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Nov 15, 1999

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

Arafat, Blair, to sign gas deal

Palestinian leader Yasser Arafat is expected to arrive Tuesday in London for a two-day visit including talks with Prime Minister Tony Blair and the signing of a gas exploration deal.

UAE approves law setting up bourse regulatory body

The United Arab Emirates has approved a draft law to form a stock market regulatory body that would pave the way for an official bourse in the Gulf Arab state, UAE newspapers reported on Tuesday.

They said the long-awaited law, approved during the weekly cabinet meeting on Monday, covers the structure for setting up the UAE securities and commodities authority, a regulatory body which would license trading floors and lay out rules governing brokerage houses and trading activities.

UAE stocks have been traded through a handful of brokerage houses and banks licnesed by the Central Bank with no centralised exchange. The market is tracked by several different banks and brokerage indices.

The UAE struggles with money-laundering

The United Arab Emirates has positioned itself as the Gulf's free-wheeling trade hub, but is also attracting some unwanted entrepreneurs: money launderers.

A large and fluid expatriate population, a thriving banking community and proximity to international drug smuggling routes make the oil-rich country an inviting target for those with dirty money to clean, according to law enforcement officials.

They say investigations in the US, Europe and Asia tracing millions of dollars in laundered cash have often turned up a link to activities in the UAE.

Iran seen lagging on oil foreign investments

Iran risks losing out in a regional race for billions of dollars in foreign capital unless it eases stifling restrictions on investment in its vast energy industry, Western executives said on Monday.

After launching more oil projects to foreign companies last year, Iran now is lobbying potential partners for investment in the country's largely untapped natural gas industry.

"The biggest danger for Iran is that others will leapfrog Iran's offers. Iran must look around," said Iranian expert Mehdi Varzi of Dresdner Kleinwort Benson on the sidelines of a gas conference in Tehran.

With the world's second largest gas reserves of more than 24 trillion cubic meters that are largely untapped, Iran is a tantalizing prospect for international energy firms.

Iran does not export any gas at present but has lofty ambitions to sell to Turkey, Pakistan and other countries and become a regional player in the industry.

Companies say they are frustrated with Iran's buy-back investment program, under which they receive crude or gas as compensation and profit for their investment.

Companies prefer production sharing agreements, a politically sensitive issue in Iran, a country which has a history of struggle against Western control of its oil reserves before the 1979 Islamic revolution.

Experts say changing the buy-back schemes would be difficult because it could require lifting a constitutional ban on foreign ownership of Iran's oil and gas resources.

Saudi plans to merge regional electricity firms

Saudi Arabia will merge its four regional electricity companies "very soon" in preparation for privatisation, the kingdom's electricity and industry minister said early Thursday.

"The Saudi Electricity Company will be established very soon, since the government has approved the merger of the electricity companies," Hashem Abdallah Yamani said.

The kingdom's electricity network is divided into four companies: SCECO-East, SCECO-West, SCECO-South and SCECO-Central.

Egypt receives bids for two banks

Egypt has received three bids for controlling stakes in two banks partly owned by the government and expects to agree deals within a few months, Minister of Economy and Foreign Trade Youssef Boutros-Ghali said on Monday.

He told in an interview that the government would complete the sale of stakes in two cement firms within weeks and was still waiting for market conditions to improve before proceeding with plans for its first Eurobond sale.

The government has bids from a British, an Arab and a US bank for controlling stakes in two banks partly owned by the state, he said during a trade mission to the UK.

Syria, EU to negotiate on customs

Syria and the European Union start two days of talks Tuesday on human rights, lowering customs duties and other financial questions, a senior EU official said.

The aim is eventually to conclude an agreement of association which will result in duty-free trade by 2010, the head of the EU mission in Syria, Marc Pierini, told.

This fourth round of discussions which began in May last year will cover duties on industrial and agricultural products, as well as certificates proving their origin, he said.

He described the subject of human rights as "an important part of the agreement," saying it figured in every accord of association between the EU and other Mediterranean countries.

Saudi seals new foreign stock investment scheme

Saudi Arabia's central bank has formally notified the kingdom's banks that foreign investors can now buy local stocks through unit trusts, Al-Riyadh newspaper said Tuesday.

The Saudi Arabian Monetary Agency's move seals a decision first announced earlier this month by Finance Minister Ibrahim bin Abdel Aziz Al-Assaf to open up the Arab world's largest bourse to foreign investors.

He said the Saudi stock market had a capitalisation of 190 billion riyals (50.6 billion dollars) and estimated the 12 unit trusts of the kingdom's banks were worth some 2.2 billion riyals (587 million dollars).

Kuwait central bank at odds with state on stock market

Kuwait's Central Bank on Sunday warned against state intervention to boost a sagging local stock market and stressed that the speedy implementation of a long-promised government economic reforms was the only way to bolster shares, the Oman Daily Observer said Sunday.

Central Bank Governor Shaikh Salem Abdel-Aziz Al-Sabah, one of Kuwait's key decision makers on economic affairs said government intervention could lead to a 'collapse' on the Kuwait Stock Exchange (KSE), the paper reported.

Kuwait to forge ahead with privatisation

Kuwait's Trade Minister Abdel Wahab Al-Wazzan on Monday said the oil-rich emirate would forge ahead with its plans for privatisation and reduce the role of the public sector.

"We can improve capacity through privatisation, and ensure the better distribution of wealth and use of resources," Wazzan told a conference here on the expertise of a dozen French companies in managing public utilities.

"Kuwait can benefit from the experience of developed countries such as France, and cooperation is good for both countries in the light of increased globalisation," he said.

Lebanon economy forecasts dark clouds ahead

Prospects for Lebanonís future depend on where you focus — the relentlessly mounting national debt or the government's assertion that its five-year economic plan will soon start to solve the problem, reported the Oman Observer daily Saturday.

So far markets have given President Emile Lahoud the benefit of the doubt, according to the paper.

The Lebanese pound has been stable, interest rates have declined more than a full percentage point this year and the government was able to tap the eurobond market for more than $700 million in September, the paper said.

Foreign visitors, from investment analysts to World Bank officials, have publicly praised the government's targets, according to the paper.

Dubai set to start work on Textile village

The Dubai government will shortly start work to set up a 'Textile Village' in the emirate which will offer bonded custom warehousing and showroom facilities to textile traders.

The project comes under instructions from General Sheikh Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and UAE Minister of Defence, a senior Dubai government official announced.

The Dubai Textile Village project is being piloted by the Dubai Customs.

Japan plans to set up free trade zone

A visiting delegation from Dubai Customs to Japan was asked recently to weigh the pros and cons of setting up a FTZ between the two states, the director general of Dubai Customs, Dr Obeid Saqr Busit, said.

Japan is one of the top trading partners of UAE, with a majority of the Abu Dhabi crude being exported on a long-term basis.

Japanese cars and automobiles have a near 80 per cent share of the-local market, besides being leaders in other consumer and white goods.

Iran taking major steps to partially privatise banks

Iran is taking major steps to partially privatise its banking system as part of a liberal reform package proposed by President Mohammed Khatami to cure the ailing economy, a senior banking official said.

Bahram Zarinqalam, Central Bank director on economic affairs, said the steps included transferring up to 49 per cent of the banks, now all state-owned, to private hands, and increasing the role of private non-banking financial institutions.

Omani banks can buy foreign shares

The Central Bank of Oman (CBO) said it will allow the country's commercial banks to trade up to $1 million in foreign shares to encourage a wider investment base.

In a statement issued in response to a query, the central bank said the banks must limit their foreign share dealings to five per cent of individual net worth.

Saudi Arabia plans major foray into gas

Saudi Arabia plans to shortly initiate a "massive" natural gas exploration and development programme from its identified reservoirs, aimed at producing at least 1.6 billion cubic feet per day (cfd) over the short-term.

Gulf poised for upsurge in drilling activity

With the upturn in oil prices; the Gulf is poised for an upsurge in drilling activity with the UAE's National Drilling Co (NDC) too increasing drilling operations, a top official said.

NDC increased its oil rigs from 19 to 11 this year at its main offshbre fields, namely Zakum and Ummshaif and plans to maintain the same rig level for the coming year too, Noureddine Hadj-Moussa, National Drilling Co head of drilling offshore, told Gulf News on the sidelines of a conference, 1999 Middle East Drilling Technology, which began in the Capital.

National Drilling Co is also updating its budget every year to invest in new technology for more effective drilling operations, he sald.

Currently, Abu Dhabi has 13 offshore and 13 onshore rigs. Except for two offshore rigs all the rest are owned and operated by National Drilling

John Colligan, president of the Society of Petroleum Engineers International endorsed the view that the recovery of oil prices led to increased drilling activity in this region. "There was a dip in drilling activity here. But now it is picking up. The outlook looks good," he said.

Earlier, delivering the keynote address, Mohamad Butti Al Qubaisi, Adnoc deputy director for exploration and production, said drilling technologies have become a major contributor for oil and gas production.

Industry officials were unanimous that oil producers should expect and accept the volatility of oil prices and its impact on drilling activity, but must focus on new technology which alone will be the key to accessing hydrocarbons effectively.

Sharjah exports leap 14.77pc in first half

Sharjah's exports surged 14.77 per cent in first-half 1999, with Iraq reasserting itself as the top export destination. Contrary to popular perception, Russia also remained an important trade partner, although pride of place went to traditional top market Iran.

Transshipment trade through the emirate also shot up 13.77 per cent, although the effects of the global economic slowdown made themselves felt in the reexports segment, dragging down overall non-oil trade by 4.88 per cent.

Bahrain finance sector sets brisk paced

An estimated $3.5 billion worth of foreign exchange transactions are executed daily by banks in Bahrain. Abdulla Saif, Minister of Finance and National Economy, attributed this to measures taken to diversify the island's economy during the past 25 years.

Addressing the Inter-Arab Cambist Association congress, Saif said there are more than 200 financial institutions in Bahrain.

Iraq to raise Jordan imports

Iraq has agreed to raise its imports of Jordanian pharmaceutical products by 60 per cent to a value of $32 million beginning November this years Health Minister Ishaq Maraqa said.

The minister who returned from a visit to Baghdad Friday said the Iraqi government's approval of the increase reflects Baghdad's confidence in the high quality of Jordanian medicine. 

Morocco to get $218m French financial aid

France granted Morocco a financial package worth1,375 million French francs ($218.2 million), nearly half of which was to swap a stake of the North African country's debts into investments.

Officials from both sides said French Prime Minister Lionel Jospin and his Moroccan counterpart Abderrahmane El Youssoufi signed several agreements in the ancient city of Fes at the end of their third annual joint Commission meeting.