GULF

 

Aug 05 - 11, 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF

 

SAUDI ARABIA VOWS TO MAINTAIN STABILITY IN GLOBAL OIL MARKETS

Saudi Arabia, the leading force in the Organization of Petroleum Exporting Countries (Opec), has vowed once again to continue striving to maintain stability in the international oil markets, balancing the interests of both, the oil producers and the consumers.

The announcement came at the end of a meeting of the Supreme Petroleum Council (SPC) on Tuesday. Crown Prince Abdullah chaired the meeting of the policy making body responsible for petroleum and energy affairs in the Kingdom. "The Council affirms the continuity of Kingdom's oil policy aimed at achieving stability in the oil market in order to guarantee the interests of producers and consumers, continuity of world economic growth and stability of oil supplies and prices at reasonable levels," a statement issued after the meeting said.

This statement is being regarded as significant in the wake of the Russian decision to abandon the production cut agreement with the Opec.

Saudi Arabia has been instrumental in maintaining a delicate balance between oil prices and supplies, as arranged under the production ceiling programme of the Opec. In a year, where the global economies have been constantly experiencing one crisis after the other, Opec's success in maintaining oil prices within its officially announced band of $22 to $28, is being acclaimed by most of the analysts, here in Dhahran, the virtual global economic capital.

Analysts here feel despite calls in the West to undo with the Opec production curbs, Saudi Arabia appears still to be favouring a control on supplies, in accordance with actual market demand, so as to ensure a reasonable return for the scarce energy resource.

The oil markets were reported to have responded positively to the decision of the Saudi Supreme Petroleum Council to maintain stability in the global oil markets. The benchmark Brent crude price for September delivery stood at $25.42 a barrel, just above the price level of $25 that the Opec has been seeking within its policy framework.

WORSENING ASSET QUALITY WORRIES BANKS IN UAE

Worsening asset quality among many of the leading banks in the UAE, especially foreign banks, is a cause for concern in the sector.

According to sources, although banks have taken a cautious stand on lending following the Patel episode of 1999 when several leading banks in the Gulf were taken for a ride the deterioration of their assets still continues unabated, at least with a section of banks.

While the asset quality the ratio of total loan provisions to gross loans and advances of almost all leading foreign banks, except Standard Chartered Bank, has deteriorated, leading local banks like National Bank of Abu Dhabi (NBAD), Emirates Bank International (EBI), Mashreqbank, and medium-sized local banks like RAKBank withstood the deterioration of asset quality during 2001.

While provisions as part of loans and advances went up marginally from around 2.75 per cent for HSBC in 2001, it has reduced with Standard Chartered Bank marginally from around 8.5 per cent to around 8 per cent.

The volume of total loans and advances for HSBC and Standard Chartered as of 2001 end were Dh9.61 billion and Dh5.34 billion respectively.

In the case of Citibank, total lending stood at Dh2.08 billion towards the end of the previous year, total provisions during this period accounted for around 10 per cent marginally up from the previous year.

In the case of Habib Bank AG, as well as Habib Bank Ltd, a marginal increase was seen in their provisions.

However, in the case of ABN Amro, provisions almost doubled during 2001, when the total loans of the bank stood at Dh1.7 billion.

In the large local banks category, the ratio of provisions to the total loans for National Bank of Dubai (NBD) has gone up from about 1.5 per cent to around 2 per cent as of 2001 end. NBD's total lending as of 2001 end stood at Dh7.18 billion.

RISING SEA LEVEL POSES PROBLEMS

Many low-lying countries in the Middle East, including the UAE, face a threat from rising sea levels and desertification caused by global warming.

Writing in a special issue of the United Nations Environment Programme's (UNEP) bulletin Our Planet on energy and the environment, Sheikh Hamdan bin Zayed Al Nahyan, Minister of State for Foreign Affairs and Deputy Chairman of Environmental Research and Wildlife Development Agency (ERWDA), warned: "In the Middle East, we have a special need to pay attention to these warnings.

"As many of the countries in the region are low-lying and short of water, we are under threat from rising sea levels and desertification."

IRAN TELLS ITS FORCES TO PREPARE FOR U.S. ATTACK

Iran's army chief said his forces had been told to make preparations for a possible attack by the United States on the Islamic Republic, which Washington has accused of supporting terrorism.

Joint chief of staff General Hassan Firouzabadi told local reporters Iran's top security decision-making body had recently discussed "enemy threats", state television said.

He said Ayatollah Ali Khamenei, Iran's supreme leader and chief commander of the armed forces, had told the army and the elite Revolutionary Guards to "get ready for two main tasks".

"The first is to make ready our arsenal for deterrent purposes. Secondly, if something comes up, we should be quickly able to punish the source of aggression," the general added.

IRAQ OFFERS ARMS INSPECTIONS TALKS

Iraq has invited the United Nations chief weapons inspector to visit Baghdad for talks about the resumption of arms inspections after a break of four years.

Iraqi Foreign Minister Naji Sabri made the offer in a letter to UN Secretary General Kofi Annan.

It came amid growing speculation about an attack on Iraq by the United States, which sees President Saddam Hussein's programme of developing weapons of mass destruction as a major threat.

Mr Sabri said the chief weapons inspector, Hans Blix, and his experts were welcome to come to Iraq for "technical talks", with a view to resuming weapons inspections. The UN has yet to comment on the invitation.

ISRAELI TROOPS POUR INTO WEST BANK CITY

Israeli tanks and troops have entered the centre of the Palestinian city of Nablus in large numbers.

Witnesses said about 150 armoured vehicles, some firing heavy machine guns, moved into the West Bank city in the early hours of Friday morning.

Two Palestinians were killed in Nablus while another was shot dead in a nearby village, Palestinians said.

The operation came hours after Israeli Prime Minister Ariel Sharon vowed to retaliate for Wednesday's bomb attack at the Hebrew University of Jerusalem.

The blast, carried out by the Islamic militant group Hamas, killed seven people and wounded dozens of others.

Israel took control of Nablus in March after Palestinian militants carried out a wave of suicide bombings in Israel.

BAHRAINIS URGED TO JOIN AUTOMOBILE SECTOR

Bahraini youngsters have been urged to consider the vehicle industry as a future career in response to the growing need in this sector.

Hassan Al Shawi, Head of the Bahrain Training Institute's (BTI) Vehicle Section, said there are plenty of jobs available in the vehicle industry but not enough graduates to take advantage of this opportunity.

"The industry is more than willing to take young Bahrainis on board to work and grow within it."

VIRTUAL UNIVERSITY

The UAE's leading IT organisation has contributed to the establishment of the first accredited virtual university in the Middle East.

Emirates Computers has implemented the knowledge management solutions at the Syrian Virtual University (SVU).

The project was initiated by the Ministry of Higher Education in Syria, which recently completed the establishment of what is reportedly the first accredited virtual university in the Middle East.

The pioneering initiative is aimed at furthering the cause of the online education movement in the region.

SEWA POWERS AHEAD WITH BIG PROJECTS

Sharjah Electricity and Water Authority (Sewa) has made big achievements in the fields of electricity, water and natural gas and significant progress on similar other ongoing projects during 2001.

The installation of two desalination units with installed capacity each of five million gallons per day at Layyah power station was completed last year. The two units of multieffect desalination (MED) were commissioned in July and August, 2001, respectively.

According to a Sewa publication, the total cost of these MED units was Dh170 million. With the installation of these units, the total desalination capacity of Layyah power station has increased to 37.5 million gallons per day.

EMAAR PRICE MUCH BELOW BOOK VALUE

Emaar Properties enjoys the lowest market price/book value ratio among the shares listed on the UAE stock markets as of June end, 2002.

Emaar, which was traded at Dh24.75 as of June end, enjoys the lowest ratio of 0.30. The other listed shares with low ratios include, National Marine Dredging Co with ratio of 0.71 against a trading price of Dh630 as of June end. A lower ratio means that market price is much below the book value of the share, which reflects the real value of the share.

PALESTINIANS REJECT UN'S JENIN FINDINGS

Palestinian officials have rejected a United Nations report on Israel's assault on a West Bank refugee camp, after it said it found no evidence that Israeli troops had committed a massacre there.

Chief Palestinian negotiator Saeb Erekat said mass killings of civilians had "clearly happened" when Israel attacked the Jenin camp in April, calling Israel's actions a "war crime".

'RUSSIA MUST END IRAN NUCLEAR DEAL'

US Energy Secretary Spencer Abraham says he has urged Russia to give up all nuclear cooperation with Iran, insisting it is a matter of "utmost concern" to the United States.

Speaking after talks with energy officials in Moscow, Mr Abraham said he was deeply worried by Russia's decision to expand its construction of nuclear reactors in Iran, and he wanted all such projects to stop.

Last week Moscow announced a 10-year nuclear cooperation accord with Iran one of three countries denounced by President Bush as an "axis of evil&quo