Middle East Business News Review – 8 November
Today’s top business and economy news from the Middle East and North Africa:
Emirates to buy 100 777s if Boeing builds new model
Emirates, the world’s largest airline by international passenger traffic, is likely to order 100 planes or more from Boeing if the plane manufacturer upgrades the design of the wide-body 777 with a newer model, the Dubai-based carrier’s president Tim Clark said.
If Chicago-based Boeing was to produce the next generation of the long-haul 777-300ER (Extended Range), its most profitable aircraft to date, an order of 100 jets from Emirates would probably cost more than US$36bn considering the current list price for the 777-300ER.
That would be Boeing’s largest single order after Emirates ordered 50 of the company’s 777-300ERs in November last year.
Abu Dhabi’s ADIB to sell $1 bln in debut Tier 1 sukuk
Abu Dhabi Islamic Bank, the emirate’s largest sharia-compliant lender, launched a $1 billion sharia-compliant hybrid Islamic bond, or sukuk, on Thursday to boost its core capital, arranging banks said, after attracting strong demand.
The Tier 1 perpetual sukuk, which has no defined maturity date, was launched at a profit rate of 6.375 percent, at the tighter end of revised guidance, after orders totalled over $15 billion.
The demand for the deal, despite its rare and unusual structure for a Middle East issuer, indicates that ADIB offered enough of an incentive to reel in investors, and more such bonds from the region may follow its lead.
Qatar Steel, Qatar Mining get Algeria steel plant deal
Qatar International, a joint venture by Qatar Steel and Qatar Mining, secured a deal to build, own and operate a $2 billion steel plant in Algeria, state media said, which would help the country meet domestic demand and cut imports.
Qatar International will hold 49 percent and Algerian state firm Sider 51 percent in the plant, which will start production from 2017 with an initial capacity of 2 million tonnes per year and increase to 5 million tonnes over time.
Qatar Steel is a wholly owned subsidiary of Industries Qatar.
Bahrain Projects BHD662M Deficit in 2013 Budget
Bahrain projected a budget deficit of 662 million Bahraini dinars ($1.756 billion) for 2013, amid rising political and security tensions as protesters demand greater rights and better living standards.
“The total deficit in the new budget for 2013 reaches BHD662 million, and BHD753 million for the financial year of 2014. This means that the deficit to Gross Domestic Product ratio will be at 6.1% in the financial year 2013 and 6.6% in 2014,” Aref Saleh Khamis, the undersecretary for Bahrain’s finance ministry said in a statement posted on the website of the state news agency, Bahrain News Agency.
MidEast set for rise in mall-based hotels – report
The Middle East is set for a rise in the number of hotels located within mall complexes, as hoteliers look to tap into consumers’ love of shopping and a high level of disposable income, according to a new report.
“Big spenders with cash to splash are driving the trend for Middle Eastern hotels to be built inside shopping malls,” according to the World Travel Market Global Trends Report 2012, compiled by market intelligence firm Euromonitor.
Iran restricts import of ‘luxury goods’ to address forex shortage
Iranian media quoted trade officials as saying on Thursday the government has frozen the import of more than 2,000 “luxury goods” in its bid to stem the shortage of foreign currency caused by Western sanctions.
According to partial lists published by various media outlets, the prohibited products include various brands of cosmetics, confectionery, clothing and jewellery as well as cars, construction materials, computers and cellphones.
According to deputy trade minister Hamid Safdel, the measure could save Iran $4 billion a year. He also confirmed that the ban is also being imposed to promote locally produced products.
Iran might reduce oil exports in response to tightening Western sanctions
The Iranian parliament’s Energy Commission is set to announce new measures that will reduce the country’s crude exports to deflect Western sanctions on the oil sector, Fars news agency reported Thursday.
The directives of the bill are part of Iran’s initiatives to slash crude exports to almost 77% in the current Iranian calendar year ending on March 20, 2013.
“The government is required to reduce oil exports up to one- third compared with last year’s in line with the Islamic republic’ s overall goal of preserving national independence and as a requirement of the present time,” the bill was quoted as saying. The Fars agency report said the bill is waiting for the final approval of the entire parliament.
WFP warns Syrian refugees influx leading to hike in food demand
Executive director of the World Food Programme (WFP) has warned on Wednesday that the food needs of Syrian refugees in Lebanon are skyrocketing and more needs to be done. Ertharin Cousin, after meeting with families during a two-day trip to Lebanon, said the UN agency was increasing its assistance by extending more food vouchers to families in need.
Around 75,000 people are benefitting through the WFP aid projects. The UN food agency hopes to extend it to 85,000 people by the end of November.
“It was very important to me to visit Lebanon as one of the first countries in this region because of the significant operation that we have begun here … to address the needs of refugees coming from Syria,” Cousin said.
Egypt awards post-revolution exploration licences to oil giants
Egypt has granted its first post-revolution exploration licences to Royal Dutch Shell, RWE and TransGlobe Energy, a Reuters report said on Thursday. The country’s government is struggling to make payments to its foreign energy producers to which it owes at least $3 billion in September.
Canada’s TransGlobe emerged as the biggest winner with four concessions whereas Royal Dutch Shell won three concessions including one via an Egyptian joint venture, the report added.
Sudan inflation rises to 45% in October
Sudan’s annual inflation rate rose to 45.3 percent in October from 41.6 a month earlier, driven mostly by large increases in food prices since last year which now seem to have stabilised, official figures showed on Thursday.
Prices have soared in Sudan since South Sudan seceded last year, taking with it three-quarters of the country’s oil output. Petroleum was Sudan’s main source of foreign currency, which it needs to support the Sudanese pound and pay for food and other imports.
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