ابو الاسهم
18-08-2005, 08:24 PM
QATAR'S SOVEREIGN RATINGS RAISED
Capital Intelligence, the international emerging markets rating agency, today announced that it has raised Qatar's long-term foreign currency rating to A+, from A-, and its short-term foreign-currency rating to A1 from A2. The ratings agency also assigned a long-term local currency rating of A+ and a short-term local currency rating of A1 to the sovereign. The outlook is stable. The upgrade reflects CI’s expectation that investment in the gas sector and other export-oriented industries will continue to deliver budget and current account surpluses over the medium term, thereby further enhancing already strong debt-servicing ability.
The ongoing exploitation of Qatar’s abundant natural gas reserves has increased the economy’s production capacity and broadened the export base. Qatar is on course to become the world’s largest producer and exporter of liquefied natural gas (LNG) within the next five years, and CI expects earnings from LNG and related products to comfortably exceed those from oil, the traditional mainstay of the economy, by 2008. Gas is also supporting the expansion of other energy-intensive industries ranging from petrochemicals to steel. Away from the energy sector strenuous efforts are being made to develop internationally tradeable service sectors such as tourism and financial services and to turn Qatar into a regional centre for education and healthcare.
The public finances are sound. Aided by high oil prices, rising output in the oil and gas industries, and improvements in fiscal management the budget recorded an average surplus of 6% of GDP in each of the past five years, and is expected to remain in surplus for the foreseeable future. Government debt has fallen steadily over recent years and stood at an estimated 30% of GDP in the fiscal year that ended in March 2005. The cost of servicing that debt has also declined, and interest payments absorbed a modest 4% of budget revenue in fiscal 2005. The risks associated with government debt and the budget’s susceptibility to a sharp decline in oil prices are greatly mitigated by the state’s portfolio of financial assets, which exceeds the debt stock in size.
High oil prices and a steady increase in LNG export volumes have also helped to strengthen Qatar’s external balance sheet. The current account surplus averaged 24% of GDP in 2002-04 and covered amortisation payments on external debt by a large margin and enabled the accumulation of foreign assets in the public and financial sectors. International liquidity is ample, with the external assets of the central bank and commercial banks alone covering external debt falling due in 2005 by 231% (the latter includes all bank foreign liabilities).
With oil and gas directly accounting for 60% of GDP, 65% of budget revenue, and 80% of merchandise exports, Qatar is vulnerable to hydrocarbon price shocks. There are, however, some mitigating factors. The state budget is based on conservative oil price assumptions (USD27 p/b for fiscal 2006) and the government has built up a stabilisation fund to support the budget in the event of large shocks. Separately, current and planned LNG output has, for the most part, been pre-sold through long-term, take-or-pay contracts which, while not insulating the industry from price shocks, do reduce exposure to demand shocks. In addition, the break-even price for Qatar’s debt-financed LNG projects is typically very low – about USD15 p/b for the upcoming RasGas expansion.
CI notes that the external debt of Qatar’s public sector, at an estimated 47% of GDP (62% of current account receipts) at end-2004, is high in comparison with other ‘A’ range sovereigns and is projected to increase moderately over the coming years in line with the large financing needs of LNG expansion. Nonetheless, external debt should remain well within the repayment capacity of the economy and external debt ratios are expected to begin declining again from 2008 as additional LNG and related output comes on stream.
from
http://www.ciratings.com/
:deal: :nice: :deal:
Capital Intelligence, the international emerging markets rating agency, today announced that it has raised Qatar's long-term foreign currency rating to A+, from A-, and its short-term foreign-currency rating to A1 from A2. The ratings agency also assigned a long-term local currency rating of A+ and a short-term local currency rating of A1 to the sovereign. The outlook is stable. The upgrade reflects CI’s expectation that investment in the gas sector and other export-oriented industries will continue to deliver budget and current account surpluses over the medium term, thereby further enhancing already strong debt-servicing ability.
The ongoing exploitation of Qatar’s abundant natural gas reserves has increased the economy’s production capacity and broadened the export base. Qatar is on course to become the world’s largest producer and exporter of liquefied natural gas (LNG) within the next five years, and CI expects earnings from LNG and related products to comfortably exceed those from oil, the traditional mainstay of the economy, by 2008. Gas is also supporting the expansion of other energy-intensive industries ranging from petrochemicals to steel. Away from the energy sector strenuous efforts are being made to develop internationally tradeable service sectors such as tourism and financial services and to turn Qatar into a regional centre for education and healthcare.
The public finances are sound. Aided by high oil prices, rising output in the oil and gas industries, and improvements in fiscal management the budget recorded an average surplus of 6% of GDP in each of the past five years, and is expected to remain in surplus for the foreseeable future. Government debt has fallen steadily over recent years and stood at an estimated 30% of GDP in the fiscal year that ended in March 2005. The cost of servicing that debt has also declined, and interest payments absorbed a modest 4% of budget revenue in fiscal 2005. The risks associated with government debt and the budget’s susceptibility to a sharp decline in oil prices are greatly mitigated by the state’s portfolio of financial assets, which exceeds the debt stock in size.
High oil prices and a steady increase in LNG export volumes have also helped to strengthen Qatar’s external balance sheet. The current account surplus averaged 24% of GDP in 2002-04 and covered amortisation payments on external debt by a large margin and enabled the accumulation of foreign assets in the public and financial sectors. International liquidity is ample, with the external assets of the central bank and commercial banks alone covering external debt falling due in 2005 by 231% (the latter includes all bank foreign liabilities).
With oil and gas directly accounting for 60% of GDP, 65% of budget revenue, and 80% of merchandise exports, Qatar is vulnerable to hydrocarbon price shocks. There are, however, some mitigating factors. The state budget is based on conservative oil price assumptions (USD27 p/b for fiscal 2006) and the government has built up a stabilisation fund to support the budget in the event of large shocks. Separately, current and planned LNG output has, for the most part, been pre-sold through long-term, take-or-pay contracts which, while not insulating the industry from price shocks, do reduce exposure to demand shocks. In addition, the break-even price for Qatar’s debt-financed LNG projects is typically very low – about USD15 p/b for the upcoming RasGas expansion.
CI notes that the external debt of Qatar’s public sector, at an estimated 47% of GDP (62% of current account receipts) at end-2004, is high in comparison with other ‘A’ range sovereigns and is projected to increase moderately over the coming years in line with the large financing needs of LNG expansion. Nonetheless, external debt should remain well within the repayment capacity of the economy and external debt ratios are expected to begin declining again from 2008 as additional LNG and related output comes on stream.
from
http://www.ciratings.com/
:deal: :nice: :deal: