my team was 50% of real business, thanks to MENA hanging on...) However experimenting with new blogging tool, Scribefire, that I hope will make some more frequent notes easier (and thus more doable).
January 12, 2009
Maghreb Intregration Rubbish.
Other than dodging various wild cat anti Israel demos here and there (which I would have more sympathy for if they were not so bloody repetitive and stereotypical, Perfide Israel just is boring, and yelling about Israeli 'racism' while indulging in essentially identical 'religio-tribalism' I find boring. Understandable I suppose, but boring), I remain immersed in a probably pointless pan Maghreb investment effort. I say probably only insofar as I see a decent chance for myself to earn more bonuses and income, while tilting at wind mills on others accounts - especially Development Banks that seem to have been created to make Quixotic efforts profitable for some actors.
As such, I draw attention to an item I picked on in the actual blog post as a point of reflexion on the Quixotic nature of Maghrebine integration.
November 22, 2008
Crisis Economics & MENA
Now that my obsession, the global financial crisis is migrating to home turf, I shall try to have some comment now and again. Unfortunately, professional limitations shall rather hinder my ability to be as entertaining as usual. Otherwise, I put E100 that Citi is toast.
September 05, 2008
Lovely Algeria, Dreaming of Tourism, largely Iraqi.
Sadly the feisty little nihilistic hmir that are Al Qaeda fil Maghreb have of late proven that while they are no doubt in the throes of bloody mad nihilism to their long term detriment, they are rather good at bloody throes.
This is a trifle annoying as I have to fly into Algiers for a nice Ramadan stay in a pointless excercise in trying to unblock some deal(s). (See Algeria, to spite our face, we shall snip off our investors noses)
August 21, 2008
Algeria, to spite our face, we shall snip off our investors noses
Algeria has a special talent, as evidenced by this FT report, in selecting the most bumbling and idiotic of policies, and then explaining them opaquely.
In this instance, frustrated that foreign investment is not magically creating lots of jobs in a state dominated, state controlled economy where foreign investment is restricted and sweated to death, and largely going into capital intensive areas (this being about the only option) under shall we say less than safe security circumstances, brilliantly decides the proper response is to restrict capital repatriation and overall investment. Why that will show them, then the State can continue doing what it's best at- blaming foreigners for its problems while playing fast and loose wasting hydrocarbons revenues:
July 27, 2008
Gulf Booster Round Up
Simply for the amusement value, I share the following FTs on Dubai, Emirates and wider Gulf:
(1) Dubai bets on lasting tourism appeal. A possible win given the extremely poor taste shown by English package holiday tourists.
Britons seem to love Dubai. Of the 1m visitors from the UK last year – the single largest national grouping – two-thirds say they plan to return soon, according to Dubai Tourism and Commerce Marketing, Dubai’s tourism promotion body, which has plans to raise that number of British visitors to 1.5m by 2015.. It might even be possible.
(2) Subprime woes exit: go to Dubai
But as much as the Gulf is booming while traditional financial powerhouses suffer, doubts persist whether there is enough business to go round.
Stiff competition is bringing down fees, while the battle for staff is fuelling wages and shaving margins. The promised listings of family-owned firms in the Middle East have largely been absent, mergers and acquisitions remain far and few between, and caps on foreign ownership in many equity markets limit the scope for capital markets earnings.
(3) Saudi Bourse woes and Fail to flock to DIFX.
All about how the Nationals Giveaway policy has bollixed it all up.
July 26, 2008
Arabic Media & Business: The Great Unread
I just picked up a survey from one of the Moroccan weeklies on the life of cadres or the middle managerial class - okay let me be honest, my staff sent it to me - from which a point pops up in skimming through. The survey of where the cadres get their news. The percentage that identified soley European language was impressive. As was the tiny single digit that relied exclusively or mainly on Arabic. This reminded me of my ongoing disappointment with Arabic language media in terms of being of any utility at all for anything but cultural whanking on or political whanking on.
Investment & Whinging On
I've just attended a terribly tedious diplo gathering, which reminded me again of why I avoid expat dominated events like death - notably I learn little to nothing of real value to me business and I have to listen to hours of uninformed lazy whinging on about why X, Y or Z project has failed due to some perceived injustice, etc. since the diplos only really here from the whingers (as of course is natural, since there's no need to talk to them otherwise, unless one is scamming for visa favours or something similar).
In this particular occasion I had to listen to one bloody sr. diplo at this long and tedious damned cocktail run on and on about how horribly declining investment and entrepreneurial endeavour are at present, and then going on to cite a series of ventures which were - in my knowledge in investing here in the region - unwise to say the least. Above all as the examples all seemed to involve said diplo's linguistically challenged fellow-countrymen falling in love with a certain touristic city or two, and getting it into their scatterbrained heads they could just pick up and open up shop, live the life as back across the ocean, and .... well tediously unrealistic bollocks if you ask me. Bloody diplo went on and on about how he didn't see why or how the Continentals were coming, and all these failures were just sign that it was something of a sham or a special deal being cut.... I kept me mouth shut, since I am making money and the only thought I had was "your mates are fucking clueless gits."
This tedious bollocks only highlighted to me, that there's not a damned emerging market in the world where one can pop in, not know the language, and think one can set up with say the first bastard who wants to do business with you. Sadly, these people go back and rather than being clever and insightful, simply whinge on about how awful emerging markets are.
July 13, 2008
Islamic Finance in Maghreb bis
An unsurprising arty on Islamic finance from Khaleej Times: Islamic finance makes slow start in N.Africa (or rather the Maghreb):
As I have noted previously the hype about a big 'Islamic' finance market englobing the poorer sections of the Islamic world, extrapolating off of the habits of the more conservative (or I would say, narrow minded) Gulf with its luxury orientation is not well placed. The article from last week makes the point.
June 22, 2008
Staffing Woes - Binding Constraints - Skilled Labour
In reviewing some materials from my staff, some newly hired to replace losses to the hiring frenzy in the Gulf where inflation of salary (and living costs) is rampant, I had a moment to reflect on binding constraints.
It strikes me that we are seeing signs in MENA of an emerging binding constrain on the labour side, in more skilled labour. (Parenthetically it leads me to have contempt for the frequent spectacle I see when I visit Morocco and more specifically the capital of the 'Young Unemployed Graduates' strike for government jobs, lazy pampered idiots, they need only take a course in basic biz skills and they'd get a job, of course not the cushy for life guv jobbie)
Perhaps to be developed later, but prompted by my being forced after a long search to hire a communications officer whose familiarity with Excel appears to be limited to the concept it exists. Well, she'll learn.
Back, Observations on MENA Travel
First, it may surprise many, but one doesn't have to worry about retarded rules like 6 fl oz containers, and yet I would say is as safe as flights through crazy lands where too large a water bottle is a grounds for siezure.
On the other hand, in sharing a plane full of footballers of teams apparently too cost constrained to hire their own charter, one does come to appreciate draconian application of inane rules. It keeps the unwashed footballer masses in their place. An evil part of me looks forward to higher air travel costs such as to reduce the number of passengers with unpleasant hygiene and communication habits - and the sort who applaud the fact of a simple landing of an air plane. Although it probably speaks poorly of me that this drives me into a near homocidal rage.
June 08, 2008
MENA - Africa investment article [corrected, blog post]
A quick if incomplete return to this topic, motivated by a somewhat peculiar article on Arab investment in Africa, oddly in a small American newspaper. Some notes on the article, both in re substance and its truly odd "background." [Correction, a blog post]
June 06, 2008
Government Development Bollocks
Yesterday I attended a "Private-Public Partnership" something or other for the financial sector sponsored by the US development agency, to "engage" the private sector about supporting (and I understood financing) their development agenda. I have rarely sat through such utter bollocks.
May 27, 2008
Maghreb & Africa
But in keeping with the amusement factor today, let me highlight this:
Maghreb, "lacking business know how...." Gulf whinging
I was rather amused to read this article apparently from Reuters parroting Gulf complaints about Maghreb investment (also at at Trade Arabia). Perhaps on the Aqoul page I shall go into greater depth, but this really amused me. I am not sure Emaar et al have such fab expertise in actual planning versus in massive use of near indentured labour with astounding disregard of standards....
May 25, 2008
Pondering the MENA Economies
Well, my return seems to have been prematurely announced, although Greg Djerian of Belgravia Dispatch had a note up that almost could be directly plagiarized by myself at least.
This aside, on this end the oil / hydrocarbons price run up - combined with the run up in food prices (not unrelated to b sure) has created some serious near-term tensions, although also ultimately opportunity for positive change I think. If the tension between the oil economies (Gulf essentially) and the non-oil (or essentially semi-self-sufficient) economies such as Morocco, Jordan, Tunisia, etc. can be managed.
I am spending rather a lot of time trying to keep up with this, and figure out what aress are going to work best - renewables? Biofuels (thank go I won the argument last year against the initial proposition that someone made to look at Palm oils....)? Before moving on, let me highlight an excellent new news source covering the Maghreb and the rest of Africa: Les Afriques, which as the link will let you know has an English version as well as a French version (the English seems to lag about 1-2 weeks and be incomplete).
May 08, 2008
Like the 70s but w localisation
Alberto Verme, Citigroup’s London-based co-head of global investment banking, is expected to announce on Thursday that he is moving from London to Dubai.
March 23, 2008
Arab El Dorado & Hollywood
A mildly amusing article on Hollywood efforts to raise funds for the usual rubbish. From the Gulf. They might think about raising money for Bollywood films first. Now, building an idiotic real estate project based on an already successful film, that's Gulf style speculation. Building something based on another model.
March 21, 2008
Lunatic Real Estate
Now and again one can question even the basic sanity of some decisions. Or the pure idiot cupidity. Real Estate and UK investors come to mind. In particular, from The Times (London) and this particularly inane note Fly-to-let: the best places to buy an investment property overseas:
March 08, 2008
Although I believe this lady is going to fail across the board, one has to be sympathetic. Having run across the blog, it appears to be a rather too typical story of Western woman falling for Maghrebine who convinces her to move to his home city without fundamental realistic thought.
Of course, the blog may not entirely reflect coping skills, etc., but certainly in my years in MENA I have seen a lot of these stories, with the woman not having the language or cultural skills and being thrown in on a sink or swim basis. Much the worse when said couple is trying to be entrepreneurial. Well, random blogs run across, and I am certain the owner would not be happy w such comments, but it gave me pause. Bloody glad I am not thrown into business in places I haven't the language basics, I know from experience it makes me quite cranky.
March 05, 2008
Understatement - Dubai, unproven rental market potential
An amusing read in FT Money which besides making a questionable assertion regarding the Moroccan property market (at least as far as I can tell) amusingly states:
Another area to be wary of is Dubai. There has been a huge amount of development in Dubai, but rental demand is unproven. "Projects have been unbelievably ambitious and rental returns very seductive," says John.
Hundreds of thousands of luxury apartments are due to come on to the market in Dubai next year and developers are promising yields of 9-10 per cent. Sales agencies have also launched some very eye-catching deals to entice investors.
One agent, Damac Properties, is offering a free Bentley or BMW with each Dubai apartment purchase, as well as the chance to win a private jet or island, although the company was unable to provide details of the offer.
John says the question is what happens when the building stops: "They have built so many luxury places, but how many people will choose to holiday there?"
November 18, 2007
MENA, Oil, Pricing, Dollars
I should discuss this on the main page, but first some initial thoughts.
I have no clue - for all MENA - OPEC seems to be playing a price max game that suggests to me they think they will have a demand decline over the 5-10 yr frame and want to max current revenues.
At the same time, non-OPEC MENA is suffering - although appears to be getting ore investment via petro-dollars. This is very hard to track, as there are "PR Announcements" by the Khalijis that often are .... vapour dollars ... then there are the monies they invest via other vehicules that are non-PR.....
There is also the "green" or alt Energy opp... and frankly this is the wild wild wild west. But for some portions of MENA with good profiles this may work.
November 04, 2007
MENA Idiocies overheard
Actually - I do bloody swear - at my hotel lobby this evening:
Group of Americans (I presume given where I am business or American development assistance people) talking:
"You know there has never been a war between two countries with Mc Donalds"
[blithering on about McDo]
"We should work harder to get McDonalds in these [presumably MENA] countries, and the culture of getting along will improve [or grow, frankly I forget the precise wording]"
Ensued was a long, statistically illiterate discussion on the impact of FDI and peace, politics, pro Americanness, etc. which provoked a deep desire to jump and shot "Black Swan, Nassim Taleb" and obscenities.
As I have to suspect the American government subsidized or otherwise promoted this illiteracy, I give my condolences to those who tax payments are subsidizing sheer idiocy... (although frankly the understanding of the limited applicability of certain kinds of observations or stat analysis is not politically driven so I have to limit my ranting)
October 22, 2007
Sometimes predictions work.
I am moderately pleased to note that that my thesis that emerging markets might prove a "safe haven" this round seems to be proving out and in flighty areas with:
For the third week in a row, emerging market equity funds absorbed more than $5bn (£2.4bn, €3.5bn) as investors continued to bail out of underperforming developed market asset classes and head for cash, emerging markets, or, to a lesser extent, commodities such as gold, said EPFR Global , which tracks fund flows.
Since the fourth week in August investors have put almost $24bn in emerging funds, more than $28bn in money market funds and $895m in commodity sector funds.
As I said back in my August note, the problems in structured finance stabbed developed market advantages in the heart.
At the same time, I don't think this is sustainable in listed markets, and moving the money to private markets - venture funds and private equity funds requires identifying rare skills... But on the other hand, investors have been pouring into China on faith alone, so....
Conference Call Idiocies: "So they're reformers?"
I hate conference calls with morons in North America. Bloody pants wetters wanted me to give them a run down of the investment situation in Maghreb, and in particular the "Democratic Developments" in Morocco.... (as well as the situation re Algeria and Libya).
Best question of the whole bloody fucking call: "So with a democratic reformer like the new Prime Minister, do you see opportunities picking up?" [in Morocco]
Reformer? I have no idea what this politically connected bloody crack-smoking fool was on about, but he should never be let near anyone's capital, that is for sure. It was a struggle to respond politely.
October 11, 2007
New Dubai Canal: 11 billion for a new inland desert waterfront
I am not quite sure if this is brilliance or madness, but it certainly is a waste of capital of epic proportions.
Meanwhile, I read a snotty remark in one of the Maghrebine financial journals questioning whether many of the Big Ticket Gulfie investment projects were in fact serious, or mere PR incidents to drive their home market stock price.
And I say "Some Gulf Firms making Vapour Ware Project / Investment Announcements???" Perish the thought. I think the better standard is assume it's fictitious until the money is in an account on shore.
October 08, 2007
Emerging Markets Sexy, sexy, sexy... Dubai rah rah ... overbought
Something about the HSBC move to open a brokerage in the Gulf aimed at international portfolio investment struck me as just not the great news that say the typical Gulf paper coverage would pimp it as. Of course, there is no bad news in the Gulf. Merely rumours of bad news, whispered or blogged (rarely).
HSBC is to become the first international bank to launch its own brokerage services in the United Arab Emirates to satisfy growing international interest in accessing these booming oil-backed economies.
The new firm, HSBC Middle East Securities, will offer institutional investors access to the Abu Dhabi Securities Market and the Dubai Financial Market, which are jointly capitalised at more than $165bn, opening to retail investors next year.
“The Middle East is increasingly valuable and important to investors,” said Neil Foster, HSBC’s head of global markets for the Middle East, and chairman of HSBC Middle East Securities.
Record oil prices continue to underpin the booming economy of the UAE and other Gulf states, with international investors increasingly shrugging off concerns about poor corporate governance as they identify value in some listed companies on these exchanges – which lost up to 50 per cent last year after the stock market crash in the region.
Hedge funds are particularly interested in Middle Eastern markets, because of the perception that the oil-rich Gulf is relatively sheltered from the credit squeeze and runs on a different cycle to global markets. Within the Gulf, the UAE’s markets are most favoured by international investors. Dubai and Abu Dhabi boast enough companies that are open to foreign investment, while other markets – such as regional giant Saudi Arabia – are still relatively closed. HSBC has offered UAE brokerage services via third parties.
What I am all in favour of the argument that the US credit crisis exposed some clay feet, "shrugging off" mediocre governance standards and paying high prices for limited publicly traded paper....
I seem to recall rewinding about 15 years something similar.
A fine way to lose money really. Again, there is value in emerging markets but public paper is thin, and... hot money is oft dumb.
September 28, 2007
Lesson One: Attracting Major Industrial Investment by Private Sector
... is not best done by making it damn near impossible to convert currency, making life unpleasant for expat managers, and generally having a shrill and paranoid relationship with the private sector.
This is my general response to over a week of hearing various Algerian Pouvoir whankers whinge on endlessly about how Perifidious Maghreb stole the super duper Renault-Nissan 400k Logan production plant from Algeria and the French backstabbed them by going back on vague hand-wavey promises of investment.
September 15, 2007
Has started. Productivity falling as we speak. Lots of pious inanities about getting closer to family and the like, while the more consistently observable phenomena is lost labour time and senseless bickering before and after ftour, honeyed over by pious inanities. Sadly I can't do my usual shut down for Ramadan, but have to push ahead on business travel, although 75% of my time is wasted.
September 06, 2007
Iranian Central Bank: Most interesting views on banking, I would like to subscribe to their
Following this Financial Times arty regarding "a plan to eliminate interest rates on loans as a way to encourage "real and genuine" banking services" I am most keen on learning more and would like to subscribe to their economic commentary.
However, it is a bit obscure and I am not an Iran watcher by profession or inclination.
August 27, 2007
Developing Private Markets, Promoting Growth etc: US & Iraq, how to fail miserably all around
In reading this article from the Washington Post entitled most charmingly, "U.S. Falters In Bid to Boost Iraqi Business, Few Products Sold To American Firms" I confess to having been a bit taken aback.
Just when I think the Americans can show no greater depth of utter incompetence in Iraq, along comes something new. What possessed the idiots in Baghdad to think they could get Iraq exporting directly to the United States when functioning emerging market economies have trouble penetrating with companies run by people actually skilled in... well commerce, well it utterly escapes me. The sheer incredible unrealism involved in these efforts is truly stunning.
Now, as context, I would like to share some rants (of many) on Iraq and economic development from 2003, a period I would remind readers where I was actively still working on a major equity investment in Iraq that thankfully never went ahead. I can thank the American occupation authority, the infelicitously named "CPA," for having saved me the losses that would have followed had they been competent enough to respond in a timely fashion to our various efforts. They were not, so no investment, and now four years later all involved thank their lucky stars.
But regardless, the historical review:
1) Encore Ideology over practicality, 5 August 2003;
2) Bring on the Clowns - CPA as circus, 24 August 2003;
3) Iraq and Responsibility 1 September 2003;
4) On Iraq & the Privatization "Rules" 29 September 2003;
5) Iraq Reconstruction: Stunning Political Idiocy, Stunning Miserliness and Stupidity;
6) Iraq: Economic Reforms Analysis 2 October 2003;
(7) Iraq: an analytical piece of interest
August 26, 2007
Risk Taking and Egypt (Umm ad-Dunya, example to the Arab world ... or simply easy place for Anglo Journos to do interviews....)
Perhaps the start of a small, tradition, commenting on stupid IHT articles, although to be fair Egypt searches for a balance that rewards risk-takers while valuing the past is an AP article and not without interest as a discussion of evolving business culture... or aspirations of evolving business culture.
Some reactions or thoughts then on Risk Taking
August 17, 2007
Terror & Credit
It's a sad statement that only our newsroom alerted me to the fact that the very week I opposed in Casa a retard decided to undertake to blow himself up, in a sad attempt to commit a suicide bombing perhaps indicative of a wider plot, whose perhaps only edifying result is to suggest that Moroccans inclined to suicide bombing are incompetent idiots. I have been rather more obsessed with the unwinding of over-leverage (and by extension possible implications for myself, but who is not without sin?
August 15, 2007
MENA & Credit Crunches, further thoughts
This interestingly timed article in the FT on the sharp rise in Islamic bond issuances provoked some thought, in conjunction with FT REPORT - FT FUND MANAGEMENT: Gulf pensions law promises a bonanza for fund managers from 13 August.
Although the arty has Humphrey Percy, chief executive of the Bank of London and the Middle East, London’s second biggest wholesale Islamic bank, saying “The growth of the sukuk market is a result of far greater knowledge about Islamic finance and much readier acceptance of sukuk as an investment vehicle.” I rather think it's a picture that looks more like CDOs before the tires got kicked this month, insofar as Sukuks haven't been stress tested in reality.
However, the plausible deniability, the lack of clarity and funky issue of "rating" (which frankly I think the rating agencies have become so lax as to make almost fictional)... all strike me as likely to fuel a boom. Liquidity flowing off, non-transparent funds....
MEMRI Econ blog?
Ran across this by accident semi-bland post on sov funds that because I have no confidence in anything MEMRI as non-agit prop, makes me wonder.
I suspect that there will be a follow-up on the potential evils of the Arab Sov Funds.
August 10, 2007
Lounsbury on Credit Crashes & MENA
I shall readily confess that while I can make some claim to accidental prescience with respect to the great Hedge Fund popping, in my attention to explosions and hedge funds, I do not truly feel I know more than your average financial fool. Which is to say, who the bloody fuck knows where this credit business is going. Nor whether the hidden iceberg of derivatives and all their black-box models will rip open the guts of a big money centre bank or not; i.e. is that just-so-tale of derivatives spreading risk around so no-one has a deadly exposure right, or merely just-so...
That aside, presuming that this moment is a nice little slap up-side the financial markets head, and the real economy is not effected, it's a good moment to squeeze out some insanity and get people thinking about risk more reasonably (as well as realising the fancy hedge fund 'hedging' is mostly a load of bollocks and luck).
Both those abstractions aside, a question in comments about my thoughts on the impact on MENA. Well, my instinct is that some portion of capital that previously was looking for emerging markets return will pull back. But then, the blow up is occurring in fancy-schmancy financial alchemy land (US of A), not in emerging markets, so... to what degree is more rational risk pricing going to effect looking at them. Dunno. But there is lots of Gulf liquidity sloshing about.
July 26, 2007
The New Humility: Or beware of Anglo Saxon Bankers Bearing Gifts
Reading the FT arty on the continuing sub-prime crisis blow back and in particular the rather nasty issue of whether the new habit of supposedly 'slicing and dicing' risk to meet specific appetites has any meaning and whether new questions about this will choke off all the M&A fun, I am amused to think of a comment by a big risk management cheese in a meeting last week btw bankers where a MENA banker asked him "what about modeling, how robust is it?"
His answer: "My answer last year would have been different. Now my answer is, I don't know."
But a rather more intellectual statement on Risk Management and Regime Change: "Specifically, it is yet to be established with a sufficient degree of confidence that, by diversifying across risky asset classes, investor portfolios will continue to sufficiently mitigate risk."
May 30, 2007
World Bank - Zoellick
I have to say this is a pleasant surprise, Bush picking Zoellick, the whinging by "unnamed" Bank officials re "someone close" to Bush being a problem is off-base. The man is a good choice overall.
May 08, 2007
Money Laundering as a Subsidy
Taking a play off of Shaheen's comment on my prior post, I was just thinking about Money Laundering as a subsidy to domestic consumption in MENA.
As I noted in my comment in reply, I don't rely care that much about the drug money laundering myself - although I know the illiberal prudes in the world, most notably the Great Finger Wagging Hypocrite Power, are all up tight about this - although I like it best when it's recycled into semi-productive areas that subsidize otherwise unaffordable consumption.
Sure, not real great for a healthy economy, but hey...
Of course, the real estate observation is key.
Algiers, The Tourist Destination
I had one of the most surreal business conversations of my life today, with some... Algerians official who have somehow deluded themselves into thinking that I may be the conduit to foreign money to invest in what I can only characterise as a truly fantastical scheme to create an Algiers Bay tourist destination.....
Abstracting away from the fact that you can't get bloody tourist visas to Algiers without jumping through absurd hoops, and paying absurd fees, who in their right mind is going to visit Algiers, a city with goddamned paramilitary at every round point (and not the weeny under-fed pseudo para conscripts of Egypt, really serious French trained toughs with spanky new assault rifles and equipment) and a palpable sense of fear and malaise?
Now, I am not saying Algiers is not an attractive city, it is. It's just one would have to be fucking retarded to invest in tourism in Algiers. Fuck, the morons who invested in the Tourist hotels in Jordan got fucking raped, and Jordan at least was a semi-sane bet in 97. (this leaves aside the money laundering hotels built recently in Amman; I have a fondness for money laundering actually, it provides ridiculous services like mini theaters in absurd round tower hotels at absurd pricing for persons like myself to enjoy)
April 16, 2007
Apres Bombing Business, Reflexions on Conducting Business in Casablanca
I am not entirely sure even how to classify this, but a moment to reflect on apres bombing business. I'm in town and have to achieve some things before flying on to some neighbours. However, this weekend rather fucked things up. Boom, boom.
I have to say that it is extraordinarily difficult to concentrate. First, everyone is talking about it. Second, the local papers charmingly published the photos of the bombers, charmingly blown in half. As I caught sight of this long distance, I can't say that I felt better about seeing it in colour on the front pages.
Then there is the business mtg interrupted by a paniced call from a man's wife who heard, falsely another bomb had gone off nearby to us. Really not conducive to getting various deals going.
April 07, 2007
How not to get (re)financed
When talking to me about your plans for a tourist development, try not to in the process bitch and whinge on about how the evil equity investors are pressing you with a put option to get their money out and how you're going to start a political campaign against them.
It's a stunningly bad idea. Why I went from being interested to thinking, "you are one dumb fool, never diss your financiers when trying to raise money."
March 20, 2007
Rotted Dimwitted Bureaucrats
Perhaps it is my general poor humour, however I have just gotten off the phone from yelling at some dimwitted git of a fool in a certain consular service from the region. I need to, to have my ridiculously expensive visa approved to go to this shitty rubbish messed up ridiculous mess of a dictatorship, have a "Justifying Letter" establishing the reason I might want, in a fit of madness no doubt, visit said worthless piece of real estate.
So, the Director of my firm has to write the letter. At this point I go ballastic and point out that I am, in fact, the motherfucking director (actually I said bloody goddamned director), and what bloody point is there to me writing a letter for myself to justify myself making the decision to go, myself, to the capital of X?
The logic, if it can be called that, was "if something happened to me they [who "they" would be escapes me] would want to know why the visa was granted." What the bloody fuck? Why the bloody fuck would anyone care what some threadbare suit wearing chimpanzee of an underpaid petty dictator of a consular official did in granting the fucking visa? I don't come from a fucking police state, and in the other direction, contra the little retard's supposition, we don't give a bloody fuck if you've been "authorised by" someone.
March 13, 2007
Another Reason to avoid US placement: Israeli lobby & The hysteric anti-Iranian Jihad
I am not sure if I am amused or annoyed by this news from the FT that AIPAC has commenced a campaign lobbying to force US pension funds to divest from companies doing business with Iran.
Well, I am glad that none of my money is invested with schemes which these Religio-Nationalist zealots can touch.
Go East Old Man, Go East: Halliburton to Dubai
An interesting article, or rather an article on an interesting development that is difficult to assess. From the FT, entitled Risky Locations, on Halliburton's queer decision to move its CEO to Dubai.
I am, to be frank, puzzled. Comment below.
March 07, 2007
Imperial America: Iran & Sanctions on 3rd Party Hydrocarbon Sector Investment
The Financial Times has an interesting, if infuriating (from its content, not writing) article on the Imperial American pretension to regulate other's investment in Iran. What irritates here especially is that I know from experience the slightest hint of similar actions by EU or similar parties touching on American interests provokes paroxysms of incoherent rage on the part of Americans. I confess readily knowledge of this, as well as my conviction that the US efforts here are posturing and will end up merely alienating without any real achievement, adds to my deep sense of irritation.
Now, mind you, the concept of the effort does not offend, and my snide swipe at Imperial America is most explicitly not from your usual Lefty whinging "evil capitalist America" tripe sort of point of view. No, It's about over-reaching, and clumsy over-reaching. I am a strong believer in avoiding too much obvious hypocrisy. One reason the overdone language the Americans and the French tends to engage in in their precious self-fellating rhetoric over their respective civilisations irritates.
Operationally, for many of the same reasons I predict that it will be the Chinese and similar parties that will reap the Iraqi hydrocarbons windfall, I strongly believe the US sanctions are an example of cutting off your nose to spite your face, which for some reason the current American administration seems to find to be a queerly enjoyable activity.
March 06, 2007
I just had an amusing, even hilarious for me, lunch with my attorney who was ranting on about how his local clients have to be brow-beaten (and we're talking corporates, name brand even) into conveying timely information, to him, their attorney, for work they've demanded.
I actually have the exact same experience. It's amazing, really, what it takes to get the simplest fucking things done in this region. Efficiency. What's most irritating and yet in some ways puzzling (in others not when you think about internal organisational structures and incentives) is the foot dragging raises their costs as much as mine (or the attorney's). Of course the constant whinging on about costs etc when they sit down with a bill makes this even more infuriating.
But there are clear organisation incentives to non-performance in the typical MENA company, nothing shocking that doesn't exist in the West of course - see Dilbert. But as always, these things are a question of degree, and indeed the weakness of countervailing incentives.
In some ways it's a good way to look at the failures of Iraq, since the American decision makers innocently assumed the exact same incentive structures, decisional processes and worst yet, reactivity. And being arrogantly blinded to the sometimes (indeed often) subtle differences - any one of which may be individually trivial, but cumulatively is fatal - were unable to react, to adjust and change at once tactics and conceptual strategy in ways that actually responded to the real incentive structures.
I've noted in places like our fool Andrew Sullivan (and even more egregiously chez the Moustache of Understanding) comments tending to indicate that Arabs (or Muslims, en grosso modo) don't value / want / desire Liberty, etc. etc. That's bollocks - but the operational incentives for making changes to achieve those things require different approaches, and realisation that the near term incentive structure is weighted towards avoidance of decisions etc. - nails get pounded down - unless one has a means to control - as in guns.
March 05, 2007
Emerging Markets Attention
This week is looking interesting, my friends in Asian markets are all in a panic although I am rather sanguine since it's better to have these moments periodically than not and I don't think we're on the edge of a market collapse as such.
It's interesting to watch the local market actors, who are relatively inexperienced (not that I am really wiser than they, but I haven't had the habit of letting my head get all that big), meanwhile my dear little Wasta boy seems to have negotiated his 50% of zero - he's out. Idiot. Instead of 15% of a very profitable ongoing proposition with regional development perspectives, because he wanted a big chunk to sit his ass on, he got nothing.
Terribly typical attitude, kills lots of development - no vision of growth, just fighting over the pie as initially presented.
Of course, that's not unique to MENA - quite the contrary, it's pretty typical globally. But MENA business community is really terribly provincial.
March 04, 2007
Prefering 50% of 0 to 10% of rather more than zero
Among the items prevernting me from enjoyable blithering on about the MENA region, I have a fine project for a new financial sector development - greenfield, very profitable. Here in region of course, I am a glutton for punishement.
Now, this will be a brilliant thing to finance, if the actors can get serious. It should not really be that hard, except my good friend, one of the local partners (proposed) seems to believe that because he's related to X, Y and Z, who are key to getting an operating license, that this means he should not only get a job in management (fine by me, not a Sr. job, but I think everyone would feel fine giving him a growth position) and get a sweat-equity stake (although I had to explain the concept, including the concept that he actually had to put some work into the sweat part), but that he should get a controlling interest.
February 18, 2007
Reflexions on Talent, Markets, MENA & Development - The Value of Initiative
Inspired in part by a comment by Shaheen, and in part by some convo I dimly recall from a few months back somewhere in bloggy land about the value of expats and overseas educated and experienced staff, I thought I might make a comment on the value of staff with international experience.
While perhaps potentially self-serving, I really mean to briefly reflect on barriers to growth in MENA, as a business as well as a social problem.
Consular Cretins and Min of Interior Cretins
Have to go Djzair shortly. Had amusing - well semi-amusing - interaction in my semi-successful attempt to get a visa.
January 17, 2007
Morocco Economics Blog
Via my amigo Ibn Kafka of the always interesting Obiter Dicta, I found Eco Maroc which for those interested in a fine discussion of business and economic dirt and controversy (such as the State abusing the "competition law" to defend certain (ahem) sensitive interests in cooking oils, etc), not to be missed.
Neither is Obiter Dicta, although it is about law and perhaps slightly infected with a Le Monde Diplo view, but I can always forgive ideological error when it is combined with pragmatism and intelligence.
So, there you are for the French readers.
January 07, 2007
Private Equity Giants - Africa & Middle East on menu
I found interesting that one of Carlyle's big hitters cited in a Business Week interview Africa and Middle East as areas of expension for Carlyle.
Of course, if one looks at what he is citing, it's big infrastructure type investments - extractive industries and similar - not venture type investing, but it is regardless interesting that such a Fund management group is actually talking about placing money in Africa and the Middle East.
January 03, 2007
Dubai, Innovation and Congestion - Outsourcing to Low Cost MENA
While it would be premature to conclude a shift, articles such as this from Gulf News re destinations like Egypt becoming attractive on a total cost basis for tech firms.
January 01, 2007
Impressive Losses: Gulf Bourses knock off 442 billion USD
An encouraging headline: 442 بليون دولار خسائر الأسهم الخليجية عام 2006
, 442 billion is actually some real money.
No surprise in this, the only question that comes to mind is whether the ongoing correction in the Gulf will substantially damage the equity industry in the medium term.
The correction is healthy, and I think will in the near term tend to push liquidity into alternatives, and perhaps out of the Gulf into neighbouring areas, as well as Europe.
December 29, 2006
A queer concept, really, the Islamic MBA, but the FT report on this from two weeks back makes for interesting reflexion on the emerging intersection of Islamist thinking - let's call it roots-Salafism (modernization oriented conservative piety as opposed to Wahhabite inflected nihilist messianic neo-Salafism of al-Qaeda) - and modern economic / socio-economic trends.
Some reflexion, then, below:
December 08, 2006
France 24: New player in the Sat News Game
Long planned the trilingual France 24 station is up and running I shall follow this as closely as possible, but another international player is interesting even if it is a very crowded market.
December 05, 2006
Flocking to Sukuk... well, maybe
The Financial Times has a moderately interesting article on the supposed flocking of Western investors to the sukuk market.
I am skeptical that the end buyers are in fact 'Western' but I was amused by the framing at the opening, with its perhaps unintentional, but certainly very clever accuracy as to reality, if adopting the double-language of the Islamist take:
December 02, 2006
Whither Gulf Markets?
The pulling of the Oger IPO is interesting and leads me to think that the Gulf infatuation with public listings may be breaking down under the sustained pressure of the correction.
On the other hand, there is so much liquidity shloshing about, and American "anti-terror" money chasing makees Western markets danerous for Muslim money - however clean.
November 28, 2006
MENA Govs - Still don't get Free Market
I just came away from an interesting yet profoundly frustrating meeting with some Sr. officials from the Maghreb on investment projects in the "Technology Space" - one can interpret that broadly to mean any technology new to the Maghreb, not just North American style Hi Tech.
Motivated folks, smart and well-educated.
And without the slightest fucking clue as to how the bloody fuck the private sector invests. Painfully clueless.
November 19, 2006
The Problem with Criticism
No one really likes it very much.
Invited to talk to some disturbingly sr officials etc. shortly on investment issues, but not in private. In private one can say what one means. In not in private, well, that's an issue. I should decline. I've now rewritten my notes 7 times, each time getting less and less interesting. Bloody moujamelat - why bother?
However, as I have been thinking about this, I do see I need to get back to my old hobby of whacking away at the idiot development people and the Sachs of the world who piss and moan about "Multinationals" and "global exploitation" w/o the slightest clue as to the sinister effects of national regulation. After so long being concerned by the incredible incompetence of the Right Bolshevik retards, it would be nice to get back to beating on the Left idiots.
November 12, 2006
Stupid American IPR anti-piracy Hollywood fellating idiocy
Goddamit, all me DVD sources now have those flimsy plastic envelops and the fixed stalls have a crappy selection right now.
Of course the lower quality wandering vendors are still all around.
Why all this? Because some newly arrived ignorant fool in the US G services here has gone on a jihad about movie pirating - no doubt due to idiotic whinging on by some Holywood scum looking to wring some few more cents out of this market - and the local authorities now feel they have to make a show of suppressing pirated DVDs.
Won't last, and all it is doing is pressing the supply into the moving rather than fixed vendors, and annoying the fuck out of me. Morons. Focus on rich markets, the marginal gain here is far below the cost.
November 10, 2006
First Islamic Bourse - Dubai & Marketing
An amusing bit of marketing from the out of favour Dubai Financial Market, as it declared it would be restructuring to comply with Islamic finance principals (which largely seem to revolve around the utter devotion to disguising interest as fees and other time linked cash flows).
As the article states:
Many investors in Dubai believe the conversion is primarily a marketing exercise. Islamic principals only exclude companies whose main business is pork, alcohol, arms, tobacco or interest, and state-owned DFM has never fallen into these categories. Furthermore, DFM will continue to list conventional banks after its conversion, with fees from banking stocks paid into a separate pool.The chief motive, analysts say, is that the main Dubai share index has fallen from a peak of 1,267 points a year ago to 379 points yesterday. They argue that bourse officials hope to offset the impact of this vicious bear market by tapping into the current Gulf Arab fad for investments with the "Islamic" tag.
Could not agree more.
October 22, 2006
Bedou Scum & Destination Aqaba - Incentives and Disincentives to Investment
A peculiar article from The Financial Times on a new emergence of little old Aqaba, that almost famous Ottoman fort, "Incentives make Jordanian port investor haven".
Never liked the place myself, but more interesting than the somewhat hypish headline is the discussion of barriers:
October 07, 2006
A quick note on some recent items from FT regarding investment flows, which will be of interest to some readers. Fund to invest $100m in African real estate, on the CDC fund for Africa (North and sub-Saharan) which is intersting as there are now also relatively substantial Gulf funds heading into real estate in North Africa as well.
And then Algeria, where supposed reforms seem to be going nowhere: Algiers turns up nationalist heat in oil and gas industry, one step back after a half step feint forward.
Algiers is reasserting control over its oil and natural gas fields barely a year after the North African country wooed international energy groups with friendlier investment terms.
October 04, 2006
Dubai, the Attraction
A quick note to draw attention to a recent arty by Roula Khalaf of FT on Dubai and the why behind its success to date: Dubai cultivates oasis of calm where Arab business life can flourish
The main thrust of the article is to highlight some of the why behind Dubai's success to date, beyond just stupid amounts of capital. Although that is a clear major condition, it is not a sufficient one as the other petro-giants of the region never managed to achieve Dubai's success (even if we mitigate our appreciation of the success by noting a definately unsustainable aspect doped by too much liquidity chasing too few quality assets).
Despite my own critical attitude towards Dubai - much is clearly illusion and can not survive, there are also clear lessons with respect to the ability of the Arab/MENA region entreprenurial classes actually being able to flourish when a moderately liberal (quite liberal for the off-shore aspects) business environment is established. I do note that some of - indeed in some ways much of Dubai's liberalism is rather Potemkin liberalism insofar as it is all of a very temporary, Enlightened Despot Suffrage quality. That being said, if one takes Dubai with a grain of salt, it does illustrate via its off-shore business services sector the degree to which Arabo-Muslim entrepreneurship is seeking a place to flourish away from the dead hand of the state, and the degree to which even in the temporary, Prince-dependent liberalism of Dubai seems vastly attractive in a world where the West is growing stupidly more hostile to Arabo-Islamic money.
September 24, 2006
Libyan Assets, American Capital
Rather preliminary, but nevertheless certain to provoke much ignorant comment, "Carlyle poised to bid for Libyan oil giant, says son of Gaddafi" reports The Independent.
The article reports " US private equity group with links to leading Republicans in talks to buy state-controlled Tamoil, valued at €3bn", which is plausible given The Carlyle Group's announced fund for the MENA region, which was very obviously aimed at these kinds of massive investments.
September 19, 2006
Psychology, Investing and Pressing Flesh
A general comment, but one I think useful from some perspectives on understanding investment flows (from an anectdotal perspective) in MENA as well as business practice.
Have been doing rather large number of meets w financial institutions in region, and have had the occasion to attend some multi-player mtgs that illustrated the key importance of pressing flesh, so to speak [or why face to face human contact is not replaceable], as well as the influence of cultural frameworks.
August 26, 2006
German Steel & Transaction Costs
The operation buying my new German Steel is taking far too fucking long.
First, there was the idiocy of the American correspondant that froze my funds when some semi literate bank functioniary panicked over the cash being transferred to a suspect country.... Once resolved, now I am lost in the intricate idiocies of the local bureacracy which render any transaction 30 times more complex than necessary.
It's the sort of operation that underlines the idiocy of the Stiglitz's in their ivory tower attacks on globalisation and celebration of statism.
August 25, 2006
Attention to Detail as a Barrier to Exports
As a favor to a local private equity group, I have been consulting with an investee on their marketing program for UK and Canada. Although the little company has some interesting products, they should thank Allah that I am reviewing their materials. For example, indicating instructions have to be adjusted according to the fatness of the user is... well... not a great marketing move.
Attention to detail - were I not imposed in a way on them, they would have sent this rubbish off without bothering to check the language.
August 24, 2006
Joint Ventures & Coops: Reflexions in real estate and coops in MENA
My side Joint Venture has given me the keys into experience and personal fashion the intricacies of communal property practices in MENA, and outside the context of a multinational with all kinds of influence and the like to throw around, but rather in the context of being a weak foreign investor without corporate structures. While surprising, the experience has highlighted the sometimes incredibly irritating but always illustrative of under-development incentives and practices in ways that have been somewhat intriguing.
August 23, 2006
Pimping Giddiness: MENA Private Sector & New America Foundation
In reading the first paragraphs of a Washington Post Op Ed by a fellow at the New America Foundation, entitled The Real 'New Middle East' I thought I was going to be pleased, sadly though the author took real observations and mixed them in with simple-minded swallowing of corporate and governmental PR spin to produce absurd tripe typical of the wide-eyed neophyte or the paid propagandist.
A pity as the author's main thesis in a less over-done and gullible form has merit.
August 17, 2006
MENA Trade, Business Culture & Americans
While I confess this note is in part motivated by my desire to have an excuse to share this cartoon from the Moroccan business daily, l'Economiste from yesterday's - 16 Aug edition. This was emailed to me yesterday, and is worthy of a good laugh, I thought it also worthwhile to undertake some reflexions on both the subject matter and some generalisations about practical issues.
The text, by the way, reads roughly, "Let's go, don't be so timid." I presume everyone gets the allusion.
The subject matter is the fairly substantial non-impact of the much ballyhooed - in US circles - and much feared -in Maghrebine circles- Free Trade Agreement with the United States.
Utterly unsurprising, I may add, despite the rather overdone expectations on the American side (based on painful conversations with earnest American officials I have had from time to time) and fears on the Maghrebine side (who delusionally feared the US was going to come in and buy everything. If only.)
August 09, 2006
Further to Frothy: Business Week notes Lebanon has not scared off The Men in Blue and Chalky Pinstriping
Following up on my note, a quick bit of attention to this piece in Business Week noting "fighting in Lebanon and Israel hasn't scared off financiers. Deals are being made in Dubai and Cairo, and Western firms are moving in..."
Not all that different from The Financial Times items highlighted, but interesting for its own insight into the attraction of liquidity.
Frothy: Fund Developments, Private Equity & MENA
A queer indicator of the amount of froth that characterises the MENA capital markets at present, my very own self got a call from an American firm looking to enter the MENA market for the first time and raise a private equity fund. Looking for a "face."
Quite frankly, they need someone grey-haired and I told them that right out, for the kind of investment they're thinking of; but on the other hand, I would be a decent face to give an image of.... "best practices" given me rep as Mr Clean.
This being said, this is not really about me, but the froth. With oil at nearly USD 80 and likely to remain well above USD 70, the amount of money flowing into the Gulf - and to a lesser extent places like Algeria and Libya - is astounding and looking like a replay of the 1970s.
August 01, 2006
Reflexions Economic & Practical - MENA During Times of Conflict
If I may (and of course I can, as this is my bloody bloggy and I do whatever I bloody want) some indirect comments on the current environment in region. Sitting in region, I will nevertheless note that spending evenings watching (as this evening) imagery of shattered children's bodies (headless even, on Al Arabiyah) is not precisely cheery. Even my JV partner, normally an almost pro-Israeli type said this evening something along the lines of "They want to impose their rule over all their neighbours like tyrants." Utterly out of character. And certainly the Arabic for tyrants carries a lot of meaning.
But on the environment, I spent this evening between popular (working class) beach and consular parties, an interesting contrast on some level, and an occasion to reflect on the diffent worlds, perceptions and understandings of crisis. Best of all, plenty of American diplos showed up at the later, I suppose needing to mingle with people less likely to tell them straight out their employer is a stupid git.
July 22, 2006
Lounsbury Musings - The Leb Crisis & Economy
Some thoughts or concerns without any particular answer at present regarding the Leb Land-Israel cris and its economic impact in the region (ex the clear disaster for Leb Land).
July 18, 2006
Transparency, FDI & Foreign Groups - Counterintuitive Observations
An amusing side note to distract from the Lebanon hysteria that is sucking us all in.
I'm presently doing research on North African financial groups for a potential new piece of business (my idiot whankers back on the other side of the Atlantic still not grasping the lack of transparency that renders any given piece of research in MENA twice as hard at minimum than in the developed world).
It has been amusing so far to find that despite all our talk in sector about how foreign groups bring best practices, better governance and more transparency, that in the Maghreb -comparing like to like, i.e. listed to listed- the locals are actually rather better about publishing their financial reports than the French groups(*). Never mind site functionalities. Not really surprising, if one knows French banks, but provides a bit of nuance to easy talk about FDI and benefits. Not, mind you, that I am against FDI and all things being equal foreign groups usually do raise standards....
July 04, 2006
Islamic Finance - Shipping Fund: Great for the investees, rather doubtful for investors
This little item caught my eye as a sign of the spiraling search for "halal" return as money pours into the Gulf: Dubai bank sets up Islamic fund that will invest in ships.
Now investing in ships at some level may not be a bad specialist asset class, given a modicum of aging in the existing fleet plus long-term growth in demand driven by globalising supply chains. At the same time, it rather strikes me that shippin has a long history of being a bad deal for investors, and that it's somewhat late in the game to be piling into building this kind of operating assets.
I'm sure it will be a fine deal for those who win the money, at best medoicre given the risk (8 percent return?) for the investors. But the Islamic finance game is getting good at selling this kind of thing. Of course the devil is in the detials, but given complicated legal fictions to present a halal face for what is effectively debt, I have a hard time crediting that the fund will be effective.
June 18, 2006
Amusing Usages re Islamic Finance
I caught a brief CNBC discussion on Islamic finance with some chucklehead in London, I liked the usage "Traditional Finance" versus "Islamic Finance" - useful, although I find the "We in the Islamic world have a more social approach" to be exactely the kind of dishonest posturing that Timur Kuran in his various articles and works (as in Islam and Mammon : The Economic Predicaments of Islamism) takes whacks at.
More social my ass.
June 14, 2006
Kas al Alam - World Cup and Arab Adverts
One item my newfound activity (besides that my after chemo strength is far, far lower than I though, six months of toxic living hell having an apparently significant effect on physical capacity. I suspect me JV partner will be disappointed with "the Extraterrestrial") has gotten back into is catching some Arab Sat - specifically MBC - broadcasting for the world cup.
A word: Saudi Ownership has never, ever been more pitifully displayed than those sad faux-Pan Arab football advert songs. The KSA team - despite the mega flag with all the little Arab flags sewn round - ain't the hope of any rational Arab football fan. Tunis, althoug injuries and group strench make this a long one, and France (Zinadine) are the rational choices.
Your whacky face painting bus trip musical numbers, they are just going to be painful when Tunis shuts you out, and the rest of the group crushes you.
June 04, 2006
With Friends like This: Euro Left Environmentalist Warns Mass Tourism to Morocco May Spoil His Noble Savages
Via our very own Aqoul Aggregator, a fine little tool I should learn to make more use of, I found this delicious piece of utter idiocy Mass tourism threat to Morocco? (not the blog, the underlying report).
Justin Francis, co-founder of Responsible Travel, a leading promoter of eco-tourism, said the Moroccan government was expanding its tourist industry without regard for traditional attractions.
"There is something unique about Morocco - it may be only a three-hour flight from Britain but in social and cultural terms it is radically different. The introduction of hordes of tourists and new hotels, without considering local sensibilities, will lead to over-crowding, over-development and a clash of cultures," he said.
Stupid drooling idiot of dumb-fuck whanker. While crappy development is a risk, letting rural Morocco stew in grinding poverty as those quaint "traditional" lifestyles people like this love to idealise produce ever-diminishing returns and send youth packing off to the slums of Casablanca looking for jobs. Where they certainly get a "clash of cultures."
Dumb fucking idiot should be taken out on a camel to Jbel Sahro and left there with nothing but a candy bar. He can then ponder the ruiining of the quiant lives of the quaint impoverished people in proper context. Loathsome fuck.
May 16, 2006
MENA PE: Note
Something to return to FT has a note on PE firms in region: but a quick note, don't take Abraaj's self-serving spin for fact. Their count as well as self-description are entirely self-serving. Good illustration, however, of the utility of objective data.
Possible Asset Bubbles in Gulf, Moody's explores the art of understatement [Updated]
Well, to be fair to Moody's, given their position, they can't say definative things.
Rather, they're issuing a useful but likely to be ignored (in the region) warning. It does come at a bad moment generally with today's "flight from risk" with all signs of a bit of old fashioned emerging markets contagion rearing its ugly head.
I have always been of the opinion head-long flight from risk is idiocy, but on the other hand it's sensible if you've placements in places not well-known.
May 15, 2006
Saudi index soars after removal of regulator
There's a title you just do not read every day in finance.
Regulator. Removal. Index. Soars.
No, just a string of words that do not typically strike one as going together.
It's the very really. Soars. No, indices just don't typically soar on such news.
But we are talking here about KSA and it's strange little fantasy world of hydrocarbon income fueled pretend economics.
However, before moving along, I would draw attention to a fine book I am perusing The (Mis)Behaviour of Markets : A Fractal View of Risk, Ruin and Reward , very much worth consideration.
May 11, 2006
In the futility department: Iraq Investment
Running across this note in the FT, US urges investment in Iraq and finding the same idiotic promo agitprop re investing in Iraq that I was hearing back in 2003.
Longtime readers of course know that I was involved in various investment projects focused on Iraq then. Including a heartbreakingly beautiful steel project that dripped away into the sand thanks to the CPA-Iraq incompetence. I should be thankful of that on some level, I would have lost money.... Although on the other hand, I strongly feel that had CPA-Iraq not been so painfully incompetent and corrupt (in an incompetent way), Iraq might have turned out far better. Not the Bush Administration's utterly unrealistic vision, but not the utter disaster that it is now.
But let me share the part that really irritated me:
April 21, 2006
On Markets, Micro Economic Observations from the MENA region
Since I am tired of being reflective about the bloody cancer and since the fine drugs given me (with increasing reluctiance by the prudish American medical staff all worried that I am some sort of narco fiend), and since I was moved by the Aqoul threads of late....
Well, lots of reasons, what was the subject? Ah yes, Markets in MENA, some close up Lounsbury thoughts on market liberalisation as seen from the micro-economic perspective. Note, these comments are fueled by drugs and therefore may have cerrtain inherent inaccuracies.Do not take these comments as an offer to sell any given product. Caveat Emptor.
April 18, 2006
In other trivialities, on business practices
Well, nausea does tend to keep one awake, and I was just reading the North African - I mean Maghreb - business press to keep up on new developments there (as an aside, I want to note how astoundingly seperate the business press and communities tend to be, between the Maghreb and the Machreq -when I say Machreq mind you I mean everyone from Egypt East (like most Maghrebines IMO). It's astounding how little the two world's interact, despite the "Arabness" - look at MENAFN (MENAFN.com), it's really MachreqFN, and that's typical.).
I came across a thoroughly irritating item (well in rereading it's not so irritating, but it quotes some people I know and loathe) on payment delays and problems in an ordinarily fairly strong publication that includes this comment: «Pourquoi Marjane ou Acima, par exemple, qui vendent cash, imposent-elles à leurs fournisseurs des délais de 90 jours ?» et il ajoute : «Comment refuser, sous peine de ne plus être référencé chez la grande distribution?».
[loose trans: Why do Marjane or Acima [NDLR: supermarket chains], for example, which sell on a cash basis, impose on their suppliers a 90 day delay? And he added, "How can one refuse, under penaly of no longer doing business with the major distributors?"]
April 14, 2006
Emerging Markets: The mindless chasing of return
A quick reference to The Short View's comment on The mindless chasing of return, for which I want to add that while I agree with the overarching point to the commentary - that there is massive liquidity chasing around the globe looking for an extra few hundred basis points (or less) regardless of risk, there is some nasty hint of irrational contagion thinking here. I am also annoyed by the far too typical "Gulf is the whole fucking Middle East" thinking.
If you want return, don't be going to the Gulf, look in the corners of MENA where you can avoid the oil curse and find fine little basic industries type firms for decent, realistic valuations.
But returning to the contagion thinking, here is the key passage I object to:
This week’s events in the Middle East could be critical. A natural response to the Iranian nuclear crisis and a collapse of share prices in the region would be to rethink the risk premium for emerging markets. Fund flow figures for this month should provide interesting reading.
Logically speaking, to be frank, the events in the motherfucking Gulf (not the Middle East, stupid git - well smart git), have fuck all to do with other emerging markets. It's well taken, the issue of underpricing risk for emerging markets right now due to the desperate search for return, but this manner of stating the problem just stinks of irrational contagion type thinking.
March 21, 2006
A new title: Islam & Mammon
An unidentified benefactor (why is it a spot of potentially fatal disease encourages people to send me books?) has sent me Timur Kuran, Islam and Mammon: The Economic Predicaments of Islamism. It looks interesting, I may have commentary later.
March 20, 2006
Egypt: Retail Empire Privatised, Omar Effendi thrown to the winds of savage liberalism
Catching this article in The Financial Times brought a fine warm glow to my heart. Omar Effendi, the Queen of the Nasser Era, the down-home slut of Mubarek (Omar is of course a male name, which simply means you should be flexible) era retailing.
I recall fondly the first time walking into Omar Effendi and encountering the brilliance of Eastern European School retailing that I had last witnessed in the Alexanderplatz (except the Cuban place that used to be around the Palasthotel area, my memory has faded now as to where): the dusty cliques of bored and hostile clerks, the broken and/or dirty merchandise. (My favourite being the dirty lingerie on the mannequin that looked to have been subject to some kind of slasher attack.
But enough of my reminscing, let's talk about Egyptians in revolt as faded diva of retail is put on sale.
March 16, 2006
Well, some quick points: Bourses & Chad
The Gulf region Bourse corrective picked up (our friend Secret Dubai has an amusing note on the reactions of the neophyte investors - as fun as it is to laugh, the governments have to take careful steps so as to (i) not destroy the equity investing culture, (ii) not set up a bail-out system that would eventually blow up equity investing.
Meanwhile, the Maghrebine bourses were untouched. Given their rational valuations and lack of speculative hot cash, this is no surprise. Plus, in the case of Casablanca, they already experienced something similar in 98. Once burned, twice shy.
Finally, and I'll link when I find something in English, the Saudis are suddenly talking of opening the Bourse to non Saudis.
So bloody transparent. The "Oooops, well, let's call in the foreigners to bail us out" response.
The KSA government has the mentality of 12 year olds.
I almost forgot, a near coup d'etat in Tchad. That will get the attention of the French. I suspect movement on Dar Fur.
MENA Economies & Investment: Your Views
In comments, a newcomer who I have likely frightened away expressed the following sentiment: why are you trying to convince us to bring money into the region's economy? Is it because you know where the MENA economy is heading? I'm no expert, but I'd guess that buying Arab stocks right now is equivalent to buying a timeshare on the Titanic.
Let me leave aside the charming misapprehension that I personally am pimping MENA securities (although of late I wish I were), and simply see what those who read here think.
March 14, 2006
Cheap MENA Markets: Get Yer Cheap Stocks Here
John Dizard offers an ironically timed article on the MENA markets in The Financial Times, telling the American investor that The Middle East offers fertile soil for value hunters (yes this is subscription only, get a fucking subscription you lazy git, best fucking paper out there).
Well, yes. Although given the timing I hardly imagine the US investor is going to overcome his fear of The Average Mohammed and buy MENA securities.
On the other hand, there are these cretins speculating on actual physical Iraqi dinars, so .... As an aside regarding the same cretins, I wonder how thy've handled the utter collapse of their dreams. Well, no matter, MENA securities and the Investor in You.
February 26, 2006
US-Arab Cham of Comm Statement on DPW
Afraid still fighting some illness at present, stupid white cells. Regardless, sharing the statement by Nat US Cham of Comm on the Dubai Ports World, in part, as I liked it.
January 30, 2006
MENA Finance and News, some interesting notes - Iraqi Bonds, Project Finance &
I would normally place this in 'Aqoul, but I don't want to push down more general conversations.
First, and most intriguing is this one:
Then there is this little dandy,
A few quick excerpts and droolingly ignorant comments on my part:
January 26, 2006
A Collounsbury Lesson on Business in MENA
I've gotten more or less numerous requests in the past with respect to "doing business" out here, etc.
Here is one I distill from recent meetings and my core line of work where it appears my home office is in the process of losing a deal with a major client. Largely because the American side wants to build in all kinds of "best practice" whanking rubbish into the game, without regard to the actual market.
Rather exactely the sort of thing I gather from the seminars and like the gold plated advice everyone from DIFD to USAID to EU (but oddly, rarely France.... hmmm) like to pimp.
In an emerging market you do not need expensive "best in class" and "best practice" - what you need is "better than the other guys" efficiencies, but one's that work in the bloody market with the bloody staffing one can realistically expect. Perfection (even in the ridiculously delusional business sense as personified by Six Sigma) becomes the enemy of the good.
There is my "Lounsbury Doctrine for Business in MENA" (with due respect for Pratike for naming my political doctrine) part One.
Second, don't judge the market opportunity by what is going on in home market, judge it by what is potentially "disruptive" relative to home market and/or export markets - pricing perhaps.
Americans have become obsesses with technology as the source of advancement in business-economic terms, and that's important, but it's not the only thing. Esp. in emerging markets, rather trivial seeming organisation changescan often find a lot of value and export competivity. That's a disruptive change, and in the contect of a lower income emerging market, more useful.
January 24, 2006
An actual comment from investment discussions today that I assisted with:
January 17, 2006
On Visas and Service, easing the process
A bit of welcome news:
US to ease obstacles for foreign visitors
By Edward Alden in Washington
Published: January 17 2006 19:33 | Last updated: January 17 2006 19:33
Some interesting steps are cited:
On business: Media Fund
As a side thought, I wanted to let certain readers know that the Media fund which I am advising on is looking at a real closing this quarter. The issue of US investors - qualified of course - interested in on-shore Gulf based came up. Some of you may want to chat with me about context.
Odd, odd, odd
That I have to, in a bit of a call that angled at resolving some issues, explain Patriot Act reporting implications to a US G staffer who supposedly tracks such issues in the area in question. And I know fuck all about Patriot Act except those motherfucking stupid ass report your 3 degrees of seperation from Osama Ben Laden bullshit requirements that make life miserable while doing fuck all for security.
Of course, I could simply be bitter about the useless extra work.
Random Thoughts on Business in MENA
When in a conference call regarding business proposition in region, you know you have an issue when one of your local actors insists that they need exemption from US Patriot Act. (As if one can grant such, bloody idiot 'aroubi fools) I rather dislike the stupid extraterritoritality meddling of the Act myself, but at the same time when this is raised as an explicit issue in negotiations it does set off the little red warning lights.
December 12, 2005
Having just seen this film, I thought I might make a comment or two.
Overall, a very interesting film, I rather liked it. Somewhat on the dramatic side, as relatively large budget film has to be, but very nicely done overall. I shall not pretend to review the film as a film reviewer, but some thoughts on its MENA subject matter and small details that pleased me (as well as displeased), from someone who operates in this kind of world.
What follows will have direct reference to the film’s events, “spoilers” to use that silly precious little phrase. Don’t want to read them, don’t read on. For those who may want to see the film, my summary is I found the film to be a very nice rendition of affaires here in my region, although to be sure dramatised.
November 11, 2005
On language expression and real communications for public diplomacy and business
An amusing side note. In conversing with my Italian colleague who is in town, about an analysis of a financing issue, a language issue arose. Or rather an amusing (for me at least) arose. My colleague, I should note in advance, is perfectly trilingual between Italian, English and French (well her French is slightly weaker on a professional level).
In other matters, what is underdevelopment?
Underdevelopment is perhaps lack of capacity in planning. An illustration follows.
October 30, 2005
Other Reflexions - On US Firms, Business and Valueing International Staff
I had the occasion with my Italian collegue to have an interesting (to people like us at least) reflective conversation about working for American firms and the value place (or not) on overseas experience.
Although it was nothing new, nor particular news indeed as I should say everyone reading my blithering on is likely aware of these things, the issue of the degree of real interest in US firms in their international staffs arose; oddly not in any way connected with my personal axe grinding or bemusement at my organisation schizophrenic approach to regional expertise, but from the Italian's experience on transfering herself to the US after a career with several large international British financial institutions with experience from London HQ right through to high level managerial experience in Asia running operations as the feranji big cheese.
October 27, 2005
Although low added value, for the culinary interest: Argan Oil & Moroccan Goat Shit
I am afraid I have been rather wrapped up in balance sheets and similar things, and while this might have once generated commentary, my new found increased paranoia inhibits.
However, I was bemused and indeed surprised to see a well loved Moroccan product featured in The New York Times online, in an article entitled Tiout Journal: Hungry Goats Atop a Tree, Doing Their Bit for Epicures
The article is... well inadequate and amateurish I should say, but despite that interesting for highlighting something that I am personally professionally interested in, and secondly as a point of reflexion on 'new' environmental prodcuts.
October 06, 2005
Starbucks and Extra Special Overdone Whinging
Due to running a search to see where 'Aqoul had been mentioned I ran across this post by a (former?) contributor to 'Aqoul on is livejournal: On the Arabization of Starbucks.
Well, I am bemused to say the least.
First, I almost was involved in some financing issues for an effort to bring Starbucks to the Levant - fell through when the bloody Iraq war started and as I was led to understand, Starbucks got cold feet. Second, I know the locations involved, indeed I suspect I even know the entrepreneur behind the Starbucks franchise (if it is the same person).
Let me say then, ridemycamel's whinging on strikes me as ridiculous and risiblely immature posturing, although very typical elitist arab lefty youth self indulgence.
September 27, 2005
Random Observations on Things Not to Do (if hosting a business meeting)
Some observations from attending a high level meet between the principals for the Fund which may (if certain wrinkles are ironed out) become my new master. All in regards to hosting such things, if you are a resto or club or the like.
September 26, 2005
Gulf Finance, Booms & Inefficiencies
Our friend and sometime contributor Waterboy draws attention to something obvious to all involved, and yet an item that remains out of control: overliquidity in the Gulf region and the consquent mad asset price boom in the Gulf. His observation is spot on, that there is
there's too much cash chasing too few investment opportunities in the region; too little oversight, regulation or transparency; too much exuberance - bear in mind, as Japanese bank Nomura pointed out, that Saudi Telecom's market capitalisation of US$74bn is worth more than BT (US$35bn), AT&T
(US$15bn), SK Telecom (US$15bn), and Telekom SA (US$9bn) combined - and far too many unsophisticated investors who think that having the names of a couple of ruling family members in the IPO prospectus is a valid alternative to a business plan - or, for that matter, an existing business.
No doubt about this at all. Some conversations I had over the past week painfully illustrated that. This aside, a key point of disequilibrium is the degree to which despite the asset valuations in the Gulf being absolutely looney to the point of surreal, the money is not flowing within the region to a reasonable degree.
September 12, 2005
Underdevelopment as Dilettantisme: Why MENA Does Not Attract Capital, Reason No. 5
While sadly behind on my ability to comment substantively, I thought a bit of a comment on dilettanstisme would be worth a quick intervention (and it being all I have time for, it's what one gets).
The comment is provoked by a series of convos over the past few days in regards to a certain MENA country (which for various sensitivity reasons shall remain unnamed) and its hosting of a MENA region investment conference. Let's say that our certain MENA country is not exactly a star performer in the realm of attracted FDI, per capita or in gross. Of course neither is the region.
August 30, 2005
Halal Beer - Instant Beer. Instant Halal Beer
A small item for consideration and reflection:
The brewer, his halal beer and a potential fortune: may sound quite mad but there are clear signs this is a real market.
What deeper meaning to take away? Not sure quite as yet, but worth pondering as one considers the modern MENA region.
There is proposal locally to create a Halal wine of discerning quality. If they can get their act together technologically and production-wise, well, I would put money into it.
August 26, 2005
Structuring Private Equity in MENA for Development (bis)
Added Thoughts on Private Equity for Devleopment MENA
I neglected to touch on a few key points in my original note, below are further thoughts on private equity and economic development for the MENA region.
August 25, 2005
Structuring Private Equity in MENA for Development
Structuring Private Equity in MENA for Development
A few weeks ago I raised the subject of emerging markets private equity in particular in the context of US Gov efforts to utilize the vehicle to further its political / development goals in the Middle East – North Africa region. One of our online world colleagues if you will posed a question to me as to what the “The Lounsbury” approach would be, in the context of my expressed skepticism in regards to the investment vehicle / definition chosen by The Overseas Private Equity Corporation.
Ironically (well not really) at present I am working on materials closely related to just this question, although not really in regards to development – but as much of the private equity activity in region has been international development institution driven there is a clearly overlap. Now, having sent drafts of my materials off for comment I can take a moment to sketch out some preliminary thoughts on the issue that will be the basis for future comment.
First, my assumptions, based on personal experience in the region and in the “sector” if we can call it that. Again, these are my a priori assumptions and principes.
August 22, 2005
On MENA Business & Rescued Excel Sheets, a Sneak Peak
Being impossibly pleased with myself for having found a way to rescue the data which my untrustworthy Excel whacked this weekend, I thought I would share the product of that work (well a sample) and a quick note on something I intend to expand upon.
[Update, hmmm, I obviously don't know what I am doing with the image taggery, but if one reads discussion below one sees the image better/ Fixed -E]
August 17, 2005
Tel Quel, Maghrebine Media and the Fine
My dear Bou Araadvrak, to use a Maghrebine form, has bring [edit: ahem brought, I of course meant to write brought, maybe brings.... well no matter, self corrected, defending my reputation for some marginal level of literacy] attention to something breaking in the fine Moroccan kingdon, the fining of the outre French language publication, Tel Quel.
Well, what do I think?
(update with further thoughts)
August 11, 2005
Market Madness or Brilliance? US Gov Private Equity for MENA Announced (cross from Aqoul main)
At the risk of descending into flackery or something approaching it, I thought a brief comment here might be fun.
Certainly this plays into my personal interests. (and in this cross post I indulge in them)
August 09, 2005
Iraq - Reconstruction - Knowing when to get out of the way [Cross from Aqoul]
This article from The Washington Post (Op Ed actually) struck me as if not important a useful point of reflection for a moment:
Less Is More in Iraq
By Michael Rubin
Tuesday, August 9, 2005; Page A17
Let us leave aside Rubin's sketchy history in regards to Iraq as part of what one might properly and non-abusively call a "Neo Conservative" circle in Washington re Iraq (and his direct and personal contribution to the fiasco via his work with CPA-Iraq). Let us leave aside as well the question of whether a US draw down of troops is a good or bad thing (I might argue either way on any given day). Rather, merely look at the question of the US contractor presence.
August 01, 2005
How (Not) to Execute Meaningful Privatisation Policy
I found this morning, despite being rather dead due to perhaps a bit too much scummy extracurricular sportingness, and a terrible weekend being surprised by a face to face with some fuqaha as part of the ongoing transaction to close the Apartment Plus Joint Venture, myself a bit upset with policy issues.
The Moroccan government, in all its (non-)brilliance announced that it was selling off the State sugar refineries in block (good thing) to the King's holding company in a rather peculiar result from the international tender it ran.
July 29, 2005
Iraq: Peculiar and Misunderstanding Journals
I got this comment on my brief comment on an Iraqi brokerage (
July 18, 2005
I had dinner with some senior finance and US officials this evening, and discussed with them a concept that is being batted about among US Gov re a equity fund for the region. I was in love with this until this evening. As I listened I went from being voluble to silence. It is so stunningly badly conceived as to take my breath away. Among the key snippets I share is the argument from the main US Gov mover on this, that they could use the proposed fund to lobby and force political change.
July 14, 2005
Iraq Brokerage Comment
Well, at the request of Jerry I had a look at the brokerage site of www.isx-aman.com and company.
Interesting to be sure. My remarks are inherently superficial as I haven�t much time, but some initial thoughts.
July 13, 2005
Banks, Banks and Drooling Morons
I am pleased to announce that the general strike in the banking sector has, in the interest of protecting the opporessed wage slave comrade bankers from (gasp) working an extra half hour, succeeded. The whinging cowards that run this country have backed down in the spectre of unionised bankers in bad pinstripe suits taking to the barricades over the burning issue of wage slavery (yes, wage slavery) in the sector, as suggested by the evil plot to re-arrange working hours.
July 11, 2005
A Collounsbury Take on Frontier Investing
This was written for comments re investing in Iraq, thought I would reproduce as I rather like it on some level:
That aside, 30 percent is a quality return, if and when you realise it. Thin illiquid markets can often show "quality returns" without being able to deliver the liquidity to realise. [In short, a market under buying pressure but little liquidity may appear to be delivering healthy returns, but when it comes sales time to realise, the same mechanics can make it impossible to sell without serious discounts, i.e. price decline - liquidity is the key, else one is trappe, many an emerging markets investor learned that in the gogo years of the emerging markets stock market boom of the mid-1990s.]
Further, electronic trading systems [noted in relationship with Iraq] have never stopped front running, playing with orders and the like. They make it a slight bit harder, but w/o oversight you have false confidence. Among the many things you need is delivery against payment with an operative guarantee system (still doesn't remove the risk as I have seen personally, but helps), and one has to be sure it is operative.
But what the fuck do I know, I've only seen it done in these markets under an electronic trading platform that was and is state of the art.
Finally on the underlying peg discussion, Frankel's theoretical proposal [in an article in the Financial Times suggesting a basked peg with roughly 1/3 Euro, 1/3 dollar, 1/3 weighted price of oil] is an interesting one as a variation on a crawling basket peg, although your online discussion takes his phrase rather far too literally in a classic case of seeking justification for a desired result. The obvious item, rather than the appreciation issue itself or false analogies to post-WW II Germany, to analyze is what a large appreciation means to the Iraqi economy. Any large, short term currency move is a shock to the real economy and few real world policy makers generally avoid such for very good reasons. In Iraq the play off is between current cost of consumption versus current income. That breaks out between consumption of domestic goods and that of tradeables - imports - although obviously some domestic goods depend on imported inputs. Immediately exporters lose the X percent of income, consumers of imports gain X percent of buying pozer, an implicit subsidy to consumption of imports and an implicit tax on domestic production that competes with imports. In short a penalty to the domestic producer economy ex-hydrocarbons.
Second of course, is the impact on real investment (in explicit contrast to speculative hot money such as yours). An X percent appreciation due to a revaluation on a peg immediately raises the cost faced by foreign currency investors for Iraqi assets, with no change in potential returns in the near term, insofar as no economic fundamentals, ex the penalty to real productive economy that is import competing (but with a boost to productive economy that has imported inputs, to the degree they are import factors and cost drivers). It is an effect a penalty to incoming money - as say for example the private equity fund I have consulted with which has USD 70 million in hard currency raised. [I of course did not touch on the disruptive effects of serious real price deflation]
Now, obviously Iraqi policy makers should be looking at these real economy choices, and not things that make hot money speculators happy. It may be that they will decide that subsidising current consumption of imports and current capital imports is more important than creating a stable real economic environment that is well-priced in regards to real assets and allows export competivity. Choosing near term "gifts" to urban consumers, who are heavier consumers of imported goods and services (running from food to white goods) than others typically in this kind of environment, and subsidising capital imports to the detriment of labour competivity is a frequent choice in these economies - certainly Egypt managed to do this ever so brilliantly over the last 30 years with a "strong pound" regime partially backed by its nat gaz and petrol exports.
I certainly hope they don't - but then to you this is merely being "negative." Contemptible speculation aside, I favour the real market and policies to grow it.
In presenting your new payment facility
Do not, I repeat, do not call it an "Islamist payment facility" - it's "Islamic" - Islamist means something else you idiot illiterate marketing goon.
Bloody hell, these idiots will want to roll out an Qaeda Basic Islamist Finances Services Platform next.
July 06, 2005
Very good arty from FT on MENA markets:
Will try to do an Aqoul item on this.
July 05, 2005
General Strike, Bankers
Well, today we have something that has to strike any good Anglo Saxon as bordering on the surreal. A general strike declared by the bankers or rather the union that represents the bankers (this being a Code Civil country, we have unions for just about every possible profession, no matter how useless or surreal).
This on the pretext that the adoption of normal banking hours represents �slavery� � yes slavery. Indeed it is slavery to have one�s work hours changed from the highly theoretical 8 to 12:30 � 14:30 to 18:00 to the no doubt equally theoretical 8:30 to 12:30 1:15 to 5:00. A trivial change which merely reduces the Sacred and Inviolate Lunch hour, in theory, from 2 hours to 45 minutes, but lets one out earlier.
So, the Trade Unions have declared strikes to fend off this evil �Anglo Saxon� intrusion into the �social order� which represents a new form of �slavery� for the oppressed � yes oppressed! � bank wage labourers. These poor Financial Sweat Shop slaves will have a reduced opportunity to disappear for many hours during the day.
Speaking from experience, the real Sacred Lunch Pause runs from Noonish through to 15:00, as a bit of padding on either side is considered �established practice� � you know it would slavery, absolute slavery I say, to expect the poor oppressed Financial Sweat Shop labourers to say pick up their fat kids from the private schools ( a colleague informed me gravely � only her wearing the latest French fashion of rather transparent linen allowed me to not laugh as I was otherwise somewhat distracted by the Mediterranean region tendency to having frontal space � that �not everyone can afford a maid to pick up their children from school.�) and feed them the latest pastries and other plumpness inducing rot.
Now perhaps I am an evil purveyor of the vague conspiracy called �The Washington Consensus� but I think presently rebaptised, �the Neo Liberal Agenda� or some such rot, but I was unable to shake the sense of utter surrealism involved in this farcical revolt against what is in the end a fairly trivial adjustment of working hours. It does illustrate my utter contempt for the organised �labour movement� in the MENA region and its leftist twit moron allies in the West who eat up the posturing agitprop without a second thought.
Fine slogans, but in reality they represent nothing but cynical posturing.
Rather reminds me of the Academic Left�s howling when the CFA, the French backed African franc had to devalue (something like 50 percent as I recall). Much commentary was made at the time (early 1990s) about the evils of the Washington Consensus, how this was going to impoverish Africans, the evils of higher costs of pharma products, etc. Tear jerker stories.
A few points emerged from looking at this hysterical, ill-informed and largely wooley headed liberal arts student, graduate or otherwise, driven bleating.
First, it was largely driven by the largely westernised urban �intellectual� elites ( I mean that in the proper sense of current income elite) complaints, who such people (even if they pretend otherwise), largely speak to or are influenced by. This is not to accuse anyone of bad faith, quite the contrary. Being an economist or economically trained businessman, I rather prefer to leave aside morality in these conditions and look at interests.
What, then, would be the interests? An (artificially) overvalued currency is an implicit subsidy to those consuming foreign goods and services, as well as of course importers of capital. It is an implicit penalty to domestic producers of any kind (services, basic goods, whatever).
Well, enough on this.
July 04, 2005
On Intellectual Property and Clueless American Git Lawyers (updated)
As I suspect this is too collounsbury for Aqoul, plus must keep my charming side up (ah yes as an aside to lawyerly readers - or one rather - I got the note on the fund issue will reply asap):
Recently I was at a consular event with the charming and dear British club (named after the charmingly porky Churchill) in its charmingly archaic setting, where I had the occasion (I should say the misfortune were I not entertained by the opportunity) to chat with the wife (or lover or some such) of a financial sector contact, a somewhat slump shouldered blonde from the Carolinas (or something like that, I confess my Anglo heretic ancestry and hundreds of years of well founded yanqui contempt for the South leads me to regard the entire southern United States as a backwards swamp of cretins. I can only say that spending a decade as the off and on intimate companion of that rare creature, a black female American bank vice president of Southern extraction only reinforced these prejudices [not in re her, she and her husband are excellent friends of mine to this day]).
The woman turned out to be a lawyer. Pity that, but we can not hold all sins against everyone one. Worse, she turned out to have worked with both my former employer and the clumsy market destroying imbeciles of Monsanto, and she is a specialist in intellectual property. Worse yet, she worked on the bio-engineering issues that I worked on, in the more business end.
I can only say that meeting an attorney who once worked on the benighted market killing legalistic narrow minded scum managed Monsanto�s efforts in genetic engineering provoked me a bit. Worse yet, she claimed to be a �true believer� in intellectual property rights (i.e. a short sighed economically illiterate hack for the market destroying morons).
This provoked a somewhat gauche and unpleasant conversation on IP rights in the region and what I politely called the �rude American idiocy of forcing things beyond any commercial rational.� I believe, if I recall my own inopportune turn of phrase, that in response to her sally re business opportunities (for her benighted American law driven views on IP law) in pharma sector IP rights that it would be �disastrous� and �fucking bloody counterproductive� to sue local firms on pharma doubtful IP infringements (the local market is not known to be a major scofflaw, and follow Euro standards in general) since you end up automatically the bad guy or as I put, �What kind of fucking market do you build suing the impoverished for a percentage? There is no fucking market upside.�
Fucking lawyers. I ranted on (to her evident discomfort, but the bitch only speaks Southern English, not even local languages, I certainly hope she is a good fuck else she is a liability for my amigo � bastard bloody well should not be associated with idiotic market killing Rich Americans sueing impoverished locals) about how lawyers never looked at realistic cost-benefit analyses on pushing suits, above all in re �total cost� to market. Fucking Monsanto followed people like her and fucking blew up the motherfucking gen modified market through their lawyer driven strategy. IPO rights are a social convenience for promoting innovation, not a divine right, and the smart firm in socially sensitive sectors with public policy and PR issues is sensitive to this.
But this idiotic bitch wants to bring American style �super� IP law to the MENA market. I am afraid I was quite rude (despite her intimate connexion with someone I like and respect in my field) about how stupid she was.
Fucking idiot lawyers. ( I note for my readers and in particular certain who I know that this, is aimed at the � well you know who you are and what I am saying. I also despise ignorant empty lawyer bashing, but I think we can agree that this sort of idiocy we mutually despise as counterproductive.)
Now, returning to a bit more substantive reflexion. Property rights are indeed important, and intellectual property rights as well. However, there are always trade offs. Certainly the idiot mentioning in particular enforcing pharma rights rather set me off as if she knew the least thing about international property rights developments, she would know that the Big Pharma companies broke their noses stupidly going after South Africa on this kind of issue (in that instance AIDS drugs), where a softer, less litigatious approach would have served them far better. Bad PR has a cost, above in this kind of business.
June 29, 2005
Why I do what I do.
Interesting point of reflexion emerged on my post on policy and funding last night. I shall extend commentary but for the moment, this post merely allows you to opine.
Well, before letting you opine, if I ever even bother, let me reproduce the comment that provoked this:
Your final paragraph is the key one.
First, all else being equal in theory developing markets ought to offer excess returns in pretty much every sector because they are not as efficient/sophisticated as developed markets. I made a sneering remark earlier about exporting best practices to Nigerian breweries. "Best practices" which ignore local political/cultural/social conditions are unworkable practices or, worse, practices that, when implemented, achieve some completely unintended effect. But you don't need to implement best practices to beat your competition in developing markets, just better practices. To do that, you must understand how and why things work they way they do in the country you're in.
The problem is that all things are not equal. Developing markets must compete for human capital just as they must compete for investment capital. The educated people who would normally be smart, agressive entrepreneurs in developing countries are either a) already part of the established rent-seeking system and, therefore, already making excess returns or b) taking advantage of better opportunities elsewhere. Why mess about with trying to crack the local system when you can make piles of cash in the developed world without having to worry about being economically or physically knee-capped?
In other words, you need the right kind of local partner to make these investments work. But the right kind of local partner often has better things to do than be your local partner. Thus, you're left to choose between various wrong kinds of local partner.
China is a good example of this. When China first opened up, it was as worthless a mess as you could ever hope to see. The best and the brightest Chinese got out of China and never went back, often starting or working for extremely innovative companies in the U.S.
But China did have a lot of highly-trained smart, agressive people who were willing and able (language skills) to game the system -- Hong Kong. They turned China into a place to do business. Now, many Chinese who left China back in the 70s and 80s have gone back or at least established strong business links there and have made piles of cash in the process.
Had you tried to convince some of these people to go back to China to start a business in, say, 1985, they would have laughed at you and quite right, too. But without their (or someone like them's) cultural/political/linguistic skills, any enterpreneurial effort would have been doomed to failure.
In conclusion, if you have the right sort of local partners with the right sort of modern business attitudes you ought to make money in almost any sector -- the more basic the better. If you don't have the right sort of local partners with the right sort of modern business attitudes, you're probably going down in flames no matter how good your idea is.
For example, few things are less sexy than distribution systems. But if you had people with the guanxi to pull it off and the modern business attitudes to run it, you could make piles of money with a Walmart-style business in almost any region in the developing world. The problem is that the folks with the guanxi are already part of the system and the folks with the modern business attitudes are in London.
I plan to comment more on this. The commentator has hit on a number of points that I absolutely agree with. Some items I would qualify, and an excellent area of discussion.
February 18, 2004
An Entreprise Fund
Informed sources tell me that influential staff in the MEPI are going to opt for an entreprise fund, over a regional private equity fund model. This is a stupid decision. A large pot of USG money, admined from Washington to do 'entreprise grants' in a region they are not well-connected with, do not have on the ground business intelligence, and for which the bureaucrats in charge really do not have a direct risk involved. Risk is discipline.
This is a perfect way to piss away a rather large number of millions. Morons.