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27th Sep, 1999

  1. International
  2. Finance
  3. Industry
  4. Policy
  5. Trade
  6. Gulf

British companies lure Bahraini Investments

Bahrain's business community is being urged to take advantage of trade opportunities offered by British companies, the daily Bahrain Tribune reported Saturday.

Incentives are also available for those wishing to do business with companies in East Lancashire the paper said.

International trade advisor to the Chamber of Commerce of East Lancashire (CCEL) Roger Davis is in Bahrain seeking customers, distributors and agents for companies in East Lancashire, according to the paper.

Kuwait: Oil prices now acceptable

Kuwait said on Saturday world oil prices had reached an acceptable level for this time of year, but exporters would seek a higher level in winter months in the northern hemisphere.

"The market is now starting to stabilize well at $23.50 a barrel. This could be acceptable for this period, but in the coming period we aspire for better prices," Kuwait Oil Minister Shaikh Saud Nasser Al-Sabah told reporters before flying to Saudi Arabia for a Gulf Arab oil meeting.

Shaikh Saud said GCC oil ministers, meeting in Saudi Arabia on Saturday, are expected to reaffirm their full commitment and compliance by a global oil cuts accord which has led to more than doubling of world crude prices since taking effect on April 1.

"It is a done deal," he added. "This is not a verbal pledge, it is a legal and official pledge signed by the oil ministers.

Omani export revenue up on higher oil price

The value of Omani exports rose in the first seven months of 1999 on the back of higher oil prices and an increase in non-oil commodity sales, according to the latest figures from the ministry of national economy.

The ministry said late on Friday oil export revenues in the tiny Gulf Arab state by the end of July were 12.2 percent above the same period in 1998 even though production was 2.2 million barrels lower since Oman, like other world oil producers, cut output from April 1 to boost flagging oil prices.

It said Oman produced 190.3 million barrels from January until end-July which it sold at an average price of $13.65 a barrel. Oil revenues for the first seven months were 771.3 million rials ($2 billion).

Arab economies slow on reform

Arab economies, tipped last year as potential safe havens amid emerging market turbulence, must accelerate growth and deregulation to compete for crucial foreign capital, analysts said on Wednesday, the Oman Daily Observer reported Saturday.

They said the Middle East and North Africa could no longer lure foreign investment by default now that Asian markets were recovering and more established economies were doing well, the paper said.

"The Middle East has come a long way, but the rest of the world is moving even faster, so they are sliding," said David Burton, deputy director of the International Monetary Fund's Middle East department, the paper said.

"Last year, after the Asian crisis, the region's lack of exposure to foreign capital was to its advantage. But we might have overreacted to the Asian crisis and now this particular fact is to its disadvantage," he told Reuters on the sidelines of a Euromoney conference on the potential of Arab economies, according to the paper.

Egypt, Morocco and, to a lesser extent, Lebanon and Jordan were touted in 1998 as promising markets when Southeast Asia was still reeling and Russia was imploding, the paper added.

Emirates signs finance deal for Airbus

Dubai government-owned Emirates airline has signed an $82.96 million financing agreement with Citibank International and Credit Lyonnais for a fifth Airbus A330-200, the company said.

"The financing is structured as a 12-year finance lease, arranged by Citibank International Plc and Credit Lyonnais," Emirates said in a statement.

The statement said that the deal contained a mix of fixed rate funding of 5.89 percent and a floating rate debt at a margin of 65 basis points above LIBOR.

The deal was guaranteed by Britain's Export Credit Guarantee Department (ECGD), Germany's HERMES and France's COFACE, it added.

The official UAE news agency WAM, reporting the deal earlier in the day, gave the amount as 304 million dirhams ($82.8 million).

Saudi candidate sure of OPEC top post

OPEC heavyweight Saudi Arabia on Saturday expressed confidence that its candidate would be chosen to the cartel's top job over his Iranian rival and an Algerian challenger.

Saudi Arabia has fielded its OPEC governor, Sulaiman Al-Herbish, to replace Nigeria's Rilwanu Lukman as secretary-general of the Organisation of the Petroleum Exporting Countries.

Saudi Prince signs $100 mln Egypt hotel deal

Saudi billionaire Prince Alwaleed bin Talal has signed a $100 million preliminary deal with an Egyptian firm to build two hotels on Egypt's Red Sea coast, the prince's Kingdom Holding Co said on Saturday.

"Prince Alwaleed bin Talal...signed preliminary agreements with Dr Fareed Saad, Chairman of Soma Bay Development Company for the establishment, development and management of a Four Seasons and a Movenpick hotels In Soma Bay, Egypt," the company said in a statement.

It said construction of the two hotels was expected to begin by the middle of next year. Soma Bay, which has an 18-hole golf course, is an upmarket tourist destination near Hurghada.

Oman industrial projects get strong response

The Omani Centre for Investment Promotion and Export Development (Ociped) has reported an enthusiastic investor response to the 14 industrial and tourism project proposals unveiled at an investment seminar earlier this month, the Oman Daily Observer reported Sunday.

Leading Omani entrepreneurs and business houses, as well as pension fund agencies, have signaled their interest in the projects, which involve a total investment of $276.6 million, the paper reported.

Many of the ventures are now expected to see progress made towards implementation before the end of the year, say officials, according to the paper.

Saudi, WTO to begin new round of entry talks

Commerce Minister Ossama bin Jaafar Al-Faqih is to travel to Geneva on Monday for fresh talks on Saudi Arabia's application to join the World Trade Organisation (WTO), the official Saudi Press Agency said.

It said Faqih would outline a programme and timetable for Saudi commercial regulations to be brought in line with WTO guidelines.

The talks are expected to last a week and Faqih will be accompanied by officials from the oil, foreign affairs, finance, industry and agriculture ministries as well as the Saudi central bank.

Saudi Arabia wants free access to the world market for its petrochemical giant, the Saudi Basic Industries Corp. (SABIC).

European and US manufacturers oppose the move, saying SABIC benefits from subsidies in the form of a 30-percent reduction on purchases of liquefied petroleum gas from the Saudi Aramco oil company.

Bahrain working on money laundering law

Bahrain is working on a draft law aimed at keeping money laundering out of its financial markets, Bahrain Monetary Agency deputy governor Shaikh Abdallah Al-Khalifa said on Monday.

Bahrain, the Gulf's main financial and banking hub, currently has no law directed specifically at money laundering operations.

Central Bank: Saudi needs deeper markets

Saudi Arabia needs to deepen its financial markets, make them more transparent and encourage a secondary debt market, the central bank governor said in remarks published on Monday.

Hamad Saud Al-Sayyari, governor of the Saudi Arabian Monetary Agency (SAMA), was quoted in newspapers as saying the existing debt market was too confined to government debt.

He told an investment seminar that the market was underdeveloped mainly because most companies relied on traditional bank financing such as syndicated loans and because the market was inadequately promoted.

IDB Gives Approval to $1 bln Islamic Firm

The Saudi-based Islamic Development Bank (IDB) Sunday approved a draft agreement to set up an Islamic firm with capital of $1 billion to promote the private sector, the official Saudi Press Agency (SPA) reported.

It said an IDB executive managerial meeting in Islamabad approved the establishment of the Islamic Private Sector Development Institute to finance private sector operations and investments.

The news agency said IDB will contribute $500 million to the firm's capital and that the new entity would begin operations after receiving final approval from the bank's governors at a meeting in Jeddah in November. No further details were available.

Iraq supports idea of Arab economic bloc

Iraqi Vice-President Taha Yasin Ramadan said Monday that his country would support the setting up of an economic bloc with other Arab countries to compete with the existing international trade groups.

"Iraq is ready to put its economic capacities at the disposition (of such an Arab bloc) to install a solid Arab economic system capable of standing face-to-face with economic bloc around the world," said Ramadan, who was receiving a Libyan industrial delegation.

Saudi moves toward privatization of airline

The aviation and defence minister on Tuesday announced the formation of a committee to prepare for the privatization of Saudi Arabian Airlines.

The committee is made up of members of the boards of the national carrier and the civil aviation department, said Prince Sultan bin Abdel Aziz, quoted by the official news agency SPA.

The minister announced on September 16 that the airline was being privatized, but without disclosing any details.

Kuwait warns against increasing oil output

Kuwait on Monday warned oil exporting countries to stick to output cuts agreed in March which have seen a dramatic recovery in oil prices over the past six months.

"Any rise in production would threaten the stability of the oil price," said Kuwaiti Oil Minister Saud Nasser Al-Sabah as he prepared to leave for a ministerial meeting of the Organisation of Petroleum Exporting Countries which opens in Vienna on Wednesday.

"The danger is that OPEC could start to increase its overall production before the summer which will see a decrease in demand for oil," said Shaikh Saud, quoted by the official KUNA news agency.

Bahrain, US business ties strengthened

American business continues to prosper in Bahrain and will be further enhanced by a new bilateral investment treaty to be signed by the two countries, says US Ambassador Johnny Young, the daily Bahrain Tribune reported Wednesday.

But he warned that American interests must work harder if they want to influence economic development here, the paper added.

Likewise, Mr Young said he remained in the forefront of those who encouraged greater transparency and the assurance that all firms, not just American companies, were presented with a level playing field, the paper said.

Kuwait stocks hit by market charges, politics

Allegations of financial irregularities at some of Kuwait's larger companies and fresh political uncertainty have combined to take the Gulf state's stock market toward record lows this week.

Stock exchange officials said some key investors were incorrectly reporting the actual size of their holdings in certain companies. There were also allegations circulating of financial irregularities, market sources said.

Stock exchange officials met late on Monday to investigate the claims. Sources say the country's central bank is expected to look into the allegations as well.

"Such a struggle between big players has an impact on the prices of at least seven listed firms directly involved in addition to others and (investment) funds indirectly linked to the disputes," said Kuwaiti economist Jasem Al-Saadoun.

"The exact size of the problem is still unknown and raises fears that other listed firms could have also committed similar alleged mistakes," he added.

The latest slump on what was once one of the Arab world's largest and liveliest markets has led some experts to voice deep concern in the local press and the official Kuwait News Agency, including some calls for intervention by state investment firms and large investment funds.