Dubaiblog

China might become a net aluminum importer by 2010

2007-09-04T05:02:00.000-07:00

Chinanews, Shanghai, August 31 – According to the sales director of UC RUSAL, the biggest aluminum and alumina producer in the world, China might become a net aluminum importer by 2010, with the great demand for aluminum products in its domestic market increasing continuously
Besides China, Russia, India and Brazil all have a great demand for aluminum, as the prices of steel and zinc have greatly increased. Aluminum products are ecologically friendly, for it is easy to recycle them. It is estimated that the need for aluminum of the four countries mentioned above will increase 5.5% annually in the future, while the demand of the global market will increase by 3.6%. By 2010, about 36% of aluminum products will be consumed in China, and the current proportion is 25%.
UC RUSAL has not formally entered the Chinese market, for the aluminum price here is lower than in London Gold Exchange. It is planning to enter the market 3 years from now, when there will be a great gap between demand and supply.
Source: Chinanews

Chinese property industry to remain hot next 10 years

2007-09-04T05:00:00.000-07:00

Chinanews, Beijing, September 4 – Due to the wide demand-supply gap in the property market in China, the property industry in the country is expected to maintain a rapid growth in the next ten years.
According to Yang Shen, former Vice Minister of Construction, total floor space of houses had increased by 8.86 billion sq m in 1980 – 2006. The average floor space of houses per capita in China is larger than the figure in many other countries.
In the past decade, the property industry has been soaring continuously at an average annual growth of 14%, contributing to 4.5% of China’s GDP. It is estimated that the growth of the property industry will take up 8% of the country ‘s GDP by 2010.
With nuclear family taking the place of extended family in China, housing demand has become stronger and stronger in the market.
In the next 10 years, commercial houses with the total floor space of 9.9 billion sq m will be needed. That is to say, the property industry must manage to keep an annual growth of 13.2%. However, taking China’s shortage of farmland into consideration, it will be very hard for the property industry to achieve it.
Nevertheless, the shortage of land might also present a chance of rapid growth of business value of the property industry
Source: China news

World's most overpriced real estate markets

2007-09-04T04:14:00.000-07:00

Buy a home in Monaco and you'll enjoy iconic beaches, glamorous casinos, a renowned arts and music scene, pulsating nightlife and boutique-packed boulevards. You'll also pay for it.That's because the Mediterranean principality tops our list of the world's most overpriced real estate markets. The rankings were compiled by calculating an effective annualized rate of return on a property based on annual cash flows derived from renting and adjusted for capital gains tax, transaction fees, operating costs and maintenance, appreciation and inflation. We then flipped the return rate to resemble the more familiar price-to-earnings (P/E) measure.
Monaco's housing market earned a P/E ratio of 74.07. What's more, the well-earned moniker of "tax haven" apparently doesn't apply to transaction costs, which rack up to a 20% premium when buying and selling a property. Rome landed at No. 2 with a P/E of 50.51; it's a slow growth market, which remains very expensive. Representing North America in the world's top 10 were Los Angeles (5th place at 26.88) and Vancouver (6th at 26.81).The relationship between rental yields and housing costs matters because a low rental yield is a good indication of a stretched market--one that has a bubble--since these markets are more likely to face downward price pressures or grow at a slower rate. Possible higher returns attracts more buyers and pushes up prices. India's disparate markets illustrate this. Bangalore has a 9.7% rental yield helping it to an 8.74 P/E, a good sign the market has room to grow. Last year prices climbed there by 16.5%. Mumbai, which posted a P/E of 17.21%, saw prices grow 6.6%.Behind The Numbers To arrive at our numbers, we inverted the effective annualized rate of return so each figure resembled a price-to-earnings measure that was easier to read. Think about each market like you would a stock: the higher the price-to-earnings figure, the more you have to pay to get one dollar of return. Many of the world's most expensive markets, such as London and New York, didn't make the top 10, and were beaten out by less expensive markets that had lower yields and smaller rates of appreciation. We measured 50 financial capitals in every continent except Antarctica. For the most part this meant one city from each country--London for Great Britain, Bangkok for Thailand, Warsaw for Poland--but for countries like India, China, the U.S., Australia, Canada and Switzerland where there were multiple, distinct financial centers we measured a variety of cities: Geneva and Zurich in Switzerland and Shanghai and Beijing in China, for example. Our valuations were based on data from GlobalPropertyGuide.com, an international real estate research firm. For each market, it assumed no debt financing; a constant cost of capital as the buyer wouldn't shift funds based on where they buy; a 10-year hold of the property and that the property would be a nonprimary residence.Pricing data were based on city center properties of equivalent size. An investor looking to buy in Rio de Janeiro likely doesn't consider Rio's favelas viable options, so data skewed by that cut of the housing stock isn't useful. In basing the numbers on the prime cut of housing markets from Kiev to Manhattan, the resultant valuations are more comparable as investment options. Purchase costs included transaction costs. In Geneva, that represents an effective 0.36% hike on the paid price, while in Seoul, buyers pay 20.88% above the property's base. Here, for example, transaction fees include housing bonds, legal fees, registration tax, acquisition tax, estate agent's commission, education tax, stamp duty and a special tax for rural development. Suddenly, a $500,000 apartment has a real cost of $604,400. Yearly operating costs and maintenance were valued at 10% of rental yields across markets, a standard estimation in pricing calculations. Projections for the future value of the home were calculated by annually compounding the original capital value based on each respective country's five-year average trailing gross domestic product growth rate and inflation, as calculated by the International Monetary Fund, which has a good rate of correlation to housing price growth. Cash flows were predicted by the annual rental yield minus operating costs and maintenance. Bangalore had the highest rental yield. There, landlords can command a 9.7% return per year on the value of their property something that undoubtedly stokes the jealousy of countrymen in Mumbai, where the strict rent controls of the local Maharashtra Rent Act beat rental yields down to 3.27%.After 10 years, when it came time to sell, we tacked on capital gains taxes and sellers' costs--something that's a serious headache in Moscow, where sellers' costs amount to 18% of the sales price; far better to live west of Russia in Latvia, where sellers' costs are 3% and capital gains nil.As N.Y.U. Stern School of Business finance professors Anjolein Schmeits and Stijn Van Nieuwerburgh point out, this system of calculation doesn't discount for risk and volatility. For the purposes of this article we decided not to adjust for these elements in part because many of the markets have undergone such dramatic transformations in the last 10 years that calculating a beta rating--what an economist would use to measure an asset's volatility against the market--wouldn't accurately represent the housing markets of rapidly developing countries like India or Latvia, for example.
Source: Menafn/Forbes

Saudi lenders $41bn foreign assets

2007-09-02T02:30:00.000-07:00

Saudi Arabia's commercial banks saw their combined foreign assets reach $41.2bn during Q2, an increase of 8.4%, according to statistics released by the Saudi Arabian Monetary Agency and cited by Arab News. Meanwhile, total bank deposits lifted by 4.8% to hit $171.2bn during Q2.

Source: AMEinfo

Saudi insurance amrket booms

2007-09-02T02:28:00.000-07:00

Saudi Arabia's insurance market grew almost 33% in 2006 after the kingdom made motor and health insurance mandatory, reported Reuters. Gross premiums paid to Saudi insurers by clients rose to 6.9bn riyals from 5.2bn riyals in 2005, while health insurance premiums grew 64% to 2.2bn riyals.

Source: AMEinfo

AIMS International moves to DIFC

2007-09-02T02:26:00.000-07:00

AIMS International, one of the largest executive search consultancies in the world with 85 offices in over 50 countries, has partnered with Talent Management Consultancy, a leading recruitment specialist in the Middle East, to launch the biggest executive search hub in the EMEA (Europe, Middle East and Africa) region. The global hub will operate out of its new offices in DIFC (Dubai International Financial City) and will serve over 45 multinational clients across the EMEA region as well as clients from across the globe.

Source: AMEinfo

800 companies registered with the Ras Al Khaimah Free Trade Zone

2007-09-02T02:25:00.000-07:00

Nearly 800 companies registered with the Ras Al Khaimah Free Trade Zone (RAKFTZ) during H1, with a total capital investment of $272m, reported Gulf News. The number of companies registered at the RAKFTZ reached 3,450 by the end of June. Around 31% of investors in H1 originated from Europe, with just 6% coming from the US.
Source: AMEinfo

UAE announces law to restrict shipments

2007-09-02T02:21:00.000-07:00

WASHINGTON (AP) — The United Arab Emirates announced a new law Friday permitting it to ban or restrict shipments for national security or foreign policy reasons.
The Bush administration had pressured it to crack down on companies believed to be smuggling equipment to Iran to build explosive devices killing American soldiers in Iraq and Afghanistan.
U.S. pressure for tougher trade laws is part of the Bush administration's broader campaign to contain Iran amid tensions over its alleged pursuit of nuclear weapons and support of the Iraqi insurgency. Just this week, President Bush said: "Iran's actions threaten the security of nations everywhere."
The new law permits authorities to ban or restrict imports, exports or passthrough shipments for reasons of health, safety, environmental concerns, national security or foreign affairs. It creates a new commission for setting these rules, and membership will include federal ministries and executives from private companies.
The passage of the law was announced by the country's president, H.H. Sheikh Khalifa bin Zayed Al Nahyan.
The White House had expressed concerns publicly and through diplomatic channels in Washington about troubling shipments to Iranian front companies operating in Dubai.
The UAE is among the world's largest shipping hubs for international commerce, and is located just across the narrow Strait of Hormuz from Iran. The countries have been trading partners for centuries. Much of Iran's trade flows through Dubai, which also ranked as the top export destination in the Middle East last year for American companies with $12 billion worth of goods.
Dubai business executives had protested the U.S. pressure.
"The regulation of re-exports should be established by the UAE without the threat from the U.S.," Hamad Buamim, the director general of the Dubai Chamber of Commerce and Industry, wrote in a letter to the Bush administration obtained by the AP. "Only the UAE is able to judge the balance of concerns for re-export relative to national security against the risk of the trade moving to another re-export location."
U.S. intelligence agencies have collected evidence that at least 11 individuals and companies operating in the United Arab Emirates are smuggling electronic components and devices — sometimes through Iran — to build explosive devices used to ambush American soldiers in Iraq and Afghanistan. The U.S. government effectively banned trade with them. The White House said its proof was based on "specific and articulable facts," which it did not describe publicly.
The companies include microelectronics manufacturers and industrial suppliers.
Partly to pressure the United Arab Emirates, the U.S. has proposed new restrictions on companies doing business in countries the White House would designate as "destinations of diversion concern." Those countries, not identified in the proposal, would include prominent shipping hubs with lax export laws. Companies shipping products through such countries would face tougher reviews for export licenses.
The Dubai chamber, which represents 88,000 companies, has bristled at the idea. It said it would be ineffective and inappropriate.
It was not immediately clear what effect the UAE's new trade law would have on the administration proposal.
Buamim urged the U.S. months ago to withdraw the proposal "while we continue to quietly negotiate in this area." Buamim said the chamber does not believe the UAE would be included under the U.S. proposal, although he complained the criteria was too vague. "Any country could be put into any category at any time," Buamim said.
The dispute highlighted the conflicted relationship between the United States and the UAE. The administration considers the emirates a close ally, especially on military matters in the Middle East. But Dubai was forced last year to abandon plans for Dubai-based DP World to take over significant operations at six major U.S. seaports amid intense national criticism.
The companies and individuals the Bush administration identified as shipping electronic components and devices for explosive devices killing U.S. troops in Iraq and Afghanistan are:
_Al-Faris of the UAE;
_Ali Akbar Yahya of Dubai;
_Amir Mohammad Zahedi of the UAE;
_Sayed-Ali Hosseini of Dubai;
_Mayrow General Trading of Dubai;
_Micatic General Trading of Dubai;
_Majidco Micro Electronics of Dubai;
_Atlinx Electronics of Dubai;
_Micro Middle East Electronics of Dubai;
_F.N. Yaghmaei of Dubai; and
_H. Ghasir of Dubai.
Source: Associated Press

Suez and Gaz de France merger deal likely

2007-09-02T02:17:00.000-07:00

Energy group Suez and state-owned Gaz de France will announce tomorrow a decision on whether to merge into what would be one of Europe’s biggest power companies, the French presidency has said.

Suez's board will meet today to ratify the long-delayed merger, Le Parisien daily said. The board of Suez “could meet on Sunday evening if a deal is concluded”, a source was quoted as saying.

Nissan in India

2007-09-02T02:11:00.000-07:00

Japan’s Nissan Motor and India’s Ashok Leyland, part of the Hinduja Group, said that they will join hands to produce light commercial vehicles for India’s growing market.
A joint venture, Vehicle Manufacturing Company, will have a medium-term target of producing more than 100,000 vehicles a year, a joint statement said. The venture is studying where in India to manufacture them.Nissan, which is Japan’s third largest automaker, and Ashok Leyland will also set up two other joint ventures to manufacture and assemble engines and other parts. “Following previous announcements relating to expanding our passenger car business in India, this latest investment will broaden our coverage of this market,” Carlos Ghosn, head of Nissan and France’s Renault, said.Nissan has been setting up a race with rivals Toyota and Honda for a slice of the Indian market, which is expected to see steady expansion as the country’s middle class grows larger every day. Ghosn had said in June that Renault and Nissan, in which the French automaker holds a controlling stake, were considering launching a low-cost $3,000 car in India.Renault announced in November that it would build a car factory in the southern city of Chennai with local partner Mahindra and Mahindra, a $902 million project which Nissan later joined.

Mobile phone operators meet

2007-09-02T02:09:00.000-07:00

MUSCAT — Some 70 senior executives are taking part in a three-day conference of Arab mobile phone operators that began in Salalah on Tuesday.
The meeting will cover a host of issues concerning mobile telecommunications in the region and provide a forum to discuss the latest technologies in the field.
Currently, there are 46 GSM operators in 21 countries providing mobile services to more than 130 million subscribers in the Middle East, according to Bishir Muhanna, head of Arab GSM Operators Group. "By organising this conference," a spokesman for Omantel, which is hosting the event, said, "we seek to get acquainted with the latest technologies and services in the field."
Source: Khaleej times

Etisalat launches service in Afghanistan

2007-09-02T02:05:00.000-07:00

ABU DHABI — Etisalat Afghanistan yesterday announced the launch of its GSM service across The Islamic Republic of Afghanistan, which is commercially available as of yesterday.
Minister of Communication and Information Technology for Afghanistan Amirzai Sangin said, “I am pleased to see Etisalat as a new entrant in the telecom market, launching in Afghanistan in accordance with the laws and policies established by the Ministry of Communication and Information Technology. I wish Etisalat Afghanistan success in competing to provide necessary services for the Afghan people.”
Etisalat Afghanistan’s coverage and wide range of services are now available in Kabul, Herat, Mazar-i-Sherif, Kunduz and Jalalabad. The cities and areas of Kandahar, Ghazni, Poli Khumri, Baghlan and Paghman will have coverage before Ramadan.
“This is an important day for Etisalat as we extend the number of our operational markets to 14 countries and export the Etisalat brand into our third market,” said Etisalat chairman, Mohammad Hassan Omran. “Our investment in Afghanistan is for the long term, which is the reason we bring to the country our values of openness; caring —both for our customers and staff; and innovation that come with it.”
The CEO of Etisalat’s Afghanistan operation, Salem Al Kendi said, “We are here to build a modern network for the Afghan people and offer world class services. Etisalat looks forward to helping Afghanistan become a telecommunications hub for Central Asia.” Etisalat Afghanistan will offer a wide range of services including: GPRS & MMS services, Ring back tones, Missed call notification and a discounted ‘family and friends’ package.Etisalat’s services will be available through over 1,000 retailers across the country and through its own Etisalat retail outlets. In addition Etisalat’s Customer Care center is available by dialing 888 (from an Etisalat mobile) or by dialing 0786 188 888 (from another network).
Source:Khaleej times

International Pearl Seminar in November

2007-09-02T02:03:00.001-07:00

DUBAI — The first International Pearl Convention will be held here in November, according to the Pearl Revival Committee. The exhibition will feature the world's second largest natural pearl.
The aim of the project is to revive the UAE's pearling tradition and highlight it as the keystone of the country's cultural identity, according to organisers.
The international convention is hoped to attract investors and industrialists to revive and promote the pearl industry.
"The convention will lay the foundation for a remarkable and unique revival that gives us back our wonderful history within the pearl industry," said Khaled Al Sayegh, Chairman of the Pearl Revival Committee. "Historically, the world's best pearls came from the Gulf. They were naturally created and collected by breath-holding divers. The discovery of large deposits of oil put an abrupt end to pearl industry in early 1930's. Those who once fished pearls sought prosperity in the economic boom ushered in by the oil industry," he pointed out.
One of the key aspects of the convention is the auction of the world's second largest natural pearl following 'The Pearl of Asia' with an approximate value of $8 million along with some of the world's rarest and most sought after pearls. Part of the revival imitative would be an industry report that will outline the economical and commercial potential of the pearl market. All funds raised from the event will be used to revive the virtually defunct regional pearl industry. Revival of the pearl industry is expected to boost the region's economy as a whole, which is now trying to tap more from non-oil industry.
Source: Khaleej times

New law on import, export procedures

2007-09-02T02:00:00.000-07:00

ABU DHABI — The President, His Highness Shaikh Khalifa bin Zayed Al Nahyan, yesterday issued Federal Law No. 13 of 2007 on commodities that are subject to import and export control procedures.
Chapter 1 of the new law authorises the authorities concerned to ban or restrict the importing, exporting or re-exporting of any commodity for reasons related to safety, public health, environment, natural resources, national security or for reasons related to the UAE’S foreign policy, taking into account any restrictions which may currently be imposed on those commodities by laws already in effect and by the existing powers of the authorities concerned, and in compliance with the international treaties that the UAE ratified or joined.The new Federal Law seeks to standardise such procedures throughout the UAE, since geographically-limited procedures would not provide the desired result of banning or restricting a particular commodity and because varying or differing control procedures would disrupt trade in the country as a whole.
Source: Khaleejtimes

The Bank of Tokyo-Mitsubishi UFJ in DIFC

2007-09-02T01:56:00.000-07:00

Dubai: The Bank of Tokyo-Mitsubishi UFJ, Ltd (BTMU), Japan's leading bank, has received a licence from the Dubai Financial Services Authority to start operation as an authorised firm in the Dubai International Finance Centre (DIFC).
The bank's new Dubai office will liaise with its existing Bahrain branch and four representative offices in the Middle East (Abu Dhabi, Istanbul, Cairo, Tehran), as well as the Japan Desk of the National Bank of Abu Dhabi, located in Dubai.
The new office will also access the network of 73 BTMU offices in Europe, Africa and Asia, areas which have deep financial ties with the Middle East, and which provide support and expertise for BTMU's customers in the region.
');
//-->

"The long and fruitful history of capital flows between the markets of East Asia and the Middle East continues with the opening of BTMU's office at the DIFC. BTMU's arrival here will contribute immensely to the corporate, government and project financing relationship between Japan and the wider Gulf region," said Nasser Al Shaali, Chief Executive Officer, DIFC Authority.
Hideki Gohbara, General Manager of the BTMU Dubai office, said: "The opening of an office at the DIFC, which has already attracted a number of international financial institutions and investors, will allow us to expand on new opportunities in this dynamic market as well as meet the growing needs of our existing customers."
The licence for BTMU is in line with the bank's strategy of achieving the highest level of service, reliability and coverage for its customers across the globe.
Source: Gulfnews

GE sells plastic division

2007-09-02T01:53:00.000-07:00

Hartford: General Electric completed a $11.6 billion sale of its plastics division on Friday, and plans to use the proceeds to help pay for a stock buyback programme.
The sale to petrochemicals manufacturer Saudi Basic Industries Corp (Sabic) is part of the US conglomerate's strategy of selling slower growth and volatile businesses such as insurance and invest in high-growth, high-technology businesses, such as health care and water processing technology.
The deal is expected to create a net gain, after taxes, of $1.5 billion. GE will use the proceeds to complete its current $27 billion stock buyback programme, with $12 billion of the $14 billion planned for 2007 in the second half of this year.

The plastics unit is a $6.6 billion global supplier of plastic resins used in automotive, health care, consumer electronics, transportation, building and construction, telecommunications, and optical media.
Its results have been weighed down by the rising costs of natural gas and raw materials since 2004. Profits for the division fell by 22 per cent to $674 million in 2006.
Source: Gulfnews

UAE in grip of hyper-inflation??

2007-09-02T01:50:00.000-07:00

Dubai: The UAE could face hyperinflation if the country does not use appropriate monetary policy tools to rein in the surging money supply and the liquidity overhang, according to analysts.
Due to the dirham's peg to the dollar, the UAE does not use any active inflation targeting measures; rather it follows the US policies.
While the US monetary policy's current priority is to infuse liquidity to save its economy from a credit squeeze arising out of the subprime crisis, the UAE faces huge surge in money supply.
If the US goes ahead with an interest rate cut and if the UAE central bank follows suit it could further accelerate the inflation in the country.

"A US rate cut leaves the UAE and Qatar with limited choices: They can continue to follow US monetary policy, lower their interest rates and risk an uncontrollable inflationary trend; or they can follow Kuwait's footsteps and free their currencies from dollar," said Reem Mansour, an analyst with Cairo-based HC Securities.
In the UAE vigorous economic growth in the recent years has fuelled a big surge in domestic demand, creating upward pressure on prices.
According to the Ministry of Economy the UAE inflation was at 9.3 per cent last year while independent estimates place the inflation to be above 9 per cent this year.
The UAE money supply (M2) rose 23.2 per cent to Dh399.3 billion in December 2006 against Dh324.1 billion in December 2005. The surge in oil prices from $35.1 per barrel in 2004 to $49.5 per barrel in 2005 and $59.5 per barrel in 2006 boosted liquidity in the market. Moreover, oil prices have continued to increase and reached an average of $67 barrel in August 2007.
Adding fuel to the flaring inflation in the country, the dirham fell 15.4 per cent against the euro from December 2005 to end of August 2007, and a 16.9 per cent against sterling as dollar depreciated against these currencies.
"The currency reforms debate has centred on the fact that credit growth remains strong and inflationary pressures have accelerated sharply in the past 18 months... The lack of policy tools to combat inflation is increasingly coming under scrutiny," said Steve Brice an economist with Standard Chartered in a recent report.
"The unprecedented economic boom driven by the oil revenues and the recycling of regional liquidity has seen the Gulf GDPs racing at close pace with some of the Asian GDP growth rates. But inflation is becoming a major limiting factor," Mohsin S. Khan, Director Middle East and Central Asia Department told Gulf News in May.
Currently, with the exception of Kuwait, Gulf states do not have any active inflation targeting policy. According to a recent report by National Bank of Dubai, GCC countries must make changes in the exchange rate policy and ensure central banks' independence.
Alternatively, variants of a fixed-rate system such as crawling pegs or target zones (like in Kuwait), so that an exchange rate target could coexist with an inflation target and will provide greater exchange rate flexibility.
Source: Gulfnews

Library on water

2007-09-02T01:46:00.000-07:00

BEIJING, Aug. 30 -- A library built on water opened to the public on Tuesday in eastern China's metropolis of Shanghai, giving people the pleasure of reading with great scenery.
The library is built on the Xiayang Lake in western Qingpu district of Shanghai, covering an area of 8,000 square meters, according to the local-based Xinmin Evening News.
In the six reading rooms of Qingpu Library people can choose from 330,000 books and 800 kinds of newspapers and magazines in collection. Among the six reading rooms, there is one designed especially for children, and one for literature fans.
The reading room for children is decorated as a pleasure ground. Equipped with computers, children can read digital books with multi-media effects, probably with the help from their parents.
The reading room for literature fans boasts of antiquity. With wide space and comfortable sofas, it can also be the site for literature salons.
Every reading lamp in the library uses energy saving bulb, a friendly gesture to the beautiful surrounding.

Source: Chinaview