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Sunday, 14 November 2010

Gulf eyes Bahrain struggles -

Bahrain needs to scale back subsidies to cope with rising pressure on state finances - but in a tense political climate it will have to offer its people jobs and better services in return.

The Gulf island kingdom is the smallest oil producer in the region and the first country to grapple head-on with these reforms, but others are watching closely since they will eventually have to make similar changes as they diversify away from oil, analysts say.

The government plans to significantly increase spending on housing, health and education over the next two years after a recent security crackdown renewed complaints by the Shi'ite majority population that it is neglected by the Sunni-led government.

How Leighton Holdings dodged disaster in Dubai | The Australian

TWENTY-EIGHT days after arriving in Dubai to take over as chief executive of Al Habtoor Leighton Group, Laurie Voyer smelt trouble.

The world had yet to experience the full force of the global financial crisis, but he did the numbers and decided to pull back.

"Eighteen months ago we were flying pretty high, and I didn't think we should be flying as high as we were, so I slowed it all down," he tells The Australian.

"I did my own assessment of where I thought we were, from all the echoes in the room I could hear, and I used that as my depth of the water. Having been here for only 28 days, people said 'what would I know?' I guess my experience in Australia would mean I'd know enough to keep us out of trouble, and I was able to navigate through those channels and put the handbrake on."

The Middle East's gas dilemma: shortages in a region of plenty- b

In the Middle East, rapid economic growth has resulted in the consumption of natural gas outpacing production while uncertainty over the level of future global gas demand is at its highest in decades, according to The global gas challenge, a new report from Ernst & Young.

This uncertainty could result in future supplies being inadequate to meet the projected growth in demand. Although global gas demand is forecast to grow by 1.5% per annum until 2030 by the International Energy Agency, actual growth will be influenced by a number of unpredictable factors.

According to David Barringer, Oil & Gas Leader, Ernst & Young MENA, “While the energy strategies adopted by some countries in the Middle East may help improve their energy independence in the longer-term, in the short-term the region’s requirements will also have to be met by imported gas.”

Dubai Shares Drop on European Debt Concern, Paced by Emaar; Tel Aviv Falls - Bloomberg

Dubai shares retreated a third day, leading a decline in the Gulf, after global markets slumped on concern some European countries will struggle to repay debt and investors trimmed holdings before a Muslim holiday.

Emaar Properties PJSC, builder of the world’s tallest skyscraper in Dubai, led the decline andEmirates NBD PJSC, the United Arab Emirates’ biggest lender by assets, slipped 0.9 percent. TheDFM General Index slid 0.4 percent to 1,685.52, at 11:52 a.m. in Dubai. The Bloomberg GCC 200 Index of regional stocks fell as much as 0.2 percent. Saudi Arabia’s and Kuwait’s markets are closed today for Eid.

Gulf shares are dropping because of a “weak international lead,” said Tarek Lotfy, executive director at Dubai-based Arqaam Capital Ltd. “Most market participants are out for the week, so volumes are expected to remain low.”

Emaar Properties Says Loan Due From Amlak Finance Is `Fully Recoverable' - Bloomberg

Emaar Properties PJSC said it believes the loan due from Amlak Finance PJSC, the Islamic mortgage company being reorganized by the United Arab Emirates government, is “fully recoverable.”

Emaar’s loan to Amlak amounted to 772.6 million dirhams at the end of September, the company said in its reviewed earnings statement on the Dubai bourse today. The loan included 533.7 million dirhams relating to a credit facility, it said. Emaar holds a 45 percent stake in Amlak, according to Bloomberg data.

Emaar’s trade receivables at the end of September amounted to 1 billion dirhams compared with 981.4 million dirhams at the end of last year, according to the statement. Trade receivables within the next 12 months totaled 802.3 million dirhams, it said.

U.A.E. Central Bank Requires Lenders to Book Provisions Every Quarter - Bloomberg

The United Arab Emirates’ central bank is seeking to improve transparency in the banking industry by requiring lenders to book provisions every three months instead of waiting until the end of the year to cover bad loans.

The new guidelines, which classify loans and provisions in line with the Basel Committee on Banking Supervision standards, will “serve as a catalyst in depicting a truly realistic financial position of banks and other financial institutions,” a statement on the central bank’s website said.

“All banks and other financial institutions are required to make provisions, specific or general, required for this regulation and deduct them from the profit and loss account at the end of each quarter and not delay them till the end of the financial year,” the statement dated Nov. 11 said.

Bahrain issues new corporate governance rules

The Central Bank of Bahrain (CBB) has issued the new requirements incorporating the corporate governance code of the Kingdom in line with the code issued earlier this year by the Ministry of Industry and Commerce.

The new rules issued last month for banks include both the new corporate governance code requirements (formally announced, the existing CBB requirements and new Board attendance rules).

The new rules incorporate the nine fundamental principles of corporate governance stipulated in the code for financial institutions, their boards and management to follow, said a CBB statement.

Globalfoundries hopes to gain on chip outsourcing

Globalfoundries, the customised microchip foundry owned by the Abu Dhabi Government, is hoping to pick up more business next year as the US$300 billion (Dh1.1 trillion) worldwide industry tries to cut costs by outsourcing chip making.

Advanced Technology Investment Corporation (ATIC), owned by the Abu Dhabi Government, has a 73 per cent stake in Globalfoundries and plans to build a US$6 billion (Dh22.03bn) microchip making plant in the emirate by 2015.

The technology research company Gartner expects global semiconductor revenue to grow 32 per cent to $300.3bn this year but anticipates a slowdown in the rate of growth next year.

Capital free zone to allow investors 100% ownership

Abu Dhabi Ports Company (ADPC) has received approval to create the first industrial free zone in the capital with 100 per cent ownership available to foreign investors.

The Khalifa Industrial Zone Abu Dhabi (KIZAD), which is in Taweelah near the border with Dubai, joins a small but growing list of free zones in the capital as the Government seeks to spur foreign investment and diversify the economy.

The industrial zone, which was known as the Khalifa Port and Industrial Zone until its renaming yesterday, received approval for free-zone status from the Abu Dhabi Executive Council on Thursday. However, the ADPC said it would operate the zone with a dual structure and offer ownership to foreign companies only in cases where proposed projects benefited Abu Dhabi's strategic economic objectives.

Qatar’s LNG output target a step closer

Qatargas has achieved a milestone by producing “first drops of liquefied natural gas” at its Train 6, the world’s largest LNG facility at Ras Laffan.

The 7.8mn tonnes per year (tpy) capacity super train has been set up under Qatargas 3 project (QG 3), which is a joint venture among Qatar Petroleum, ConocoPhillips and Mitsui & Company.

Qatargas said the production of first LNG at Train 6 was taking Qatar one more step closer to realising HH the Emir’s vision of achieving 77mn tpy of LNG production capacity by 2010-end.

Agility Net Income Drops 66% as U.S. Government Contracts End Amid Lawsuit - Bloomberg

Agility Public Warehousing Co. reported a 66 percent drop in third-quarter profit as the Kuwait-based logistics company faces charges in the U.S. of overbilling on supplies to American troops.

Net income fell to 13.89 million dinars ($49.5 million) from 40.6 million dinars, the company said in an e-mailed statement today. Revenue declined to 405.9 million dinars in the third quarter, from 413.6 million dinars a year earlier, Agility said.

Agility, the Middle East’s largest storage and logistics company, was first indicted in November 2009 for allegedly overcharging the U.S. government on a multibillion dollar contract to supply food for troops in Kuwait and Iraq. The company had said it’s in talks to resolve legal issues with the U.S. Department of Justice and there’s no guarantee a settlement will be reached.