More on the business theme that has been recurring the past couple of weeks.

Kuwait has been slowly in a decline compared to most other gulf countries, especially Qatar and Dubai, who have been taking giant strides in all aspects of urban development and economic planning. In education, many international universities and colleges opening in both countries, which will only benefit both places as time goes by. In medicine, most international institutions have been opening up in both countries. In business, there is a huge move towards both places, especially Dubai, and the latest move of Halliburton’s headquarters to Dubai is a perfect example.

Recently, there has been a new shift in business, from Qatar and Dubai INTO Kuwait.

In the past two weeks or so, three major deals have happened to Kuwaiti companies that need to be looked at in that perspective! The most famous and biggest one is the one I already talked about, Qtel’s takeover of Wataniya.

1. Wataniya Telecom -

Qtel bought 51% of Wataniya from Kipco group. For some reason the KSE website hasn’t updated the shareholders’ list yet, but the deal is definitely done and dusted.

2. Global Investment House -

Dubai Investments (DI) recently bought more than 10% of Global. This is also the reason that the ex-chairman Al-Noory left the company. He was about to retire anyway, so he offered to leave the board to make room for the representative from DI, which makes sense for everyone.

This is from the stock market -

بيانات الافصاح عن ملكية كبار المساهمين
النسبة المرهونة / طريقة المساهمة كبـــار المـســاهميـن / النســـبـة

المؤسسة العامة للتأمينات الاجتماعية / 8.96 %‏
طارق خالد الحميضي (وآخرين) / 8.942 %‏
مجموعة دبي للاستثمار / 10.18%‏

3. Agility -

The logistics giant, previously known as PWC, has also been in the news today. Apparently, Dubai Holding has been buying Agility stock from the market and has already collected more than 5% according to Al-Seyassah newspaper and other sources.

ومن ناحية اخرى علمت »السياسة« من مصادر مطلعة استحواذ شركة دبي القابضة التابعة لمجموعة الشيخ محمد بن راشد آل مكتوم لما نسبته 5 في المئة من اسهم شركة المخازن العمومية »اجيلتي« عن طريق عمليات شراء تجميعية قامت بها المحافظ الاستثمارية التابعة للشركة في السوقين المالي الكويتي والاماراتي.

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All this news is very good for shareholders and increases confidence in these stocks. Knowing that an institutional investor is coming in for a good portion of the company can only mean good things for the company.

The question is, why the sudden interest from other gulf countries into Kuwaiti companies?

Has the economic power shift grown that much?

It is true that Qtel, Dubai Holdings, and Dubai Investments have alot of government ownership and influence, so how does that affect the deals?

I think its a great deal for the buyers in all three deals, especially if there is a long term plan and the determination to make it happen. For example, if I was Dubai Investments, I would keep buying into Agility and try my best to take its headquarters to Dubai. If I was Agility on the other hand, I would also hope that Dubai wants me to come and base my business from there. In the past year alone, there have been so many hurdles put by either government or other (social competition) forces on Agility, it gets to the point where you think they really don’t want it to succeed!

Agility is a great example of how privatization should be done. Not so long ago, it was a government owned company with not much business except for warehouses. In years, the new management transformed it into a global leader in logistics, which benefitted the shareholders who got the share at 100 fils up to more than 4 KD two years ago! The move to Dubai will trully make it a powerhouse!

It is a good sign that these other gulf countries are investing in our companies, but what will be the long term effect for such deals?