GULF VIEW

 

July 18 - 24, 2005

.

UAE THE LARGEST MARKET FOR LUXURY CARS

Mercedes Car Group Middle East has confirmed its leadership in the region's luxury car segment with half-year sales up by 26 percent during the first six months of the year compared to 2004.
Sales of Mercedes-Benz vehicles from the period January to June totaled 6,848 with the CLS-Class, E-Class, C-Class and M-Class helping to drive growth. The numbers put the company well on the way to another record year.
The UAE continues to be the largest market in a region that includes the PGCC, Levant, Pakistan, Yemen and Afghanistan but not Iran, with sales up a massive 57%. However, Qatar turned in the best figures with year on year sales up a massive 140%, followed by Jordan, Bahrain and Pakistan.

 

 

Demand growth continues to show that Mercedes still the leading luxury car in the Middle East with a range of exciting and technologically advanced vehicles in each market segment that meet all the needs of increasingly demanding customers,' said Nicholas Speeks, President and CEO, DaimlerChrysler Middle East.

Emphasizing Mercedes-Benz leadership in the region, June was another double-digit growth month with over 1,000 vehicles sold, the sixth month in succession this year that sales have increased.

"With the premium market continuing to expand, the highly successful introduction of the second generation M-Class, new engine variants and Sports Editions of the C-Class and E-Class plus a new S-Class, the region's best selling luxury sedan with an over 40 percent market share in its segment, due to arrive in September, I am confident that we will increase our lead in the luxury car segment in the second half of the year," said Speeks.

BMW

ALFARDAN Automobiles, the exclusive BMW, Mini and Rolls-Royce importer in Qatar, has delivered a fleet of new BMW 7 Series cars to the Four Seasons Hotel Doha.

Hotel visitors can now experience luxury 24 hours a day with the 2006 BMW 7 Series chauffeur-driven services.

The deal reflects Alfardanís ongoing commitment to provide its Qatar customers with quality services and is part of its strategic agreement to enhance its market share within the hospitality industry, according to the company.

"We are delighted to partner with Four Seasons Hotel Doha and to offer our customers a service known for its high quality. Our partnership aims at providing customers and guests with world class luxury services," said Ahmed Sorour, Senior Vice President of Alfardan Automobiles.

"We are looking forward to further enhancing our partnership with the Four Seasons Hotel in the future. The hotel, like BMW, is known for its high standards and quality services."

Commenting on the agreement, Simon Casson, general manager of the hotel, said: "We are excited to be able to offer another great 'Four Seasons Experience' to our guests in Doha. We look forward to a long term working relationship with Alfardan Automobiles where we are able to build on each other's expertise to offer truly exclusive products and services".

The decision to choose the new BMW 7 Series fleet reflects BMW Group's worldwide reputation and market position in the premium luxury car sector, as well as being the preferred VIP vehicles, the company said. The BMW 7 Series features optimized suspension technology, up-rated drive control system, and equipment raised to a new, unprecedented level. The BMW 7 Series 2006 model is the most successful in the history of BMW, it said. The new BMW 7 Series will be on hand to welcome the hotelís guests as they arrive at Doha International Airport. They will also be used to transport guests throughout Doha.

The BMW 7 Series Cars will be driven by trained hotel drivers. When using the chauffeur drive service, guests will be offered refreshments while onboard as well as have access to information about the city and the hotel. BMW new 7 Series has a proven record of high sales since it was launched last June, officials said, adding that all shipments of the New 7 Series to date had been sold. In addition, five coming shipments are all reserved.

DOHA STOCK MARKET

A regulatory body to manage Doha Securities Market (DSM) is to be set up shortly; the draft law on the formation of the proposed regulatory body has been cleared by the Advisory Council.

Once set up, the Qatar Securities Markets Authority will be responsible for market surveillance, companies listing, regulating listed firms and issuing license to brokerage firms.

The draft law also proposes a separate entity for running the trading floor. To be known as Doha Securities Market Company, it will be responsible for providing IT infrastructure and administrative backup that are required for brokerage firms and investors. As the market regulator, the Qatar Securities Market Authority will be responsible for overall surveillance and ensuring that listed firms complied with the bourseís regulations. The apex body would also examine pre-listing processes and facilitate listing of companies.

The proposed authority would deal with issuing licenses to brokerage firms.

On the other hand, the Doha Securities Market Company would focus on setting up trading and the IT and administrative backup required for listed firms, brokers and investors.

The Qatar Securities Market Authority would be headed by a chairman to be nominated by the Cabinet. Besides a vice-chairman, the body would have a minimum five members and a maximum seven. The Cabinet will also appoint them. Administrative head of the apex body would be a chief executive who would not be on the board of directors.

Doha Securities Market Company would have a capital of QR20mn. All the current assets of Doha Securities Market would be transferred to the Doha Securities Market Company.

IRAN MODERNIZES BAMIAN AIRPORT

Iran has provided the central Afghan city of 'Bamian' with weather-related instruments, said Head of Afghanistan Province airport.

The equipment valued at $60,000 was installed by Iranian road and transportation ministry officials. The equipment and accessories are useful in facilitating safe landing of airplanes at Bamian. Earlier, the Bamian airport could not relay weather information to pilots intending to land at the airport. Bamian has the highest altitude among Afghan cities and it was the sight of giant Buddha statues attracting the most number of tourists in the country.

Some 50 Iranian trade and service companies are currently active in Afghanistan, involved in production of potable water, medicine, polyethylene pipe, electrical switches, concrete, computer and liquid gas cylinder filling device as well as wood industry, construction of houses and restaurants and establishment of dental clinics. Out of the total 35 countries currently investing in Afghanistan, Iran stands fourth.

The two countries have been enjoying constant trade exchanges for a long time, with the exception of a short period during the Taliban rule.

Since the present government took office in Afghanistan after two decades of detrimental conflicts, measures are being taken towards political stability and development of national economy. Trade volume of Iran-Afghanistan transactions has reached $260 million a year.

Iranian Minister of Economic Affairs and Finance Safdar Hosseini was quoted saying on the sidelines of ceremonies to ink the document of the first Tehran-Kabul Economic Commission meeting that the agreement will pave the way for further increase in trade relations between the two countries. Hosseini said Iran had, following the establishment of new government in Afghanistan, granted the country $500 million, adding that a headquarters has been set up, operating under the supervision of Iran's first vice president, to expedite the implementation of development and reconstruction projects by the Afghan government. Establishment of the Dogharun-Herat road and Milak Bridge, the power, irrigation, agricultural and telecommunications projects, as well as technical and vocational training are among the projects implemented in cooperation with the Afghans.

DUBAI'S NON-OIL TRADE GROWS 64 PC IN 2005

Dubai's non-oil global trade is set to grow 64 percent this year if the emirate's impressive first half performance is taken as an indication.

The emirate's global non-oil trade, which recorded a 41 percent surge in 2004 to Dh.215.72 billion, from Dh.153.064 billion in 2003, received a major boost in the first half with export, re-exports and imports showing major increase in the backdrop a buoyant economy.

According to official statistics released by Dubai Customs, which handles some 80 percent share of the total international non-oil trade of the UAE, is geared to register such growth rate if the buoyancy in trade continues at the same level for the rest of the year.

This indicates rapid growth achieved in Dubai in a relatively short period of time, and the future targets the emirate can achieve in international trade. Over the past four years, Dubai has been recording an average 25 percent growth in global non-oil trade.

Dubai's total non-oil trade, also including the turnover of the free zones, reached Dh.351.404 billion in 2004, compared to Dh 252.072 billion in 2003, an increase of 39.4 percent. Ports, Customs and Free Zones Corporation is also expecting for itself a remarkable revenue growth due to its consistency in responding to changes in the economy, and the fact that it has developed the ports to comply with the requirement of the period.

Different factors contributing to this expected growth include the booming real estate market across the AGCC region in general and the UAE in particular. The rally on stock markets and the increase in the number of international companies that are making Dubai their regional headquarters also have a strong impact. The number of registered companies in Jafza (Jebel Ali Free Zone Authority) has jumped to 5,000 in the first half of this year.

The year 2004 was marked by a noticeable activity in the re-exports field, which contributed to 26.4 percent to the emirate's total (excepting free zones), a fact that strengthened Dubai's position as a trade hub in the region. These numbers have risen 51.1 percent compared to 2003 to reach Dh57.037 billion during the last year compared to Dh.37.748 billion the year before, while exports, which were 4.5 percent, saw a remarkable growth of 45.5 percent to reach 9.643 billion in 2004 compared to Dh6.5 billion in 2003.

 

 

On the other hand, imports which consisted 69.1 percent, increased by 37.1 percent to reach Dh.179.046 billion during the last year compared to Dh.108.723 billion the year before that. This is due, mainly, to the leap within the construction sector and the increased needs for building materials in order to comply with the requirements of the gigantic projects and developments in Dubai, combined with the increased budget the government designated to the infrastructure development in accordance with the dramatic increase in oil prices that exceeded the expected limits for 2004.

Other factors included the population growth, steady increase in the number of the companies setting up in the emirate and growth within other sectors including tourism, fairs, exhibitions, festivals, among others.

In the same way, the area of Dubai's commercial cooperation has spread in 2004 to include new regions and countries in the five continents. The number of states having trade agreements with the emirate has risen to 210, taking in to consideration the programs adopted by the UAE government to liberate the economy and setting new free zones, in and offshore, which had remarkable positive effects on the emirate's reputation internationally.

IRAN-RUSSIA TIES

"Russia is interested in developing economic relations with Iran. We are very interested in cooperation in oil and gas production, railroad building, the launch of the Zohreh satellite, the construction of pipelines and also in the foodstuffs and light goods industries," said Alexander Rumyantsev, the head of the Russian Federal Agency for Nuclear Power and co-chairman of the Russian-Iranian intergovernmental cooperation commission. "Recently held election of the new Iranian president would not affect bilateral cooperation. An intergovernmental agreement regulates our cooperation with Iran and the change of leadership will not affect Russian-Iranian cooperation," Rumyantsev said. He also said that countries lacking a developed nuclear power sector will not gain anything by developing a nuclear fuel cycle themselves.

CASPIAN OIL

The issue of oil exploration in the Caspian Sea, once getting lots of news coverage, was marginalized for a long time, subsequent to gas discovery in the oil wells of Meisam and Meqdad in Iranís coast in 1990 and 1991.

In addition, the legal regime of the Caspian Sea and Iranís border line are yet to be determined, 1921 and 1940 historical ëagreementsí are still presented as the documents in this regard. Presently, Iran does not approve the border line determined for it, because the division does not include in the main share of oil resources held by the country.

However, despite problems, the agreement on oil exploration in the Caspian Sea was made, pursuing the purpose of oil production by Iran in the next couple of years.

SEISMOGRAPHY IN CASPIAN SEA

Due to a new contract made between Oil Exploration Company and Khazar Oil Company, Pejvak ship will perform three dimensional seismographic operations in the Caspian Sea. The two dimensional seismographic measurements have already been taken by a consortium comprising Shell Co. and Bowlazma.

GAS EXPORT TO ARMENIA

Iran and Armenia have signed a contract according to which the former would export gas to Armenia, and in return, it would import electricity. Based on an agreement made between National Iranian Gas Company (NIGC) and Tavanir Co., the imported electricity would be connected to the national grid.

The NIGC has the task of implementing the construction operations and commissioning of gas pipelines for export purposes, starting from Tabriz's pressure station to Norduz village located in Iran-Armenia border. In Armenia, Sanir Co., affiliated to Iran's Energy Ministry, is in charge of the pipeline construction to Karajan and commissioning it.

In Iran, the construction of this gas export pipeline is delivered to the domestic contractor on the EPC (engineering, procurement and construction) basis, and in Armenia, the pipeline construction has been launched since February 2005. The Iranian contractor is presently equipping the workshop; the required pipes have been purchased, and the construction operations have been launched in four zones. The main contract has been signed by the NIGC and Armenia, and a trilateral operational agreement for commissioning the pipeline is about to be finalized among the NIGC, National Iranian Gas Export Company and Armenia Republic. According to the agreement, the construction operation of the pipeline in Iran would be completed by January 2007, and then the commissioning would follow.

The part of the pipeline passing via Iran is 113 km long and 30 inches in diameter. It may be mentioned that 60 percent of the pipeline construction operation is carried out in the mountainous and hard-to-pass regions.

The pipeline passing via Armenia is 42 km long with a diameter of 28 inches. It transfers gas from the border point with Iran to Karajan. The received gas in Karajan is injected to internal gas distribution network in Armenia.

The two countries have agreed on the figure of 200 million cu. m as the volume of the gas export per annum, equal to 300,000 to 400,000 cu. m per day.

GAS SUPPLY TO NAKHICHEVAN

The supply of gas to Nakhichevan would be carried out on the swap basis with Azerbaijan Republic. The NIGC takes the gas from Azerbaijan in the border point of Astara and delivers it to Nakhichevan on Jolfa border. The construction operation of this project is being implemented and would be completed by October 2006.

NEKA-SARI PIPELINE

The 32-inch gas pipeline between Neka and Sari would soon be completed by Iran Oil Engineering and Construction Company (IOEC), affiliated to National Iranian Oil Products and Distribution Company (N.I.O.P.D.C). By implementing this project, the capacity of transferring crude oil to Tehran would increase to 370,000 barrels per day (bpd). The amount of the crude oil swap was put at 65,000 bpd on average in the last month with the renewal of the swap contracts by Nikoo Co.

Capacity of transfer pipeline of Baku-Tbilisi-Ceyhan at 50 million tons per annum (one million bpd), explaining that this pipeline is 1,800 km long and is like a reservoir with the capacity of 10 million barrels. In other words, the pipeline itself is the first consumer and its operation has had no impact on the amount of the oil swap via Iran.

NEGOTIATIONS WITH TOTAL

Negotiations have been made with the French Total Co. on transferring gas within two stages. The first stage transfers crude oil to a maritime terminal in Kazakhstan via a pipeline, and then, it is carried to Neka by using the 63,000-ton ships. The second stage includes in the continuation of the pipeline to the Persian Gulf, he said. A memorandum of understanding (MOU) has been signed with Total Co. on this pipeline named KTI (Kazakhstan-Turkmenistan-Iran).

CASPIAN SEA EXPLORATION CONTRACT

A contract on oil exploration in the Caspian Sea has been signed, and presently the required equipment for drilling two wells has been purchased. For drilling the wells, North Drilling Company would enjoy cooperation of a foreign partner possessing enough experience in this field, since drilling wells in the deep waters is the first experience in the country.

With regard to cooperation with the foreign companies in the Caspian Sea project, an international company has made a proposal and an MOU would be signed upon the agreement by the officials.

A proposal has also been made on the presence of a third company in the oilfields disagreed by Iran, Turkmenistan, and Azerbaijan. However, the exploration operation would be carried out in these fields, if an agreement is reached.

ALBORZ PLATFORM

Alborz platform is made in order to launch drilling operations for the exploration wells in the Caspian Sea as well as determination of the legal regime of Caspian. It is the only alternative for developing the oilfields in this sea. Khazar Oil Company is presently carrying out the construction of the platform and drilling wells. In addition, the Foreign Ministry and the Supreme National Security Council have emphasized to assist the Oil Ministry on determination of the legal regime of the Caspian Sea.

The time of oil production in the Caspian Sea depends on the results of drilling two exploration wells. If the results are successful, the project developing the seaís oilfields would be launched through drilling the development wells.

PERSIAN GULF SECURITY

Expediency Council Chairman Akbar Hashemi Rafsanjani has said that Iran-Saudi Arabia ties are essential for maintaining security in the sensitive Persian Gulf region.

In a meeting with the Saudi Arabian Ambassador to Tehran al-Morshed al-Berek, Rafsanjani assessed ties between Tehran and Riyadh as satisfactory, saying that the expansion of ties is to the benefit of the region and the world of Islam.

Referring to Iran and Saudi Arabia as two major poles of the Islamic world, he noted that terrorist operations in some countries have exposed Islam and Muslims to threats, accusations and propaganda.

Cooperation among Islamic countries is needed to help prevent the deterioration of the situation, Rafsanjani underlined. No appropriate approach has been taken in the campaign against terrorism, adding important countries should step up extensive and intensified efforts in a bid to uproot this phenomenon.

On the current situation in Iraq, Rafsanjani said that neighboring countries, particularly Iran and Saudi Arabia can help the Iraqi nation and government make political, economic and security progress.

Saudi officials are willing to expand ties with Iran and believe positive relations between the two countries will benefit the Muslim world, the ambassador noted.

SAUDI MILLIONAIRES WARNED

Saudis have started realizing that for a safe investment they should prefer domestic market following a bad experience after the event of Sept 9/11 some of them losing heavily through overseas investments.

According to reports, Turki Faisal Al-Rasheed, chairman, Golden Grass Inc. engaged in wheat, barley, peanuts and production of other crops, had incurred a 38 percent loss on his investment following the advice of a consultant working for a London-based bank.

 

 

During the same period, the returns on his investment in Saudi mutual funds averaged 50 percent in the post 9/11 period.

Al-Rasheed said he found it necessary to warn Saudi investors against falling into what he described as "the trap laid by international investment firms" which are targeting 78,000 Saudi millionaires with lucrative offers.

One of the factors on which overseas financial institutions have capitalized is the Saudi tendency to keep things under wraps when they incur a loss. He said they regard the loss of money as the loss of face, he remarked. This suits to banking institutions as they can go about making glib promises to the target audience without facing awkward questions.

Recalling his own experiences, he said when he was first approached by the representative of the London-based bank; he had been promised attractive returns on his investment. He was also told that the money would be invested in a low-risk fund. However, it turned out to be a moderate-risk fund. "After a great deal of time and effort, I was able to escape from their clutches after losing 38 percent on the invested amount," he added.

When he took up the matter with the multinational firm, he received their response which read in part: "Your account has always operated on an advisory basis. This means any decisions regarding investments or any other aspect of your account are entirely your responsibility. As such, monitoring of your account is limited as we rely on your specific instructions before we can take any action".

The Golden Grass chairman said his account with the London-based international bank was classified as moderate. However, it did not have any minor growth of the principal; instead, it ended up after four years with losses of 38 percent of the principal fund.

Al-Rasheed said it is difficult to understand why one should pay for the advisory services rendered by financial consultants if the account holders are eventually held accountable for the loss they incur. By contrast, the bank claims the credit if the mutual fund is performing well. The financial market was doing well in the Gulf States, though returns were not too high yet it is safe to invest in the domestic market.