Showing posts with label business. Show all posts
Showing posts with label business. Show all posts

Sunday, May 20, 2007

Told You So

KUWAIT, May 20 (KUNA) -- After approval by the Cabinet in its session Sunday, the Kuwaiti Dinar's exchange rate against the US Dollar is to be based on a basket of main currencies, which was the previous system abandoned since January 5, 2003, said Governor of the Central Bank of Kuwait Sheikh Salem Abdelaziz Al-Sabah today.

Kuna siteStory pageKuwaiti Dinar exchange rate against USD based on b...5/20/2007

Just like many had predicted and as I mentioned in previous posts.

Wednesday, May 16, 2007

Mergers and Marriages

Daimler’s shareholders have been desperate for the divorce papers to be signed. The unhappy union should be a warning to others: compatibility matters in business as well as love, and a happy wedding day is not a guarantee of a happy marriage.

FT.com / Comment & analysis / Editorial comment - Mergers, like marriages, fail without a meeting of minds.


As we see a rush of merger and acquisition (M&A) activity in the local market, it would be worthwhile to be reminded of the difficulty of making such transactions successful. It is said that mergers are triumph of hope over experience -the same applies to marriages some argue sarcastically. Despite experience that points to bleak outcomes, mergers continue in the hope of success. Such is the fate of Daimler Chrysler.


Daimler Chrysler tied the knot back in 1998 with a $36bn price tag for Chrysler. Few days ago this came to an end and the knot was untied at a price of $7.4bn. Separately some analysis shows that Daimler would not receive this amount and it will actually end up paying. This is a rude awakening to merger dreams. So before you tie the knot, business or otherwise, make sure you have a meeting of minds, without which mergers, like marriages, are doomed.


 


 

Saturday, April 28, 2007

Show Me the Money

The United Arab Emirates Central Bank Governor on Thursday ruled out any immediate revaluation in the UAE dirham and said that Kuwait had committed to keeping its currency trading band unchanged.

The Daily Star - Kuwait Edition - Published by Alwatan.


We were having a debate last week at work on what to do with our USD deposits. This is in light of the speculation that the KD will be revalued up against the dollar. So your dollars will be worth less should this happen. Even though the Central Bank of Kuwait keeps saying that it is sticking with its policy of fixing the KD to the dollar, there is much speculation as the dollar continues to decline dragging the KD with it unnecessarily.


In a previous post I argued against pegging the KD to the dollar. The pegging is part of GCC plan to unify currencies by 2010, which is now in much doubt. In an environment of increasing oil prices and budget as well as trade surpluses, the KD is artificially weakening because it is tied down by the dollar. And because the KD is weakening it takes more of it to import goods leading to inflation. The market seems to believe that this will not last for long and the KD will be revalued; hence the shift of dollar deposits into KDs. The Central Bank keeps denying and discouraging speculation by lowering KD rates (so those shifting their dollars to KDs will deposit at lower rates). So back to our USD deposits, we followed the market (but shhhh don't tell the Central Bank).

Wednesday, April 18, 2007

MTC Trading

As of the time of writing this there has been MTC trading worth KD 1,710,000,000. This is an unprecedented amount of trading for the entire Kuwait Stock Exchange ever and the market has not closed yet. The real surprise however is that no one has any clue what is going on?! Everyone is speculating.. Shares being sold to Emarati investors.. Saudi investors.. It's anyone's guess..

Why is the market silent on this?! This is a record trading volume, yet the investment community is left in the dark. It seems large shareholders of MTC and Wataniya before that have gotten into the habit of making big deals while leaving other shareholders behind with the blessing and silence of Kuwait Stock Exchange authorities! When will this come to an end?!

Wednesday, April 04, 2007

Doing Well and Doing Good

I had the pleasure of attending the Young Arab Leaders (YAL) event at the Babtain Library for Poetry where Mr. Abdulaziz Saud Al-Babtain was the guest speaker –at his own library so to speak. He is very charismatic and enjoyable character and he had a lot to talk about. Since the event was meant to inspire young leaders, he talked at length about his personal experience and the success he worked so hard to achieve.

He had few stories to share. One was during his honeymoon as he strolled the streets of Cairo he saw an ad for a product. He thought to himself how those on pilgrimage to Mecca recouped the expenses of their trip by engaging in trade while they were there. So he turned to his young wife and took her permission to meet with the distributor of that product to talk him into granting him the agency; this way they could recoup the honeymoon expenses he mused. In another story he courted an Afghan he saw walking outside his office and took him to lunch at a fancy restaurant thinking he was a merchant - restaurant was called Golden Beach or something which was the fanciest place around at that time. During lunch he realized that the Afghan was only a tailor so he paid the bill and left at once! Well the moral of the stories is to chase opportunities and never let them pass by.

The event and Mr.Babtain’s talk was very inspiring. Not only did he do well but he did good too which is apparent in all his charity and cultural efforts. He mentioned how early on in his life his focus was to accumulate wealth but after a certain point he wanted to share this wealth by doing good. Even though he was open about his business, especially the cigarette agency, I would have loved to hear how he reconciles selling cigarettes with his social responsibility.