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1996-2011
Bahrain..............BD 1.0
Kuwait............... KD 1.0
Oman................ RO 1.0
Qatar.................. QR 10
Saudi Arabia.......SR 10
UAE.................. DHS 10
1he Middle LasL's
megawaLL ambiLion
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Can the CulI brand get its moio back? pg. 50
Banking: Catar's leap oI Iaith pg. 5^
Mishal Kanoo: Free trade is a myth pg. 8
V. 5hankar, 5tandard Chartered CEC,
on surviving the unrest pg. ^6
!$GB July 2011.indd 1 7/4/11 11:02:18 AM
Gulf Business 206x270 E.indd 1 6/22/11 5:39 PM
CULF BUSlNLSS&,
>::KF;8P
(' REGIONAL NEWS, PEOPLE, NUMBERS AND EVENTS
FG@E@FEJ
(/ MISHAL KANOO
Free trade is false trade.
)' MATEIN KHALID
The truth about GCC debt markets.
)* DR TOMMY WEIR
Building a corporate society.
9I@<=@E>
)+ REAL ESTATE
Is the GCC buying out Lebanon?
). ENERGY
What disharmony at OPEC means for the body.
)/ FINANCE
How wealth managers are wooing the regions HNWIs.
*' BUSINESS
Recruiting independent non-executive directors in the GCC.
*) ENERGY
Global energy consumption levels are rising.
*+ TRADE
The GCC and Australia ramp up ties.
*- INDUSTRIES
The regions rst caviar factory
*0 BUSINESS
Do team-building exercises really work?
:FEK<EKJ
'.%)'((
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1 9 9 6 - 2 0 1 1
*+
)+
*0
:FM<I;<J@>E1 1ARAK PARLKH
>F@E>
EL:C<8I
:FM<IJKFIP
DLSPl1L JAPAN'S
FUKUSHlMA 1RACLDY,
1HL MlDDLL LAS1
lS FORClNC AHLAD
Wl1H BlLLlON DOLLAR
NUCLLAR PLANS
1O OFFSL1 POWLR
SHOR1ACL.
+'
05-06 Contents July 2011.indd 5 6/28/11 7:49:53 PM
-&JULY 20
<;@KFI$@E$:?@<=
Obaid Humaid Al 1ayer
>IFLG<;@KFI8E;D8E8>@E>G8IKE<I
lan Fairservice
>IFLGJ<E@FI<;@KFI
Cina Johnson
J<E@FI<;@KFI
Cuido Duken
<;@KFI
Alicia Buller Xc`Z`X7dfk`mXk\%X\
:?@<=JL9$<;@KFI
lain SmiLh `X`ej7dfk`mXk\%X\
<;@KFI@8C:FFI;@E8KFI9LJ@E<JJ
Hilda D'Souza _`c[X7dfk`mXk\%X\
8IK;@I<:KFI
1arak Parekh kXiXb7dfk`mXk\%X\
J<E@FI;<J@>E<I
B Raveendran iXm\\e[iXe7dfk`mXk\%X\
;<J@>E<I
Charlie Banalo Z_Xic`\7dfk`mXk\%X\
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Roui Francisco ifd7dfk`mXk\%X\
G?FKF>I8G?<IJ
Farooq Salik: Naveed Ahmed: Vikram Cawde
:FEKI@9LKFIJ
Sabah Haider: Dania Saadi: Ryan Harrison:
Angela Shah: PeLer ShawSmiLh: LiLhne 1reanor
><E<I8CD8E8><IGIF;L:K@FE
8E;:@I:LC8K@FE S Sasidharan
J<E@FIGIF;L:K@FED8E8><I S Sunil Kumar
GIF;L:K@FED8E8><I C Sudhakar
><E<I8CD8E8><I>IFLGJ8C<J
AnLhony Milne Xek_fep7dfk`mXk\%X\
J<E@FI8;M<IK@J<D<EKD8E8><I
Abraham Koshy XYiX_Xd7dfk`mXk\%X\
8;M<IK@J<D<EKD8E8><I
Ajay MaLhews XaXp7dfk`mXk\%X\
;<GLKP8;M<IK@J<D<EKD8E8><I
Melroy Noronha d\cifp7dfk`mXk\%X\
><E<I8CD8E8><I89L;?89@
Joe MarriLL af\7dfk`mXk\%X\
J<E@FI8;M<IK@J<D<EKD8E8><I 89L;?89@
Darryl Wiley [Xiipc7dfk`mXk\%X\
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Hamdan Bawazir _Xd[Xe7dfk`mXk\%X\
PrinLed by LmiraLes PrinLing Press, Dubai
?<8;F==@:<: PO Box 233, Dubai, UAL
1el: +97 ^ 282 ^060, Fax: +97 ^ 282 ^^36,
dfk`mXk\7dfk`mXk\%X\
;L98@D<;@8:@KP1 Ollice 508,
5Lh Floor, Building 8, Dubai, UAL,
1el: +97 ^ 390 3550, Fax: +97 ^ 390 ^8^5
89L;?89@1 PO Box ^3072, UAL,
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CFE;FE1Acre House, /5 William Road,
London NW 3LR, UK, dfk`mXk\lb7dfk`mXk\%X\
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+- PROFILE: V SHANKAR, CEO, STANDARD CHARTERED
Unrest is inating wages but the UAE is a safe haven.
,' DESTINATION BRANDING
Can the Gulf get its mojo back?
,+ BANKING: QATARS LEAP OF FAITH
New regulations are transforming the Emir state.
,/ PROFILE: IVAN CHU, COO, CATHAY PACIFIC
The airline launches the rst direct route from Abu Dhabi
to Hong Kong.
-) BORN IN THE RAK
The emirates new maritime city
-- HOSPITALITY TRENDS
Top hotel CEOs on business patterns amid the unrest.
;8K8DFE@KFI
.' STATS
Regional mergers, acquisitions and bond issuances.
;FNEK@D<
.+ TRAVEL
Charming Malta boasts towns drenched in yesteryear.
.. CRUISE
Reviewed: The Bentley Continental Flying Spur Speed.
.0 PLACES TO BE
Al Maha, Dubais most luxurious desert hideaway.
I<>LC8IJ
/' GULF BUSINESS PREFERRED HOTELS
A selection of the regions top rooms.
/( EVENTS
The Gulfs top business conferences.
/) IN YOUR SHOES
Harley Davidsons Paul de Jong.
-)
:FEK<EKJ
05-06 Contents July 2011.indd 6 6/28/11 7:49:59 PM
01143 Gulf Business FP 6/17/11 3:05 PM Page 2
Composite
C M Y CM MY CY CMY K
('&JULY 20
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RLClONAL NLWS, PLOPLL, NUMBLRS AND LVLN1S
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$3.58bn
1.7 MILLION
$16bn
2015
1he debL pile LhaL KuwaiL's lnvesLmenL Dar, owner ol
BriLish carmaker AsLon MarLin, is resLrucLuring alLer
receiving lnancial aid under a sLaLebacked plan.
OaLar's populaLion growLh in Lhe lasL decade, up 28
per cenL since 200^.
Bahrain governmenL's public expendiLure over Lhe nexL
Lwo years, revealed in a spending plan alLer lour monLhs
ol delays due Lo civil unresL.
1he year OaLar will compleLe Lhe consLrucLion ol iLs lrsL
ol 2 sLaLeolLhearL sLadia in preparaLion lor hosLing Lhe
World Cup 2022.
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Nervousness among CCC invesLors over poliLical violence will cosL Lhe
MLNA region nearly S0 billion in loreign direcL invesLmenL (FDl) Lhis
year, according Lo Lhe World Bank.
FDl in MLNA will almosL halve lrom S20 billion lasL year Lo S0.7
billion in 20, Lhe bank's Clobal Lconomic ProspecLs reporL concluded.
Cullbased invesLors will insLead diverL invesLmenLs back inLo Lhe
CCC and adopL a 'waiL and see' approach.
ProLesLhiL counLries in MLNA like LgypL and 1unisia will rely
heavily on loreign lnancial help Lo rebuild Lheir economies.
"1he locus ol Lhe CCC, less allecLed by poliLical unresL and
bolsLered wiLh new revenues, may Lurn inward lor a Lime Lo bolsLer
domesLic demand and inlrasLrucLure invesLmenL," Lhe reporL said.
1he recenLly announced S20 billion Cull DevelopmenL Programme
lor Bahrain and Oman is an example ol Lhis emerging Lrend, iL added.
1he news is devasLaLing especially alLer capiLal inlows lrom Lhe
CCC had been on Lhe rise, peaking in 2008 aL S29.3 billion or 3. per
cenL ol MLNA CDP.
Meanwhile, Lhe World Bank expecLs oilexporLing counLries LhaL
were relaLively lree lrom proLesLs, such as Algeria, KuwaiL, Oman,
OaLar, Saudi Arabia and Lhe UAL, Lo benelL lrom Lhe oil price gains
creaLed by Lhe Libyan crisis.
BuL Lhese naLions' neL lscal revenues will be impacLed by Lhe need
Lo increase spending on social issues highlighLed by Lhe region's unresL.
Oil imporLers especially counLries LhaL subsidise lood and energy
lor Lheir ciLizens have more chance ol sullering economically in Lhe
shorL Lerm, Lhe bank added.
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10-17 GCC Today.indd 10 6/28/11 8:19:23 PM
CULF BUSlNLSS&((
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J8L;@8I89@8
FD8E
LE@K<;8I89<D@I8K<J
66,000
SR180Bn
28,000
Dh115.4BN
3
New jobs will be creaLed in Saudi Arabia's public secLor lor
graduaLe Leachers as well as lor healLh diploma holders. Saudi
King Abdullah bin Abdul Aziz ordered Lhe creaLion ol Lhe jobs, ol
which 52,000 will be in Lhe educaLion secLor.
Saudi Arabia's public spend in 20. 1his
expendiLure will be boosLed by Lhe massive
lnancial package lor ciLizens announced
by King Abdullah over Lhe pasL weeks.
1he number ol Omani sLudenLs Lo
receive scholarships ^0 per cenL up
lrom Lhe original plan in a move by Lhe
governmenL Lo quell proLesLers' demands.
1he Dubai governmenL's ouLsLanding debL, which sLands
aL 38 per cenL ol Lhe Dh300.8 billion CDP in 200,
according Lo Lhe emiraLe's deparLmenL ol lnance.
1he number ol LLihad lighLs
inLo 1oronLo ouL ol Lhe weekly
38^ LoLal long and ulLralong
haul journeys, according Lo a
disgrunLled CLO James Hogan.
10-17 GCC Today.indd 11 6/28/11 8:19:26 PM
()&JULY 20
CCC T0DAY
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UAE tops global
Iashion spend
Clarication
5audi seeks bigger
inhuence in IMF
5hariah assets in
Cman to hit $6bn
!|e UA| |s t|e ||ccest
srer1er rer |eo1
or fos||or |r t|e
1eve|ore1 Wor|1.
corsu|torts A!
Keorrev so|1. !|e
hrr's c0ll keto||
Arrore| lr1ei four1
t|e |r|rotes |os
t|e ||c|est
c|ot||rc
so|es rer
cor|to
ot 8S o
veor W|||e
t|e UA| o|so
score1 ||c|est
for t|e rur|er of
|rterrot|oro| reto||ers
orerot|rc |r t|e courtrv.
lr |ost rort|'s Cu|f bus|ress. Ootor
Not|oro| bor| (ONb) ror|e1 |r t|e
'!or S0' ror||rcs. rot t|e Not|oro|
bor| of Ootor. os t|e ort|c|e stotes.
Oror's ls|or|c ossets cou|1 r|se
to os ruc| os o |||||or over t|e
reit feW veors |f t|e courtrv ro||s
out o successfu| S|or|ocorr||ort
|or||rc svster. occor1|rc to
|rrst & \ourc. !|e |rtro1uct|or of
severo| ls|or|c |rst|tut|ors to t|e
Cu|f stote ore eirecte1 to corture
o su|stort|o| rrorort|or of t|e
courtrv's est|rote1 4c |||||or
|e|1 |r ossets.
On the Radar
UAE growth to hit 4% on Libya oil turmoil
The UAE can expect a windfall from high
oil prices to lift economic growth to four per
cent in 2011, according to Saudi American
Bank Group (Samba). It had previously been
projected by the IMF that the UAE would enjoy
a 3.5 per cent growth rate this year.
But Samba put the increase down to
soaring crude output in the country after the
disruption in Libyas oil supplies, plus better
performance in Dubais non-oil sectors.
The UAEs larger public spending budget
this year is also expected to play a part.
Despite weak real estate sectors and debt
problems in Dubai, the UAEs growth outlook
remains positive and will moderate to 3.6 per
cent in 2012, said Samba.
Bahrain has reinsLaLed 57 ol iLs ciLizens LhaL
were sacked by privaLe companies during Lhe
recenL unresL.
AlLer an invesLigaLion Lhe governmenL said
Lhere was a lack ol legal sLanding lor Lhe
dismissals. 1he decision is parL ol a move by
Bahrain Lo ease Lhe backlash lrom iLs recenL
crackdown on civil disorder.
Around 2,000 Bahrainis, boLh in Lhe public
and privaLe secLors, were lired during Lhe
monLhs ol March and April, according Lo Lhe
Ceneral FederaLion lor Bahrain 1rade Unions.
A governmenL panel was subsequenLly
lormed Lo invesLigaLe dismissals ol workers
and Lo keep unemploymenL in Bahrain no
higher Lhan lour per cenL ol Lhe worklorce.
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SOAPBOX
Aer|a| v|eW of reW
deve|operts |r Duba|, UAL.
Sou1| Aro||o's hrorce r|r|ster
so|1 t|e ||rc1or |s rus||rc
for o creoter ro|e |r t|e
lrterrot|oro| |oretorv |ur1
(l||) |r o reet|rc to 1|scuss
reW |eo1ers||r of t|e |rst|tut|or.
Sreo||rc W|t| |rorce's C|r|st|re
|ocor1e 1ur|rc |er corro|cr
to |eo1 t|e Wos||rctor|ose1
l||. l|ro||r A|ossof voWe1 to
|rcreose Sou1|'s s|ore of t|e
fur1 fror c.8l rer cert.
Bahrain backtracks cn
unrest dismissaIs
10-17 GCC Today.indd 12 6/28/11 8:19:37 PM
C
M
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CM
MY
CY
CMY
K
3Men Gulf Business FP.ai 1 6/16/11 9:40 AM
(+&JULY 20
MidEast airlines' prot slumps $S00m
Dubai
property
Ialls during
unrest
How to rule
the world like...
German technology company Siemens
has launched a bribery investigation
against several former managers
involved with its Kuwait unit,
according to newspaper reports.
It is alleged that former employees
had attempted to bribe officials of
Kuwaits energy and water ministry
with $1.8million for a future project,
an article in the Financial Times
claims. The case had been detected by
Siemens compliance unit.
DespiLe speculaLion
LhaL invesLors would
seek sale havens in
Lhe Middle LasL, Lhe
Dubai properLy markeL
is sLruggling, according
Lo DeuLsche Bank.
Home values
declined .2 per cenL in
May lrom Lhe previous
monLh and renLs
lell by one per cenL,
according Lo Lhe bank.
Meanwhile, aparLmenL
prices dropped .3 per
cenL and villas losL
per cenL.
Since Lheir peak in
mid2008, properLy
prices in Dubai have
lallen 6^ per cenL,
while renLs have sunk
55 per cenL.
G@:BPFLI=I@<E;JN@J<CP
He counts MicrosoIt Iounder Bill Cates as a
longtime Iriend and bridge partner. The
two are avid players oI the popular card
game and can be Iound competing Ior
hours on end.
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In a recent charity auction organised by
BuIIett an anonymous bidder paid $2.6
million Ior a lunch with the billionaire
investor. BuIIett plans to give away 99 per
cent oI his Iortune to charity.
;FPFLIK8O<J<8ICP
The son oI a Nebraska politician, he
delivered newspapers as a boy and Iiled his
Iirst tax return at age !3 claiming a $35
deduction Ior a bicycle.
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The Cracle oI Cmaha challenged members
oI The Forbes 400 in 200S, saying he would
donate $! million to charity iI the collective
group oI richest Americans admitted they
pay less taxes, as a percentage oI income,
than their secretaries.
JFLE;9@K<JD8KK<I
BuIIett is known Ior his memorable remarks.
Classic quotes include this one about
knowing who's taking excessive risk during
high times: "It's only when the tide goes out
that you learn who's been swimming naked."
He also picks winners, with his endorsement
oI Barack Cbama iust one example.
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Siemens alleges bribes in Kuwait
Middle East airlines will see profits drop $800 million
in 2011, according to the International Air Transport
Association (IATA).
Estimates were revised from a previous earnings
forecast of $900 million to $100 million, an 86 per
cent cut.
High oil prices, uncertain market conditions and
natural disasters were all cited as reasons for the
new prediction.
Globally, the aviation sector had its profit margins
slashed for the year to $4 billion from $8.6 billion, a
figure forecast in March.
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Berkshire HaLhaway Chairman and CLO
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10-17 GCC Today.indd 14 6/28/11 8:19:49 PM
CULF BUSlNLSS&(,
>::KF;8P
Saudi awards $85m Mecca-Medina rail contract
Saudi Arabia has awarded Swiss-based power
and technology group ABB a $85 million contract
to supply key components for a new high-speed
rail link in the kingdom.
The mandate, ordered by AlFanar Construction
Co, will see ABB supply 380kV indoor gas-
insulated switchgear that are a key component
of new substations that will power the 444km
Haramain rail line currently under construction.
ABB will design, supply, install and
commission the GIS by the middle of 2013, the
company said in a statement.
Owned and operated by the Saudi Electricity
Company, the substations are needed to supply
electricity to high-speed electric trains that are
expected to help transport about three million
passengers annually.
The railway will link the pilgrimage cities
of Mecca and Medina via the King Abdullah
Economic City, Rabigh, Jeddah and King
Abdulaziz International Airport.
Its expected to reduce traffic congestion on
the roads and cut travel time between the two
holy cities from six hours to two.
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On the Radar
Drake & Scull lnLernaLional (DSl) has won iLs
second hospiLaliLy projecL in Sharm Ll Sheikh,
LgypL, lor a value ol Dh80 million (S2.8 million).
1he Dubai conLracLor, which has been rapidly
expanding iLs operaLions ouLside iLs home markeL
since Lhe 2008 crash, will carry ouL mechanical,
elecLrical and plumbing works on Lhe projecL.
1he developmenL is expecLed Lo be compleLed
by February 202.
Khaldoun 1abari, CLO ol DSl, said: "We anLicipaLe
subsLanLial growLh lor DSl in LgypL, driven by
Lhe large populaLion growLh LhaL losLers sLrong
real esLaLe domesLic demand in addiLion Lo Lhe
lundamenLal need lor inlrasLrucLure developmenL."
He added LhaL aside lrom Lhe hospiLaliLy indusLry, Lhe company is also LargeLing Lhe
commercial, residenLial and healLhcare secLors.
DSl's oLher projecL in LgypL, Lhe Dh^60million Nile Corniche ProjecL in downLown Cairo,
is expecLed Lo be handed over in 20^, Lhe company added in Lhe sLaLemenL.
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project focus
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eros|ts ot UA| |or|s creW
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|er1|rc rero|re1. oro|vsts so|1.
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Sl |or|s 1eros|ts surce1 veor
orveor |v reor|v lo rer cert ot
t|e er1 of Arr|| W|||e 1orest|c
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cert. Aro|vsts so|1 |er1ers Were
st||| j|tterv ofter t|e|r eirosure to
rec|oro| 1e|t 1efou|t rro||ers.
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9X_iX`eX[d`kj`k
cfjk=(iXZ\
10-17 GCC Today.indd 15 6/28/11 8:20:00 PM
(-&JULY 20
Saudi Arabia will raise oil ouLpuL Lo 0 million barrels a day in
July, in a show ol deliance againsL Lhe ollicial OPLC policy,
according Lo a reporL.
Riyadh is asserLing iLs auLhoriLy over lellow OPLC members
alLer iL lailed Lo convince Lhe carLel Lo lilL ouLpuL lasL monLh.
CiLing OPLC and indusLry ollicials, Saudi newspaper 8c
?XpXk reporLed LhaL Lhe kingdom's producLion would rise lrom
8.8 million barrels per day (bpd).
A proposal by Saudi, Lhe UAL and KuwaiL Lo lilL OPLC
producLion was blocked by seven producers including lran,
Venezuela and Algeria.
"1he Saudi inLenLion is Lo show LhaL Lhey cannoL be pushed
around," said one energy analysL.
ln June, OPLC ligures suggesLed Lhe world will be
undersupplied by .73 million bpd in Lhe second hall ol 20
enough Lo meeL demand in an economy Lhe size ol France il
oil producers do noL increase supplies.
SAUD! DEF!ES 0PEC T0
!NCREASE 0UTPUT
GCC and the world
2,000 sq m
JK8KJ
1HL SlZL OF DOHA lN1LRNA1lONAL AlRPOR1'S NLW
1LRMlNAL B A DLDlCA1LD FAClLl1Y FOR FORLlCN
AlRLlNLS SL1 1O OPLN A1 1HL S1AR1 OF JULY.
).%.D8I89JC@B<=8:<9FFB
1he number ol Facebook
users in Lhe Arab world
jumped by 30 per
cenL in Lhe lirsL Lhree
monLhs ol Lhe years.
Spurred by uprisings
in Lhe Middle LasL, users
increased Lo 27.7 million
by Lhe end ol March,
according Lo Lhe Arab
Social Media ReporL.
1he populariLy ol
siLes like Facebook and
1wiLLer are being driven
increasingly by civil
and poliLical acLion.
Qatar will offer the first tender
to contractors around the
world for its metro system
in the next two months,
according to Abdullah
al-Subaie, managing director of
the Qatar Railways Company.
The Qatar railway project
will reach QR130 billion
($35.7 billion) and require
more than 1.2 million tonnes
of iron.
Al-Subaie said there will
be a total of 100 stations in
the project contracts being
put out for tender and
include digging tunnels and
constructing train platforms.
Bidding due for $36bn Qatar railway
CCC vitaI tc S2trn !sIamic
trade hnance crcwth
1he lslamic Lrade linance
indusLry is widely expecLed
Lo double in size Lo S2
Lrillion over Lhe nexL live
years, helped by deals
beLween CCC counLries
and Asia.
1rade linance, Lhe
lileblood ol global
commerce, underpins
6080 per cenL ol Lhe
S23 Lrillion Lrade in
global merchandise.
lslamic linance could
capLure 20 per cenL ol
Lhis porLion, according Lo
Lhe AccounLing & AudiLing
OrganisaLion lor lslamic Financial lnsLiLuLions.
1he group said growing crossborder Lrade among Asian
and Middle LasLern counLries will see demand lor more
ShariacomplianL linancing lrom Muslims increase.
And LhaL appeLiLe lor lslamic linancing is being led by
economic powerhouse Saudi Arabia.
Asia Lo Middle LasL Lrade llows more Lhan doubled beLween
2005 and 2008, according Lo Lhe World 1rade OrganisaLion.
While lslamic banking and lslamic bonds, or sukuk, are
expecLed Lo lead growLh more generally, bankers say lslamic
Lrade linance could serve as Lhe dark horse emerging Lo
propel Lhe indusLry lurLher.
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`ek\ie\kY\`e^[`jZfee\Zk\[`dd\[`Xk\cp%
SOAPBOX
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10-17 GCC Today.indd 16 6/28/11 8:20:04 PM
CULF BUSlNLSS&(.
CCC T0DAY
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Marriott Hotels & Resorts will build a total ol eight new
properties in the Middle Last and North Alrican by 205.
1he investment includes three hotels in the UAL and
one in Saudi Arabia, Marriott lnternational said.
1he hotel group said the regional plans were part ol
its global pipeline ol nearly 50 new hotels and resorts to
open in the next lour years, representing a multibillion
dollar investment.
DXii`fkklem\`cjdlck`$Y`cc`fe
[fccXiD<E8\ogXej`fe
30
COMPANY focus
J<:FE;JKFD8B<J<EJ<F=%%%
D8B@E>JL@KJ
What kind cf cIients dc ycu
attract?
We work with a wide variety
of clients, predominantly
expats (including those from
the Indian sub continent), in
addition to a few affluent local
and expat Arab customers.

Hcw have IccaIs taken tc an
EncIish styIe cf taiIcrinc?
We have found that it has taken a while for people in the
Middle East who are not familiar with custom tailoring and
the Savile Row ethic to warm to our concept, especially
in an environment where people are brand-conscious and
there is a tendency to expect things instantly.
What are the services cffered at ycur empcrium?
We offer an array of different services that include custom
tailoring for suits, jackets, trousers, shirts and shorts.
Currently we are noticing a large trend for tailored shorts
and linen trousers. Personalisation and monogramming is
also very popular at the moment.

!s it pcssibIe tc Icck cccd cn a budcet?
Yes. Custom made shirts start at about Dh500 and are an
ideal option for the client who doesnt want to go through
the suit ordering process.
LccsdaiI ceIebrated its third anniversary this May, hcw
did ycu manace tc Iaunch in a recessicn and what has
been the mcst pressinc chaIIence?
The recession did impact our business strategy; at the
height of Dubais boom, people were spending excessively
and we thought we would fit into that superior income
bracket, but, like everyone, we had to stay flexible and
focus on how we could adapt our core product range into
a new economic landscape. We chose to base our business
on garments that were both affordable and personalised.
Any tips fcr dressinc in the 50 decrees heat?
We have introduced a Cool Effect fabric by Zegna, which
reflects sunlight, therefore making you feel cooler by up to
10 per cent our clients swear by it. We also suggest that
you opt for breathable. lightweight fabrics (so stay away
from synthetics). Also dont wear blue if you are prone to
perspiration.
The Saudi Arabian government has agreed a SAR5 billion ($1.33
billion) loan to launch the construction of its King Abdullah
Economic City project, a 168-square-kilometre development on the
Red Sea north of Jeddah.
The project, a publicly listed joint venture from Emaar
Economic City, brings together Saudi investors and the Dubai-
based developer Emaar. It is the largest private-sector development
in the kingdom.
The loan is expected to boost development activity in the
city after a sluggish 2010, analysts at Deutsche Bank said in a
note to clients.
The kingdom had recently announced plans to bolster its
construction industry by generating nearly $450 billion in
construction contracts in the next five years, according to data
released at the Arabian World Construction Summit in Abu Dhabi.
The Saudi ministry of finance is giving Emaar 10 years to repay
the loan, with repayment starting after three years.
Saudi lends $1.3bn for
Emaar project
ZULF HYATT KHAN
Director ol Logsdail
London, UAL
@EK<IM@<N<;9P?@C;8;JFLQ8
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10-17 GCC Today.indd 17 6/28/11 8:20:10 PM
(/&JULY 20
FG@E@FE
REE TRADE IS WHAT WE NEED. FREE TRADE
is the basis for economic growth. Free trade will
set us free... pardon the pun. What a lie! The basic
concept is that competition makes things better for
the consumer. Anyone who believes that competition
makes us better should see how he or she feels about that concept when
it comes to his or her spouse or childrens attention. Some competition
is good to keep us on our feet but constant competition can have a
disastrous effect.
Most messiahs of the free trade mantra are liars. The secondary
problem is that the lie, once it starts to unravel, forces us to believe it
more; because we dont want to admit the truth: that we were duped into
a false belief.
Let me start with the secondary problem. We are taught that
competition through free trade benefits us all. Really? Lets test this
theory. A company invents a product that is promoted to be important
in our lives, say, the car. After the hard work of convincing customers
that this is the best thing ever to help humanity, other manufacturers buy
into the concept and enter the market. Great so far. Now everyone gets
excited as there are two manufacturers and, in principle, the price should
go down.
But it doesnt fall enough and the margins are still healthy enough
for others to take the plunge. This still doesnt drive the prices down
enough until the market is flooded by countless others. Then the prices
sink so much that some manufacturers die a natural death. In economist
parlance, we call this equilibrium. The problem is that is doesnt stop
there. This savage rationing continues while prices plunge and companies
go bust.
There are those who promote free trade as the best solution for all
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8E;8CCFNK?<DKFIFCCFM<ILJ%
economic woes, but they are usually the first ones who
fall back on government support when things tank.
They say we should open our doors but they firmly shut
theirs. They fight off others from entering their markets
yet they believe that flooding yours is perfectly normal.
Amid the financial crisis, Western governments
immediately propped up failing companies under
the guise of too big to fail. The hypocrisy of it was
obvious to all. The way they shut up their detractors
was by scaring them by saying the world economy
would collapse if they hadnt didnt save those
companies. But why would the world collapse if free
trade did its role as they promised and one bank took
over another? Ah! Because all their banks became
insolvent. And how did that happen? Because they
all believed their own lies of ever-expanding without
fearing the consequences as they knew that big brother
was looking out for them. Thats not free trade thats
unfair trade.
Look into the history of all those countries that
today want the world to buy into this false religion
of free trade and you will see that no one smells
of protectionism more than they do. Now China is
knocking on the door and what are those very same
countries now saying about free trade? They now want
fair trade not free trade. Why? Because they know that
their religion is false and, when exposed to the light of
someone else taking over the lead, they collapse.
Today, we in the Gulf, are told we should open our
shores to competition. Our airline industry is now
being attacked under that guise. They want us to pull
down all the barriers on our airlines from an economic
fairness point of view. In reality, they want us to give
up our competitatve edge and allow them to roll over
us. I dont see them giving up their economies of scale
to allow us to compete with them, nor do I see them
giving us more space to fly into.
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COMMENT
Free Lrade has lined Lhe pockeLs ol Lhe world's largesL companies
unLil Lhe lrms collapse and are rescued by Lhe governmenL
=I<<KI8;<M<IJLJ=8CJ<KI8;<
Mishal Kanoo is deputy chairman,
Kanoo Group.
18 Column Kanoo.indd 18 6/28/11 6:31:18 PM
G_Business Elite 500 - 270x206mm-E.indd 1 6/1/11 4:40 PM
)'&JULY 20
FG@E@FE
COMMENT
As invesLors scramble Lo buy Middle LasL debL iL's clear LhaL Lhey
have lnally grasped Lhe vasL dillerences in regional counLryrisk
Matein Khalid is fund manager in a
royal investment ofce and a writer
in nance and geopolitics.
K?<9LCCILE@E>::
JFM<I<@>E;<9K
i
T IS IRONIC THAT THE GCC SOVEREIGN CREDIT
market has remained relatively immune from the escalating violence in
Libya, Yemen and Syria. Saudi, Qatari and UAE sovereign and quasi-
sovereign issuers borrow sukuk/Eurobonds at the lowest yields since the
uprisings in Tunisia overthrew the regime of President Ben Ali back in
January. When unrest first swept across the Arab world, all MENA bonds/
sukuk prices fell in unison as credit spreads widened on risk aversion and
panic selling. Six months later, the debt markets scrambled to buy the
bonds of oil and gas rich, capital exporting states with stable regimes not
assailed by violence or insurgencies. Arab sovereign bonds now trade on
country specific financial, not regional macro-political, criteria. Investors
in the MENA debt market have finally grasped the nuances of country-risk
and differentiate the credit spectrum that exists across the Arab world.
Of course, the GCC debt market does not exist in isolation. Soft US
economic data, aggressive buying by Asian central banks and safe haven
flows from the Greek crisis have led to a spectacular fall in the yield on
10 year US Treasury bonds, whose yield is now 2.95 per cent and the
five year US Treasury note trades at 1.56 per cent. As Uncle Sams debt
yields plummet, so do the yields of all emerging and frontier market
debt. Yet MENA debt has actually outperformed the JP Morgan Chase
emerging market debts four per cent performance in 2011. The fall in
bond yields and sovereign credit default swap (CDS) spreads has been
most pronounced in the GCC, though even Egypts April 2020 maturity
bellwether yield trades at 5.54 per cent, the level just before the endgame
for the Mubarak regime began in Tahrir Square five months ago. However,
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the capital markets are still nervous about Egypt, as
its CDS is 300 points.
It is, of course, no coincidence that Bahrain is the
worst performing sovereign bond market in the GCC,
with its yields now on its 2020 bonds even higher
than Egypt at 5.80 per cent. The debt markets are
more sanguine about the political and fiscal equation
in Cairo than in Manama. The catalyst for the rally in
the GCC debt market was the absence of violence
or mass unrest in Saudi Arabias Day of Rage in
March. The CDS on the largest economy of the Arab
world plummeted from 145 basis points in March
to a mere 94 basis points now. In essence, the
international capital market has concluded that the
kingdom has defused any political time bomb with
its epic $130 billion social spending/housing
programme. Yet the promise of a $10 billion GCC
Marshal Plan fund did not lead to yield compression
in Bahrain sovereign debt.
Apart from lower US Treasury bond yields, the last
six months witnessed a spectacular rise in North Sea
Brent prices, a revenue windfall for the major GCC
oil exporters (Kuwait, Qatar, Saudi, UAE). This was
the reason GCC bond yields ignored the potential
of higher post-crisis budget break-even oil prices
and government spending. GDP growth rates across
the Arab world will differ dramatically in 2011
2012. Qatar has one of the worlds highest growth
economies, due to high LNG export volumes and
pricing while Tunisia and Egypt could well have zero
GDP growth.
The credit default swap market gives hints for the
future of Arab debt. The Syrian bloodbath means
Lebanon trades at 335 basis points as sovereign and
banking risk in Beirut surges. Yet Abu Dhabi trades
at the same low level as Qatar at 90 basis points,
meaning safe havens with zero political risk. I believe
GCC debt is priced to perfection now. Why? After the
OPEC fiasco in Vienna, oil prices will fall. Two, Egypt
faces a political vacuum and Syria/Yemen a descent
into chaos. Three, US Treasury bond yields do not
compensate investors for two per cent inflation. Four,
risk aversion will hit emerging markets debt, including
GCC/MENA. Five, a regional bubble is evident as even
dubious credits were oversubscribed.
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20 Opinion Matein.indd 20 6/28/11 6:31:51 PM
Gulf Business_FPC_20.6x27 cm_Freezone.pdf 1 6/26/11 6:45 PM
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CULF BUSlNLSS&)*
FG@E@FE
COMMENT
Following Lhe Arab Spring, Lhe region is unanimous LhaL jobs need Lo
be creaLed lor naLionals. BuL how?
9L@C;@E>8:FIGFI8K<JF:@<KP
d
URING AN INTERVIEW WITH SAUDIS
English newspaper, Arab News, in August 2009, I accurately predicted
what has become known as the Arab Spring.
I was quoted as saying, The kingdom is facing a shortage of nationals
with corporate leadership qualities and there is an unprecedented
imbalance in the expat-national ratio when it comes to holding private
sector leadership postings. If I were the government of Saudi Arabia, this
is the issue Id be most concerned about. The kingdom is experiencing
one of the largest youth bulges in the world and what this means is that
unemployment is going to escalate if Saudi Arabia does not tackle the
shortage of Saudi leaders in the private sector.
Whenever a country has a disproportionate percentage of young
people coupled with limited job availability in the private sector, it
means reform or revolt. Today, nobody is arguing with the reality of
the heightened prospects of unemployment and the relative national
impact. Now the debate is about what to do next.
Following years of rhetoric, governments are now taking action to try
and remedy the fractured private sector job market and imbalance. This
requires more than the proposed six-year visa limitations, educational
reform, existing sponsored programmmes and legacy nationalisation
programmes. What is needed is to accept the fact that the region
is a first-generation corporate society and a right-fit plan to build a
corporate mentality and skills.
Well, in order to solve this, we need to understand the fundamentals.
This is relevant for every leader in the region whether new to the
market, a pillar of the community, a national or an expatriate. The
fundamentals are:
N?@C<K?<I@J<F=K?<:FIGFI8K<
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While the rise of the corporate mentality has
accelerated in the past decade with market
progression and advancement of the cities, for all
practical purposes, this generation is the first in their
families to truly enter the private sector.
J8EJDF;<IE@KPThe Arab world (and most of
Asia) rose to power well after the establishment of
the industrial revolution, not with it. So in other
words, it jumped over the modern revolution making
it a society that rose without (sans) modernity the
era of industrialisation.
Now, what needs to be done? Government
programmes and the private sector need to invest
heavily in building a corporate mindset and skills.
As there are many success stories in the private
sector across the region we should learn from them.
The six key insights include having:
Performance orientation
Business acumen
Private sector work habits
Resilience
Confidence
Entrepreneurship
This region is in a very unique position due to the
imbalance of the age of its population. It is working
against time and tradition as local managers and
leaders are needed more rapidly than is typically
required to develop the expected level of capability.
As a result, heavy investment is needed in leadership
development on the front-end. The market will
experience waves of people joining the work force
and moving through it. Therefore, development
activities and legislation are needed to match this.
While the emphasis on job creation and the
curtailing of expat dependency is timely, it must be
coupled with the private and public sector joining
together to build the first generation corporate
members into a corporate society.
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Dr Tommy Weir, advisor on
fast-growth and emerging
market leadership, and
author of The CEO Shift
23 Column Weir.indd 23 6/28/11 7:31:00 PM
)+&ALCP)'((
I5 THE CCC BUYINC CUT LEBANCN?
I<8C<JK8K<
CulI real estate players are pumping
money into Lebanon and playing
an everlarger hand in the nation's
landscape. Are the country's residents
being priced out oI their homes?
K<OK9PJ898??8@;<I
own property market by cash-rich buyers
from the GCC.
This is mostly the case in Beirut and
likely began in the post-war 1990s when
the late Prime Minister Rafik Hariri a
long-time resident of the KSA and dual
passport holder attracted petrodollar
investment to redevelop Beiruts Central
District, via the creation of the Solidere
publicly-listed company. The firms plush
creation completely rebuilding Beiruts
central district has arguably created an
A
T FIRST GLANCE, it seems like all
of Beirut is under development,
as cranes and construction fill up the
city with elaborate new commercial and
residential projects in various stages of
completion. At prime real estate sites all
over Lebanon, a significant number of
developers are promoting their ambitious
projects however, on closer inspection,
they are not Lebanese firms, but GCC.
In a country where the average national
wage is $900 (the official minimum
wage is $200) per month, the well-
worn complaint on the street is that the
Lebanese are being priced out of their
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24-25 Briefing Lebanon.indd 24 6/28/11 6:33:53 PM
>LC=9LJ@E<JJ&),
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area that few Lebanese can afford to live
in; occupancy is estimated at 50 per cent.
The early 2000s also saw a massive
wave of GCC investment in Lebanon.
The last two huge Gulf acquisitions in
Lebanon were in downtown Beirut in the
first half of 2006, with the Phoenician
village and Beirut Gate. One was by a
Kuwaiti group and the other was by an
Abu Dhabi investment company, says
Raja Makaram, founder and managing
director of Beirut-based Ramco real estate
advisors, established in 1973. These
represented around 200,000 buildable
square-metres each, and the acquisitions
were made at around $250-300 million
dollars each, adds Makarem.
But others are of the view GCC
investment in Lebanon now is as strong
as ever. New developments, in Beirut
especially, are visible everywhere and are
largely being put up by GCC money and
developers. According to the IMF between
20022007, 60 per cent of foreign direct
investment to Lebanon was from the GCC,
with more than half of that in real estate.
Lebanon also gets one third of all GCC
foreign direct investment in the MENA
region, says Dr. Walid Hazbun at the
American University of Beirut. More recent
figures of GCC investment in Lebanese
real estate, since 2007, are likely higher.
Today, some of the Gulfs biggest
developers such as Nakheel, Damac, Al
Futtaim, to name a few, are highly visible
in Lebanons real estate and development
sphere not including a previous wave of
development in hotels which drew in big
Gulf names, such as Habtoor and Rotana.
The result of Gulf-style projects in
Lebanon for Gulf-buyers and a debatable
numbers of Lebanese who can afford
them, is questionable. Its transforming
the image of the city as well as the living
experience for everybody. In some ways
it helps push the developments Solidere
began in a more extreme and socially
unfriendly direction, says Hazbun. The
hotel district at the edge of downtown
is not a very pedestrian friendly area to
walk through. Without Gulf investment
its possible it wouldnt have completely
gone in that direction. It might have been
more mixed in terms of the kinds of
developments and projects.
Major GCC projects being built include
Al Futtaims 60,000 sq. metre mall, in a
Beirut suburb, and Emaars $800 million
gated residential community in the
mountains overlooking Beirut, called
Beit Misk. DAMAC is building a luxury
apartment building with interiors designed
by Versace, in the Solidere development.
The rate of usage of these properties
is quite low, says Hazbun referring to
Solidere as an example. They mimic
projects in the Gulf, which of course
mimic projects in other cities. Every
evening how many people are living in
them? You get tall buildings but you
dont get urban density.
We estimate that about half the people
currently buying property in Lebanon
are Lebanese expatriates, who have been
working away, and want to secure a
property to live in when they eventually
return home, says Niall McLoughlin,
senior vice president, Damac Properties.
We are also seeing strong interest from
the Gulf, as people look to invest in a
holiday home in Beirut.
The starting price for an apartment in
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the DAMAC Tower in Beirut is $700,000.
Makarem says the Lebanese public
have a distorted view of GCC investment:
There is a fallacy in the opinion of people
here there is an over exaggeration of
Gulf interest in Lebanon, he says. After
the war of 2006, there were some huge
brakes put on Gulf investment in Lebanon,
for political reasons.
Despite attempts at contacting them,
representatives from Al Futtaim and Emaar
were not available to comment.
There are strong economic
fundamentals underpinning growth in
Lebanons property market, says Damacs
McLoughlin. The IMF is predicting
economic growth of between four and
five per cent this year, and the expanding
economy is fuelling population growth,
which is currently outpacing the supply
of available accommodation. Increasing
demand for housing is pushing up rental
prices [in Beirut], which are now the
highest in the Middle East.
The real estate sector in Lebanon is
underpinned by strong economic growth,
a highly liquid banking system and strong
demand, which is currently outpacing
supply, he adds.
;XdXZKfn\i#9\`ilk%
24-25 Briefing Lebanon.indd 25 6/28/11 6:33:55 PM
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DI5HAPMCNY AT CPEC
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The lack oI unanimous agreement over oil production cast a shadow over CPEC's
Iuture but indecision was inevitable given the unstable global economic climate.
K<OK9P<@K?<KI<8EFI
I
T WAS FAR from business-as-usual
at OPECs 159th meeting in Vienna
in June. Early rumours from the Saudi
Arabia camp all pointed to a definite
increase in production and the conference
began in an optimistic mood with
the market expecting more oil. The
international media carried the message
loud and clear and markets reacted
favourably to the downside. So the world
reacted with shock when the OPEC
president and acting Minister of Petroleum
from Iran announced that the ministers
were unable to reach a decision.
The most important issue is the
production ceiling, he said. No-one
really opposed the production increase
but it was the timing and the amount of
the increase that was discussed.
The uncertain state of the global
economy was top of the agenda, as was
the need to replace missing barrels due to
the unrest in Libya. The OPEC Secretary
General, Abdalla Salem el-Badri assured
the market there was no danger of a
shortage of oil, but said a unanimous
decision was not possible.
OPEC is not in crisis, he said and
emphasised there was plenty of spare
capacity and enough oil on the market
despite this situation. We debated very
thoroughly, we have many points of view
but, unfortunately, we were unable to
reach a consensus to change production.
This surprise announcement caught
the market off guard and the oil price
rose in afternoon trading. Analysts might
not have welcomed this situation, but
some could appreciate the dilemma
OPEC faced. There were definitely some
tensions, said Jason Schenker, president
of Prestige Economics, but everyone
has to do business and countries have
different views on what the future of
demand looks like.
El-Badri also emphasised there was
plenty of spare capacity available, more
than four million barrels and said the
object was to increase the production
in the third and fourth quarter, where
OPEC data sees a rise in demand. He
added that it was the uncertainty of
the world GDP growth, global inflation,
unemployment, sovereign debt and
manufacturing decline that made the
decision very difficult.
Sean Evers, managing partner of The
Gulf Intelligence, based in Dubai, said
OPEC usually managed to find consensus
at meetings and said it was interesting
that this time, they chose to emphasise
there was disagreement. He added
that it was also important they clearly
signalled to the market that there were
some members who wanted to increase
the quota and Saudi Arabia, particularly,
wanted to increase quotas.
While the oil price shot up temporarily
after the meeting, it has since calmed
down with WTI trading below $100 a
barrel and Brent Crude still around $111
a barrel. Speaking in London in June
El-Badri stressed that $100 oil was not
harming the global economy.
Many OPEC ministers hope the
situation will be solved with behind-the-
scenes dialogue in the coming months.
According to El-Badri, the OPEC members
can handle this disagreement amicably,
additional oil needed on the market will
be met by individual members and Saudi
Arabia has made it clear they will take
the lead.
An extraordinary meeting can be called
later in the year if need be but, for now,
the next scheduled meeting of the OPEC
conference will be in early December in
Vienna. Industry watchers and analysts
hope it will be business as usual at
OPECs 160th conference.
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WCCINC THE WEALTHY
@EM<JKD<EK
Middle East millionaires repatriated
Iunds Irom oIIshore accounts during
the recession to boost liquidity. Local
banks and wealth managers must now
act Iast to secure Iunds.
K<OK9P;8E@8J88;@
W
HILE THE WEALTHY in the Middle
East and Africa (MEA) are forecast
to grow their assets under management
by 50 per cent to $6.7 trillion by 2015, the
wealth managers that will benefit most
from the Gulfs high density of millionaires
will be local players, according to the
Boston Consulting Group (BCG).
Of the $2 trillion of assets under
management for wealthy households in the
Gulf in 2010, 52 per cent was held onshore,
according to BCGs 2010 Global Wealth
report revealed in June.
Over the last 10 years, the onshore part
has come up five percentage points, said
Sven-Olaf Vathje, partner and managing
director at BCG Middle East. Although
regional investors continue to be risk-
averse, the current political unrest is
unlikely to alter their concentration of
wealth domestically, except in countries
directly hit by the turmoil, due to the strong
economic story, BCG officials said.
The growth in the regions overall wealth
is in tandem with the global trend. In 2010,
global assets under management grew by
eight per cent to $121.8 trillion from a year
earlier, surpassing the previous peak of
$111.8 trillion in 2007, on the back of equity
market recovery.
Global wealth is forecast to reach
$162 trillion in 2015, according to the
report, which excludes property. In MEA,
assets under management grew 8.6 per
cent to $4.5 trillion in 2010 from a year
earlier however, the recovery in MEA
began in 2009 when wealth jumped to
$4.1 trillion from $3.6 trillion in 2008.
Recovery was quick in the Middle
East because the general tendency to hold
equities is less in the Middle East than in
other parts of the world, said Vathje.
While Singapore boasted the highest
proportion of millionaire households in
2010, Saudi Arabia witnessed the highest
density of ultra-wealthy households,
defined as those with more than $100
million in assets under management.
Kuwait, Qatar and UAE also made it to
the top 10 list in terms of the highest
proportion of millionaire households.
Thats why you see a lot of international
players suddenly setting up shop in the
region because the competition is heating
up for these clients, said Vathje.
The financial crisis enabled local
players to wrestle portions of the asset
management pie from global competitors
as the regions wealthy repatriated offshore
funds to manage liquidity when bank
lending ground to a halt.
We saw a lot of inflow of funds from
offshore accounts because many of the
wealthy households are also entrepreneurs
and they needed funding for their
businesses, said Vathje. Once the funds
were here some of the local banks did a
good job of retaining the money.
Traditionally, regional investors tend to
hold their cash and deposits locally, while
allocating the management of their equity
portfolios, which are mostly in international
markets, to offshore operators.
Local wealth managers could also
gain from the investors growing appetite
for Gulf equities and capital-protected
products, according to a BCG survey
conducted about six months ago. Regional
investors prefer to invest in the oil and gas,
industrial manufacturing, and health and
education sectors. As for their geographical
focus after the Gulf, they are most keen on
India and South-east Asia.
If you look at the current portfolio, a
good portion of that is managed through
European private banks into European and
American assets, said Vathje. Thats not
the preference looking forward, which
is to build a higher share of the portfolio
into the region or tap into some of the
growing emerging markets, especially on
the Asian side.
Sver0|af Vatbje,
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INDEPENDENCE DAY
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The region welcomes its rst non
executive director 'matchmaking'
service as it strengthens corporate
governance regulation.
I
MMEDIATELY AFTER THE fall of the
Gulf economy in 2009, many questions
were asked. In Dubai, where the search
for millions of lost dollars frequently
ended with turning out the lining of
the CEOs pockets, the calls were most
urgent. What went wrong? How did we
lose the money? The answer is simple:
no-one was looking.
Since then, the UAE has taken strident
steps towards a corporate governance
framework with the aim of making
companies more transparent and
accountable. In April 2010, Emirates
Securities and Commodities Authority
(ESCA) updated the Code of Corporate
Governance for Joint-Stock Companies.
According to the new code listed
companies on UAE securities markets
must have a minimum of 30 per cent
independent director representation and
separate the role of chairman and CEO.
However, research from Hawkamah
Institute of Corporate Governance shows
a wide gap between legislation and reality
with an estimated 56 per cent of listed
companies in the MENA region having no
more than one independent director and
42.3 per cent of companies still combining
the function of chairman and CEO.
John Martin St. Valery, partner at NxD-
global, a new firm that match-makes
companies with potential independent
directors says that an independent party
adds strength, vitality and credibility to
the board.
Instead of viewing the independent
director as a tick the box exercise,
companies must realise that a truly
independent board member can not
only bring new expertise and strategy to
the equation, but this framework also
attracts investors. With any external
parties, the first thing they want to see is
transparency, he adds.
Owner directors have always been
slightly autocratic. Progressive and
forward-thinking companies have
recognised that disclosure though it
might sound uncomfortable initially
raises the perception of a company to
potential stakeholders.
Founded in January this year, the NxD-
global service identifies, screens and
recommends independent directors that
are suited to the needs of its clients.
But what makes a truly independent
board member?
Well obviously they cant be related
or married to anyone in the company,
or work at the company or have any
interests in the company, says St. Valery.
The partner adds that most non-executive
directorships are paid, except in some
cases where the director is so committed
to the cause often a government cause
that they are willing to give their time
for free.
It is a stringent vetting process so
that we understand their background
education and the particular sector in
which they want to work some apply
to us, and some we approach directly. Its
important for us to match them properly,
says St.Valery.
Prior to launch we had 12 individuals
and four companies. We are going through
the process of supplying to firms.
Regulatory enforcement of the number
of independent directors on the boards of
UAE-based public joint stock companies
in directly linked to the improvement of
conditions for foreign investment; post-
recession, this directive is more important
than ever,
ESCA has made great progress in
collecting the corporate governance
disclosures from 70 per cent of listed
companies in the UAE, but we must see
this increased to 100 per cent, said Nick
Nadal, director, Hawkamah, at a recent
panel meeting, suggesting that stronger
enforcement measures may be required to
ensure full compliance.
St Valery agrees that force may be the
next government measure, but says that
companies would be churlish not to realise
the already innate benefits of independent
directorship. Not least, being able to keep
tabs on where the money is going.
The financial crisis unearthed the
inextricable link between independence
and corporate governance. In a boom
market some of these things dont come
to mind, but in a crisis the holes are
exposed, he says.
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30 Briefing Independence Day.indd 30 6/28/11 6:35:52 PM
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CLCBAL ENEPCY DEMAND PI5E5
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Mass energy consumption beat real growth in both developed and emerging markets
in 20!0. Cas will be increasingly important in meeting Iuture demand.
K<OK9PG<K<IJ?8N$JD@K?
T
HE JUST-RELEASED BP Statistical
Review of World Energy remains
a seminal guide to trends in the global
energy industry. In his introduction,
CEO Bob Dudley said global energy
consumption rebounded strongly in 2010
after the recession. Consumption growth
reached 5.6 per cent, the highest rate
since 1973, increasing strongly for all
forms of energy and in all regions. Total
consumption of energy in 2010 easily
surpassed the pre-recession peak reached
in 2008, he said.
While emerging economy consumption
continued to rise rapidly, the big surprise
was that OECD countries also saw
growth well above average, he said.
Globally, energy consumption grew more
rapidly than the economy, so that the
energy intensity of economic activity
increased for a second consecutive year.
Global CO
2
emissions from fossil fuel
consumption will also have likely grown
strongly last year.
To take the data at face value, the
world has around 40 years of oil left, 50
years of natural gas and 120 years of coal,
although this does not account for future
discoveries of reserves.
Total global proved oil reserves have
risen from 1.003 trillion barrels in 1990 to
1.383 trillion barrels, an average annual
increase of 1.62 per cent. In 2010, the
Middle East (excluding North Africa)
accounted for 54.4 per cent of world
oil reserves, but only 30.3 per cent of
production. In a sign of the tightness of
global oil markets, 2010 consumption was
well ahead of production.
In 2010, global daily oil consumption
stood at 87.4 million barrels a day, up 3.9
per cent on the previous year and 6.4 per
cent above 2010 production of 82.1 mbd,
thus eating into reserve stocks.
Total global proved gas reserves stood
at 187.1 trillion cubic metres in 2010, up
from 125.7 tcm in 1990, an average annual
increase of two per cent. LNG imports
as a share of total imports stood at 30.52
per cent in 2010, up from 27.7 per cent
in 2009, a sign that strategies like Qatars
are headed in the right direction. Gas
pricing remains anomalistic, depending on
regional demand and delivery mechanism.
The emergence of US shale gas, deeper
deposits requiring more advanced drilling
techniques, could yet threaten the LNG
strategies of major exporters Qatar and,
increasingly, Australia.
The Russian Federation remains the
largest holder of global gas reserves at
23.9 per cent, followed by Iran, with 15.8
per cent and Qatar with 13.5 per cent. Iran
continues to be completely hamstrung by
sanctions, which mean that, even with
Chinese assistance, which many analysts
deem unlikely, it is still at least five years
away from turning Asseluyeh into a major
LNG export hub on a par with Ras Laffan.
One of the clearest messages to emerge
from the report is perhaps also one of the
more coded. In reserves to production
terms, that is, the number of years a
country can produce given known reserves
at current production levels, no region can
produce oil for more than 100 years, gas
for more than 200 years, or coal for more
than 300 years. This is a clear sign of the
increasing importance of gas over oil, as
is being demonstrated in international
energy markets.
Bob Dud|ev, cb|ef
execut|ve of BP.
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32 Briefing Global Energy.indd 32 6/28/11 6:36:19 PM
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C
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corp publishing ad gb.pdf 6/29/11 4:31:06 PM
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CCC AND AU5TPALIA PAMP UP DEAL5
KI8;<
Western Australia Premier Colin
Barnett visited the UAE and revealed a
blossoming relationship Ior minerals and
iI the Aussie Iarmers are willing Iood.
K<OK9PG<K<IJ?8N$JD@K?
produced in the world, and some 37 per
cent traded internationally, dominating
the global market, along with Brazil. The
state also accounts for seven per cent of
the worlds liquefied natural gas (LNG)
production, 18 per cent of alumina, 12 per
cent of nickel, seven per cent of gold and
25 per cent of the worlds mineral sands.
Around 500 mineral and hydrocarbons
projects are now under way on- and
offshore. Alumina, refined from bauxite, is
a key input to the aluminium industry, a
key industry in the UAE.
Around 66 per cent of Australias exports
to China and 42 per cent to Japan are
sourced from the state. Of the Chinese
investment funds entering Australia,
80 per cent are destined there. This is
a historic period of expansion, declares
Barnett, accompanied by a leap in
W
RITER BILL BRYSON called Perth
the remotest city on earth yet, with
the highest concentration of millionaires
in the world, and tied for eighth place in
the Economists 2010 list of the worlds
most liveable cities, Perths easy-going, sun
blessed lifestyle set on the Indian Ocean is
the envy of many.
Its hinterland, Western Australia,
which comprises the westernmost third
of the island continents land-mass, has a
population of only 2.3 million people: yet,
only eight countries in the world have a
larger area. Some 60 per cent of Australias
exports come from the sprawling western
state: mining and oil and gas form the
backbone of its economy but, says its
Prime Minister, Colin Barnett, the state is
much more than that.
Barnett was in the UAE at the
beginning of June to foster ties in Western
Australias agriculture and alumina trade
with the GCC and further encourage
what is a very rapidly growing business,
in education, health and cultural
relationships. The goal is to move closer
to the UAE in the years to come and
relations are strong, along with those with
Singapore, China, Japan and Korea.
The minerals story is one of astonishing
quality, scale and diversity: the state is
the source of 21 per cent of all iron ore
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34-35 Briefing Australia.indd 34 6/28/11 6:36:45 PM
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productive capacity, being driven largely by
development in China, India and Korea.
As part of one of the greatest investment
cycles ever seen, China surpassed Japans
steel production of 100 million tonnes
per annum (mtpa) in 1996. In 2010,
it produced 586mtpa, while Japans
output still stood at 100mtpa. Chinas
steel production is expected to plateau
at 1,100mtpa in the next decade or so.
Western Australia provides a staggering
40 per cent of the iron ore inputs to the
Chinese juggernaut. Remember, China is
still a developing nation, says Barnett.
The state is expected to double iron ore
production by the end of the decade. The
Pilbara iron ore region alone will bring two
new complete iron ore ports and two-four
entirely new heavy haulage rail systems
online to cope.
Barnett, however, dismisses accusations
that Western Australias economy is simply
a dig it up, dig it out economy. This
is not the trend of modern mining. Rio
Tinto has built a 1,500km railway in the
Pilbara, comprising a fleet that runs 30-car
trains by remote control. The industry
is changing, he says. He estimates that
$100 billion of projects have been finalised
and that a further $200 billion are in
various stages of planning over the next
five to seven years.
Barnett admits that Qatar is a world
LNG leader with gas resources at
13.5 per cent of the total that dwarf
Australias, at only two per cent of world
reserves. He estimates that his state has
reserves of 150 trillion cubic feet (tcf),
a figure likely to increase to 200 tcf, a
resource for at least the next 100 years.
As a clean, more flexible energy source,
world LNG demand, particularly in Asia,
is expected to keep rising. At present,
Australia is exporting 17mtpa and expects
this to increase to 60mtpa by the end of
the decade, in contrast to Qatars current
77mtpa production capacity.
The state sees itself as where the Gulf
of Mexico was 30 years ago, so the story
is likely to run and run. Chevron is now
largely an Australian company, Barnett
claims, and has made the hydrocarbons
industrys largest ever investments,
totalling $43 billion, in the Gorgon and
Wheatstone LNG projects, among others.
Most of its assets are now in Western
Australia, he says.
The state is carefully diversifying its
economy in a manner familiar to the GCC
and meetings on food security and the
sourcing of agricultural products from
Australia to the GCC were a highlight of
his trip. Agriculture dominates Western
Australias exports and it is a trading
nation very much as the UAE,
accounting for 44 per cent of Australias
total exports.
Agricultural exports are a $7 billion
a year industry for Australia, including
grain, especially wheat, sheep and cattle.
There is much to discuss on resource
security between the UAE and Australia,
and Barnett said this was a key issue in
his talks with Sheikh Hamdan bin Rashid,
Deputy Ruler of Dubai and Minister of
Finance, and other Dubai officials on
June 2.
Australian farms are generally not
corporate entities, says Barnett, implying
that this could be an obstacle to GCC firms
looking to acquire Australian agricultural
assets. Qatars Hassad Food bought the
prestigious Kaladbro sheep farming estate
in Victoria last year, while other regional
companies are looking to follow suit.
Wheat, livestock and chilled meat are
a key export from which the UAE can
benefit. Today, Australian farmers are
struggling with grain price volatility, and
are looking to the UAE to assist in certainty
of supply to overcome the fragility caused
by bad crop years.
In October, as a sign of its burgeoning
status worldwide, Western Australia will
host the Queen and 63 prime ministers in
the Commonwealth Heads of Government
summit. Barnett took the 150-turnout in
Abu Dhabi as a similar compliment to the
state of Western Australia and summed
up its approach to making its way in the
world: I believe in doing limited things,
but doing them superbly.
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34-35 Briefing Australia.indd 35 6/28/11 6:36:46 PM
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The UAE currently boasts the world's
tallest building and the world's largest
manmade islands now, welcome to the
world's biggest caviar Iactory.
K<OK9P8E><C8J?8?
N
EWLY IMPORTED WORKERS toil
inside steel tanks on a farm in
Mustaffah, Abu Dhabi. But this labour
isnt going into building up the emirates
new urban skyline. Instead, the workers
in question are sturgeon, flown in from
Frankfurt, Germany, as the foundation for
the worlds largest indoor caviar farm run
by the Royal Caviar Company.
The factory currently contains about
18 tonnes of the fish and it expects the
delivery of another 124 tonnes this year.
The first production of caviar and sturgeon
fillets is scheduled for late this year. Royal
Caviar expects to begin commercial sale of
its osetra caviar by the second half of 2012.
Abu Dhabi is an ideal location for
distribution to the worlds growing markets
for high quality caviar, said Robert Harper,
group commercial director for the Bin
Salem Group, which is leading the project.
Abu Dhabis taste for caviar has
grown alongside its economic prowess.
Though Russian and other European
expatriates are still the biggest customers
locally, restaurateurs said the increasingly
sophisticated palate of Emiratis and other
Gulf residents were boosting demand for
the delicacy. And executives said Royal
Caviars location in the Gulf makes it an
ideal distribution point to satiate booming
appetites for the eggs in Far East markets,
especially China. One gram of the Emirati
caviar will cost between $4 to $6.
Harper said world demand for caviar is
estimated at 400 tonnes a year. Right now,
only about 120 is produced annually. Wild
sturgeon from the Caspian Sea was placed
on the endangered species list in 2006.
Farms like Royal Caviar plan to help fill
that gap in supply. At full production
in 2015, the 50,000-square-metre facility
will crank out 35 tonnes of caviar and
700 tonnes of sturgeon meat annually.
Royal Caviar is a partnership between
Bin Salem and United Food Technologies of
Germany, which specialises in aquaculture
facilities. The $120 million facility features
a state-of-the-art monitoring system that
will ensure the sensitive fish are swimming
along in an optimal environment.
Temperatures will be kept from 15
degrees Celsius to 20 degrees Celsius,
depending on where the fish is in its
growth cycle. Technicians will use
ultrasound when the fish are three-years-
old to separate the males from the females
the former go on to become sturgeon
fillets. At four-and-a-half-years old, another
ultrasound is performed to determine if the
roe are ready to eat.
After the eggs have been harvested and
the fish fillets cut, the rest of the fish the
skin, bones and head will be ground into
compost and used as fertiliser. About 90
per cent of the water in each of the tanks
will be recycled through a filtration system.
Any wastewater will be turned over to the
Abu Dhabi Municipality as grey water for
use in irrigation throughout the city.
Since Caspian and Siberian sturgeon
need at least four years to produce caviar,
Royal Caviar flew in 22 fish from Germany
to help stock the tanks in the meantime.
This year we dont expect a profit, but
we expect a profit by the second year and
positive cash flow, says Michel Nassour,
Bin Salems chief financial officer.
To kick off the hatchery, United
Technologies made a gift to Royal Caviar
of 20 rare albino European sturgeon, from
which the first batch of wholly Emirati
caviar will be harvested. In the meantime,
the company plans to unveil its line of
retail products this fall. We will make
caviar available and approachable, even
if it is an elite product, Harper says.
We will help more people obtain caviar
and make it a part of their special
occasion protocol.
0re ora of L|rat|
cu|t|vated cav|ar W||| cost
betWeer S4 to S6.
36 Briefing big catch - Industries.indd 36 6/28/11 6:37:23 PM
The Rolex Tower - a distinguished new address.
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always in distinguished style.
New inventory available for lease. Call the Asteco Leasing team today for an appointment to view.
Customer Service Centre: +971 4 403 7700
www.asteco.com
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PLAY TIME
In a bid to shore up morale postrecession, local rms have hocked to team building
events. But can a day's 'bonding' really liIt the bottom line?
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Corterders at Duba|'s
Percu|es Iropbv evert.
T
O SOME THE term corporate team
building may sound gimmicky,
and for others it might raise eyebrows,
but considering the boom in these events
in the UAE, its safe to hypothesise
that the concept is perhaps a bit
misunderstood. But that seems to be
changing fast, as team building events
are fast being adopted by companies of
all shapes and sizes in the UAE, and are
increasingly being integrated into annual
business plans.
Corporate team building is not simply
throwing a staff barbecue or dinner.
Nor is it handing a couple of free cinema
tickets to the employee of the month.
Simply put, its an organised challenge
for employees of a firm (or firms), in
which staff work together to achieve a
common goal and, in doing so, develop
their relationships with each other. It
might sound like another day at the
office, except the challenges corporate
team building events offer are rather fun.
In February, a total of 80 corporate
teams, comprised of five to seven
players, participated in an inter company
team building and networking event
known as the Hercules Trophy in
Dubai. Held for the first time outside its
native Belgium, the event at the Sevens
Stadium featured 12 labours or sporting
challenges with a fun twist designed
to help players master teamwork and
increase company loyalty.
The event attracted teams from a slew
of top companies such as Middle East
jobs site Bayt.com, cosmetics giant Este
Lauder, Al Futtaim Logistics, international
relocation firm MoveOne, FedEx Express,
the Dubai Ladies Club, and cargo and
logistics firm Danzas whose team
won the inaugural Hercules Trophy.
Its about developing a great team
spirit, and this is what you take back
to the workplace, said Michael Buckley,
general manager Global Forwarding,
at Danzas AEI Emirates LLC, the winning
team at the inaugural Hercules Event.
The results of a good team building
event are so much better than a typical
social function like an annual staff
dinner party, says Tom Nauwelaerts,
managing director of Al Futtaim Logistics.
><KK@E>@KI@>?K
Hazel Jackson is the CEO of Biz-
events, the leading team building
company in the UAE, and local
representatives of the Hercules Trophy.
Jackson says the idea of team building
events has grown steadily since the
company kicked off in 2004.
Companies need to use multiple ways
to foster and promote teamwork. Good
team building products are strategically
designed to meet specific behavioural
needs improving communication;
building belief in the team; problem
solving together; unleashing creativity,
she says. Team bonding is also
important its about sharing an
experience together and having fun.
The type of companies that participate
in team building events are a mix
between multi-national brands and
government-affiliated entities, explains
Jackson, with business equally divided
between Dubai and Abu Dhabi, and
GCC growth is on the up with a new
sub-franchise operation in Qatar.
While the 2009 recession saw a
30 per cent drop in team building
numbers and revenue, business in
2010 bounced back with an overall 34
per cent increase, to 20072008 levels.
The first-quarter of 2011 is also looking
rosy, as business is up again on the
first-quarter of 2010 by 43 per cent.
Yves Vekemans, co-founder of the
Hercules Trophy in Belgium 15 years
ago, says: In Dubai and the UAE,
people understand the connection
between sports, business and
entertainment.
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40-44 Nuclear Power.indd 41 6/28/11 7:46:03 PM
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increased to a level where other options
have become feasible, said al-Shehri.
All Gulf states, except gas-rich Qatar,
are considering nuclear power generation
and renewables due to their shortage of
gas, increase in domestic consumption,
and the need to free up oil used in power
generation for export. Qatar, which sits
on the worlds third largest gas reserves,
is the only Gulf country that doesnt
experience power cuts in the peak
consumption months of summer, when
residents ramp up air-conditioning usage.
The major issue for the Arab states is
how to improve their economic situation
and avoid the blackouts that are seemingly
spreading around the region because the
energy grid is stressed, said Theodore
Karasik, the director of research and
development at the Dubai-based Institute
for Near East and Gulf Military Analysis.
The gas shortage is compounded by
the Gulfs subsidised pricing of fuel
and electricity plus poor insulation
of buildings, which allows power to be
wasted. Subsidised pricing is unlikely
to be removed soon, particularly in
these politically sensitive times, when
governments are increasing social
benefits to please a restless populace
On-the-heels of the UAEs decision in
2009 to award South Korean firms $20
billion to build the first nuclear reactors
in the Gulf region in 2017, Jordan plans
to award contracts to build its first $5
billion nuclear plant by next year.
But all eyes are on Saudi Arabia
holder of a fifth of global oil reserves,
and next in line for a nuclear shift.
The kingdom is currently struggling to
reduce its overarching dependence on
crude oil for domestic power generation.
The country must also keep pace with
an increase in consumption sparked by
population growth that is expected to
lift peak-time power demand to over
120,000 megawatts (MW) by 2032 from
around 50,000 MW in 2011, according to
Abdullah Al-Shehri, governor of Saudi
Arabias Electricity and Co-Generation
Regulatory Authority.
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oer cen o' |e wor|J's oroven o|| reserves. Jev|seJ a nuc|ear
enerov oo||cv o |e|o nee a orow|no oower JenanJ |a |s
r|s|no |v a|ou ]0 oer cen a vear |e resu| was a Jec|s|on
o |u||J nuc|ear o|ans anJ ooen|a||v |econe |e Hrs
Ara| counrv o oroJuce e|ecr|c|v us|no nuc|ear enerov.
w||c| cou|J suoo|v uo o a ouarer o' |e counrv's oower
A consor|un |eJ |v orea |ecr|c ower Coro o' Sou|
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'our nuc|ear reacors |n |e UA's Wesern reo|on. eac|
w|| a caoac|v o oenerae ].=00 W |e Hrs reacor |s
exoeceJ o sar |n 0]. |u |e Jec|s|on on |e source
o' |e 'ue| |as ve o |e naJe as |e UA |as 'or'e|eJ
|e r|o| o enr|c| uran|un esourceooor u|a| |s a|so
cons|Jer|no us|no nuc|ear enerov o nee |s oower neeJs
|e UA |s exoeceJ o |e a noJe| 'or |e res o' |e reo|on
'or |e oursu| o' nuc|ear enerov anJ |as en||seJ oo
o'Hc|a|s |nc|uJ|no ans b||x. |e 'orner J|recor oenera| o'
|e Un|eJ Na|on's nuc|ear wac|Joo nerna|ona| Aon|c
nerov Aoencv AA). o c|a|r |e counrv' nerna|ona|
AJv|sorv boarJ. w||c| |s oversee|no orooress o' |e nuc|ear
oro|ec o||ow|no Jaoan's nuc|ear J|saser. |e UA |as
a'HrneJ |s conn|nen o |e nuc|ear orooranne anJ
w||| non|or anv Jeve|oonens |n |e ||o| o' |nc|Jen
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To reach 120,000 MW, it is going
to cost probably in the range of $250
billion, said Al-Shehri on the sidelines
of the Nuclear Power World conference
held last month. It is likely going to be
a mix of gas powered plants, nuclear and
renewables and the rest will be covered
by crude and heavy fuel.
Saudi Arabia currently produces about
50 per cent of its power from burning
crude oil and other products, with the
remainder from gas. Saudi officials have
said they would like to half the usage
of fossil fuels in power generation, but
this plan depends on several factors,
including cost, feasibility, and oil prices.
Saudi Arabia created the King Abdullah
City for Atomic and Renewable Energy
to devise a strategy to introduce clean
energy and the agency is expected to
reveal a detailed plan this year.
If current power consumption levels
persist, Saudi daily energy demand
could more than double to over eight
million barrels of oil a day by 2028 from
3.4 million barrels of oil a day in 2009,
Khalid al-Falih, Saudi Aramcos chief
executive officer warned last year.
Fuel oil prices in the international
markets rose last year and this year have
Saud| Araco's
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40-44 Nuclear Power.indd 42 6/28/11 7:46:05 PM
CULF BUSlNLSS[+*
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|e s|x Cu|' saes nav |o|J nore |an a ||rJ o' |e wor|J's oroven o|| reserves. |u
|ev are |arJ oresseJ o nee r|s|no annua| JenanJ 'or oower |a |s |reaen|no
o ea |no |e|r o|| exoors ower JenanJ |s suro|no Jue o ooou|a|on orow|.
vas oovernnen soenJ|no oroorannes. an exoanJ|no oeroc|en|ca| |nJusrv anJ
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anJ |ous|no oro|ecs a|e uo nore e|ecr|c|v |e neeJ 'or aoo|no nuc|ear anJ
renewa||e enerov |s exacer|aeJ |v a s|oraoe o' oas. w||c| |ncreas|no|v |s
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as 'eeJsoc| 'or |nJusr|a| o|ans Near|v a|| Cu|' saes. exceo oasr|c| Oaar.
su''er 'ron oower cus |n |e oea| consuno|on non|s o' sunner Cu|' saes
|ave r|eJ o cone uo w|| |nJ|v|Jua| anJ co||ec|ve so|u|ons o Jea| w|| |e
oower s|oraoes n 00o. |e s|xnen|er Cu|' Coooera|on Counc|| sa|J | was
suJv|no Jeve|oo|no a |o|n nuc|ear enerov orooranne A|| Cu|' saes. exceo
Onan. |ave a|so ||n|eJ uo |e|r oower newor|s o a S]= |||||on reo|ona| oower
or|J |a nav evenua||v save |en a|ou So |||||on |n e|ecr|c|v coss
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"1he recenL proLesL wave
may pose securiLy risks
LhaL could be as dangerous
as Japan's propensiLy
lor earLhquakes. Afi[Xe
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demanding better economic conditions.
In Saudi Arabia, the government is
subsidising the fuel for power plants
and this subsidy is roughly about 50
billion riyals with the current oil prices,
said al-Shehri.
Saudi Arabias hunger for power
is piquing the interest of local and
international firms, who are expected
to target the region more aggressively
to make up for loss of business if more
industrialised countries follow Germany
and decide to abandon nuclear power.
Construction goliath Saudi Binladin
Abdu||ab A|Sbebr|,
ooverror of Saud|
Arab|a's L|ectr|c|tv ard
Coererat|or Reou|atorv
Autbor|tv
Ibe reed for
ruc|ear ererov |s
exacerbated bv oas
sbortaoe.
Group has already teamed up with
Frances Areva in order to bid for nuclear
and renewable contracts in Saudi Arabia
and other Gulf states. The Saudi group
expects to win billions of dollars worth of
contracts once Saudi Arabia implements
its clean energy programme, according to
executive board member Gasem Al-Shaikh.
We hope to hear the initial guidelines
for the private sector in the coming two
to three months. The market is ready to
build, said Al-Shaikh.
But the nuclear option carries a set
of risks for companies wishing to enter
the Middle East. The recent protest wave
may pose security risks that could be
as dangerous as Japans propensity for
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40-44 Nuclear Power.indd 43 6/28/11 7:46:16 PM
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earthquakes. Jordan, which has been
trying for years to launch its own nuclear
reactor, could fall victim to the perceived
risk in building a nuclear plant in such a
volatile region.
Anyone who wants to invest will
reassess the risk evaluation, and
investors may raise the rate of return
because they may consider it a risky
project, said Bahjat Aulimat, general
planning section head at Jordans
National Electric Power Co.
Western states may be wary of giving
the green-light for their allies in the region
to build nuclear power reactors, only to
see these regimes toppled by popular
uprisings. Egypt had initiated plans for
building nuclear reactors under the ousted
rule of Hosni Mubarak, but a future
leadership that is hostile to the West
may not elicit support in seeking nuclear
power and could even face sanctions, Iran
being a case in point. While Iran has said
its nuclear programme is peaceful and
targeted at power generation, suspicions
that it may be a covert programme to
develop weapons has led to a series of
UN sanctions.
Another issue is uranium enrichment
a technology privy only to a handful of
states. The UAE has forfeited its right to
uranium enrichment, but Jordan and Saudi
Arabia are not ready yet to forego that
right. Jordan, in particular, has a greater
impetus to protect its right, since it holds
uranium resources. Jordans King Abdullah
has also accused Israel of trying to block
Jordans nuclear bid and the country has
yet to conclude a nuclear co-operation
agreement with the US, which wants to
curtail its right to enrich uranium.
Jordan has the 11th largest uranium
reserves and Amman will pursue that
option given that the international
environment has changed so dramatically
because of the Arab Spring; it doesn't
matter what Israel and the US think,
said Karasik.
While nuclear power poses political
challenges, the cost of building such
plants is another hurdle to surmount.
For resource-barren Jordan, the nuclear
option is needed to cut its dependence
on imported Egyptian gas, which was
used for more than 90 per cent of its
power generation before attacks on the
gas pipeline halted its flow this year.
The attacks forced Jordan to import oil
products for power generation at a time
when oil prices were spiralling out of
control and the Jordanian government is
subsidising prices. Jordans losses from
the halt in Egyptian gas supply could top
$1 billion in 2011, according to Aulimat.
Jordan is looking to build a 1,000
MW nuclear plant by 2020 to help meet
K?<NFIC;JC8I><JKEL:C<8IGC8EKJ
the eight per cent annual increase in
power consumption, which is expected
to boost demand to 5,000 MW by 2020,
from 3,000 MW now. It floated bids in
January to build the plant and expects to
receive proposals from three pre-qualified
companies in July. It has plans to invite
operators/investors to bid in July.
While Saudi Arabia is unlikely to face
financing problems, Jordan has yet to
lure investors to help foot the bill for its
nuclear plant, which is expected to be
financed 30 per cent via equity and the
remainder through debt.
There has been investment interest
from UAE and Kuwait for the project
in the last few months, said Aulimat,
adding that Jordan is also whispering
into the ears of Islamic and Arab funds.
As industrialised countries balk at
the radiation risk sparked by nuclear
capacity, the increasing irony is that
region with the worlds largest energy
reserves is running short on power
and shorter on options.
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INSPIRINGOPPORTUNITIES
www.medsecurities.com
AtMedsecurities,wearegearedtowardsthewealthpreservationofourcustomers.
Our drive to perform stimulates a consistent response to the changing market
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+-&JULY 20
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I would have said youre crazy, says V.
Shankar, CEO of Standard Chartered for
EMEA and the Americas, if in January
youd come to me and said expect
regime change in Tunisia, Egypt, plus
whats happened in Libya and Bahrain.
It has taken everyone by surprise, but
when you have fundamental mega-events
that change the world very often you
cant predict them.
The political upheaval is a watershed
moment for the Gulf, he says, but the
writing was on the wall for a while. If
you look at all these places there is a
commonality, including the increasing
demographic of educated youth, growing
use of social media, high unemployment
and inflation.
Bahrains uprisings, in particular,
unnerved foreign banks operating in the
Gulf. Political violence led to reports that
the likes of BNP Paribas, Citigroup, HSBC
and Standard Chartered had lifted staff
out of the kingdom.
But Shankar is defiant: Despite what
you read we have shifted nobody out of
Bahrain. Everyone is in exactly the same
place as they were in December. Even
during the protests Dan Azzi, our co-head
of wholesale banking, was in town and
did not leave the country. The aim was to
keep branches open every day.
Standard Chartered has a sizeable
presence in Bahrain, although it makes
up less than one per cent of the banks
global business. Shankar says overall the
Gulf unrest has had little impact on the
performance of the bank. His confidence
caps a solid set of results last year,
which saw the banks net profit in the
Middle East and South Asia region more
than double to $841 million. In the UAE
V. Shankar, CLO ol SLandard CharLered, says Lhe unresL is inlaLing banking wages buL he remains conldenL LhaL Lhe UAL will be Lhe lnancial services powerhouse lor Lhe region.
alone, its income grew six per cent to $1
billion. Standard Chartered, whose roots
are traced to British colonial expansion
in Africa and India in the 19th century
and now earns most of its profit in Asia,
is seeing the UAE emerge as a standout
performer, says Shankar.
Dubai has emerged as a regional
safe haven and is benefiting from the
unrest in its core areas of tourism,
transportation and trade. The UAE
government has provided support for
banks by pumping in capital, therefore
providing a floor for credit risk. Some
banks still need to work out their legacy
portfolios but with valuations improving
and better macroeconomic conditions in
general the picture is looking good.
The anti-government movements in
Bahrain, Oman, Egypt and Libya have
pushed up the cost of borrowing across
46-49 Shankar.indd 46 6/28/11 7:58:31 PM
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V. Shankar, CLO ol SLandard CharLered, says Lhe unresL is inlaLing banking wages buL he remains conldenL LhaL Lhe UAL will be Lhe lnancial services powerhouse lor Lhe region.
46-49 Shankar.indd 47 6/28/11 7:58:37 PM
+/&JULY 20
the region as well as raised oil prices,
but it wont hurt Dubais ability to
refinance about $18 billion of loans this
year, he says.
Dubai and its state-owned companies
ran up debt of at least $129.3 billion,
according to estimates by Credit Suisse
Group, as the emirate developed its
property, tourism, trade and financial-
services industries.
Shankar says this financial legacy is
unlikely to stoke political instability in
the Emirates because of the high level
of per capita affluence. The chances
of unrest are negligible to non-existent.
The local population is pretty well
looked after. Theres been a far better
distribution of wealth in the UAE,
especially in the form of subsidies, than
other countries in the region. Put it this
way, you dont see many poor Emiratis.
Plus, theres a far higher degree of
openess in the system which acts like a
FD8E1 1he ruler is
balancing volaLile
lorces. 1he challenge is
Lo seLLle Lhings down.
L8<1 Has bounced
back sLrongly: iL's Lheirs
Lo lose.
J8L;@8I89@81BenelLed lrom oil prices, buL
needs Lo push Lhrough wider relorms.
BLN8@K1SignilcanL room lor relorm
ouLside Lhe uplilL lrom Lhe price ol oil.
H8K8I1 ln a sweeL spoL.
LveryLhing is going righL lor Lhem.
98?I8@E1 SLabiliLy is being resLored,
buL longLerm underlying issues need
addressing.
We|| corrected: PL Nattar A| Iaver,
cba|rar of tbe Road ard Irarsport
Autbor|tv, W|tb V. Sbar|ar.
pressure release valve. When you want
to look for opportunities in the region
for people that dont belong to the royal
family, the one place you stand a chance
of having a meritocracy is Dubai.
Bahrain, the smallest country in the
Gulf with around 1.1 million inhabitants,
established itself as a regional financial
hub in the 1970s, long before the rise of
Dubai and Doha. But a prolonged period
of unrest in Bahrain could serve Doha and
Dubai well as investors seek stability.
The DIFC is the busiest Ive ever
seen it. This is also related to the fact
that globally theres been an economic
recovery and people that left Dubai
are coming back. Plus, office rental
rates have been adjusted down to more
realistic levels and more in line with the
M%J?8EB8IJ>LC=JE8GJ?FK
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46-49 Shankar.indd 48 6/28/11 7:58:42 PM
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market, so that has helped activity. Add
to this Dubais attractiveness from a tax
perspective and things are looking good.
There is trouble in paradise though for
the British bank, which has become a
victim of its Asia focus. A new UK bank
levy is likely to put it at a competitive
disadvantage against overseas rivals
Only 2,000 of Standard Chartered's
85,000 staff are based in the UK, but
the bank is still subject to the levy,
which represents an additional fixed
cost for larger banks operating in the
UK. British finance minister George
Osborne recently proposed raising
the bank levy rate next year in order
to offset a cut in UK corporation tax,
but analysts say Standard Chartered,
and rivals HSBC, would be impacted
slightly more than their rivals since they
make most of their profits overseas.
Shankar says the rationale for keeping its
headquarters in London is weakening, but
it has no plans to shift headquarters. He
adds that a recent clampdown in Europe
on bankers bonuses is also hurting the
firm The rules on compensation that
apply to British and European banks
also put us at an additional competitive
disadvantage. What we need is a globally
consistent set of principles that apply to
all. In short, we need a level playing field.
Cost control remains a major concern
for banks in the Gulf as scarcity of talent,
intense competition in the industry and
reluctance among bankers to settle in
the region force salaries rapidly higher.
Standard Chartereds staff costs rose 17
per cent last year while headcount climbed
nine per cent, according to recent company
documents. The bottom line is that the
bank is paying more to attract employees.
The bank is expected to hire about 1,000
staff this year, reversing this outward flow.
Shankar says: When you talk about
expenses there is always a period in
which you invest and harvest. Its very
difficult for both these concepts to
co-exist. In 2010, we invested at a rate
higher than our income, particularly in
the wholesale bank. The year before the
growth rate outran the costs, so if you
look at it as a two-year cycle then 2011
is a year that we wont invest much but
will see a return.
Staff costs for its employees
worldwide accounted for $5.76 billion
last year, a 17.3 per cent increase on
2009. Of that figure, total compensation
for the banks five highest earners
accounted for $41.7 million.
The ongoing unrest in the region has
applied upward pressure to salaries
as foreign candidates factor in a risk
premium of working amid instability.
Most analysts agree that the longer these
risks exist the worse it gets for banks
cost control efforts.
Shankar says Standard Chartereds heavy
UAE bias, where it employs 2,400 of the
3,000 MENA staff and earns most of its
income, will stand it in good stead.
?H1London, UK F==@:<J1,700 :FLEKI@<J1 70 JK8==185,000
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46-49 Shankar.indd 49 6/28/11 7:58:45 PM
,'&JULY 20
WHEN
BRAN
GO BAD
S
D
1he Cull sLaLes lace a painlul image clean up operaLion on Lhe inLernaLional sLage
il Lhe region doesn'L Lurn around maLLers lasL.
K<OK9PIP8E?8II@JFE
Experts have warned Bahrain that it faces
an unprecedented brand clean-up job if
its to survive. Recent political violence
in the Gulf state left the countrys
national brand, built around the slogan
Business Friendly Bahrain, in shreds.
After years of honing an image and
selling it to the world, Bahrain now faces
its most daunting PR campaign yet. The
tagline held true up until the government
revealed their unfriendly pragmatism of
political and religious parties, which was
influenced by a bigger regional agenda,
said Lana Bdeir, managing director of
FutureBrand Middle East & Africa. I say
it is time for a Bahrain rebrand.
The art of nation branding hit the
headlines in recent years as states looked
to limit the damage to their countrys
identity caused by economic mishandling
during the financial crisis. Greece and
Dubais chronic debt had a huge impact
on their international image.
Meanwhile, nation-branding experts
were called in to tackle the stigma
attached to Austria after Josef Frizl's
horrific crimes in his cellar.
In the Gulf, states have been carving
out their own unique brands, but the
current unrest has jeopardised these
efforts. There is now a risk of contagion
across all country brands in the Gulf,
confirming a latent fear in the West of
instability in the Middle East, said Ares
Kalandides, a place branding expert
based in Germany. Because the Middle
East has been seen as volatile and
unstable by some in Europe and the US,
particularly because of the Palestine-
Israel situation, there was a feeling
that this would also be true of the Gulf
countries. Countries like Bahrain built
a brand that disproved this stereotype,
but now theres a sense of told you so.
And there will be people that will avoid
investing in or travelling to the region.
National brands in the Gulf have been
damaged particularly in Europe, with
50-53 Branding.indd 50 6/28/11 7:54:48 PM
CULF BUSlNLSS&,(
9I8E;@E>
tourists opting for more Mediterranean
holidays this year and avoiding Arab
countries, said Kalandides. But he said
that educated observers in the West
would be able to identify the hope for
long-term change thats emerging in the
Arab Spring.
;L98@9FLE:<J98:B
Brand gurus say Dubai has built the
most striking vision of itself on the world
stage, led by powerful corporate entities
like Emirates Airline and the Jumeriah
Group and projects like The Palm and
Burj Khalifa.
Given that country branding is still
a relatively new practice for many
governments, the process of building
a strong country brand is often left to
marketing and communication activities
and primarily focused at tourism
campaigns and promotions. But many
say brand development is more than
just putting yourself on the map. For
instance, although Dubai has led the way
in tourism and business friendliness, it
lacks clarity on the value system that the
nation lives by.
Fundamentally though, Dubai has
closely associated itself with economic
prosperity, a brand attribute that always
shines a positive light on a destination.
The turmoil in Bahrain has helped
Dubai in this character trait, said Gaurav
Sinha, the managing director of branding
specialists Insignia. Its amplified the
strength of what Dubai has to offer,
from investment, progressive thinking to
leisure and tourism. Sinha added that
the negative stigma attached to Bahrain
is unlikely to rub off on Dubai. For New
Yorkers or Londoners reading headlines
about the protests, I feel the strength of
brands like Emirates will automatically
correct the negative perceptions.
Received wisdom has it that these
major Gulf companies could not build
such a prestigious brand unless there
was support from a stable government
and strong economy.
98?I8@EJ:C<8E$LGAF9
Countries like Bahrain and Qatar have
been free to shape their nation brands
in recent years partly because there was
limited knowledge of them around the
world. They almost had a blank slate
to work with, unlike Western nations,
which were already established as brands
over centuries.
Qatar has emphasised luxury, prestige
and modernity combined with tradition
through power brands like Qatar
Airways and strength in commerce with
RasGas, Qatar National Bank and Qatar
Petroleum. But marketing specialists say
while the country gained international
currency with these sub-brands they
do not form a cohesive whole. Indeed,
internationally, people often see Qatar as
merely a wealthy emirate as a result of
its gas reserves.
Bahrain has also struggled to achieve
a multi-dimensional brand image,
mainly because it has doggedly worked
at driving home its single consistent
"BuL many say YiXe[
[\m\cfgd\ek`jdfi\k_Xealjk
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50-53 Branding.indd 51 6/28/11 7:54:50 PM
,)&JULY 20
9I8E;@E>
message as a world-class banking hub.
For this reason the recent troubles have
been so devastating, as international
banks and financial institutions threaten
to pull out of the country. But the impact
of the political protests on business may
not be as cut and dried as first thought,
said Kalandides. Businesses often dont
care if its a dictatorship or democracy.
Its the business friendly climate that
matters, and it seems that not a lot of
serious damage has been done to that.
If the question is about the security of
employees at these foreign businesses
then thats a serious problem.
A brands security is often about
perception. For instance, Colombia
improved its crime rates and in fact
had a much lower level of criminality
compared to Buenos Aires, but it still
attracted the more negative security
R
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U
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associations because of the long history
of risks. In general, businesses will be
put off if regulations and local laws
change and become business unfriendly,
he added.
Fundamentally, Bahrain has clearly
lost the support of some of its citizens.
Meanwhile, purely from a brand
perspective, it has dented the confidence
of the outside world, said Bdeir.
Brands are built on experiences. The
damage that has been done to Bahrain
as a nation brand will take years to
repair. This can only be achieved if they
start with changing whats broken in the
system. Communication alone will not
solve their brand problem.
Experts like Bdeir say the clean-up
operation for Bahrains brand must start
with resolving the political violence
and restoring stability. Only
then can work begin on
resuscitating its image.
It has become clear that
theres no chance to re-brand
a country as safe while
its still unsafe, mainly
because branding is about
creating perception, not
changing reality.
Gaurav adds: From
a branding point of view, what Bahrain
needs is a degree of balance between
the rational and emotional benefits of
the country. This means building safety
and security for business with a sense of
austerity, while maintaining the countrys
aspirational values.
Great logic creates great magic, so
a testimonial campaign about Bahrains
successes would be a good place to
start. I firmly believe that the damage
is not irreparable. Travellers travel and
people forget. People still travelled after
SARS and 9/11.
There is consensus that Bahrain needs
to re-draft its brand and re-evaluate its
core strengths in light of recent events,
so tourists and investors know what
theyre buying into. This process may
start by gluing back the broken pieces
of its image, but to guarantee future
strength there needs to be a commitment
from rulers to invest in a brand building
process that does not have a short-term
end goal but is developed and grown
organically over time.
The Arab Spring might just be the
necessary catalyst for those governments
who have been reluctant to open up and
actively embrace change, particularly in
the national brand.

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50-53 Branding.indd 52 6/28/11 7:55:01 PM
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Stuff Website Ad_GB.indd 2 6/29/11 9:51 AM
,+&JULY 20
H8K8IJC<8GF==8@K?
Ahead ol Lhe World Cup, OaLar has disallowed convenLional banks lrom holding
lslamic lnance arms and crunched down on lending limiLs. IpXe?Xii`jfe
invesLigaLes Lhe reasons behind Lhe mandaLes and asks wheLher Lhe rulings will
seL a precedenL across Lhe Cull.
@CCLJKI8K@FE9PK8I8BG8I<B?
BANK
54-57 Qatar Banking copy.indd 54 6/28/11 7:59:56 PM
>LC=9LJ@E<JJ&,,
98EB@E>
H8K8IJC<8GF==8@K?
Qatars decision to restrict Islamic banking
has set a precedent that other regulators
in the Gulf will follow, according to
investment bankers. Qatar Central Bank
(QCB) surprised markets in February after
ordering conventional banks to close their
Islamic windows by the end of the year.
The move, which is likely to gift market
share to Qatar-based Shariah compliant
lenders once the ruling comes into effect,
angered international banks.
ISLAMIC
FINANCE
DIVISION
But it seems other jurisdictions in
the Gulf are likely to follow QCBs lead,
said Salah Jaidah, Deutsche Bank's chief
country officer in Qatar. It will definitely
set a precedent in the region, in the sense
that most other regulators are now going
to provide banks that declare themselves
as Shariah-compliant with the full support
of segregation-type regulations and how
these rules are applied. Kuwait was first
to do this, even before Qatar. I expect
others to follow, said Jaidah.
Analysts regard the co-mingling of
funds and, in particular, the use of
conventional fixed-income deposits to
fund Islamic assets as a main reason
for the QCB intervention. It resulted in
HSBC Holdings announcing it will close
its Islamic banking unit HSBC Amanah
by 31 December and migrate staff into its
conventional business.
Jaidah added: QCB deemed it
54-57 Qatar Banking copy.indd 55 6/28/11 7:59:56 PM
,-&JULY 20
98EB@E>
necessary to segregate the Islamic
assets to avoid any conflicts at
conventional banks. But its also a
matter of allowing the four Islamic
banks a fair market share.
This is not unusual. Central
banks tend to monitor the
performance of banks
and what clients expect;
if you need to reassure
customers over
Shariah-compliant
assets then thats
what will happen.
The likelihood
is that other Gulf central banks will not
change policy imminently, but will instead
see Qatars decision as a benchmark
to monitor the success or failure of the
policy. One Qatar-based analyst said:
Central banks will be keeping a close eye
on what happens next before making any
rash decisions.
C<JJ:?F@:<
In the short-term, the rule changes are
expected to reduce competition in the
Qatar banking sector, with some seeing
the edict as a windfall for standalone
Islamic banks, which will benefit from a
much larger customer base. Eventually
this could force up interest rates on loans
to borrowers in the private sector, as
choice on Islamic lending is reduced, said
Jaidah, Real estate has found it difficult
to borrow from banks outside of Qatar
because of market conditions recently,
so loans are naturally more locally
syndicated. If borrowers have less choice
then they may get tighter terms, he said.
In isolation, you could say interest
rates on these loans would be higher, but
that would ignore that Qatari banks are
flush with liquidity, which they are. This
will offset price rises. But the reduced
competition in the Islamic debt financing
market could be sowing the seeds for
higher costs for borrowers down the road.
There were also fears that international
banks would be barred from activities in
project finance, where business had been
expected to balloon as Qatar prepared to
host the 2022 Fifa World Cup. Rumours
were rife that the likes of HSBC would
be unable to conduct financing using
sukuk, hijra or other Islamic instruments,
although they would still have access to
conventional finance.
But at this point it seems a
conventional bank will still be able to
OaLar has seven convenLional banks,
which pay and receive inLeresL on
deposiLs and loans, lour lslamic
lenders, which don'L, and seven
loreign insLiLuLions operaLing in
Lhe counLry, including Lhe HSBC
uniL LhaL is scheduled Lo close.
lslamic banks are required Lo lollow
Muslim Shariah rules, which ban Lhe
paymenL and receipL ol inLeresL as
well as invesLmenLs in indusLries like
alcohol and gambling. lslamic lenders
pay a prolL insLead ol inLeresL, and
Lheir loans are backed by asseLs LhaL
may include an agreemenL where
Lhe bank and Lhe borrower agree
on Lhe cosL and a prolL margin.
@JC8D@:98EB@E>@EH8K8I
Efk\m\ipk_`e^ LhaL's going
Lo _Xgg\e`eHXkXi`jY\ZXlj\
f]k_\Nfic[:lg%K_\Y`^^\jk
Xi\X`ek_\e\ok('p\Xij`jk_\
`e]iXjkilZkli\j\Zkfi#which
includes anyLhing lrom airporLs,
porLs, rail and roads Lo hospiLals,
elecLriciLy and waLer."
Sbabzad Sbabbaz,
cb|ef execut|ve
of |rvestert
bar| 0|rvest.
Sa|ab Ja|dab, Deutscbe Bar|'s cb|ef courtrv
offcer |r 0atar.
operate on a single transaction or on
an advisory basis, but just not through
its fully-fledged Islamic operation. A
spokesman for HSBC was not available to
comment on the rules.
But Shahzad Shahbaz, chief executive
of investment bank QInvest, said there
will be enough project finance spoils
from the World Cup building frenzy to
keep all banks busy.
Financing for Qatars vast
infrastructure projects, which include
the World Cup, will get done the
conventional and Islamic method,
whether its public equity, private equity,
sukuk or bi-lateral funding. We will see
0atar|s car roW or|v
borroW a ax|u of
400,000 r|va|s over
four vears.
C
L
1
1
Y

l
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A
C
L
S
54-57 Qatar Banking copy.indd 56 6/28/11 8:00:02 PM
CULF BUSlNLSS&,.
98EB@E>
Bank of Qatar, the nations second-largest
bank, were cut 22 per cent, or 478
million riyals ($131 million) on the rule
changes by analysts at Credit Suisse.
For Doha Bank, the fourth-biggest
lender, profits were shaved by 10 per cent,
according to a report to clients. Because
the changes have negative implications
on growth, we think the time has come
to turn less positive on the sector,
Mohamad Hawa, an analyst at Credit
Suisse, said in a research report. He said
that banks profit margins would also be
squeezed after the capping of personal
loan rates at 6.5 per cent, compared to
current rates of up to nine per cent.
Analysts at Dubai-based investment
bank Rasmala have since scaled down
forecasts of consumer loan growth in
Qatar this year to about five per cent
from eight per cent to 10 per cent earlier
after the new lending rules.
But Qatar isnt the only country in
the region to have framed new rules on
consumer lending. The UAE announced
regulations earlier this year that came
ln February, OaLar CenLral Bank issued
a circular sLipulaLing LhaL convenLional
banks musL close Lheir lslamic windows
by Lhe end 20. 1he move shuL ouL some
ol Lhe region's key banking players.
Mashreq Al lslami, Lhe Sharia
complianL arm ol Dubai's Mashreq, was
blocked lrom obLaining a licence Lo
operaLe in Lhe Cull sLaLe as a resulL ol
Lhe cenLral bank's acLions, according
Lo Lhe bank's chiel execuLive.
Meanwhile, HSBC's Lale is even more
woelul. HSBC Amanah's lrsL branch in
OaLar opened lasL July aL a ceremony
aLLended by Lhe bank's Lhen chiel
execuLive, Michael Ceoghegan, and
Lhe cenLral bank's governor, Sheikh
Abdullah bin Saud Al 1hani.
BuL only Lhree monLhs laLer,
Lhe cenLral bank issued a circular
banning new lslamic banks lrom
being esLablished, lollowed by Lhe
announcemenL in February mandaLing
LhaL convenLional banks sell Lheir
lslamic uniLs.
:CFJ@E>K?<N@E;FN
increased activity across the board, so
there will be plenty to go around.
He said because the Qatar government
wants to avoid empty promises, there
is also a greater guarantee that projects
will be completed on time. Not
everything thats going to happen in
Qatar is because of the World Cup. The
biggest area in the next 10 years is the
infrastructure sector, which includes
anything from airports, ports, rail and
roads to hospitals, electricity and water.
All this has been planned irrespective of
whether 2022 was taking place or not.
What the World Cup brings is greater
logic and sense of urgency to get these
things done, said Shahbaz.
:FEJLD<IC<E;@E>C@D@KJ
Meanwhile, Qatar unveiled new
regulations on consumer borrowing to
clamp down on both how much local
banks can lend customers and how much
interest they can charge.
Qatari citizens can now borrow no
more than two million riyals ($549,254)
on loans with a maximum maturity of six
years and 400,000 riyals on loans of no
more than four years.
QCB also put a 400,000 Qatari riyals
($109,850) ceiling on a personal loan to
an expatriate.
Bankers said the restrictions might
reduce profits for banks and hamper the
expansion of the retail banking sector.
Net income estimates for Commercial
into effect May 1 to curb excessive bank
lending and cap some service fees.
The UAE capped personal loans at
20 times a borrowers monthly salary
and its repayment period to 48 months,
while overall instalments for all loans,
including personal, car, housing and
credit cards, must not exceed 50 per cent
of a borrowers gross salary and any
regular income.
Worryingly though for Qatar, local
banks, including Al Khaliji Commercial
Bank, have said the new limitations
undermine any expansion in the retail
sector while there exists a small local
bankable population.
Qatar has definitely created a buzz
around its recent regulatory changes,
but too often this has been for all the
wrong reasons. Whether other central
banks will follow suit with some or all of
its new rules is yet to be seen, but they
will no doubt be looking to learn lessons
from any of Qatars missteps.
HXkXi
:\ekiXc
9Xeb
9XebjgifkdXi^`ej
nflc[XcjfY\jhl\\q\[
alLer Lhe capping ol
g\ijfeXccfXeiXk\jXk
-%,g\iZ\ek, compared Lo
currenL raLes ol up Lo nine
per cenL."
54-57 Qatar Banking copy.indd 57 6/28/11 8:00:03 PM
,/&ALCP)'((
58-61 Cathay Pacific.indd 58 6/28/11 8:02:29 PM
CULF BUSlNLSS&,0
GIF=@C<
:8K?8PK8B<J
FEK?<>LC=
lvan Chu, CaLhay Pacilc COO, is so unlazed by compeLiLion lrom
regional carriers LhaL he's jusL launched Lhe world's lrsL direcL
lighL beLween Abu Dhabi and Hong Kong
G?FKFJ9PM@:KFI9<J8
Cathay Pacific, the worlds third most profitable airline, has
become the first international carrier to
set up direct flights between Abu Dhabi,
capital of the UAE, and Hong Kong.
Company officials were in Abu Dhabi
to introduce themselves to UAE Trade
Minister Sheikha Lubna Al Qasimi and a
gamut of local officials, as the inaugural
flight from Abu Dhabi to Hong Kong
lurched into the skies early last month.
We are the first carrier to offer a direct
service from Abu Dhabi to Hong Kong,
said Tom Wright, general manager Middle
East, India, Africa and Pakistan, Cathay
Pacific. With the increasing economic
and tourism links between Abu Dhabi
one of the fastest growing cities in the
Middle East and Hong Kong, which
has long been a vibrant destination and
popular hub in Asia, we expect this
service to be well received amongst both
business and leisure travellers throughout
the Emirate.
Company officials believe that Chinas
vast potential to send its citizens out into
the world on business and tourism, combined with increasing
inquisitiveness on the part of Middle East business and leisure
travellers, will cement the routes status.
Abu Dhabi in itself is a good business market. We believe
there is a good mixture of business traffic, corporate travel, and
leisure travel, says Ivan Chu, Cathay Pacifics chief operating
officer, who led the airlines delegation to the UAE capital.
As of May, Cathays route map consisted of 142 destinations
in 39 countries. Prior to the Abu Dhabi-Hong Kong launch
in June, Cathay served the Middle Eastern cities of Dubai,
Manama, Jeddah and Riyadh.
We are the only airline operating between Abu Dhabi and
Hong Kong non-stop, says Chu, adding that, although very large
investments, the company might also consider Cairo and Beirut
as future destinations if the timing was right.
Cathay reported a bumper year in 2010, with revenues up
34 per cent, net profits up 199 per cent and an eleven-fold
increase in dividends. The airline connects to 17 cities in
mainland China through its sister airline, Dragonair, while cargo
contributed around 30 per cent of income. It is also hoped the
new service will turn Hong Kong and the Pearl Delta region into
a destination for Middle East tourists.
Cathay Pacific was founded in Hong Kong in 1946 by
Australian Sydney de Kantzow and American Roy Farrell, war
veterans who had flown the Hump route over the Himalayas.
58-61 Cathay Pacific.indd 59 6/28/11 8:02:29 PM
-'&JULY 20
Each put up HK$1 to register the
airlines single craft, and moved its base
from Shanghai to Hong Kong, naming
it Cathay, Chinas ancient name, and
Pacific, because they thought they would
eventually fly across the ocean (this
would happen a generation later). In
1948, Swire Group bought 45 per cent of
the airline, leaving Australian National
Airways 35 per cent and the two
founders 10 per cent each.
Today, Cathay Pacifics major
shareholders are Swire Pacific Limited,
l
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1
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A
1
l
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:

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A
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P
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with 44 per cent, CITIC Pacific Limited,
two per cent and Air China Limited with
30 per cent. Cathay in turn owns 19
per cent of Air China. In May, Cathay
Pacific launched Air China Cargo in a
joint venture with Air China. We believe
this will be the most successful freighter
airline in China, says Chu.
As of mid-May, Cathay Pacific operated
a fleet of 125 passenger aircraft, including
37 Boeing 777 variants, 45 Boeing 747s,
and 43 Airbus 330s and 340s, with an
average passenger aircraft age of 11.1
Left to r|obt: Par|b A| Pae||, ADAC, Ne|sor Cb|r,
Catbav Pac|fc, Jaes Berret, ADAC, ard Yous|f
A| JoWdar, ADAC, at tbe cereorv pr|or to tbe
frst f|obt fro Abu Dbab| to Poro Koro.
years. It had firm orders for a further 88
aircraft, including 20 Airbus A330-300s, 32
Airbus A350-900s, 26 Boeing 777-300ERs
and 10 Boeing 747-8Fs. The company
expects to take delivery of over 90 aircraft
by the end of the decade.
Chu says the Airbus A350s, despite a
CATHAY PACIFIC AIRWAYS STATS
CX OPERATING FLEET OF AIRCRAFT: 125 CX INVENTORY OF AIRCRAFT: 128
AVERAGE AGE OF PASSENGER AIRCRAFT: 11.1 YEARS
FIRM ORDERS: 88
DESTINATIONS SERVED: 142 IN 39 COUNTRIES
BOEING 777-300: 12
BOEING 777-300ER: 20
BOEING 777-200: 5
BOEING 747-400: 21
BOEING 747-400 BCF : 12
AIRBUS A330-300: 20
AIRBUS A350-900: 32
BOEING 777-300ER: 26
BOEING 747-8F : 10
BOEING 747-400F : 6
BOEING 747-400ERF : 6
AIRBUS A340-300 : 11
AIRBUS A330-300 : 32
:_`eX`jfe\f]k_\
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see conLinued growLh
ol Lhe economy. 1here
may be bubble issues
buL n\Xi\Ylcc`j_
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58-61 Cathay Pacific.indd 60 6/28/11 8:02:33 PM
>LC=9LJ@E<JJ&-(
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troubled roll-out, and Boeing 777s will
be the backbone of the companys long-
haul operations. We have ordered a
lot. As far as we are concerned, we are
not the earliest buyers of the A350 so
we hope that our deliveries will not be
delayed. We do have a substantial order
of Boeing 777s, which we believe will be
helpful. We expect delivery of the first
A350 sometime in 2015. The Boeing 777
and Airbus A350 will provide the right
frequency and mix.
Qatar Airways will be the launch
customer of the A350, having ordered
80 of the variants.
Chu refused to comment on how large
a share of operating expenses is allocated
to fuel, but expects it to be bigger than
last year, when it contributed 35.6 per
cent to group operating costs.
He would not be drawn on the threat
posed to international airlines by the
Gulf trio of Emirates, Qatar Airways and
Etihad. If we look at the development
of the Gulf carriers, we have seen
tremendous improvement and expansion
of these airlines. No doubt they have
become a force in the industry but Cathay
Pacific intends to focus on ourselves.
All competition keeps us on our
toes and we are used to competition.
In my mind, it keeps us strong. Today,
competition is stronger than in the past.
We focus on the things we can control,
like investment, customer service,
hubbing China. Thats the best formula
for us. Our focus will be on developing
Hong Kong as major hub for passengers
and cargo. There are a lot of things we
cannot control. Competition [is one
of them]. If we continue to manage
ourselves, we will continue to win.
Hong Kong is the most successful
city in China as an investment hub and
for building infrastructure, says Chu.
Shanghai and Beijing are growing, he
adds. Last month, the Hong Kong Airport
Authority issued a consultation paper on
the future of Hong Kong Airport, dealing
with future expansion and construction
of a third runway. Cathay Pacific is very
clear we want this runway to be built.
Based on our estimates, the airport will
be full by 2020. It is the right spot to
operate from.
Hong Kong is a busy hub, with
estimates of 50 million passengers a
year, outnumbering the seven million
population of the special administrative
region. Chu says over 60 per cent are
transit passengers, considerably in excess
of the transit percentage in Dubai. Hong
Kong was the worlds third busiest
international airport, according to Airport
Council Internationals 2010 data up to
August, while Dubai ranked fifth. Hong
Kong was also the worlds busiest by
annual cargo weight.
Chu is optimistic on the outlook for the
Chinese economy, expecting a resumption
of growth. China is one of the major
powers in the Pacific region. We see
continued growth of the economy. There
may be bubble issues but we are bullish
about the upward trajectory. Some 70 per
cent of our income is outside Hong Kong.
China is a big part of that.
The move by a major international
player is a feather in Abu Dhabis
cap. It is something to ponder that a
representative of a leading international
airline founded 65 years ago was in
the UAE capital to pay court to UAE
officialdom, in this case, the august figure
of Sheikha Lubna, rather than the other
way round. It says something about the
way that the UAE has asserted itself on
the global map and is likely a sign that
deals of this type will continue to emerge
in future to the countrys credit.
:Xk_XpGXZ`Zje\nYlj`e\jjZcXjj
58-61 Cathay Pacific.indd 61 6/28/11 8:02:40 PM
-)&ALCP)'((
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62-65 RAK.indd 62 6/28/11 8:03:56 PM
CULF BUSlNLSS&-*
Ras Al Khaimah has always punched
above iLs weighL. Now wiLh Lhe
insLallaLion ol iLs new mariLime
laciliLy, Lhe emiraLe plans Lo become
a global shipping cenLre.
K<OK9PG<K<IJ?8N$JD@K?
When Sheikh Saud bin Saqr Al Qasimi, Ras Al Khaimahs
ruler, declared on May 16 that RAK was a regional hub in
the movement of maritime trade, he may well have raised
a few eyebrows. Jostling for position with a mega-port
installation in Jebel Ali, another coming up in Abu Dhabi
at Taweelah under Abu Dhabi Ports Company, and a
smaller but very effective container facility at Khorfakkan
run by Gulftainer, RAK faces stiff competition.
In making his declaration, Sheikh Saud
was announcing the launch of RAK
Maritime City, the UAEs newest
maritime free zone and the emirates
fifth port facility. Occupying an area of
eight square kilometres, it will serve as a
maritime industrial park for medium and
heavy industry. Over AED 520 million
has been invested in RAK Maritime
City, to make the large existing natural
channel perfect for industry.
China Harbour Construction Company
was commissioned in 2008 to develop
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62-65 RAK.indd 63 6/28/11 8:04:00 PM
-+&ALCP)'((
the new waterway and constructing five
kilometres of quay wall, which will offer
exclusive-use jetties. Harbour-mouth
depth is nine metres, while vessels
will have a draught of seven metres
alongside. In short, the facility is perfect
for the workboat industry.
Three international anchor tenants are
already operating at RAK MC: Malaysian
barge and tug operator Shin Yang, Greek
construction company Archirodon and
RI8BDXi`k`d\:`kpn`ccT
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\oZ\cc\eZ\fg\iXk`e^n`k_`e
nfic[$ZcXjjjkXe[Xi[j
Capta|r Croo|sbar| (far |eft) ard
RAK ru|er Sbe||b Saud A| 0as|| |x
W|tb croWds at tbe |aurcb evert.
German gypsum board manufacturer
Knauf. The site will be zoned into
specified areas for retail, warehousing,
general cargo handling, industrial
production and manufacturing, tank
storage and shipbuilding and repair.
RAK plays host to four other maritime
installations, namely Port Saqr, the largest
bulk commodity port in the Middle East;
Al Jazeera, a dry dock and ship repair
yard for small and medium-sized vessels;
Al Jeer Marina, a sailing club with
adjacent livestock handling and general
warehousing; and RAK Khor, which
provides warehousing, afloat ship repair,
general trading and cruise tourism.
[RAK Maritime City will] elevate
Ras Al Khaimah to the position of a
dominant global shipping centre of
excellence operating within world-class
standards. It also sets out the blueprint
for the sustainability of the maritime
industry in Ras Al Khaimah and indeed
the region, which after all is an inherent
part of the Emirates heritage and legacy.
We will offer our customers and tenants
much more than just export and import
facilities. Our objective is to be able
to attract all industries connected with
B|rd's eve v|eW of
RAK Nar|t|e C|tv.
62-65 RAK.indd 64 6/28/11 8:04:07 PM
CULF BUSlNLSS&-,
J?@GG@E>
seed oil, are expected to sign by the end
of July. We could have two-three major
EPC [engineering, procurement and
construction] contracts to announce in
the next three months. Weve got a lot
of enquiries. When people are investing
considerable amounts of capital, its not
impulse buying. We are very pleased
with the launch and it has certainly put
the maritime park on the map.
RAK has served as a centre for
quarrying and cement manufacture
since the 1970s, but maritime activity
is bound to stand its economy in good
stead. With a size of only 1,683 square
kilometres, or less than half the size of
Dubai emirate, RAK, the UAEs fourth-
largest emirate, has the advantage of
Civen iLs small size, RAK never ceases
Lo amaze even when compared Lo Lhe
opulence ol Dubai and Abu Dhabi. 1he
smaller emiraLe has gained a repuLaLion
lor punching above iLs weighL. CaLeway
Lo Oman's Musandam Peninsula, and
girded wiLh mounLains cloaked in
summer haze, RAK is delniLely a breaLh
ol lresh air. lndeed, iLs inhabiLanLs are
almosL wisLlul as Lhey describe Lhe
benelLs ol Lhe new roads Lo all poinLs ol
Lhe compass, which have denLed Lhe lun
ol disappearing inLo Wadi Bih lor a day's
deserL ollroading Lo Dibbah.
LxLensive redevelopmenL ol Lhe
verdanL Al Hamra Village Coll ResorL
has broughL Lhe glamorous Residences
Complex, as well as rows and rows ol
smarL Lownhouses aL Lhe adjacenL Al
Hamra Village. 1he mall opposiLe RAK
Ceramics is now open, and alLhough
all reLail space has noL been llled, iLs
pleasanL aLmosphere is jusL Lhe Lonic
alLer Lhe drive lrom Dubai. RAK has
over 20 hoLels, and Lhe pick would be
1he Cove RoLana ResorL, developed by
LgypLian enLrepreneur Samih Sawiris
and his Orascom DevelopmenL Holding
SA. ConsLrucLion sLarLed in 2005 and is
nearing compleLion buL plenLy ol hoLel
space is now available.
RAK's Lies Lo Abu Dhabi are exLremely
close, and Lhe insLallaLion ol Sheikh
Saud as Crown Prince in 2003 over Lhe
head ol his elder hallbroLher, Khalid,
was noL lnally puL in moLion wiLhouL Lhe
expliciL approval ol Lhe laLe Sheikh Zayed
bin SulLan Al Nahyan, Lhe UAL's lrsL
presidenL, who died in 200^. 1he presenL
ruler and member ol Lhe UAL's Supreme
Council, Look over lrom his laLher, who
died lasL year as Lhe world's oldesL
serving monarch aL Lhe age ol 90.
K?<I@J<F=I8B
the maritime world and to offer them
a long-term partnership in a dynamic
and growing business environment,
said Captain Colin Crookshank, general
manager of RAK Maritime City.
In 2010, the government of Ras Al
Khaimah consolidated RAKs five ports
under one structure managed by Saqr
Port Authority, as a way to eliminate
intra-emirate competition and maximise
cooperation between different entities.
This will augment the emirates ability
to compete UAE-wide with larger rivals.
RAK Maritime City Free Zone has the
ability to incorporate companies as both
FZE and FZC entities and will issue
industrial, commercial and general trading
licences along with work permits and
UAE residence visas. An office park at
the entrance to the free zone will also
accommodate customs, immigration and
the RAK Maritime City management team.
In addition to the three anchor tenants,
a source at RAK Maritime City says that
six projects are nearing close. Three
medium-sized tenants, including a
leisure craft and house-boat builder, and
a Malaysian company wanting to build
a tank-farm blending facility for palm
"RAK has served
as XZ\eki\]fi
hlXiip`e^Xe[Z\d\ek
dXel]XZkli\ since Lhe
970s, buL mariLime
acLiviLy is bound Lo
sLand iLs economy in
good sLead."
Last vear, RAK corso||dated fve
ports urder ore structure.
an extensive 65-kilometre shoreline
close to the Straits of Hormuz. As its
latest project cements its place on the
map, its capitalisation on access to the
Gulf could almost be considered an
example to the rest of the UAE.
62-65 RAK.indd 65 6/28/11 8:04:16 PM
--&JULY 20
>lc]9lj`e\jj caughL up wiLh some
ol Lhe world's Lop hoLel managers and
asked how Lheir businesses are laring
in Lhe regional Lurmoil. 1he overwhelming
consensus is LhaL Lhe UAL has gained looLlall amid
iLs more LurbulenL neighbours. Occupancy raLes have
plunged in conlicLLorn counLries, buL Lhe longLerm
regional hospiLaliLy ouLlook is posiLive, wiLh global hoLel
chains conLinuing Lo invesL millions ol dollars in new
properLies across Lhe Middle LasL.
FD<IB8;;FLI@#:FF#
IFK8E8?FK<CJ
We will have 30 more hotels in MENA by
2014 across the Gulf, Egypt, Morocco
and Iraq. We dont plan to hold back on
any of these. We have one project thats
due to come out of the ground in Libya
but, just like every other project in Libya,
things are on hold.
We announced an $800 million hotel
investment over five years. Its exciting
and we will have 46 hotels by September.
Since the recession, more people are
attracted to medium and budget hotels.
And the UAE can offer that. Centro, our
mid-tier hotel, is doing very well its our
fastest growing brand and I think that
mid-tier is the fastest growing type of
HOSPITALITY
AMID UNREST
Fd\iBX[[fli`#:FF#IfkXeX_fk\cj
66-69 Hotels.indd 66 6/28/11 8:12:11 PM
CULF BUSlNLSS&-.
?FK<CJ
hotel in the region today. The dynamic of
the market is changing people want to
spend less but they are still demanding a
certain quality.
People dont have money to spend
like they used to. The budget airlines
are doing well at bringing in people
who are conscious of spending money.
The appetite for luxury never waned,
however, there were more people that
could afford luxury as the prices of the
room rates came down.
Q1 2011 in the UAE is going well. We
budgeted at around 70 per cent and were
doing 80 per cent occupancy. There are
good signs. In the past two years we
didnt know where we were going.
The regional turmoil helped Dubai
and the UAE as the Saudis didnt fly
to Lebanon or Egypt or Syria. In the
UAE there is so much happening in
Abu Dhabi and Dubai. Exhibitions are
increasing, theres a lot of internal focus
on putting the UAE in the best position.
Im optimistic about the future but
Im cautiously optimistic about how far
it will get back to the norm, or even
better that the norm. Do we want it to
be extravagantly expensive like it was
before the crisis the highest in the
world in terms of occupancy and rates?
I dont want to see that again. Its not a
sustainable model. I am looking forward to
a normalisation of our industry in Dubai.
Were seeing some destinations open
up to the UAE India and China, and
the Iranian market is becoming stronger
than ever. Europe is still a major
demographic for us. But I think China
has the potential to be the first major
destination to visit the UAE in the next
five years. We are opening an outside
sales office in Shanghai a lot of hotels
are trying to attract the Chinese.
The budget market will become
stronger and stronger; weve offered
a style thats slightly above our
competitors, our customers pay a little
more. I see three stars becoming the
highest growing hotel in most cities
in MENA over the next five years.
Customers want the right value and the
right service offering at the right price.
We are now on the hunt for global
hotels. The Rotana model has got us
where we are today and we think it can
work anywhere.
<JJ8D89FL;8#M@:<
GI<J@;<EK#8I89@8E
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The whole of Egypt was negatively
affected. The resorts went from 80 per
cent occupancy to 25 per cent. Cairo
went down even further. However, the
resorts reached 60 per cent plus by
May. Cairo is still suffering from lack of
business, but we think pick up will come
steadily for the resorts.
The economic situation is picking up
in the UAE. Weve had an extremely
strong beginning this year. You can
link it to the fact that the UAE is a
safe environment, as well as the fact
infrastructure is booming, so its hard
to pinpoint the upsurge. In Dubai,
occupancy is well over the 80s, and in
the UAE its around the 70s. Its a slight
improvement on last year.
Our plan is to grow by 80 per cent in
the MENA region over the next three
years and at least double our hotels to
more than 100 in the coming five years.
We see that there is a big demand for
;fn\nXek`kkfY\
\okiXmX^Xekcp\og\ej`m\
c`b\`knXjY\]fi\k_\
Zi`j`j Lhe highesL in Lhe
world in Lerms ol occupancy
and raLes? l don'L nXekkf
j\\k_XkX^X`e%@kjefkX
jljkX`eXYc\df[\c%
Lssa Abouda, v|ce pres|dert,
Arab|ar per|rsu|a ard |rd|ar 0cear,
P||tor Wor|dW|de
Wa|dorf Astor|a
0asr A| Sbaro, KSA
66-69 Hotels.indd 67 6/28/11 8:12:19 PM
-/&JULY 20
?FK<CJ
LgypL is Lhe hardesL hiL counLry. 1he image has
been broken. lL was a popular desLinaLion and
now all Lhese evenLs have made iL dillculL Lo
bring Lhe hospiLaliLy indusLry back. 1here has
Lo be a long Lerm sLraLegy alLer Lhese evenLs:
how do Lhey bring Lhe LourisLs back? lL will Lake
a long Lime Lo recover.
BuL leL's noL lorgeL LhaL Lhe Middle LasL is a
major hub and Lhe developmenL ol Lhe airlines
is an imporLanL lacLor. LmiraLes, LLihad and
OaLar Airways are all developing Lheir rouLes Lo
Lurope, Alrica and America which mighL help
overcome Lhe problems. ln addiLion we have
Lhe growLh ol low cosL airlines.
1he UAL and KSA are Lhe counLries LhaL
are benelLLing lrom Lhe unresL. You have Lhe
winners and Lhe losers.
1here is so much going on in so many
counLries. OaLar, lor example, is invesLing
heavily in business and highend leisure
proposiLions, plus MlCL and high prolle evenLs.
You also have Lhe emerging emiraLes in Lhe
UAL: irrespecLive ol Lhe economic condiLions
Lhere is poLenLial in Fujeirah, RAK and Sharjah.
Oman is also a counLry wiLh greaL poLenLial. ln
Oman, Lhere is Lhe willingness buL less acLion.
1here is a growing Lendency Lo develop
sLrongholds in medical Lourism, parLicularly in
Saudi Arabia. 1here is also a growing impeLus
in religious Lourism. 1he sporLs Lourism is
growing Lhere has been a loL ol evenLs in Lhe
Middle LasL. WheLher iL's F or crickeL, Lhese
evenLs boosL overall Lourism across Lhe region.
1here is a heighLened demand lor luxury in
some segmenLs because Lhe emerging markeLs
are coming Lo power. lndia, Malaysia and China
have large populaLions bolsLered by a very
sLrong middle class.
However, Lhe overall global menLaliLy ol
Lravelers changed in Lhe recession. 1hey are
priceconscious and Lhey preler low cosL airlines.
Lurope is sLill lacking a lull recovery. Consumer
expendiLure is squeezed and luxury operaLors
have been lowering Lheir
prices, which has never
been seen belore.
K?<8E8CPJKJM@<N
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1RAVLL AND
1OURlSM RLSLARCH,
LUROMONl1OR
I`kq:Xickfe
hotel chains and massive room for
growth, especially in Saudi Arabia.
Weve also seen more of a demand
for budget hotels such as Hilton
DoubleTree. I dont believe we have
enough budget hotels in this region.
You need to cover all levels of
travelers, budget and high-scale.
The UAE is definitely out of the
recession and is going back at a
good pace to the best year of 2007.
For the countries that experienced
unrest, the pace will be slower. In
the long term, the conflict could be a
booster for Egypt after the elections,
where it could regain its success as a
tourism destination. The economy will
be restored and there will be more
opportunity to invest in tourism.
9F9B?8I8QD@#>CF98C
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We have six projects in MENA and I
believe we will double that by 2013.
This is a very vibrant region. We
see a lot of growth in the market, Ritz-
Carlton wants to make sure that we
are here. I dont think the ME unrest
will affect our investments long-term.
We saw double digit growth in 2010
and we see strong business pick up
this year. The average rate is getting
stronger as people are willing to pay
more for great service.
I think the global economy overall
shows growth. Our business is not
different from what happens in
66-69 Hotels.indd 68 6/28/11 8:12:22 PM
Bob Kbaraz|, o|oba| offcer,
Wor|dW|de operat|ors, R|tzCar|tor
the global economy its attached to
consumers and whether they want to
spend our disposable income. We want
to make sure we stay focused because
business has come back stronger than
many expected.
One thing that is not going to stop
for sure is growth. International hotels
will try to grow different hotels in their
portfolio in this market. You will also
see airlines grow they have made the
reach to the location very easy. You
will see Ritz-Carlton trying to get into
most destinations where people travel
to. The growth is driven by where your
customers are and we are a customer-
orientated company.
The liquidity market was tied up with
the global slowdown but right now
you can see that the banks are willing
to finance the hospitality industries.
In this part of the world, there is
considerable wealth. Our customers
will come from wherever the airlines
bring them in. With the reach that
Emirates airline has to Asia and the
US, customers come from everywhere.
The airlines have done an incredible
job and fuelled the hospitality business
Ritz Carlton is a beneficiary of that
as well as international brands.
Our differentiator is service and also
consistency in that service. We create an
environment which means they cannot
forget we reach their hearts and souls.
Even if the economy is tough they will
choose a hotel that they love.
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Zljkfd\i$fi`\ekXk\[ZfdgXep%
66-69 Hotels.indd 69 6/28/11 8:12:23 PM
.'&ALCP)'((
DATA MONITOR
TOP DEALS AND GCC ECONOMIC INDICATORS
TOP DEALS GULF BUSINESS
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|r A| As|ro keo| |stote Corrorv.
Vo||ourec Crour SA. t|e ||ste1 |rorce |ose1 stee| tu|es rorufocturer for |r1ustr|o|
orr||cot|ors. |os ocree1 to occu|re Sou1| Seor|ess ||res |octorv |t1. Co.. t|e Sou1|
Aro||o |ose1 f|rr 1eo||rc |r t|e rro1uct|or of tu|es for t|e 1r||||rc |r1ustrv. fror /or||
Crour Ho|1|rc Corrorv. t|e Sou1| Aro||o |ose1 c|o|o| |rvestrert corrorv W|t| 1|verse
|rterests or1 coro||||t|es. for o cors|1erot|or of l1Sr.
Ootor A|rWovs O.C.S.C.. t|e Ootor |ose1 correrc|o| o|r||re orerotor. |os ocree1 to occu|re
o 1S rer cert sto|e |r Corco|ui A|r||res lrterrot|oro| S.A.. t|e |uier|ourc |ose1 corco
o|r||re orerotor. for o cors|1erot|or of ll.Sr. !|e trorsoct|or |s |r ||re W|t| Ootor
A|rWovs' strotecv to eiror1 |ts ror|et |r t|e o|r fre|c|t |us|ress. !|e trorsoct|or |s
eirecte1 to c|ose W|t||r o feW Wee|s fror t|e orrourcerert 1ote. Corco|ui orerotes lc
corco r|ores to 70 1est|rot|ors Wor|1W|1e.
ACWA |oWer lrterrot|oro|. t|e Sou1| Aro||o |ose1 roWer or1 1eso||rot|or corrorv.
|os o 11.lS rer cert sto|e |r Certro| ||ectr|c|tv Cererot|rc Corrorv (C|CCO). t|e
)or1or |ose1 e|ectr|c|tv cererot|rc corrorv. fror )or1or u|o| Cor|to|. t|e )or1or
|ose1 rr|vote ecu|tv f|rr. for o cors|1erot|or of 71.cr.
A| lrt|o lrvestrert Corrorv. t|e ||ste1 KuWo|t |ose1 |rvestrert corrorv. |os
ocree1 to occu|re o 40 rer cert sto|e |r bevoo ||rorce or1 lrvestrert Corrorv. t|e
KuWo|t |ose1 corrorv ercoce1 |r 1eve|or|rc f|rorc|o| rro1ucts or1 serv|ces. fror
!or1eer lrvestrert Corrorv K.S.C.. t|e ||ste1 KuWo|t |ose1 |rvestrert corrorv. for
o cors|1erot|or of KW c.cr (c4.08r).
!ec|rocorr Ho|1|rc S.A. t|e SW|ter|or1 |ose1 corrorv ercoce1 |r c|oc| or1
Wotc| ro||rc. or1 su|s|1|orv of !|e SWotc| Crour |t1. t|e ||ste1 SW|ter|or1 |ose1
corrorv ercoce1 |r rorufoctur|rc of f|r|s|e1 Wotc|es. |os occu|re1 o 11.1 rer cert
sto|e |r A|ouror Cerero| !ro1|rc Co. |t1. t|e Sou1| Aro||o |ose1 corrorv ercoce1
|r 1|str||ut|or of SWotc| or1 |||| ||o| |ror1s t|rouc| |ts oWr reto|| stores. fror
So|e| |o|orro1 A|ouror Sors Co. |t1. t|e Sou1| Aro||o |ose1 corrorv ercoce1
|r Wotc| reto|||rc. ov|ot|or. e1ucot|or or1 reo| estote serv|ces. for o cors|1erot|or of
SAk c0r (lcr).
DEAL VALUE ($M) BIDDER TARGET DEAL DESCRIPTION
70-72 DATA MONITOR July2011.indd 70 6/28/11 6:40:06 PM
CULF BUSlNLSS&.(
DEAL VALUE ($M) BIDDER TARGET DEAL DESCRIPTION
lc

S
|o|orro1 A||oj|| Crour
tWofourS4 |/ ||C
kovsut Cerert Corrorv
Cu|f |||te Cerero|
Cortroct|rc Corrorv
SA| lrst|tute u|o|
Oror |ortucuese Cerert
|ro1ucts ||C (S0 rer cert
Sto|e)
|o|orro1 A||oj|| Crour (||C). t|e ||ste1 Sou1| Aro||o |ose1 corrorv ercoce1
|r cortroct|ose1 corstruct|or or1 ro|rterorce Wor| W|t||r t|e c|v||. o|| or1 cos.
retroc|er|co|. or1 |r1ustr|o| sectors. |os ocree1 to occu|re Cu|f |||te Cerero|
Cortroct|rc Co.. t|e Sou1| Aro||o |ose1 corrorv ercoce1 |r cortroct|rc serv|ces for
t|e corstruct|or |r1ustrv. for o cors|1erot|or of SAk 4cr (lc.cr).
Cu|f |||te |os or err|ovee |ose of 84S reor|e. |ost corr|et|or Cu|f |||te W|||
orerote os or orerot|ors orr of ||C |r c|v|| Wor| or1 |rfrostructure.
tWofourS4 |/ ||C. t|e UA| |ose1 corrorv ercoce1 |r t|e f||r. |roo1cost. 1|c|to|.
cor|rc. ru|||s||rc or1 rus|c |r1ustr|es. |os occu|re1 SA| lrst|tute u|o|. t|e UA|
|ose1 |rst|tute |rvo|ve1 |r tro|r|rc |r t|e f|e|1 of ou1|o erc|reer|rc. fror Nov|tos
||r|te1. t|e ||ste1 Austro||o |ose1 1eve|orer or1 rrov|1er of e1ucot|oro| serv|ces or1
|eorr|rc so|ut|ors. for o toto| cors|1erot|or of r||||or.
kovsut Cerert Corrorv. t|e ||ste1 Oror |ose1 rorufocturer of cerert. |os
occu|re1 o S0 rer cert sto|e |r Oror |ortucuese Cerert |ro1ucts ||C (O|C|).
t|e Oror |ose1 cerert rro1ucer fror Oror lrvestrert Corrorot|or (OlC). t|e
Oror |ose1 rr|vote ecu|tv f|rr. or1 S||vo Corrorot|or. t|e Oror |ose1 |rvestrert
|o|1|rc corrorv W|t| rorufoctur|rc of corcrete rro1ucts. for o cors|1erot|or
of O|k l.7cr.
Notes: |ea|s are oaseo on tne oeooranv of taroet. o|ooer or venoor oe|no |n tne H|oo|e fast. for tne er|oo oetween Hav |8. 20|| ano June |7. 20||. Baseo on announceo oea|s. |nc|uo|no
|aseo ano w|tnorawn o|os. wnere oea| va|ue |s not o|sc|oseo. tne oea| nas oeen entereo oaseo on turnover of taroet exceeo|no S|0 m||||on. /ct|v|t|es exc|uoeo from tne tao|e |nc|uoe
roertv transact|ons ano restructur|nos wnere tne u|t|mate snareno|oers |nterests are not cnanoeo. Source: Heroermarket. /|| oo||ar (S) amounts |no|cateo aoove are |n US oo||ars.
CULF BUSlNLSS OUAR1LRLY M&A AC1lVl1Y
FROM 200^ 1O 7 JUNL 20
BREAKDOWN: TAKEOVER ACTIVITY BY SECTOR AND VOLUME
MlDDLL LAS1 ANNUAL M&A AC1lVl1Y
FROM 200^ 1O 7 JUNL 20
CULF BUSlNLSS AC1lVl1Y BY lNDUS1RY SLC1OR
YL 20 VOLUML
CULF BUSlNLSS AC1lVl1Y BY lNDUS1RY
SLC1OR YL 20 VALUL
ConsLrucLion
8.3
ConsLrucLion
.7
Lnergy, Mining & ULiliLies
6.
Consumer
.
Delence
0.9
Real LsLaLe
5.0
Delence
.7
1ransporL
.7
Financial Services
5.7


0
c0
40
c0
0
c.000
4.000
c.000
8.000
l0.000
lc.000
l4.000
c004 c00S c00c c00 c008 c007 c0l0 c0ll
Ol Ol Ol Ol Ol Ol Ol Oc Oc Oc Oc Oc Oc Oc O1 O1 O1 O1 O1 O1 O4 O4 Ol Oc O1O4 O4 O4 O4 O4
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c004 c00S c00c c00 c008 c007 c0l0 c0ll
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lS.000
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0
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4.000
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l0.000
lc.000
l4.000
c004 c00S c00c c00 c008 c007 c0l0 c0ll
Ol Ol Ol Ol Ol Ol Ol Oc Oc Oc Oc Oc Oc Oc O1 O1 O1 O1 O1 O1 O4 O4 Ol Oc O1O4 O4 O4 O4 O4
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c004 c00S c00c c00 c008 c007 c0l0 c0ll
0
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0
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l0.000
lS.000
c0.000
cS.000
10.000


0
c0
40
c0
0
c.000
4.000
c.000
8.000
l0.000
lc.000
l4.000
c004 c00S c00c c00 c008 c007 c0l0 c0ll
Ol Ol Ol Ol Ol Ol Ol Oc Oc Oc Oc Oc Oc Oc O1 O1 O1 O1 O1 O1 O4 O4 Ol Oc O1O4 O4 O4 O4 O4
N
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c004 c00S c00c c00 c008 c007 c0l0 c0ll
0
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l00
lS0
c00
cS0
0
S.000
l0.000
lS.000
c0.000
cS.000
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0
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c0
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c.000
4.000
c.000
8.000
l0.000
lc.000
l4.000
c004 c00S c00c c00 c008 c007 c0l0 c0ll
Ol Ol Ol Ol Ol Ol Ol Oc Oc Oc Oc Oc Oc Oc O1 O1 O1 O1 O1 O1 O4 O4 Ol Oc O1O4 O4 O4 O4 O4
N
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c004 c00S c00c c00 c008 c007 c0l0 c0ll
0
S0
l00
lS0
c00
cS0
0
S.000
l0.000
lS.000
c0.000
cS.000
10.000
lndusLrials &
Chemicals
6.7
lndusLrials &
Chemicals
^8.
Financial
Services
.7
Business
Services
6.7
Pharma, Medical
& BioLech
6.7
Pharma,
Medical &
BioLech
5.3
1M1
5.7
Consumer
5.0
Lnergy, Mining
& ULiliLies
3.3
Leisure
.7
1M1
.7
Real LsLaLe
9.7
Business Services
5.8
70-72 DATA MONITOR July2011.indd 71 6/28/11 6:40:11 PM
.)&JULY 20
In association with
TOTAL RETURN INDEX
HSBC/NASDAQ DUBAI MIDDLE EAST
SOVERIGNS
CORPORATES
BANKS
SUKUK
I550k 000P0N Mk]0kI]Y 00kkN0Y MI0 PkI0 YIL0 M000Y5 5&P
A|u |o|| Covt S.S 4|8|c0l4 US ll0.1l l.l Aoc AA
u|o| Covt c. l0|S|c0lS US l0S.S0 S.cS Nk Nk
u|o| Covt .S l0|S|c0c0 US l0c.cS c.81 Nk Nk
Ootor Covt 4 l|c0|c0lS US l0S.l7 c.48 Aoc AA
bo|ro|r Covt S.S 1|1l|c0c0 US 7.88 S.8l Nk bbb |*
|cvrt Covt S.S 4|c7|c0c0 US l00.S S.c4 bo1 bb
|orocco Covt 4.S l0|S|c0c0 |Uk 7l.S S.cc Nk bbb
I550k 000P0N Mk]0kI]Y 00kkN0Y MI0 PkI0 YIL0 M000Y5 5&P
!oco 4.S 7|lS|c0l4 US l0S.88 c.81 A1 Nk
A|1or l0.S S|c|c0l4 US llc.00 c.cl bl |* b
u|o| Ho|1|rc |-1.S|rs c|l|c0lc US 74.S 7.41 b1 Nk
|WA c.1S l0|cl|c0lc US l01.S S.SS boc Nk
Ote| 1.1S l0|l4|c0lc US l00.00 1.1 Ac A
Ootor| |or S |cl|c0c0 US l01.S0 4.S1 Aoc AA
SAblC 1 ll|c|c0lS US l00.18 c.7l Al A-
|urto|o|ot S c|10|c0lS US l00.00 S.00 Nk bbb |*
|b|S ll.cS ll|lS|c0lS US l00.S0 ll.l0 Nk b-
Kl|CO 8.8S l0|l|c0lc US ll1.00 S.78 booc |* bbb
I550k 000P0N Mk]0kI]Y 00kkN0Y MI0 PkI0 YIL0 M000Y5 5&P
ACb 4.S l0|8|c0l4 US l0S.00 1.l4 Al A
NbA 4.cS 1|cS|c0lS US l04.c1 c.74 Ao1 A-
|r|rotes Nb |-4S0|rs 4|10|c0lc US l0c.cS c.lc A1 Nk
HSbC bor| || 1 l0|cl|c0lS US 77.cS 1.l7 Al Nk
CbO S ll|l8|c0l4 US l0c.18 1.0c Al A
Sou1| br|t|s| 1 ll|lc|c0lS US l00.18 c.7l Nk A
bbK 4.S l0|c8|c0lS US 78.c1 4.8S booc Nk
I550k P.0.k* Mk]0kI]Y 00kkN0Y MI0 PkI0 YIL0 M000Y5 5&P
!lC 4.747 l0|cl|c0l4 US l0c.S0 c.87 Al AA
Alb 1.4S ll|4|c0lS US l0l.88 1.c8 Ac Nk
u|o| Covt c.17c ll|1|c0l4 US l0S.l1 4.1 Nk Nk
l|C |-1.S|rs c|l1|c0lc US 74.00 c.7c b1 b-
)A|/A |-l10|rs ll|c|c0lc A| 74.18 .11 bc b
| Wor|1 c.cS |c|c0l US l04.00 S.4c boo1 bb
|roor 8.S 8|1|c0lc US l0c.cS .0c ble bb
kAK S.c17c l|c8|c0lc US l08.S 1.l8 Nk A
or A| Ar|or l0.S c|l8|c0lS US l01.S0 7.S8 Nk bb
1he HSBC/NASDAO Dubai Middle LasL 1oLal ReLurn
lndex Lracks Lhe LoLal reLurn ol an emerging Middle
LasL sukuk/bond porLlolio. 1oLal reLurn Lakes inLo
accounL Lhe income lrom coupon paymenLs, in
addiLion Lo any appreciaLion/depreciaLion in Lhe
price ol Lhe securiLy.
MAIN REGIONAL BONDS: CURRENT PRICES
THE EXPERTS
VIEW
1his monLh has seen a signilicanL sLep lorward
in Lhe inLernaLional sukuk markeL. HSBC Middle
LasL issued a benchmark sized S500 million
public sukuk Lo help grow Lhe group's lslamic
business. AparL lrom Lhe obvious size, Lhis deal was
imporLanL lor a number ol reasons. FirsL, when we
look aL who boughL Lhe sukuk, Lhere was a lairly
even spliL beLween convenLional and lslamic buyers.
Clobally, Lhe spread ol inLernaLional buyers was
broad, wiLh Asian, Luropean and regional buyers
invesLing. Second, Lhe price: Lhis was issued llaL
Lo Lhe convenLional HSBC bond, meaning LhaL Lhe
issuer did noL have Lo pay a new issue premium lor
Lhis sukuk. 1hird, iL proves LhaL convenLional banks
LhaL operaLe lslamic businesses can successlully
issue sukuk. DespiLe iLs complexiLy, iL can be done
and we expecL oLhers Lo lollow.
BuL is Lhis a sign ol a pick up in Lhe sukuk
markeL? ln Lerms ol issuance, Lhe markeL seems
incredibly acLive Lhis year. AL one poinL, Lhree were
launched in one week in MLNA alone. Clobal lslamic
bond sales have climbed 2^ per cenL so lar Lhis
year Lo S7.8 billion lrom Lhe same period lasL year
as borrowing cosLs dropped.
So why does Lhe sukuk markeL seem so
aLLracLive? ParL ol Lhe reason lor Lhis is Lhe
invesLor base. New lslamic lunds locaLed in Lhe
CCC and SouLh Asia provide sLable long Lerm
invesLors and Lhis has Lhe ellecL ol smooLhing
ouL volaLiliLy iL's inLeresLing LhaL Lhe debL capiLal
markeLs LransacLion LhaL reopened Lhe regional
markeL Lhis year was a sukuk lrom Lmaar. WhaL's
changed, however, is Lhe proporLion ol inLernaLional
buyers keen Lo access Lhe sukuk markeL and
we are sLarLing Lo see dedicaLed
inLernaLional invesLors sLarLing Lo
LargeL sukuk lor invesLmenL.
GEORGES ELHEDERY,
Head of global markets,
MENA, HSBC
lssued by HSBC Bank Middle LasL LimiLed. RegulaLed byJersey Financial Services
Commission. All ligures quoLed are sourced lrom Bloomberg and HSBC and are
correcL aL Lhe Lime ol publicaLion. PasL perlormance is an noL an accuraLe guide Lo Lhe
luLure. 1his inlormaLion is general and does noL Lake inLo accounL your circumsLances,
objecLives or needs. You should consider Lhese maLLers and consulL your linancial
advisor prior Lo making any invesLmenL decisions. For prolessional assisLance, conLacL
HSBC on 800 ^0 ^^^3.
*rer|o1|c 1|str||ut|or orourt
!48
!46
!44
!42
!40
!38
!36
!34
!53! March 20!! !29 kpr|| 20!! 23! May 20!! 2!5 Juae 20!!
70-72 DATA MONITOR July2011.indd 72 6/28/11 6:40:14 PM
C
M
Y
CM
MY
CY
CMY
K
gulf air.pdf 6/29/11 5:29:02 PM
.+ & JULY 20
DXckXf]]\ijkfnej[i\eZ_\[`ep\jk\ip\Xi#Xe[`dgi\jj`m\XiZ_`k\Zkli\#
ni`k\jG\k\iJ_Xn$Jd`k_%
T
HE HOTEL PHOENICIA in Valetta is a charming product of
a bygone age. Room keys still bear Le Meridien insignia long
after this association ended. A honking flotilla of ancient yellow
buses gathers in Valetta Square outside the one deficiency of
our trip is that we are not prompted to sample its delights and
disappear off to get lost.
The hotels delightful rooms smack of yesteryear, but are
comfortable and have fine views of Valettas old city walls. The
kitchen serves a sumptuous breakfast and the terrace looks out
over the superb backdrop of Sliema and Gzira, the island in
Valettas north bay.
The bar is crammed with pictures of naval vessels of yore,
the backbone of British control of the Mediterranean and, in
one corner, photos of a mysterious yet glamorous World War II
blonde. Questions as to her identity cannot be answered.
First up is magnificent Mdina, perched on the islands largest
hilltop with superb views of a verdant hinterland. Malta has
two cathedrals and Mdina offers one of them the magnificent
St. Pauls Cathedral its commanding position overlooks the
entire north and east of the island.
TURN BACK TIME IN MALTA
Built following the 1693 earthquake, it is a curtain-raiser
for the magnificent Baroque architecture to be found all over
the island. Its designer, Lorenzo Gafa, conceived its octagonal
dome and lantern, perhaps in deference to its more illustrious
namesake in London.
The site is venerated as the place where Maltas first bishop,
St. Publius, received St. Paul after his shipwreck off the island,
recounted in the Acts of the Apostles.
Although the roads on the island are sometimes atrocious at
least for those used to Dubais slick freeways they are definitely
worth exploring. Visit the town of Naxxar, site of the Mosta
Dome, clearly visible from Rabat, where lunch of the highest
quality is available at the Palazzo Parisio restaurant, along with
a stroll in its ornamental gardens.
Visitors from Dubai should take time out to take a look at
Smart City Malta, the fruit of a 275 million investment by the
government of Dubai designed to emulate Dubai Media and
Internet Cities and convert the Ricasoli Industrial Estate into an
information technology hub. The park is up and running but
space is still available.
;FNEK@D<
AR1, S1YLL, CRUlSL, BY1LS, HO1LLS & SCLNL
M
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74-75 Downtime-Malta.indd 74 6/28/11 6:40:39 PM
>LC=9LJ@E<JJ&.,
KI8M<C;FNEK@D<
>fqfI\ekX]Xid_flj\
ett|ro to ozo ears ta||ro tbe ferrv fro
C|r|eWWa, Wbere a reW ter|ra| |s be|ro bu||t,
or Na|ta's rortbWesterr t|p. 0ueue for a boat
|eav|ro everv 45 |rutes, a|tbouob Wee|erds,
espec|a||v Saturdavs, are extree|v croWded, as
tbat's Wber ost a|e tbe tr|p. LoroWee|erd
re||o|ous bo||davs |||e Cbr|stas, Laster, ard tbe
feasts of St. eoroe ard St. Narv, botb |r suer,
are a|so busv. far bouse rerta|s are a|| tbe raoe
ard car cater to part|es of varv|ro s|ze.
?fk\cj
"A oood sa|| bote| |s tbe Xara Pa|ace Re|a|s
et Cbateaux, |r Nd|ra, exc|us|ve ard afford|ro
peacefu| ever|ros. Ibe vouroer set |ove St
Ju||ar's bote|s sucb as tbe West|r Draoorara,
P||tor, |rtercort|rerta| ard fourstar o|der Iu||p
V|va|d| W|tb r|obt||fe or tbe doorstep. Pa|f a ||e
aWav |s tbe SAS Rad|ssor, Wb||e |r betWeer are
tbe tWo Cor|rtb|a bote|s, Sar oro (fve star) ard
Nar|ra (four star)," savs V|rce de Boro, ore of
Na|ta's |ead|ro tour ou|des.
At the airport, Abu Dhabis Mubadala
Investment Company has extended
its investment in Zurich Airport-
based aircraft maintenance company
SR Technics, with the creation of a
new MRO (maintenance, repair and
overhaul) facility, which won an 11-year
maintenance contract to oversee EasyJets
Airbus A-319 fleet.
Beyond the airport lies Marsa Open
Centre, a camp that is home to hundreds
of African refugees many of them from
Eritrea or Sudan fleeing the violence
in Libya. One professed himself sick
and tired of being stuck in Malta on a
government handout of 80 a week, but
added that the onward journey to Europe
was barred.
Maltas 359 churches are said to provide
the opportunity for residents to attend
mass every day of the year. Many of
them are located in Valetta, the capital,
which, like a mini-Manhattan, is criss-
crossed with government ministries,
businesses, shops and restaurants to
sample at your leisure.
The highlight is the St. Johns
Co-Cathedral, commissioned in 1572
by the Knights of Malta, who were
to be expelled from the island by the
French in 1798. It contains the signature
painting The Beheading of St. John the
Baptist, the only painting signed by
Italian master, Caravaggio.
Emirates Airline flies daily to Malta via
Cyprus. For those who like Europe with
a meso-Mediterranean twist, Malta is
definitely a destination to consider.

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74-75 Downtime-Malta.indd 75 6/28/11 6:40:43 PM
Fast track your career and gain the
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Schools Executive MBA, ranked second
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not only oers a rm grounding in
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* Financial Times 2010
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CASS_Ad_Gulf Business July 2011_270x206_AW.pdf 1 6/29/11 4:09 PM
=fikp$\`^_k_flijn`k_k_`j9\ekc\p`jaljkefk\efl^_%
BRIEF ENCOUNTER
B
IG ENGINES. THATS what W.O
Bentley had in mind when he started
his firm back in 1919. The four-door
Continental Flying Spur Speed sat in front
of me taking up a lot of kerbside, while
continuing the family tradition of big
power blocks, is a world away from its
post-war predecessors and the technology
employed would be unthinkable to Mr
Bentley in his heyday.
The Flying Spur model is the most
successful 12-cylinder luxury saloon in the
world, and the Speed edition I tested has a
new 6-litre, twin-turbo W12 powerplant. Its
600 brake horsepower makes it the most
powerful produced by Bentley ever. Maxing
out at 322 km/h, and capable of sprinting
from rest to 100km/h in an astonishing 4.5
seconds, the Speed engine develops 15 per
cent more torque and nine per cent more
power than the standard edition.
Its front grille and air intakes are
different from the Spur and are finished
in dark chrome, and the wider rifled
sports exhaust offer a couple of hints that
the Speed version is more a cheetah in
sheeps clothing than wolf. Other than
these, there is little obvious indication that
this machine could blow sportier Italian
offerings into the weeds. All while opera
plays tastefully on its 1,100-Watt, Naim
sound system, of course. And boy, can
this thing move. The torque is
formidable and starts at the
DFKFI@E>;FNEK@D<
K<OK9PE@:B:FFG<I
low end of the rev range. A slight down
pressure on the accelerator is all it takes for
it to leap and strain at the leash. Acoustic
glazing, tri-laminate underlays and wheel
arch liners give superb soundproofing and
means that the W12 doesnt howl in your
ears, but rather gives a low, restrained
growl. Felt more than heard.
There is so much detail, its impossible
to take in just how much effort and
thought went into the Flying Spur Speed
at first glance. Little touches make
themselves apparent the more you drive
it, an experience that more cars of this
bracket should offer. Behind the wheel,
its an intuitive space. No need to take
your eyes off the road for a moment, all
controls fall to hand exactly where they
should be, leading to instant and instilled
confidence a good thing in such a large
car. Everything happens quickly at speed,
and acting instinctively makes a difference.
Acceleration, as expected, is
phenomenal. There is no discernable
lag from the turbo-chargers. The most
surprising aspect is how smoothly the 600
horsepower and tractive force is supplied.
No jerkiness, no juddering, the speedo
needle winds on and on calmly with no
drama or theatrics. Before you know it
youre stamping on the other pedal to
restore some legality to the proceedings.
A weekend press drive, while welcome
and better than nothing, is over before you
know it. I wish there were more time to
get to know her, as my feeling of sadness
at handing her back was overwhelming.
It was all too brief an encounter
for this love-struck
chap.
77 Downtime-Bentley.indd 77 6/28/11 8:21:29 PM
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q invest.pdf 4/28/11 1:55:59 PM
>LC=9LJ@E<JJ&.0
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T
HIS SECLUDED LUXURY
resort is only a short 65
kilometre drive out of Dubai,
but Al Maha seems a country
away; a world away.
The only person youll see
throughout your stay is your
partner and the charming,
discreet butler bearing gifts
of silver-service breakfast,
lunch and dinner to be
consumed on the terrace by
your temperature-controlled
private pool.
Your very own oasis is
perched amid 225 sqkm of
pristine desert landscape, amid
the Dubai Desert Conservation
Reserve. The area is home to
300 Oryx, the largest, free-
roaming herd of its kind in
the UAE.
More often than not,
youll spot an Oryx padding
through the villa grounds.
This mythical-looking animal
will pause, look at you
insouciantly, and walk on
or, depending on his thirst
levels, take a slurp of water
from your pool. Al Maha
AL MAHA
K_\ifdXeZ\f]k_\[\j\ik
provides a wildlife book and a
pair of binoculars to spot the
spectacular array of animals,
including 116 species of bird
the guidebook is just one of
the resorts many individual,
surprise touches.
Inside the Bedouin-style
tent villa youll find high-spec
nods to the traditional nomadic
lifestyle and Arabian heritage.
Aside from the huge regal bed
and well-appointed bathroom,
Al Mahas rooms are an
important repository for over
2,000 historic and rare pieces of
artwork, weaponry, traditional
jewellery, and Bedouin
handicrafts. Another special
touch is the artists easel and
wax crayons, an attempt to
coax out the artist in you, long
buried by the constant beep of
your Blackberry.
But the highlight of Al Maha
has to be floating in the pool
at night, counting the stars you
didnt know Dubai had, set
to a soundtrack of nothing but
a breeze.
www.al-maha.com
(
)
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Ibe Wor|dfaous brard bas
opered |ts reW Duba| restaurart
tbe frst brarcb outs|de tbe UK.
Ibe |vv erjovs a pr|e |ocat|or or
tbe orourd foor of Ibe Bou|evard,
Jue|rab L|rates IoWers.
Ibe orard brasser|e bas beer
des|ored bv Nart|r Brudr|z|| ard
features a pr|vate d|r|ro roo
ard a 60seat terrace. Ibe eru
|rc|udes tbe |vv Lordor's coveted
sbepberd's p|e, Dover so|e ard
Scard|rav|ar |ced berr|es W|tb bot
Wb|te cboco|ate sauce. N.
nnn%k_\`mp%X\
Pere vou car expect d|scret|or ard tbe
r|obt erv|rors for corversat|or or a
bus|ress eet|ro. W|tb a ||st of arourd
800 W|res expert|v deta||ed bv ex0re
& 0r|v Pote|s Na|d|ves soe||er,
Dar|e| B|a|s, ard fr|erd|v treatert
fro V|P araoers, vou car or|v
|eave tb|s p|ace fee||ro spec|a| ard
ratber |portart. |f vou Wart to sea|
a dea| W|tb a carr|vore, u|f Bus|ress
recoerds tbe fourcourse, spec|a|
tW|st 'beef tast|ro' eru, |rc|ud|ro
Carpacc|o, r|bs ard Arous terder|o|r,
for Dbs 399 per persor.
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scere, tb|s suer exb|b|t|or fro Ara
a||erv |s ded|cated to sboWcas|ro tbe
Wor|s of vouro L|rat| art|sts. |r add|t|or
to tbe exb|b|t|or, tbere are sess|ors
a||ro to fa|||ar|se tour|sts ard expats W|tb
cu|ture, trad|t|or ard overa|| ||festv|e |r tbe UAL.
Ibe exb|b|t|or rurs fro I Jure to 3I Auoust.
nnn%k_\XiX^Xcc\ip%X\
QldX
fee||ro burorv, but pusbed for t|e to ta|e a
|urcb brea|? Lrter Zua |ocated at tbe Pod|u
6 at Ibe ate V|||aoe |r Duba| |rterrat|ora|
f|rarc|a| Certre. Ibe sopb|st|cated Japarese
restaurart popu|ar W|tb bus|ress tvpes bas
refresbed |ts aWardW|rr|ro Lb|su |urcb eru.
Ibe ea| |s des|ored to bave vou fed ard bac|
at vour des| |r |ess tbar 50 |rutes after re||sb|ro
a tbree course of tbe frest Japarese food
for Dbs I20.
nnn%qldXi\jkXliXek%Zfd
IXZ_X\c:XccX[`e\;lf
|f vou're |oo||ro to sperd soe We||earred doWrt|e erjov|ro c|ass|c us|c
tber bead to B|ue Bar, Novote|, Irade Certre |r Duba| Wbere Racbae| Ca||ad|re
perfors ||ve jazz ard sou| rerd|t|ors of c|ass|c soros. 0r everv Nordav,
Iuesdav ard Wedresdav fro 8p to IIp, Ca||ad|re, a reou|ar perforer at
Rorr|e Scott's, Lordor, oraces tbe fr|doe staoe.
nnn%k_\]i`[^\[lYX`%Zfd
(
)
*
+
,
,
+
*
79 Downtime-Places to be.indd 79 6/28/11 6:42:02 PM
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T
HE 14TH EDITION of Dubais biggest summer entertainment
and shopping fiesta is in full swing. Organised by The Dubai
Events and Promotions Establishment, the government entity
offers regional shopping malls an opportunity to showcase
bargains, activities, contests and raffle draws as part of the
festival promotions.
The bright yellow, deliriously cheerful festival mascot, Modhesh,
now beckons visitors to his very own theme park, Modhesh World
attracting over 500,000 visitors annually. Join him at the Dubai
International Airport Expo Centre. Spread across 37,000 square
metres, attractions include horse and camel rides, a mini zoo,
games, stage shows and an interactive sports zone.
DUBAI SUMMER SURPRISES
81 Calendar July2011.indd 81 6/28/11 6:44:19 PM
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A
LEATHER WAIST-COATED biker named Kamel offers me a
cigarette and shows me his baby a heavily customised
Harley Davidson, replete with studs, special pockets and
gleaming chrome. I love her, he says, Marlboro dangling out
of his mouth, my wife said its me or the bike. I said: Ill take
the bike.
Kamel, who owns five of the iconic American bikes, is just
one member of the Harley Davidson Dubai Owners group. Each
week, a disparate collection of bikers from CEOs to admin
workers to Sheikhs to technicians cast off their day-clothes and
go in search of the kind of escape you can only find on the open
road with the wind in your hair.
Today 200 bikers from around 30-plus nationalities have
gathered together in homage to freedom and the Harley Davidson
American dream. But this counterculture club is more bourgeois
than bat-out-of-hell. The burly, bearded man with the studded
leather jacket and much-tattooed arms says sorry as he brushes
past me and while the traditional Hells Angels rite of passage
includes drinking ones own bodily passings the urbane Dubai
riders even stop to wash their hands after visiting the gents.
The low, sombre growl of motorbikes is intoxicating. As I hop
onto the back of his bike for a group journey to Hatta, my rider
only offers me one piece of advice: hold on tight, babe.
Theres something special, palpable and alive in this group
as they rev off one-by-one into double file. This scene offers a
8c`Z`X9lcc\i r|Jes o||||on w|| |e ar|ev av|Json |||ers' oano
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LICENCE TO THRILL
real-life glimpse into how Harley-Davidsons longevity has been
sustained by its loyal brand community.
Licensing of the Harley-Davidson logo accounts for almost
five per cent of the companys net revenue, which was $3.14
billion last year, with improved profits of $259.7 million after a
major restructuring plan following waning sales in the US. Part of
the companys renaissance plan includes tackling the emerging
markets, with plans to add up to 150 dealers across the globe.
Paul de Jong, Harley Davidson country manager for the
Middle East and North Africa, set up the dedicated corporate
team in Dubai in October, moving over from the main EMEA
office in Cape Town, where he worked for three and half years.
Ive been riding since I was eight years old, so, for me, the
dream started very early. Thats what we do, we help people
realise their dreams. Its the sort of brand that attracts people
who dream. Its the best job in the world, he says.
De Jong explains that Harley Davidson promotes a
brotherhood feel and each dealership promotes and sponsors
a Harley Davison Owners Group, which provides owners with
regular group rides and events.
You wonder why they tattoo themselves with Harley Davison
logos? Its the camaraderie and the belonging between people.
Its very strong in the whole region. As soon as you buy a
Harley you buy into a big group of friends, no matter where you
go, he says.
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