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Oct 18, 1999

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

MasterCard's leading mart

The UAE is Mastercard International's biggest market in the Middle East/North Africa region with total spending in 1998 amounting to $362.02 million.

Despite better penetration in Saudi Arabia, the kingdom last year yielded gross spending of $331.78 million.

The UAE is expected to remain the company's top Mena market this year as well, with a projected total spend of $425 million against second-placed Saudi Arabia's $375 million.

Egyptians recorded an average spend last year of $4,723, although the figure is expected to come down this year to $4,000. The Qataris came next, shelling out $4,716 on average, and were followed by the Lebanese with $3,703.

But the biggest market in terms of card penetration continued to be Saudi Arabia, with 172,060 cardholders last year, accounting for a dominant 33.09 per cent of total Mastercard holders in the Mena region.

UAE vehicle imports

Vehicle imports by UAE during 1999 is expected to close at the 84,000 mark, a sharp drop from the record 96,204 during 1998 according to a local automobile dealership.

While overall market conditions are one factor, the decline has also been engineered by the sharp rise in the value of the yen in recent weeks. Japanese auto manufacturers have a dominant position in the local and regional markets.

UAE, S. Korea agree to boost trade

Sheikh Hamdan bin Rashid A Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance and Industry, and Chung Duck-koo, South Korean Trade, Industry and Energy Minister, signed a joint statement on trade and industrial co-operation in Dubai.

The UAE and South Korea agreed to step up cooperation in oil and mineral resources, the official news agency WAM reported.

It said Obeid bin Saif Al Nasiri, UAE Minister of Petroleum and Mineral Resources, and Chung Duck-koo, South Korea's Minister of Industry and Energy decided at talks in Abu Dhabi to form a committee tasked with boosting cooperation in the two fields.

They also agreed to "encourage joint oil projects," in reference to the ongoing negotiations between the Abu Dhabi International Petroleum Investment Co (Ipic) and South Korea's Hyundai Oil Refinery Co.

In April, Ipic agreed in principle to buy a $500 million stake in Hyundai Oil Refinery Co.

"Negotiations are still going on, but we expect the deal to be signed this year," for Ipic to acquire the 50 per cent stake said, I.S. Chung, general manager of Hyundai Oil Refinery Co's Dubai branch.

The South Korean oil company is mainly involved in importing crude from Iran, Saudi Arabia, Abu Dhabi, Kuwait and Oman for refining in South Korea. It is a subsidiary of the giant Hyundai group.

Ipic, owned by the Abu Dhabi government, is an investment company focusing on oil and oil-related activities and acquisitions.

Morocco airline selloff

Morocco plans to privatise up to 40 per cent of state-run airline Royal Air Maroc (RAM), including the sale of a stake to a foreign partner, a transport ministry official said.

Talk about a partial privatisation of the national carrier began in 1995, but the plans were shelved as the company underwent a restructuring programme that included upgrading its fleet and raising its capital.

Iran to open up mining industry to foreigners

The Iranian government has decided to open up its mining and metal industries, the most important in the country after oil, to foreign investors, including from the United States, an official said.

"We want to replace oil little by little because Iran is extremely rich in minerals," the deputy minister for mines and metals Mohammad Javad Assemi-Pur, told a press conference.

He stressed that U.S. firms were among those invited to take part in an international conference aimed at attracting investment in the mining industry, to be held in Tehran on October 19 and 20.

Assemi-Pur said four contracts would be signed at the end of the conference, including two for gold-mining with South African interests.

"Some 100 projects worth approximately $10 billion will be offered to the foreign and Iranian investors at the conference, which is the first of its type to be organised in Iran," he said.

Of the projects, ten concerned steel production, nine aluminium, 11 copper and four zinc.

Representatives of 67 foreign companies, mainly from European countries like Britain, France and Germany, are expected to attend.

"We want to reassure our foreign partners that there is security for investment in Iran," Assemi-Pur said, stressing the desire of the government to attract capital from outside.

Assemi-Pur said, stressing the desire of the government to attract capital from outside.

"Foreigners can invest in Iran up to 100 per cent, but we prefer them to establish joint ventures with Iranian firms," he added.

For several years Iran has been seeking foreign cash to help it exploit its mineral wealth, with the aim of boosting exports and countering a fall in revenue from oil.

Last year administrative formalities governing mineral exports were abolished, including the prior authorisation required from the mines and metals ministry.

Iran earns 85 per cent of its foreign currency from oil.

UAE software piracy rate at all-time low

Boosted by strict policing against software piracy, the local information technology (IT) sector has grown ten-fold in the last 42 months, and other Middle East countries could attempt to follow this growth model, said a senior industry official.

The size of packaged software sector in the UAE is estimated at Dh440 million, and if clubbed with the market for customised packages, it could be as high as Dhl.3 billion.

Piracy rate in the UAE is also the lowest in the region at 47 per cent, and could fall to levels in major West European markets by end-2000.

In 1998, UAE piracy level was registered at 54 per cent.

But despite attempts by Middle East governments to enforce strict copyright regime, software piracy continues to average a high 90 per cent, and is hindering IT sector growth the official said.

Oman may drop $900m project

Oman may cancel a proposed $900 million petrochemical plant in the Gulf state after feasibility studies showed the project would not be profitable, the official Omani news agency ONA reported.

ONA quoted a commerce and Industry Ministry official as saying that BP Amoco had asked Omani government to reconsider the project after studies showed it would not be profitable at the proposed size, due to fluctuating petrochemicals prices on the global market.

Qatar set to raise $400m in bonds

Qatar is to raise $400 million through corporate bonds to help finance a natural gas liquids (NGL) project, which has already raised a similar amount with a loan, a Qatari gas official said.

"It was always intended to raise $800 million for the NGL-4 complex through a syndicated loan and bonds. The first part has been closed with the signing of a $400 million loan with 14 banks and preparations for another tranche to raise another $400 million through bonds is under way,'' the official said.

Iran, Greece sign economic accords

Iran and Greece signed a series of agricultural and industrial cooperation agreements on Thursday before visiting Greek President Kostis Stephanopoulous left Tehran for the central city of Isfahan.

Deals on the production of olive oil as well as Persian Gulf and Caspian Sea fisheries were among those inked by Stephanopoulos and his Iranian counterpart Mahammad Khatami, who also signed cultural cooperation agreements.

US trade mission in Egypt

A group of US corporate executives headed by Commerce Secretary William Daley arrived here Wednesday hoping to exploit fresh trade opportunities with Egypt after a change of government.

The delegation is looking forward "to exploring commercial opportunities resulting from Egypt's economic reforms and ongoing privatization reforms," Daley said on his arrival here at the head of a delegation of 12 business leaders.

Among the US companies represented were Nortel Networks, Enron Corporation, ProNetLink.com and New York Life International.

Qatar launches $700 mln Chemical Plant

Qatar opened a $700 mln petrochemical project aimed at converting the Gulf Arab state's mammoth hydrocarbon deposits into valued added products, the Oman Daily Observer reported Wednesday.

Energy and Industry Minister Abdallah bin Hamad Al-Attiyah said the country's third petrochemical plant, Qatar Fuel Additives Company (QAFAC), was designed to produce 825,000 tons of methanol and 610,000 tons of MTBE (methyl tertiary butyl ethane) a year, the paper said.

They will be sold to foreign partners during the project's loan period spanning 12 years under an offtake agreement put in place, according to the paper.

The project is 50 per cent owned by the state's Qatar General Petroleum Corp (QGPC), 20 per cent by Taiwan's Chinese Petroleum Corp and 15 per cent by Canada's International Octane Ltd (IOL) and Taiwan's Lee Chang Yung Chemical Industry Cor (LCYCIC), the paper reported.

US: Jordan nearer to WTO membership

US Commerce Secretary William Daley said Jordan's pace of IMF-directed economic reforms so far this year was bringing it closer to membership of the World Trade Organisation.

"I think the reforms that have occurred have moved Jordan very far down the road towards entry into the WTO," he told reporters before ending a two-day visit here.

ABC Bank to arrange 'Islamic' loan for Iran

Bahrain-based ABC Islamic Bank said on Sunday it would arrange financing for an oil and petrochemical project in Iran worth millions of dollars.

ABC Islamic Bank, owned by Arab Banking Corp (ABC), also said it would soon introduce an Islamic credit card in a joint project with Bahrain-based Arab Financial Services.

"We will be the lead manager for the financing facility for an oil and petrochemical project in Iran," Executive Director of ABC Islamic Bank Mahamed BuQais told Reuters in an interview.