Gulf Business Review

Monitoring the Latest News

April 2009

Dear reader,

Welcome to the monthly Gulf Business Review Newsletter which offers a concise review of key developments in the region suffering from low oil prices.

Despite a slight pick-up in March, the prospects of business awakening in the Gulf are still grim.

Across the region the picture is mixed. On one hand, the slump in real estate prices, particularly in Dubai has affected liquidity of Islamic Banks, investing pursuant to Sharia law principles. At the same time Kuwait is expanding its telecom reach in Asia and Africa and Saudi Arabia is lifting earlier imposed restrictions on citizens of other GCC countries engaging in economic activities in the country.

If you would like to learn more about this newsletter or forthcoming events, or perhaps would like to suggest an event or article for inclusion in the next edition, please do not hesitate to contact me on info@meconsult.co.uk

Kind regards

Maya Rusinowicz

Editor

MEC International Ltd

132-135 Sloane Street

London SW1X 9AX

Tel (+44) (0)20 7591 4816

Fax (+44) (0)20 7591 4801

Email: projects@meconsult.co.uk

www.meconsult.co.uk

HSBC UAE Lowers Salary Floors for Consumer Loans (14/04/2009)

HSBC Holdings Plc cut the minimum monthly salary required for personal and auto loans in the UAE by half to Dh10,000 ($2,720), in a possible sign credit is easing in the second-biggest Arab economy. HSBC Bank Middle East Ltd., the regional unit of Europe’s biggest bank, raised the minimum salary for personal and auto loans to Dh20,000 in November after the global credit crisis hurt the UAE economy and forced some employers to cut jobs. Read More…

GCC Warned Over Turmoil (16/04/2009)

As reported from Manama, GCC countries have been warned against potentially devastating effects of the global meltdown. The chairman of Bahrain Chamber of Commerce and Industry, Dr Essam Fakhro stated that "The financial crisis threatens economic and investment programmes."  Read More…

Plugging the Gap (18/04/2009)

Kuwait plans to sign a deal to import electricity from Qatar to cover possible power shortages until 2010, according to the country’s electricity and water minister, Nabil bin Salama.

Kuwait has one of the world’s highest per capita power consumption rates and has struggled to keep up with rising demand. With temperatures close to 50 degrees Celcius in the summer, the country’s electricity grid often fails to cope. Read More…

Zain Plans New Acquisitions (18/04/2009)

Kuwait’s Mobile Telecommunications Company, Zain, plans to spend up to $5 billion on new acquisitions by 2011. Zain wants to expand in Asia, Africa and the Middle East and is currently in talks to move into the Syrian market, according to Saad al Barrak who was interviewed by the London-based Asharq Alawsat newspaper. Read More…

Liquidity Crunch (18/04/2009)

Islamic Banks hit by the real estate downturn face a crisis that could include layoffs or more rescue measures if liquidity does not improve, with some players aiming simply to survive instead of grow. Islamic finance has grown into a $1 trillion industry built on a belief of ethical investing under Sharia law, but poor earnings by Gulf Islamic banks due to exposure to the ailing property sector have thrown regulation of the business into the spotlight. Read More…

Dubai Tourism Defies Global Economic Downturn (20/04/2009)

Tourism to the Gulf emirate of Dubai grew by eight percent last year despite the global financial crisis, according to the city-state’s tourism department. It said the number of tourists rose to 7.5 million in 2008, compared with 6.95 million in 2007 - an increase of 8.3 percent. Dubai is popular for its year-round hot weather and large number of shopping malls. Read More…

Saudi Arabia Lifts Restrictions (21/04/2009)

Saudi Arabia has lifted all restrictions on citizens of other Gulf Cooperation Council (GCC) states engaging in economic activities and independent professions in the Kingdom. The aim of this operation is to accelerate the process of economic integration in coordination with the steps taken to establish the GCC Common Market. Read More…

Gulf States Studying Proposal to Introduce Green Tax (21/04/2009)

The Gulf Cooperation Council states are studying a proposal that seeks to impose "Green Tax" to protect the environment in the region. The tax would be modelled on the lines of similar system in some of the EU and Far Eastern countries as specified by Ali Al Kiyumi, the Director General of Nature Conservation. Read more…

Record Gulf Remittances Bleak Comfort for Expats (21/04/2009)

Significant increase from expatriates working in Gulf countries despite global economic crisis. Studies show that remittances of Pakistanis in March surpassed the previous monthly record of 673.5 million dollars in December 2008 and clocked up a significant increase from expatriates working in the Gulf countries.

Read More…

Job Market ‘Bucks Global Downturn’ (22/04/2009)

The existing global downturn had had a negligible effect on Bahrain with unemployment rates among Bahrainis being maintained at a low 3.5 per cent.

On the other hand, there was evidence that no jobs were being lost due to the economic meltdown with more expatriates coming into Bahrain to take up employment than those leaving the country after finishing their stay in the last three months, he said. Read More…

Dubai Prices Slump 40 percent (25/04/2009)

Property in Dubai have plunged by up to 40 per cent since December last year, a new study has found, as industry experts express hope in the possibility of an upturn in the real estate market of neighbouring Abu Dhabi. The new figures were released as analysts try to take stock of a turbulent period in the United Arab Emirates’ (UAE) previously buoyant property market. Read More…

Nakheel Debt May Be Restructured (30/04/2009)

Dubai World, the government-owned investment group, may be forced to restructure a $3.5 billion bond issued by property unit Nakheel. Nakheel’s sukuk bond due in December has slumped to 83 cents on the dollar, raising the yield to 52 per cent, on concern the company may be unable to repay its debt after house prices more than halved since August. Read More…