Global Arab Network | Moody's: Moderate recovery in Gulf countries telecom and utilities sectors

Translate this article to your language:

GANPublications

e-Publications

Add Site to Favorites

Add Page to Favorites

Make Homepage

Share This Page

RSS Feed

--------------------------------------------------------------------------------------------------------------------
| |

Moody's: Moderate recovery in Gulf countries telecom and utilities sectors

Global Arab Network - - Ahmed Rashid

Monday, 06 June 2011 22:42

Moody's Moderate recovery in Gulf countries telecom and utilities sectors

Global Arab Network - In a new Special Comment issued today, Moody's says that an assessment of the credit conditions of rated corporates in the Gulf Cooperation Council (GCC) points to a picture of moderate recovery and stabilising conditions overall, with some benefiting from rising oil prices and the generally improving market conditions, while others continue to suffer from sector-specific weaknesses. The report also notes that the political unrest in some countries in the wider Middle East and North Africa (MENA) region could affect some issuers, Global Arab Network reports according to a press statement.

Moody's outlook for the property industry remains negative due to persistent oversupply in key markets in the GCC. "The excess supply of commercial and, to a lesser extent, residential property reflects excessively high growth projections made before the global financial crisis," notes Martin Kohlhase, an Assistant Vice President -- Analyst in Moody's corporate finance team.

The outlook for the integrated telecommunications industry is stable,albeit with a negative bias. While the rating agency expects operators to continue to generate moderate revenue growth, event risks associated with M&A activity have recently been heightened as a result of mounting competitive pressures in core markets.

The outlook for the GCC utilities sector is stable, balancing differentfactors. On the one hand, rapid economic and demographic growth throughout the GCC is spurring demand, which is necessitating large investments in electricity and water, and is therefore a credit negative for operators. On the other, the ratings of all these entities benefit from strong government support, their ownership structures (as they are either wholly or partly government owned) and the strategic importance they play in supporting the economic growth of the countries in which they operate.

Global Arab Network

Add comment

The opinions of the authors in articles published are theirs alone and do not necessarily reflect the views of Global Arab Network
------------------------------------------------------------------------------
Published comments are the opinions of private individuals and do not reflect the views of Global Arab Network