Standard & Poor's economic outlook for the GCC region looks positive in the mid to long term. While the contagion effect of recent regional political events, the euro-zone crisis and investor perception of geopolitical risks may drag on growth in the short term, the region has demonstrated its resilience. S&P expects that our forecast average Brent oil price of US$100 to $120 per barrel this year will support the region's growth.
However, we do not think that oil revenue and existing reserves alone can finance the immense investments, including huge infrastructure projects planned by GCC countries, particularly Saudi Arabia. As European banks wind back their exposure to the region while their domestic economies falter and capital requirements increase, this means access to domestic and international capital markets will be even more important for funding the region's next growth phase.
In this context, ratings agencies have a vital part to play in creating deeper and more liquid capital markets in the region. Without ratings, capital markets investors and lenders would be less inclined to provide capital to borrowers. As the IMF and other authorities have recognised, publicly available ratings improve the flow of information about credit risk and consequently the efficiency and liquidity of capital markets. Ratings may help investors to price risk better, which in turn may enable regional issuers such as governments, banks and companies to tap pools of investment capital across the world. Ratings also play an important role as one of the tools used by banks and insurers to improve their risk diversification options, and for asset and wealth managers to find new investment opportunities.
Since the onset of the global financial crisis in 2008, some have suggested that ratings methodologies should be changed and the influence of ratings agencies reduced. We support regulation and oversight to the extent that it enhances the quality, independence and transparency of ratings; builds market confidence in ratings providers; increases competition and fosters a wide diversity of research and views on credit risk. However, we feel that some of these discussions have overlooked the generally strong performance of ratings in most asset classes and regions since 2008.
The performance of ratings can be measured by how they correlate with defaults and by the rate at which they change. A look at the performance of rated corporate entities over the past few years shows the higher the issuer rating, the lower the frequency of default, and vice versa. Between 2008 and 2010 - spanning the worst economic downturn for decades - the global average default rate for corporates rated "investment grade" (above "BB plus") was 0.9 per cent, compared with 13.9 per cent for those with speculative-grade ratings. None of the 81 rated companies that defaulted in 2010 began the year at investment grade, and nearly 90 per cent started 2010 at "B minus" or below. Furthermore, of the record 289 defaults among rated companies and financial institutions in 2009, 86 per cent had a first - original - rating of "BB minus" or lower.
However, we have acknowledged that the recent performance of certain ratings in two specific areas - US residential mortgage-backed securities and related collateralised debt obligations - has been disappointing, and we have taken major steps to address that.
We have learnt from the crisis and have taken significant steps to strengthen the quality and transparency of our ratings. We believe it is up to the market to determine which ratings are credible and useful.
Ratings agencies have occasionally faced criticism that the models they use to evaluate regional companies - in particular government-related entities - should be changed for the region. However, S&P believes strongly in applying consistent rating methodologies across different markets and sectors. Similarly, investors want us to apply the same criteria to the sovereign governments we rate so that investors can obtain a comparable view of credit risk around the world.
At the same time, S&P fully understands the importance of local factors. Robust ratings benefit not just from consistent methodology, but also from a sound understanding of local and regional issues. Since entering the Middle East in the early 1990s, S&P has steadily increased its coverage to become the largest provider of credit ratings in the region, rating more than 130 issuers across the GCC, Egypt, Jordan and Lebanon, including five of the six Gulf sovereigns and 25 leading Gulf banks, leaving us well positioned to evaluate local factors and subtleties. S&P also remains at the forefront of rating criteria for sukuk and takaful structures, helping global investors better understand Islamic finance, which in turn may broaden their investment opportunities.
Over the coming years, S&P seeks to support the development of a more independent and integrated regional economy and financial marketplace by continuing to provide independent and objective views about credit risk. We believe our rating opinions and research enhance the transparency and efficiency of the GCC and wider Middle East capital markets, generating worldwide exposure for issuers, and contributing significantly to their development and diversification to the benefit of investors, intermediaries and issuers.
Yann Le Pallec is the executive managing director at Standard & Poor's ratings services in Europe, the Middle East and Africa
The Bio
Name: Lynn Davison
Profession: History teacher at Al Yasmina Academy, Abu Dhabi
Children: She has one son, Casey, 28
Hometown: Pontefract, West Yorkshire in the UK
Favourite book: The Alchemist by Paulo Coelho
Favourite Author: CJ Sansom
Favourite holiday destination: Bali
Favourite food: A Sunday roast
Company Profile
Company name: Yeepeey
Started: Soft launch in November, 2020
Founders: Sagar Chandiramani, Jatin Sharma and Monish Chandiramani
Based: Dubai
Industry: E-grocery
Initial investment: $150,000
Future plan: Raise $1.5m and enter Saudi Arabia next year
2019 ASIA CUP POTS
Pot 1
UAE, Iran, Australia, Japan, South Korea, Saudi Arabia
Pot 2
China, Syria, Uzbekistan, Iraq, Qatar, Thailand
Pot 3
Kyrgyzstan, Lebanon, Palestine, Oman, India, Vietnam
Pot 4
North Korea, Philippines, Bahrain, Jordan, Yemen, Turkmenistan
RESULTS
Dubai Kahayla Classic – Group 1 (PA) $750,000 (Dirt) 2,000m
Winner: Deryan, Ioritz Mendizabal (jockey), Didier Guillemin (trainer).
Godolphin Mile – Group 2 (TB) $750,000 (D) 1,600m
Winner: Secret Ambition, Tadhg O’Shea, Satish Seemar
Dubai Gold Cup – Group 2 (TB) $750,000 (Turf) 3,200m
Winner: Subjectivist, Joe Fanning, Mark Johnston
Al Quoz Sprint – Group 1 (TB) $1million (T) 1,200m
Winner: Extravagant Kid, Ryan Moore, Brendan Walsh
UAE Derby – Group 2 (TB) $750,000 (D) 1,900m
Winner: Rebel’s Romance, William Buick, Charlie Appleby
Dubai Golden Shaheen – Group 1 (TB) $1.5million (D) 1,200m
Winner: Zenden, Antonio Fresu, Carlos David
Dubai Turf – Group 1 (TB) $4million (T) 1,800m
Winner: Lord North, Frankie Dettori, John Gosden
Dubai Sheema Classic – Group 1 (TB) $5million (T) 2,410m
Winner: Mishriff, John Egan, John Gosden
FFP EXPLAINED
What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.
What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.
What are the penalties?
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
The Details
Kabir Singh
Produced by: Cinestaan Studios, T-Series
Directed by: Sandeep Reddy Vanga
Starring: Shahid Kapoor, Kiara Advani, Suresh Oberoi, Soham Majumdar, Arjun Pahwa
Rating: 2.5/5
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
What can you do?
Document everything immediately; including dates, times, locations and witnesses
Seek professional advice from a legal expert
You can report an incident to HR or an immediate supervisor
You can use the Ministry of Human Resources and Emiratisation’s dedicated hotline
In criminal cases, you can contact the police for additional support
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%3Cp%3EAuthor%3A%20Alasdair%20Soussi%3C%2Fp%3E%0A%3Cp%3EPages%3A%20300%3C%2Fp%3E%0A%3Cp%3EPublisher%3A%20Scotland%20Street%20Press%3C%2Fp%3E%0A%3Cp%3EAvailable%3A%20December%201%3C%2Fp%3E%0A
The%20specs
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MATCH INFO
Inter Milan 2 (Vecino 65', Barella 83')
Verona 1 (Verre 19' pen)
Killing of Qassem Suleimani
Killing of Qassem Suleimani
Godzilla%20x%20Kong%3A%20The%20New%20Empire
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3EAdam%20Wingard%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%20%3C%2Fstrong%3EBrian%20Tyree%20Henry%2C%20Rebecca%20Hall%2C%20Dan%20Stevens%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
Two-step truce
The UN-brokered ceasefire deal for Hodeidah will be implemented in two stages, with the first to be completed before the New Year begins, according to the Arab Coalition supporting the Yemeni government.
By midnight on December 31, the Houthi rebels will have to withdraw from the ports of Hodeidah, Ras Issa and Al Saqef, coalition officials told The National.
The second stage will be the complete withdrawal of all pro-government forces and rebels from Hodeidah city, to be completed by midnight on January 7.
The process is to be overseen by a Redeployment Co-ordination Committee (RCC) comprising UN monitors and representatives of the government and the rebels.
The agreement also calls the deployment of UN-supervised neutral forces in the city and the establishment of humanitarian corridors to ensure distribution of aid across the country.
Know before you go
- Jebel Akhdar is a two-hour drive from Muscat airport or a six-hour drive from Dubai. It’s impossible to visit by car unless you have a 4x4. Phone ahead to the hotel to arrange a transfer.
- If you’re driving, make sure your insurance covers Oman.
- By air: Budget airlines Air Arabia, Flydubai and SalamAir offer direct routes to Muscat from the UAE.
- Tourists from the Emirates (UAE nationals not included) must apply for an Omani visa online before arrival at evisa.rop.gov.om. The process typically takes several days.
- Flash floods are probable due to the terrain and a lack of drainage. Always check the weather before venturing into any canyons or other remote areas and identify a plan of escape that includes high ground, shelter and parking where your car won’t be overtaken by sudden downpours.
The Settlers
Director: Louis Theroux
Starring: Daniella Weiss, Ari Abramowitz
Rating: 5/5
