GULF

 

Sep 09 - 15, 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF

 

OIL PRICE SLUMPS AS WAR FEARS RECEDE

Oil prices have fallen sharply shedding as much as 4% following promises by leading oil producers to keep prices stable.
A string of other factors contributed to the drop,
which took the price of a barrel of Brent Crude oil, the international benchmark, down 96 cents to $26.58.

Demand for oil is now expected to remain relatively low, after an influential survey suggested that US manufacturing remained weak.

The news sent US share prices tumbling, further undermining expectations of an economic recovery and higher demand for oil.

And worries about a second Gulf War, potentially disrupting Middle Eastern oil supplies, receded as well.

Traders said Iraq's diplomatic offensive over the issue of United Nations weapons inspections was designed to head off a US military attack and calmed market fears.

Fears that military tensions could reach crisis levels had driven oil prices close to the $30 a barrel level during recent weeks.

With London's Brent Crude price setting the lead, the US benchmark Nymex crude oil followed.

The price of a barrel for October delivery fell $1.19 or more than 4% to $27.79 its lowest level in two weeks.

The markets are now watching the next move of the oil cartel Opec, the Organisation of Petroleum Exporting Countries, which is due to meet on 19 September.

Opec has pledged to keep oil prices in a range between $22 and $28 a barrel, but tracks the price of a basket of Opec-produced oil varieties, which currently stands at just under $27.

There has been speculation that Opec might decide to increase its output, to put an end to the seemingly unstoppable trend of rising prices during recent months.

UAE STILL RANKS AS PAKISTAN'S LARGEST MARKET IN MIDEAST

The UAE maintained its lead as Pakistan's largest export market in the Middle East with exports to Dubai alone touching $719.6 million for the year ended July 01 to June 02, official figures showed.

Total exports from Pakistan to the UAE were valued at $727.4 million. While Dubai is the main gateway in the region for Pakistani exports, Saudi Arabia and Turkey followed next.

"Dubai is not only the largest export market for Pakistan in the Middle East, it is also the fastest growing," a senior official of the Pakistani embassy told Gulf News.

Exports from Pakistan to the UAE has shown a steady growth in the last three years from $492.7 million to $625.9 million and now to $727.4 million.

Not only has Dubai accounted for a major share of Pakistan's exports to the UAE, it has accounted for some 50 per cent of Pakistan's exports to the Middle East. "Dubai will continue to hold its own as the export destination and a re-export base," said the official.

Pakistan's exports to Saudi Arabia during 2001-02 reached $330.4 million, up from $272.0 million the previous accounting year. However, exports to Turkey dipped slightly to $98.2 million from $100.5 million.

Figures relating to exports from the UAE to Pakistan were not available. Pakistan's principal export items include cotton and textiles, rice, leather and leather products, sports goods, surgical instruments, meat, fruits and vegetables. Cotton products include raw cotton, yarn, thread, bags, fabrics, hosiery and garments.

Interestingly, new non-traditional export items such as fish and fish products are becoming an important component of Pakistan's exports showing impressive growth in the last two years.

GULF STATES OPPOSE ATTACK ON IRAQ

Gulf oil monarchies on Tuesday rejected a US strike against Iraq but urged Baghdad to readmit UN weapons inspectors to ward off an attack.

The Gulf Cooperation Council (GCC) states "renew their adherence to the decision of (last March's) Arab summit in Beirut which rejected any military action against any Muslim or Arab country, including Iraq," said a statement issued by foreign ministers of the six-nation bloc at the end of a two-day meeting in this Red Sea city.

Such action would have "consequences that would endanger security and stability in the Gulf region," said the statement by the chief diplomats of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE).

PORTUGAL SEEKS TO DOUBLE UAE TRADE

The Portuguese Trade Centre, which recently opened in Dubai, aims to double bilateral trade in the next five years, said a senior official.

"I would like to see a gradual increase. The links need to be developed and then I would like to see the level of trade between the two countries double in the next four to five years," said Carlos Costa, trade commissioner, Portuguese Trade Centre.

The centre, which opened at Doha Tower on Sheikh Zayed Road last month, was previously based in Saudi Arabia.

But it was moved to the UAE because of the emerging business opportunities.

ARAB POPULATION EXPECTED TO HIT 459M IN 2020

Arab people are expected to increase by around 180 million to 459 million in 2020 while population growth is set to remain relatively slow in the UAE, Qatar and five other regional countries, according to the United Nations.

By that year, Egypt's population might cross 100 million for the first time in the Arab history while the ratio of children in most regional countries is expected to start climbing down.

In its 2002 Arab Human Development Report, the UNDP presented two scenarios for the population growth in the region. The first assumed stable fertility and life expectancy rates and the second used variable annual rates.

UAE'S GDP GROWTH MAY DIP TO 1.7PC

The UAE's real GDP growth which fell to 2.9 per cent in 2001 could drop further to 1.7 per cent in 2002 as oil production falls in line with Opec supply-management policies, forecasts the Economist Intelligence Unit (EIU) in its latest country report on the UAE.

However, real growth will recover to 4.1 per cent in 2003 following a pick-up in world growth and oil production, the report adds.

While the UAE's oil output is expected to fall by 5.3 per cent in 2002, in terms of domestic demand, higher than expected oil prices will underpin strong government spending throughout the year.

"Furthermore, relatively high oil prices and an improving world economy will boost consumer and investor confidence in the domestic and regional markets on which the UAE depends."

Real GDP growth will be much stronger in 2003, rebounding to 4.1 per cent. A number of factors will underpin this recovery, particularly a 4.3 per cent increase in oil production in line with rising global oil demand.

BRITAIN WILL PAY BLOOD PRICE BLAIR

Britain must be prepared to pay a "blood price" to secure its special relationship with the US, Prime Minister Tony Blair has told ahead of talks on Iraq with President Bush.

But Britain was not America's puppet, the prime minister said in an interview with the BBC Two programme Hotline to the President, to be screened on Sunday.

Meanwhile, almost 100 British and United States war planes attacked an air defence base in western Iraq. Defence sources say the raid was part of the enforcement of the no-fly zone, but it was much larger than normal.

US AND EUROPE SPLIT OVER IRAQ

For months America's relations with its European allies have been edgy and frayed. Now the US faces a full-scale rebellion.

That rebellion is led by Germany's Chancellor Gerhard Schroeder. He has said "no" in the strongest terms to German support for any US-led military action against Iraq.

He has also dressed down President Bush for failing to consult his allies.

Mr Schroeder, who faces a battle for re-election in two weeks' time, now says he would oppose military action, even if the UN Security Council were to give its backing to the use of force.

HIGH-TECH GATEWAY TO DUBAI

More than 1,200 passengers have passed through the fast-track e-gate at Dubai International Airport since it was set up on August 11.

Lieutenant Khalid Lootah, Head of the IT Department at the Dubai Naturalisation and Residency Department (DNRD), said that another e-gate will be installed next month for businessmen.

The e-gate is the first of its kind in the Middle East and the third in the world. This advanced passenger clearance system helps accelerate the movement of passengers with the help of smart cards.

BAHRAIN INDEX UP 6.72 POINTS

The Bahrain Stock Exchange (BSE) index for July closed at 1819.19 points, marking an increase of 6.72 points above previous month's closing index, official figures showed.

Results indicated that 687 transactions took place with a volume of 18,408,687 shares worth BD5,023,371.

GROUP 4 SECURITAS WINS NBAD CONTRACT

Group 4 Securitas has secured a contract from National Bank of Abu Dhabi (NBAD) to handle the bank's cash management and total solutions.

An agreement was signed by Khamis Buharoon, head of domestic banking, NBAD, and Fuad Tannous, group managing director, Al Hamed Enterprises Group, the joint venture partners of Group 4 Securitas in the UAE.

STRUCTURE FOR THE ISSUE OF EUROBONDS

The classical structure of 'eurobond' issues involves or requires the presence of three groups:

1. The managers who arrange the issue.

2. The underwriters who are normally a large group of financial institutions who agree among themselves to underwrite the issue in case investors do not subscribe.

3. The selling-group who are professional dealers in securities who place the bonds with their clients.

In many cases, there may be only two groups managers and underwriters. The subscription agreement is normally between the managers and the issuer and this agreement includes the terms upon which the managers agree to purchase or procure purchasers for bonds.

DSS DONATES MONEY FOR PALESTINIANS

A total of Dh859,140 generated through Modhesh Fun City entrance fees has been donated to the Sheikh Mohammed bin Rashid Al Maktoum Charitable and Humanitarian Establishment, to aid Palestinian children.

The move is in line with the decision of the Dubai Summer Surprises (DSS) 2002 office on July 25, to donate the income from the City from that date onwards, to Palestinian children.

STANCHART STUDIES BIG PRESENCE IN DIFC

Standard Chartered Bank is seriously considering establishing a presence at the Dubai International Financial Centre (DIFC), where the multinational bank may open shops for more than one activity.

Speaking to Gulf News, Andrew Duff, chief executive officer, UAE and head of corporate banking, Gulf, said that the bank's board members had already visited and held discussions with DIFC top brass a few months back, on the future course of action.

AL KHAZNA NET PROFIT DOWN

Al Khazna Insurance Co (Al Khazna) has posted a net profit of Dh12.66 million, down 33 per cent compared to Dh19.1 million earned in the first half last year.

DIGITAL PRODUCTS SALES PROP UP MARTS

Extremely buoyant sales for digital-based products helped prop up growth in the local consumer electronics markets in the year to date, according to a senior industry source. Growth for the overall market this year in quantity terms is estimated at 5 per cent.

However, revenues may have remained flat, primarily because of the drop in prices in major product categories, the official added.

VIOLENCE ERUPTS IN LEBANESE CAMP

At least two Palestinians and a Lebanese soldier have been killed during a gunfight in al-Jalil refugee camp in Lebanon.

Many more were wounded in the fighting, and Lebanese tanks are still surrounding the camp, near the eastern town of Baalbek.

The clashes erupted when the soldiers raided offices of an organisation linked to the Palestinian guerrilla leader, Abu Nidal, who was found dead in Baghdad last month.

The Lebanese army rarely enters Palestinian refugee camps, which are controlled by various armed factions and considered beyond government authority.

LIBYA PLACES HUGE HYUNDAI ORDER

The Libyan government is providing Hyundai Motor with its biggest-ever single export deal.

South Korea's biggest car maker has won an order to export 26,373 compact cars to the North African country, the biggest export deal not just for Hyundai but also for the South Korean car industry.

Hyundai has declined to say how much the order is worth, saying only that it has never before received a single order for so many cars.

Motor analysts have valued the deal at $240m (153m), a welcome boost to the South Korean car industry, which is about to lose government tax break on domestic sales.

BUSH OPPOSES US SANCTIONS ON SYRIA

US President George W Bush has told Congress that he opposes a bill to introduce economic sanctions against Syria.

"I want to confirm that my administration disapproves [of the] Syrian Accountability Act and has made this clear to the Congress," the president's Middle East envoy David Satterfield told journalists in Beirut after meeting with Lebanese President Emile Lahoud.

The bill would ban US investment or trade with Syria until Damascus closes "offices of Palestinian movements based in Syria, like Hamas and Islamic Jihad".