Saudi economic growth likely to accelerate to 3.9% in 2010
Posted by ArabNews
John Sfakianakis
Saturday 16 January 2010


Saudi Arabia’s economic recovery this year will most likely follow a gradual, steady track. Economic growth should accelerate following a stagnant and difficult year, inflation will remain at manageable but historically high levels and expansion of the private sector is set to take a turn for the better along with credit expansion at Saudi banks. The government, through a stimulatory public spending program, will continue to lead the pick up in the economy as Saudi oil averages around $74 a barrel and low levels of government debt bolster the Kingdom’s fiscal position. A higher oil price environment will enable Saudi Arabia to experience comfortable budget and current account surpluses.

While many key elements are in place to support a recovery in the Middle East’s largest economy, Banque Saudi Fransi (BSF) reducing slightly its 2010 economic growth forecast for the Kingdom to 3.9 percent from 4 percent based on our view that improvements in business activity will be gradual and cautious. The government’s commitment to counter-cyclical fiscal expansion remains solid.

Banks are likely to loosen up on their reluctance toward lending to the public and private sectors, one barrier that choked the private sector during 2009. Last year, claims on both sectors by banks contracted by almost 5 percent, following growth of 30 percent during 2008. This year, banks will have little choice than to lend more as they emerge from a period of challenging revenues and an unfavorable low interest rate environment.

It was not only banks that stifled nonoil private sector growth in 2009; private Saudi companies themselves shelved many projects as international credit became more scarce, and businesses deleveraged and restructured. Assessing the private sector’s appetite to expand is as important as examining banks’ willingness to lend.

The Saudi government last month revised lower its real GDP growth figure for 2007 to 2 percent (from 3.3 percent) and 2008 to 4.3 percent (from 4.45 percent).

Real economic growth in Saudi Arabia has not surpassed 5 percent since 2005. Expansion of the private sector — which was growing by more than 5 percent per year between 2004-2007 — is also down to levels that are not strong enough to support the amount of job creation Saudi Arabia needs in order to cater to a population that accounts for two-thirds of the Gulf total, and is growing around 2 percent per year. The private sector expanded 2.5 percent in 2009 and the bank anticipates growth to rise to 3.7 percent in 2010.

A measured turnaround

The Saudi economy registered better-than-expected growth of 0.15 percent in 2009, while nominal GDP, subject to oil price fluctuations, contracted around 21 percent, according to government estimates. A smaller-than-anticipated decline in oil sector output of 6.4 percent enabled GDP to grow last year as most major world economies fell into recession. The bank had expected a 9.1 percent contraction in the oil sector, which underestimated Saudi Aramco’s investments in oil sector expansion.

The private sector’s investment appetite subsided and overall domestic demand declined, contributing to low nonoil private sector performance. The private sector expanded 2.5 percent down sharply from 4.7 percent a year earlier. International and local credit was scant and prompted many businesses to postpone and cancel projects as they opted to hoard cash.

BSF is cautiously optimistic that 2010 will witness an improvement in the private sector’s performance. The downside risks BSF foresees are linked to both the willingness of banks to provide credit and on the private sector’s willingness to undertake investments. BSF anticipates private sector GDP will expand at 3.7 percent this year, accounting for more than 47 percent of GDP at constant prices. With oil prices standing around $80 a barrel and key global economies beginning to return to growth, Saudi Arabia, a seminal oil and petrochemical products exporter, is likely to benefit from the improvement in global economic conditions. The bank foresees real growth for the Saudi economy of 3.9 percent this year, including a 4.1 percent rise in real oil GDP activity (accounting for 28 percent of total GDP). GDP growth should rise to 4.8 percent in 2011, the fastest pace in six years, once banking sector and business momentum is back in full swing.

BSF expects the government sector to grow by 4.1 percent in 2010, accelerating slightly from its 4 percent growth level last year, as the state continues to take the lead in the economic recovery. Government sector growth above 4 percent has happened only three times in the last 20 years — 2005, 1997 and 1992.

In the 2010 budget, this expansionary stance culminated in a 13.7 percent rise in projected state expenditures to a record level of SR540 billion. The largest budget in Saudi history is designed to encourage private sector businesses to loosen their purse strings and urge banks, awash with liquidity, to jumpstart lending following a slow 2009.

According to government budget projections, which BSF estimates are based on an average oil price of $44 per barrel for Saudi crude, the state’s fiscal deficit will widen to SR70 billion in 2010 after a smaller-than-expected shortfall of SR45 billion in 2009.

Below is a breakdown of some of the key trends the bank expects in nonoil economic sectors this year:

Finance

Finance sector GDP growth rates continued their declining trend in 2008-2009 as both bank profit and asset growth registered weak performance. The growth rate dropped to 2.8 percent in 2008 and 1.8 percent in 2009. Last year, in particular, bank lending to the private sector slowed to a crawl. Despite being awash with liquidity, bank claims on the private sector rose only 2 percent, down from 27 percent expansion a year earlier. Total domestic credit growth (including lending to public entities) fell about 5.4 percent last year.

As risk appetite among banks cautiously returns this year, the bank expects the finance, insurance and real estate sector will grow 3.8 percent in 2010, more than double its rate of growth last year.

BSF does not expect any change to SAMA’s (Saudi Arabian Monetary Agency’s) exchange rate policy in 2010.

Construction

Saudi Arabia’s construction sector grew 3.9 percent in real terms in 2009 — faster than growth of 2.2 percent registered a year earlier. This is partly a reflection of the knock-on affect of government infrastructure spending. In bank’s view, a lot of work remains to address growing demand for housing which BSF estimates, given prevailing conditions, at 255,000 residential units per year for the next five years. The kingdom’s real estate sector is still suffering from a shortage of housing units, a fact that has shielded it from the sharp price corrections experienced in neighboring countries, particularly the United Arab Emirates. The demand for new housing will continue, steered by the indigenous population.

Manufacturing

In 2009, manufacturing sector GDP growth slowed sharply to 1.7 percent from almost 6 percent in 2008. This decline in output is understandable given the general deceleration in the domestic economy, in addition to a slowdown in demand for goods, particularly petrochemical products, globally. The value of petrochemical and plastics exports from Saudi Arabia, for instance, fell 21.5 percent between January and September of 2009, according to preliminary data of the Central Department of Statistics (CDSI). The bank anticipate the manufacturing sector’s output will rise to 4.1 percent in 2010 as petrochemical output increases on the back of higher oil prices and new production volumes reach fruition.

Wholesale trade

Wholesale and retail trade is likely to witness GDP growth rates of 3.6 percent this year, compared with 1.97 percent in 2009, according to BSF estimates. Saudi Arabia’s exports are highly dependent on the price of and demand for oil. Oil exports accounted for 85 percent of a total estimated $153 billion in 2009. Nonoil exports, primarily petrochemicals and derived products, have performed well over the past few years in line with global demand and the Kingdom’s competitive advantage. However nonoil exports were not isolated from the global economic downturn, falling about 16 percent in 2009.

Letters of credit against the import of items such as food, automobiles and machinery are likely to track the performance of private sector expansion and private consumption. The bank expects imports, which fell 21 percent to $80.3 billion in 2009, to climb to $94.7 billion in 2010.

BSF anticipates that Saudi Arabia’s current account surplus will rise to SR98.7 billion this year, or 6.2 percent of GDP, compared with SR76.7 billion last year on the back of higher oil income.

Electricity

The electricity, gas and water sector grew 3.4 percent in 2009, down from an expansion at constant prices of 6.7 percent a year earlier, and we expect this sector to grow by a solid 4.3 percent this year. As demand for utilities rises in the coming years, greater government and private funds will be allocated to efforts to improve output and address growing demand. In 2008, electricity generation grew 5.7 percent, and domestic demand for utilities is growing by 8% per year.

Transport

BSF expects the transport and communications sector to grow 4.8 percent this year, having been the fastest-growing sector last year, at 6 percent. The Saudi telecoms sector has expanded quickly with the introduction of two mobile phone operators to compete with the incumbent Saudi Telecom Co. in recent years. Zain Saudi Arabia, the Kingdom’s third mobile phone operator, reached 6 million subscribers in November, and total Saudi mobile phone subscriptions exceeded 41 million at the end of the third quarter.

Agriculture

Agriculture GDP is likely to grow 0.5 percent in 2010 according to our estimates, up from growth of 0.2 percent last year. While the rate appears low at first glance, it is in line with the state’s policy of moving away from agricultural production toward importing key commodities, including wheat. Saudi Arabia is giving up a 30-year program to grow its own wheat as part of a government strategy to change its water usage habits by phasing out water-intensive crop production.

Inflation

After soaring to a record 9.9 percent in 2008, inflationary pressures subsided in 2009 due to slower domestic demand, lower global commodity prices, a retreat in food prices and a decline in domestic rents. The circumstances created deflationary trends in some Gulf countries, particularly Qatar, although we do not foresee a substantial decline in inflation in Saudi Arabia this year. BSF expects Saudi annual inflation to average 4.3 percent this year, compared with 5.1 percent in 2009.

(To be concluded)

(John Sfakianakis is group general manager and chief economist at Banque Saudi Fransi, Riyadh)


News Link: http://arabnews.com/?page=6&section=0&article=131272&d=16&m=1&y=2010

Global recession knocks start-ups
Posted by BBC News
Wednesday, 13 January 2010


The US saw a big fall in the number of new start ups

The number of new businesses being set up around the world has declined in the face of the global recession, a report has found.

New start-ups were down 10% last year in 20 of the world's richest nations, said the latest edition of the annual Global Entrepreneurship Monitor (GEM).

It found that the decline was the most severe in the US, where it fell 24%. By contrast, the UK only saw a 6% dip.

The United Arab Emirates saw the most start-up activity in 2009, up 38%.

'Greater difficulty'

Now in its 11th year, the 2009 GEM report was based on a study of 54 countries, and more than 180,00 interviews.

The study was established by London Business School and Babson College in the US.

"Throughout the world, would-be entrepreneurs reported greater difficulty in obtaining financial backing for their start-up activities, especially from informal investors - families, friends, and strangers," said Professor Bill Bygrave of Babson College, one of the founders of GEM.

He said this pool of money had declined from $400bn (£247bn) to $350bn, a 12.5% drop across the 33 countries that taken part in both the 2008 and the 2009 GEM surveys.

And it was not necessarily in developing countries that start ups found it difficult to secure financing in 2009.

Among wealthier nations a quarter of new entrepreneurs feel the prospects for their businesses are now more positive in 2010 than a year earlier.

'Engine'

"Clearly, the slowdown has led to changes in the environment for entrepreneurs with investors holding back financing and consumers buying less," said Kristie Seawright, executive director of GEM.

"What is needed is for entrepreneurs to feel comfortable venturing out again, because they are the real engine for creating new jobs.

"Unfortunately, there is not a silver bullet for entrepreneurs. Each country needs to develop the right formula to encourage business start-ups."

When comparing estimates on pre-recession results of 2006-2007 with 2008-2009, individuals starting new businesses dropped 24% in the US, 17% in Denmark, 12% in Spain and Belgium, 9% in Germany and Norway, 7% in Italy and 6% in the UK.

There was no change in France, Iceland, Japan, Netherlands, and Slovenia.


News Link: http://news.bbc.co.uk/2/hi/business/8455361.stm

Saudi industries eye European expansion
Posted by Saudi Gazette
Wednesday, 13 January 2010


JEDDAH - Saudi manufacturers intend to increase their exports to Europe amid growing demand for high quality Saudi products across the European Union (EU) market.

The trend would help maintain the Kingdom’s status as one of EU’s top 15 international trading partners.

In particular, the Kingdom is monitoring Europe’s construction industry, the region’s biggest sectoral employer and one of its major sources of gross capital.

Eu’s construction sector is forecast to achieve market stability this year and open up various opportunities in related-businesses such as flooring and carpeting.

As this developed, Al-Sorayai Trading and Industrial Group, one of the largest floor coverings manufacturer in the world and one of Saudi Arabia’s top 100 companies, plans to leverage its high production capacities of 85 million square meters a year to respond to the increasing global demand.

The floor coverings manufacturer will take part in Domotex Hannover in Germany, the world’s leading trade fair for carpets and floor coverings, aiming to increase its European exports in 2010 in response to the region’s strong demand for its high-quality carpets. The exhibition is being held from Jan.16- 19, 2010.

Prior to the full worldwide impact of the economic crisis towards late 2008, the global market value of the flooring and carpets trade was set to climb by 2.5 percent annually and reach $150 billion by 2012.

Positive 2010 forecasts such as the UN World Tourism Organization’s prediction of a 1 to 3 percent growth in international tourism and the McGraw-Hill Construction Outlook 2010 Report’s expectation of increased construction activity are expected to boost demand for flooring materials and coverings. Europe is a particularly profitable target market due to the huge volume of its planned and ongoing construction activities.

“Europe has been a lucrative market for us, even amidst the downturn. We intend to further expand our presence in the region, specifically by interacting with current and potential customers through high-profile industry events. During the past years we have been attending Domotex Hannover to get a pulse of the international floorings trade. This year is of great significance because there are high expectations for at least moderate recovery across sectors that are linked to our line of business. We are highly prepared to meet demand should a strong market upswing occur,” said Saleh Nasser Al-Sorayai, managing director, Al-Sorayai Trading and Industrial Group.

Al-Sorayai, the first carpet manufacturing company in the Middle East to obtain ISO 9001-2000 certification, occupies an area of almost 90,000 sq m dedicated solely to manufacturing activities. The company’s Jeddah Industrial Yarn Factory produces its own polypropylene and nylon yarn, the main raw materials for carpet making. Al-Sorayai has grown almost 20 times in production capacity over the past years due to annual production expansions and currently exports its products to 65 countries around the world.

Domotex will feature the products and services of 1,400 exhibitors from around 60 countries in 13 halls. The four-day trade fair will feature “contractworld,” Europe’s biggest forum for architects and interior designers. Al-Sorayai will take advantage of the forum, which will also act as an exhibition, a congress and architect’s award platform, to explore European business prospects and further promote its portfolio to the region. Europe currently counts among US, Australia, China and other Middle Eastern countries as Al-Sorayai’s main markets. - SG


News Link: http://saudigazette.com.sa/index.cfm?method=home.regcon&contentID=2010011359993

MENA equity markets fell 1.2% in December bringing 2009 gains down to 17.3%
Posted by www.bi-me.com
Mon January 11, 2010

INTERNATIONAL. Regional markets continued to suffer following Dubai World’s announcement on 25 November 2009 that it would seek a standstill agreement with creditors and an extension of loan maturities until at least 30 May, 2010, the latest Rasmala MENA equity report said.

The Dubai government also stated that it will not guarantee the debt of its government related entities. On 14 December, the government of Abu Dhabi injected US$10.0 billion to the Dubai Financial Support Fund, which will be used to satisfy a series of obligations on Dubai World, most significantly the US$4.1 billion Nakheel sukuk that matured on December 14th.

The move was well received by credit markets and led to a dramatic reduction of implied credit risk premiums on Dubai sovereign and government related entities (GREs) debt.

Capital markets also reacted positively to the new development, as on the day of the announcement, the DFM and ADX indices increased by 10.4% and 7.9% respectively.

According to the Rasmala report, Tunisia was the best performing regional market in 2009, gaining 48.4%, followed by Egypt which gained 35.1%.

Bahrain ended the year as the worst performing market losing 19.2%, followed by Kuwait which fell by 10.0% in 2009.

MENA markets have underperformed both emerging markets and the US market for 2009. MSCI Arabia gained 17.3% in 2009 versus 23.5% for the S&P 500 and 74.5% for MSCI EM.

In the UAE, ongoing uncertainty surrounding the outcome of Dubai World's moratorium request, weighed down the DFM index as it fell 7.0% during the month. The ADX index managed to gain 2.8%, bringing the year to date gains for the two indices to 10.2% and 14.8% respectively.

Saudi Arabia’s Tadawul Index (TASI) fully reversed the gains recorded in November, as the index was down 3.7% by the end of December.

On a regional level the TASI underperformed all indices with the exception of the DFM. On a positive note, year to date gains were 27.5%, representing the third best performance regionally after Tunisia and Egypt.

Egypt’s EGX 30 was the best performing market in the region for the month, increasing by 5.8%.

The EGX 30 outperformed regional peers, as it had previously taken a severe hit due to Dubai’s debt problems on the last trading day of November 2009, unlike most other regional indices that took the hit on the first trading session of December.

The Kuwait Stock Exchange (KSE) gained 1.0% during the month of December. Yet, on a year to date basis the Kuwait market has performed poorly, losing 10.0% since the beginning of the year; rendering Kuwait as the second worst performing market in the region, after Bahrain.

As a result of the Dubai World debt crisis, Qatar’s DSM 20 index lost 8.3% on December 1st, 2009, its first trading session following the Eid holidays.

However, the index has been on the road to recovery ever since, recouping most of its losses to conclude 2009, with a month to date drop of 3.3%.

Performances in the banking sector have been improving lately, following an announcement made by Qatar’s Finance Minister, stating that the government will buy 5% of some local banks (with the exception of Qatar National Bank) spending around US$900 million in an effort to boost investor confidence.

The Omani market ended the last month of 2009 up 0.2%, resulting in a year to date gain of 17.1%. The banking sector was under the spotlight during the month as several banks disclosed their exposure to Dubai World's debt.

The Central Bank announced that Omani banks' exposure to the Dubai-based troubled company is estimated at US$77.0 million.

News Link: http://www.bi-me.com/main.php?id=43319&t=1&c=34&cg=4&mset=1011

KEC offers attractive commercial terms to enhance investors’ expected returns
Posted by Saudi Gazette
Tuesday, 12 January 2010


JEDDAH - Against the backdrop of unprecedented and coordinated policy measures across the globe to ensure that the world economy is again recovering from the worst economic downturn in the postwar era, investment drive in Saudi Arabia has gained additional momentum.

In particular, investment appetite in the Knowledge Economic City - the third of four Economic Cities being developed in Saudi Arabia - has increased, as demonstrated by the tremendous outcome of the recent “Business Opportunities Forum” hosted by KEC on its project offerings.

Tahir Bawazir, CEO of KEC, announced at the forum that contract agreements worth SR1.5 billion will be signed early this year on construction of infrastructure and related facilities for the first phase of the KEC project. The contracts would cover hospitality industry, commercial/retail malls, business parks and educational facilities for information technology, health education, management tourism courses, among others.

KEC continuously receives a lot of pre-qualification bidders for a host of projects at stake, he added.

At the moment, a lot of investment opportunities in KEC await potential investors, said Jones Lang LaSalle - which has been the real estate advisor to KEC for the past 3 years - in its presentation at the forum.

Being instrumental in sizing, phasing and creating the development strategy for the various phases of KEC development, Jones Lang LaSalle said investors could take advantage of KEC’s “attractive commercial terms” to enhance their expected returns. It noted that investors have the opportunity to acquire land for development in Phase 1 of KEC.

It outlined KEC’s unique selling proposition such as high capital appreciation potential, high quality infrastructure offering, inherent demand drivers for residential and commercial assets, and opportunity to acquire land in the only economic city proximate to an existing urban center in the Kingdom.

In retail and hospitality, for instance, KEC offers investors an opportunity to co-invest in a mixed-use development containing a quality retail and hospitality asset which support the entire residential and commercial development in Phase 1, Jones Lang LaSalle said.

The asset will be developed on a 40,000 sq m land and will have a total built up area of 71,000 sq m. Diversified revenue arises in hospitality, Jones Lang LaSalle pointed out.

The residential villa community part of Phase 1 would be the only integrated residential villa community in Madina once finished, it added. The 3-bedroom 320 villas will form as part of an integrated development including retail, school and religious facilities.

The apartment community part of Phase 1, Jones Lang LaSalle further said, will have more than 200 apartment units of different sizes. After completion, it will be the only integrated mid-rise residential apartment community in Madina and will also become a part of an integrated development which includes retail, school and religious facilities. – SG

News Link: http://saudigazette.com.sa/index.cfm?method=home.regcon&contentID=2010011259892

Saudi-Chinese panel holds meeting
Posted by Saudi Gazette
Monday, 11 January 2010


RIYADH — The fourth session of the Saudi-Chinese Joint Commission began here Sunday under the co-chairmanship of Minister of Finance Dr. Ibrahim Al-Assaf and Chinese Trade Minister Chen Deming.

In his speech at the session, Al-Assaf highlighted the role of the Commission in cementing bilateral relations in the economic, trade, technical and investment domains.

Al-Assaf recalled the visit to China in 2006 by the Custodian of the Two Holy Mosques, King Abdullah, and the visits to the Kingdom by the Chinese president in 2006 and 2009 and the agreements signed on the fringes of these visits.

In 2008, Al-Assaf said the volume of trade exchanges between the two countries amounted to more than $40 billion. Al-Assaf hoped that the Chinese market would be open for the Saudi non-petroleum commodities. He lauded the Saudi economy and said despite the world economic crisis, it was capable of implementing its reform programs and updating its systems.

“I was happy when I heard the Chinese ambassador to the Kingdom say that the Chinese companies have obtained contracts for implementing 100 projects of infrastructure in the Kingdom with a total cost of about SR44 billion,” he noted. He also called on other Chinese companies to contribute to implementation of varied projects in the Kingdom.

Al-Assaf hailed the existing distinguished relations between the two countries and their coordination on a number of issues like the climate change.

He said the Gross Domestic Product (GDP) in the Kingdom amounted to about SR1trillion and SR400 billion in 2009.

Al-Assaf said the Kingdom has been doing its best to support efforts of economic integration among the member states of the Gulf Cooperation Council as well as among the Arab countries.
“Moreover, the Kingdom is keen on the stability of the global economy,” he said. He noted that the Kingdom is also keen on maintaining the stability of the world petroleum market.

Al-Assaf pointed out that the Kingdom has allocated large sums of money for supporting investments in petrochemicals, minerals, energy, transport and health sectors.
The meeting was attended by a number of senior officials. — SPA


News Link: http://saudigazette.com.sa/index.cfm?method=home.regcon&contentID=2010011159786

Al Ain Municipality appoints Atkins
Posted by BI-ME , Author: BI-ME staff
Posted: Thu January 7, 2010 6:10 pm

INTERNATIONAL. International design and engineering consultancy, Atkins, has signed a major contract with Al Ain Municipality for establishing an Environment, Health and Safety (EHS) department for the Building and Construction Sector in Al Ain in the Emirate of Abu Dhabi, UAE.

The official signing ceremony took place yesterday (7 January 2010) in Al Ain and was attended by HE Dr Matar Al Nuaimi, General Manager of the Al Ain Municipality, and Dr. Abdullatif Merii, Atkins Director, Abu Dhabi

The establishment of the Building and Construction Sector EHS Department seeks to ensure effective EHS Management Systems (EHSMS) are implemented on construction sites within the eastern regions of the Emirate of Abu Dhabi, Al Ain by 2012.

The key objectives for this project include safer work places, healthy working environments, minimising pollution waste and delivering sustainable lifestyle and development.

Atkins’ scope on the project involves the recruitment and training of inspectors and other support staff according to training and Emiratization program set by the municipality, the establishment of an IT system for registration and reporting, and the development of an enforcement strategy under the supervision of the Municipality.

Atkins’ Project Director Dr Abdullatif Merii commended the Municipality for their holistic approach saying, “This is a landmark project for the Emirate of Abu Dhabi and the UAE.

Al Ain Municipality has taken the bold step to lead the way in assisting contractors and others to develop construction site management systems that will safeguard people and the environment – this new authority will quite simply save lives.” He also commended on the professionalism that the Municipality displayed through out all phases of the project from announcing the tender to the execution.

"The application of the EHSMS will raise the awareness of environmental aspects that stem from construction activities, ultimately improving man's situation within the environment without upsetting it,” he concludes.

This Sector department will have a direct link with Abu Dhabi Municipality (ADM) and the Western Region Municipality (WRM).

The joint initiative with Atkins is very much in line with the Municipality goal of encouraging the establishment of strategic partnerships between the public and private sectors to improve ‘efficiency and accountability towards progress’.

General Manager of Al Ain Municipality, HE Dr Matar Al Nuaimi commented “This phase of the project will ensure the full implementation of the system which adheres to the decision of HH Sheikh Mohammad bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces and Chairman of the Executive Board - no. (42) for the year 2009 on the system of environmental management and health and safety, which refers to the role of the Department of Municipal Affairs as the regulator for the Emirate. It also reflects the project as one of the most basic components of the political agenda of the Emirate of Abu Dhabi, it is also a top priority for the Environmental Agency’s strategy which was adopted by the Executive Board for the period from 2008-2012 AD.”

Research recently carried out by UAE University indicated that about two-thirds of occupational-injury admissions at AI Ain Hospital in 2008 involved accidents common to construction workers. Most of the injuries were caused by falls or falling objects both of which could be minimised through enforcement, education and precaution, experts said. Elias McGrath, the group administrator of BuildSafe UAE, said that although the government has passed laws to protect labourers, better enforcement was needed.

By the year 2020, it is anticipated that there will be an EHS culture that delivers these goals as a part of normal life in the Emirate of Abu Dhabi.


Engineer Rowda Al Saadi – Infrastructure & service coordination division manager "The fundamental goal of the environmental management system, is to ensure healthy and safe working conditions in the construction sector in Al Ain and the development of an effective administrative system for environmental, health and safety regulations and to help the sector entities in Al Ain to develop their own systems in this area, in cooperation with the municipality of the Emirate of Abu Dhabi and under the umbrella of the Department of Municipal Affairs.

Al Ain Municipality has completed the first stage of the project which includes the development of this system, which is the first in the Emirate, particularly in the construction sector as well as the development of the internal system of Al Ain Municipality, through:

• Analysis of gaps, for all the various environmental, health and safety aspects of the building and construction sector in the Emirate, and to determine the appropriate validity, effectiveness, efficiency, and the strengths and weaknesses of counter measures and to achieve the aspirations of the Abu Dhabi government, both in the short and long term, up until 2030.

• Study the requirements of the new legislative framework, and determine the additional legislative requirements.

• Development of the first unified system of environmental management and health and safety particularly in the building and construction sector in the Emirate, with the development of new practices which incorporate the best international practices.

• Explore the best global information systems which deal with environmental management, health and safety, and working at the sector level in order to ensure standardization of the system between municipalities.

• Providing a business portfolio to implement the system which includes: (1) breakdown of the organization, (2) cost-benefit analysis, (3) timetables for implementation, (4) key performance indicators for the implementation of the new system.”


News Link: http://www.bi-me.com/main.php?id=43262&t=1&c=35&cg=4&mset=1011

Salman City attracts $3.5bn in Bahrain
Posted by Arab News
Mahmood Rafique | Arab News
Thursday 7 January 2010






King Hamad bin Isa of Bahrain being briefed by the Minister of Industry and Commerce Hassan A. Fakhro on a model of Salman Industrial City in the presence of the crown prince, prime minister and ministers on Wednesday. (AN photo)

MANAMA: The inflow of investments within Salman Industrial City has already reached $3.5 billion and will reach over $7.6 billion after its various projects are completed, a senior government minister has claimed.

Minister of Industry and Commerce Hassan A. Fakhro, speaking at the opening of the Salman Industrial City, said on Wednesday that infrastructure and industrial development would also create an estimated 34,000 jobs.

The opening ceremony at Hidd industrial area was attended by Prime Minister Sheikh Khalifa bin Salman Al-Khalifa, Crown Prince Sheikh Salman bin Hamad Al-Khalifa, and about 1,000 guests.

The Salman Industrial City is an ambitious economic development project, which according to the minister will shape the future of Bahrain’s economy.

The industrial clusters include the Hidd Industrial Area, Bahrain Investment Wharf (BIW) and Bahrain International Investment Park (BIIP).

As part of the strategic Vision 2030 for economic development, Fakhro claimed such vital projects would complement the great strides already achieved by Bahrain.

He added the leadership’s presence at the opening ceremony was testament to the personal interest it has taken in all matters related to the development of the country. Fakhro said the industrial field has emerged as the main engine of growth of the economy.

“This project will build Bahrain’s economic future and link our country with the Gulf region through causeways and highways to other GCC (Gulf Cooperation Council) countries, and will hopefully meet the country’s needs and enhance our economy even further, so as to achieve our citizens’ hopes and aspirations at all levels.”

News Link: http://arabnews.com/?page=6&section=0&article=130830&d=7&m=1&y=2010

Modon awards SR600m water, sanitation project for Jeddah Second Industrial City
Posted by Saudi Gazette
Thursday, 07 January 2010

JEDDAH - Saudi Industrial Property Authority (Modon) has awarded a major project to Mowah Company for the construction of water, sanitation, industrial drainage, irrigation and wastewater treatment plant at a total capacity of 45,000 m³/day.

In a statement on Wednesday, Modon said theagreement was signed by Dr. Tawfig Bin Fawzan Alrabiah, director general of Modon.

The company said the project will help to preserve the environment by treating wastewater to be highly pure and reusable in the industry.

Mowah Company as one of the leading companies in the field of water services projects in the Kingdom.

The project is among a number of similar projects that were signed by Modon with a number of other local companies under BOT system, where Modon has succeeded in attracting the private sector to invest in the infrastructure projects and the operation of facilities and establishment of services.

The contract is one of the important projects in Jeddah 2nd Industrial City, where the development process began last year. The project includes establishment of wastewater treatment plant, another plant for the industrial wastewater, establishment of three (drinking, irrigation, and sanitation) water networks as well as pumping stations and a modern control system.

Alrabiah said “the company’s investment value in this project is SR600 million, while the expected time frame for the completion of the project is three years in its first phase. The project will cover the needs of factories in Jeddah 2nd Industrial City on an area of 8 million square meters and will provide different types of water, from which, the industries established in the city and the district cooling shall benefit, which will reflect positively on the factories for which lands are allocated.”

Eng. Sami Ben Fahd Al-Rayes, chairman of Mowah Company, said the project provides infrastructure services for the new factories which are expected to benefit from drinking water and industrial water supplies along with sewage disposal, providing water for irrigation, as well as providing water supply for the district cooling system of the city.

The major project facilities are:

• Network of drinking water on a total length of about 90 kilometers.
• Network of industrial wastewater on a total length of about 70 km.
• The network of irrigation water on a total length of about 80 km.
• Wastewater treatment plant for a total capacity of 45,000 m³/day.
• Drinking treatment plant for a total capacity 35,000 m³/day.
• Water pumping station for a total capacity of 35,000 m³/day.
• A pumping station for water at a capacity of 25,000 m³/day.
• Modern technology system by using SCADA systems for monitoring all the facilities mentioned above.

The project would also bring economic returns to the national economy and local development such as provision of new employment opportunities directly to about 360 people in the construction phase and 66 people in its operational phase, in addition to about 1,000 indirect jobs as an additional benefit to the Saudi market.

Moreover, the project will also contribute to relieve the burden on traffic caused by the movement of heavy trucks (water tanks) on Jeddah roads.

Besdies, the project will reduce or limit pollution and aggravation of sanitation problem of Jeddah City to be re-used in the industry which will help in rationalization of water use.

Modon currently oversees 18 existing industrial cities in various regions of the Kingdom (Riyadh 1 & 2, Jeddah 1 & 2, Dammam 1 & 2, Makkah, Qassim, Ahsa, Madinah, Assir, Al Jouf, Tabuk, Hail, Najran, Al-Kharj, Jazan, and Ar’ar). The investments in these cities exceeds SR200 billion and approximately 300,000 workers are employed in these cities. Meeting with the investors who applied to obtain industrial lands in Jeddah 2nd Industrial City is under process and lands and investment opportunities are still available in various fields. Investors wishing to invest in the industrial cities are advised to visit Modon website where they can invest in industrial, service, commercial, residential and/or medical sectors. - Saudi Gazette Staff


News Link: http://saudigazette.com.sa/index.cfm?method=home.regcon&contentID=2010010759361

The world's tallest tower, 'Burj Khalifa' is 828 metres high
Posted by BI-ME , Author: BI-ME staff
Posted: Tue January 5, 2010 11:31 am

UAE. The world's tallest tower, developed by Emaar Properties, was unveiled on Monday to a crowd of thousands and the world in a crescendo of fireworks, lasers and fountain displays.

The official height of the tower, unveiled as 'Burj Khalifa', was announced as 828 metres (2,716.5 ft).

A closely guarded secret, the official height of Burj Khalifa was flashed onto a giant screen before an estimated crowd of more than 400,000, as lasers and fireworks lit up the night sky.

Fireworks cascaded from the tower's spire to the base and lasers blazed out from all levels leaving the crowds awestruck.

The height was disclosed in arithmetic progression, with the numbers being flashed onto the screen, one after another. The tower's height breaks all existing world records for tall buildings.

Burj Khalifa is the tallest building in the world according to the three main criteria of the Council on Tall Buildings and Urban Habitat (CTBUH). The CTBUH ranks the world’s tallest buildings based on ‘Height to Architectural Top,’ ‘Height to Highest Occupied Floor’ and ‘Height to Tip.’

At 828 metres (2,716.5ft), Burj Khalifa is 320 metres taller than Taipei 101, which at 508 metres (1,667 ft) had held the record for the world’s tallest building measured to the architectural top since 2004, the year the project was announced.

Burj Khalifa achieved the distinction of being the world's tallest structure – surpassing the KVLY-TV mast (628.8 metres; 2,063 ft) in North Dakota, USA – 1,325 days after excavation work started in January 2004.

The tower also beats the 31-year-old record of CN Tower, which at 553.33 metres (1,815.5 ft) had been the world’s tallest free-standing structure on land since 1976.

Burj Khalifa employs a record-breaking 330,000 cubic metres of concrete, 39,000 metric tonnes of steel rebar and 142,000 square metres of glass; and it took 22 million man hours to build.

Other world records for Burj Khalifa include the highest occupied floor in the world, at over 550 metres (1,800 ft); the highest outdoor observation deck in the world – At the Top on Level 124; and the tallest service elevator, which travels to a height of 504 metres (1,654 ft).

Mohamed Alabbar, Chairman, Emaar Properties, said that with the unveiling of the final height of Burj Khalifa, the world now had a new reference point for high-rise developments.

“Burj Khalifa is an example of collaboration on a global scale, and the tremendous positive energy that can be generated when people from all over the world come together to work towards a common goal. Thousands of professionals and skilled workers from around the world worked on this once-in-a-lifetime project.”

“More than 60 of the world’s leading consultants including South Korea’s Samsung Corporation and New York-based Turner Construction International realised the design for Burj Khalifa of Chicago-based Skidmore, Owings and Merrill (SOM),” he said.

Burj Khalifa employed the latest advances in wind engineering, structural engineering, structural systems, construction materials and methods. All design considerations took into account the 12,000 people who will live and work in the tower.

The handover to residents of the various components of Burj Khalifa will begin in February.

With a total built-up area of about 6 million sq ft, Burj Khalifa features nearly 2 million sq ft of residential space and over 300,000 sq ft of prime office space, in addition to the area occupied by the keenly awaited Armani Hotel Dubai and the Armani Residences.

The tower also features modern lifestyle amenities including clubs, health and fitness facilities, gourmet restaurants and the 124th floor observation deck, 'At the Top.'

Burj Khalifa is the focal point of the 500-acre ‘mega-project’ by Emaar Properties, described as the new heart of Dubai.

News Link: http://www.bi-me.com/main.php?id=43192&t=1&c=34&cg=4&mset=1011-


Abo

Saudi economy to grow by 4.5% in 2010, says Goldman Sachs
Posted by BI-ME , Author: BI-ME staff
Posted: Tue January 5, 2010 9:40 pm


SAUDI ARABIA. The Saudi economy will expand 4.5% this year as increased public expenditure paves the way for sustained economic recovery, The National reported, citing a Goldman Sachs forecast.

Strong balance sheets in the banking and household sectors should also help to ensure that the kingdom outperforms most other GCC members, Goldman said in a research note.

“Saudi authorities currently have considerable fiscal resources at hand, which would enable them to support the economy and ensure that recovery is sustained through 2010,” said Ahmet Akarli, an economist at Goldman Sachs

The US bank expects a budget surplus for the current year of about SAR230 billion, with revenue at SAR860 billion and outlays at SAR630 billion.

Public expenditure could approach 35% of GDP this year, a smaller share than last year, but higher than the shares for the two years prior to that, Goldman said.

“Clearly, Saudi Arabia, alongside the GCC’s other hydrocarbon-heavy economy Qatar, is ideally positioned to benefit from the ongoing cyclical recovery in the global economy and outperform its peers in the Gulf region,” said Akarli.

The IMF has forecast growth of 4% in Saudi Arabia for this year.


News Link: http://www.bi-me.com/main.php?id=43216&t=1&c=34&cg=4&mset=1011

Arab fund for small projects receives $1.25b
Posted by Saudi Gazette
Wednesday, 06 January 2010

CAIRO - The Arab fund for supporting small and medium-sized development projects has now received $1.25 billion in contributions out of the targeted $2 billion, the Arab League said here Monday.

The fund was launched during the first Arab Economic and Social Development Summit held in Kuwait in January 2009.

The $1.25 billion sum has been contributed by several Arab countries to the fund which was suggested by the Amir of Kuwait Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, Assistant Secretary General of the Arab League for Economic Affairs Mohammed Al-Tuwaijri said in news remarks.
Regulations and bylaws are underway for governing the process of extending loans to small and medium-sized development projects.

Several Arab countries, have presented 11 food projects to the fund for bankrolling, he added. – Kuna

News Link: http://saudigazette.com.sa/index.cfm?method=home.regcon&contentID=2010010659255

Abu Dhabi's World Future Energy Summit gains support of global business community
Posteb by BI-ME -| Author: BI-ME staff
Posted: Mon January 4, 2010 11:30 am

UAE. The World Future Energy Summit has gained the support of some of the world’s leading businesses, who are joining Masdar and Abu Dhabi in demonstrating their commitment to developing a sustainable future energy supply, as Abu Dhabi’s position as a global hub for renewable energy grows.

Hosted by Masdar, Abu Dhabi’s multi-billion dollar cooperative future energy initiative, the Summit has attracted sponsorship from Deutsche Bank Climate Change Advisors, the principal sponsor for the 2010 event. Emirates Aluminium is Associate sponsor and additional sponsors include BP Alternative Energy, Standard Chartered, Siemens, Schneider Electric, Exxon Mobil, ABB, Abu Dhabi Water and Electricity Authority, Oxy, Abu Dhabi Department of Municipality Affairs and Terna.

The World Future Energy Summit has rapidly become one of the globe’s foremost meetings in the world of renewable energy. The event represents a platform for the global alternative energy industry to further new initiatives, technologies and policies, and reinforces Abu Dhabi’s contribution to the global renewable energy industry.

For the third year running, Standard Chartered Bank will host the Standard Chartered Future Theatre showcase, bringing together worldwide renewable energy experts to discuss the most recent and significant innovations of the sector. Discussions linked to the energy economy, cross-border M&A or solar in the Middle East will be a part of the program.

BP will host the Carbon Theatre which will be led by Katrina Landis, Group Vice President of BP Alternative Energy. Theatre audiences will hear leading experts from BP and high level speakers from around the world discussing the critical issues of carbon capture and storage and how it can reduce global carbon emissions. Speakers at the Carbon Theatre include Paul Bryant, Director of HPAD, Ernie Moniz, Director of MIT Energy Initiative, Graeme Sweeney Executive Vice President of Shell for future fuels and CO2 and Jeff Chapman, Chief Executive of the Carbon Capture and Storage Association.

News Link: http://www.bi-me.com/main.php?id=43164&t=1&c=34&cg=4

Makkah to be made most advanced city in the world
Posted by Arab News
Galal Fakkar | Arab News
Tuesday 5 January 2010


JEDDAH: Makkah Gov. Prince Khaled Al-Faisal has emphasized the importance of making Makkah one of the most beautiful, clean, civilized and advanced cities in the world.

Launching the first competition for the beautification of Makkah at the Park Hyatt Hotel in Jeddah, he said the Saudi leadership was keen to make Makkah one of the most developed and beautiful cities in the world.

A number of artists, consuls general, businessmen, government officials and media persons attended the ceremony organized by the Makkah municipality.

“The development strategy for Makkah has been at the heart of the Kingdom’s Five-Year Development Plans,” the prince said. “If Makkah had not been here, this region would not have attained such an important cultural and political position in the world,” he added. He said all development proposals and initiatives for Makkah’s development came from the vicinity of the Holy Kaaba.

“We are honored to serve the House of God and we have a responsibility to develop Makkah and ensure that peace and security prevail there for the welfare of pilgrims who come from different parts of the world,” he said.

He commended the efforts of those, including artists and businessmen who have taken the initiative for the beautification of Makkah.

Makkah Mayor Osama Al-Bar said the preparation for the first Islamic competition for the beautification of Makkah had taken two years to make a plan, taking into account Makkah’s preeminent position in the Islamic world.

He said the municipality intended to ensure the participation of a large number of artists from Arab and Islamic countries in the competition, adding that it would be publicized in the international media.

Spelling out the main objectives of the competition, Al-Bar said it primarily aimed at the beautification of Makkah by converting its corners into museums of Islamic artwork.

“It also offers a good opportunity for Muslim artists around the world to display their skills and standards,” the mayor said.

He said the competition also aims at spreading art by depicting Makkah’s heritage in artworks. It will help to exchange the participants’ expertise.

Prizes worth $300,000 will be given to the winners, said artist Taha Sabban, a member of the contest’s preparatory committee. The art works will be displayed at 12 locations in the city.

News Link: http://arabnews.com/?page=1&section=0&article=130723&d=5&m=1&y=2010

AgraQuest Introduces New Soil Fungicide for Potatoes and Other Crops
Posted by AgraQuest

AgraQuest Introduces Valuable New Soil Fungicide for Early Season Disease Control in Potatoes and Other Crops

SERENADE® SOIL fungicide to provide growers with unique solution to improve profitability

Davis, Calif. (January 4, 2010) - AgraQuest Inc. announced today the launch of SERENADE SOIL, the first soil fungicide based on its patented active ingredient Bacillus subtilis strain QST 713. In 2010, SERENADE SOIL fungicide will be available in the U.S. for growers needing protection against profit-robbing soil diseases such as Rhizoctonia, Fusarium, Pythium and Phytophthora in potatoes, tomatoes and cucurbits.

Applied at planting, SERENADE SOIL quickly builds a disease protection zone around the seed. As the seedling grows, the beneficial bacteria in SERENADE SOIL continue to grow, attaching themselves to the roots of the plant, expanding the disease protection zone, resulting in higher-yielding fields and better quality fruits and vegetables.

“Proven over the past several years in numerous lab studies, field trials and large-scale grower demos, SERENADE SOIL delivers on our commitment to bring growers unique tools that deliver on AgraQuest’s promises: performance, flexibility and value,” said Ashish Malik, Senior Vice President of Global Marketing.

Three years of investigation have demonstrated that plants treated with SERENADE SOIL fungicide are stronger, healthier, and are shown to deliver average yield increases of two to four tons of potatoes per acre. The strong yield results delivered by SERENADE SOIL are based on the diverse and unique activities of B. subtilis strain QST 713 in the soil.

When SERENADE SOIL is applied at planting, the beneficial bacteria quickly attack soil diseases, while rapidly colonizing the seedling and root. Once colonized, the bacteria produce compounds that not only continue attacking soil diseases, but also trigger metabolic pathways to activate the plant’s natural defenses and modulate growth.

Products based on AgraQuest’s patented B. subtilis strain QST 713 have been protecting crops from foliar diseases for nearly a decade, since the first SERENADE products was introduced in the U.S. in 2000. Registrations have been obtained in more than 26 countries, including several countries in the the European Union, Latin America, Japan and Canada. SERENADE SOIL fungicide is the first product in the SERENADE line designed and tested for use in the soil. In April 2009, AgraQuest announced a license, supply and distribution agreement with BASF for SERENADE for agriculture applications outside of NAFTA.

“We such dramatic yield and quality effects because SERENADE SOIL brings som many distinct modes of action to the battle,” said Malik. ”And, as with other products in the family like SERENADE ASO and SERENADE MAX, growers who use SERENADE SOIL can count on its ease of use with 4-hour REIs, broad tank-mix compatibility, and exemption from residue tolerances.”

Investment in new products like SERENADE SOIL are part of the $130 million spent by AgraQuest on research and development designed to revolutionize the way we produce food globally.

About AgraQuest, Inc.

AgraQuest is a biotechnology company that focuses on discovering, developing, manufacturing and marketing highly effective pest management products for agricultural, institutional and home markets. As a leader in the emerging low chem sector, AgraQuest works to provide growers with solutions that offer best in class control while reducing the chemical load on the environment. The Agrochemical division of AgraQuest offers a global portfolio of products - recognized as safer to beneficials, workers, and the environment - that includes SERENADE®, SERENADE® Garden, RHAPSODY®, SONATA® and BALLAD® fungicides and BARITONE® and REQUIEM® insecticides. AgraQuest’s BioInnovations division provides the company an avenue to take biological and low-chemical technology created for the agricultural industry and discover innovative uses for it in related markets. The BioInnovations division identifies both appropriate market segments and opportunities for AgraQuest’s intellectual property, while seeking industry leaders in ancillary markets to partner in the commercialization and distribution process. AgraQuest has received several environmental awards including the Presidential Green Chemistry Award from the U.S. EPA for the discovery and commercialization of SERENADE. For more information visit www.agraquest.com

News Link: http://agraquest.com/news/2010/01/agraquest-introduces-new-soil-fungicide-for-potatoes-and-other-crops/

Jadwa Investment acquires equity stake in GUFC
Posted by Arab News
Monday 4 January 2010


JEDDAH: Jadwa Investment has completed its acquisition of a substantial equity stake in Gulf Union Foods Company (GUFC) through Jadwa Food and Beverage Opportunity Fund, according to a joint announcement from the two companies.

“The acquisition builds on our direct investment portfolio which contains Saudi Aramco’s Lubricating Oil Refining Company and capitalizes on our execution expertise. It’s also consistent with Jadwa Investment’s strategic objective of acquiring substantial equity stakes in promising companies,” said Ahmed Agil Al-Khateeb, MD and CEO of Jadwa.

“I am pleased that the shareholders overwhelmingly approved Jadwa’s proposal to acquire a substantial equity stake in GUFC. I would like to thank them for their support over the course of this transaction and now look forward to partnering with them to execute our strategic plan and continue to grow the business together. GUFC has a strong and talented management team that has helped growth of the business to become a dominant player in the Saudi food and beverage market. We are delighted to work with them in the next phase of the company’s growth and expand the business to become a regional food and beverage company. Our goal in the next phase of the company’s growth is to expand the business operationally so it becomes the market leader in the Saudi food and beverage market. Also, the company is pursuing an ambitious expansion plan that will help it better serve this active sector,” Al-Khateeb said.

“GUFC is pleased to be associated with a renowned financial group like Jadwa”, said Suleiman Saleh Al-Rushudi, chairman of GUFC. “Looking at the history of growth trend and its long-term vision, GUFC approved the deal with Jadwa, which is a reputed, reliable and a sound financial entity. GUFC strongly believes that this association will help materialize its long-term growth objectives. The technical and financial ability of Jadwa along with the manufacturing expertise of GUFC will further enhance and optimize our operations in various fields. GUFC considers this business association with Jadwa as an opportunity to benefit from each other’s expertise and diversify in other related businesses,” Al-Rushudi added.

GUFC is one of the leading juice and beverage manufacturing companies in the Kingdom. The company manufactures juices, nectars and flavored drinks, with its products sold in more than 20 countries across different regions, including Saudi Arabia, GCC (Gulf Cooperation Council), Levant, North Africa, Canada, UK, Indian Subcontinent and other countries. It currently has seven state of the art production lines, 550 dedicated staff and 120 sales trucks. It has a diversified product mix with recognized brands such as: Original, Maaza, Captain and Qobtan.

News Link: http://arabnews.com/?page=6&section=0&article=130663&d=4&m=1&y=2010

2010 will put Arab markets back on international radar
Posted by Zawya.com
Emirates Business 24-7, 04 January 2010

Arab markets will be able to leave behind issues related to over-leveraging and real estate and show strong performance in 2010. Markets will attract much stronger interest from global investors as compared to 2009, finance industry players told Emirates Business.

"The west has realised that the future is in the East, be it the Middle East or the BRIC (Brazil, Russia, India, China) countries. Global focus is shifting to this direction. The UAE is in a prime, easily accessible location, and its laws are straightforward," said Amani Choudhry, Managing Director, Mayfair Wealth Management.

Investor confidence will be more positive by the third quarter of 2010 and institutional investors are likely to be more aggressive in their approach. The year will also see organisations focusing more on managing their risks, analysts said.

"The main theme for 2010 will be the return to normalcy. We will leave behind the past two years' gloomy thinking and return to a rational assessment of investment opportunities," said Zin Bekkali, CEO, Silk Invest.

"Emerging market equities will be preferred and Asian, Arab and African markets are typically poised to do well. Emerging markets have not been impacted too much by the downturn and will continue profiting from their long-term convergence trend. Asian, Arab and African markets will do especially well. These three regions account today for around 46 per cent of world GDP (gross domestic product), though historically this was close to 80 per cent.

"Catalysts for good returns during 2010 in the three regions will differ. Arab markets should finally leave behind issues related to real estate and over-leverage. This should lead to a rally in both Arab equity and fixed income markets," he added.

In terms of asset categories, equities are likely to stay the preferred option, analysts opined. "We favour equities but are looking to start selling into a strong market in Q1 2010. As of Q2 2010, we should be underweight stocks and favour government bonds.

"We are not looking into gold as an option but it should perform better than commodities and real estate, which will suffer if the cycle goes into reverse. Within stocks, we would rotate into defensive sectors such as telecoms and consumer staples and underweight consumer cyclicals and financials, " said Rohit Walia, Executive Vice Chairman and CEO, Bank Sarasin-Alpen (ME) Limited and Alpen Capital (ME) Limited.

Industry analysts expect overcautious investors who have been holding on to cash, to increase their allocation to active fund managers and take some risks by the third quarter of the year.

The first two quarters are likely to see investors emphasizing on liquidity in their investments, analysts predicted. "At the moment most clients are pushing on liquidity and want easy access to money. Right now we are focusing on investments in gold, precious metals, foreign exchange," said Choudhry.

Analysts said confidence was returning gradually and would show positive results in 2010. "We look forward to an improved scenario," said Hedi Ben Mlouka, Managing Director of Duet Group. Higher confidence would lead to a better market environment for asset managers, observers felt.

"We expect investors to increase their allocation to active fund managers and risky asset classes. Many investors used passive indexing strategies to return to the market in 2009 and we believe these investors will allocate back to active fund managers in 2010," said Bekkali.

Analysts also expect institutional investors to be more aggressive in their decisions during 2010. "Many institutional investors have missed part of the recovery that global markets experienced and will be keen to invest more aggressively in 2010," said Bekkali.

Interest from global investors is expected to be more encouraging when compared to 2009 but a lot will depend on local investors activity, analysts said. "Low valuations are putting the region back on the radar screen of international investors. Foreign investors will however only start to become more active if local investors return to the market themselves.

"The good news is that foreign investors have become more realistic and understand better that there should be room for success and failure in these markets.

"Companies will continue with their expansion plans in the coming year. We are also planning moderate expansion and are looking at asset management business," Mlouka said.

"Tight credit markets suggest that regional businesses may turn to local equity markets for growth capital. Many family-owned businesses across the GCC put IPO plans on hold during the downturn. They now require capital and anecdotal evidence suggests that investors are ready to back strong local businesses at sensible valuations," said Oliver Schutzmann of Shuaa Capital.

Greater focus on risk management and increased regulation is expected in 2010. "Having learnt their lesson from the economic crisis, 2010 will see an increased focus on risk management," said Saad Maniar, Managing Partner, Horwath Mak.

"Earlier, risk management was just one of the functions, not a focus area. But this year, that will be a big change." Risk consultancy business, as a result, will grow in 2010.

"At Horwath Mak, we expect about 10 per cent growth, in line with industry growth of eight per cent to 10 per cent in the coming year. Also, the function of risk management will be seen moving to personnel in senior positions such as the CEO, Maniar said.

The financial sector can expect higher regulation as organisations and regulatory bodies pay more attention to strengthening fundamentals.

Raising capital and liquidity ratios is likely to be a major focus area. "Finance industry will face strong headwinds from regulatory bodies requiring them to raise capital and liquidity ratios," pointed out Walia.

Levels of Non Performing Loans (NPLs) have been rising and analysts expect these to peak in 2010 and impact bank balance sheets. Banks in the region though will be able to sail through, they said.

"Write-offs from the recession will continue to mount and will impair banks' ability to continue lending. However, low central bank interest rates will help them over this difficult period," said Walia.

By Q3, analysts expect a more positive scenario. Choudhry opined that government measures would play a significant role in boosting market sentiment. After weathering recent tough liquidity conditions, banks need more liquidity, she added.

By Shveta Phatak

© Emirates Business 24/7 2010

News Link: http://www.zawya.com/Story.cfm/sidZAWYA20100104043032/2010%20will%20put%20Arab%20markets%20back%20on%20international%20radar

Saudi market cap rises by 29.31% to SR1.20 trillion
Posted by Arab News
Khalil Hanware | Arab News
Sunday 3 January 2010



JEDDAH: The Saudi stock market began the first day of trading in 2010 on a positive note on Saturday after a roller coaster 2009.

The Tadawul All-Share Index (TASI) closed 19.87 points or 0.32 percent higher at 6,141.63. The sector gains for the day ranged from 0.05 percent by the Real Estate Development sector to 1.74 percent by the Telecommunication & Information Technology sector where as the sector losses ranged from 0.11 percent by the Banks & Financial Services sector to 1.06 percent by the Industrial Investment sector. The market breadth remained positive with 57 advancers against 53 decliners giving an AD ratio of 1.08, the Jeddah-based Financial Transaction House (FTH) said in its daily market commentary.

The Petrochemical Industries index closed 0.84 percent higher at 5,441.94. Shares in Saudi Basic Industries Corp. (SABIC) increased by 0.30 percent to SR82.75 while shares in Rabigh Refining and Petrochemical Co. (Petro Rabigh) gained 0.56 percent to SR35.70. Saudi Kayan Petrochemical Co. shares surged 1.37 percent to SR18.45.

The only loser in the sector was Saudi International Petrochemical Co. Its shares closed on Saturday at SR23.80, down 0.21 percent.

In the Banks & Financial Services sector, shares in Riyad Bank, Bank Albilad, Alinma Bank, Arab National Bank and Bank AlJazira declined on Saturday.

Shares in Etihad Etisalat jumped 3.46 percent to close at SR44.90 on Saturday. Saudi Telecom Co. (STC) shares gained 0.45 percent to SR44.30.

The stock market turnover was over SR1.44 billion on Saturday.

At the end of 2009, TASI closed at 6,121.76 points compared to 4,802.99 points in the previous year. The index gained 1,318.77 points or 27.46 percent last year. The highest closing level for the index during the year was 6,568.47 points as on Oct. 24.

The total market capitalization in 2009 increased by 29.31 percent to SR1.20 trillion ($318.80 billion), according to Tadawul’s Annual Statistical Report 2009, released on its website on Saturday.

The total value of shares traded for the year 2009 reached SR1.26 trillion ($337.07 billion) compared to SR1.96 trillion ($523.45 billion) for the previous year, a drop of 35.61 percent.

The total number of shares traded in 2009 reached 57.34 billion compared to 60.82 billion shares traded during the previous year, decreasing by 5.73 percent.

The total number of transactions executed in 2009 fell by 30.07 percent to 36.46 million compared to 52.14 million trades in 2008, the report said.

The daily average value of shares traded during the year 2009 dropped by 35.35 percent to SR5.06 billion compared to SR7.82 billion in the previous year.

The daily average number of shares traded (adjusted) in 2009 was 229.35 million compared to 242.31 million shares for the previous year, decreasing by 5.35 percent.

The Tadawul report said petrochemical sector was the most active sector in term of volume of shares traded in 2009. The number of shares traded for the sector reached 10.98 billion that represent 19.15 percent of the total volume traded during the year, followed by the Banks & Financial Services sector with a volume of 8.90 billion shares or 15.52 percent of the total shares traded during the year and the Insurance sector with 5.58 billion shares traded or 9.74 percent of the total shares traded during the year 2009.

The petrochemical sector also led the market in term of value of shares traded in 2009 amounting to SR299.90 billion or 23.7 percent of the total value traded, followed by the Insurance sector at SR201.11 billion or 15.91 percent and the Banks & Financial Services sector at SR149.42 billion or 11.82 percent of the total value traded.

The Insurance sector was the most active sector in term of number of transactions with 8.58 million trades that represent 23.55 percent of the total transactions executed during the year, followed by the Petrochemical Industries sector with 5.93 million trades or 16.28 percent and the Agriculture & Food Industries sector with 3.47 million trades or 9.51 percent of the total transactions during 2009.

News Link: Arab News

Saudi, Japan JV taking care of Jeddah wastewater
Posted by Arab News
Shaheen Nazar | Arab News
Sunday 3 January 2010


JEDDAH: The wastewater treatment plant that was built last year near the Musk Lake in the east of Jeddah is operating smoothly, treating up to 15,000 cubic meters of water per day (m3/day).

The 60,000-m3/day-capacity plant has “the ability to dry up the lake in one year,” said Nizar Kammourie, chief executive officer of Suido Kiko Middle East, a joint venture between Saudi Brothers Commercial Company and Suido Kiko Kaisha of Japan.

In light of negative rumors about the lake following November’s floods, Kammourie’s statement lends weight to the Jeddah Municipality reassurances that the lake is safe.

Suido Kiko Middle East is working on two other projects in Jeddah that will be ready for operation this year. The first is Al-Khomrah wastewater treatment plant, which will receive industrial waste as well as domestic waste. The second project is a seawater desalination plant on the shores of the Red Sea in south Jeddah. The plant near the Musk Lake has been built under a contract with the Jeddah Municipality. It applies the most advanced sewage water treatment technology called MBR (membrane bio-reactor). This is said to be the largest facility of its kind in the entire Middle East. Kammourie said the Japanese technology is capable of treating sewage water to the point of making it “almost drinkable.”

On a visit to the plant, Kammourie displayed the treated water in a glass claiming it is consumable, adding that it requires one more stage of treatment called reverse osmosis (RO) if needed on a commercial basis. He said his company would increase its capacity gradually as and when the municipality wants them to do. So far, the plant is not taking sewage water from the lake and only concentrating on sewage brought from Jeddah everyday by trucks. “We have proposed to the municipality to link our plant with the Musk Lake. Given the opportunity, we have the ability to dry up the lake in one year,” he said.

The contract between Suido Kiko Middle East and the Jeddah Municipality is only for the daily supply of sewage water. Kammourie said his company has set strict parameters to accept truckloads. Among the parameters are PH, TDS, color and smell. This is to ensure that no industrial waste is mixed with domestic waste.

The company has trained Saudis to handle the sophisticated machines installed on the plant. The site also has Japanese experts, besides the usual work force from Asian countries. The treated water is collected in a pond and so the municipality has laid a pipeline to take the water to the eastern forest for irrigation.

Work on the other water treatment plant at Al-Khomrah in the south of Jeddah is in progress. According to Kammourie, it will be ready by July this year. It will have a capacity to treat 25,000 m3/day of industrial waste and 25,000 m3/day of domestic waste. The recycled water can be used for irrigation as well as agricultural purposes. Even the factories which would supply the wastewater themselves can use it. But it is for the municipality to decide what to do of this water. “If no one takes this water it can be disposed of in sea. It’s safe,” said Kammourie. But, he said, the ultimate decision about the use of recycled water lies with the National Water Company, an autonomous body formed by the Ministry of Water and Electricity. Launched in 2008, it is mandated to oversee water treatment and water supply in the Kingdom.

The desalination of seawater is another important area of water management in the Kingdom. This is the responsibility of the Saudi Water and Electricity Company (SWEC).

Suido Kiko Middle East is working on another ambitious project for the desalination of seawater in Jeddah. Known as South Jeddah Corniche (SOJECO), the plant is scheduled to be ready by the fourth quarter of 2010. It will supply water to the upcoming Jeddah Industrial City Phase II. It will also cater to the needs of Al-Khomrah area, which is 10 km from the plant. While the facility is being built by the Saudi-Japanese joint venture, it will be run by SAWACO, a private company involved in desalinating seawater and supplying to consumers in and around Jeddah. It is owned by Saudi Brothers, the local partner of Suido Kiko. SOJECO as well as the wastewater treatment plants in Al-Khomrah and east Jeddah are based on Japanese technology. “You can see very noticeable Japanese elements in all of our projects. We have a joint venture with them. But this apart, they have good engineering and they have good equipment. In MBR, Japan is the world leader. With regards to anything to do with membrane filtration, the Japanese are ahead. They have a distinctive advantage whether it is UF, MF, RO or MBR,” Kammourie said.

Besides Jeddah, Suido Kiko Middle East has its plants in Qatif and Ras Tanura while it is also working on projects in Najran and Taif. It is running a plant in the Asab oil field in Abu Dhabi as well.

The transfer of Japanese technology to Saudi Arabia is coordinated by Japan Water Desk, the Jeddah branch of Japan Water Cooperation Center for the Middle East (JCCME), a non-profit organization of Japan’s Ministry of Economy, Trade and Industry.

According to Kyoji Nakano, representative of Japan Water Desk, his organization assists Japanese companies in transferring their technologies to the Kingdom and encouraging Japanese companies to invest in the Kingdom in the field of desalination, wastewater treatment, recycle of treated water and other fields of business.

News Link: Arab News

Investors eyeing Q4 results of listed firms
Posted by Arab News
Abdul Jalil Mustafa | Arab News
Saturday 2 January 2010


JEDDAH/AMMAN: Saudi shares came under selling pressures last week amid expectations of retreating profits, particularly for the banking sector.

The Tadawul All-Share Index (TASI) shed nearly 2 percent last week, closing at 6,121.76 points, which represented a 27.5 percent rise since the beginning of 2009, according to the weekly report of the Riyadh-based Bakheet Investment Group (BIG).

The retreat was aggravated by statistics published last week by the Saudi Arabian Monetary Agency (SAMA), which predicted a 20 percent decline in banks' profits in November compared with those for October, the report said.

The BIG expected the Saudi market to be the scene for "narrow fluctuations" next week with investors eyeing the results of listed firms for the fourth quarter of 2009.

Last week, the Capital Market Authority (CMA) announced the final decisions of the Committee for the Settlement of Securities Disputes against investors. The CMA has imposed sanctions on five people for insider trading and stock price manipulation.

Jazan Development Co. was the top gainer last week as its shares surged over 3 percent to SR13.45. Shares in Mouwasat Medical Services Co. rose by 2.51 percent to SR61.25, National Agriculture Marketing Co. by 2.15 percent to SR42.80, Jarir Marketing Co. by 2.10 percent to SR133.75 and Fawaz Alhokair Co. by 1.65 percent to SR36.90.

The major losers last week were Al-Sagr Cooperation Co., down 15.08 percent, Anaam International Holding Group Co. (10.78 percent), Saudi Pharmaceutical Industr. & Medical Appliances Corp. (9.06 percent), Al-Rajhi Company for Cooperative Insurance (7.53 percent) and Allied Cooperative Insurance Group (7.30 percent).

Saudi Basic Industries Corp. (SABIC) shares dropped slightly to SR82.50 last week.

The value of Saudi traded shares increased to SR13.95 billion last week from SR12.57 billion in the previous week.

Arab stock markets are expected to focus attention early in the new year on the annual results of listed firms which are expected to start going out next week, financial analysts said Friday.

"Regional stocks are expected to move sideways in the coming period as investors are apparently concerned over the 2009 results," an Amman-based portfolio manager said.

"We believe that annual profits will represent the main moving factor for Arab markets in the coming couple of weeks," he said.

"However, developments on global markets, clues to world recovery and oil prices will continue to be key elements to reckon with," he added.

Jordanian shares were narrowly volatile last week with persistent lack of liquidity and weak foreign buying, analysts said.

The all-share price index of the Amman Stock Exchange closed week flat at 2,534 points, according to the ASE weekly report.

Kuwait's KSE all-share price index shed 0.7 percent last week, closing at 7,005 points.

The all-share index of the Dubai stock exchange went up by 2.6 percent last week to close at 1,804 points, while the Abu Dhabi bourse gained 2.8 percent to close week at 2,774 points.

The UAE stocks gained only 10 percent throughout 2009 retreating from a 50 percent rise in June. "It was the most volatile year in the country's stocks history," said Walid Khatib, head of trading at the Dubai-based Daman brokerage firm.

He expected UAE and other regional markets to be responsive to developments relating to the Dubai World debt rescheduling moves and other regional events in the coming weeks.

Egypt's AGX30 index, measuring performance of the market's 30 most active stocks, lost 2.7 percent last week to close at 6,209 points.

The GulfBase GCC Index fell 0.89 percent to 3,726.06 points last week. The value of GCC traded shares, however, surged by 10.57 percent to $5.79 billion and volume increased by 1.08 percent to 3.76 billion of shares.

News Link: Arab News

Egypt is largest and most authentic consumer society in Arab World

Posted by BI-ME eNewsletter
Source: BI-ME , Author: BI-ME staff

Posted: Wed December 30, 2009 11:26 am

EGYPT. With the sheer size of its population, Egypt has been recognised as the largest and a truly authentic consumer society in the Arab World, creating the kind of environment wherein competition thrives and consumers have a real choice.

The same competitive environment also serves as an ideal breeding ground for developing world-class brands, especially since the Egyptian market has thousands of brands that are only waiting to stand out, according to the brand expert BrandCentral.

Although it is already a highly self-sufficient economy, Egypt can further enhance its overall economic performance by helping local manufacturers and business organisations cultivate brand loyalty among the country's millions of consumers, which will help create powerful local brands that can compete internationally and reduce the Egyptians' reliance on international brands.

"Egypt has always been the focus of most industries as it is the largest, real consumer society in the Arabic speaking world. It is one of the oldest economies too.

The one thing that is still missing in Egypt is a culture of branding within the local business community. Brand loyalty is not yet well established in Egypt, which is why Egyptian consumers are loyal to very few local brands that enhance Egypt's image.

In reality, there are thousands of brands in the market that are waiting to shine," says Ibrahim Lahoud, Director of Strategy and Brand Communication, BrandCentral.

Egypt's consumer market is dependent largely on price or on various benefits being offered by certain products, which is, strictly speaking, not brand loyalty, BrandCentral explains.

In this system, clients can easily shift allegiance to a new brand if the competition offers a better price or a new product. Nonetheless, BrandCentral points out that it expects a gradual paradigm shift as Egyptian businesses are now increasingly appreciating the long-term, strategic value of branding.

"Based on our experience, there are several businesses that are pushing for reforms in their branding strategies. Somehow, the market is realising how important branding is, not just as a visual manifestation, but mostly as the expression of the business organisation's soul and philosophy, and as a powerful instrument to get closer to the consumer's heart," says Lahoud.

"BrandCentral's work with various local business organisations has achieved tremendously positive results. As a brand consultancy and design communication firm, our goal has always been to help local businesses create brands that are truly relevant, emotional, perennial and act as vehicles for values and attributes that their businesses stand for.

Furthermore, our clients appreciate the fact that we are an Arab company that identifies with and understands the Arab market. We are here because BrandCentral truly believes in the long-term potential of the Egyptian market," added Lahoud.

BrandCentral also pointed out that the value of branding becomes even more apparent in the aftermath of the global economic recession, as consumer spending trends now favour the more reliable, tested and proven brands that give greater value for money.

"Smart marketers know that in order to make money, they have to spend money. Where do they spend that money? The answer is branding.

If brands that are currently suffering from the depression had been thoroughly developed much earlier, they would have certainly enjoyed a huge competitive advantage during the economic squeeze.

The fact is that in bad times, nobody spends on trial and error; instead, we consumers spend on reliable, tested and proven brands. This illustrates why creating wonderful, memorable and visible brands must be a top priority for any business entity whether it is during a boom time or a downturn," concluded Lahoud.

News Link : BI-ME eNewsletter

Middle East IPO deal values in 2009 are one-sixth of 2008, says Ernst & Young

Source: BI-ME , Author: BI-ME staff

Posted: Tue December 29, 2009 1:56 pm

INTERNATIONAL. Reflecting the general state of the regional IPO market, the year-end IPO update by Ernst & Young states that total regional IPO deal values in all of 2009 came in at approximately one-sixth the value of all IPOs in 2008.

Middle Eastern markets raised US$2.06 billion from 15 IPOs until 25 November this year as compared to US$12.46 billion in all of 2008.

Fourth in the region dominated by the insurance sector
Of the four regional IPOs between October and November of 2009, three were Saudi Arabian insurance companies and one bank in Syria.

Syria’s Albaraka Bank was the biggest IPO raising US$37.23 million followed by Saudi Arabia’s Gulf General Cooperative Insurance Company (Al Khaleej Insurance) at US$21.3 million.

Al Alamiya Cooperative Insurance Company and Buruj Cooperative Insurance Company, both from Saudi Arabia, raised US$16 million and US$13.87 million, respectively.

According to Phil Gandier, Managing Partner, Transaction Advisory Services, Ernst & Young Middle East, “In 2009 IPO activity was concentrated in three countries; Qatar raised US$952.03 million, Saudi Arabia raised US$1.03 billion and Syria raised US$76.99 million in 2009.

There has been no IPO activity in any other country in the Middle East in 2009. It is difficult to foresee with any certainty when the IPO activity will pick up even though as many as 114 IPOs have been announced.”

Asia and South America drives growth
Globally, after stagnant markets in the first two quarters, IPO activity started to pick-up in the second half of 2009, principally driven by deals from Asia and South America.

These two regions have raised US$68.6 billion in listings so far in 2009 accounting for 72% of the total IPO value, according to the update.

The number of deals for the 11 months is dramatically down in 2009, with only 459 IPOs listing so far in 2009 (compared to 740 deals for the same time period in 2008).

However, from 1 January to 30 November 2009, the capital raised globally was US$94.9 billion, which is at parity with the amount raised in the 11 months of 2008 (US$94.6 billion).

Gregory K. Ericksen, Global Vice Chair Strategic Growth Markets for Ernst & Young says: “Emerging market activity has dominated IPO markets this year with Chinese companies the largest source of total funds raised globally.

Brazil’s stock market has seen a flurry of activity, notably in financial services. China and Brazil are clearly playing an integral role in leading the global economic recovery.”

Capital shifts accentuated by the recession
IPO activity in North America declined in value by nearly 38%, from US$26.6 billion in the 11 months in 2008 to US$16.6 billion with 66 IPO listed so far this year. European IPOs only accounted for 10% of total IPO deals and a modest US$5.0 billion in value.

This compares with 22% of total value of IPO deals last year, with 160 IPOs raising US$13.6 billion. However, we did see some significant activity in the US in the second half of 2009 and finally in Europe in fourth quarter with some high profile listings received well by the market.
IPOs by sectors and stock exchanges

The leading sectors by number of deals were industrials (77 IPOs); materials (68); and high technology (55). The following three sectors (out of 12) accounted for 50% of total capital raised: financials (US$21.7 billion), industrials (US$16.1 billion) and real estate (US$9.5 billion).

The top three IPOs by capital raised were Banco Santander Brazil SA, the largest IPO this year and the largest in Brazilian history, which raised US$7.5 billion, China State Construction Engineering Corp, which listed in Shanghai in July at US$7.3billion, Metallurgical Corp of China (US$5.2 billion on the Shanghai and Hong Kong stock exchanges). Of the top 10 IPOs, six are from emerging markets.

By funds raised, the top three exchanges for the year to date are the Hong Kong Stock Exchange, which accounted for 18.7% of capital raised (US$17.7 billion); New York Stock Exchange 17.9% (US$16.9 billion) and Shanghai Stock exchange for 17.0% (US$16.1 billion).

The top three exchanges by deal activity are the Shenzhen stock exchange (73 IPOs); Hong Kong Stock Exchange (47) and KOSDAQ stock exchange (46).

Ericksen concludes, “Dynamic companies from emerging markets continue to list on their local stock exchanges. The principal exchanges in China, India, Brazil and other emerging markets are now mature enough to source funding for the very largest companies seeking listings.”

News Link: The BI-ME eNewsletter

Saudi Arabia market for U.S. wheat
Posted by Western Farm Press
Dec 29, 2009 9:23 AM

U.S. Wheat Associates (USW) recently conducted a seminar in Riyadh, Saudi Arabia, to introduce U.S. wheat and the U.S. marketing system to the Saudi Arabian wheat buying organization, Grain Silos and Flour Mills Organization (GSFMO).

Conducted in cooperation with local USDA/Foreign Agricultural Service and State Department officials, the seminar was the first ever held exclusively with this new international wheat buyer, and was designed to build confidence in U.S. wheat crop quality, handling, and commercial reliability.

The Kingdom of Saudi Arabia has decided to end domestic wheat production by 2016 and may eventually need to import more than 2.5 million metric tons (91 million bushels) of wheat per year.

“Competition for this market is intense,” said Dick Prior, USW regional vice president, Cairo, Egypt.

“The Canadian Wheat Board monopoly is allowing select traders to offer comparable quality Canadian wheat at delivered prices well below what our exporters can offer so establishing the value of U.S. wheat with GSFMO is critical,” Prior said.

“As of Dec. 17, Saudi Arabia had purchased almost 60,000 metric tons (2.2 million bushels) of U.S. hard red winter wheat in marketing year 2009/10 (June-May).

Prior said the seminar was a full year in planning. With perseverance from the USW Cairo staff and strong personal support from GSFMO Director General Waleed Khureiji and U.S. Ambassador to Saudi Arabia James Smith, about 20 GSFMO staff and Saudi authorities met at the GSFMO offices in Riyadh in late November.

USW is the industry’s market development organization working in more than 100 countries on behalf of America's wheat producers. The activities of USW are made possible by producer check-off dollars managed by 19 state wheat commissions and through cost-share funding provided by USDA’s Foreign Agricultural Service.

For more information, visit www.uswheat.org

News Link: Western Farm Press