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By John Lee.

Qatar National Bank (QNB) has announced that it has taken control of Iraq's Al-Mansour Investment Bank.

It acquired an additional 27.7 percent shareholding for a cash payment of QR425.4 million, bringing its interest in the bank to 50.8 percent.

The company said that goodwill of QR117.6 million has been determined on acquisition of this additional stake on a provisional basis.

Dubai's DAMAC Properties has signed a memorandum of understanding with the Iraqi Minister for Construction and Housing on the final day of Cityscape Global 2012.

The region’s largest private luxury developer already has two plots of land in Baghdad that was previously bought from the private sector and is currently developing designs with the projects to be announced shortly.

The agreement will see DAMAC Properties provide expertise and insight for a number of residential and commercial projects in Baghdad and the surrounding region. The MoU is the result of many months of negotiations, culminating in high-level talks, which were concluded during the exhibition.

DAMAC Properties has also opened a branch office in Baghdad, further enforcing its commitment to developing in the country.

Mohammad Al Darraji, Iraqi Minister of Construction and Housing, met with DAMAC Properties Chairman Hussain Sajwani at the DAMAC Properties stand at Cityscape Global and signed an agreement which will allow DAMAC Properties to further expand its operations in Iraq.

Speaking earlier to delegates at the Cityscape conference, Mr. Al Darraji said:

“Iraq has seen significant changes to regulations and the governing of economic activities. The new laws promote fresh investment and this transition will promote the rapid restructuring of our economy.”

Mr. Sajwani added:

“DAMAC Properties is delighted to be invited to work with the Iraqi government on these forthcoming projects. This is a significant agreement which will allow us to take the DAMAC Properties commitment of luxury and quality to a new territory.”

DAMAC Properties currently has 65 buildings currently at various stages of construction in Dubai, Abu Dhabi, Qatar, Egypt, Lebanon, the Kingdom of Saudi Arabia and Jordan. The company has already completed 37 buildings throughout the Middle East and North Africa, with the latest project, Marina Bay in Abu Dhabi receiving its handover certificate only last month.

“DAMAC Properties is continually looking for the right opportunities to bring the luxury living brand to other parts of the world,” said Mr. Sajwani. “We are doing due diligence on a number of projects in different countries and if we believe the circumstances are right and our brand can add value to a particular country, we will seriously consider it, as we aim to become one of the leading luxury developers not just in the Middle East but the world.”

The Iraqi government has been showcasing various projects during Cityscape Global 2012 and discussing a number of private-public partnerships with potential investors. During a speech to the conference Al Darraji said that US$ 10.4 billion worth of construction and infrastructure projects are expected to be approved next year and that the ministry has 65 projects worth US$ 3 billion with 60,000 units already under construction.

(Source: DAMAC)

By John Lee.

Doha-based Qatar Airways is to operate four flights a week to Najaf, according to Arabian Aerospace.

The company will use an Airbus A320 with 12 seats in Business Class and 132 in Economy.

Chief Executive Officer Akbar Al Baker said:

“Iraq is proving to be an important market for Qatar Airways; we currently operate four flights a week between Doha and the cities of Baghdad and Erbil. We are confident that Najaf will prove to be a popular destination for our passengers, especially those from the Middle East, Africa and Asia Pacific and those returning to visit their homeland.

“With major infrastructure developments and vast untapped tourist potential, we are very excited about our launch of flights to Najaf.

“Qatar Airways constantly looks at new market opportunities and the launch of flights to Najaf will enable us to quickly meet the growing demand for travel to this increasingly popular destination. The start of our services to three cities in Iraq within a short span of time emphasises the value and importance of tourism, trade and business links between Qatar and Iraq."

(Source: Arabian Aerospace)

By John Lee.

According to a report from Bloomberg, Morgan Stanley is no longer a bookrunner for the IPO (initial public offering) of Asiacell, the Iraqi telecom operator majority-owned by Qatar Telecom (QTEL).

A person with knowledge of the discussions told the news agency that, while Morgan Stanley is still an adviser on the deal, the company will not manage Asiacell’s share sale because it does not have a client base inside Iraq, where most of the demand for this IPO is expected.

The sale of a 25 percent stake in Asiacell could raise as much as $1 billion, making it the biggest ever in the country, and doubling the market capitalization of the Iraq Stock Exchange.

Rabee Securities, a Baghdad-based brokerage, is also managing Asiacell’s IPO.

A London-based official at Morgan Stanley declined to comment, as did a Qtel spokesman.

(Source: Bloomberg)

By John Lee.

Vodafone and Zain have jointly announced a Partner Market agreement that will significantly expand Vodafone’s Partner Market presence in the Middle East and provide Zain customers with greater support in Vodafone’s global footprint.

Under the non-equity partnership agreement, Vodafone will work with Zain companies in Saudi Arabia, Bahrain, Kuwait, Jordan and Iraq to provide customers with high quality communications services.

The move will enhance both Zain and Vodafone’s ability to meet growing demand among multinational businesses for sophisticated voice and data communications solutions as well as advanced roaming services within the Middle East.

This will complement Vodafone’s own regional operations in Egypt and Qatar and increase the number of countries in which Vodafone has Partner Market agreements to more than 50.

Zain will have access to Vodafone’s devices and services in its home markets and become the preferred partner of Vodafone in respect of the agreed areas of cooperation. Vodafone and Zain will work together to provide customers with enhanced network coverage, harmonised roaming rates across multiple countries with greater cost efficiencies and Zain will be able to use the Vodafone brand.

Vodafone's multinational customers served by Vodafone Global Enterprise will benefit by being able to add the Zain countries to their existing contracts for international managed services, while continuing to be serviced via a single point of contact. Zain will similarly benefit from Vodafone's footprint.

By John Lee.

Asiacell has become the first mobile operator to reach an initial agreement to list on the Iraqi bourse, according to a report from Reuters.

The company, part of Qatar Telecommunications, along with its two rivals Zain Iraq and Korek, were required to float their shares on the stock market as a condition of their $1.25 billion operating licenses, but all three companies missed the August 2011 deadline.

Iraq's communications regulator has fined all three companies for failing to meet the requirement.

Asiacell said in a statement that it was working through the final paperwork necessary to complete the listing.

(Source: Reuters)

To overcome Iraq’s current political crisis and prevent the breakdown of the entire post-2003 order, Prime Minister Maliki (pictured) and his opponents both will have to agree to painful compromises, according to this report from the International Crisis Group:

EXECUTIVE SUMMARY AND RECOMMENDATIONS

At first glance, the current Iraqi political crisis looks like just one more predictable bump in the long road from dictatorship to democracy. Every two years or so, the political class experiences a prolonged stalemate; just as regularly, it is overcome. So, one might think, it will be this time around.

But look closer and the picture changes. The tug of war over Prime Minister Nouri al-Maliki’s second term suggests something far worse: that a badly conceived, deeply flawed political process has turned into a chronic crisis that could bring down the existing political structure.

To avoid this outcome, both Maliki and his opponents need to make painful compromises: the prime minister should implement the power-sharing deal negotiated in 2010 and pledge to step down at the end of his term; in turn, his rivals should call off efforts to unseat him and instead use their parliamentary strength to build strong state institutions, such as an independent electoral commission, and ensure free and fair elections in two years’ time.

The present stalemate has its immediate roots in the Erbil accord between key political actors, which led to the second Maliki government. Key elements of the power-sharing agreement, which political leaders reached in a rush in November 2010 as impatience with the absence of a government grew, were never carried out.

By John Lee.

Iraq’s crude oil production overtook Iran’s last month for the first time since 1988, when the countries ended their eight-year war, reports Bloomberg.

Iraq pumped 2.984 million barrels a day in June, versus 2.963 million bpd for Iraq, OPEC said today in its Monthly Oil Market Report.

Production from Iran fell ahead of sanctions from the EU that started on 1st July 1, while Iraq is steadily increasing output.

OPEC’s 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.

(Source: Bloomberg)

By Mark DeWeaver.

Original shares of Al Mansour Bank (BMNS) resumed trading on July 1 following the announcement of the bank’s capital increase and dividend plan. All shareholders will receive a 51% bonus share issue along with an IQD 0.068 / share dividend. Qatar National Bank (QNB) is also buying 85 bn new shares at IQD 1.60 / share, which will raise its stake from 23% to 51%.

This is an exciting development. Before the capital increase, BMNS had only IQD 100 bn in capital, making it just one of a number of mid-sized Iraqi lenders. The new funds will raise the bank’s capital to IQD 236 bn, making it second only to BUND, which now has IQD 250 bn.

The terms of the deal were also not unfavorable to minority shareholders. QNB’s total cost per new share, adjusting for the dividend and bonus shares it received, comes to IQD 1.39—a 7% premium to the last traded price of IQD 1.30.

The July 1 closing price was IQD 1.18. For everyone but QNB, this must have been the best one-day return in the ISX all year.

Suppose you were holding one BMNS share worth IQD 1.30 on the last trading date. Following the bonus issue, you had 1.51 new shares, along with the IQD 0.068 dividend. At the July 1 close, you ended up with cash and shares worth IQD 1.18 * 1.51 shares + IQD 0.068 = IQD 1.85. The value of your account had increased by a whopping 42%.

Not bad for a bear market.

In May, Turkey and Iraqi Kurdistan announced they would build pipelines taking oil and gas from Iraq into Turkey, then possibly Europe. But according to this article from NIQASH behind the energy dream, lurks a nightmare of militant Kurdish independence fighters and the spectres of energy giants, Iran and Russia.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

To some it is a dream come true, others think it’s a nightmare that will never see the light of day. The May 2012 announcement by Ashti Hawrami, the Minister of Natural Resources in the semi-autonomous state of Iraqi Kurdistan that they would build new oil and gas pipelines to Turkey shook the Iraqi government in Baghdad.

The first phase of pipeline construction is supposed to be completed by October this year and the second phase is due to be finished by August 2013. Another pipeline is to be built by 2014.

Baghdad reacted unhappily to this announcement, saying – as they had done with other oil deals – that the Kurds were working outside of the national remit. National Deputy Prime Minister for Energy, Hussein al-Shahristani, was dismissive of the pipelines and local media were also rather negative about it.

Yet it appears that Baghdad feels that that the northern state of Iraqi Kurdistan is slipping out of its control. For the last five years Baghdad has been trying to reign in the Kurdish government, especially when it comes to oil and gas.

Shahristani has blacklisted oil companies operating in Iraqi Kurdistan and even ensured that, during the recent lacklustre fourth round of bidding to do oil work in Iraq, there was a new clause preventing any oil companies from going into Iraqi Kurdistan without Baghdad’s permission, as oil major Exxon Mobil did in November 2011.