Gulf Business - October 2011

p\Xij
1996-2011
Bahrain..............BD 1.0
Kuwait............... KD 1.0
Oman................ RO 1.0
Qatar.................. QR 10
Saudi Arabia.......SR 10
UAE.................. DHS 10
g^%,+
1HL CCC'S $25 BlLLlON HLAL1H lNJLC1lON
g^%.-
SAUDl ARABlA: HOW 1HL RlCH CO1 RlCHLR
8CJF@EJ@;<
<O:CLJ@M<
>I<<E>L@;<1?FN>LC=9LJ@E<JJ<J8I<:C<8E@E>LGK?<@I8:K
PUMP UP
THE VOLUME
FG<:J<:I<K8IP><E<I8C
FEN?PK?<NFIC;N@CC
8CN8PJE<<;DFI<F@C
MFCLD<(-
@JJL<'-
F:KF9<I)'((
!$GB Oct 2011.indd 1 10/2/11 11:43:33 AM
50 fathom Gulf business DPS.pdf 1 9/12/11 10:27 AM
50 fathom Gulf business DPS.pdf 1 9/12/11 10:27 AM
Black Label
RAL PHL AURE N. COM
THE DUBAI MALL
GULF BUSINESS UAE 412X270 BLAB FA11 OCT GB.indd 1-2 15/09/11 11:53
Black Label
RAL PHL AURE N. COM
THE DUBAI MALL
GULF BUSINESS UAE 412X270 BLAB FA11 OCT GB.indd 1-2 15/09/11 11:53
>LC=9LJ@E<JJ&((
ABDALLA SALEM EL-BADRI,
SECRETARY GENERAL, OPEC
>::KF;8P
(- REGIONAL NEWS, PEOPLE, NUMBERS AND EVENTS
FG@E@FEJ
)- MATEIN KHALID
The falling oil price and buying BP shares.
)/ DR TOMMY WEIR
Company succession planning is vital.
*' OLIVER CORNOCK
Metro stations are good for business.
:FEK<EKJ
('%)'((
p\Xij
1 9 9 6 - 2 0 1 1
(-
:FM<IG?FKF1M@BI8D>8N;<
<O:CLJ@M<@EK<IM@<N
++
K?<M<K<I8EF@C9FJJJG<8BJ
:8E;@;CP89FLK?FC;@E>K?<
B<PJKFK?<F@CJLGGCP@E8
NFIC;FEK?<<;><F=8E<N
<:FEFD@::I@J@J%
11-14 Contents.indd 11 9/26/11 6:33:41 PM
DA_CorpC_Heart_GulfBusi_206x270.ai 1 9/19/11 4:33 PM
>LC=9LJ@E<JJ&((
ABDALLA SALEM EL-BADRI,
SECRETARY GENERAL, OPEC
>::KF;8P
(- REGIONAL NEWS, PEOPLE, NUMBERS AND EVENTS
FG@E@FEJ
)- MATEIN KHALID
The falling oil price and buying BP shares.
)/ DR TOMMY WEIR
Company succession planning is vital.
*' OLIVER CORNOCK
Metro stations are good for business.
:FEK<EKJ
('%)'((
p\Xij
1 9 9 6 - 2 0 1 1
(-
:FM<IG?FKF1M@BI8D>8N;<
<O:CLJ@M<@EK<IM@<N
++
K?<M<K<I8EF@C9FJJJG<8BJ
:8E;@;CP89FLK?FC;@E>K?<
B<PJKFK?<F@CJLGGCP@E8
NFIC;FEK?<<;><F=8E<N
<:FEFD@::I@J@J%
11-14 Contents.indd 11 9/26/11 6:33:41 PM
()&F:KF9<I)'((
bXicq\`jj
< = $ J ( / $ * ,
d
d
(
1
*
$
,
%
-
@
@
9I@<=@E>
*) FINANCE
Islamic scholars get their act together.
*, M&AS
Regional mergers are on the up.
*/ INDUSTRIES
Cement rms face closure as UAE projects are culled.
+( POLITICS
Will Morocco and Jordan join the GCC?
+* AVIATION
Private jet travel boosted by Arab Spring talks.
=<8KLI<J
,+ A SHOT IN THE ARM
The regions health and pharmaceutical sectors are set for another
massive cash injection.
-+ PROFILE: MEDICINE MAN
TVM Capital MENA CEO on bringing the rst private IVF clinic
to the region.
.( TOP TECH TRENDS AT GITEX
Cloud computing and cybercrime on the agenda at this years
mega-tech event.
.- HOW THE RICH GOT RICHER
Saudi Arabias banks are riding the government spending wave.
/) BRAIN GAIN
Local business schools get top marks as pupils scramble to update
their CVs.
// A CALL FOR ARMS
The regions defence spend is set to explode as GCC security
fears grow.
*)
:FEK<EKJ
.(
//
.-
11-14 Contents.indd 12 9/26/11 6:33:43 PM
(+&OC1OBLR 20
:FEK<EKJ
;FNEK@D<
0/ TRAVEL
Unwind in the mountains at Six Senses Hideaway Resort.
('( CRUISE
Reviewed: Rolls Royce Ghost EWB.
('* PLACES TO BE
Does Dubais La Petit Maison live up to its French
reputation?
;8K8:ILE:?
0+ STATS
Regional mergers, acquisitions and bond issuances.
I<>LC8IJ
('+ GULF BUSINESS PREFERRED HOTELS
A selection of the regions top rooms.
(', EVENTS
The Gulfs top business conferences.
('- IN YOUR SHOES
Paul Kenny, CEO of Cobone.
0/
('(
<;@KFI$@E$:?@<=
Obaid Humaid Al 1ayer
>IFLG<;@KFI8E;D8E8>@E>G8IKEIFLGJ<E@FI<;@KFI
Cina Johnson
J<E@FI<;@KFI
Cuido Duken
<;@KFI
Alicia Buller Xc`Z`X7dfk`mXk\%X\
:?@<=JL9$<;@KFI
lain SmiLh `Xèj7dfk`mXk\%X\
<;@KFI@8C:FFI;@E8KFI9LJ@E<JJ
Hilda D'Souza _`c[X7dfk`mXk\%X\
8IK;@I<:KFI
1arak Parekh kXiXb7dfk`mXk\%X\
;<J@>EEI8G?<IJ
Farooq Salik, Naveed Ahmed, Vikram Cawde
:FEKI@9LKFIJ
Adrian Murphy, Dania Saadi, Ryan Harrison,
PeLer ShawSmiLh, LiLhne 1reanor
J<E@FIGIF;L:K@FED8E8><E<I8CD8E8>IFLGJ8C<J
AnLhony Milne Xek_fep7dfk`mXk\%X\
J<E@FI8;M<IK@J<D<EKD8E8><E<I8CD8E8><I89L;?89@
Joe MarriLL af\7dfk`mXk\%X\
J<E@FI8;M<IK@J<D<EKD8E8><I 89L;?89@
Darryl Wiley [Xiipc7dfk`mXk\%X\
J<E@FIJ8C<J<O<:LK@M< 89L;?89@
Hamdan Bawazir _Xd[Xe7dfk`mXk\%X\
PrinLed by LmiraLes PrinLinq Press, Dubai
?<8;F==@:<: PO Box 233, Dubai, UAL
1el: +97 ^ 282 ^060, Fax: +97 ^ 282 ^^36,
dfk`mXk\7dfk`mXk\%X\
;L98@D<;@8:@KP1 Ollice 508,
5Lh Floor, Buildinq 8, Dubai, UAL,
1el: +97 ^ 390 3550, Fax: +97 ^ 390 ^8^5
89L;?89@1 PO Box ^3072, UAL,
1el: +97 2 677 2005, Fax: +97 2 677 02^,
dfk`mXk\$X[_7dfk`mXk\%X\
CFE;FE1Acre House, /5 William Road,
London NW 3LR, UK, dfk`mXk\lb7dfk`mXk\%X\
<;@KFI@8CJPE;@:8K@FE;<K8@CJ
1el: + 97 ^ 282^060, ^Y7dfk`mXk\%X\
11-14 Contents.indd 14 9/26/11 6:33:47 PM
C
M
Y
CM
MY
CY
CMY
K
ahmed seddiqi.pdf 9/26/11 2:53:04 PM
(-&OC1OBLR 20
>::KF;8P
RLClONAL NLWS, PLOPLL, NUMBLRS AND LVLN1S
BLN8@K
H8K8I
98?I8@E
34%
120%
5,200
$434m
1he percenLaqe ol expaLs LhaL will make up Lhe
KuwaiLi worklorce in lve years Lime, down lrom
Loday's 70 per cenL, accordinq Lo qovernmenL plans.
1he rise in salaries LhaL OaLar handed Lo miliLary
sLall ol ollcer rank, wiLh sLaLe civilian employees
receivinq a 60 per cenL boosL on Lheir basic salary.
1he number ol complainLs received lrom Lhe public
by Lhe Bahrain lndependenL Commission ol lnquiry, Lhe
body invesLiqaLinq Lhe poliLical unresL earlier Lhis year.
1he size ol Lhe OaLar NaLional Museum pro|ecL
awarded Lo SouLh Korean consLrucLion lrm Hyundai
Lnqineerinq & ConsLrucLion, which will Lake nearly Lhree
years Lo build.
;lYX`gifg\ikpfm\ij_X[fn\[
Yp>lc]i`mXcj
Saudi Arabia and KuwaiL have conLinued Lo eclipse Dubai as Lhe mosL
aLLracLive housinq markeLs in Lhe Cull reqion, accordinq Lo research.
While Dubai shows siqns ol sLabilisinq, residenLial real esLaLe in
KuwaiL and Saudi is provinq a sLronq beL lor invesLors, invesLmenL
bank Clobal lnvesLmenL House (ClH) said in iLs laLesL reporL.
1he Saudi properLy secLor was buoyed by demand ouLpacinq
supply due Lo a rapidly qrowinq populaLion, business acLiviLy and
an inherenL shorLaqe ol residenLial uniLs.
Accordinq Lo Lhe Saudi Arabian MoneLary Aqency's O2 inlaLion
reporL, Lhe index lor housinq renLs and relaLed iLems surqed by 7.2
per cenL yearonyear alLer an 8.2 per cenL increase in O.
ClH said KuwaiL's privaLe housinq seqmenL remained acLive in
O2 amounLinq lor 55 per cenL ol LoLal LransacLions value alLhouqh
Lhe commercial seqmenL conLinued Lo suller lrom oversupply wiLh
vacancy raLes sLill averaqinq around 2025 per cenL.
1he sLudy lound CCC real esLaLe sLill saw downward pressure
on prices and renLs in Abu Dhabi while commercial properLy was
sullerinq lrom oversupply across Lhe Cull reqion, especially in Dubai.
Dubai aparLmenL renLs decreased Lwo per cenL in Lhe second
quarLer ol Lhe year, lollowinq a similar lall in O. ClH said LhaL villa
renLs mainLained Lheir O levels wiLhouL any siqnilcanL declines.
Dubai properLy prices lell by as much as 50 per cenL in some
areas beLween Lhe heiqhL ol Lhe properLy boom and Lhis year.
Meanwhile, in Abu Dhabi aparLmenL renLs dropped eiqhL
per cenL in O2, while villa renLs dropped modesLly on selecLive
demand lor ready Lo move in properLies.
R
L
U
1
L
R
S
16-25 GCC Today.indd 16 9/26/11 5:27:22 PM
CULF BUSlNLSS&(.
>::KF;8P
J8L;@8I89@8
FD8E
LE@K<;8I89<D@I8K<J
62%
$64m
$20.4m
2,700
1he percenLaqe LhaL Saudi makes
up ol Lhe CCC asseL manaqemenL
lund indusLry, which is currenLly
worLh $28.9 billion, accordinq Lo
Zawya & Markaz research.
1he shares Oman's SMN Power
Holdinq, Lhe counLry's biqqesL
power company, has pledqed iL
will sell, equal Lo 35 per cenL ol
iLs LoLal share capiLal.
Dubaibased Drake & Scull lnLernaLional's conLracL lor Lhe
consLrucLion ol a sewaqe pro|ecL in Al Ain, scheduled Lo
sLarL immediaLely and Lo be compleLed by November 202.
1he cars Japanese auLo qianL Honda has recalled
in Lhe UAL in order Lo repair a laulLy elecLric
window mechanism.
l
L
L
U
S
1
R
A
1
l
O
N
:

1
A
R
A
K

P
A
R
L
K
H
16-25 GCC Today.indd 17 9/26/11 5:27:22 PM
(/&OC1OBLR 20
CCC T0DAY
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
NBAD issues $20m
in private placement
Kuwait's Clobal plans
$350m Iund
Catar private credit
growth up 20
Not|oro| bor| of A|u |o||, t|e
|orest |or| |] ror|et vo|ue |r
t|e UA|, |ssue1 ;c0 r||||or |r
o r|vote |ocerert ur1er |ts
ei|st|r |or1 rororre.
!|e |or1 Wos |ssue1 ot o hie1
rote couor of 4.8 er cert
o ]eor or1 rotures |r c01o,
reresert|r t|e |orest teror
|ssue fror o Cu|f Aro| |or|.
||C Herres |os ro|se1
Ootor's r|vote sector cre1|t
roWt| forecost to c0 er
cert for c0ll, u fror l
er cert. !|e |or| so|1
r|vote sector cre1|t roWt|
strert|ere1 to lo er cert
|r Ju|], W|t| so||1 cororote
|oor roWt| or1 o |c|u |r
corsurer cre1|t.
On the Radar
Saudi and UAE to send Egypt loan lifeline
Egypt expects to reach a loan agreement
with Saudi Arabia and the UAE worth several
billions of dollars each soon, while another
$500 million should come from the Arab
Monetary Fund.
According to Egyptian Finance Minister Hazem
al-Beblawy, the country is likely to strike a deal
on loans before the end of the year.
There are talks about a package coming
from Arab countries, from Saudi Arabia,
from the Emirates. We are under discussion,
but both of them have presented proposals of
a couple of billion dollars each, he said.
Egypt turned down a $3 billion International
Monetary Fund loan in June.
Its economy contracted 4.2 per cent in the
quarter that ended in March amid the worst
political crisis to hit the country in three decades.
Bahrain 1elecommunicaLions Co. (BaLelco) is planninq
Lo sell mosL ol iLs sLake in iLs lndian |oinL venLure, as iL
seeks Lo unlock value lrom Lhe invesLmenL in one ol Lhe
counLry's smallesL Lelecom operaLors.
BaLelco is lookinq Lo sell up Lo 30 per cenL ol S 1el and
has hired an invesLmenL bank Lo approach poLenLial buyers,
sources close Lo Lhe deal have said. BaLelco holds ^2.7 per
cenL ol S 1el.
lndian Lelecom operaLors are sLruqqlinq aL presenL
because ol inLense compeLiLion LhaL has kepL call Larills
low and due Lo hiqh debL cosLs lor expansion and acquirinq
bandwidLh. Any sale would help BaLelco scale back iLs
exposure Lo lndia, where Lhe qovernmenL is planninq new
M&A rules LhaL will drive consolidaLion in Lhe secLor.
D@:?8<C
NFLC;?8M<
;FE<@K@E8
?<8IK9<8K%
A<ID8@E<A8:BJFEi\m\Xc\[
k_Xk_`j]Xd`cp_X[j\Zi\kcpXiiXe^\[
kf]cp_`jYifk_\ikf9X_iXè`]k_\gfg
`Zfe_X[Y\\e]fle[^l`ckpf]Z_`c[
dfc\jkXk`feè)'',%
SOAPBOX
R
L
U
1
L
R
S
C|o|o| Co|to| |oroerert,
t|e o|terrot|ve osset
roroerert orr of KuWo|t's
C|o|o| lrvestrert House, |s
|orr|r o ;1S0 r||||or r|vote
eu|t] fur1 |r !ur|e], ore of
tWo fur1s |r t|e |e||re. 'We
|or to ro|se ;1S0 r||||or for
o fur1 1e1|cote1 to !ur|e].
We'|| |e o|r u to t|e
ror|et oo|r |r eor|] c0lc to
to|| o|out o CCC fur1,' so|1
roro|r ortrer koj|v No|or|.
BateIcc edes cut cf !ndia
teIeccms sectcr
<^pgk`Xe=èXeZ\Dè`jk\i
?Xq\dXc$9\YcXnp
16-25 GCC Today.indd 18 9/26/11 5:27:24 PM
Gulf Business 20.6x27cm Men.ai 1 9/13/11 4:11 PM
)'&OC1OBLR 20
>::KF;8P
DUBAl'S 1RADL SLC1OR 1O BOOS1
CROW1H 1O 6 lN 202
Plans Ior $400bn MENA nuclear sites
How to rule
the world like...
MLNA naLions are planninq Lo expand Lheir nuclear power capabiliLies wiLh an
expecLed pipeline ol pro|ecLs worLh over $^00 billion, accordinq Lo experLs.
Saudi Arabia, Lhe UAL, Jordan and LqypL are amonq Lhe counLries leadinq Lhe
nuclear drive, deleqaLes aL SepLember's MLNA Nuclear ConsLrucLion Conlerence in
Dubai heard.
Saudi is workinq Lo build an enLire ciLy LhaL produces zero Co2 emissions by only
usinq an enerqy mix ol nuclear power and oLher renewable sources.
9<K9@>#9LK9<I@>?K
Soros is sLill mosL lamous lor 'breakinq Lhe Bank
ol Lnqland', havinq made $ billion by beLLinq on
Lhe devaluaLion ol Lhe pound sLerlinq in 992.
J?8I<K?<N<8CK?
1hese days Lhe HunqarianAmerican linancier
is known more lor his philanLhropy and supporL
ol proqressive causes. He has qiven away more
Lhan $8 billion since 979.
=I@<E;J@E?@>?GC8:<J
Soros has rubbed shoulders wiLh various US
presidenLs. CriLics say Barack Obama is his
'puppeL' buL recenLly Soros has been criLical
ol Lhe presidenL's handlinq ol Lhe economy.
HL@KN?@C<PFLI<8?<8;
ln 2003, lormer Federal Reserve Chairman
Paul Volcker wroLe in Lhe loreword ol Soros'
book 1he Alchemy ol Finance: "Ceorqe
Soros has made his mark as an enormously
successlul speculaLor, wise enouqh Lo larqely
wiLhdraw when sLill way ahead ol Lhe qame."
89FM<8CC#GIF;L:<I<JLCKJ
AparL lrom Lhe BriLish pound beL, Soros is also
lamous lor runninq Lhe OuanLum Fund, which
qeneraLed an averaqe annual reLurn ol more
Lhan 30 per cenL while he was aL Lhe helm.
J<<@E>K?<9@>><IG@:KLI<
Soros was a masLer aL LranslaLinq economic
Lrends inLo hiqhly leveraqed, killer plays in
bonds and currencies. As an invesLor, he was
a shorLLerm speculaLor, makinq huqe beLs on
Lhe direcLions ol linancial markeLs.
Bad debt hampers UAE banks
R
L
U
1
L
R
S
Chairman ol Soros Fund ManaqemenL
><FI><JFIFJ
Dubai can expect robust growth ahead
thanks to support from buoyant revenues
in the trade sector, a government official
has said.
Abdul Rahman Saif Al Ghurair, chairman
of Dubai Chamber of Commerce and
Industry, said: Dubais economy will grow
between three and five per cent in 2011.
In an interview with Arabic daily Al
Khaleej, he said the emirates economy will
be strongly supported by the trade sector
and added that he expects more than six
per cent growth next year.*
The UAE is still suffering the
painful side effects of escalating
non-performing loans (NPL), with
provisions rising 29.8 per cent year-on-
year in July, according
to data released by the central bank.
Bank provisions for NPLs increased
2.3 per cent month-on-month to
Dhs48.4 billion in July 2011, and are up
9.3 per cent for the first seven months
of the year. This was despite bank
loans edging up by just 2.6 per cent
during the last year.
Bank deposits, on the other
hand, are up 11.5 per cent year-on-
year to Dhs114 trillion although the
month of July saw a 1.1 per cent
decline in total deposits.
16-25 GCC Today.indd 20 9/26/11 5:27:27 PM
))&OC1OBLR 20
>::KF;8P
l
L
L
U
S
1
R
A
1
l
O
N
:

A
H
M
A
D

A
B
U

1
A
H
O
U
N
Saudi mega steel mill
open in nine months
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
On the Radar
Oman's plans Lo esLablish a naLional
rail sysLem are back on Lrack alLer
a sixmonLh disrupLion sparked by
poliLical unresL.
1he sulLanaLe's auLhoriLies have
announced Lhey are lloaLinq a Lender
lor Lhe key desiqn enqineerinq ol Lhe
pro|ecL, which will be parL ol a wider
panCCC rail neLwork.
1he mulLibillion dollar scheme hiL
Lhe skids earlier Lhis year when a
key minisLry drivinq Lhe pro|ecL was
dissolved by Oman's ruler, SulLan
Oaboos Bin Saeed, in Lhe wake ol
proLesLs by ciLizens demandinq |obs
and poliLical relorm.
BuL Lhe CovernmenL 1ender
Board has now inviLed prequalilied
enqineerinq consulLanLs Lo bid lor Lhe
desiqn enqineerinq packaqe, markinq
a revival ol Lhe ambiLious pro|ecL.
1en wellknown lirms have been
prequalilied Lo compeLe lor Lhe
desiqn enqineerinq packaqe.
1he aliqnmenL ol a rouqhly ,000km
rail sysLem exLendinq lrom KhaLmaL
Malaha on Oman's border wiLh Lhe
UAL Lo Duqm on Lhe WusLa coasL has
already been linalised.
FD8EK<E;<IJ;<$I8@C<;KI8@EGIFA<:K
project focus
CCC electric
bill increases
Boon Ior Catar bonds
in August
CS |r|reer|r & Corstruct|or |os
Wor tWo 1eo|s Wort| orour1 ;18
r||||or |r toto| |r KuWo|t.
!|e Sout| Koreor |u||1er so|1
|t |o1 secure1 o 1eo| fror KuWo|t
O|| Coror] to |u||1 foc|||t|es to
ro|rto|r ressure ot o|| We||s or1
o Woter foc|||t] roject fror t|e
||r|str] of ||ectr|c|t] & Woter.
||ectr|c|t] corsurt|or |r
t|e CCC |s eiecte1 to r|se c.S
er cert o ]eor |etWeer roW
or1 c01S, occor1|r to
corsu|torc] e|o|tte.
!|e hrr ottr||utes t|e |rcreose
to t|e roWt| of t|e re|or's
ou|ot|or W|t| o s|r|hcort 4
er cert of erer] corsurt|or
1|verte1 |rto res|1ert|o| use.
Ootor's sovere|r |or1s Were t|e
|est erforrers |r t|e ||11|e
|ost |r Auust os |rvestors
sou|t refue fror o s|oW|r
US ecoror] or1 o Worser|r
1e|t cr|s|s |r |uroe. |our of t|e
hve |esterforr|r secur|t|es
oror t|e 1c t|ot ro|e u t|e
HSbC/NASAO u|o| ||11|e |ost
Corvert|oro| Sovere|r bor1
lr1ei Were fror Ootor.
5outh Korean rm
lands $73Sm
Kuwait contracts
The Saudi unit of ArcelorMittal,
the worlds largest steelmaker,
expects to start production at
its new mill in Jubail in the
first half of 2012, according
to local media.
The $700-million plant
will produce 600,000 metric
tonnes of pipes a year for
the oil and petrochemical
industry, said Mohammed
Al-Jabr, ArcelorMittals
managing director in Saudi
Arabia. Al-Jabr was formerly
the vice president of Saudi
Basic Industries Corp.s
steel unit.
16-25 GCC Today.indd 22 9/26/11 5:27:36 PM
))&OC1OBLR 20
>::KF;8P
l
L
L
U
S
1
R
A
1
l
O
N
:

A
H
M
A
D

A
B
U

1
A
H
O
U
N
Saudi mega steel mill
open in nine months
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
++++++++++++++++++++++++
On the Radar
Oman's plans Lo esLablish a naLional
rail sysLem are back on Lrack alLer
a sixmonLh disrupLion sparked by
poliLical unresL.
1he sulLanaLe's auLhoriLies have
announced Lhey are lloaLinq a Lender
lor Lhe key desiqn enqineerinq ol Lhe
pro|ecL, which will be parL ol a wider
panCCC rail neLwork.
1he mulLibillion dollar scheme hiL
Lhe skids earlier Lhis year when a
key minisLry drivinq Lhe pro|ecL was
dissolved by Oman's ruler, SulLan
Oaboos Bin Saeed, in Lhe wake ol
proLesLs by ciLizens demandinq |obs
and poliLical relorm.
BuL Lhe CovernmenL 1ender
Board has now inviLed prequalilied
enqineerinq consulLanLs Lo bid lor Lhe
desiqn enqineerinq packaqe, markinq
a revival ol Lhe ambiLious pro|ecL.
1en wellknown lirms have been
prequalilied Lo compeLe lor Lhe
desiqn enqineerinq packaqe.
1he aliqnmenL ol a rouqhly ,000km
rail sysLem exLendinq lrom KhaLmaL
Malaha on Oman's border wiLh Lhe
UAL Lo Duqm on Lhe WusLa coasL has
already been linalised.
FD8EK<E;<IJ;<$I8@C<;KI8@EGIFA<:K
project focus
CCC electric
bill increases
Boon Ior Catar bonds
in August
CS |r|reer|r & Corstruct|or |os
Wor tWo 1eo|s Wort| orour1 ;18
r||||or |r toto| |r KuWo|t.
!|e Sout| Koreor |u||1er so|1
|t |o1 secure1 o 1eo| fror KuWo|t
O|| Coror] to |u||1 foc|||t|es to
ro|rto|r ressure ot o|| We||s or1
o Woter foc|||t] roject fror t|e
||r|str] of ||ectr|c|t] & Woter.
||ectr|c|t] corsurt|or |r
t|e CCC |s eiecte1 to r|se c.S
er cert o ]eor |etWeer roW
or1 c01S, occor1|r to
corsu|torc] e|o|tte.
!|e hrr ottr||utes t|e |rcreose
to t|e roWt| of t|e re|or's
ou|ot|or W|t| o s|r|hcort 4
er cert of erer] corsurt|or
1|verte1 |rto res|1ert|o| use.
Ootor's sovere|r |or1s Were t|e
|est erforrers |r t|e ||11|e
|ost |r Auust os |rvestors
sou|t refue fror o s|oW|r
US ecoror] or1 o Worser|r
1e|t cr|s|s |r |uroe. |our of t|e
hve |esterforr|r secur|t|es
oror t|e 1c t|ot ro|e u t|e
HSbC/NASAO u|o| ||11|e |ost
Corvert|oro| Sovere|r bor1
lr1ei Were fror Ootor.
5outh Korean rm
lands $73Sm
Kuwait contracts
The Saudi unit of ArcelorMittal,
the worlds largest steelmaker,
expects to start production at
its new mill in Jubail in the
first half of 2012, according
to local media.
The $700-million plant
will produce 600,000 metric
tonnes of pipes a year for
the oil and petrochemical
industry, said Mohammed
Al-Jabr, ArcelorMittals
managing director in Saudi
Arabia. Al-Jabr was formerly
the vice president of Saudi
Basic Industries Corp.s
steel unit.
16-25 GCC Today.indd 22 9/26/11 5:27:36 PM
)+&OC1OBLR 20
A Chinese company has secured a conLracL Lo
supply waqons lor whaL will be Lhe
UAL's naLional railway neLwork.
China SouLh LocomoLive and
Rollinq SLock CorporaLion (CSR) will
supply 2^0 covered waqons lor Lhe
carriaqe ol qranulaLed sulphur in Lhe
WesLern Reqion ol Abu Dhabi.
LLihad Rail, Lhe developer and
operaLor ol Lhe UAL's railway
neLwork, appoinLed Lhe lirm, which
expecLed Lo compleLe Lhe lirsL
phase ol Lhe pro|ecL by 20^.
"WiLh conLracLs also recenLly
announced lor Lhe railway sleepers
and locomoLives, Lhis rollinq sLock award represenLs
anoLher imporLanL sLep lorward in Lhe plans Lo deliver Lhe
lirsL sLaqe ol Lhe neLwork by Lhe end ol 20^," LLihad Rail
said in a sLaLemenL.
1he lirm is workinq in parLnership wiLh Abu Dhabi NaLional
Oil Company Lo consLrucL Lhe 266km rouLe LhaL will LransporL
up Lo 22,000 Lonnes ol qranulaLed sulphur daily lrom sources
in Shah and Habshan lor exporL in Ruwais.
ConsLrucLion on Lhe lirsL phase ol Lhe neLwork is
scheduled Lo commence aL Lhe end ol Lhis year.
UAE RA!LWAY R0LLS
T0WARDS F!RST PHASE
GCC and the world
4,000
JK8KJ
1HL NUMBLR OF NLW SCHOOLS SAUDl ARABlA'S MlNlS1RY
OF LDUCA1lON HAS PLLDCLD 1O BUlLD A1 A COS1 OF $8.5
BlLLlON AS PAR1 OF l1S PLAN 1O OVLRHAUL 1HL CULF
S1A1L'S LDUCA1lON SYS1LM.
CCC spends $150 biIIicn
tc keep the peace
Bank ol America has puL
Lhe LoLal cosL ol addiLional
spendinq by CCC qovernmenL
in Lhe wake ol Lhe Arab
Sprinq aL $50 billion.
"1he iniLial response ol
CCC policymakers has been
Lo sharply increase currenL
spendinq Lo accommodaLe
social pressures and Lo
pledqe inLrareqional liscal
Lranslers Lo less endowed
members," said Jean
Michel Saliba ol BolAML
in an economic noLe.
ln recenL monLhs,
spendinq pledqes have
been made LoLallinq 2.8
per cenL ol Cull CDP, or
$50 billion, Lhe bank said.
OA1AR $2.2BN S1LLL PROJLC1S SHLLVLD
OaLari sLeelLolerLiliser conqlomeraLe lndusLries OaLar, or
lO, has puL on hold Lwo planned sLeel planLs in Lhe
indusLrial ciLy ol Mesaieed, worLh OR8. billion, due
Lo problems securinq naLural qas lor Lhe pro|ecLs, Lhe
company said.
"1he markeL should also be aware LhaL lollowinq
exLensive discussions wiLh OaLar PeLroleum, iL has been
aqreed Lo puL Lhe OaLar SLeel Phase 2 and 3 pro|ecLs on
hold due Lo naLural qas allocaLion resLricLions," lO said in
a Lradinq updaLe. "lL is our inLenLion Lo revisiL Lhe pro|ecLs
when sullicienL naLural qas allocaLions have been secured,"
Lhe Dohabased conqlomeraLe added.
1he news is a blow lor lO's expansion plans aL a Lime ol
surqinq domesLic demand lor Lhe meLal in OaLar.
K?<I<J<<DJKF9<8KI<E;N@K?
;<M<CFG@E>:FLEKI@<JN8EK@E>
KF=FCCFN@EK?<=FFKJK<GJF=
K?<N<JK<IENFIC;%
A8D@<FC@M<I#k_\Z\c\Yi`kpZ_\]Zi`k`Z`j\jYX[\Xkè^_XY`kj
]fik_\[iXdXk`Zi`j\èfY\j`kpXZifjjk_\D`[[c\<XjkXe[èfk_\i
\d\i^è^\Zfefd`\j%
SOAPBOX
Nakheel cleans up its act
Nakheel, Dubais biggest developer by assets,
told creditors it wrote down its real estate by
$21 billion after property values in the emirate
fell by more than half.
The state-owned company wrote off
Dhs301.4 million in the first half of last
year, Dhs73.8 billion in 2009 and Dhs4.44
billion in 2008, according to its Islamic bond
prospectus obtained by Bloomberg News.
After the write-offs, the companys share
capital dropped to Dhs10.6 billion as of June
2010 from 87.1 billion in 2008.
16-25 GCC Today.indd 24 9/26/11 5:27:37 PM
CULF BUSlNLSS&),
CCC T0DAY
A Oatari sovereiqn wealth lund is close to buyinq the W Hotel in
central London tourist destination Leicester Square lor about
$38 million, sources have said.
1he 0storey property opened in February this year and has
92 rooms, a Michelinstarred restaurant, a 35,000 square loot
M&M's store and apartments.
lt was put up lor sale in January by property broker Jones
Lanq LaSalle lor Northern lrish developer McAleer & Rushe.
Oatar has previously snapped up Harrods and stakes in qrocer
J Sainsbury and the Olympic athlete's villaqe in east London.
HXkXigf`j\[kfYlpN?fk\c
èZ\ekiXcCfe[fe
The Abu Dhabi Investment Authority has emerged as one of
a group of investors backing Virgin Moneys bid for the 632
branches put up for sale by Lloyds Banking Group.
The online bank, part of Sir Richard Bransons Virgin empire,
has already expressed an interest in buying state-owned Northern
Rock, but with funding now in place to back a larger deal, it is
also poised to enter a second round bid for the Lloyds branches.
Abu Dhabis sovereign wealth fund, which has assets in excess
of $600 billion, could be the necessary ingredient to ensure
Richard Bransons company launches a successful tender.
Other new backers include the private equity group Carlyle,
General Atlantic and the Universities Superannuation Scheme,
all of which will take a minority stake in the online bank if it
is successful in acquiring either Northern Rock or the Lloyds
branches, or both.
30
J<:FE;JKFD8B<J<EJ<F=%%%
K?<9LJ@E<JJF=I8CCP@E>
Ycun Emirati raIIy drivers
Icck up tc ycu, but whc is
ycur mentcr?
Myself. I believe in myself.
Whatever Im doing now in
the world championship is not
an opportunity handed to me.
I worked hard to build this
opportunity. The idea of Abu
Dhabi tourism backing the
world championship started
with my belief and the support
of the Abu Dhabi government.

What inspired ycu tc be a raIIy driver?
I always loved motorsports. I started with carting and then in
2002 I tried out a rally car and decided to master it well and
participate in the UAE championship event to see how it felt.
In the first year itself when I won most of the titles it boosted
my confidence in attempting outside my terrain. I believe if
you put a goal in your head, you can achieve that goal.
!s it chaIIenin fcr ycur team tc attract spcnscrs?
When youre competing in a world championship and
have keen drivers and have already secured big sponsors
like Abu Dhabi, Ford and Castrol then youre really not
looking for more big sponsors and any new sponsor
wanting to enter the team will need to bid high. So its
not a problem when it comes to WRC, but when we are
doing a regional event that has nothing to do with WRC
it can get quite difficult.
Ncw that Abu Dhabi is hcstin F1 racin with pIans in the
pipeIine tc hcId the MctcCP, can we be cptimistic abcut
WRC ccmin Abu Dhabi?
Yes, perhaps in two to three years it could happen. Theres
a lot of work to be done and if the interest continues to
hold good then yes, its possible.
!f ycu had tc keep just cne cf ycur perscnaI cars, which
wcuId it be?
The Bugatti.
UnIike cther raIIy drivers, ycu drive fcr ycur ccuntry. Have
ycu dcne Abu Dhabi prcud?
Im really happy with my performance so far; the only
think Id like to see is more Emiratis do what Ive done.
I always wanted to motivate people in this region to try
motorsport and be an inspiration as an ambassador.
SHE!KH KHAL!D
AL 0ASS!M!
World Rally
Championship
driver lor Abu Dhabi
@EK<IM@<N<;9P?@C;8;JFLQ8
ADIA backs
Virgins
bid for
Lloyds bank
branches
16-25 GCC Today.indd 25 9/26/11 5:27:39 PM
)-&OC1OBLR 20
FG@E@FE
COMMENT
A sLable Libya and conLinued WesLern economic
woes will dampen Lhe oil price in Lhe nearLerm.
Matein Khalid is fund manager in a
royal investment ofce and a writer
in nance and geopolitics.
K?<=8CC@E9I<EK:IL;<8E;9G
a
MAJOR FALL IN CRUDE OIL IS
inevitable this autumn. Why? Three reasons. One, the momentum of
global economic growth has clearly decelerated since July. German and
US GDP growth has been revised sharply downwards. The US economy
created zero new jobs in August, a bad omen for gasoline demand in
the planets leading energy consumer. Chinese GDP has peaked even as
South Korean/Taiwan industrial exports begin to soften. A Greek default
is the kiss of death for Eurozone growth. The macro storm clouds have
now turned oil bearish.
Two, the collapse of the Gaddafi regime means a credible new Libyan
government is in place, even though the IEA estimates that it will take at
least another year to resume exports, given the war damage to refineries,
pipelines and ports. This means that the geopolitical/oil supply risk
premium due to Libya will unwind in the next three months.
Three, Saudi Arabia ignored the OPEC quota system and increased
its production to its highest ever levels. OPEC output is now 30 million
barrels a day, the highest in five years. There is no sign of an imminent
U-turn in the kingdoms oil pricing and production strategy. Saudi Arabia
is OPECs swing producer and there is no immediate prospect of a Saudi
output cut. As both global supply and demand curves shift, Brent could
well decline by $25 to the $8085 range.
Oil futures markets also suggest that traders expect a fall in oil prices,
as open interest in out of the money put options has surged on the
'
'
'
'
'
' '
'
NYMEX West Texas crude contract with a $50 strike
price. This means that the smart money expects at
least a $30 fall in prices from current levels.
The oil market clearly wants to hedge against
a 2008-style black swan event when the failure of
Lehman Brothers, global recession and the seizure of
the worlds credit market led to an epic meltdown in
black gold, with crude oil falling from $147 to below
$40 between July and December 2008. While another
free fall is unlikely, the spike in the dollar, the high
Volatility Index (VIX) and Europes bank funding
woes is highly oil negative.
Asian economies are nowhere near recession,
though GDP growth in India and China has probably
peaked in early 2011 as monetary tightening bites.
Moreover, Saudi Arabia announced a $138 billion
social welfare spending hike and it needs a budget
breakeven price of at least $80 Brent to avert budget
deficits and contractor debt crises. This means
that Saudi Arabia, Kuwait and UAE will act to cut
output to preempt a major fall in oil prices. Saudi
Arabia publicly protested speculative bullish spirals
in oil prices in April because they hit industrialised
economies and increased global recession risk. The
kingdom has, in essence, a strategic economic interest
in cutting output. Saudi Arabia has offered the oil
market a de-facto floor against a ruinous collapse.
The fall in oil prices is bearish for the shares of
listed energy producers in London and New York.
Yet a compelling opportunity in BP shares will
emerge if they trade in the 300-320 pence range in
London. Thanks to the Deepwater Horizon debacle
in the Gulf of Mexico and the collapse of CEO Robert
Dudleys Rosneft share swap deal to explore for oil
in the Siberian Arctic, BP shares trade at a valuation
discount of 30 per cent to its Big Oil peers and offers
a dividend yield of 4.6 per cent, more than double
the yield on the US Treasury ten year note. BP has
a stellar balance sheet, a global exploration,
production and downstream franchise and significant
growth opportunities in India, Brazil, the Caspian
Basin, West Africa and Angola. As oil prices slide,
so will BP shares. Yet bottom fishing in Big Oils
deep value Cinderella could well prove profitable
for investors eager to drill for oil on the London
stock exchange.
l
L
L
U
S
1
R
A
1
l
O
N
:

1
A
R
A
K

P
A
R
L
K
H
26 Column Matein.indd 26 9/26/11 3:30:06 PM
:
e
_
k
^
]
=
n
g
a
b
e
e
E
m
]
'
43059_Dunhill_01_Fiennes_GulfBus_01-10_UAE.indd 1 09/08/2011 09:32
FG@E@FE
)/&OC1OBLR 20
COMMENT
Companies LhaL don'L plan lor leadership succession risk
Lhrowinq iL all away.
N?F@JPFLIE<OKC<8;<I6
i
N MY TWENTIES I WAS LIVING IN VIRGINIA, US,
when a major ice storm broke. Amid the clean up operation one of
my friends taught me a life lesson that I hope to never forget SPF
(single point of failure). Nearly every time it is the SPF that keeps
you from reaching your goal.
Following the storm, the guys did the macho thing and gathered
our chainsaws, put on our boots and headed to my friend Steves house
to help him clean up the fallen trees. Right in the midst of what started
out to be a productive day of cutting wood, we all learned the lesson
of the SPF. One of the chains popped off the saw and while attempting
to fix it we realised that no one had the necessary screwdriver. This
one oversight kept us from finishing our task.
If you are thinking that it was a stupid oversight to forget a common-
sense tool, you are right. Oftentimes the SPF is an obvious oversight.
Now, back to the business environment, what is the SPF (single
point of failure) for your business?
If my observation is accurate, for most businesses in the region the
SPF lies in succession planning the act of identifying and developing
future leaders for a business. And the most critical role to be planned
for is that of the CEO.
Does the $13 billion Ralph Lauren Inc. have a ready successor for
the 71-year-old founder Ralph? Unfortunately, it does not appear that
they are ready for the departure of their and CEO. During the calls for
Rupert Murdoch to step down during the News Corp. phone hacking
' ' ' ''
'

'
' '
scandal it was obvious that succession planning is
their SPF as they are left without a designated and
ready successor.
I wonder how many of the family empires across
the GCC have a successor in place and are prepared
for the future? Succession planning is especially
tough for founders of companies where they have
been the leader, brand representative and patriarch.
When Silicon Valley legend Steve Jobs retired in
August, Apple quickly announced that Jobs was to
be succeeded by longtime heir apparent Tim Cook.
Because this succession was well planned, analysts
do not expect Jobs resignation to derail
the companys fabled product-launch roadmap.
In my conversations with founders and other
senior executives there is a general concern about
the quality and readiness of a future cadre of
leaders. Apple is known for its great bench strength
of candidates for internal promotion and ready
qualifications to lead at higher levels. There are
three points to think about when you take on this
strategic exercise:
(%You must calculate the risk of vacancy and impact
of a position on the business. The higher the risk
and the impact, the more crucial it is that you have
ready successors in place.
)%Succession planning is very similar to athletics.
Teams that have great bench strength players
who are ready to replace another who gets hurt or
tired usually outperform their competitors. Through
succession planning an organisation is ensuring that
they have leaders in line for each leadership position.
*% Make sure that you have future roles planned for
gifted leaders. And make sure they know that you
do. Otherwise, your talented employees will not
stick around.
Across the region, CEO succession is one of
the most neglected and strategic risk mitigation
strategies. It is time to erase the SPF called
succession planning and confront the challenge.
l
L
L
U
S
1
R
A
1
l
O
N
:

1
A
R
A
K

P
A
R
L
K
H
Dr Tommy Weir, advisor on
fast-growth and emerging
market leadership, and
author of The CEO Shift
28 Column Weir.indd 28 9/26/11 5:29:54 PM
:
e
_
k
^
]
=
n
g
a
b
e
e
E
m
]
'
43059_Dunhill_02_Pennefather_GulfBus_01-10_UAE.indd 1 09/08/2011 09:33
*'&OC1OBLR 20
FG@E@FE
COMMENT
1he emiraLe's new meLro sLaLions are sLimulaLinq business
acLiviLy and properLy values
=8JKKI8:BGIFG<IKPGI@:<J
d
UBAIS PROPERTY MARKET IS VALIDATING
the adage that the three most important factors in real estate are,
indeed, location, location, location. While much of the market is
expected to post modest gains this year before rebounding more
strongly in 2012, properties that are close to the emirates growing
metro network are increasing in popularity and value at a healthy pace.
According to data from property management firm Asteco, rents for
residential properties near some of the 29 stations on the Red Line
one of two lines of the Dubai Metro network have risen by more than
10 per cent since the route opened in September 2009.
Vineet Kumar, the head of business development at Asteco, said
easy access to transport connections is a major selling point for clients
looking for property and the demand for prime locations will drive
up returns. People like to be near a transportation link, Kumar told
reporters last month. Since the opening of the metro, properties in
close proximity to a station have become a priority for many tenants,
who are prepared to pay extra for the privilege.
Both commercial properties in the city centre, as well as residential
units along the Red Lines 52km route, have seen a boost in demand,
and that trend is set to continue now that the 23km Green Line is
in operation.
Daniel Norman, the director of sales and marketing at the Crowne
Plaza Deira-Dubai, located within two minutes walking distance of the
K?<;L98@D<KIF?8J8;;<;8
N?FC<E<ND8IB<K;PE8D@:8E;
8JK?<E<KNFIB@JIFCC<;FLK
8:IFJJK?<<D@I8K<#K?<I<EK8C
;@JG8I@KPN@CC9<:FD<<M<EDFI<
GIFEFLE:<;K?8E@K@J8CI<8;P%
new line, has already begun encouraging
hotel patrons to use the metro. Were really
very delighted about the metro opening up just
down the road, he said.
Proximity to the new metro line, which is
served by 18 stations and runs from Etisalat to the
Creek, is a priority for residential tenants, many
of who would prefer to reside close to public
transport. According to Asteco, a small property
within walking distance of the Green Line could
command an annual rent of Dh50,000 ($13,600),
while a similar unit further away would only see
Dh40,000 ($11,000).
Elaine Jones, the chief executive officer at
Asteco, said she believes the rail network is in
the process of changing the local property market.
The Dubai Metro has added a whole new market
dynamic and as the network is rolled out across
the emirate, the rental disparity will become even
more pronounced than it is already.
To some degree, the metro is also dependent
on real estate projects for its operational success.
The Al Jadaf and Creek stations will remain
closed for the time being because the property
developments they are intended to serve have
not yet been completed. They will become
operational when there is demand for it possibly
in the next year or so.
The popularity of the metro with commuters
from residential districts inspired the Roads and
Transport Authority (RTA) to declare that it would
increase late night and weekend services. Any
increase in services will also boost the business
opportunities of shopping and recreational centres
close to the stations, which, in turn, could raise
their rental and sales value.
Although Dubais property market cannot
depend on expansion spurred solely by the
improving transport network, the rising prices
along the main metro corridors are set to put the
sector on a fast track to wider growth.
l
L
L
U
S
1
R
A
1
l
O
N
:

1
A
R
A
K

P
A
R
L
K
H
Oliver Cornock, regional
editor for the GCC, Oxford
Business Group
30 Column- OBG.indd 30 9/26/11 5:30:36 PM
:
e
_
k
^
]
=
n
g
a
b
e
e
E
m
]
'
43059_Dunhill_03_Grandage_GulfBus_01-10_UAE.indd 1 09/08/2011 09:35
*)&F:KF9<I)'((
9I@<=@E>
I<>@FE8CKI<E;J#8E8CPJ@J8E;M@<NJ
THE DEMI5E CF 5UITCA5E 5CHCLAP5
@JC8D@:=@E8E:<>IFNJLG
AIter years oI pressure, Islamic scholars
in the CulI are nally modernising their
operations, much to the delight oI
Western nancial organisations.
A
S INDIVIDUALS THAT hold the key
to unlocking an industry that could
soon be worth $5 trillion, Islamic finance
scholars have traditionally opted for a
rather informal approach.
Over the last decade, the potential
wealth locked up in Gulf has encouraged
international banks to enter Islamic
finance in their droves. And when
launching Islamic products, these
financial institutions have called on
scholars to authorise their products as
Shariah compliant.
The handful of well-known scholars that
operate in the region have become keenly
sought by banks for their Islamic legitimacy.
In the search for a fatwa (or seal of
approval for an Islamic product) bankers
would call around until they found a
scholar that would oblige. It was dubbed
fatwa shopping, and scholars built
a reputation for running around with
briefcases and a cell phone issuing decrees
left right and centre.
This is starting to change though
according to Islamic finance analysts,
who have seen Islamic scholars begin
to formalise their operations and often
mimic the Western conventional models
of doing business.
Ayman Khaleq, an Islamic finance
specialist at law firm Vinson & Elkins,
said: They are setting up more on an
institutional basis, so they have an office,
with junior associates that can help in
their absence.
Banks like to know where a Shariah
scholar is if hes not at his desk. Before,
you had a hotmail or gmail account and
a mobile number, and you just hoped
he answered.
Khaleq said in recent years there had
been a groundswell of demand from
finance professionals, especially at Islamic
banking meetings and conferences in the
Gulf, for scholars to change. Institutional
investors are not used to the lone
ranger approach and need more of the
institutional model that theyre familiar
K<OK9PIP8E?8II@JFE
>
<
K
K
P
@
D
8
>
<
J
32-33 Briefing Demise of suitcase Scholars.indd 32 9/26/11 3:31:05 PM
>LC=9LJ@E<JJ,**
@JC8D@:=@E8E:<9I@<=@E>
'
'
' '
'
'
'
'

with in their dealings with law firms
and accountants.
Bankers have complained in the past
that until the credit crunch the scarcity
of Shariah scholars was the biggest drag
on growth of the Islamic finance industry.
But, despite this, the number of scholars
qualified to pass judgment on products has
remained low.
The Islamic finance industry could
reach $5 trillion by 2015, up from $1
trillion currently, according to the latest
forecasts by Moodys Investors Service.
This is three times the size of Chinas
mutual fund asset base.
The fact that there is no formally
accepted definition of Islamic finance poses
the biggest threat to this growth.
In some cases a product is deemed
Shariah compliant in one market and not
in another, which is especially the case
with Malaysian products, which are often
judged not Shariah compliant in the more
austere Gulf.
This is less of a problem for Islamic
banks in the Middle East, which are
obliged to have a Shariah supervisory
board to approve or ban transactions,
products and services.
They often depend on an even narrower
clique of about a dozen or so brand
name scholars who usually chair their
Shariah boards.
Jawdat Al-Halabi, CEO of Jeddah-
based NCB Capital, the largest Islamic
wealth manager in the Middle East, said
the banks Shariah board looks into all
products that go out and tests them for
authenticity on a regular basis.
You do have different interpretations
from scholars in different countries, even
within Saudi Arabia. But theres enough
commonality in most of the structures
and products.
When youre innovating and exploring
untested products, thats when it becomes
trickier; there are some scholars that are
stricter than others. As a rule, we tend to
err on the side of caution and pursue a
more strict interpretation on our products.
Historically, the risks associated with the
shortage of qualified Shariah scholars in
the Islamic financial industry has been a
major obstacle.
Currently, financial advisors, Islamic
financial institutions and their Shariah
committees are grappling with how to
structure Islamic finance to properly
integrate with conventional finance. The
end result has been the development
of a cumbersome and document-heavy
structure that in many respects echoes
conventional financing.
GCC scholars that are heavily versed
in Shariah law often dont have the
financial background needed for modern
sophisticated banking products.
Still, Al-Halabi added that there are some
scholars that are becoming increasingly
globalised and are being used by various
institutions, whether its in the GCC, MENA
or more internationally.
Its likely that as Gulf scholars take on
a more formal, institutionalised approach
Asses o' s|an|c Hnanc|a| |ns|u|ons
|ncreaseJ Hve'o|J o arounJ S r||||on
|eween 00. anJ |as ,ear bu 'or now.
||s on|, na|es u arounJ Hve er cen
o' |e _|o|a| Hnanc|a| |nJusr,
|e nun|er o' s|an|c Hnanc|a|
or_an|sa|ons _rew 'ron us a 'ew |n
|e n|J'0s o severa| |unJreJ now
oera|n_ |n nore |an o0 counr|es
across |e wor|J
@JC8D@:=@E8E:<9FFD
to doing business, so their international
client list will expand.
The appetite for Islamic finance has
strengthened given the battering that
conventional banking suffered during and
after the global crisis.
Financial transactions in Western
Europe and North America were left in
tatters, while Islamic finance witnessed a
refreshing burst of growth. Largely shielded
from the economic downturn, although
not entirely immune, there is a significant
opportunity for the Islamic financial system
to provide an attractive alternative to
conventional financing.
One Gulf-based banker said: The
financial crisis hit Islamic banking, but
not as hard as conventional banking. This
spurred interest from clients for Shariah
compliant investment.
Since the start of 2011, clients have
looked for value and growth and better
returns than theyve seen in the past.
Whereas they were previously sitting on
the sidelines post-crisis, they are now
becoming more demanding, he added.
Islamic finance hubs in Asia, including
Malaysia and Singapore, have long been
wary of the regions enormous growth
potential on the international stage.
Although Malaysia is by far the bigger and
more sophisticated market, the Middle East
is seen as a sleeping giant.
If local Shariah scholars continue to
upgrade and modernise then the dynamic
of the Islamic global marketplace could
shift dramatically in the coming years.
JaWdat A|Pa|ab|, CL0 of NCB Cap|ta|.
32-33 Briefing Demise of suitcase Scholars.indd 33 9/26/11 3:31:06 PM
21972GE_Gulf business27x20.6HealthE.indd 1 9/18/11 3:28 PM
>LC=9LJ@E<JJ&*,
IN IT TCCETHEP
D<IJ8:HL@J@K@FEJ
@
C
C
L
J
K
I
8
K
@
F
E
1
:
?
8
I
C
@
<
9
8
E
8
C
F
Faced with limited nancing avenues,
regional companies have been pushed
towards consolidation.
K<OK9P;8E@8J88;@
in the larger mid-market deals in the
$100-$300 million range, which are
usually led by family businesses and mid-
sized corporates.
Since late 2008, a number of
corporates have effectively been
buying time or living in denial
regarding the pressures on their
capital structures, said Mehanna.
They have been requesting temporary
debt rollovers from their banks. For many,
it has got to a stage now where their
strategic capital raising options
are becoming more limited, so whats
left is effectively M&A.
HSBC acted as M&A advisor for several
recent deals, including Qatars Mannai
Corp acquisition of a stake in UAE
mobile phone retailer Axiom Telecom,
the Qatari sovereign wealth funds
purchase of a stake in German builder
Hochtief and the Kuwaiti sovereign
wealth funds investment in French
nuclear group Areva.
The regional unrest and financial woes
gripping the US and Europe, as well as
capital and debt restructuring of various
corporates in the Gulf have pushed prices
to a level conducive to deals.
M
ERGERS AND ACQUISITIONS
(M&A) are set to pick up this year
due to the narrowing of the price gap
between buyers and sellers, pressure
on some companies capital structure
and sovereign wealth funds investing
in enterprises to bolster their local
economies, analysts and investors said.
Although this year marked the
scrapping of the estimated $12 billion sale
of a stake in Kuwait mobile operator Zain
to UAEs Etisalat, the M&A landscape has
been busy with deals from corporates and
sovereign wealth funds.
At the start of 2011, when the political
unrest was in full swing, there was an
initial expectation that the levels of M&A
activity could decline. We have conversely
observed a noticeable uptick in activity,
particularly in the intra-regional mid-
market space, said Omar Mehanna,
HSBC head of advisory for the Middle
East and North Africa. In certain sectors,
there are strategics that have survived the
crisis remarkably well with their capital
structures intact. They view this period
as an opportune time to diversify and
consolidate their position both regionally
and internationally.
M&A deal value in the Middle East
and North Africa in the first half of 2011
rose 30 per cent to $21.17 billion from a
year earlier period, according to portal
Zawya.com. The largest M&A deal was
Abu Dhabi-government backed IPICs
$5 billion acquisition of an incremental
equity investment in Spanish oil firm
Cepsa taking its stake to 100 percent.
The first half was a bit surprising.
It will continue with the same trend,
keeping an average of 30% growth
this year (compared with 2010),
said Youssef Saada, Zawyas head
of financial research.
HSBC currently has a pipeline of
mandates for inbound and outbound
transactions involving Sovereign Wealth
Funds and large family groups,
with activity centered in the UAE,
Qatar, Saudi Arabia and Kuwait, said
Mehanna, declining to give specific
figures. He expects increased activity
D89I@<=@E>
35-36 Briefing In it Together.indd 35 9/26/11 3:31:45 PM
*-&F:KF9<I)'((
9I@<=@E>D8
A year and a half ago there was
a fundamental disconnect between
buyers and sellers, said Mehanna. The
vendors mindsets were still pre-crisis
and it was very difficult to convince
them of the fundamental value of their
businesses. With the political unrest, the
price disconnect between buyers and
sellers has narrowed.
And with the fixed-income market
remaining open to select high-rated
corporates, the equity markets in the
doldrums and bank lending selective,
many companies are turning to M&A for
capital. One example is Axiom Telecom,
which cancelled its IPO last year due to
market conditions and opted instead to
sell its stake to a firm this year.
HSBCs views on prices are echoed by
UAE contractor Drake & Scull, which has
been actively snapping up companies
in the Gulf region, with the most recent
acquisition this year in Saudi Arabia.
Valuations in the market have come
down tremendously, said vice-chairman
and CEO Khaldoun Tabari. What we
thought were opportunities in 2009-2010,
M8CL8K@FEJ@EK?<
D8IB<K?8M<:FD<
;FNEKI<D<E;FLJCP%
KF;8PK?<P8I<9<KKFF;
M8CL8K@FEJ8KK?<
K@D<%KF;8PK?<I<@J
DFI<G8@E%
today they are better than in 2009, which
were also good valuations at the time.
Today there is more pain.
But the M&A arena remains fraught
with problems in terms of regulation and
politics within a company and country,
which are thwarting potential deals.
Big-ticket cross-border items such as
the scrapped Zain-Etisalat tie-up remain
sparse and are unlikely to increase, given
the current ecosystem.
Louis Besland, partner and vice
president at consultancy A.T. Kearney
Middle East, said: I do not expect
significant growth in number or value
of M&A deals in the short term because
of regulations in the region, the lack of
visibility and the shareholding structure,
which is very much linked to families.
In some cases, there are conflicting
interests between stakeholders. They
(shareholders) think their investment is
their inheritance that they can and need
to keep.
The thin line between shareholders and
management is often blurred and the fact
that most large publicly-listed companies
have some sort of government connection
does not help. Many sectors, such as
banking, are ripe for consolidation, but
little activity has occurred because it is
viewed as a strategic sector.
There are no real cross-border
regulations. It is very much country-
specific, which makes large deals difficult
and complicated, said Besland. Cross-
sector regulation is unpredictable and
for international companies, it is a bit
worrying to deal with the region,
when you also have the unrest.
If you look at the regulations for local
employment, it is changing rapidly
and this creates uncertainty for
international corporations.
Meanwhile, sovereign wealth funds,
who invest heavily abroad, are unlikely to
significantly slow down their investments,
despite the financial crash in the US and
Europe. But their future investments are
set to become more selective and geared
toward importing technology and know-
how because governments are under
increasing pressure to answer to a restive
population demanding better jobs and
economic prospects. IPICs investment
this year in CEPSA fits well with Abu
Dhabis efforts to expand its refining
capacity, while Qatars investment in
Hochtief will prove handy as the Gulf
state embarks on a building spree
for its World Cup in 2022 and other
mega projects.
I can see an increase in international
investments (from sovereign wealth
funds), particularly where, not only
the value proposition is compelling,
but also the strategic angle can yield
tangible benefits back into the local
economy, said Mehanna. In the past,
the strategic angle was there, but it was
not as prominent.
Lou|s Bes|ard, partrer ard
v|ce pres|dert of corsu|tarcy
A.I. Kearrey N|dd|e Last
35-36 Briefing In it Together.indd 36 9/26/11 3:31:45 PM
A WORLD LEADER OF THE ACCOUNTANCY AND FINANCE PROFESSION
BUT DO THEY
UNDERSTAND
YOUR BUSINESS?
ANY ACCOUNTANT CAN
CLAIM TO UNDERSTAND
YOUR BOOKS
Training a chartered accountant makes business sense.
Find out more at icaew.com/betterqualied
THE CHARTERED ACCOUNTANT.
NO ONES BETTER QUALIFIED.
ICAEW Chartered Accountants have the nancial intelligence and skills your
business demands to drive a better and more sustainable return. Now you
know who to consider for your next business investment.
007_Gulf_Bussiness_270x206_M_DUB.indd 1 19/09/2011 09:40
*/&F:KF9<I)'((
CEMENT PPCDUCEP5 FACE CLC5UPE
:FD@E>LEJKL:B
Cement Iactories are Ieeling the pinch
as UAE pro|ects are culled. But prospects
Ior 5audi Arabia's building boom are
somewhat brighter.
K<OK9PG<K<IJ?8N$JD@K?
A
S GRANDIOSE CONSTRUCTION
projects are scaled back, looming
overcapacity is biting the UAE cement
industry. The countrys production has
slumped in the past two years, and
industry players believe that that volumes
will more than halve in 2011 from a peak
of 20.8 million tonnes (mt) in 2008.
With as much as 43 per cent capacity
owned by unlisted companies this year,
the UAE will feel excessive pain as these
owners are unable to share losses with
outside equity holders. Industry insiders
say that a collapse in capacity utilisation
to around 26 per cent will take place in
2012, a figure that fell to 37 per cent in
2010. Plant shutdowns are inevitable.
In contrast, the prospects of Saudi
Arabias cement industry are solid with
a construction boom contributing to
brisk activity in the sector, a new report
from Kuwaits Global Investment House
(GIH) said. Saudi plants account for half
of GCC production capacity and
the effects of the global financial crisis
on its cement industry are likely to be
muted. The outlook for Kuwait and Qatar
is neutral.
Excluding Saudi Arabia, GCC countries
continue to witness an erosion in profits:
The UAE saw a decline of 56.1 per cent
year on year in 1H2011, while Oman has
seen a decline in profitability by 53.3 per
cent year-on-year in the same period,
said GIH, adding that UAE excess capacity
was also adversely impacting the Omani
cement sector, with UAE-produced cement
being dumped in the sultanate.
Cement prices in the GCC averaged
around $66 per tonne in 1H2011,
compared to $68.60 per tonne enjoyed
in 1H2010, said the report. High prices
of around $85 per tonne in Kuwait and
$75 per tonne in Oman in early 2010
have now moderated to $80 and $65
respectively. Elsewhere, prices averaged
>
<
K
K
P
@
D
8
>
<
J
38-39 Briefing Cement.indd 38 9/26/11 5:32:24 PM
>LC=9LJ@E<JJ&*0
@E;LJKI@<J9I@<=@E>
between $60-70 in Saudi Arabia and
Qatar, although UAE prices are now
testing the $50 floor.
L8<
At a cement industry conference in
Dubai in late 2008, the signs were
there but the industry was reluctant
to face them: the sector was headed
for disastrous levels of overcapacity.
An official from a UAE-based company
said he was determined to be
optimistic, but the passage of time has
shown otherwise. His verdict today:
Everybody [in the UAE] is losing
money now. I just heard that [only one
company is] on course to break even [in
2011]. The rest are losing money.
It is difficult not to feel some sympathy.
As the real estate boom gathered
momentum in the years to 2008, cement
producers were left struggling to meet a
deluge of demand. Cement plant build-
out usually takes at least two years, so
decisions to go ahead with expansions or
greenfields are coloured by the current
operating environment. As a result, in
2008, UAE capacity grew 24.7 per cent,
Saudi 32.7 per cent and the GCC as a
whole 26.1 per cent. Herein lies the root
of the UAEs trouble.
With the overall projects market having
fallen from around $900 billion in mid-
2009 to around $800 billion a year and a
half later, according to MEED, the pain in
the UAE cement sector is set to continue.
J8L;@8I89@8
The kingdoms bloc of eight listed
cement companies is extremely long in
the tooth the first was set up as early
as the 1950s and for decades saw
negligible levels of debt and unfeasibly
high levels of profitability.
Three years ago, analysts were
expecting a major rollout of new
construction and this is ongoing. In March
this year, global real estate consultants
Jones Lang Lasalle reported that the
kingdom would need 900 new houses
per day completed over the next five
years, or a total of 1.65 million homes.
Several big-ticket projects will
also bolster the Saudi industry.
The consultancy identifies major
elements of government infrastructure
investments totalling SR133 billion: six
airport projects; two port projects; and
23 railway projects. The central region,
focussed on Riyadh, is forging ahead,
with established player Yamama,
and recent entrants, Najran, Madina and
Riyadh Cement Companies accounting
for the bulk of volume growth, GIH said.
The biggest construction sites in
Saudi Arabia are now the biggest in the
world, said a regional construction
services supplier. This situation will
continue for [at least] the next two years.
FD8E8E;H8K8I
The outlook for cement in Qatar is bright,
with several major projects, including
roads, rail and construction having
received a boost by Qatars winning World
Cup 2022 host bid. Qatar and Oman have
much smaller cement capacities than their
two larger GCC partners, at 6.2 million
tonnes per annum (mtpa) each. However,
Qatar National Cement has announced it
will add 930,000 tonnes of capacity soon,
to bring it to 5.36 mtpa.
Oman has witnessed the halving of
sector profits owing to a 37 per cent
increase in costs and a huge increase
in financial charges, GIH said. Raysut
Cements revenues grew by 20.7 per cent
while Oman Cements saw a drop of 13.9
per cent. Pioneer Cements entry into the
market has increased sales volume.
:FEKI8JK@E>=FIKLE<J
Accounting for around 80 per cent of
GCC sales, the contrasting fortunes of
Saudi Arabia and the UAE will continue
to be the focus of investor sentiment.
Certainly, many regional players are
looking to the kingdoms vibrancy
to offset the UAE slowdown. We are
at the same level or higher [in terms
of operations] than 2009 because of
Saudi Arabia, says Peter Vogel, general
manager, Doka Gulf FZE. [In the
UAE alone], we are half where we
were [then].
<M<IP9F;PR@EK?<
L8<T@JCFJ@E>DFEDFE<P%
L8<:<D<EKNF<J
C
F
:
8
C
G
I
F
;
L
:
<
I
J
8
C
<
J
K
F
E
E
<
J
((%+*
(*%''
(,%,-
(0%-'
(.%.'
()%+(
38-39 Briefing Cement.indd 39 9/26/11 5:32:31 PM
Business Credit Cards
from Business Banking Group
Need emergency cash and instantly provided liquidity? You need a partner you can bank on.
NBADs Business Banking Group believes in the spirit of entrepreneurship and fully supports
the growth of the SME sector within the business industry of the UAE. From exible rates,
convenient services and professional nancial advice, you can rest assured that at NBAD,
you have found the right banking partner for your SME.
Your business. Your banking partner.
Terms and conditions apply.
www.nbad.ae
Call Toll-Free 800 2211, visit any Business center or contact us at bbg@nbad.ae
>LC=9LJ@E<JJ&+(
GFC@K@:J9I@<=@E>
NEW KID5 CN THE BLCC
>::D<D9<IJ?@G
The Arab spring reignited interest in Jordan and Morroco
|oining the CCC but not all the member countries agree.
W
ILL THE SIX GCC countries become
seven, or even eight? Meetings at
foreign minister level held in Jeddah last
month brought closer the possibility of
Jordanian and Moroccan membership
of the GCC over the next decade, but a
time-scale for formal accession has not yet
been clarified.
The GCC has announced that it will
set up specialised committees to look at
the question of Jordan and Moroccos
membership, while the council has
unveiled a five-year economic development
assistance programme for the two
monarchies and Jordanian Foreign Minister
Nasser Joudeh confirmed that Jordans
formal membership request was submitted
on 10 September.
Jordan requested to join and the GCC
initially accepted, based on the last summit
in Saudi Arabia in May, said Riad Kahwaji,
security expert and CEO of Inegma (the
Institute for Near East & Gulf Military
Analysis). No one had any idea about
admitting new countries, while the two
countries that were interested in joining the
GCC were Yemen and Iraq. Both have not
been admitted.
According to a report published in the
Kuwait Times in August, there is far from
unanimous opinion for Jordans bid to
join the GCC. The attitude of GCC states
governments towards Jordans application
to join the Gulf bloc seems to vary from
country to country, with some, such as
Saudi Arabia and Bahrain, welcoming the
move, and others like Kuwait and Qatar
expressing reservations on the idea,
the paper said. Oman and the UAE,
meanwhile, have wholly rejected the idea
of Jordans becoming a member, although
they were initially supportive of it.
Jordan applied to join the GCC in the
eighties and again in 1996, while Moroccos
enthusiasm for membership is said to be
tempered by distance and the desire to
stand on its own two feet. Both countries
would welcome the economic benefits of
joining but the advantages to existing GCC
members are less clear, despite the clear
potential benefits of fellow Middle Eastern
and Arab monarchies broadening the base
of the organisation.
Kahwaji says the original news about
Jordans bid to join the GCC was a complete
surprise to some of the [GCC] states. What
is understood so far is that this was a Saudi
initiative to include the Jordanians, and to
invite Morocco to join. In principle, this was
not a comprehensive effort; it was more or
less unilateral [by the Saudis] and pulled
the rest on board in support. Nevertheless
we have seen the GCC leadership feel
compelled to join in inviting the Jordanians,
while many officials in their circles remain
hesitant, suspicious, and even disapprove of
the idea.
It is not clear why the GCC invitation
was made. Jordan had made the request
years ago and it was ignored for a while.
The Arab Spring did help but no one is
sure why, says Jordan-based journalist
and commentator, Daoud Kuttab. Some
say that GCC countries wanted the use of
Jordans security and intelligence service.
Others say it was a way of creating a royal
club of monarchies.
It is too early to say what kind of
membership Jordan will be offered if
its bid is successful. Jordan is more
interested in the economic opportunities
and not so much in full or partial
membership, says Kuttab. Jordans
interests are economic, while the GCCs are
political and security-related.
The apparent lack of homogeneity
between Jordan and the GCC has led to
concern in Amman. [Accession to the
GCC] is a big worry for many liberals. It has
even become the butt of jokes questioning
when Jordanians will have to wear the
dishdash and hijab, Kuttab said.
K|r Abdu||ab || of Jordar
(L) ard Norocco's K|r
Nobaed V|.
8
=
G
N?8K@JLE;<IJKFF;
JF=8I@JK?8KK?@J
N8J8J8L;@@E@K@8K@M<
KF@E:CL;<K?<
AFI;8E@8EJ#8E;KF
@EM@K<DFIF::FKF
AF@E%
41 Briefing Jordan & Morroco.indd 41 9/26/11 5:35:51 PM
12.09.2011 14:36 PDF_QUADRI_300dpi_txvecto
>LC=9LJ@E<JJ&+*
8M@8K@FE9I@<=@E>
PPIVATE JET U5ACE 5CAP5
The Arab 5pring boosted private |et
travel as diplomats and business
leaders engaged in peace talks.
W
HILE THE COMMERCIAL
aviation market nosedived
during the Arab Spring this year,
regional private jet usage soared. In
times of crisis, the need for urgent
high-level talks and diplomatic relations
increases, as does the need
for convenient, safe transportation.
This year, the regional private jet
market will grow by around seven to
eight per cent, having experienced
negative growth of 10 to 11 per cent in
2010, said Shane OHare, CEO of Abu
Dhabi-based Royal Jet. The private jet
market is maturing, and we are getting
to the places airlines dont fly to.
The added regional flying activity as
heads of state frantically flew between
states to stymie this years Arab Spring
In a nod to the growing demand for
chartered services, the private jet firm
recently launched its Premium Connect
service for UAE airline Etihads VIP
customers, allowing customers to switch
directly from a commercial flight to a
private jet and fly to the destination of
their choice.
The old adage that time is money has
become increasingly important. Premium
Connect offers a seamless global network
and can connect customers from Abu
Dhabi to anywhere in the world, said
OHare. The private jet industry is
maturing very quickly and the consumer
is increasingly understanding the value
of private jet travel, security and check-in
times. People want to travel when they
want to travel.
Royal Jet is also counting on its thriving
medical tourism business as a growth
pillar. The firm currently has 11 aircraft,
seven of which can be utilised for medical
services. Royal Jet provides an on-board
medical service, which can be compared
to a flying hospital, and Europe, Asia,
Bangkok in Thailand and Washington in
the US are currently the most popular
destinations for health trips.
From 2008 onwards, Royal Jet
identified a five-year expansion strategy
that is aimed at creating solutions to
address the Middle Easts business
aviation growth in conjunction with Abu
Dhabis wider 2030 vision to boost traffic
and tourism to the emirate.
Royal Jet works closely with Etihad
and Abu Dhabi corporations and its
a collective effort to drive traffic to
Abu Dhabi. Its driven from the top,
said OHare.
The Abu Dhabi Tourism Authority
released its report on the industrys
first-half year performance at the end
of July, showing that the emirates hotels
hosted more than one million guests
during the first six months of the year,
an increase of 11 per cent over the same
period in 2010.
JLIGI@J<GIF=@KJ
K<OK9P8C@:@89LCC<I
crisis directly bolstered the bank balances
of private jet companies.
Global crises can stimulate the need
for more travel because of the need for
more delegations and summits. Last year
there were also an unprecedented number
of summits and meetings, both at a global
level and regional level, directly caused by
the economic crisis, and thats good for
our business. This is where our business
is quite unique, said OHare.
The dwindling corporate market has
tempered the growth of the private jet
industry, as jittery businesses made travel
cutbacks to protect their bottom lines in
an uncertain economic climate. Semi-
government-owned Royal Jet services
a mix of corporate, government and
presidential sectors.
Corporate travel represents about 20
per cent of our business. It accounts for
around 50 per cent in the US, 30 per
cent in Europe and 20 per cent here,
said OHare. Its up and down, so our
growth this year has been balanced out by
different factors.
K_\gi`mXk\a\kdXib\kî\n
\`^_kg\iZ\ekk_`jp\Xi%
@
D
8
>
<
:
F
L
I
K
<
J
P
1
I
F
P
8
C
A
<
K
43 Briefing Aviation.indd 43 9/26/11 5:34:18 PM
++&F:KF9<I)'((
FG<:
G
?
F
K
F
J
1
M
@
B
I
8
D
>
8
N
;
<
44-53 OPEC.indd 44 9/26/11 5:39:00 PM
>LC=9LJ@E<JJ&+,
FG<:J\Zi\kXip
>\e\iXc8Y[XccX
JXc\d\c$9X[i`
_fc[jk_\b\pj
kfk_\nfic[jf`c
jlggcpXjk_\^cfYXc
\Zfefdpk\\k\ij
èk_\YXcXeZ\%
?\k\ccj<`k_e\
Ki\XefiXYflk_`j
]\Xij]fiC`YpXXe[
n_pk_\nfic[n`cc
XcnXpje\\[dfi\
f`cèk_\cfeîle%
GLDGLGK?<
MFCLD<
OPECs Secretary General knows a crisis when he sees
one. And, despite a recent downward revision of global
oil demand, Abdalla Salem el-Badri is not a man to panic.
What Im seeing is not a crisis in the oil market, its a
slight slowdown.
While OPEC recently trimmed back 150,000 barrels a day
in oil demand for the rest of the year to reflect 2011 growth
of 1.1 million barrels a day, growth in 2012 is expected to be
1.3 million barrels a day. However, El-Badri admits that the
US stimulus packages are floundering.
You cannot reduce unemployment by hedging and
speculating on commodities. He urges that something
must be done to increase employment in North America.
I hope these negative signs will not continue through
the remainder of the year and throughout 2012. We hope
solutions can be found.
The health of the global economy is always uppermost on
the minds of OPEC members. Oil producers require healthy
demand from the world market and any slowdown will have
a direct impact. The September OPEC Monthly Oil Market
Report estimates the world economy will grow by 3.6 per
cent in 2011 and 3.9 per cent next year. The downward
revision on the figures is only a small percentage, but the
slowdown in industrial activity in the developed world is
44-53 OPEC.indd 45 9/26/11 5:39:01 PM
01143 Gulf Business FP 6/17/11 3:05 PM Page 2
Composite
C M Y CM MY CY CMY K
CULF BUSlNLSS&+.
FG<:
worlds biggest energy player and while
there are good relations between individual
OPEC countries and the Chinese, OPEC as
an organisation is anxious to improve the
dialogue with China.
OPEC has succeeded in building
strong relations with the EU and the
IEA, despite its recent release of reserve
stocks seen as unnecessary by some
OPEC members and many in the market.
Theres still a distance with China since
their last meeting in 2007 and El-Badri
says he needs to talk to the Chinese and
exchange data and information.
As OPEC looks to increase production
in the future, El-Badri says his members
want to feel confident there will be
demand for the additional oil. Without
C
L
1
1
Y

l
M
A
C
L
S
this assurance, investment will be just
shooting in the dark and new supply
will never go to the market.
OPEC also wants to see stronger ties
with the BRICS; Brazil, Russia, India,
China and South Africa. Its good for us
both to help forecast our numbers and
forecast exactly how much oil we should
produce. If they are confident there are no
negative signs then we will produce what
they want, but we really dont know now.
Despite an uncertain future for the
world economy and global oil demand,
there remains considerable investment
in the energy sector. OPEC members
have sealed a robust investment plan,
committing to a quarter of the worlds
energy investment needs, according
to OPECs World Oil Outlook 2010.
K?<I@>?KGI@:<
A healthy sum of $312 billion has been
allocated for expansion of OPEC member
oil projects in the coming years up to
2015. Price fluctuations will always be
a concern, but El-Badri makes it clear
that OPEC has no price target in place
with OPEC decisions determined by a
reasonable price where we can invest
and where it does not adversely effect
world growth.
Industry analysts and many ministers
have hinted at a price around $85 a barrel
to please all parties and recent aggressive
social spending programmes in producing
countries in the Middle East would tend
to support this figure. El-Badri says that
all member countries are still going
ahead with planned investment in the
oil industry, particularly in Iraq. All the
countries have contributed this amount
evident and remains a major concern
in the short-term. El-Badri watches the
industry and the markets on a daily basis
and he concedes, there is a slowdown
in economic growth and a decrease in oil
demand and this will affect the balance
of supply and demand.

NFF@E>:?@E8
Demand for oil from China and Asian
countries have been key driving forces in
the market in recent years. Chinese GDP
growth remains robust at nine per cent,
despite Chinese government intervention
to curb inflation. As El-Badri oversees
an aggressive investment plan by OPEC
members, he seeks to know China more
intimately. The country will become the
"Some counLries aqreed wiLh my June reporL,
some counLries did noL, buL Lhis is hardly a
crisis. FG<:_Xj]XZ\[Xcfkf][`]Zlckp
èk_\gXjk#i\Xc[`]Zlck`\jn_\i\jfd\
Zfleki`\jèmX[\[\XZ_fk_\iXe[]fl^_k
\XZ_fk_\i%
F`ckiX[\ij_Xm\\og\i`\eZ\[XkliYlc\eki`[\k_`jp\Xi%
44-53 OPEC.indd 47 9/26/11 5:39:06 PM
>LC=9LJ@E<JJ&+0
FG<:
F@CGI@:<G<I=FID8E:<
@EK?<C8JK=@M<P<8IJ
9I<EK:IL;<
?`^_1(++%0,
Cfn1*/%()
6
>I<<EK?I<8KJ
Fossil fuel will remain essential and
El-Badri adds that oil and coal will go
neck to neck. The rise of alternative
energy is inevitable but, with a projected
50 per cent rise in global energy demand
to 2035, El-Badri says there is room
for all kinds as every country is looking
for more energy and demand will
accommodate all types of energy.
But surely the growth of alternative
energy is gaining strength and will be
a threat to the oil business? Not so,
he says. He adds that some sources of
alternative energy present dilemmas
like using land for food or fuel and the
nuclear issue remains uncertain since the
catastrophe in Japan. They are growing
from a really low base and we encourage
all sources of energy and we see growth
in the energy mix as demand rises.
FG<:=8CC$FLK
Medium to long-term demand may
be secured, but in the shorter term,
the market would like to see OPEC
to increase oil supply by 21 million
additional barrels by 2015. We care about
bringing additional supply to the market.
Investment in Libya is currently at
a standstill, but the Secretary General
hopes this will restart in the near future.
According to the IEAs World Energy
Outlook 2010, Middle East countries will
collectively invest around $37 billion per
annum from 2010 until 2035. Much of
this investment will be in the upstream
sector, such as the upcoming $20 billion
Aramco/Dow Chemical petrochemical
Sadara plant in Saudi Arabia. The IEA
has studied the countries in the Middle
East that can add the incremental barrels
and agrees the bulk will come from
Iraq, but also from Saudi Arabia, Kuwait
and the UAE. El-Badri says member
countries realise they are also consuming
more, so they are all looking to find
additional oil or gas to satisfy domestic
demand as well.
OPEC may have revised oil demand
downwards slightly for this year and next
but El-Badri says the long-term energy
demand is what member countries are
planning for. In 1960, energy demand
was around 55 million barrels of oil
equivalent, in 2011 it is 235 million
barrels. Looking ahead to 2035, the
world needs 355 million barrels of
oil equivalent to satisfy demand.
demonstrating a more unified front in
decision making. The lack of agreement
at the June meeting this year may have
appeared negative but El-Badri insists
that OPEC members have lived through
tougher times than a disagreement over
supply and demand figures. He says we
need to remember the context under
which the meeting took place. The
outside environment was not so friendly;
there were many negative signs like the
state of the US economy, the European
debt crisis, and fears of a slowdown
in China. Added to that, we had one
country out of production and six new
ministers at the meeting.
El-Badri presented his report to the June
meeting indicating fears of a shortage of
1.5 million barrels in the third and fourth
quarter of this year. Some countries
agreed with my report, some countries did
not, but this is hardly a crisis. He reminds
us that OPEC has faced a lot of difficulty
in the past, real difficulties where some
countries invaded each other and fought
each other but we have been able to
overcome these difficulties. He says a real
test of unity came in 2008 when the oil
price dropped from $147 to $30 a barrel.
OPEC took a decision and spoke with one
(++%0,
*/%()
)''. )''/ )''0 )'(' )'((
6
44-53 OPEC.indd 49 9/26/11 5:39:06 PM
C
M
Y
CM
MY
CY
CMY
K
hp.pdf 9/26/11 6:41:11 PM
>LC=9LJ@E<JJ&+0
FG<:
F@CGI@:<G<I=FID8E:<
@EK?<C8JK=@M<P<8IJ
9I<EK:IL;<
?`^_1(++%0,
Cfn1*/%()
6
>I<<EK?I<8KJ
Fossil fuel will remain essential and
El-Badri adds that oil and coal will go
neck to neck. The rise of alternative
energy is inevitable but, with a projected
50 per cent rise in global energy demand
to 2035, El-Badri says there is room
for all kinds as every country is looking
for more energy and demand will
accommodate all types of energy.
But surely the growth of alternative
energy is gaining strength and will be
a threat to the oil business? Not so,
he says. He adds that some sources of
alternative energy present dilemmas
like using land for food or fuel and the
nuclear issue remains uncertain since the
catastrophe in Japan. They are growing
from a really low base and we encourage
all sources of energy and we see growth
in the energy mix as demand rises.
FG<:=8CC$FLK
Medium to long-term demand may
be secured, but in the shorter term,
the market would like to see OPEC
to increase oil supply by 21 million
additional barrels by 2015. We care about
bringing additional supply to the market.
Investment in Libya is currently at
a standstill, but the Secretary General
hopes this will restart in the near future.
According to the IEAs World Energy
Outlook 2010, Middle East countries will
collectively invest around $37 billion per
annum from 2010 until 2035. Much of
this investment will be in the upstream
sector, such as the upcoming $20 billion
Aramco/Dow Chemical petrochemical
Sadara plant in Saudi Arabia. The IEA
has studied the countries in the Middle
East that can add the incremental barrels
and agrees the bulk will come from
Iraq, but also from Saudi Arabia, Kuwait
and the UAE. El-Badri says member
countries realise they are also consuming
more, so they are all looking to find
additional oil or gas to satisfy domestic
demand as well.
OPEC may have revised oil demand
downwards slightly for this year and next
but El-Badri says the long-term energy
demand is what member countries are
planning for. In 1960, energy demand
was around 55 million barrels of oil
equivalent, in 2011 it is 235 million
barrels. Looking ahead to 2035, the
world needs 355 million barrels of
oil equivalent to satisfy demand.
demonstrating a more unified front in
decision making. The lack of agreement
at the June meeting this year may have
appeared negative but El-Badri insists
that OPEC members have lived through
tougher times than a disagreement over
supply and demand figures. He says we
need to remember the context under
which the meeting took place. The
outside environment was not so friendly;
there were many negative signs like the
state of the US economy, the European
debt crisis, and fears of a slowdown
in China. Added to that, we had one
country out of production and six new
ministers at the meeting.
El-Badri presented his report to the June
meeting indicating fears of a shortage of
1.5 million barrels in the third and fourth
quarter of this year. Some countries
agreed with my report, some countries did
not, but this is hardly a crisis. He reminds
us that OPEC has faced a lot of difficulty
in the past, real difficulties where some
countries invaded each other and fought
each other but we have been able to
overcome these difficulties. He says a real
test of unity came in 2008 when the oil
price dropped from $147 to $30 a barrel.
OPEC took a decision and spoke with one
(++%0,
*/%()
)''. )''/ )''0 )'(' )'((
6
44-53 OPEC.indd 49 9/26/11 5:39:06 PM
,'&OC1OBLR 20
FG<:
voice then to reduce production, and we
did it successfully. This current slowdown
in oil demand should not be viewed as
a crisis, he says, especially when the
market has more pressing issues at hand,
such as job creation and re-instatement of
consumer confidence.
K?<C@9P8EGIF9C<D
The Secretary General is relieved and
encouraged to see Libyan oil coming back
to the market. Restoring oil production
in Libya is an emergency, it must happen
without delay and any obstacles. The
past few months has been a time of
personal and professional concern for the
Libyan-born oil official who has watched
the demise of his country and its oil
industry with fear and sadness. I spent
all my life working in Libya from clerk
to chairman of the National Oil Company.
I know all of the oil fields by heart. It
was also a time of immense personal
distress as members of his family were
left behind in the country. Months later,
the future looks brighter. His family is safe
and well, the war is coming to a close and
the outlook for the oil industry is hopeful.
El-Badri is optimistic about the future
of energy in Libya, and says restoring
oil production is vital. This is the only
source of income they have. The priority
he says is to restore their production
and restore their exports because its
important the Libyan people have
an income, medicine, food and other
things needed to get back to normal
as it was or even better. He says the
country now needs the full cooperation
and investment of the international oil
companies. He urges them to waste no
time. I encourage them to come back
immediately and without delay as they
are part of the game, they must be there
from day one and take the initiative.
Libyan oil expertise is first-class and
he is confident that the expat workers
and management will also return in their
droves once the security and political
environment is more settled. Security
must be 100 per cent and financial help
must be given. He said the oil industry
has the leadership and the expertise to
succeed. I have great confidence in the
chairman of the National Oil Corporation,
Dr. Nuri Berruien. The country has some
of the best oil experts and the National
Transitional Council must support them,
this is a top priority. He says he expects
Libya to be producing up to a million
barrels a day in six months and he
expects oil production to be back to pre-
war levels of 1.6 million barrels a day
within 15 months.
El-Badri also suggests that current oil
prices have a built-in political unrest risk-
premium of $16 $20 a barrel. If Libya
can return to normal soon, this premium
should shrink, although continuing
turmoil in the region means it is unlikely
to disappear altogether.
The oil price has hovered above $100
most of this year with Brent Crude
becoming the benchmark of choice. The
relative strength of the oil price, given
the weakness of the global economy,
has surprised the market as well as the
Secretary General, but many analysts say
it underlies longer-term tightness in the
market. El-Badri is not worried about
members over-producing at a time like
this, the market has not been flooded,
but he expects OPEC members to reduce
excess production when Libya comes
back on track. As long as other member
countries have a different oil from the
very sweet Libyan oil, then this cutback
will automatically happen. Libya has a
strong customer base in Italy, France,
Spain and Austria; the market will take
care of this shift.
JC@:BGC8EJ
OPEC celebrated its 50th anniversary last
year and this economic organisation
is still relevant and vital to the world
economy, says El-Badri. Now in his
second term as Secretary General, he looks
forward to the remaining year and a half
I\jkfiè^f`cgif[lZk`fe
èC`YpX`jXe\d\i^\eZp%
K_`j`jk_\fecpjfliZ\
f]èZfd\k_\p_Xm\%
l encouraqe Lhe oil
companies Lo come back
immediaLely as Lhey are
parL ol Lhe qame, Lhey
musL be Lhere lrom day
one and Lake Lhe iniLiaLive."
44-53 OPEC.indd 50 9/26/11 5:39:09 PM
OPEN FOR DISCOVERY
Now open in the vibrant West Bay district, the new Renaissance
Doha City Center Hotel is a stunning mix of modernist styling and
Arabic inuences.
Theres everything todays traveller could desire: the serene Saray
Spa and an eclectic array of restaurants, bars, and lounges at the
dynamic West End entertainment zone.
Discover the new Renaissance Doha City Center Hotel,
connected to the City Center Mall
Call 00974.4419.5000 or see renaissancedoha.com
RENAISSANCE DOHA CITY CENTER HOTEL
West End, City Center
Al Wahda Street
Doha, Qatar
CULF BUSlNLSS&,*
FG<:
despite the challenges. The organisation
combines the production efforts of 12
member countries, eight of which are in
the Middle East. In this very uncertain
world, the future for OPEC will be more
of the same, ensuring the stabilisation of
oil markets. No new member countries are
being considered we are not out knocking
on doors and no-one is knocking on our
door right now.
El-Badri does not rule out future
expansion but says we have no
immediate intention to grow, if any
countries are interested, they are welcome
to talk to us, but they must qualify and
abide by the OPEC statutes. OPEC and
other major energy-related organisations
are busy collecting data throughout the
year and longer-term reports such as
OPECs Annual World Oil Outlook and
the IEAs World Energy Outlook are
due out before the end of the year. The
International Energy Forums Joint Oil
Data Initiatives investment guide will
be published sometime in 2012. This
collective information will help guide
costly investment decisions in a world of
economic uncertainty. The need for solid
energy data has never been so urgent;
clearer data and more transparent facts
and figures can only make OPEC Secretary
General El-Badris job a less difficult one
in the coming 18 months.
"We have no immediaLe
inLenLion Lo qrow, `]Xep
Zfleki`\jXi\èk\i\jk\[#
Lhey are welcome Lo Lalk
Lo us, Ylkk_\pdljk
hlXc`]pXe[XY`[\Ypk_\
FG<:jkXklk\j%
44-53 OPEC.indd 53 9/26/11 5:39:14 PM
CULF BUSlNLSS&,*
FG<:
despite the challenges. The organisation
combines the production efforts of 12
member countries, eight of which are in
the Middle East. In this very uncertain
world, the future for OPEC will be more
of the same, ensuring the stabilisation of
oil markets. No new member countries are
being considered we are not out knocking
on doors and no-one is knocking on our
door right now.
El-Badri does not rule out future
expansion but says we have no
immediate intention to grow, if any
countries are interested, they are welcome
to talk to us, but they must qualify and
abide by the OPEC statutes. OPEC and
other major energy-related organisations
are busy collecting data throughout the
year and longer-term reports such as
OPECs Annual World Oil Outlook and
the IEAs World Energy Outlook are
due out before the end of the year. The
International Energy Forums Joint Oil
Data Initiatives investment guide will
be published sometime in 2012. This
collective information will help guide
costly investment decisions in a world of
economic uncertainty. The need for solid
energy data has never been so urgent;
clearer data and more transparent facts
and figures can only make OPEC Secretary
General El-Badris job a less difficult one
in the coming 18 months.
"We have no immediaLe
inLenLion Lo qrow, `]Xep
Zfleki`\jXi\èk\i\jk\[#
Lhey are welcome Lo Lalk
Lo us, Ylkk_\pdljk
hlXc`]pXe[XY`[\Ypk_\
FG<:jkXklk\j%
44-53 OPEC.indd 53 9/26/11 5:39:14 PM
>
<
K
K
P
@
D
8
>
<
J
?<8CK?:8I<
,+&F:KF9<I)'((
54-62 Pharma.indd 54 9/26/11 6:01:09 PM
>
<
K
K
P
@
D
8
>
<
J
?<8CK?:8I<
,+&F:KF9<I)'((
54-62 Pharma.indd 54 9/26/11 6:01:09 PM
SHOT IN THE ARM
K
he regions healthcare sector is
entering a golden age as nationals
and expatriates become more
demanding about their health needs and
pharmaceutical firms grow their bases
in the region. MENA region spending on
healthcare is now likely to hit $125 billion
in 2015, up from $65.6 billon in 2009,
according to Al Masah Capital research.
As the GCCs standard of living
continues to benefit from high oil prices,
it is clear that attainment of Western
style standards of healthcare today do
not match progress in other lifestyle
areas. The US allocates four times as
much in GDP spending to healthcare
as the GCC, while per capita health
spending is dwarfed by American
spending levels that are eight times as
high. Taking MENA as a whole, per
CULF BUSlNLSS&,,
1he reqional pharmaceuLical and healLhcare indusLry is seL Lo
boom wiLh a new $25 billion invesLmenL in|ecLion.
capita health spending is less than a
twentieth of that in the US. There are
three US hospital beds for every two in
the GCC and only one physician in the
region for every two in the US.
Speaking to reporters last month,
Amitava Ghosal, partner at Al Masah
Capital Management, said investing in
healthcare was bound to increase. On
the demand side, high population growth
rates, at two per cent for the last 10
years, exceeded global rates of 1.3 per
cent. Life expectancy was also up, with
lower mortality thanks to new medical
techniques. There were also more older
people in the region's growing population.
Awareness about healthcare facilities
has increased among locals, who are
demanding higher quality services. And
healthcare insurance is also undergoing
massive change. We lag behind. Some
200,000 new beds are needed in the
region, he said.
The belated decision by Dubais
Ruler, Sheikh Mohammed, in May to
appoint his wife, Princess Haya, to take
over the reins at Dubai Healthcare City
as Chairwoman of the DHC Authority,
is another sign of the reassessment of
health priorities. In tacitly endorsing a
refocusing of the Citys strategy away
from real estate and back onto turning
Dubai into a healthcare tourism hub,
there seems to be recognition at the
highest political level that excellence in
healthcare cannot be compromised.
@EM<JKFIFGGFIKLE@KP
Nimble private equity companies
committed to fast venture creation
have capitalised on the opportunity.
According to Al Masah, almost $900
million was invested by regional
houses in 13 healthcare ventures in
the region between 2005 and 2010. The
UAEs openness saw it win six of the
projects and just over half of the total
investments, while Saudi Arabia, with
its booming economy and Egypt, with
l
N
F
O
C
R
A
P
H
l
C
S
:

1
A
R
A
K

P
A
R
L
K
H
54-62 Pharma.indd 55 9/26/11 6:01:13 PM
There is something rather empowering about
having The Platinum Card. It brings with it
that unstoppable feeling of freedom with
No Pre-set Spending Limit to hold me back.
So whatever it is I fancy, be it rst class
travel, a dose of good old retail therapy or
front row tickets to the theatre, I can now do
it without a second thought.
Or I could just let my personal concierge
make all the arrangements for me.
Thanks to The Platinum Card
,
I have no pre-set spending limit
to limit me.
Apply today and receive 50,000 bonus
Membership Rewards
points to redeem
against complimentary ights, luxury hotel
stays, shopping, ne dining and more.
Terms and conditions apply
Offer is available from 18 September 2011 to 31 January 2012.
www.americanexpress.com.bh/apply
00973 1755 7755
CULF BUSlNLSS&,.
?<8CK?:8I<
a population approaching 80 million
people, the rest.
Gulf Healthcare International (GHI), set
up in Dubai Healthcare City in 2009 as
a joint venture by Kuwaiti private equity
players Global Capital Management and
the Varkey Group, which was later bought
out by JP Morgan, owns a total of 19
business units with interests in diagnostic
laboratories, polyclinics and occupational
health clinics.
The UK has a ratio of 23 per cent
obesity and seven per cent diabetes.
In most of the Middle East, obesity is
above 50 per cent while diabetes is at
23 per cent, says Mark Adams, GHIs
CEO. In Saudi Arabia, 50 per cent of
those over age of 40 exhibit full-blown
diabetes. These diseases involve huge
costs to the healthcare system, involving
cancer, heart disease, strokes and limb
amputation if not treated.
Abraaj Capitals healthcare portfolio
invested in a number of transactions,
mainly in 2008. Through its funds, it
bought a 90 per cent stake in Egyptian
medical business Al Borg Laboratories. It
has also invested in Acibadem Healthcare
8_d\[9X[i\c[è#
\o\Zlk`m\[ì\Zkfi#
8YiXXa:Xg`kXc
K?<D@;;C<<8JK
G?8ID8:<LK@:8C
D8IB<K)'('$)'(,
2010 2011 2012 2013 2014 2015 CAGR
'CONS1AN1 LXCHANCL RA1LS
JFLI:<1@DJ?<8CK?
'US$
(MlLLlON)
J8L;@8I89@8
*#,+.%'
00-%)
**'%'
(/,%0
,#(./%*
(((%'
./%'
((-%(
*#/'0%+
(#'.0%0
*,,%/
(0'%)
,#,.)%(
())%'
/(%(
()*%0
+#()0%+
(#(-0%-
*/+%)
(0,%0
-#'*+%0
(**%.
/+%/
(**%)
+#+/'%+
(#)-,%,
+(*%'
)')%+
-#,*.%(
(+,%(
0'%*
(+)%/
+#/-,%/
(#*.0%+
++(%,
)'0%)
.#'0(%,
(,-%.
0,%.
(,)%+
,#)/0%(
(#,('%+
+.'%)
)(-%-
.#.')%)
(-0%'
('(%,
(-)%'
/%*G<I:<EK
/%.G<I:<EK
.%*G<I:<EK
*%(G<I:<EK
/%*G<I:<EK
/%/G<I:<EK
,%+G<I:<EK
-%0G<I:<EK
L8<
BLN8@K
P<D<E
>::
FD8E
98?I8@E
H8K8I
1he qlobal pharmaceuLicals indusLry qeneraLes revenues
in excess ol $700 billion, says lMS HealLh. Research
and developmenL accounLs lor 6 per cenL ol Lhe LoLal,
manulacLurinq 29 per cenL and sales and markeLinq 39
per cenL. lnLernaLional pharmaceuLicals companies are
expecLed Lo concenLraLe on sales and markeLinq in Lhe
MLNA reqion, an $8 billion markeL lasL year, qiven iLs
"emerqinq" qrowLh poLenLial.
1he CCC pharmaceuLicals markeL is expecLed Lo qrow aL
a compound averaqe raLe ol 8.3 per cenL over Lhe lve years
Lo 205. ln 20, Saudi Arabia's markeL share is expecLed Lo
be 68.^ per cenL, Lhe UAL's 9.^ per cenL, and Lhe resL ol
Lhe CCC 2.3$. DaLa lrom lMS HealLh shows LhaL Lhe lasLesL
qrowinq counLries will be Oman, Lhe UAL and Saudi Arabia,
all aL levels above eiqhL per cenL. 1he size ol Lhe markeL is
expecLed Lo be $7.7 billion in 205.
K?<;IL>J;FNFIB
54-62 Pharma.indd 57 9/26/11 6:01:13 PM
,/&F:KF9<I)'((
?<8CK?:8I<
8d`kXmX>_fjXc#
gXike\iXk8c
DXjX_:Xg`kXc
DXeX^\d\ek
Ahmed Badreldin, senior partner at the
firm. For example, the average number of
diagnostic tests done per person per year
totals to around 15-20 in Western Europe.
In Egypt, the figure is 3.5 tests per person,
5-6 in Jordan and the same in the GCC.
The Al Masah report says that
diagnostic centres, offering a range of
services from X-rays, MRI and pathology,
and high-street pharmacy chains are
attractive to private equity players. With
lower overheads than hospitals and
clinics, which are still the major preserve
of government health authorities in
the region, the potential for expanding
revenues is good. Diagnostics business
offers attractive profit margins, it said.
Meanwhile, the historical
development of the healthcare sector via
government vehicles and free service
to local nationals has meant that the
private sector has traditionally been
underrepresented in the sector. Al Masah
research puts the government share of
total spending in healthcare in the MENA
region at 64 per cent. Clearly, as costs
rise, GCC governments want to allocate
a part of the infrastructure spending to
the private sector to free up valuable
spending for other targets.
Ghosal says several initiatives are
taking place at government level to
bridge the gap between public
sector provision and
private sector entry.
Group, a Turkish hospital chain, and
in Tadawi Group, the largest wholesale
pharmaceutical chain in Saudi Arabia.
Through its funds, Abraaj Capital
maintains a 50 per cent stake in Acibadem
and a 49 per cent stake in Tadawi.
The long-term situation for GCC
healthcare is simple: the outlook is
very strong as everything in the region
is coming from a very low base, says
:`kp?fjg`kXcXk?\Xck_ZXi\:`kp%
>cXofJd`k_Bcè\#
n_`Z__X[k_\cXi^\jk
g_XidXZ\lk`ZXcjdXib\k
j_Xi\èk_\L8<èk_\
cXjk()dfek_j#_Xjj\\e
(.g\iZ\ekîfnk_è
`kjD`[[c\<XjkdXib\kj#
n_`Z_èZcl[\k_\>::#
Afi[Xe#@iXh#Jpi`XXe[
C\YXefeèk_\gXjkm\
p\Xij%
54-62 Pharma.indd 58 9/26/11 6:01:18 PM
CREATIVITY FROM
ANY POINT OF VIEW
PICTURES THAT AMAZE. MOVIES THAT INSPIRE.
Stimulate your creativity. The NIKON D5100 offers a host of new photographic and video tools that deliver
superior performance and exceptional image quality with surprising versatility. With 16.2 megapixels, a swivel
Vari-Angle LCD monitor, full HD movie capabilities, new EFFECTS Mode and new HDR setting, you hold the
power and performance to capture beautiful moments and the freedom to get creative.
http://ae.nikon-asia.com/
-'&OC1OBLR 20
?<8CK?:8I<
Paradoxically, the Arab Spring has seen
government expenditure levels rise
significantly. The private sector is now
being welcomed by the government
to invest in a big way. Public-private
partnerships are increasing in popularity.
As a private equity player, we feel there
are immense opportunities to come in,
he says.
D<;@:@E<=FIK?<D8JJ<J
The GCC countries are likely to
experience a sharp increase in healthcare
needs in coming years, primarily led by a
growing and ageing population and a rise
in chronic non-communicable lifestyle
diseases, a research report published by
Alpen Capital in December said. This,
coupled with favourable government
policies, would drive growth in the
pharmaceuticals sector in the region.
GlaxoSmithKline, which had the largest
pharmaceuticals market share in the UAE
in the last 12 months, has seen 17 per
cent growth in its Middle East markets,
which include the GCC, Jordan, Iraq,
>cXofJd`k_Bcè\G_XidXZ\lk`ZXcj\dgcfp\\jnfibèk_\Yfkkc\ccè^j\Zk`fe
THE MENA AND THE CCC APE LCW CN
HEALTHCAPE 5PENDINC AND FACILITIE5
TCTAL HEALTHCAPE 5PENDINC
PEP CAPITA (U5$)
UNl1LD S1A1LS 7,^0
MLNA 35
CCC 93
NC. CF HC5PITAL BED5 PEP !0,000 PECPLE
UNl1LD S1A1LS 3.0
MLNA 2.6
CCC 20.6
NC. CF PHY5ICIAN5 PEP !0,000 PECPLE
UNl1LD S1A1LS 26.7
MLNA 8.3
CCC 3.0
16.2
PER CENT
LE@K<;
JK8K<J
4.3
PER CENT
D<E8
3.8
PER CENT
>::
1oLal healLhcare
spendinq as a
per cenL ol CDP
JFLI:<18CD8J8?:8G@K8C
C
L
1
1
Y

l
M
A
C
L
S
54-62 Pharma.indd 60 9/26/11 6:01:20 PM
C
M
Y
CM
MY
CY
CMY
K
mp.pdf 9/26/11 2:53:51 PM
-)&OC1OBLR 20
?<8CK?:8I<
Syria and Lebanon in the past
five years, according to marketing
manager, Ghandi Gharaibeh.
[Regional] development is taking
place very quickly, says Gharaibeh.
Authorities and private providers
are improving, and there are now
centres in Dubai, Ajman, Qatar and
Bahrain. Its evolving. Screening
for cancer could be better in the
region. Epilepsy treatment needs to
improve. Infrastructure is good but
equality of care needs attention,
so you tend to find varying quality
in training of medical staff and
treatment guidelines.
The local industry is starting
to see growth in pharmaceutical
companies in Abu Dhabi, RAK and
Dubai. There are six big companies
in Saudi Arabia and GlaxoSmithKline expects all
of them to grow. Oman boasts two companies and
products there are cheaper, with innovative new
remedies. Overall, Gharaibeh expects higher prices,
more volume and higher-cost care.
It looks to us as if people in the region are
going to get older, to settle longer, he says. We
have already started to see people retire to Dubai.
They are using products for hypertension, asthma,
cholesterol, and obesity. The number of children is
rising, and more kids need care and preventative
vaccines. The average child needs 30 shots of
vaccine in his first three years.
One frequently cited statistic is the around $15
billion leaving the region as patients travel to
the US, Europe, India and the Far East to receive
treatment. As a flagship player in Dubai Healthcare
City, Adams wants to see the city turn into a centre
for inbound healthcare tourism. And although the
vexed issue of health insurance is complicated by
the disparity of incomes in the UAE, It is highly
unlikely that you will end up with a national health
service that is trying to provide the same [level of
service] to everyone, he says.
Healthcare always inflates: its like property,
says Gharaibeh. There are always things people
want to treat, they wish to live longer, and get
more secure. As time goes on the list of products
they require will only grow.
G?8ID8:<LK@:8C
:FDG8EPI<M<EL<J
RANK US$
(2 MON1HS 1O JULY 20)
JFLI:<1@DJL8<G?8ID8:<LK@:8CI<K8@C8L;@K
>C8OFJD@K?BC@E<
(
)
*
+
,
-
.
/
0
('
*
((-#0)/#*,/
0)#)')#*-0
/'#.(,#,.+
.0#,*)#+*/
,/#,(-#0.)
,+#')0#+.-
+(#*..#,.+
+'#0.*#/((
*.#,'/#-0+
*+#.+*#((+
/'#.(,#,.+
G=@Q<I!
EFM8IK@J
DJ;
J8EF=@$8M<EK@J!
8JKI8Q<E<:8
98P<I?<8CK?:8I<
899FKK
ALCG?8I
IF:?<!
KFK8CL8<J8C<J
1he UAL saw pharmaceuLical sales ol |usL over $ billion in Lhe 2
monLhs Lo July. ClaxoSmiLhKline Look . per cenL, Plzer 8.8 per
cenL and NovarLis 7.7 per cenL. lndusLry analysLs expecL an economic
rebound in Lhe UAL in Lhe nexL 22^ monLhs and expecL doublediqiL
qrowLh levels. lMS HealLh ciLes Lhe relaLively easy reqisLraLion process
lor FDA/LMA approved producLs as a key Lo Lhe UAL's aLLracLiveness
as a markeL place lor inLernaLional druq companies.
L8<$98J<;G?8ID8:<LK@:8C
I<M<EL<J
8eX^\è^gfglcXk`fe[\dXe[jdfi\g`ccj%
C
L
1
1
Y

l
M
A
C
L
S
54-62 Pharma.indd 62 9/26/11 6:01:21 PM
C
M
Y
CM
MY
CY
CMY
K
pal zileri.pdf 9/27/11 12:33:36 PM
-+&OC1OBLR 20
Dr HelmuL Schhsler, chairman ol 1VM CapiLal MLNA, Lells AIicia BuIIer
abouL brinqinq Lhe lrsL privaLe lVF clinic Lo Lhe reqion and why
he's conldenL he can raise anoLher $^0 million Lhis year.
d\[`Zè\
dXe
J
ome people would have called Helmut Schhsler
crazy for setting up a private equity firm in Dubai in
2009. But whats more surprising is that the doctor
succeeded in closing his MENA Healthcare fund at
$30 million less than a year later. It wasnt intentional that we
launched in a recession. Wed been looking at the region since
2006 and we were ready, says the chairman and CEO of TVM
Capital MENA, Dubai.
After a near death in the private
equity markets in the recession, almost
$180 billion of private equity was
invested globally last year, up 62 per
cent from 2009 but still down 55 per
cent on the peak in 2007, according to
research firm TheCityUK. Activity in
the industry looks set to build on this
recovery this year and top $200 billion
in 2011.
Schhsler, unlike nearly every other
economist or CEO at the moment, says
hes not worried about the double dip.
Its extremely trendy to worry at the
moment, so I should probably say Im
worried. The markets have become a bit detached from
reality. Extremely successful companies have gone
down by 30 per cent on their share price, on sentiment
alone. But I dont worry because healthcare is a
pretty safe place to be in a recession, especially in
an environment where you have mostly governments
paying and where there is a constant inflow of capital
through the oil revenues.
And its not just talk. The CEO is so confident in the
local markets that he has reopened the TVM Capital
MENA Healthcare fund until the end of the year and is
on the lookout for a $40 million top-up.
The fund is focused on capitalising on the privatisation
and growth of the healthcare market in the MENA
region and India and the original investors included GE
Healthcare, the International Finance Corporation and
Olayan Financing Company.
New investors subscribing to the fund will gain
access to a pipeline of proprietary investment
opportunities as well as the original value created in
the first two transactions the fund closed in 2010.
The firms first healthcare investment was the ProVita
International Medical Center, a long-term medical care
G?FKFJ9PM@BI8D>8N;<
64-68 Medicine Man.indd 64 9/26/11 6:13:14 PM
-+&OC1OBLR 20
Dr HelmuL Schhsler, chairman ol 1VM CapiLal MLNA, Lells AIicia BuIIer
abouL brinqinq Lhe lrsL privaLe lVF clinic Lo Lhe reqion and why
he's conldenL he can raise anoLher $^0 million Lhis year.
d\[`Zè\
dXe
J
ome people would have called Helmut Schhsler
crazy for setting up a private equity firm in Dubai in
2009. But whats more surprising is that the doctor
succeeded in closing his MENA Healthcare fund at
$30 million less than a year later. It wasnt intentional that we
launched in a recession. Wed been looking at the region since
2006 and we were ready, says the chairman and CEO of TVM
Capital MENA, Dubai.
After a near death in the private
equity markets in the recession, almost
$180 billion of private equity was
invested globally last year, up 62 per
cent from 2009 but still down 55 per
cent on the peak in 2007, according to
research firm TheCityUK. Activity in
the industry looks set to build on this
recovery this year and top $200 billion
in 2011.
Schhsler, unlike nearly every other
economist or CEO at the moment, says
hes not worried about the double dip.
Its extremely trendy to worry at the
moment, so I should probably say Im
worried. The markets have become a bit detached from
reality. Extremely successful companies have gone
down by 30 per cent on their share price, on sentiment
alone. But I dont worry because healthcare is a
pretty safe place to be in a recession, especially in
an environment where you have mostly governments
paying and where there is a constant inflow of capital
through the oil revenues.
And its not just talk. The CEO is so confident in the
local markets that he has reopened the TVM Capital
MENA Healthcare fund until the end of the year and is
on the lookout for a $40 million top-up.
The fund is focused on capitalising on the privatisation
and growth of the healthcare market in the MENA
region and India and the original investors included GE
Healthcare, the International Finance Corporation and
Olayan Financing Company.
New investors subscribing to the fund will gain
access to a pipeline of proprietary investment
opportunities as well as the original value created in
the first two transactions the fund closed in 2010.
The firms first healthcare investment was the ProVita
International Medical Center, a long-term medical care
G?FKFJ9PM@BI8D>8N;<
KMD:8G@K8C
CULF BUSlNLSS&-.
KMD:8G@K8C
bXicq\`jj
< = $ J ( / $ * , d
d
(1*$,%-@@
@e)''/n\n\i\]le[iX`jè^
Xe[n\n\i\XYflkkfZcfj\
k_\]le[Xk.'d`cc`feYlk
Y\ZXlj\f]k_\i\Z\jj`fen\
cfjkXcck_\Zfdd`kd\ekjXe[
_X[kfi\jkXikk_\gifZ\jj. We
are lookinq lor anoLher Lhree or
lour invesLors aL $0 million or
so. 1haL qives us all Lhe money Lo
do whaL we need Lo do, which is
build six or seven companies."
C
L
1
1
Y

l
M
A
C
L
S
and it became extremely competitive
between the indigenous private equity
groups and those from the US. I just
didnt feel that it was the right time for
us. I felt that the Arab world was a good
bet. We were the first movers at that time
and that felt good.
Indeed, the regions healthcare sector
is set to witness a $125 billion cash
injection over the next five years as
GCC governments work to update their
respective medical sectors in line with
growing, ageing, and increasingly health-
conscious local populations. Schhsler
sees his opportunity in investing in
small, specialist clinics that do things
hospitals cant do.
A key TVM specialism will be its
IVF capabilities. While some public
and private hospitals across the region
already offer fertility services, Bourn
Hall International is the first-mover
on specialised clinics and Schhsler
expects the Dubai branch will open by
Q1 next year. We believe that there
is a consistently growing demand for
IVF services. There is better education;
people dont marry as young as they
used to and many of them cannot
conceive naturally anymore. This is for
local and Arab expats.
Schhsler hopes that Dubai will serve
as an IVF hub for affluent clients who
want to fly in from across the region to
try for children. This is a completely
privately paid service. While in Dubai
IVF is not paid as part of insurance, in
Qatar the IVF service is government-
funded for locals. The Qataris can go
through the cycle as many times as they
want and the government will pay.
TVM Capital is also looking to invest in
pharmaceutical supply deals, as well as
hospital supplies, hospital services, blood
testing and genetics clinics, as part of its
healthcare fund.
We want to take care of patients
facility in Abu Dhabi, which reached
profitability four months after admitting
its first patients. The second investment,
Bourn Hall International, witnessed
a soft opening of its first IVF clinic in
Kochi, India, in April 2011 and will open
its Dubai branch next year.
Schhsler says: In 2008 we were
fund raising and we were about to
close the fund at $70 million but
because of the recession we lost all the
commitments and had to restart the
process. Our interest is to only have a
small group of investors, with strong
connections to the region, which can
help us to build our business. We
are looking for another three or four
investors at $10 million or so. That
gives us all the money to do what
we need to do, which is build six or
seven companies.
TVM Capital MENA is an international
offshoot of German firm TVM Capital,
with offices in Germany and the
US, which has raised $1.2 billion in
the healthcare, IT and life sciences
sectors to date. The local TVM Capital
branch operates under a Dubai
International Financial
Centre license and is the
first international private
equity house with a focus
on healthcare in the region.
We wanted to pick one
area for expansion and we
were gravitating towards
India and the Middle East.
In 2007, everyone was
running to China and India,
there was tremendous
opportunities in healthcare
infrastructure, but those
countries had so much cash
flowing into them, especially
from the US, says Schhsler.
There was tremendous
turnover in India and China
IVN NLNA |s tapp|r |oca| deard
for pr|vate |Vf c||r|cs.
CULF BUSlNLSS&-.
KMD:8G@K8C
bXicq\`jj
< = $ J ( / $ * , d
d
(1*$,%-@@
@e)''/n\n\i\]le[iX`jè^
Xe[n\n\i\XYflkkfZcfj\
k_\]le[Xk.'d`cc`feYlk
Y\ZXlj\f]k_\i\Z\jj`fen\
cfjkXcck_\Zfdd`kd\ekjXe[
_X[kfi\jkXikk_\gifZ\jj. We
are lookinq lor anoLher Lhree or
lour invesLors aL $0 million or
so. 1haL qives us all Lhe money Lo
do whaL we need Lo do, which is
build six or seven companies."
C
L
1
1
Y

l
M
A
C
L
S
and it became extremely competitive
between the indigenous private equity
groups and those from the US. I just
didnt feel that it was the right time for
us. I felt that the Arab world was a good
bet. We were the first movers at that time
and that felt good.
Indeed, the regions healthcare sector
is set to witness a $125 billion cash
injection over the next five years as
GCC governments work to update their
respective medical sectors in line with
growing, ageing, and increasingly health-
conscious local populations. Schhsler
sees his opportunity in investing in
small, specialist clinics that do things
hospitals cant do.
A key TVM specialism will be its
IVF capabilities. While some public
and private hospitals across the region
already offer fertility services, Bourn
Hall International is the first-mover
on specialised clinics and Schhsler
expects the Dubai branch will open by
Q1 next year. We believe that there
is a consistently growing demand for
IVF services. There is better education;
people dont marry as young as they
used to and many of them cannot
conceive naturally anymore. This is for
local and Arab expats.
Schhsler hopes that Dubai will serve
as an IVF hub for affluent clients who
want to fly in from across the region to
try for children. This is a completely
privately paid service. While in Dubai
IVF is not paid as part of insurance, in
Qatar the IVF service is government-
funded for locals. The Qataris can go
through the cycle as many times as they
want and the government will pay.
TVM Capital is also looking to invest in
pharmaceutical supply deals, as well as
hospital supplies, hospital services, blood
testing and genetics clinics, as part of its
healthcare fund.
We want to take care of patients
facility in Abu Dhabi, which reached
profitability four months after admitting
its first patients. The second investment,
Bourn Hall International, witnessed
a soft opening of its first IVF clinic in
Kochi, India, in April 2011 and will open
its Dubai branch next year.
Schhsler says: In 2008 we were
fund raising and we were about to
close the fund at $70 million but
because of the recession we lost all the
commitments and had to restart the
process. Our interest is to only have a
small group of investors, with strong
connections to the region, which can
help us to build our business. We
are looking for another three or four
investors at $10 million or so. That
gives us all the money to do what
we need to do, which is build six or
seven companies.
TVM Capital MENA is an international
offshoot of German firm TVM Capital,
with offices in Germany and the
US, which has raised $1.2 billion in
the healthcare, IT and life sciences
sectors to date. The local TVM Capital
branch operates under a Dubai
International Financial
Centre license and is the
first international private
equity house with a focus
on healthcare in the region.
We wanted to pick one
area for expansion and we
were gravitating towards
India and the Middle East.
In 2007, everyone was
running to China and India,
there was tremendous
opportunities in healthcare
infrastructure, but those
countries had so much cash
flowing into them, especially
from the US, says Schhsler.
There was tremendous
turnover in India and China
IVN NLNA |s tapp|r |oca| deard
for pr|vate |Vf c||r|cs.
-/&OC1OBLR 20
KMD:8G@K8C
who need to be taken out of hospitals
and treated in the home. Theres autistic
children or people who cant breathe,
for example. How do we take care of
them? We only want to fill gaps. These
opportunities emerge when you talk
to the regulators, patients and hospital
managers, Schhsler says.
Were looking at three-to-five years
investment plans, possibly in existing
companies. Generally our strategy is
to invest in existing companies where
we can help to create growth. We are
not a buy-out firm, we look at smaller
companies that want to grow to two or
three times their original size.
He believes that the region is still
underserviced by private equity firms,
particularly specialised ones. The doctor
says that the Gulf must review its
openness to foreign investment and pay
attention to its corporate governance
regulations to encourage more private
equity players into the fray. Healthcare
is a local business that involves assets
"1here is qrowinq
demand lor lVF services.
K_\i\`jY\kk\i
\[lZXk`fe#g\fgc\[fek
dXiipXjpfle^Xjk_\p
lj\[kfjfdXepf]
k_\dZXeefkZfeZ\`m\
eXkliXccpXepdfi\% 1his
service is lor boLh locals
and Arab expaLs."
on the ground so I need regulation that
I can depend on. If I invest in a clinic
in Abu Dhabi, I cant move that clinic
somewhere else he says. Saudi
Arabia is a very affluent and attractive
market but, as we all know, its not easy
to do business there. We have started
to look into the country as we are very
close and there is certainly an openness
in the Ministry of Health to consider
private business.
Ultimately, all the Arab countries are
currently trying to find their own ways
to navigate their respective medical
conundrums. The region is unanimously
agreed that the MENA healthcare
;I%?<CDLKD%J:?|?JC<I
is a manaqinq parLner ol 1VM CapiLal
in Munich and BosLon and serves as
chairman and CLO ol 1VM CapiLal MLNA
in Dubai. 1VM CapiLal MLNA is Lhe lrsL
inLernaLional privaLe equiLy house wiLh
a locus in healLhcare and lile sciences Lo
esLablish operaLions in Lhe MLNA reqion.
Since |oininq 1VM CapiLal in 990,
Schhsler has been Lhe dealmaker on
more Lhan 20 direcL invesLmenLs in lile
sciences companies in Lurope and Lhe
US. ln LoLal, he has overseen more Lhan
80 invesLmenLs in Lhe healLh markeL.
ln 2007 and 2008, Schhsler served
as chairman ol Lhe Luropean PrivaLe
LquiLy and VenLure CapiLal AssociaLion
(LVCA). 1he docLor has lived in Lhe UAL
lor six years.
9@F@E9I@<=
system must be dramatically upgraded
in the coming years. Right now, local
governments may own the majority of
health assets and services, but the widely-
publicised impending health time-bomb
will necessitate the employment of private
operators to cope with the demand.
We are in the right place for what
we do. We want to achieve up to 30
per cent per annum net for investors.
We have achieved these returns in our
innovation business in Europe, which is
far more risky than what we do here,
says Schhsler.
In healthcare you can make those
returns easily if you know what youre
doing. Its all in the execution you
have to have good managers, build good
relationships, and provide good healthcare
to patients. You cant just look at profits.
Thats a big challenge in healthcare
because in other industries you can
optimise everything to drive down costs.
Theres a feedback loop in healthcare and
its a very immediate one.
bXicq\`jj
<
= $ J ( / $ * ,
d
d
(
1
*
$
,
%
-
@
@
CULF BUSlNLSS&.(
>@K<O
8K>@K<O
KFG('
KI<E;J
IpXe?Xii`jfe
discusses Lhe main
Lrends aL Lhis year's
Lechie lesL CiLex, and
how Lhe Arab Sprinq
has pushed cyber
crime up Lhe aqenda.
l
L
L
U
S
1
R
A
1
l
O
N
S
:

R
O
U
l

F
R
A
N
C
l
S
C
O
71-75 Gitex.indd 71 9/26/11 6:15:05 PM
bXicq\`jj
<
= $ J ( / $ * ,
d
d
(
1
*
$
,
%
-
@
@
CULF BUSlNLSS&.(
>@K<O
8K>@K<O
KFG('
KI<E;J
IpXe?Xii`jfe
discusses Lhe main
Lrends aL Lhis year's
Lechie lesL CiLex, and
how Lhe Arab Sprinq
has pushed cyber
crime up Lhe aqenda.
l
L
L
U
S
1
R
A
1
l
O
N
S
:

R
O
U
l

F
R
A
N
C
l
S
C
O
71-75 Gitex.indd 71 9/26/11 6:15:05 PM
CULF BUSlNLSS&.*
>@K<O
bXicq\`jj
< = $ J ( / $ * , d
d
(1*$,%-@@
Loh added: This year is all about
practicality, so were talking about things
like governance and security, the type
of cloud thats right for which type of
business, and which is more efficient.
+>K?<E<OK
><E<I8K@FE
Seen as the next big thing in telecoms,
4G technology promises to solve 3Gs
capacity issues and meet the soaring
demand for data services in the Gulf.
Long-term evolution services like 4G are
predicted to grow by 54 per cent in Saudi
Arabia and by 84 per cent in the UAE,
with both countries' demand driven by a
tech-savvy, youthful population, a report
by consultants Frost & Sullivan said.
With the current 3G networks proving
incapable of handling the growth in
mobile data traffic, mobile operators in
Saudi Arabia and the UAE are expected
to migrate to 4G technologies soon," the
report added.
In particular, Gitex will be exploring
how to use 4G in business, the risks and
rewards and how to monetise technology.
;@>@K8CD8IB<K@E>
Middle East businesses are still light-years
behind the Western world when it comes
to successfully marketing online. There
are positive signs emerging though.
Recent studies by marketing strategists
Econsultancy show that companies in
MENA are on average spending 22 per
cent of their marketing budget on digital
platforms, but more than half (58 per cent)
are increasing their digital budgets in 2011.
There will be a greater emphasis on
the subject at the new GITEX Digital
Media & Marketing feature, which aims
to whip local firms online campaigns
into shape.
The event presents a host of digital
opportunities to an emerging market
where the expansion of fibre optics,
high-speed internet and broadband
penetration has opened a brand new
digital marketing world more accessible
to Middle East marketeers than ever
before, said Loh.
G
erhaps the most pervasive
tech trend at Gitex 2011 will
be the impact of the regional
unrest on the information and
communications technology (ICT) sector.
Like most industries in the Middle
East, ICT has not emerged unscathed
from the uprisings.
The biggest threat has been the
sustained guerilla attacks on governments
and organisations in the region from
hackers with political agendas.
Chatter among businesses and visitors
at Gitex in October is, therefore, likely to
centre on cyber crime and what the ICT
experts can do to up their game.
Trixee Loh, senior vice president of
Dubai World Trade Centre, which organises
the event, said: One of the issues to come
out of the Arab Spring was activism, and
politically motivated cyber crime attacks.
So it may be one of the issues that will be
discussed and may come to the attention
of many different governments.
The numbers involved with cyber
security are far from negligible. It costs
the UAE economy $600 million a year,
according to internet security firm
Norton. Meanwhile, globally this figure
stands at $400 billion.
As part of a number of online security
events, Gitex is hosting the Middle East
and India Cyberlympics, a simulated
hacking competition.
:CFL;:FD<JF=8><
In 2010, although cloud technology
provided a lot of promise at Gitex, there
was little in terms of substance.With
the novelty and idealism of the concept
gone, delegates will now be demanding
practical business solutions.
Last year cloud was more mist than
cloud, said George DeBono, general
manager for the Middle East and Africa
at software maker Red Hat. This year,
its starting to take a lot more form in
terms of deliverables for businesses.
Gitex Cloud Confex, which is the
largest cloud show in the Middle East,
features two days of intense conferencing
and a five day exhibition.
DF9@C<8GGJ
One of the more tangible trends for
consumers, mobile apps will play a big
part in Gitex this year.
The popularity of this technology
has skyrocketed, with mobile apps
now making up more than five per
cent of the overall marketing budgets
of Gulf-based companies across
consumer industries.
Underpinning this growth is the
UAE economy, which now has a 232
per cent mobile phone penetration
rate, according to the World Economic
Forums latest Global Information
Technology report.
Gitex Mobile, Apps & Content World,
which launched at last years event,
returns in 2011 to meet demand.
On the agenda will be whether the
Arab world can expand more quickly
and what can be done to bridge the gap
between English and Arabic content on
mobile apps.
>I<<E:FDGLK@E>
How to go green and save the planet is still
top of the list of priorities for tech firms.
Ever since Japanese electronics giant
Panasonic laid down the gauntlet to go
green at last years Gitex, companies
have been scrambling to boost their
environmental credentials.
Panasonic vowed to educate 100,000
of its customers over three years by
celebrating Green Day on the first
"1he evenL presenLs
a hosL ol diqiLal
opporLuniLies Lo an
emerqinq markeL where
Lhe expansion ol lbre
opLics, hiqhspeed inLerneL
and broadband peneLraLion
hasfg\e\[XYiXe[
e\n[`^`kXcdXib\kè^
nfic[dfi\XZZ\jj`Yc\kf
D`[[c\<XjkdXib\k\\ij
k_Xe\m\iY\]fi\%
71-75 Gitex.indd 73 9/26/11 6:15:05 PM
>LC=9LJ@E<JJ&.,
>@K<O
week of every month. Tech firms
typically achieve greener results by
producing energy-saving products with
increased efficiency and less waste.
Steve Bailey, regional operations
director at data storage and protection
specialists CommVault, said theres still
a long way to go for the Middle East in
the global battle to go green.
In Western Europe green tech is
important because from a government
point of view, when organisations
upgrade their systems and data centres,
there will be a green element that allows
local governments to apply for grants.
But in the Middle East youre not
seeing it at all. Weve spoken to a few
vendors who have said its a nice to
have but not a necessity, added Bailey.
N<98;;I<JJ
<OGCFJ@FE
In recent years there were fears that the
world would run out of web addresses as
a result of the massive rise in the use of
the internet.
The internet was built on something
called version 4 of the Internet Protocol
(IPv4), which has an upper limit of
about four billion addresses. Every
device you use, be it a computer or
a smartphone, has its own Internet
Protocol, or IP, address.
Today, internet giants such as Google,
Yahoo, Microsoft and Facebook are
upgrading their systems and switching
from IPv4 to IPv6 operating systems to
create more room for web addresses.
Companies and individual users will
also need to make the switch but that
will not be for some years.
Sakhnini from Brocade said that for
service providers in the Middle East
it is a pressing issue, especially given
the anticipated rapid growth in the net.
This transition will have to be smooth,
as most operators will still operate both
stacks for some time to come.
:8I;K<:?
Gitex will be again turning its hand
to card technology, focusing on the
evolution of smart cards including
financial services, mobile phone sim
cards, road toll systems, national ID
cards and biometrics.
According to Frost & Sullivan, the
MENA smart cards market is expected to
reach $328.5 million by 2014, growing at
a compound annual growth rate of 10.8
per cent.
The firms latest report said: Booming
economies and strong demand for digital
security is making the shift in demand
for smart cards. It is projected that
the global smart card market will post
double digit growth (around 12 per cent)
during 2011-2013.
M@IKL8C@J8K@FE
Companies and individuals turning to
virtualisation to manage their workload
is nothing new, but the breakneck speed
of growth in the Middle East around the
technology is unprecedented.
In its broadest sense virtualisation can
refer to the creation of a virtual (rather
than actual) version of something,
whether its a hardware platform,
operating system or storage device.
How business can utilise this trend
will be the central focus of the Cloud
Computing Confex at Gitex.
Yarob Sakhnini, systems engineering
manager for CEMA at Brocade
Communications, which supplies
networking equipment and storage
facilities, said: As we see more
applications residing on servers
because of virtualisation, bottlenecks
on the storage side will have to be
eliminated, so higher speed and more
secure FiberChannel Fabrics will have
to be built.
N<9KI8EJ8:K@FEJ
Despite some reluctance in recent years
to embrace online transactions such as
shopping, activity in the Middle East has
gained ground. The overriding theme
continues to be safety and security
on the internet. At Gitex this year, the
organiser has announced that one of the
keynote speakers leading the debate at
the Global Leaders Summit on 9 October
will be Rod Beckstrom, president and
CEO of the Internet Corporation for
Assigned Names and Numbers (Icann).
Icann is the world body that governs
billions of transactions done every day
on the internet.
&
>@K<O
1
HL@:B=8:KJ
!36,!!4 TPADE
VI5ITCP5
IN 20!0.
44 HAD A
PUPCHA5INC
PCWEP CF
$250,000
CP ABCVE
LA5T YEAP.
ATTENDANCE
FPCM !39
CCUNTPIE5
APCUND THE
WCPLD IN 20!0.
71-75 Gitex.indd 75 9/26/11 6:15:06 PM
>LC=9LJ@E<JJ&.,
>@K<O
week of every month. Tech firms
typically achieve greener results by
producing energy-saving products with
increased efficiency and less waste.
Steve Bailey, regional operations
director at data storage and protection
specialists CommVault, said theres still
a long way to go for the Middle East in
the global battle to go green.
In Western Europe green tech is
important because from a government
point of view, when organisations
upgrade their systems and data centres,
there will be a green element that allows
local governments to apply for grants.
But in the Middle East youre not
seeing it at all. Weve spoken to a few
vendors who have said its a nice to
have but not a necessity, added Bailey.
N<98;;I<JJ
<OGCFJ@FE
In recent years there were fears that the
world would run out of web addresses as
a result of the massive rise in the use of
the internet.
The internet was built on something
called version 4 of the Internet Protocol
(IPv4), which has an upper limit of
about four billion addresses. Every
device you use, be it a computer or
a smartphone, has its own Internet
Protocol, or IP, address.
Today, internet giants such as Google,
Yahoo, Microsoft and Facebook are
upgrading their systems and switching
from IPv4 to IPv6 operating systems to
create more room for web addresses.
Companies and individual users will
also need to make the switch but that
will not be for some years.
Sakhnini from Brocade said that for
service providers in the Middle East
it is a pressing issue, especially given
the anticipated rapid growth in the net.
This transition will have to be smooth,
as most operators will still operate both
stacks for some time to come.
:8I;K<:?
Gitex will be again turning its hand
to card technology, focusing on the
evolution of smart cards including
financial services, mobile phone sim
cards, road toll systems, national ID
cards and biometrics.
According to Frost & Sullivan, the
MENA smart cards market is expected to
reach $328.5 million by 2014, growing at
a compound annual growth rate of 10.8
per cent.
The firms latest report said: Booming
economies and strong demand for digital
security is making the shift in demand
for smart cards. It is projected that
the global smart card market will post
double digit growth (around 12 per cent)
during 2011-2013.
M@IKL8C@J8K@FE
Companies and individuals turning to
virtualisation to manage their workload
is nothing new, but the breakneck speed
of growth in the Middle East around the
technology is unprecedented.
In its broadest sense virtualisation can
refer to the creation of a virtual (rather
than actual) version of something,
whether its a hardware platform,
operating system or storage device.
How business can utilise this trend
will be the central focus of the Cloud
Computing Confex at Gitex.
Yarob Sakhnini, systems engineering
manager for CEMA at Brocade
Communications, which supplies
networking equipment and storage
facilities, said: As we see more
applications residing on servers
because of virtualisation, bottlenecks
on the storage side will have to be
eliminated, so higher speed and more
secure FiberChannel Fabrics will have
to be built.
N<9KI8EJ8:K@FEJ
Despite some reluctance in recent years
to embrace online transactions such as
shopping, activity in the Middle East has
gained ground. The overriding theme
continues to be safety and security
on the internet. At Gitex this year, the
organiser has announced that one of the
keynote speakers leading the debate at
the Global Leaders Summit on 9 October
will be Rod Beckstrom, president and
CEO of the Internet Corporation for
Assigned Names and Numbers (Icann).
Icann is the world body that governs
billions of transactions done every day
on the internet.
&
>@K<O
1
HL@:B=8:KJ
!36,!!4 TPADE
VI5ITCP5
IN 20!0.
44 HAD A
PUPCHA5INC
PCWEP CF
$250,000
CP ABCVE
LA5T YEAP.
ATTENDANCE
FPCM !39
CCUNTPIE5
APCUND THE
WCPLD IN 20!0.
71-75 Gitex.indd 75 9/26/11 6:15:06 PM
.-&F:KF9<I)'((
?FNK?<I@:?
>FKI@:?FKI@:?<I
CULF BUSlNLSS&..
economy. From 2003 onwards, the stock
market grew eight-fold before crashing
spectacularly in 2006. In 2008, some
$400 billion of government spending was
announced for infrastructure, industry,
oil and gas and the new economic
cities. The Saudi leadership was shaken
by the potency of the Arab Spring, but
King Abdullah was quick to announce
further $93 billion of state spending in
March to offset adverse effects. But it is
the crucial role played by Saudi Arabias
central bank, the Saudi Arabian Monetary
Authority (SAMA) that has proved the key
to the stability of the nations banking.
In a nutshell, the Saudi banking sector
is very healthy, says Jamal Alkishi,
chief country officer, Deutsche Bank
Saudi Arabia. Capital levels and capital
adequacy ratios are strong and liquidity
in the system is at a historical level in
terms of deposits. Demand for corporate
loans has come down somewhat, which
meant that loan-to-deposit ratios have
been brought down to what are broadly
vspeaking relatively low levels compared
to our neighbours in the region.
Thomas Kummert of Banque Saudi
Fransi concurs. The average tier one
capital with around 14 per cent is much
higher than the in future required Basel II
minimum of eight per cent, so even any
future dictated increases will not create
any stress test problems for Saudi banks.
In contrast to the UAE, the
Saudi Arabian banking system has
98EB@E>
Saudi Arabia's bankinq secLor has larqely avoided Lhe
piLlalls ol iLs CCC peers. 1he indusLry conLinues Lo
buck Lhe qlobal downLurn and ride Lhe qovernmenL's
billiondollar spendinq spree.
8
mid the global financial crisis,
the strength of the Saudi
economy has surprised many
international companies based
in the Gulf. The kingdom continues
to offer investors a lifeline as markets
elsewhere in the GCC exhibit signs of
malaise. In contrast to the rest of the
blighted globe, Saudi Arabia has escaped
recession in the past two years, and its
nationals are happy to recount stories of
success over conference lunches that offer
tantalising glimpses of the secretive land.
For a country that is largely desert, its
foundations are not built on sand, but on
the strength of its banking system.
Recent history points to a counter
cyclicality evidenced by the Saudi
Volatility and uncertainty are taking a toll on investors. In fact, in our recent survey of investors, 48%
said their primary investment objective is stability in volatile times.
1
We know building the durable
portfolio investors crave starts with risk as a primary concern. And adding alternatives investments
is an option that can help better manage it. But more than this it means taking a more measured
approach to protecting principal and making sound long-term decisions. At Natixis, we have many
solutions to help investors pursue the durability they want from equity to xed-income to innovative
strategies in alternative investments.
Its the result of a process we call Better thinking. Together.
XVisit ga.natixis.com to see
how our intellectual capital
can sharpen your thinking.
Today the most important
portfolio characteristic
may be durability.
Better thinking. Together.
1 Natixis, CoreData Research Survey, June 2011, responded to, The most important thing for my investments is to stay stable in volatile times.
This communication is provided in and from the Dubai International Financial Center (DIFC) by Natixis Global Associates Middle East. It is only available to persons
who have sufcient nancial experience and understanding to participate in nancial markets within the DIFC, and qualify as Professional Clients as dened by the
Dubai Financial Services Authority (DFSA). This communication should not be delivered to or relied on by any other type of person. Natixis Global Associates Middle
East is the trade name for Natixis Global Associates Middle East, a branch of Natixis Global Associates UK Limited, which is duly licensed and regulated by the
DFSA. Registered ofce: PO Box 118257, Ofce 603 - Level 6, Currency House Tower 2, DIFC, Dubai, United Arab Emirates. Natixis Global Associates Middle East is a
business development unit of Natixis Global Associates, the global distribution organization of Natixis Global Asset Management, the holding company of a diverse
line-up of specialized investment management and distribution entities worldwide, including the investment managers referenced herein. The investment management
subsidiaries of Natixis Global Asset Management mentioned in this communication conduct any investment management activities only in and from the countries in
which they are licensed or authorized.
This communication is for information only and does not constitute an offer of nancial services, nor a recommendation or offer to purchase or sell shares in any
nancial instrument. Investors should consider the investment objectives, risks and expenses.
ADINT236-0911
ADINT236-0911_F.indd 1 9/9/11 3:44 PM
CULF BUSlNLSS&.0
98EB@E>
8
C
I
8
A
?
@
9
8
E
B
8CI8A?@98EB
J8D98=@E8E:@8C>IFLG
I@P8;98EB8CI8A?@98EB
98EHL<J8L;@=I8EJ@
SAUDI ARABIA
),#)+,
demonstrated a high degree of self-
sufficiency throughout its 1,500-strong
branch network in the kingdom over
the years, and 87 per cent of the
sectors 36,000 employees are Saudi
nationals. According to data provided
by the German-Saudi Liaison Office
for Economic Affairs, 95 per cent of
retail lending in the kingdom is Sharia-
compliant and 40 per cent of deposits are
non-interest bearing. Credit availability
in the kingdom is at comfortable levels.
In terms of credit outstanding, some $6
billion is real estate loans, $11 billion car
loans, $36 billion other loans and $2.4
billion on credit card loans.
In terms of innate conservatism versus
active regulation of the banking sector, I
think the Saudi success is a combination
of both. These banks are tightly run by
boards, typically populated by Saudi
business people, who are conservative in
nature, says Alkishi.
SAMA has done a superb job of
keeping tabs on concentration levels
in respect of borrowers and industries
and has applied meaningful scrutiny
to exposures to offshore entities. Saudi
Arabia is unique in this regard in terms of
SAMA being very involved as a regulator
and overseer of the banking system.
Lending to a foreign entity has to be run
past SAMA. Saudi banks also have a very
conservative approach to lending that is
perhaps cultural.
bXicq\`jj
< = $ J ( / $ * , d
d
(1*$,%-@@
"ln Lerms ol innaLe
conservaLism versus acLive
requlaLion ol Lhe bankinq
secLor, Saudi success is
a combinaLion ol boLh.
1hese YXebjXi\k`^_kcp
ileYpYfXi[j#kpg`ZXccp
gfglcXk\[YpJXl[`
Yljè\jjg\fgc\#n_fXi\
Zfej\imXk`m\èeXkli\%
J8L;@9I@K@J?98EB
8I89E8K@FE8C98EB
8CCED898EB
J8L;@@EM<JKD<EK98EB
J8L;@?FCC8E;@98EB
98EB8C9@C8;
98EB8CA8Q@I8
BANKING SECTOR
l
N
F
O
C
R
A
P
H
l
C
S
:

R
O
U
l

F
R
A
N
C
l
S
C
O
MARKL1 CAPl1ALlSA1lON' lN
MlLLONS OF SAUDl RlYALS
D8IB<K:8GD@CC@FE
JFLI:<1>CF98C@EM<JKD<EK?FLJ<I<J<8I:?
' AS ON JULY, 2, 20
+,#-.,
(((#'''
*(#0-,
*-#'''
,#.0'
*(#+),
(,#'.,
(,#'.,
('#()*
,#,)'
/'&OC1OBLR 20
98EB@E>
Standard & Poors analyst, Nicolas
Hardy, says the profitability of Saudi
banks stems from a unique combination
of factors. They operate in a supportive
operating environment because of high
oil prices and the backing of a cash-
rich sovereign. They also benefit from a
protected franchise with high barriers to
entry and a limited number of players:
there are 12 commercial banks, with
widely varying market positions. Saudi
banks also benefit from structural
advantages regarding costs. Their cost of
funding is low due to the high portion of
stable, unremunerated deposits.
Total banking sector assets grew
at a CAGR of 13.3 per cent between
2005 and 2010, and totalled $401
billion in April. The unlisted National
already today unique and does not exist
in any European country, says Saudi
Fransis Kummert. It is envisaged to add
an all-encompassing invoice payment
system for all companies in Saudi Arabia,
whereby all invoices will be posted
online and paid accordingly. This will be
a first and globally unique solution for
payments and settlements."
That is not to say that the kingdom has
been completely unaffected by the global
environment. A research note published
by brokerage Jadwa Investment in April
said that in the 24 months to the end
of 2010, non-performing loans of listed
banks jumped by SR10.2 billion (a rise of
132 per cent), after being relatively stable
over the previous five years.
This surge in loan defaults was
set off by the global financial crisis
and exacerbated by defaults by two
large local private sector companies
and a broader rise in corporate failures
owing to tough economic conditions,
said Jadwa.
Moodys added that pressure
on operating conditions remained
elevated because of a low interest-rate
environment exerting pressure on the
banks profitability through reduced
margins and lower business growth.
Indications already point to a pick-up
in loans to the private sector, with a
healthy pipeline of projects expected
over the next 18 months, which
coupled with the banks growing
emphasis on retail banking
is conducive to stronger private
sector growth. That said, growth will
likely remain below the levels seen
before the financial crisis, the ratings
agency says.
And, despite the press furore, the
governments failure to move ahead
and approve a mortgage law has not
held the real estate market back. I
have given up trying to guess when
the mortgage law will be promulgated.
There have been many rumours, says
Alkishi. I dont think its productive
to engage in speculation. I think
people interested in the market, and
practitioners in the market, have
established mortgage finance companies
and are lending anyway.
We already have a very promising
market in the kingdom, and are
moving ahead without the mortgage
legislation. There are several companies
in operation, sanctioned by SAMA and
licensed by the Ministry of Commerce,
writing mortgages for citizens and
expats in the country, he says. In
the very short term, as the government
launches more and more projects and
companies invest in infrastructure,
equipment, plants and capacity to cope
with economic activity, I am not worried
about the health of Saudi banking
sector. If I had to bet on a banking
market in the Gulf, in terms of health,
long-term viability and sustainability,
it would be the Saudi market.
BJ8YXebjfg\iXk\èXjlggfik`m\fg\iXkè^
\emìfed\ekY\ZXlj\f]_`^_f`cgi`Z\jXe[k_\YXZbè^
f]XZXj_$i`Z_jfm\i\`ê% 1hey also beneliL lrom a
proLecLed lranchise wiLh hiqh barriers Lo enLry and
a limiLed number ol players: Lhere are 2 commercial
banks, wiLh widely varyinq markeL posiLions."
AXdXc8cB`j_`#Z_`\]Zflekipf]Z\i#;\lkjZ_\
9XebBJ8
Commercial Bank has the highest
market share overall of 20.5 per cent
of total sector assets. Among the top
five banks in the kingdom, Banque
Saudi Fransi saw highest net income
growth of 13.5 per cent year on year in
2010. Distinguishing factors of Saudi
Arabias robust banking system include
a conservative loan to deposit limit of 85
per cent, NPL coverage of more than 100
per cent, net interest margin (2006-10) at
3.5 per cent or above, capital adequacy
(Tier 1) ratio above 11 per cent, and
equity-to-assets ratio at around 15 per
cent," said a recent report by Global
Investment House.
The kingdoms SADAD bill payment
system has come in for praise from
international actors envious of the
smooth system of transfers it provides.
The SADAD bill payment system is
Gulf Business Eng Man Sitting 270x206-E.indd 1 8/18/11 12:01 PM
/)&F:KF9<I)'((
@
C
C
L
J
K
I
8
K
@
F
E
1
K
8
I
8
B
G
8
I
LC=9LJ@E<JJ&/*
<;L:8K@FE
L8<Yljè\jjjZ_ffcjXi\k_i`mè^Xjjkl[\ekjjZiXdYc\kflg[Xk\
k_\ì:Mjèk_\eXeZ`XcZi`j`j
K<OK9P;8E@8J88;@
K?<9I8@E>8D<
=
rom a liver transplant surgeon to an
NGO director, the diverse roll call of
UAE-based individuals signing up to
MBA courses has sky-rocketed as
individuals seek to improve their skills.
The London Business School, Hult Business
School, Cass Business School, Manchester Business
School and INSEAD have all witnessed an increase
in enrollment this year as the financial crisis prompts
professionals to develop their businesses, and spruce
up their CVs in order to win big-ticket jobs.
The UAEs MBA market is also contending with
a developing education story in Qatar, where gas-
fuelled growth and a government spending spree
have wooed big names to set up base. But the
UAEs financial hub status, developed infrastructure
and vibrant population are set to keep professionals
flocking to the UAE in order to attain an MBA while
also soaking up the lifestyle.
Hult began with 100 students in its first year of
operation in Dubai in 2008 and the school now
boasts 300 post-graduates, which is close to its
maximum. INSEADs Abu Dhabi campus, the
schools third campus, is looking at 30 participants
this year, versus 26 the year before. Manchester has
nearly 250 students now, compared with about
60 five years ago.
Demand for MBAs is rising due to a surge in
inflows of professionals from the surrounding
region jetting into Dubai to attend classes. The
boom in markets all the way from India to the
Eastern bloc is fuelling a new stream of students.
Our activity in Abu Dhabi is not something
exclusively for the local market, but it is a regional
platform for INSEAD. The campus in Abu Dhabi
gives us access to the GCC, the wider Middle East,
parts of the subcontinent, and parts of Africa,
says Javier Gimeno, INSEADs dean of the executive
MBA programme.
We expect the GCC to continue to do well.
It will be interesting to see what happens with
Egypt and Libya, which could be a developing
market, but India is probably the fastest growing
educational market at the moment.
The London Business Schools mix of students
is currently split 50/50 between UAE residents and
students from abroad. In 2007, nearly 70 per cent of
the class was UAE-based.
Now we have students travelling each month
from Russia, Uzbekistan, Iran, India, Senegal,
Egypt, Jordan and even people from London, says
Denise Johnsen, London Business Schools senior
recruitment and admissions manager in Dubai The
reason they come here is because they want to
establish a network in the GCC.
The growth in demand for MBAs is also linked
to the global trend of individuals from outside the
finance industry finding value in acquiring an MBA
to get ahead in their respective fields.
At the moment there is a more balanced intake
i
t
s

e
a
s
y
i
t
s

c
o
s
t

e
f
f
e
c
t
i
v
e
i
t
s

h
a
s
s
l
e

f
r
e
e

r
e
l
o
c
a
t
i
o
n
F
o
r

g
l
o
b
a
l

e
x
p
a
t
r
i
a
t
e
s

c
o
n
s
t
a
n
t
l
y

o
n

t
h
e

m
o
v
e
,

r
e
n
t
i
n
g

a
l
l

y
o
u
r

f
u
r
n
i
t
u
r
e

f
r
o
m

I
n
d
i
g
o

L
i
v
i
n
g

o
f
f
e
r
s

t
h
e

p
e
r
f
e
c
t

s
o
l
u
t
i
o
n
.

F
l
e
x
i
b
l
e

r
e
n
t
a
l
,

s
h
o
r
t

o
r

l
o
n
g

t
e
r
m

w
i
t
h

e
x
p
e
r
t

a
d
v
i
c
e

f
r
o
m

o
u
r

e
x
p
e
r
i
e
n
c
e
d

t
e
a
m

t
a
k
e
s

t
h
e

h
a
s
s
l
e

o
u
t

o
f

m
o
v
i
n
g

t
o

t
h
e

r
e
g
i
o
n
.
F
o
r

a

f
r
e
e

c
o
n
s
u
l
t
a
t
i
o
n
,

p
l
e
a
s
e

c
a
l
l

o
u
r

C
o
r
p
o
r
a
t
e

S
a
l
e
s

t
e
a
m

o
n

+
9
7
1

4

3
3
9

7
7
0
5

o
r

e
m
a
i
l

s
a
l
e
s
d
u
b
a
i
@
i
n
d
i
g
o
-
l
i
v
i
n
g
.
c
o
m
L
e
t

u
s

s
h
o
w

y
o
u

a

r
e
n
t
a
l

s
o
l
u
t
i
o
n

t
h
a
t

w
i
l
l

m
a
k
e

a
n
y

h
o
u
s
e

a
n

I
n
d
i
g
o

L
i
v
i
n
g

h
o
m
e
.

I
n
d
i
g
o

L
i
v
i
n
g

L
L
C
.

O
f
c
e

1
2
0
.

O
a
s
i
s

C
e
n
t
r
e
.

S
h
e
i
k

Z
a
y
e
d

R
o
a
d
.

P

O

B
o
x

2
8
2
4
2
5
.

D
u
b
a
i
.

U
A
E

T
:

+
9
7
1

4

3
3
9

7
7
0
5

F
:

+
9
7
1

4

3
3
9

7
7
0
4
.

w
w
w
.
i
n
d
i
g
o
-
l
i
v
i
n
g
.
c
o
m
G
u
l
f

B
u
s
i
n
e
s
s

7
8
1
3
8
6

i
n
d
i
g
o

r
e
n
t
1

1
8
/
2
3
/
1
1

1
0
:
2
1
:
2
3

A
M
CULF BUSlNLSS&/,
<;L:8K@FE
"Now we have jkl[\ekjkiXm\ccè^\XZ_dfek_ lrom Russia, UzbekisLan, lran, lndia,
Seneqal, LqypL, Jordan and even people lrom London.K_\i\Xjfek_\pZfd\_\i\`j
Y\ZXlj\k_\pnXekkf\jkXYc`j_Xe\knfibèk_\>::%
a different learning experience from
their classmates. For Emirati students,
the choice of school is also linked to
accreditation. Dubai governments
Knowledge and Human Development
Authority (KHDA) accredits the business
schools and universities in the emirates
free zones, but accreditation at federal
UAE level has a different set of criteria.
These variations could create problems
for Emirati employees working for the
Abu Dhabi government, but studying for
an MBA at a Dubai school.
We place emphasis on global
accreditation and we work with KHDA,
which has a global perspective, says
Nick van der Walt, Hults executive
director and dean in Dubai.
We certainly understand that the
federal ministry has a different set of
standards that apply to different types
of universities.
Opening an overseas branch can
be risky and costly to a school, with
its biggest asset being its quality of
education, which can be easily impacted
if professors and resources are stretched.
Thats why many of the top schools
limit classes to a select group in order to
distinguish themselves from the fray.
We want to mix nationalities so that
people can learn from each other and we
want to mix industries. We will not allow
too many people from one country or
one nationality or industry to dominate,
says Hults van der Walt.
Setting a high
standard for enrollment
means that many
of the top MBA
across the world, says Nigel Banister,
Manchesters chief global officer. There
is no doubt that MBAs have always
been regarded as pre-requisite for senior
positions in the financial sector, but many
other sectors that were not embracing
them before do so now.
The palette of MBAs offered in the
UAE ranges from regular university
degrees to specialised and executive
MBAs, which are geared toward a varied
calibre of individuals, with different
financial means and needs. Executive
MBAs target individuals in the higher
echelons of companies or businessmen
keen to learn leadership skills needed in
times of boom and crisis.
Some schools prefer to offer just general
MBAs, while others have specialisations,
such as Cass, which offers four areas that
include Islamic finance.
Students who seek MBAs look for
different qualities in their programmes.
Many are interested in programmes
that offer opportunity to take some
courses on other campuses to gain
E`ZbmXe[\iNXck#
?lckj\o\Zlk`m\
[ì\ZkfiXe[[\Xe
è;lYX`
CULF BUSlNLSS&/.
<;L:8K@FE
and work with banks to help MBA seekers
finance their degrees. INSEAD for example,
offers a scholarship funded by the schools
alumni for social entrepreneurship.
Each university has its own ways of
handling the financing, says Hults Van
der Walt. We monitor those who are
employed immediately after finishing
their education to ensure our graduates
are highly competitive and sought after
in the job market.
The financial crisis has altered the mix
of students seeking an MBA education.
A greater number of entrepreneurs are
attaining degrees to gain skills to set up
schools are expensive. Today, many MBA
seekers no longer enjoy company or
government sponsorship.
At the beginning, there was more
government employees because training
budgets were healty. In 2007, between
65 to 70 per cent of students were
sponsored by companies or other
entities, says Ehsan Razavizadeh, Cass
regional director. When the financial
crisis started, we saw a big decline in
sponsorships, which have now gone
down to 10 per cent.
The Middle East region as a whole
is not as supportive to its workforce as
multinationals in the West, which tend
to invest more in their employees and
encourage them to attain MBAs when the
money is flowing.
It is certainly an issue, particularly in
the region, because companies within the
Middle East dont see investment in talent
development as a priority. Because labour
mobility is so high, maybe companies
are afraid of not retaining people, says
INSEADs Gimeno. But if they support
them, this is a way to retain their best
talent in the company. For local Emiratis,
Saudis, Bahrainis or Kuwaitis there is
more company support.
The tightening of purse strings in the
region and across the globe drove schools
to beef up their scholarship programmes
8î\Xk\ieldY\i
f]\eki\gi\e\lij
Xi\XkkXèè^
D98jkfj\klg
Yljè\jj\j%
"Openinq an fm\ij\Xj
YiXeZ_ZXeY\i`jbpXe[
ZfjkcpkfXjZ_ffc#n`k_
`kjY`^^\jkXjj\kY\è^
`kjhlXc`kpf]\[lZXk`fe#
which can be easily
impacLed il prolessors and
resources are sLreLched.
K_Xkjn_pdXepf]k_\
kfgjZ_ffcjc`d`kZcXjj\j
kfXj\c\Zkîflgèfi[\i
kf[`jkè^l`j_k_\dj\cm\j
]ifdk_\]iXp%
or grow their businesses rather than the
pre-crisis trend of professionals from
areas such as construction and finance.
Since 2008, there has been a
40 per cent increase in the number
of applications and enquires from
entrepreneurs, says Cass Razavizadeh.
During the crisis, people realised it
was a good time to set up their own
businesses and an MBA can help with
achieving their goals.
The rise in the number of entrepreneurs
seeking MBAs is partly due to mass
layoffs from financial institutions, which
left many employees jobless.
Many of big global names that we
know like Google started in financial
downturns, and, not surprisingly, if
investment banks are not taking as many
people then ambitious people will seek
alternative ways to satisfy their ambitions,
says Manchesters Banister. It is almost
entrepreneurship by necessity.
The diversity aspect of classes is a
major attraction for applicants, who look
at MBAs as opportunities to build contacts
and learn from their peers how business is
conducted in one industry versus another.
One of our students was a very successful
manager at Ernst and Young, but he quit
the corporate world to set up a charity and
he is now opening up his own schools in
India, says Londons Johnsen.We also
had a liver transplant surgeon who wanted
to do an MBA because he didnt know
how to run a hospital.
l
L
L
U
S
1
R
A
1
l
O
N
:

1
A
R
A
K

P
A
R
L
K
H
CCC counLries spend heavily on delence, and LhaL
Lrend is seL Lo conLinue.
8:8CC
=FI8IDJ
K<OK9P8;I@8EDLIG?P
88-92 Defence.indd 88 9/26/11 6:21:01 PM
>LC=9LJ@E<JJ&/0
;<=<E:<
K
he GCC continues to be
one of the worlds leading
military spenders with a
combined outlay of $68.3
billion (approximately 14.7 per cent
of GDP) on defence in 2010 with
Saudi Arabia and the UAE leading
the way.
This is equivalent to nearly 10 per
cent of the worlds largest defence
spender the United States, which
totalled $698 billion, and more than
50 per cent of second place China,
which invested $114 billion on its
defence in 2010 according to figures
from the Stockholm International
Peace Research Institute (Sipri).
According to Forecast International,
the GCCs defence expenditure will
climb to $73.4 billion by the end of
2011 and continue to grow to $82.5
billion by 2015. The largest increase
in defence and security expenditure
in the region last year was by Saudi
Arabia, which spent $45.2 billion, an
increase of 3.9 per cent compared to
2009 according to Sipri.
Saudi Arabia has maintained an
increasing trend in the period 2006-
2010. Military spending increased
by 21 per cent in real terms during
that period, says Carina Solmirano,
a researcher on the Military
Expenditure Project at Sipri. The
UAE was the second largest GCC
spender in 2010 with $16 billion and
has increased its military spending by
50 per cent during 2006-2010.
Located along the Arabian Gulf,
with the Strait of Hormuz in the
north east corner, the GCC countries
lie south of Iran, Iraq and Kuwait and
between them they ship at least 13
tankers, carrying 15.5 million barrels
of oil, through the narrow inlet every
day, which constitutes 35 per cent
of the worlds seaborne shipments.
Saudi Arabia holds 18 per cent of the
worlds known oil reserves, Iran nine
per cent, Iraq eight per cent, and
Kuwait and the UAE both seven per
cent, making peace in the region vital
to the global supply of crude oil.
This means there is still plenty of
tension in the Gulf stretching back to
the Iraqi invasion of Kuwait in 1990,
which saw Saudi and UAE forces
in action against Saddam Husseins
army and the US military launching
operations from GCC soil.
More recently in 2008, the
commander of Irans Revolutionary
Guard threatened to seal the Strait of
Hormuz if Iran was attacked by the
US or Israel. This sent alarm bells
ringing across the GCC, which sees
itself in the firing line if any conflict
would arise, especially in the UAE
which has an long-standing dispute
with Iran over what it calls the
occupation of the Greater and Lesser
Tunb islands in the Arabian Gulf.
Iran is a strategic concern, and
GCC states want to ensure they do
not offer Iran the opportunity to
be more aggressive in its regional
activities, says Sabahat Khan, senior
analyst at the Institute of Near East
and Gulf Military Analysis (Inegma).
Defence spending is important
to send a message to Iran that the
GCC militaries are there and give
the perception that GCC militaries
are operationally active around the
region. Border control issues have
become a top priority for GCC states
the Saudis signed a big contract
a few years ago with EADS, and
the UAE and Qatar are two other
countries that will be willing to
continue investing in state of the art
systems here.
As defence budgets are cut in the
western world the GCC states will
remain very lucrative markets for
US and European defence firms,
but recently economic and societal
factors have played a part in the
realignment of some plans.
There are different factors
involved with expenditure the
obvious is oil prices, which have
dropped considerably from their
highs of 2008, says Khan. Global
88-92 Defence.indd 89 9/26/11 6:21:01 PM
0'&F:KF9<I)'((
;<=<E:<
K_\>::jkXk\j_Xm\_X[e\n`jjl\jkf
[\Xcn`k_Xe[_fd\cXe[j\Zli`kp\og\e[`kli\`j
fe\Xi\Xm\ipc`b\cpkf^flgèk_\X]k\idXk_f]
k_\8iXYJgiè^#\jg\Z`Xccp`]k_\i\`jdfi\XZk`m`kp
i\^`jk\i\[]ifd\oki\d`jkîflgj%
would be $37 trillion, meaning many
GCC countries will be able to continue
their defence expenditure and increase
capabilities for indigenous military and
aerospace engineering.
Since arms production capabilities
in the region are limited, almost all
procurements of major weapons have
traditionally been imports. However,
this is gradually changing with UAE
companies such as the Abu Dhabi Ship
Building Company which is building
six corvettes for the UAE navy at an
estimated $820 million and Mubadala
Aerospace and Thuraya, that provide
integrated satellite communications,
leading the way to broaden the countrys
defence and technology sector. In
2007 the UAE-made Caracal pistol
was unveiled as the official side arm
for the UAE armed forces and Zayed
Military City in Abu Dhabi is home to
the Burkan Munitions Factory. At the
10th International Defence Exhibition
and Conference (Idex) in Abu Dhabi in
February this year, Dhs14.5 billion in
deals were recorded, which included
those from UAE companies.
In the past three years European and
US companies have not only sold defence
and security equipment to the GCC but
are also forging partnerships and joint
ventures. Our studies in 2010 show
there was 6 billion spent on UK defence
exports and we achieved 22 per cent
of the global defence market and new
security exports passed 2 billion for the
first time, says Adam Thomas, senior
spokesperson on defence and security for
UK Trade and Investment.
The Gulf is the UKs largest market
with BAE Systems, the Ministry of
Defences main contractor, Rolls Royce
and Boeing Defence UK all being
manufacturers that rely heavily on the
GCCs defence spending.
The Gulf is a particularly important
area for the UK and is traditionally [over
the past five years] responsible for 50
per cent of UKs defence exports. We
aim to make this 5 billion in the
future, says Thomas.
Last month the UK held its bi-annual
Defence and Security Equipment
international (DSEi), the worlds largest
defence exhibition, attracting more than
1,300 exhibitors, and Emiraje Systems
signed a deal, initially worth Dh17-22.5
million with German firm Cassidian
to provide it with its Ectocryp data
protection devices. Our theme at DSEi
was partnerships, says Thomas. We are
extremely impressed with Idex and the
Dubai Air Show, and see them as two
prominent global defence exhibitions
that we need to be at.
The region is continually keen to
enhance its indigenous defence capabilities
and there are very highly qualified
engineers. Our strategy is to create joint
>
<
K
K
P
@
D
8
>
<
J
economic slowdown could depress these
prices more and affect GCC income from
oil exports and consequently impact
defence spending. The Arab Spring
would also have affected calculations on
government expenditure in general, with
large social welfare programmes being
announced [especially in Oman where
defence spending has dropped].
Bahrain, Saudi Arabia and Oman have
all pledged to increase social spending
on houses and education in the coming
years, which may have an effect on
defence spending.
But with estimates from the Dubai
International Finance Centre that if oil
prices were to average $100 a barrel,
then the value of GCC energy reserves
Ibe |rterrat|ora| Deferce Lxb|b|t|or (|DLX) |r Abu Dbab|, Ur|ted Arab L|rates.
88-92 Defence.indd 90 9/26/11 6:21:03 PM
DUNLOP UAE GULF BUSINESS.ai 1 8/10/11 4:09 PM
0)&OC1OBLR 20
DEFENCE
Sababat Kbar|, ser|or ara|yst, |rea
Ibe u|f spert a|ost $I0 b||||or or b|btecb
deferce |r 20I0.
development in Ammrocs evolution and
we are delighted to partner with another
global leader in the aerospace industry,
said Homaid Al Shemmari, chairman
of Ammroc. Linking this new expertise
to Ammrocs developing capability in
the rotary-wing segment allows it to
become a leading global provider of
military aviation maintenance, repair
and overhaul (MRO) services to the
UAE Armed Forces and other military
operators both globally and regionally.
In August 2010, 12 UAE aviators became
the second batch of Emirati military to be
trained for operations in Afghanistan by
the US. Earlier this year, Gulf countries
where called into action with the UAE and
Qatar participating in the Nato-led no-fly
zone over Libya in March, to protect
civilians from attack by Colonel Gaddafis
loyalist forces, and in the same month the
UAE and Saudi sent forces to Bahrain, at
the invitation of King Hamad ibn Isa Al
Khalifa, as part of the GCCs Peninsula
Shield. Some GCC politicians and analysts
believe that Iran was covertly behind the
unrest in the country, something that Iran
has categorically denied.
According to unofficial reports the
budget for the Iranian armed forces in
2010 increased by 20 per cent to $9 billion
and the Revolutionary Guard Corps was
boosted by a $5.8 billion arms spend,
causing more worried glances from GCC
leaders. However, Sipri has been unable
to verify these figures or compare them
with previous data from other sources,
therefore the most important country
for which data was missing in 2010 was
Iran, says Solmirano.
Regardless, the Gulf remains at the
forefront of global defence manufacturers
minds, and with the continuing threat
from Iran and an oil industry to protect
it is clear the GCC will remain a major
source of income and employment for the
military industry beyond 2015.
Ibe Arab Spr|r
ay defect soe
deferce sperd|r
|rto bous|r ard
educat|or.
ventures and industrial partnerships.
BAE Systems announced in August
last year it intends to establish a military
aircraft assembling plant in Saudi Arabia.
The potential for deepening ties has also
been realised by the US and in January
Lockheed Martin acquired an equity
stake in Mubadalas Advanced Military
Maintenance, Repair and Overhaul
Center (Ammroc). This is an exciting
KFG('D@C@K8IPJG<E;<IJ
=FI)'('@E9@CC@FEKF>;G
. UniLed SLaLes $698 (4.7%)
2. China $^ (2.2%)
3. France $6 (2.5%)
^. UK $57 (2.7%)
5. Russia $53 ($4.3)
6. Japan $5 (1.0%)
7. Cermany $^7 (1.4%)
8. Saudi Arabia $^5.2 (11.2%)
9. lLaly $38 (1.B%)
0 lndia $36 (1.B%)
7. UAL $6 (7.5%)
CCC tctaI $6B.3
S
O
U
R
C
L
:

S
l
P
R
l
R
L
U
1
L
R
S
88-92 Defence.indd 92 9/26/11 6:21:04 PM
The Pink Pony Fund of the Polo Ralph Lauren Foundation
is Ralph Laurens worldwide initiative in the fight against cancer.
Our mission is to reduce disparities in cancer care
in medically underserved communities and ensure that
treatment is available at an earlier, more curable stage.
10% of proceeds from Pink Pony products will benefit Friends Of Cancer Patients.
TO LEARN MORE OR TO VISIT THE RALPH LAUREN CENTER FOR CANCER CARE AND PREVENTION, PLEASE VISIT
RALPHLAUREN.COM/PINKPONY
Pink Pony
RALPH LAUREN
GULF BUSINESS UAE 206X270 PINK PONY Fa11 OCT.indd 1 26/09/11 10:20
0+&F:KF9<I)'((
DATA CRUNCH
TOP DEALS AND GCC ECONOMIC INDICATORS
TOP DEALS GULF BUSINESS
ccS
l00
lc
NO lrterrot|oro| ASA
Coverrrert of Su1or
H||or Ho|1|r ||r|te1
NOkAK Ho|1|r AS
Su1or A|rWo]s (47
Sto|e)
A| |orsoor| H||or
|etro|eur ||es ||C
(Sl Sto|e)
NO lrterrot|oro| ASA |os s|re1 o 1ef|r|t|ve oreerert to ocu|re NOkAK Ho|1|r AS fror
kAK |etro|eur |u|||c Coror] ||r|te1 |r eic|ore of NO lrterrot|oro| s|ores for o vo|ue of
;ccS r||||or, of W||c| ;lS r||||or ore t|e vo|ue of kAK |etro|eur's os|t|ve Wor||r co|to|.
kAK |etro|eur |C|, t|e UA| |ose1 coror] |eo1uortere1 |r kos A| K|o|ro|, |s or o|| or1
os rou. NO lrterrot|oro| ASA, t|e NorWo] |ose1 |eo1uortere1 |r Os|o, |s or o|| or1
os ei|orot|or coror]. NOkAK Ho|1|r AS |s t|e NorWe|or|rcororote1, UA| |ose1 S|V
creote1 for t|e trorsoct|or, |o|1|r o ortfo||o of kAK's o|| or1 os oerot|r coror|es or1
ossets |r Oror, t|e UA|, or1 !ur|s|o
!errs. ko| |etro|eur W||| rece|ve lS1,4cc,141 s|ores of NO lrterrot|oro| ot NOK 7.S0
(; l.1) er s|ore. !|e co|cu|ot|or of s|ores to |e |ssue1 |rc|u1es o os|t|ve Wor||r co|to|
|o|orce of ;lS r||||or |r t|e kAK |etro|eur su|s|1|or|es os ot t|e Jure 10, c0ll ecoror|c 1ote
kAK |etro|eur ||NA ossets ore vo|ue1 ot ;cS0 r||||or.
kot|oro|e. !|e trorsoct|or |s ||re W|t| NO lrterrot|oro|'s strote] to eior1 |ts oerot|ors
|r t|e ||NA re|or W|||e secur|r o rore 1|vers|f|e1 osset |ose t|rou| ocu|s|t|or of ei|st|r
reserves or1 ro1uct|or os We|| os o11|t|oro| ei|orot|or ocreoe, |ot| ors|ore or1 offs|ore.
|ost 1eo| 1eto||s. kAK |tro|eur W||| |o|1 |r toto| o 40 er cert sto|e |r NO lrterrot|oro|,
|ov|r |e|1 10 er cert r|or to t|e trorsoct|or uor cor|et|or, t|e cors|1erot|or s|ores
trorsferre1 or1 |ssue1 |] NO lrterrot|oro| to kAK |etro|eur W||| |e ||ste1 or1 tro1o||e or
t|e Os|o Stoc| |ic|ore.
!|e Coverrrert of Su1or |os ocu|re1 o 47 er cert sto|e |r Su1or A|rWo]s, t|e Su1or |ose1
o|r||res f|rr, fror Ak|| lrvestrert Crou, t|e ||ste1 KuWo|t |ose1 1eo||r |r t|e |us|resses
of sectorW|se |vers|f|cot|or, |veste1 |rect lrvestrerts or1 Oro|r |rect lrvestrerts,
for o r|r|rur cors|1erot|or of ;l00 r||||or. !|e 1|vestrert |s eiecte1 to rov|1e o rof|t of
;4S r||||or to Ak|| or1 t|e coror] W||| restructure |ts |rvestrerts |r or1er to ersure t|e
secur|t] of |ts ||u|1 ossets. !|e overrrert |rter1s to W|o||] ocu|re t|e o|r||res |r or1er to
1eve|o |t. |or||er |r Jure c00, Ak|| lrvestrert, o|or W|t| |o||o Ho|1|r Co |o1 ocu|re1
o 47 er cert or1 cl er cert sto|es resect|ve|] |r Su1or A|rWo]s fror t|e Su1orese
overrrert, for o toto| cors|1erot|or of ;lS r||||or.
DEAL VALUE ($M) BIDDER TARGET DEAL DESCRIPTION
H||or Ho|1|r ||r|te1, t|e ||ste1 C||ro |ose1 |rterote1 o||f|e|1 eu|rert or1 serv|ce
rov|1er, |os oree1 to ocu|re o Sl er cert sto|e |r A| |orsoor| H||or |etro|eur ||es ||C
(A|H||), Ur|te1 Aro| |r|rotes |ose1 coror] eroe1 |r t|e ro1uct|or of 1r||| |es or1
rov|s|or of coot|r serv|ces, fror A| |orsoor| Sec|o||e1 |r|reer|r Coror] ||C (A|S|),
t|e Ur|te1 Aro| |r|rotes |ose1 rov|1er of o||f|e|1 serv|ces, for toto| cors|1erot|or of ;lc.S
r||||or. As of 1l ecer|er c0l0, A| |orsoor| H||or reorte1 ret |oss of |s cl.S0 r||||or (;S.8S
r||||or) or1 toto| ossets of |s 88.cl r||||or (;c4.04 r||||or). As er t|e terrs of t|e oreerert,
H||or Ho|1|r W||| o] ;4.7 r||||or |r cos|, ;.lS r||||or s|o|| |e o|1 |] Wo] of reo]|r, or
|e|o|f of A|S| o ort|or of |or| foc|||t|es of A|H|| ottr||uto||e to A|S| or1 ;0. r||||or |]
Wo|v|r o 1e|t oWe1 |] A|S| to H||or lrvestrert. !|e trorsoct|or |s cors|stert W|t| H||or's
strote] to eior1 |ts |rterrot|oro| footr|rt ot strote|c |ocot|or or1 W||| |ve t|er 1|rect
occess to t|e ror|ets |r t|e ||11|e |ost. A| |orsoor| H||or |etro|eur ||es Wos o jo|rt
verture |etWeer A||orsoor| Sec|o||e1 |r|reer|r or1 H||or or1 ost ocu|s|t|or, H||or
lrvestrert W||| |ove effect|ve cortro| over A| |orsoor| H||or |etro|eur. !|e f|rorc|o| resu|ts
of A|H|| W||| |e corso||1ote1 |rto t|e H||or's f|rorc|o| stotererts ofter cor|et|or. !|e
trorsoct|or |s su|ject to orovo| forr re|evort |oco| reu|otor].
94-97 DATA CRUNCH OCTOBER2011.indd 94 9/26/11 3:34:42 PM
0+&F:KF9<I)'((
DATA CRUNCH
TOP DEALS AND GCC ECONOMIC INDICATORS
TOP DEALS GULF BUSINESS
ccS
l00
lc
NO lrterrot|oro| ASA
Coverrrert of Su1or
H||or Ho|1|r ||r|te1
NOkAK Ho|1|r AS
Su1or A|rWo]s (47
Sto|e)
A| |orsoor| H||or
|etro|eur ||es ||C
(Sl Sto|e)
NO lrterrot|oro| ASA |os s|re1 o 1ef|r|t|ve oreerert to ocu|re NOkAK Ho|1|r AS fror
kAK |etro|eur |u|||c Coror] ||r|te1 |r eic|ore of NO lrterrot|oro| s|ores for o vo|ue of
;ccS r||||or, of W||c| ;lS r||||or ore t|e vo|ue of kAK |etro|eur's os|t|ve Wor||r co|to|.
kAK |etro|eur |C|, t|e UA| |ose1 coror] |eo1uortere1 |r kos A| K|o|ro|, |s or o|| or1
os rou. NO lrterrot|oro| ASA, t|e NorWo] |ose1 |eo1uortere1 |r Os|o, |s or o|| or1
os ei|orot|or coror]. NOkAK Ho|1|r AS |s t|e NorWe|or|rcororote1, UA| |ose1 S|V
creote1 for t|e trorsoct|or, |o|1|r o ortfo||o of kAK's o|| or1 os oerot|r coror|es or1
ossets |r Oror, t|e UA|, or1 !ur|s|o
!errs. ko| |etro|eur W||| rece|ve lS1,4cc,141 s|ores of NO lrterrot|oro| ot NOK 7.S0
(; l.1) er s|ore. !|e co|cu|ot|or of s|ores to |e |ssue1 |rc|u1es o os|t|ve Wor||r co|to|
|o|orce of ;lS r||||or |r t|e kAK |etro|eur su|s|1|or|es os ot t|e Jure 10, c0ll ecoror|c 1ote
kAK |etro|eur ||NA ossets ore vo|ue1 ot ;cS0 r||||or.
kot|oro|e. !|e trorsoct|or |s ||re W|t| NO lrterrot|oro|'s strote] to eior1 |ts oerot|ors
|r t|e ||NA re|or W|||e secur|r o rore 1|vers|f|e1 osset |ose t|rou| ocu|s|t|or of ei|st|r
reserves or1 ro1uct|or os We|| os o11|t|oro| ei|orot|or ocreoe, |ot| ors|ore or1 offs|ore.
|ost 1eo| 1eto||s. kAK |tro|eur W||| |o|1 |r toto| o 40 er cert sto|e |r NO lrterrot|oro|,
|ov|r |e|1 10 er cert r|or to t|e trorsoct|or uor cor|et|or, t|e cors|1erot|or s|ores
trorsferre1 or1 |ssue1 |] NO lrterrot|oro| to kAK |etro|eur W||| |e ||ste1 or1 tro1o||e or
t|e Os|o Stoc| |ic|ore.
!|e Coverrrert of Su1or |os ocu|re1 o 47 er cert sto|e |r Su1or A|rWo]s, t|e Su1or |ose1
o|r||res f|rr, fror Ak|| lrvestrert Crou, t|e ||ste1 KuWo|t |ose1 1eo||r |r t|e |us|resses
of sectorW|se |vers|f|cot|or, |veste1 |rect lrvestrerts or1 Oro|r |rect lrvestrerts,
for o r|r|rur cors|1erot|or of ;l00 r||||or. !|e 1|vestrert |s eiecte1 to rov|1e o rof|t of
;4S r||||or to Ak|| or1 t|e coror] W||| restructure |ts |rvestrerts |r or1er to ersure t|e
secur|t] of |ts ||u|1 ossets. !|e overrrert |rter1s to W|o||] ocu|re t|e o|r||res |r or1er to
1eve|o |t. |or||er |r Jure c00, Ak|| lrvestrert, o|or W|t| |o||o Ho|1|r Co |o1 ocu|re1
o 47 er cert or1 cl er cert sto|es resect|ve|] |r Su1or A|rWo]s fror t|e Su1orese
overrrert, for o toto| cors|1erot|or of ;lS r||||or.
H||or Ho|1|r ||r|te1, t|e ||ste1 C||ro |ose1 |rterote1 o||f|e|1 eu|rert or1 serv|ce
rov|1er, |os oree1 to ocu|re o Sl er cert sto|e |r A| |orsoor| H||or |etro|eur ||es ||C
(A|H||), Ur|te1 Aro| |r|rotes |ose1 coror] eroe1 |r t|e ro1uct|or of 1r||| |es or1
rov|s|or of coot|r serv|ces, fror A| |orsoor| Sec|o||e1 |r|reer|r Coror] ||C (A|S|),
t|e Ur|te1 Aro| |r|rotes |ose1 rov|1er of o||f|e|1 serv|ces, for toto| cors|1erot|or of ;lc.S
r||||or. As of 1l ecer|er c0l0, A| |orsoor| H||or reorte1 ret |oss of |s cl.S0 r||||or (;S.8S
r||||or) or1 toto| ossets of |s 88.cl r||||or (;c4.04 r||||or). As er t|e terrs of t|e oreerert,
H||or Ho|1|r W||| o] ;4.7 r||||or |r cos|, ;.lS r||||or s|o|| |e o|1 |] Wo] of reo]|r, or
|e|o|f of A|S| o ort|or of |or| foc|||t|es of A|H|| ottr||uto||e to A|S| or1 ;0. r||||or |]
Wo|v|r o 1e|t oWe1 |] A|S| to H||or lrvestrert. !|e trorsoct|or |s cors|stert W|t| H||or's
strote] to eior1 |ts |rterrot|oro| footr|rt ot strote|c |ocot|or or1 W||| |ve t|er 1|rect
occess to t|e ror|ets |r t|e ||11|e |ost. A| |orsoor| H||or |etro|eur ||es Wos o jo|rt
verture |etWeer A||orsoor| Sec|o||e1 |r|reer|r or1 H||or or1 ost ocu|s|t|or, H||or
lrvestrert W||| |ove effect|ve cortro| over A| |orsoor| H||or |etro|eur. !|e f|rorc|o| resu|ts
of A|H|| W||| |e corso||1ote1 |rto t|e H||or's f|rorc|o| stotererts ofter cor|et|or. !|e
trorsoct|or |s su|ject to orovo| forr re|evort |oco| reu|otor].
CULF BUSlNLSS&0,
Notes: |ea|s are oaseo on tne eorany of taret, o|ooer or venoor oe|n |n tne H|oo|e fast, for tne er|oo oetween /uust |8, 20|| ano Setemoer |8, 20||. Baseo on announceo oea|s,
|nc|uo|n |aseo ano w|tnorawn o|os. wnere oea| va|ue |s not o|sc|oseo, tne oea| nas oeen entereo oaseo on turnover of taret exceeo|n $|0 m||||on. /ct|v|t|es exc|uoeo from tne tao|e |nc|uoe
roerty transact|ons ano restructur|ns wnere tne u|t|mate snareno|oers |nterests are not cnaneo. Source: Herermarket. /|| oo||ar ($) amounts |no|cateo aoove are |n US oo||ars.
CULF BUSlNLSS OUAR1LRLY M&A AC1lVl1Y
FROM 200^ 1O 8 SLP1LMBLR 20
BREAKDOWN: TAKEOVER ACTIVITY BY SECTOR AND VOLUME
MlDDLL LAS1 ANNUAL M&A AC1lVl1Y
FROM 200^ 1O 8 SLP1LMBLR 20
CULF BUSlNLSS AC1lVl1Y BY lNDUS1RY SLC1OR
Y1D 20 VALUL
CULF BUSlNLSS AC1lVl1Y BY lNDUS1RY
SLC1OR Y1D 20 VOLUML

Vo|ue
Vo|ure
N
u
r
|
e
r

o
f

1
e
o
|s
V
o
|u
e
(
;
r
)
c004 c00S c00c c00 c008 c007 c0l0 c0ll
0
S0
l00
lS0
c00
cS0
0
S,000
l0,000
lS,000
c0,000
cS,000
10,000
0
c0
40
c0
c004 c00S c00c c00 c008 c007 c0l0 c0ll
Ol Ol Ol Ol Ol Ol Ol Oc O1 Oc Oc Oc Oc Oc Oc O1 O1 O1 O1 O1 O1 O4 O4 Ol Oc O1 O4 O4 O4 O4 O4
N
u
r
|
e
r

o
f

1
e
o
|s
V
o
|u
e
(
;
r
)
Vo|ue
Vo|ure
0
c,000
4,000
c,000
8,000
l0,000
lc,000
l4,000

Vo|ue
Vo|ure
N
u
r
|
e
r

o
f

1
e
o
|s
V
o
|u
e
(
;
r
)
c004 c00S c00c c00 c008 c007 c0l0 c0ll
0
S0
l00
lS0
c00
cS0
0
S,000
l0,000
lS,000
c0,000
cS,000
10,000
0
c0
40
c0
c004 c00S c00c c00 c008 c007 c0l0 c0ll
N
u
r
|
e
r

o
f

1
e
o
|s
V
o
|u
e
(
;
r
)
Vo|ue
Vo|ure
0
c,000
4,000
c,000
8,000
l0,000
lc,000
l4,000
Delence
0.7
Lnerqy, Mininq & ULiliLies
7.8
Consumer
^.3
Business Services
5.6

Vo|ue
Vo|ure
N
u
r
|
e
r
o
f
1
e
o
|s
V
o
|u
e
(
;
r
)
c004 c00S c00c c00 c008 c007 c0l0 c0ll
0
S0
l00
lS0
c00
cS0
0
S,000
l0,000
lS,000
c0,000
cS,000
10,000
0
c0
40
c0
c004 c00S c00c c00 c008 c007 c0l0 c0ll
N
u
r
|
e
r
o
f
1
e
o
|s
V
o
|u
e
(
;
r
)
Vo|ue
Vo|ure
0
c,000
4,000
c,000
8,000
l0,000
lc,000
l4,000
lndusLrials
& Chemicals
^^.5
Real LsLaLe
7.8
Pharma, Medical
& BioLech
2.^
ConsLrucLion
.^
Leisure
0.9
1M1
0.
Financial Services
^.6
Delence
.
Leisure
3.^
Lnerqy, Mininq
& ULiliLies
^.5

Vo|ue
Vo|ure
N
u
r
|
e
r
o
f
1
e
o
|s
V
o
|u
e
(
;
r
)
c004 c00S c00c c00 c008 c007 c0l0 c0ll
0
S0
l00
lS0
c00
cS0
0
S,000
l0,000
lS,000
c0,000
cS,000
10,000
0
c0
40
c0
c004 c00S c00c c00 c008 c007 c0l0 c0ll
N
u
r
|
e
r
o
f
1
e
o
|s
V
o
|u
e
(
;
r
)
Vo|ue
Vo|ure
0
c,000
4,000
c,000
8,000
l0,000
lc,000
l4,000
lndusLrials
& Chemicals
20.5
Real LsLaLe
3.^
ConLrucLion
6.8
Pharma,
Medical &
BioLech
3.6
1ransporL
.
1M1
2.5
Financial
Services
.^
Business
Services
2.5
Consumer
9.
SCA| A| Kortoro |ur1 A|rooj Co|to| Ho|1|rs
||r|te1
A|rooj Co|to| Ho|1|rs ||r|te1, t|e UA| |ose1 r|vote eu|t] f|rr, |os ocu|re1 SCA|
A| Kortoro |ur1, t|e |rorce |ose1 fur1, fror Arur1| Asset |oroerert, t|e |rorce
|ose1 osset roroerert jo|rt verture creote1 |] Cre1|t Ar|co|e SA or1 Soc|ete
Cerero|e SA, for or ur1|sc|ose1 cors|1erot|or. Ur1er t|e terrs of oreerert, A|rooj
|os ocu|re1 Arur1|'s sto|e |r t|e fur1 or1 ll rer|er Arur1| |rvestrert teor.
!|e ocu|s|t|or W||| |e| A|rooj to eior1 or1 er|orce |ts reserce. !|e ocu|s|t|or
W||| cor|erert A|rooj's k|]o1o |rterr|se eve|orert, t|e sro|| or1 re1|ur
erterr|se (S||) |rvestrert |otforr or1 W||| eior1 A|rooj reserce |r t|e ||11|e
|ost or1 Nort| Afr|cor re|or. |ost ocu|s|t|or, A|rooj W||| roroe t|e US lclr fur1.
borWo bor| lrterrot|oro| bor| of
Ootor (A| \usr ls|or|c
|or||r reto|| oerot|ors)
borWo bor|, t|e Ootor |ose1 rov|1er of reto||, cororote, or1 |us|ress |or||r
serv|ces, |os ocu|re1 A| \usr ls|or|c |or||r reto|| oerot|ors of lrterrot|oro| bor|
of Ootor (lbO), t|e Ootor |ose1 |or||r |rst|tut|or, for or ur1|sc|ose1 cors|1erot|or.
!|e ocu|re1 oerot|ors |rc|u1e o|| A| \usr er|o]ees, os We|| os A| \usr reto||
|oors or1 1eos|t occourt ortfo||os or1 tWo A| \usr |rorc|es |ocote1 ot A| So11
or1 A| ko]]or. !|e r|vote or1 cororote |or||r ortfo||os ore eic|u1e1 fror t|e
trorsoct|or. !||s ocu|s|t|or W||| ero||e borWo to eior1 |ts oerot|ors |r t|e |oco|
ror|et or1 to corso||1ote |ts os|t|or os or ls|or|c |or| |r Ootor. !||s 1|vestrert
|s cors|stert W|t| lbO's strote] of cor|]|r W|t| Ootor Certro| bor|'s |rstruct|ors
1|recte1 toWor1s correrc|o| |or|s |r t|e courtr] to ceose t|e|r ls|or|c oerot|ors
|] 1l ecer|er c0ll. !|e trorsoct|or |os o|reo1] rece|ve1 Ootor Certro| bor|'s
orovo|.
0-&OC1OBLR 20
In association with
TOTAL RETURN INDEX
HSBC/NASDAQ DUBAI MIDDLE EAST
1he HSBC/NASDAO Dubai Middle LasL 1oLal ReLurn
lndex Lracks Lhe LoLal reLurn ol an emerqinq Middle
LasL sukuk/bond porLlolio. 1oLal reLurn Lakes inLo
accounL Lhe income lrom coupon paymenLs, in
addiLion Lo any appreciaLion/depreciaLion in Lhe
price ol Lhe securiLy.
SOVERIGNS
CORPORATES
BANKS
SUKUK
I550k 000P0N MkJ0kIJY 00kkN0Y MI0 PkI0 YIL0 M000Y5 5&P
A|u |o|| Covt S.S 8/04/c0l4 US ll0.c7 l.c Aoc AA
u|o| Covt c. S/l0/c0lS US l04.18 S.4 Nk Nk
u|o| Covt .S S/l0/c0c0 US l0S.l1 c.7 Nk Nk
Ootor Covt 4 c0/0l/c0lS US l0c.l7 c.0c Aoc AA
bo|ro|r Covt S.S 1l/1l/c0c0 US 7.c1 S.8c Nk bbb
|]t Covt S.S c7/04/c0c0 US l0c.88 S.11 bo1 bb
|orocco Covt 4.S l0/S/c0c0 |Uk 70.c1 S.8 Nk bbb
!oo 4.S lS/07/c0l4 US l0c.00 c.c4 A1 Nk
A|1or l0.S c/0S/c0l4 US l08.S0 .l7 b1 b
u|o| Ho|1|r |-1.S|s 0l/0c/c0lc US 74.S0 l.01 b1 Nk
|WA c.1S cl/l0/c0lc US l0S.18 S.lc boc Nk
Ote| 1.1S l4/l0/c0lc US l0l.S0 1.0S Ac A
Ootor| |or S cl/0/c0c0 US l07.c1 1.l Aoc AA
SAblC 1 0c/ll/c0lS US l0l.S0 c.cl Al A-
|urto|o|ot S 10/0c/c0lS US l0l.00 4.0 Nk bbb /*
|b|S ll.cS lS/ll/c0lS US 7c.S0 l1.c Nk b-
Kl|CO 8.8S l/l0/c0lc US l08.00 c.7 boo1 bbb
ACb 4.S 08/l0/c0l4 US l0c c.c8 Al A
NbA 4.cS cS/01/c0lS US l0c.18 c.14 Ao1 A-
|r|rotes Nb |-4S0|s 10/04/c0lc US l0l.S0 c.1S A1 Nk
HSbC bor| || 1 cl/l0/c0lS US l00.cS c.71 Al Nk
CbO S l8/ll/c0l4 US l0.00 c.cc Al A
Sou1| br|t|s| 1 lc/ll/c0lS US l0l.18 c.cS Nk A
bbK 4.S c8/l0/c0lS US 7c.88 S.1c booc Nk
I550k P.0.k* MkJ0kIJY 00kkN0Y MI0 PkI0 YIL0 M000Y5 5&P
!lC 4.747 cl/l0/c0l4 US l0.S c.1c Al AA
Alb 1.4S 04/ll/c0lS US l0c.18 1.lc Ac Nk
u|o| Covt c.17c 01/ll/c0l4 US l04.18 4.8c Nk Nk
l|C |-1.S|s l1/0c/c0lc US 7c.00 lc.4S b1 b-
JA|/A |-l10|s c/ll/c0lc A| 7c.S0 7.84 bc b
| Wor|1 c.cS 0c/0/c0l US l04.18 S.1c boo1 bb
|roor 8.S 01/08/c0lc US l0c.l1 .7c bl bb
kAK S.c17c c8/0l/c0lc US l07.S0 c.87 Nk A
or A| Ar|or l0.S l8/0c/c0lS US 74.00 lc.78 Nk bb
MAIN REGIONAL BONDS: CURRENT PRICES
THE EXPERTS
VIEW
As parL ol Lhe wider resLrucLurinq ol Dubai World's
debLs, conLracLors employed by Nakheel were
ollered seLLlemenL Lerms lor Lhe money Lhey were
owed. For every $00 ol debL, Nakheel qave Lhem
$^0 cash and paid Lhe remainder in Lhe lorm ol a
Sukuk. A LoLal ol Dhs3.8 billion ol Lhis Sukuk has
now been issued Lo Lhe conLracLors, wiLh a lurLher
Dhsbillion Lo be issued shorLly.
1he Sukuk pays a 0 per cenL proliL raLe
(replacinq Lhe LradiLional coupon paid by a
convenLional bond qiven LhaL inLeresL in noL
permiLLed under Shariah law) maLures in 206,
and is secured by Lwo ploLs ol land in Dubai's
'WaLerlronL' developmenL. Some conLracLors have
elecLed Lo hold iL and receive Lhe 0 per cenL proliL
raLe unLil Lhe Sukuk maLures in 206. OLhers have
chosen Lo cash ouL and sell, alLhouqh Lhey have
employed dillerinq sLraLeqies Lo do so. Several have
opLed lor an aucLion process involvinq a number ol
compeLinq banks, while oLhers have simply Lraded
wiLh Lheir counLerparLy ol choice.
AL Lhe Lime ol wriLinq, Lhe Sukuk is Lradinq aL
around 76 per cenL, siqnilicanLly lower Lhan iLs issue
price ol 00 per cenL and well below Lhe lirsL Lrades
in Lhe 83 per cenL area. HSBC has ollered Lhe
conLracLors lree cusLody services on Lheir holdinqs
and has been acLively Lradinq Lhe Sukuk wiLh iLs
clienLs, boLh qlobally and in Lhe MLNA reqion.
1his currenL Lradinq level represenLs a yield ol
7.^6 per cenL, which has bequn Lo aLLracL reqional
invesLors lrom HSBC's wealLh manaqemenL
services. Lookinq beyond Lhe currenL price acLion
however, HSBC expecLs Lo see more balanced
Lradinq llows very soon. Once Lhe iniLial round ol
sellinq lrom conLracLors is linished,
reqional invesLors and inLernaLional
money manaqers should sLarL Lo
see value in Lhis Sukuk.
GEORGES ELHEDERY,
Head of global markets,
MENA, HSBC
lssued by HSBC Bank Middle LasL LimiLed. RequlaLed byJersey Financial Services
Commission. All liqures quoLed are sourced lrom Bloomberq and HSBC and are
correcL aL Lhe Lime ol publicaLion. PasL perlormance is an noL an accuraLe quide Lo Lhe
luLure. 1his inlormaLion is qeneral and does noL Lake inLo accounL your circumsLances,
ob|ecLives or needs. You should consider Lhese maLLers and consulL your linancial
advisor prior Lo makinq any invesLmenL decisions. For prolessional assisLance, conLacL
HSBC on 800 ^0 ^^^3.
!5!
!52
!5!
!50
!49
!48
!41
!46
!45
!44
!43
2030 Juae 20!! !29 Ju|y 20!! !3! kuust 20!! !20 5ept 20!!
0-&OC1OBLR 20
In association with
TOTAL RETURN INDEX
HSBC/NASDAQ DUBAI MIDDLE EAST
1he HSBC/NASDAO Dubai Middle LasL 1oLal ReLurn
lndex Lracks Lhe LoLal reLurn ol an emerqinq Middle
LasL sukuk/bond porLlolio. 1oLal reLurn Lakes inLo
accounL Lhe income lrom coupon paymenLs, in
addiLion Lo any appreciaLion/depreciaLion in Lhe
price ol Lhe securiLy.
SOVERIGNS
CORPORATES
BANKS
SUKUK
A|u |o|| Covt S.S 8/04/c0l4 US ll0.c7 l.c Aoc AA
u|o| Covt c. S/l0/c0lS US l04.18 S.4 Nk Nk
u|o| Covt .S S/l0/c0c0 US l0S.l1 c.7 Nk Nk
Ootor Covt 4 c0/0l/c0lS US l0c.l7 c.0c Aoc AA
bo|ro|r Covt S.S 1l/1l/c0c0 US 7.c1 S.8c Nk bbb
|]t Covt S.S c7/04/c0c0 US l0c.88 S.11 bo1 bb
|orocco Covt 4.S l0/S/c0c0 |Uk 70.c1 S.8 Nk bbb
!oo 4.S lS/07/c0l4 US l0c.00 c.c4 A1 Nk
A|1or l0.S c/0S/c0l4 US l08.S0 .l7 b1 b
u|o| Ho|1|r |-1.S|s 0l/0c/c0lc US 74.S0 l.01 b1 Nk
|WA c.1S cl/l0/c0lc US l0S.18 S.lc boc Nk
Ote| 1.1S l4/l0/c0lc US l0l.S0 1.0S Ac A
Ootor| |or S cl/0/c0c0 US l07.c1 1.l Aoc AA
SAblC 1 0c/ll/c0lS US l0l.S0 c.cl Al A-
|urto|o|ot S 10/0c/c0lS US l0l.00 4.0 Nk bbb /*
|b|S ll.cS lS/ll/c0lS US 7c.S0 l1.c Nk b-
Kl|CO 8.8S l/l0/c0lc US l08.00 c.7 boo1 bbb
ACb 4.S 08/l0/c0l4 US l0c c.c8 Al A
NbA 4.cS cS/01/c0lS US l0c.18 c.14 Ao1 A-
|r|rotes Nb |-4S0|s 10/04/c0lc US l0l.S0 c.1S A1 Nk
HSbC bor| || 1 cl/l0/c0lS US l00.cS c.71 Al Nk
CbO S l8/ll/c0l4 US l0.00 c.cc Al A
Sou1| br|t|s| 1 lc/ll/c0lS US l0l.18 c.cS Nk A
bbK 4.S c8/l0/c0lS US 7c.88 S.1c booc Nk
I550k P.0.k* MkJ0kIJY 00kkN0Y MI0 PkI0 YIL0 M000Y5 5&P
!lC 4.747 cl/l0/c0l4 US l0.S c.1c Al AA
Alb 1.4S 04/ll/c0lS US l0c.18 1.lc Ac Nk
u|o| Covt c.17c 01/ll/c0l4 US l04.18 4.8c Nk Nk
l|C |-1.S|s l1/0c/c0lc US 7c.00 lc.4S b1 b-
JA|/A |-l10|s c/ll/c0lc A| 7c.S0 7.84 bc b
| Wor|1 c.cS 0c/0/c0l US l04.18 S.1c boo1 bb
|roor 8.S 01/08/c0lc US l0c.l1 .7c bl bb
kAK S.c17c c8/0l/c0lc US l07.S0 c.87 Nk A
or A| Ar|or l0.S l8/0c/c0lS US 74.00 lc.78 Nk bb
MAIN REGIONAL BONDS: CURRENT PRICES
THE EXPERTS
VIEW
As parL ol Lhe wider resLrucLurinq ol Dubai World's
debLs, conLracLors employed by Nakheel were
ollered seLLlemenL Lerms lor Lhe money Lhey were
owed. For every $00 ol debL, Nakheel qave Lhem
$^0 cash and paid Lhe remainder in Lhe lorm ol a
Sukuk. A LoLal ol Dhs3.8 billion ol Lhis Sukuk has
now been issued Lo Lhe conLracLors, wiLh a lurLher
Dhsbillion Lo be issued shorLly.
1he Sukuk pays a 0 per cenL proliL raLe
(replacinq Lhe LradiLional coupon paid by a
convenLional bond qiven LhaL inLeresL in noL
permiLLed under Shariah law) maLures in 206,
and is secured by Lwo ploLs ol land in Dubai's
'WaLerlronL' developmenL. Some conLracLors have
elecLed Lo hold iL and receive Lhe 0 per cenL proliL
raLe unLil Lhe Sukuk maLures in 206. OLhers have
chosen Lo cash ouL and sell, alLhouqh Lhey have
employed dillerinq sLraLeqies Lo do so. Several have
opLed lor an aucLion process involvinq a number ol
compeLinq banks, while oLhers have simply Lraded
wiLh Lheir counLerparLy ol choice.
AL Lhe Lime ol wriLinq, Lhe Sukuk is Lradinq aL
around 76 per cenL, siqnilicanLly lower Lhan iLs issue
price ol 00 per cenL and well below Lhe lirsL Lrades
in Lhe 83 per cenL area. HSBC has ollered Lhe
conLracLors lree cusLody services on Lheir holdinqs
and has been acLively Lradinq Lhe Sukuk wiLh iLs
clienLs, boLh qlobally and in Lhe MLNA reqion.
1his currenL Lradinq level represenLs a yield ol
7.^6 per cenL, which has bequn Lo aLLracL reqional
invesLors lrom HSBC's wealLh manaqemenL
services. Lookinq beyond Lhe currenL price acLion
however, HSBC expecLs Lo see more balanced
Lradinq llows very soon. Once Lhe iniLial round ol
sellinq lrom conLracLors is linished,
reqional invesLors and inLernaLional
money manaqers should sLarL Lo
see value in Lhis Sukuk.
GEORGES ELHEDERY,
Head of global markets,
MENA, HSBC
lssued by HSBC Bank Middle LasL LimiLed. RequlaLed byJersey Financial Services
Commission. All liqures quoLed are sourced lrom Bloomberq and HSBC and are
correcL aL Lhe Lime ol publicaLion. PasL perlormance is an noL an accuraLe quide Lo Lhe
luLure. 1his inlormaLion is qeneral and does noL Lake inLo accounL your circumsLances,
ob|ecLives or needs. You should consider Lhese maLLers and consulL your linancial
advisor prior Lo makinq any invesLmenL decisions. For prolessional assisLance, conLacL
HSBC on 800 ^0 ^^^3.
!5!
!52
!5!
!50
!49
!48
!41
!46
!45
!44
!43
2030 Juae 20!! !29 Ju|y 20!! !3! kuust 20!! !20 5ept 20!!
CULF BUSlNLSS&0.
LOCAL DIETS
SECTOR ANALYSIS
I8EB :8K<>FIP GIF;L:K M8CL<J8C<J
l V|tor|rs V|tor|r b cl.8
c V|tor|rs |u|t|v|tor|rs c1.S
1 V|tor|rs V|tor|rs C lS.c
4 |etor] su|ererts ko]o| je||] lc.S
S V|tor|rs Ot|er s|r|e v|tor|rs ll.
TABLE TALK
TOP FIVE
OBESITY RATES
(PER CENT OF POPULATION AGED 15 YEARS+)
SOURCL: LuromoniLor lnLernaLional, www. euromoniLor.com, 200.
(Dbs ||||or)
Accordinq Lo LuromoniLor lnLernaLional,
healLhy lood caLeqories such as pro/pre
bioLic yoqhurL, nuLs, honey, and olive oil
have wiLnessed sLronq qrowLh Lhis year
and are expecLed Lo conLinue Lheir upward
sales Lrend as consumers shilL away lrom
chocolaLe conlecLionery, cookinq laLs and
icecream Lowards healLhier producLs.
Pro/prebioLic drinkinq yoqhurL
wiLnessed almosL 3 per cenL qrowLh in
value Lerms in 20, wiLh companies such
as Yeo Valley launchinq Orqanic Yeo's
ProbioLic YoqhurL 1ubes markeLed as a
healLhy desserL alLernaLive lor children.
Overall, companies are becominq more
innovaLive in Lheir healLhy producL
launches.
1he hiqh number ol WesLern
expaLriaLes is also a lacLor conLribuLinq
Lo risinq healLh awareness raLes. As
WesLern consumers brinq Lheir healLhy
consumpLion habiLs Lo Lhe reqion,
companies have been prompLed Lo launch
healLhy producLs common in WesLern
counLries, includinq muesli. NoneLheless,
unhealLhy eaLinq habiLs, especially amonq
Lhe local populaLion and Arab expaLriaLes,
remain Lhe mosL dominanL lood
choice and producLs such as chocolaLe
conlecLionery and chips/crisps conLinued
Lo wiLness sLronq qrowLh in 20.
Accordinq Lo LuromoniLor lnLernaLional
liqures, chips/crisps wiLnessed eiqhL
per cenL volume qrowLh in 20, while
chocolaLe conlecLionery wiLnessed live
per cenL volume qrowLh in Lhe same year.
LaLinq habiLs in Lhe UAL are undoubLedly
shilLinq, however, Lhe exLenL ol Lhis shilL is
yeL Lo be seen.
SANA TOUKAN
Research manager,
Euromonitor
WiLh raLes ol obesiLy, diabeLes and hearL disease soarinq around Lhe world,
qovernmenLs have been sLrivinq Lo raise healLh awareness. As a resulL,
consumers have been increasinqly shilLinq away lrom ready meals and lasL
lood Lowards healLhier lood producLs includinq low laL and reducedsuqar
alLernaLives, and lresh lruiLs and veqeLables.
Lumbered wiLh one ol Lhe hiqhesL obesiLy raLes in Lhe world, coupled wiLh a
hiqh raLe ol inacLiviLy amonq adulLs, Lhe UAL qovernmenL has been invesLinq in
awareness campaiqns, includinq Lhe 200 UAL MinisLry ol HealLh iniLiaLive wiLh
Lhe UniLed NaLions Children's Fund (UNlCLF) Lhe "NaLional Campaiqn Lo liqhL
Child ObesiLy in Lhe UAL 1he FaL 1ruLh".
1hese campaiqns served Lo raise consumer awareness and sLimulaLe sales ol
healLhier lood producLs in Lhe counLry, wiLh more lirms launchinq healLhier
alLernaLives and markeLinq Lhem under Lhe "qood lor you" sloqan.
VITAMINS AND DIETARY SUPPLEMENTS (UAE)
P
e
r

c
e
n
L
+'
*,
*'
),
)'
(,
('
,
'
>\fîXg_`\j
KuWa|t
USA
Lypt
Ur|ted Arab L|rates
Saud| Arab|a
Jordar
Ur|ted K|rdo
Iur|ey
Soutb Afr|ca
40.6
33.2
33.5
29.3
2I.8
2I.4
22.9
2I.6
2I.2
)'',
4I.0
34.3
33.I
29.4
28.I
2I.6
23.3
2I.9
2I.4
)''-
40.I
34.I
34.0
29.6
28.3
2I.8
23.8
22.I
2I.I
)''.
40.5
33.9
34.2
29.9
28.6
28.I
24.2
22.4
2I.9
)''/
40.3
34.I
34.5
30.I
28.8
28.3
24.6
22.I
22.2
)''0
40.0
35.2
34.I
30.3
29.I
28.5
25.0
22.9
22.4
)'('
c0l0 c007 c008 c00 c00c c00S
Soutb Afr|ca Iur|ey UK Jordar Saud| Arab|a UAL Lypt USA KuWa|t
)'
),
*'
*,
+'
+,
0/ & OC1OBLR 20
K_`jclolip\Zf$i\jfikf]]\ijk_\lck`dXk\eXkliXcnè[$[fneèFdXejdflekXèj%
T
HIS HEALTH RESORT lies about 1.5 hours away from
Dubai, tucked away on the tip of Northern Musandam
Peninsula in Oman. After a hair-raising, vertiginous drive
up the dusty Hajjar mountains, youll be blown away by the
beauty that awaits you on the other side (for an even more
hair-raising experience, Six Senses also offers the option to
paraglide into the resort which gives a whole new meaning
to the term arrive in style.)
Atop the mountains, the resort and the tiny fishing
village Six Senses is adjacent to present themselves in full
kaleidoscopic view; a picture postcard of wooden villas framed
SIX SENSES ZIGHY BAY
by an unfeasibly blue coastline. At the reception, it already
feels like youre a long, long way from the hustle and bustle
of the UAE. The friendly staff are dressed in floaty linen and
offer up fresh juices and Buddha-like smiles while you recline
on the rustic sofas and take in the ethereal surroundings.
Our dedicated butler invites us to take a bicycle through
the resorts sandy grounds to our villa. Six Senses is built
to be sustainable, which means the surroundings resonate
with earthy brown hues, and it doesnt take long to feel
relaxed, peaceful, and ready to cast away your Dubai diva for
a few days.
;FNEK@D<
1RAVLL, S1YLL, CRUlSL, BY1LS, HO1LLS & SCLNL
M
A
L
1
A

1
O
U
R
l
S
M

A
U
1
H
O
R
l
1
Y

V
A
N
l
C
S
L
K

P
L
1
L
R
Gffcm`ccX
98-99 Downtime-six senses zighy bay.indd 98 9/26/11 3:36:16 PM
>LC=9LJ@E<JJ&00
KI8M<C;FNEK@D<
J\ejlfljjgX
Ibe 0ar|rsp|red S|x Serses Spa features r|re
treatert roos offer|r We||be|r care v|a S|x
Serses S|rature treaterts, trad|t|ora| Paa
ard ||festy|e proraes W|tb spec|a||st v|s|t|r
pract|t|orers. A|| treaterts are ad|r|stered by a
tea of u|t|rat|ora|, We||tra|red tberap|sts.
DflekXè[èè^
Ibe ourta|rtop, oderr fre d|r|r restaurart
'Serse or tbe Lde' s|ts 293etres above sea
|eve| offer|r adverturous, oderr cu|s|re |r
card|e||bt. Iry tbe Dr|r|s or tbe Lde |oure
afterWards for |press|ve |xo|oy ard s|rature
coc|ta||s.
This resort effortlessly combines
luxury and sustainability. Six Senses
resembles a traditional Omani village
in many ways, with narrow passages
between the individual villas and palm
shaded, sandy roads and almost no cars.
Each of the villas is furnished to reflect
Omani culture and features its own
private infinity pool as well as a private
deck and sun-house; you can relax here
for most of the day, sunbathe, and enjoy
room service from the resorts extensive,
five-star menu. Inside the villa youll find
a range of luxurious mod-cons, including
wireless, music and video on demand,
iPod docking station, private wine cellar
and outdoor rain-shower.
The resort really is self-contained
and, with the range of activities on
offer, you could easily stay at this
resort for a week. As expected, its
on the expensive side, but theres a
long list of things to do, including
most non-motorised watersports,
mountain trekking, paragliding, diving
and yacht chartering. Theres also a
childrens club for kids between four
and 12-years-old with activities in the
mornings and early evenings.
Theres a range of eateries on offer
too, in the form of restaurants, lounges
and bars. Dining on the Sand offers
Arabian and pan-Asian fare in barbecue
form when the weather is good; Sense
on the Edge offers a dining experience
thats perched atop the mountains (so
you can enjoy the same breath-taking
view as on arrival) and Vinotheque is a
wine cellar room offering intimate meals
by candlelight and wine-tasting courses.
Six Senses stands alone with
its dramatic, unique setting and
consistently friendly five-star service.
Theres nothing that the staff wont do
to make sure you leave this resort more
'Zen' than when you arrived. @
C
C
L
J
K
I
8
K
@
F
E
1
:
?
8
I
C
@
<
9
8
E
8
C
F
' '
' ' ' '
' ' ' '
'
'
'
JLCK8E8K<
F=FD8E
LE@K<;8I89
<D@I8K<J
J@OJ<EJ<J
Q@>?P98P
;XYX
;`YYX
>lc]f]FdXe
Suer Pouse cb||| bar
Sto] t|ree r||ts or1 rece|ve c0 er cert 1|scourt
or t|e |est ovo||o||e rote or rooror|] |os|s. Vo||1
fror Seter|er c0 ecer|er c0ll for UA| or1
CCC res|1erts.
s|iserses.cor/s|iserses||]|o]
Fecè\gifdfk`fe
98-99 Downtime-six senses zighy bay.indd 99 9/26/11 3:36:27 PM
>LC=9LJ@E<JJ&('(
E`Zb:ffg\ijXpj_\Zflc[^\klj\[kffne\ij_`gf]k_\Ifccj$IfpZ\>_fjk<N9%
HIGH ROLLER
I
T WASNT A typical Wednesday
evening, I admit. Normally, my pyjama-
ed frame is crashed out on the sofa, slice
of pizza in one hand, TV remote in the
other. On this particular Wednesday,
however, my hands were employed
elsewhere. One was zipping up my ladys
slinky LBD, while the other was wrestling
with my cufflinks. Both occurring as
we waited for our chauffeur-driven
Rolls-Royce Ghost Extended Wheelbase
(EWB) to take us for dinner at Splendido
restaurant at Dubais The Ritz-Carlton
Hotel. See, I told you it was different.
Why arent all Wednesdays like this?
Seeing the car parked on the pavement
outside my tiny villa, I was affected by a
touch of the preening peacocks. Shooting
ones cuffs la Duke of Edinburgh
as the driver held open the door for my
partner, I could see a neighbour checking
us out and I shamelessly milked it for all
it was worth. It makes neighbours stare,
drivers gawp and passengers point. Thats
the Rolls-Royce effect. Having visited Rolls-
Royces assembly facility at Goodwood in
the UK (its too space-age and ordered to
be called a factory), I am fully conversant
with how much painstaking detail and
effort goes into the construction of each
hand-built model. Sat in the back seat,
enjoying the extra 170mm of legroom
afforded by the eponymous extended
wheelbase, each facet of the tour came
back to me. The leather workshop with
its laser-cutting technology and old-school
craftsmanship, the mind-bogglingly
involved process to produce the wood
panelling, the spotless floors, the air of
humming, quiet efficiency. Each car is a
result of countless man hours. And boy,
is it worth it. A finished Rolls-Royce is
superlative in every sense.
After a sumptuous dinner, the driver
drove us home and left me the keys
to experience the car for myself the next
morning. Sat on the pavement in front
of my common two-bedroom villa, the
black and silver Ghost EWB was more
than a little incongruous. It has
a theatricality more suited to the
swankiest houses or finest hotels. To
have such a car parked outside says that
you are part of a tiny percentile of the
worlds population.
A lot has been written about the
silence of the ride, however, as I set
off, a loud whooshing noise dominated
the cabin. Ha, I thought to myself,
perhaps the much-vaunted ride is not
so silent after all. How could a 6.6-litre,
twin turbo V12 be quiet? And then I
realised that the noise was in fact, the
rush of the air-conditioning, and once Id
turned it off, silence descended. I could
wax lyrical about the luxury, finish,
equipment, ride and quality incredible
though they all are but that has been
explained a million times before. Instead,
I will leave you with an observation
that sums up the Rolls-Royce experience
perfectly the air coming through the
AC vents was noisier than the engine
capable of providing 563 horsepower.
A real ghost whisperer.
DFKFI@E>;FNEK@D<
101 Downtime-Rolls Royce.indd 101 9/26/11 6:22:07 PM
Dening 40 years
of extraordinary
development
in the UAE,
Ramesh Shukla
creates a
masterpiece
of historical
photography
motivate-adh@motivate.ae
books@motivate.ae
Tel +971 2 677 2005 Fax +971 2 677 0124
Tel +971 4 282 4060 Fax +971 4 282 7898
PO Box 43072
PO Box 2331
Abu Dhabi UAE
Dubai UAE
Available at all leading retail outlets
in the Gulf and at
GB AD-UAE 1965-2010 Ramesh.indd 1 9/18/11 2:23:23 PM
>LC=9LJ@E<JJ&('*
GC8:<JKF9<;FNEK@D<
T
HIS FRENCH RESTAURANT has its roots in
Nice, where the owner serves a glittering
set of regulars, including President Nicholas
Sarkozy. And even though the bistro's latest
offshoot lies in the heart of Dubai International
Financial Centre, its still possible to feel that
you, too, are somewhere along the Riviera.
Starched-white tablecloth settings sit neatly
with the high cream walls decorated with
modern art. The dining room is drenched in
light. The staff are reassuringly French, good-
looking, and delighted with themselves.
The restaurant is bustling; bustling is a
seldom-used adjective for Dubai restaurants
local restaurants are often busy but never
bustling. This place heaves with atmosphere
and a sense of occasion.
The extensive menu covers all the French
classics and, with great difficulty choosing,
we plump for the Green Beans with Foie Gras,
along with the Burrata dish, for starters.
The skilfully presented, colourful food is
delivered quickly (even though the waiter tells
us the food will be delivered when its ready).
The beans are fresh and crunchy, the foie
Cbec| out tbe reW Vo| restaurart
at tbe Jue|rab Zabee| Saray bote|
|ocated or tbe West crescert of tbe
Pa| Jue|rab |r Duba|. Ibe b|berd
sty||sb |rter|or prepares you for a
toprotcb V|etraese eru W|tb ar
|rsp|red frercb tW|st. We recoerd
tbe sauted ||r praWr sa|ad W|tb
tary uava ard steaed sa|or or a
bed of reer pea pure.
[ume|rah.com
Duba| |rterrat|ora| f|rarc|a| Certre's
or|y Cb|rese restaurart |s roW fu||y
||cersed ard offers a W|de rare of
coc|ta||s ard W|res. Roya| Cb|ra's
sbarp red ard b|ac| decor |s a oderr
ta|e or tbe trad|t|ora| Cb|ratoWr
sty|e eatery ard tbe s|ee| bar area
re|rds us of Lost |r Irars|at|or (yes,
We |roW tbe f| |s set |r Io|yo). L||e
|ts s|ster restaurarts |r Cb|ra, Lordor
ard S|rapore, tbe Duba| brarcb
offers Por Kor Cb|rese cu|s|re W|tb
a |uxury fee|. Ibe serv|ce |s fr|erd|y
ard tbe D| Su |s de||c|ous.
roya|ch|aaduba|.com
et ar |rs|bt |rto Wby Cb|ra bas
beer touted as ore of tbe |ead|r
||bts of tbe corteporary art scere
W|tb a tr|p to tbe roup sboW at
Duba|'s a||ery Ltead. featur|r 25
u|t|ed|a Wor|s by e|bt of tbe
courtry's |ead|r art|sts |rc|ud|r ao
Brotbers, 0|u J|e ard Pur Iur|u, tbe
exb|b|t|or W||| rur urt|| I2 Noveber.
a||eryetemad.com
reer Art a||ery ||c|s off |ts reW
seasor prorae W|tb a body
of |aresca|e pa|rt|r fro tbe
acc|a|ed Syr|ar express|or|st
pa|rter. Noua||a |s |roWr for b|s
b|b|y draat|c carvases dep|ct|r
tbe cop||cated re|at|orsb|p betWeer
soc|ety ard tbe |rd|v|dua|. Ibe sboW
rurs urt|| I0 Noveber.
aa||ery.com
Ib|s seasor's ||reup at Abu Dbab|'s
Yas |s|ard |rc|udes Jaret Jac|sor
ard Neta|||ca. S|xt|e ray
aWardW|rrer Jaret Jac|sor |s
br|r|r ber ruber oreb|ts to
tbe cap|ta| or 0ctober I3. Leerdary
beavyeta| bard Neta|||ca are set
to roc| tbe c|ty or 0ctober 25.
yas|s|aad.ae

grass is silky smooth, and the mozzarella is the
best this journalist has tasted anywhere. In
fact, the Burrata et Tomates is the restaurants
house dish and consists of just cheese,
tomatoes and fresh basil leaves drizzled with
olive oil but, like the rest of the dishes, the
simplicity works.
After a discussion with the well-versed
waiter, who recommends a selection of dishes
with flair, we choose the roast baby chicken
with lemon, along with the sea bream. In a
special touch, the fish is wheeled out steaming
and whole for inspection before it is filleted;
were not sure why, but this kind of frivolous
showmanship is endearing in itself. The chicken
is succulent, simple and fresh, and my date
assures me that the bream topped with olive oil
and herbs is bursting with flavour.
In La Petit Maison, youre able to drown
in your senses the bold sights, sounds and
flavours. The spirited staff take pride in their
jobs and their food, and it shows. This is not
another Dubai hotel restaurant with its standard
opulence. Its the real deal. Bon appetit.
lpmdubai.ae
LA PETIT MAISON
(
)
*
+
,
Mf`
IfpXc:_èX
D`[[c\<Xjk#D`[[c\
Bè^[fd
>i\p8j_by khmad Mou||a
D\kXcc`ZXXe[AXe\k
AXZbjfe
( ,
K<OK9P?@C;8;JFLQ8
) *
103 Downtime-Places to be OCT2011.indd 103 9/26/11 6:06:15 PM
('+&OC1OBLR 20
RECULARS >9GI<=<II<;?FK<CJ
GULF BUSINESS HOTELS COLLECTION
?FK<CCF:8K@FEB<P L8< H8K8I J8L;@8I89@8
;L98@Corver|ert|] |ocote1 reor|]
u|o| lrterrot|oro| A|rort !err|ro| c.
Offers eicet|oro| |eve|s of corfort W|t|
c1c roors & su|tes, t|ree 1|r|r ot|ors,
tereroturecortro||e1 sW|rr|r oo|
or1 stoteoft|eort htress certer.
K\c+97 ^ 233 ^^^^
=Xo+97 ^ 233 ^^^5
welcome.plazalayia.neL
89L;?89@!||s |ote| |s creote1
to rov|1e t|e ver] |est of tro1|t|oro|
Aro||or |os|to||t]. !||s ur|ue jeWe| of
|uiur] or1 troru|||t], offer|r ror|hcert
serv|ces, oWo|ts ]ou for or urforetto||e
v|s|t to A|u |o||.
K\c+97 2 508 0555
=Xo+97 2 508 0^29
89L;?89@Corver|ert|] |ocote1
o1jocert to K|o||fo |or|, t|e roert]
offers 1l8 |uiur|ous roors or1 su|tes,
c Wor|1 c|oss 1|r|r verues, c reet|r
roors or1 soc|ous |o||roor W|t| 1o]
|||t occess or1 out1oor terroce.
K\c+97 2 657 3333
=Xo+97 2 657 3000
park.hoLelroLana.com
;L98@!||s 174roor |ote| |oosts l0
1|r|r or1 erterto|rrert verues o suer|
so or1 urr|vo||e1 reet|r foc|||t|es.
K\c+97 ^ 332 5555
=Xo+97 ^ 332 ^555
dubai.reservaLionslairmonL.com
89L;?89@offers l7c soc|ous
roors or1 su|tes, stote of t|e ort
corfererce or1 |us|ress certer, os We|| os,
o ru|t|urose ]r, |r1oor oo|, or1 t|e
eic|us|ve Cr|sto| So.
K\c+97 2 652 0000
=Xo+97 2 652 000
res.auhcrisLalhoLels.ae
crisLalhoLelsandresorLs.com
;L98@!o||ore1 to t|e sovv] |us|ress
trove||er, W|t| |ore corforto||e |e1s &
|| tec| foc|||t|es. A v||rort co||ect|or of
cofes, |ors & restourorts, stoteoft|eort
corfererce foc|||t|es, o fu||] eu|e1 ]r
W|t| or|e or||r.
K\c+97 ^ ^27 000
=Xo+97 ^ ^27 00
cumediaonehoLel.com
;L98@|ocote1 |r t|e certre of u|o|'s
|us|ress 1|str|ct or1 just hve r|rutes
oWo] fror l|C, Jure|ro| beoc|, burj
K|o||fo or1 u|o| |o||, t||s S00roor |ote|
offers ]ou o corver|ert occess t|e rust
see or1 rust o |oces |r t|e er|rotes.
K\c+97 ^ 323 0000
=Xo+97 ^ 323 0003
reservot|orCer|rotesror1|ote|.cor
;L98@|ocote1 or S|e||| /o]e1
koo1, t||s |ote| |s o s|ee| orc||tecturo|
roster|ece of stee| or1 |oss. lt
re1ehres t|e |us|ress |ote| coteor],
seor|ess|] cor||r|r forr W|t| furct|or,
||| tec|ro|o] W|t| uroro||e|e1 |uiur]
or1 e|eorce W|t| efhc|erc].
K\c+97 ^ 330 0000
|umeirah.com
;L98@Offers 10l |uiur|ous|] oo|rte1
uest roors or1 su|tes, r|re restourorts
or1 |ors, |eo|t| c|u| or1 so, terr|s or1
suos| courts or1 out1oor sW|rr|r.
K\c+97 ^ 3^3 8888
=Xo+97 ^ 3^3 8886
sldbshanqrila.com
;L98@k|s|r ||| o|ove t|e fr|re of
|e1|o C|t] or S|e||| /o]e1 koo1, |roser
Su|tes u|o| erjo]s ororor|c v|eWs
W|t| suer| l, c & 1 |e1roor oortrerts,
||fest]|e foc|||t|es, re|oie1 1|r|r |r Auo
Cof or1 t|e eic|us|ve AWoer So.
K\c+97 ^ ^^0 ^00
=Xo+97 ^ ^^0 ^0
reservot|ors.1u|o|Cfrosers|os|to||t].cor
I8J8CB?8@D8?!||s |s o
suer||] 1es|re1 four stor |ote| cor|ete
W|t| A| No|||o restourort, t|e st]||s|
||or|ro |or, t|e v||rort C|u| Acoc|o, o
r|st|re oo| serv|r os o |oc|1ro to
vor|e1 or1 eic|t|r !|ere N||ts, t|e
|uiur|ous O/ore So, or1 |||erer]
Oi]er C]r.
K\c+97 7 2^3 ^^2
=Xo+97 72^3 ^^29
;L98@|scover o reW ott|tu1e |ote|
1|rect|] ||r|e1 to t|e re|or's u|t|rote s|o|r
1est|rot|or or|1st u|o|'s so||st|cote1
retroo||s. ||eort 48l uestroors
cor|ererte1 W|t| c||c 1|r|r eier|erces
oWo|ts |ot| |e|sure or1 |us|ress uests.
K\c+97 ^ 702 8000
H7337accor.com
pullmanhoLels.com
C8P@8GC8Q8?FK<C;L98@ 8CI8?89<8:??FK<C G8IBIFK8E889L;?89@ K?<=8@IDFEK;L98@ :I@JK8C?FK<C89L;?89@
D<;@8FE<?FK<C <D@I8K<J>I8E;?FK<C ALD<@I8?<D@I8K<JKFN<IJ J?8E>I@$C8
=I8J<IJL@K<J;L98@ 8:8:@8?FK<C
GLCCD8E;L98@
D8CCF=K?<<D@I8K<J
;L98@Offer|r lcl furr|s|e1 ur|ts
ror|r fror 8l sr to lc0 sr, 1
1|r|r verues, 1 ru|t|urose reet|r
roors, recreot|or foc|||t|es & o rojest|c
|or1scoe1 oreo orour1 t|e tereroture
cortro||e1 oo|.
K\c+97 ^ ^37 7888
=Xo+97 ^ ^37 7999
welcome.oaklayia.neL
C8P@8F8B?FK<CJL@K<J
0UR L0CAT!0N
;F?8Suer||] |ocote1 |r t|e
rest||ous West bo] oreo or1 W|t||r
eos] reoc| of t|e c|t] certre. W|t| |ts
vor|ous 1|r|r ot|ors, cS uest roors
or1 su|tes, r|vote |eoc| or1 o c4|our
stoteoft|eort ]rros|ur, |t |s or |1]|||c
sett|r for |us|ress or1 |e|sure.
K\c+97^ ^^8^ ^^^^
=Xo+97^ ^^83 9555
@EK<I:FEK@E<EK8C;F?8
;F?8|ocote1 or t|e Corr|c|e koo1,
oos|te t|e |useur of ls|or|c Art,
t|e |ote| offers lS4 roors or1 su|tes,
o |us|ress certre or1 reet|r roors.
kecreot|or foc|||t|es ore o|so ovo||o||e.
K\c+97^ ^^29
=Xo+97^ ^^29 00
roever|c|1o|o.cor
D{M<EG@:B?FK<C;F?8
I@P8;?!|e hrst S stor Ho||1o] lrr
|ote| |r t|e K|r1or, W|t| c87 reW or1
trer1] occorro1ot|ors, |ue |o||] W|t|
W|| occess, out1oor oo|s, souro, Jocu|
or1 |eo|t| c|u|. A|so |os stoteoft|eort
reet|r roors, c4|our |us|ress certer
W|t| rofess|oro| secretor|o| suort.
K\c+966 ^50 505^
=Xo+966 ^50 5056
?FC@;8P@EEI@P8;?#@Q;@?8I
Cull Business maqazine is available in all ol Lhese exclusive CCC hoLels
@JPFLI?FK<CC@JK<;FEK?@JG8><6
Become one ol Cull Business' Prelerred HoLels and benelL
lrom Lhe exposure Lo our exLensive CCC readership.
ConLacL: nayeemmctivate.ae
TeI: +971 4 205 2290, Fax: +971 4 2B27593
104 Preferred Hotel-October 2011.indd 104 9/26/11 6:23:27 PM
>LC=9LJ@E<JJ&(',
<M<EKJI<>LC8IJ
;L98@@EK<IE8K@FE8C:FEM<EK@FE8E;<O?9@K@FE:<EKI<%0$(*F:KF9<I#)'((
LE@K<;8I89<D@I8K<J
Abu Dbab|
0ctober 36 20II UAL Custoer Serv|ce Wee| Sberator Abu Dbab| Pote| & Resort |qpc.co
I9I2 4tb Arrua| Produced Water Naraeert Su|t N|||err|u Pote| |qpc.co
2326 6tb Arrua| Corros|or Naraeert Su|t NLNA Le Roya| Ner|d|er |qpc.co
Duba|
0ctober 35 2rd Arrua| Co|d Cba|r N|dd|e Last Su|t AWaj Rotara |qpc.co
35 Ie|ecos Wor|d N|dd|e Last Jue|rab L|rates IoWers terrap|rr.co
I6I9 Super Returrs N|dd|e Last 20II R|tz Car|tor, Duba| |rterrat|ora| f|rarc|a| Certre |rfora|oba|everts.co
2225 |rdex 20II Duba| Wor|d Irade Certre devertse.co
2325 |rReta|| Su|t Duba| Wor|d Irade Certre devertse.co
2425 N|dd|e Last Cortract Naraeert Corfererce Dus|t Ibar| Pote|, Duba| ||re.co
252I Ibe Spec|a||ty food fest|va| 20II Duba| |rterrat|ora| Corvert|or ard Lxb|b|t|or Certre dWtc.co
252I |ICA Irave| Cater|r Lxb|b|t|or & Corfererce 20II Duba| |rterrat|ora| Corvert|or ard Lxb|b|t|or Certre dWtc.co
Sbarjab
0ctober 48 N|dLast Watcb & JeWe||er SboW Lxpo Certre Sbarjab expocertre.ae
I2I4 |rterrat|ora| Lducat|or SboW Lxpo Certre Sbarjab expocertre.ae
242I Corex N|dd|e Last 20II Lxpo Certre Sbarjab expocertre.ae
FD8E
0ctober 5I4 Corsuer fa|r 0ar |rterrat|ora| Lxb|b|t|or Certer oarexpo.co
I820 Ned|a & Advert|s|r 0ar |rterrat|ora| Lxb|b|t|or Certer a|r|rexpo.co
2I28 Sports & Luxury AutosboW |rtercort|rerta| Pote|, Nuscat a|r|rexpo.co
H8K8I
0ctober I6I8 0atar |rterrat|ora| Lrv|rorert Protect|or Lxbb|t|or Doba Lxb|b|t|or Certer sta|||oradv.co
III9 Doba Lxb|b|t|or Irarsport ard Ra|| Doba Lxb|b|t|or Certer a|ba|daroup.co
2529 Doba Ir|beca f|| fest|va| 20II Katara, tbe Cu|tura| V|||ae, Doba, C|ty Certer,
C|reas, four Seasors Beacb, V|||a|o C|rep|ex,
ard add|t|ora| verues arourd Doba
dobaf|||rst|tute.co
F
OR THREE DECADES Gitex Technology Week
has served as a magnet for the leading names
in the IT sector and showcased zeitgeist tech
products to reflect regional and global trends.
This year is no exception, as the worlds most
influential technology businesses line up at the
show to share their wares with Middle East buyers.
Under the 2011 theme of Redefine the Future,
Gitex will address a wide range of IT issues, from
social networking to cloud computing to 4G,
with themed seminars and presentations. A major
theme at this years event will be cyber-crime,
following widespread computer hacking amid
the Arab Spring.
GITEX TECHNOLOGY WEEK 2011
K<OK9P?@C;8;JFLQ8
105 Calendar Oct2011.indd 105 9/26/11 3:38:00 PM
('-&F:KF9<I)'((
I<>LC8IJ@EPFLIJ?F<J
I
F YOU WERE to conjure up an image of the proverbial dot-com
founder youd dream up Paul Kenny. The nattily-dressed
26-year-old Irishman might be young, but he thinks big. Im
going to build the largest e-commerce site in the Middle East,
he says. Kenny launched Cobone, the regional group-discount
website, just over a year ago amid a scrum of competition.
Incumbent site GoNabit had already cornered some of the latent
market with a four-month head start on Kenny.
They were the first-mover but within six weeks we were
number one, he says, peering out over a barely-furnished office.
Cobone, part of the locally-founded Jaber Internet Group which
sold Maktoob.com in 2009, recently moved buildings to free up
space for more employees. Revenues have grown 30 per cent a
month since we started.
The CEO claims he now owns 67 per cent of the market, with
US-firm Groupon commanding a 22 per cent share, GoNabit six
per cent, and the rest with smaller firms. People dont realise
that it takes a lot of resources to set up a group-buying site. The
initial set up is resource heavy you need to fill the finance,
marketing and IT departments. A few of the smaller sites will
disappear in time.
Certainly, Cobone introduced a wide range of payment options,
which has proved key in a developing market still wary of
buying goods over the internet. Kennys site allows customers to
purchase goods with credit cards, pre-paid cards and, crucially,
cash-on-delivery.
Local culture was holding e-commerce back. People perceived
that the internet was not safe, although everyone paid their
DEWA and Etisalat bill through the web, he says. Group
discount sites are a gentle way to introduce the population to
e-commerce. They already know the outlets we are displaying,
they can even call them up and check, so its real.
Group-buying sites have become household names globally,
offering discounts on anything from nail spas to personal training
sessions and restaurant meals. With the Middle East market is
still nascent, Kenny plans to soak up some of the growth. Local
firms make a profit by mass-discounting their products but the
GXlcB\eep#]fle[\if]îflg$[`jZflek
j`k\:fYfe\#k\ccj8c`Z`X9lcc\iXYflk_`j
gcXejkfYl`c[k_\Y`^^\jk[fk$Zfdè
k_\i\^`fe%
BIG HITTER
main selling point for companies is the extra exposure the site
can offer. A rock-bottom deal on a nail spa, for example, may lure
clients away from their usual salon to try another beauty spot on
the other side of town.
Companies are realising that offline marketing is more
expensive than online marketing. On day one, Cobone was
a difficult sell not now. Businesses have
realised the value of it. You take that
marketing budget and you flip it and you
actually get cash back for it, he says.
As local in-boxes begin to clutter up with
deals on products and services, the range of
offers has become bewilderingly wide, with
Cobone even offering a discount for
a RAK free-zone company licence
recently. Will this sort of non-
descript discounting eventually
cheapen the value of products
and lead to apathy?
The daily deal model is still
very immature as a whole as
it has been in operation for
just over two years. From our
experience we have found that
diversification is key and offers
more choices and increases the
audience size, says Kenny. For
example, we had a billboard at
the Dubai Media One hotel which
was extremely successful selling
almost 40 units, a $28,000 Nissan
Pathfinder that sold four units, and
the UAE trade licence sold two units.
Diversifying the model is the key
to success.
Kenny can often be seen working
until 3am. And when hes not working
on the site, hes encouraging other
employees in his company to take the
plunge and become entrepreneurs
in their own right launching new
divisions within Cobone.
I act as a venture capitalist and
they present their business plans
to me. Im going to prove that you
can do anything no matter who
you are.
' '
' '

''

'
G
?
F
K
F
1
M
@
B
I
8
D
>
8
E
;
<
106 In Your SHoes.indd 106 9/26/11 3:38:56 PM
C
M
Y
CM
MY
CY
CMY
K
alpari.pdf 9/28/11 10:56:55 AM
UAE Gulf Business PUWA1390_270x206.indd 1 9/18/11 3:47 PM

Gulf Business - October 2011

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Gulf Business - October 2011

Uploaded by

Copyright:

Available Formats

p\Xij

You might also like