Qatar no longer holds the balance of power when needy banks come seeking equity. The terms of recent investments by the country’s sovereign wealth fund in Russia’s VTB and Germany’s Deutsche Bank suggest that the emirate can no longer extract unusually favourable terms.

Five years ago, a global capital freeze meant cash-rich Qatar could make Barclays and Credit Suisse offer equity at a big discount or hybrid debt with double-digit coupons. True, investing in financial firms in the midst of a historic crisis was risky. All the same, the juicy terms made it easier for Qatar to enjoy outsize returns.

Today it’s a different story. Equity investors are looking for cheap entry points back into the market rally. Qatar isn’t in need as a capital provider of last resort. So there were no bells and whistles with its latest investments. Of the $3.3 billion issue by VTB, the emirate is expected to be allocated shares worth around $500 million, and at the same 10 percent discount offered to existing shareholders as well as sovereign funds from Norway andAzerbaijan.

The careful stage management of Deutsche’s recent 3 billion euros placing presented even less scope for Qatar to bag a big bargain. The new shares were sold at close to the prevailing market price. Qatar picked up at least 100 million euros of the issue, the Financial Times reported. The days when it would bank roll entire offerings may have passed.

Qatar can expect lower returns from its new investments, although they also involve less risk. As a sovereign buyer, part of Qatar’s return from VTB may be political. A closer relationship with Moscow wouldn’t hurt Doha’s foreign policy goals. The two are at odds over how to resolve the situation in Syria. China used its 2011 investment in VTB as a platform to co-invest with the bank in potash miner Uralkali and gold miner Polyus – albeit with mixed success.

Qatar needs to find a home for billions of dollars raised from gas exports each year. Regulation disincentivising banks from investing in each other gives the emirate some advantages. But it is no longer the only answer to the financial sector’s needs.

UAE-based telecommunications operator Etisalat today launched its first global corporate social responsibility and sustainability report to highlight activities across its 15 operating countries.

Entitled “Etisalat CSR & Sustainability Report 2012,” the report was released at The Institute for International Research (IIR) 10^th CSR Summit, held today in Dubai. The heads of CSR departments from Etisalat’s operations in Afghanistan, Benin, Gabon, Egypt, Niger, Nigeria, Pakistan, Saudi Arabia, Togo and the UAE all presented their latest projects.

Etisalat Egypt included the initiative “Origin”, a project to secure drinking water in 19 governorates to date.

Other African countries, such as Togo, have had aid contributions split between education and health, while Nigeria received aid through its annual Merit Awards Scheme – an educational scholarship program that focuses on undergraduate students of Electrical and Electronics Engineering, Computer Science, and Business Management courses.

The aid to Afghanistan included the distribution of more than 3,000 food packages in Kabul during the holy month of Ramadan.

Benin received supplies for elementary school students and the provision of seating and tables for nine colleges. Additionally, the company has supported the Ministry of Health in Benin through blood donations.

The telecommunications company also provided assistance to both Sri Lanka and Pakistan for water projects, sanitation aid, education, as well as aid to orphans.

During the conference, which was also sponsored by Etisalat, the telco group exhibited its high impact projects, including Mobile Baby (Tanzania), Emirates Energy Star (UAE) and the Etisalat Foundation (Egypt).

He cited Singapore’s currency regime as an example that Gulf states could adopt.

Gulf Arab monarchies embraced fixed exchange rate regimes to stabilise their currencies and import low inflation from overseas. But their economic cycles have diverged from the United States in recent years as Asiabecame the Gulf’s dominant trade partner.

“We in the GCC need more than an outdated four-decade old simple uni-instrument, uni-tool macroeconomic policy framework,” Khalid Alkhater, Central Bank (QCB) Director of Research and Monetary Policy, said in a prepared speech seen by Reuters.

“This framework was suitable for the earlier stages of development. However, the world has changed,” said Alkhater, who has recently completed a scientific research study on the topic, adding it did not necessarily reflect the QCB’s official view.

Alkhater is due to speak at the Doha Forum later on Tuesday.

Any change to currency pegs to the dollar would be a sensitive issue in the Gulf Arab region, which has strong political and economic ties with the United States. Comments diverging from the official line are very rare.

Qatar adopted a currency peg after gaining independence from Britain in 1971. It has kept the riyal pegged at 3.64 riyals to the dollar since 2001, when it replaced pegging it to special drawing rights (SDR) used in 1975-2001.

A more active monetary policy may now be needed as Qatar plans to spend $140 billion on infrastructure, partly to prepare for hosting the 2022 World Cup soccer tournament.

As the World Cup draws closer, Qatar’s fiscal spending, its only policy tool, may become difficult to restrict due to the tournament building commitments and pre-planned diversification programmes, Alkhater said.

“We could potentially face a threat of a buildup of inflationary pressures over the next 10 years. Hence, we need additional macroeconomic stabilization instruments, namely monetary policy and exchange rate,” Alkhater said.

Inflation in Qatar climbed to 3.7 percent on an annual basis in April, the highest level since at least 2009, fuelled by rising rental costs. Bank credit expanded by 32 percent on average last year, the fastest rate since the global crisis started in 2007/8.

After days of rumours and user-driven panic about where the service is heading, the search engine giant has confirmed its purchase of the New York-based blogger site, and after a track record of ‘mismanaged’ acquisitions, such as Flickr, the chief promises not to screw things up this time around. In fact, both she and 26-year-old CEO of Tumblr, David Karp, have made several promises to ‘allay’ any concerns users may have.

“We’re not turning purple. Our HQ [office] isn’t moving. Our team isn’t changing. Our roadmap isn’t changing. And our mission – to empower creators to make their best work and get it in front of the audience they deserve – certainly isn’t changing,” writes Karp in his celebratory post. “So what’s new? Simply, Tumblr gets better and faster. The work ahead of us remains the same – and we still have a long way to go – but with more resources to draw from.”

As for Mayer, along with inserting a quirky GIF and the aforementioned ‘We promise not to screw it up’, she vows to run Tumblr independently and help it become even better and faster.

“We promise not to screw it up. Tumblr is incredibly special and has a great thing going on,” she writes in a recent blog post. “We will operate Tumblr independently. David Karp will remain CEO. The product roadmap, the team, wit and irreverence will all remain the same, as will the mission to empower creators to make their best work and get it in front of the audience they deserve.”

As far as working together goes, Mayer adds that Tumblr can deploy Yahoo’s personalisation technology and search infrastructure to help users discover creators, bloggers and content they’ll love. “In turn, Tumblr brings 50 billion blog posts (and 75 million more arriving each day) to Yahoo’s media network and search experiences. The two companies will also work together to create advertising opportunities that are seamless and enhance user experience,” she writes.

For those of you out there who are still cynical about this long-term partnership – then allow Kipp to quote another sentence from David Karp’s post; perhaps the quirkiest one of all: “We also share a vision for Tumblr’s business that doesn’t compromise the community and the product we love. Plus, both our logos end with punctuation.”

Tumblr. and Yahoo! – now if that doesn’t convince you, nothing will.

*Photo Credit

This year, and more specifically since Saturday, ‘thousands’ of workers went on a two-day strike – involving employees in Dubai and Abu Dhabi refusing to leave their accommodation premises. According to most reports, Arabtec’s workers earn between Dh650 to Dh1200 per month and they’re requesting for an additional Dh250 a month to help support their families back home.

In an official statement, Arabtec said they are working with the Ministry of Labour and police to resolve the situation “as quickly as possible”, yet there are mixed reports concerning the latest situation.

Gulf News has reported that on Tuesday, workers returned back to their normal routine after being promised their issues will be looked into, if not completely resolved. On the other hand, today’s report by 7days suggests an almost entirely different scenario.

Workers told the local paper that they vowed to continue this strike until their demands are met. One worker said that he, along with several of his colleagues, plan on having a meeting with the supervisor and listening to what he has to say. “If we do not get our increase the strike will continue,” he added. Other reports suggest that their demands were rejected and the workers had no choice but to return to work.

The argument of the workers’ wages being low, according to the report, is that meals are provided. The counterargument, according to several workers, is that they’d rather have more money to send home then have meals provided for them.

The company promises its projects delivery schedule will not be affected by the action and that the labour dispute will be resolved as soon as possible, but yet – according to Reuters – two employees said other workers continue to observe the stoppage and no promises on wage hikes have been made.

Interestingly enough, we haven’t been told what measures would be used to get the residents to actually leave, but a similar scheme is happening in Saudi Arabia as we speak. Currently, expats make up 68 per cent of Kuwait’s population – approximately 2.6 million.

Come June 1st, a medical segregation at public health facilities will be imposed – whereby only Kuwaiti patients will be treated in the morning, while all foreigners resort to evening consultations and visits. This particular ruling came after complaints in parliament of Kuwaiti patients having to ‘wait’ for treatment due to the large number of expatriates.

And thirdly, the gulf state has recently started deporting expat residents for traffic offences, including driving without a licence, using their cars to carry paying passengers, jumping a red light for the second time, or breaking the speed limit by more than 40 kilometres per hour. So far, over 1,200 expats have been shown the door since the month-old crackdown began and violators can be deported without an official court order. In a nutshell, Kuwait appears to be on a ‘deportation spree’.

It is already difficult enough for any foreigner to obtain a driver’s licence as – according to a now decade-old decision – one must hold a university degree, earn at least $1,400 a month and have lived in Kuwait for at least two years.

The Kuwait Society for Human Rights described the deportations as “oppressive” and urged the government to stop, as it “violates the basic principles of human rights” and could tarnish the state’s image – particularly at a time when its human rights record is already under scrutiny.

Most blue collar workers in the Gulf Arab states are migrant labourers hired on a contract basis from South Asian countries such as India, Pakistan, Bangladesh and Nepal, and strikes are uncommon.

Migrant workers in Dubai are often employed at wages that are low by Western standards and housed in dormitory-style accommodation on the outskirts of the city, part of the United Arab Emirates, a regional business and tourism hub.

Two Arabtec employees who asked not to be identified said several thousand workers engaged on various projects did not report for duty on Sunday and stayed in their accommodation.

A sub-contractor confirmed the stoppage, saying he had to call back his workers from one Dubai work site after Arabtec labourers failed to show up on Sunday.

Asked for comment, an Arabtec spokesperson said: “We are working to resolve the situation as quickly as possible, alongside the Ministry of Labour and the Police Authority.”

The UAE Labour Ministry told Reuters a team of the ministry’s labour crisis management committee was “closely following the work stoppage by a number of Arabtec’s workers”.

The ministry added that Arabtec was paying the workers according to contracts it had signed with them, and said their accommodation was in compliance with labour regulations.

FREE MEALS AND ACCOMMODATION

It said the labourers were receiving meals and had free transportation, housing and health insurance, services that it said were at least equal to their salaries.

The employees said the strike began on Saturday and that the workers were determined not to end it without a pay rise.

“They are upset at the low wages and also about not being paid for overtime work,” one employee told Reuters. He said workers at his site were paid between $160 and $190 a month.

“The protest started in Abu Dhabi on Saturday and today (Sunday), workers in Dubai have also joined,” he said.

Arabtec, the largest publicly-listed construction firm in the United Arab Emirates, was part of a consortium that won a $653 million contract in January to build a branch of France’s Louvre museum on Abu Dhabi’s Saadiyat Island. It was not clear whether this project was affected by the protest.

Arabtec was among the contractors that built Dubai’s palm-shaped island projects and the world’s tallest tower, the Burj Khalifa.

Dubai’s building boom stalled in 2009 after the global slowdown triggered a collapse in its real estate sector, with prices falling by over 50 percent from their peaks of 2008.

Construction has gradually picked up as developers have revived stalled projects and announced new ones including the world’s biggest Ferris wheel and more than 100 luxury hotels.

In the same way that Instagram CEO Kevin Systrom maintains control of his application at Facebook, David Karp (Tumblr CEO) will stay at Yahoo! for at least four years, get a ‘windfall’ of cash and retain ‘a lot’ of control over the service. The upside? Yahoo intends to bring years of experience and established infrastructure to Tumblr’s relatively nascent advertising model.

Since Marissa Mayer took over as Yahoo’s CEO last summer, this has been her largest acquisition yet.

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Yahoo needs to be cool again. It needs a younger target audience – preferably one between 18 and 24 years old. It needs to invest more in marketing and become more ‘visibly’ trendy. And one of its main lingering challenges? Its aging demographic.

Kipp is slightly paraphrasing; these aren’t our words. Earlier this week, at JP Morgan’s Global Technology conference, Yahoo’s CFO, Ken Goldman, explicitly highlighted the company’s challenges and its need to slightly shake things up again. As it turns out, Yahoo’s possible $1.1 billion acquisition of Tumblr – a blogging platform founded by the now 26-year-old David Karp in 2007, with more than 86 million blogs – may serve as their path to ‘coolness’.

And why wouldn’t it? According to analysts, the site has the ’18- to-24-year-old sweet spot’ demographic, along with high levels of credibility among its users. The real question isn’t necessarily whether this move would be good for Yahoo, rather, would it be beneficial for Tumblr’s repertoire in the long run.

Whenever a billion-dollar tech acquisition is imminent, both excitement and heavy criticism are bound to follow. Countless reports have suggested that Yahoo’s board meeting on Sunday evening will decide whether the take-over is the right move for Yahoo!.

Interestingly enough, on the other end of the spectrum, are reports – or rather speculation – about the invasion of an outsider. Quite similarly to how Facebook ‘stole’ the acquisition of Instagram away from Twitter in 2012, rumours suggest that the social network will, could or should swoop in again and place a higher bid for Tumblr.

According to the Business Insider, it is very unlikely. Apparently, the notion that someone within the Tumblr team purposely sparked rumours of this so-called ‘auction’ to try and drive up the acquisition price was a believable one – until they were told that no such auction or offer will be made.

There are a few outcomes to tonight’s meeting. Either Yahoo’s Marissa Mayer will decide that acquiring Tumblr isn’t worth a billion dollars and that a strategic partnership, rather than a full-blown acquisition, would serve them well. On the other hand, Karp could also just as easily raise the price of his company drastically and not accept a penny under – or decide that he’d no longer like to sell it.

Either way, nothing is certain yet, and the fact that Facebook hasn’t yet made a public offer does not mean they won’t. At this point, it’s improbable but not impossible.

*Photo Credit

Moody’s Investors Service raised its rating on Ankara’s sovereign bonds to Baa3, or investment grade, from Ba1 late on Thursday, following in the footsteps of Fitch credit ratings agency, which took that step last November.

The upgrade came on a day when Prime Minister Tayyip Erdogan was showcasing Turkey’s global prestige on a visit to the White House, and in a week when the emerging nation of 75 million made a final loan repayment to the International Monetary Fund.

“It was a major strategic step for Turkey,” said Erdal Tanas Karagol, economic director of the SETA think-tank in Ankara.

“This will help the current ruling party prepare long-term plans, to set higher goals and will create a suitable international environment to carry out those plans.”

The boost puts Turkey 11 notches on Moody’s rating scale above historic rival Greece, on the other side of the European Union frontier, and should drive more foreign direct investment (FDI) to an economy that still has great potential to grow.

“The ratings agencies are finally catching up with the fact that the Turkish government has done a huge amount of work in the last decade to put the country onto a stronger economic and political footing,” said Simon Quijano-Evans, head of emerging market research at Commerzbank in London.

Government debt has fallen to 30 percent of gross domestic product from more than 100 percent in the crisis years early last decade. Inflation and the budget deficit are falling.

POLICY ANCHOR

Turkey’s IMF programme and candidacy to join the EU provided a strong policy anchor in the early years of Erdogan’s mildly Islamist conservative AK party government from 2003. But the pace of political reform has slowed as EU accession talks have run into the sand due to Cypriot and French obstruction.

“There is a sense of a lost anchor,” said Sinan Ulgen, chairman of the Istanbul Center for Economics and Foreign Policy Studies, EDAM.

The EU had lost influence on issues such as media freedom, tolerance of dissent and freedom of expression because Turks no longer believed they were wanted inside the European bloc. Rights groups complain Erdogan is falling short on democracy.

Ulgen said the rating upgrade was a triple vote of confidence in the resilience of the Turkish economy despite Europe’s debt crisis, in sound economic and fiscal management, and in a strengthened geopolitical relationship with the West.

Since we’ve written about the card possibly a thousand times (here, here, here and here), it’s been called all sorts of names; one of the more positive ones being ‘wallet-stiffener’.

But the day when it will require a more prominent position in our wallet is drawing closer – some time in 2015, we’re led to believe.

According to a report by The National, not only is the Emirates Identity Authority currently ‘in talks’ with the Central Bank of the UAE to enable financial transactions on the card, but the government body is ‘keen’ to give the ID card a bit more functionality than a mere form of authentication.

Kipp feels relatively comfortable speaking for the majority of the population when we say we are just as keen, if not more so.

Currently, the authority is working with banks, telecom companies and other private and public sector entities to eventually maximise the use of the chip, for both the aforementioned entities, and residents.

“The trends show that the cards and payment industry is going more towards convergence, interoperability and integration,” said Ali Mohamed Al Khouri, the director general of the EIA at the Cards Middle East exhibition in Dubai.

The paper’s report further notes that the National Bank of Abu Dhabi, Sharjah Islamic Bank and Al Hilal Bank are already using the card for some of their services – including opening new accounts and registering for loans. However, Al Hilal is also experimenting with the possibility of using it as a pre-paid credit card.

“There is so much dependency on paper verification. We have to create a paradigm shift in the mindset of the government and government organisations to take this card and enable new and interesting initiatives,” added Mr Al Khouri.

We couldn’t agree more.

The last thing that Europe’s overcrowded aviation sector needs right now is Turkish Airlines. The ambitious flag carrier is doubling its fleet and splashing out on costly marketing in a bid for a slot in the global top 10. As investment stories go, it sounds pie in the sky. But the shares have performed well and a continuing discount suggests there is more to go for.

Travelling on Turkish Airlines was once so bad that locals joked that its initials THY (Turk Hava Yollari) stood for They Hate You. Today, the award-winning airline has become a symbol of Turkey’s wider vision for growth that capitalises on Istanbul’s position as a gateway between east and west. Istanbul’s new airport, due to open in 2017, will be one of the biggest in the world.

The strategy of exploiting Istanbul as a hub has precedent. The big Gulf carriers – Emirates, Qatar Airways andEtihad - have achieved success as each of their home cities have become a nodal point between east and west. Almost a quarter of passengers that fly with Turkish Airlines only enter the country to fly out again. And while Turkish Airlines doesn’t have the deep pockets of its Gulf peers, it does benefit from a large domestic market of 75 million people.

What’s more, the airline’s plans look realistic. The aim to more than double its passengers to 90 million per a year by 2020 implies a 10 percent compound annual growth rate, compared to 16 percent between 2004 and 2012, say analysts at local brokerage IS Investment.

Assuming the demand will come as forecast, the challenge will be to harness it without letting costs rise or quality slip. The power of the main union looks weak after a strike on Wednesday failed to disrupt services and analysts expect it to stay that way. Chief Executive Temel Kotil has denied reports of a boardroom struggle and will take a short break to look after his sick father. It will be important for him to return quickly.

Turkish Airlines shares have risen 204 percent in the past year but they still trade at only 8.2 times forward earnings. Its long-mooted partner Lufthansa, which has been forced to suspend its dividend and cut costs, trades on almost 13 times. And fast-growing Air China trades at around 12 times. The drag is uncertainty over the government’s 49 percent stake. But signs of operational success should both narrow the discount and make it more likely that the overhang will be removed.

“Our goal is very clear. We have to secure our survival from our own internal strength,” Chief Executive Wolfgang Prock-Schauer told reporters on Wednesday.

Germany’s second-biggest carrier, almost 30 percent-owned by Etihad, suffered a first-quarter loss before interest and tax (EBIT) of 188.4 million euros ($244.5 million), causing its shareholders’ equity to turn negative – meaning its liabilities exceeded its assets.

Air Berlin’s finances have been deteriorating for several years as it struggled to halt losses and manage its debts following a period of aggressive growth. Some analysts have had a close eye on the size of its equity compared with its debt as a key indicator of financial health.

The group’s shareholders’ equity was minus 53.1 million euros at the end of March, against a positive 130.2 million at the end of last year.

Air Berlin blamed a traditionally weak first quarter and restructuring costs for the drop in equity and said it expected the measure to turn positive by the end of this year.

The airline said it would not need more help from Abu Dhabi-based Etihad, which bought its stake in Air Berlin via a share issue in 2011 and then granted it a $255 million loan.

Last year, Air Berlin posted its first annual operating profit since 2007, after cutting seats and unprofitable routes and selling its frequent-flyer programme to Etihad.

Earlier this year it also launched a restructuring programme called Turbine 2013, under which it is reducing its staff numbers by 10 percent to help save 450 million euros by the end of 2014.

It said on Wednesday it had already achieved two thirds of the 200 million euro earnings contributions from Turbine it had targeted for the year and affirmed its 2013 EBIT breakeven goal.

It also said its liquidity, which rose to 470 million euros at the end of March from 328 million at the end of 2012 thanks to a bond issue, would be sufficient to finance its operations, implement Turbine and make investments until next year.

“They’re still in a stressful situation, but the liquidity is so high. The situation will improve rather quickly in the next few months,” analyst Juergen Pieper at brokerage Metzler Equities said. “With Etihad as a strong partner, I think the situation there is under control.”

Turkey is finally standing on its own two feet. That’s the message Ankara is sending to international investors with the payment this week of its last loan instalment the International Monetary Fund – all $422 million of it. It is the first time in 19 years that Turkey is free from debt to the fund, and it crowns a decade of reform under Prime Minister Tayyip Erdogan and his ruling Justice and Development Party (AKP).

Turkey was in 2002 where many of its European neighbours are today. Its economy was reeling from a banking crisis, and the public purse was stretched. The AKP inherited from the previous government $24 billion of debt to the IMF, conditioned on a plan to fix public finances. Erdogan used the crisis as a chance to do what his predecessors had been unable to: cut spending and start a major privatisation programme.

Independence from the fund will help Turkey sell its juicy investment story. Total government’s net debt has fallen from 71 percent in 2002 to 28 percent of GDP at the end of last year, according to the IMF. Turkey’s banks are amongst the best capitalised in Europe and the country’s five-year credit default swaps already trade inside Italy’s and South Africa’s, suggesting Ankara will soon win a second investment grade credit rating.

Yet Turkey’s shortage of natural resources and a low rate of domestic savings mean it relies on foreign funding to fuel its growth now more than before. The country’s current account deficit was 0.3 percent of GDP in 2002 and it is expected to rise from 5.9 percent last year to 8.4 percent in 2018, according to the IMF.

Turkey’s economic strength now allows it to contribute to the fund’s resources – it has pledged $5 billion to that effect. As long as global risk appetite endures, the country can afford to turn itself from debtor to lender. That very condition is also why breaking free from IMF debt only deserves a cautious cheer.

Back in Dubai, Kipp Report speaks exclusively to Tom Farrell, Vice President of the company in the Middle East as he strongly points out that – especially as far as this part of the world goes – people still have a place for Nokia in their hearts and that traditionally, this region is a strong one for the Finnish group.

On a side note, we’re also told that an extensive, lengthy legal process was necessary before they were able to publicly claim that Lumia 920 is the most innovative Smartphone in the world. “Let’s put it this way, nobody challenged us,” says Farrell.

“What you’re seeing from Nokia is a very fast innovation cycle, much faster than before,” says the visibly excited VP. “We want to drive the industry and take leadership and that means being better and faster.”

With the release of the Lumia 920 and 925, Nokia brought a lot of firsts into the market including the first optical image stabiliser on a Smartphone, wireless charger technology, the best mapping software in the world and real time traffic and navigation updates; compliments of a partnership with the RTA in Dubai. Farrell says that with new innovation, Nokia is able to set higher standards in the industry for others to follow.

Until Kipp actually read through the revamped post, sent out to its 200 million users, we hadn’t the faintest idea that ‘prostitution’ was a skill for which you can be endorsed on the professionals’ social network. In fact, what was considerably surprising is that LinkedIn deemed the problem significant enough to impose a blanket ban of such “unlawful activities” in writing.

In reality, this ban isn’t new. The professionals’ network has always forbidden the promotion of escort-related services. Only now, they’ve seen the need to slightly reword it and, in effect, cover up an obvious loophole. Previously, it simply stated that such ‘unlawful’ activities are banned, but as LinkedIn later realised, said ‘activities’ aren’t considered unlawful in all countries of the world.

Under a section in the user agreement, it specifically states that users should not undertake the following:

‘Upload, post, email, InMail, transmit or otherwise make available or initiate any content that: Even if it is legal where you are located, create profiles or provide content that promotes escort services or prostitution’.

Call us naive if you will, but who would have thought that the promotion of escort services – on what essentially is a business network – would turn into a growing epidemic?

Drake, which specialises in mechanical, engineering and plumbing (MEP), has seen its shares jump 35 percent year-to-date on growing speculation that it was a takeover target, with Arabtec viewed by analysts as a possible buyer.

Arabtec is on an expansion drive after a management shake-up led by Abu Dhabi state fund Aabar, its largest shareholder.

“I have heard the speculation,” Drake Chief Executive Khaldoun Tabari said on the sidelines of a conference in Abu Dhabi. “I am not interested in selling my stake. Our shares are out in the market and our company is doing well. We have always worked closely with Arabtec and will continue to do so. You are going to see more announcements of us working closely with Arabtec.”

He attributed the increase in share price to the company’s performance this year.

“Our turnover has increased by 25 to 30 percent.”

Tabari owns about 44 percent of Drake directly and through other companies.

The construction sector in the region is gradually picking up after nearly three years of slow growth following a global slowdown and the collapse of Dubai’s property boom.

He said the results of a bid for MEP work at the Midfield Airport Terminal project in Abu Dhabi, currently under construction, would be known in a few days.

“We don’t rule it out,” said Tabari, when asked if Drake would secure this contract.

The tender is valued at around 500 million dirhams.

The contractor in total is currently bidding for projects worth about 15 billion dirhams, Tabari said. It is active on projects in Gulf countries including the UAE, Saudi Arabia, Qatar and Kuwait and has also worked in other countries like Egypt and India.

The proposal calls for state-owned Kuwait Airways to buy 25 new Airbus jets and to lease a further 13 to upgrade its fleet but needs government approval, the source said. It could be signed by the end of this month.

The move comes months after Kuwait was awarded $500 million by Iraqi Airways for damage caused when former Iraqi President Saddam Hussein’s forces seized aircraft and parts, ending a two-decade row over compensation.

The Kuwaiti airline’s aircraft buying committee judged that Airbus made the most attractive offer in a tender process which included bids from Boeing and Bombardier, the source said.

The source declined to be named because the deal still needs government approval.

In August 2007, Kuwait Airways cancelled an order for 19 passenger planes worth $3 billion from local lessor Alafco after failing to get government approval.

Under the new proposal, Kuwait Airways would pay around 850 million dinars ($2.98 billion) for the 25 new planes, which would include 10 wide-bodied A350-900 jets and 15 of the slimmer medium-haul A320neo, the source said.

Such an order would be worth $4.38 billion at list prices, but aircraft are usually sold at a discount.

The A350 is designed to counter Boeing’s 787 Dreamliner, which would have been included in the deal scrapped in 2007.

Kuwait Airways would start receiving the Airbus aircraft from 2019, the source said, confirming details of the talks originally reported by Al-Watan newspaper on Sunday.

“The final decision is the government’s,” the source said. “I think by the end of this month, they should take it.”

Kuwait Airways and Airbus, which is owned by aerospace and defence group EADS, declined to comment.

Under the plan, the airline would also lease 13 of Airbus’s A330 and A320 models for six years, the source said, without giving an estimate for the cost of that part of the agreement.

One of the reasons the Airbus deal was seen as favourable was that it combined the new and leased jets, the source said, adding that the leased jets should start arriving this summer.

The airline wants to take 11 jets from its old fleet out of service.

“It brings complementarity to Dubai and to the region overall,” Mahmood Ebraheem al Mahmood, chief executive and chairman of ADS Holding, said of Abu Dhabi’s plan.

In an interview, he noted that other successful financial centres operated in close proximity, such as Tokyo andOsaka, London-Frankfurt-Zurich, and New York and Chicago.

Early this month the Abu Dhabi government said it would set up a full-service financial zone on an island near the city’s downtown. The zone would have its own administration and court system to attract banks and other firms from around the world.

The announcement prompted speculation that because of its oil wealth, Abu Dhabi could eventually become a major competitor to the Dubai International Financial Centre (DIFC), currently the Middle East’s top financial centre. The DIFC is little more than an hour’s drive from Abu Dhabi.

Al Mahmood, who is also on the board of Abu Dhabi state investment fund Mubadala, said ADS, a major, privately owned financial firm based in Abu Dhabi, would establish operations in the zone. He took part in preliminary discussions with Abu Dhabi authorities planning the new financial centre.

Business types that are likely to flourish in Abu Dhabi include market-making, money markets, asset management, commodities trading and prime brokerage services – activities that currently lack sophistication and depth in Abu Dhabi, said Al Mahmood.

“We are looking at opening a door of a new set of services that wasn’t here. If you open this door, there will only be more traffic flow,” he said.

Because of the presence of big Abu Dhabi investment firms such as its sovereign wealth fund, the Abu DhabiInvestment Authority with estimated assets of $400-600 billion, Abu Dhabi has traditionally been a centre for “buy side” financial activity.

Now the emirate is providing an environment for sell-side services to cater to the buy-side requirements of Abu Dhabi and the region, Al Mahmood said. “The buy side is really going to attract a lot of the sell side to come in,” he said.

The private sector will be expected to take the leadership in developing Abu Dhabi’s financial zone, instead of leaving it to the government to build the zone, he said. The zone is to be launched in the fourth quarter of this year.

“Private sector players will make a big mistake if they don’t take advantage of that and try to invest there.”

Meanwhile, ADS Securities, a unit of ADS Holding, plans to expand to Singapore and Hong Kong to cater to its clients there and take advantage of growth opportunities in emerging markets in the vicinity of those two hubs, Al Mahmood said.

ADS offers trading in foreign exchange, bullion and precious metals, derivates and fixed income, as well as investment banking; it trades about $6 billion daily, a figure which could more than quadruple in the next three years, Al Mahmood added.

It all began when a shocking Emarat Alyoum article was published; stipulating that the punishment of illegally (without a licence) using certain services on Skype, like making telephone calls, would lead to jail time and a fine of no less than Dh50,000 and no more than Dh1 million.

The article – published in Arabic, only to later be picked up by Emirates247 – states that violators would be subject to the Telecommunications Regulatory Authority’s (TRA) amended Article 71 of the Telecommunications Act.

As always, the reactions were mixed, but primarily stemmed from confusion and disbelief. Kipp, for one, found it extremely suspicious, but not entirely unexpected. Well, much to our relief, a lot of the information in the article was false and inaccurate.

Could you imagine how congested those jail cells would be? Half the country would be locked up, we’d have horrible chores to do and the meals, don’t get me started on how starchy those prison meals can be.

According to emailed statements and three separate Twitter posts by the TRA, many of the facts in the article aren’t factual and Article 71 of the Telecommunications Act does not apply in this context.

“TRA did not state the mentioned penalties in the @emaratalyoum article.”

“TRA confirms that there are a number of factual inaccuracies in the @emaratalyoum article.”

“Reference to the @emaratalyoum article; the provisions of Article (71) do not apply in this case.”

Well, there you have it folks. As it turns out, we won’t be skinned alive for making a phone call or two.

Oman-based Bank of Muscat lost $40 million and United Arab Emirates-based National Bank of Ras Al Khaimah PSC (RAKBANK) lost $5 million in the global heist, U.S. prosecutors said on Thursday. Hackers gained access through third-party companies that processed transactions for prepaid debit cards issued by the banks, the prosecutors said.

While details of what happened are still sketchy, experts said the banks could bring claims against the processing companies in court, or they could file claims with their own and the processing companies’ insurers.

“There’s no hard and fast rule,” said Dan Karson, the Americas chairman of Kroll Advisory Solutions. “We’re in very much a new cybersphere of finance, and allocating liability is still very much evolving.”

Any claims by banks against the processing companies would depend on the contracts between the two parties, Karson and other experts said. Those contracts include industry security standards, which are required by the major credit card payment networks, in this case MasterCard.

In most security breach cases, the processing company in question did not fully comply with the standards, said Doug Johnson, vice president for risk management policy at the American Bankers Association.

However, even if the processor failed to comply with security standards, banks may still be unable to get back their money. That is because the contracts between processors and banks, under terms set by credit card companies like MasterCard or Visa, typically limit the processor’s liability.

“They can’t make everybody whole, or they’ll be out of business,” said Michael Klaschka of Integro Insurance Brokers, which has many financial institutions as clients. “The bank may have very little recourse against thecredit card processor.”

In the hit against Bank of Muscat, the processor is enStage Inc, based in Cupertino, California, a source close to the Bank of Muscat said. Bank of Muscat has not commented on the attack.

Officials at enStage did not respond to requests for comment on Saturday. EnStage CEO Govind Setlur said in a statement in the Times of India his company had implemented security enhancements since the attack.

In the RAKBANK case, the processor is India’s ElectraCard Services, according to people familiar with the situation. RAKBANK has not confirmed that ElectraCard Services is the payment processor and ElectraCard Services has not commented.

It is currently operating 950 flights a week and will be one of the first airlines to operate out of Dubai World Central in October – with 50 weekly flights to the kingdom. It has also just celebrated its fifth consecutive year as part of the Arabian Travel Market.

And although CEO Captain François Bouteiller tells Kipp of the airline’s previous success, nasair hopes  – for the first time  – to end this year in profit. In the past nasair has come close to profitability and even broken even, but never has it enjoyed profitable success.

Operating an airline in Saudi Arabia is challenging – whether you’re a budget or traditional carrier – because the fare caps implemented by the government have remained unchanged for 25 years. Francois tells Kipp he thinks they may be working on loosening the strings. “You can imagine how costs have increased in 25 years but the fares haven’t changed,” he says.

Click here to watch a brief video clip of Francois Bouteiller

“We’ve had major changes in 2012 and we’ve had consecutive months of profit, but we hope to actually end the year with a profit,” he says. When pressed for speculative figures, he insisted it was too early to even begin guessing.

“If you take a look at what we’ve done over the past couple of years, but more specifically last year, we’ve had a 40 per cent increase in passenger numbers and sales growth,” he adds. “In 2012, we transported nearly three million passengers, and this year it could be 4.5 million.”

For one, they’ve promised to help combat obesity – after facing heavy allegations and criticism that they in fact, are major contributors to the epidemic – by no longer advertising or marketing to children under the age of 12.

Secondly, they will be transparently labeling all their products with calorie counts; a promise they originally made in 2009 and say they have now fulfilled. Thirdly and perhaps most importantly, the company plans to offer low or no-calorie drinks in every one of the 200 markets they operate in.

Muhtar Kent, CEO, is working on changing the (incorrect?) perception that Coca-Cola contributes to obesity, specifically in America. He adds that currently, the world’s largest beverage company does not have ‘healthier’ versions of their product consistently across the world and that needs to change.

“The key here is to ensure that in every market where we operate to have no- or low-calorie beverages of our main brands available,” he said. “We all know that taking in calories is more fun than spending calories and we want to make  spending calories also a little bit of fun.”

A 16-ounce bottle of Coca-Cola contains 210 calories while a Coke Zero, a diet version of the drink, contains zero calories.

If you ask Kipp, while referring to their contribution to obesity as ‘major’ may be purely subjective, all companies producing sugar-laden products are, whether they like it or not, contributors in some shape or form.

To cease all adverts and marketing efforts targeted at children is a good move, nobody can deny that, but frankly, the idea that this initiative somehow encapsulates the solution is slightly ludicrous. Perhaps their efforts would be worthwhile knocking some sense into irresponsible parents.

It’s also the fact that he’s the chief executive officer and visionary behind Qatar Airways – an airline that, despite facing financial losses, delays and muted expansion plans, continues to plough on stronger than ever. When asked what the greatest challenges airlines in the gulf face, he candidly referred to insufficient slots in western airports due to lack of expansion, rising fuel prices, government lobbying aimed at restricting growth due to Co2 emissions and most importantly, congested airspace.

It was only recently that the Doha-based airline’s fleet of 20 Boeing 787 aircrafts was given the green light to operate. Before then, they were parked on the ground for three months; costing the airline $200 million in financial losses. Al Baker has expressed unhappiness and disappointment with the situation, but repeatedly says he will be compensated by Boeing – but that actual figures cannot be discussed.

“We don’t buy planes to park them on the ground,” he said to reporters at this year’s Arabian Travel Market in Dubai. “We lose money this way, and it upset us that we were unable to operate them. Of course, now they’re flying again and we will push ahead with our growth plans.”

Click to watch Kipp’s video interview with Akbar Al Baker

Al Baker tells Kipp Report that he intends to regain the airline’s expansion momentum in two ways; by vigorously pursuing their existing plans to expand, and by receiving additional aircrafts – possibly from both Boeing and Airbus. As far as alliances go, he insists that once Qatar Air officially joins OneWorld in October, they will be part of “a huge alliance and continue to look for more partners to grow their business”.

As for an alliance with Dubai-based Emirates Airlines, Al Baker did not want to discuss it anymore. “We talk to each other often, but to even have an alliance, we would have to pass through many regulatory hurdles and they’re very complicated, therefore we don’t want to talk about it anymore,” he said.

Aside from airplane deliveries and expanding to new routes, Al Baker was visibly proud about an arguably more important, and imminent, development.

Hamad International Airport (commonly known as Doha’s new International Airport) is the world’s first to be designed, operated and solely managed by an airline. Kipp wondered whether this sets a precedent for other airlines to follow suit but the visibly enthusiastic CEO doesn’t necessarily agree.

“I don’t know if other airlines have the same vision that Qatar Airways does,” he tells Kipp. “I don’t know if other airlines have the kind of knowledge that we’ve developed managing an airport.” He adds that once the airport is officially operational, it will “simply be the best in the world” – as the airline has put in six years of detailed planning in transforming it into a world-class airport. He believes the airport will very difficult for anybody else to match.

“It’s not always money that produces something good, it’s the vision, the perseverance and of course, the quality and standards,” he said.

Education Minister Nayef al-Hajraf, Commerce and Industry Minister Anas al-Saleh and Sheikh Mohammad al-Mubarak al-Sabah, all in their early 40s, had come for an informal meeting with some 30 Kuwaiti bloggers and online journalists to discuss issues that concern young people.

“It was an ice-breaking action,” Sheikh Mohammad, a member of the ruling family who is Kuwait’s minister for cabinet and municipal affairs, told Reuters.

“We wanted them to hear what we had to say. We wanted to hear what they had to say,” he said in the April interview.

Like most countries in the Gulf region, Kuwait has seen little of the kind of turmoil that turfed out entrenched rulers in other Arab countries in 2011. But opposition politicians and a youth movement have been emboldened.

Dozens of activists and political figures have been charged since late last year with insulting 83-year-old ruler Sheikh Sabah al-Ahmad al-Sabah, mainly in comments made online.

Young people regularly spill out onto the street to protest over local issues. Most of the gatherings are peaceful, but some have resulted in clashes with police.

In an attempt to prepare for the future of a country where more than half of citizens are under 25, Kuwait has tasked the three men and other younger officials with exploring reform. With little desire to substantively change the political structure – the Al-Sabah family has ruled Kuwait for 250 years – the men are focusing their efforts on the economy.

Their concerns about Kuwait’s economic future give them common ground with many activists, a Kuwait-based diplomat said.

“They understand the difficulties and the realities of the situation here,” the diplomat said. “But they face huge hurdles.”

THEY GET IT

A major oil producer and U.S. ally, Kuwait is one of the world’s richest countries per capita and one of the most politically free in the Gulf, but development has stalled due to bureaucracy and political upheaval – December’s parliamentary election was the fifth since 2006.

The economy is almost entirely dependent on oil, even more than most in the oil-rich Gulf region. Income from crude made up 94 percent of Kuwait’s state revenues in the first 10 months of the fiscal year.

The International Monetary Fund has warned that Kuwait may exhaust all of its oil savings by 2017 if it keeps raising state spending at the current rapid rate.

Rock-bottom prices for gas, power and gasoline have turned the world’s 20th biggest economy into its sixth-biggest consumer of oil, producing less than $3.70 of economic output for every kilogram of oil equivalent that it used in 2010, compared with the global average of $6.20, according to World Bank data.

“This has become an increasingly important issue as these subsidies have become increasingly distorting to our economy. This is something we are trying to address,” Economy and planning minister Mohammed al-Jasser said on Tuesday.

“Rationalisation of subsidies, particularly on fuels for non-targeted participants”, is needed to improve Saudi productivity, he told a financial conference in Riyadh.

Jasser did not give details of how Riyadh would tackle fuel subsidies.

Saudi Arabia keeps its domestic energy prices low for everyone, regardless of income levels, paying the subsidies out of the hundreds of billions of dollars that the kingdom makes from exporting crude oil.

This practice limits the potential long-term returns from oil exports. Nearly 40 per cent of Saudi electricity is still produced by burning oil.

Energy-hungry industry has boomed over the past decade, thanks to energy costs that are a fraction of those in most countries. This growth increases the cost burden on state-run companies that supply fuel, power and gas.

“Subsidy is becoming a big part of the government budget. Subsidy should be revised and done in a different way. It should be smarter and support low income people,” state-run Saudi Electricity co chief executive, Ali al-Barrak said.

Jasser also said Saudi Arabia should also resolve imbalances in its labour market, including the low level of private-sector employment among Saudi citizens, particularly women.

He said it was important for the country to diversify its economic base and develop more medium-sized companies.

There has been talk before about raising low fuel prices, including domestic natural gas prices, for years, but there is no clear sign that it will happen.

The government is wary of provoking social unrest by hiking gasoline or power prices, especially since the Arab Spring. It is also being cautious not to scare off gas-hungry industries that create jobs for a youthful population.

Reducing subsidies available to higher income groups, while maintaining cheap power supplies for millions of Saudis who are relatively poor, could help lighten the burden on Riyadh without sparking unrest.

“Over the last two years we have seen a real debate happening in government and among the wider public, so that’s a definite step forward,” John Sfakianakis, chief investment strategist at Masic in Saudi Arabia, said.

“But now we need to look at how this can be addressed in terms of actual decisions,” he adds.

Reuters

According to Reuters, the grounding cost the airline a total of $200 million and Al Baker expects to be compensated for the losses.

The progress of Hamad International Airport – which the airline intends to manage and operate – has also hit delays but is expected to be completed in phases. And yet, despite these setbacks, the airline hasn’t faltered in terms of its aggressive growth strategy – unless you count the cutbacks in routes of course.

During a press conference on the opening day of Arabian Travel Market – Al Baker announced yet another major expansion on three continents with an enormous increase in capacity in Pakistan.

The Ethiopian capital, Addis Ababa, will become the carrier’s 20^th destination on the African continent, launching on September 18, followed a month later by Clark International Airport in the Philippines from October 28. Effective March 1 next year, Philadelphia will become the airline’s fifth US gateway.

“Yet again Qatar Airways is bucking the trend across the industry demonstrating that we are resilient in times of global economic austerity because while others are cutting back, we see the opportunities to expand our global footprint,” Al Baker said.

“Our three new routes we are announcing today show we have faith in expanding our operations across different continents. This year, for example, has certainly been the year of growth in the Middle East with five of our eight scheduled route launches in the region alone.”

Qatar Airways is currently in talks with Airbus to buy up to 15 of the European aircraft maker’s A330 passenger jets, a deal worth potentially $3.6 billion at list prices, citing production delays to Boeing’s 787 Dreamliner.

“We are talking to Airbus about A330s to fill in the gap that the Dreamliner delays have caused Qatar Airways. Anywhere between 10 and 15 (aircraft),” Chief executive, Akbar al Baker, told Reuters on Monday.

Additional reporting from Reuters

These fast-growing Gulf carriers are expected to be among the first and possibly biggest customers for Boeing’s latest offering, which was presented to customers last week.

“For sure they have changed, I hope they have,” Emirates’ President Tim Clark said, when asked whether the Dreamliner crisis has changed Boeing’s approach and thinking.

“Boeing came out of the ashes of the Sonic Cruiser years ago and came up with the Dreamliner, which was a leap of faith by any stretch. They were just beginning to stabilize when things went wrong again,” said Clark.

Emirates is not a customer of the Dreamliner but is the largest 777 operator with up to 175 jets that will need replacing soon.

Boeing announced it had begun selling an upgraded aircraft family code-named 777X, launching a race against Airbus for sales of long-haul jets.

Boeing, which has just emerged from the Dreamliner crisis, will now have to convince customers who have lost millions due to the grounding of the 787s.

Qatar Airways, which grounded all its five Dreamliner aircraft, would receive compensation from Boeing, its chief executive Akbar al Baker said.

“Everyone takes risks but Boeing took a very big risk because they went from ground zero to 100 in one leap instead of going in stages,” Qatar Airways’ outspoken chief Baker told Reuters on board its first 787 flight from Dubai to Doha last week, after the battery fix was installed.

Apart from Qatar Airways, fast-growing Gulf airline Etihad Airways has 41 Dreamliners on order.

“We put together a permanent and comprehensive fix for the issue and we are confident of the 787 safety,” Boeing’s Middle East President Jeff Johnson said when asked about assurances to its Gulf customers.

LESSONS LEARNED

U.S. regulators formally lifted flight restrictions on the 787 last month and allowed the redesigned lithium-ion battery system to be installed in airlines.

Ethiopian Airlines became the first carrier last month to resume flying the revamped Dreamlinerfollowed by All Nippon Airways and Qatar Airways.

It all began when the private luxury real estate developer revealed plans for a Hollywood-themed Damac Towers by Paramount in March. Since then, they’ve also announced plans of a 28-million square foot ‘Akoya by Damac’, a master plan development in Umm Suqeim (ten minutes from Sheikh Zayed Road).

Along with a long list of developments Akoya will include – like international schools, a solid retail infrastructure, boutique hotels and spas – Damac has announced the development of an 18-hole PGA Championship Golf Course, to be named Trump International Golf Club.

You wouldn’t think it at first, but Dubai and Abu Dhabi have recently been ranked as the 6^th most popular destinations for golf tourism, according to a study by accounting firm KPMG last month. Surprisingly, that’s not a regional comparison; but a worldwide one where the emirates are pinned against the likes of England, South Africa and USA.

Construction of the 7,205-yard course has already begun and will be ready for play next year. It will also include a 30,000 square foot state-of-the-art club house and a luxurious Trump Spa & wellness centre, which will be managed by The Trump Organization.

Donald Trump cancelled a previous foray into Dubai’s real estate market, a project to build an international hotel tower on Dubai’s Palm Jumeirah, after the emirate’s property downturn.

Hussein Sajwani, Chairman at Damac says the course will provide a ‘unique challenge for golfers, while delivering the utmost luxury and refinement’. “By collaborating with Donald Trump, we are bringing the most elite name in golf and international luxury real estate to Dubai,” he said.

Donald Trump, chairman and president of The Trump Organization says that ‘Dubai is an incredible city that truly understands the meaning of luxury’ and that this golf course – which is his first in the Middle East – will ‘exceed all expectations’. The Trump Organization already has 14 award-winning courses under its ownership and management across the world.

“There will be nothing like it in the region and beyond,” he said.

For all of its wonders and its promise of a tax-free life, Dubai isn’t always a cheap place to live. And as there’s no taxation there’s no requirement for any services to be provided to most of us living here. For those of us fortunate people who have come from (usually) colder climes we often forget what our taxes paid for – infrastructure, social services and other meaningful things which I so often forget. We don’t pay taxes, we don’t receive services. Instead we pay for them based on wants and needs.

My question to you is has it come to a point where those in the Emirate would benefit more from a direct taxation system? It’d be clear and simple; you pay x and you get y. There’d be no additional charges on top unless the person wanted to put their child through a different school or go to a different hospital. Most of all, the beauty of direct taxation is that it is progressive and arguably fairer than a system whereby everybody pays the same no matter their level of income.

In effect, higher earners bear more of the tax burden based on their disposable income. The process is transparent and it’d take a significant burden off lower income employees who are disproportionately affected by all of the indirect fees lived on them.

The benefits could work both ways as Dubai would have a better estimate of what revenues could be spent on infrastructure projects and social welfare schemes. The elephant in the room on the taxation debate is civic rights. Normally, when you pay taxation there’s a certain expectation that you as a tax-payer should have in terms of how and where that money is spent and on the results.

Does direct taxation make sense? If it allows Dubai’s residents to have a clear idea of how much they’ll pay and the services that they’ll receive every month then yes it does. However, what would the implications be for the civic rights of the Emirate’s expatriates?

Taxation is normally considered to be a horrid issue, and one which every elected official the world over tries to avoid discussing. However, the debate may just be worth having if it makes living in Dubai more affordable for the majority of the people who work here and support the city’s existence. If taxation affords us all some transparency in terms of our outgoings and removes all those nitty, gritty costs that keep adding up whilst allowing for the development of good-quality schools and hospitals for expatriates then it may be the most sensible course of action. There may be a better alternative to Dubai’s tax-free living after all.

A British national with Arabic roots, Alex has spent ten years in the Gulf and has lived in Saudi Arabia, Bahrain, Lebanon, Jordan, Syria and the United Arab Emirates. Alex lost his heart to journalism years ago, but he has worked with a range of multinational companies in the technology, energy and financial sector to develop marketing and communications approach to the region. He’s currently based in Dubai but calls Bahrain home.

Citi’s family office unit is part of the private bank business which manages over $250 billion in assets and serves over a third of the world’s billionaires.

Citi first moved into the market for family offices – mini financial institutions set up by rich families to manage their affairs – in 2010 when it set up a unit to cater to them. In March this year the bank appointed Anthony Habis, a managing director at its institutional clients group business, to head the family office coverage in the region.

Many of the families own businesses which are corporate banking clients of the group. The families themselves have now started to diversify away into sophisticated asset classes and have become more institutional in their operations.

A key market for Citi’s family unit is the Middle East, home to some of the world’s oldest family businesses like Dubai’s Al-Futtaim Group and Saudi Arabia’s Olayan Group, who controls lucrative businesses such as oil and gas and automobiles.

“What we are seeing is that the old money has become more progressive and more institutional in the thinking and there is a big push to build out the capabilities,” Habis said in an interview.

“You are seeing some of the largest family offices setting up in Geneva, London and New York which wasn’t the case earlier. They are being smarter with the money they spend,” said Habis, who took up the new role in March.

Industry-wide assets under management for single-family offices stood at about $1.2 trillion in September 2011, while multi-family funds had assets of $777 billion in December 2012, according to a study by Boston-based Cerulli Associates.

Middle East clients have toned down their aggressive return expectations and are now focused on wealth preservation, capital protection and estate planning instead, Habis said.

Broadly speaking, family office clients around the world are looking for more cross-border investment opportunities and generally tend to prefer real estate investments, said James Holder, head of family office for Europe, the Middle East and Africa at Citi Private Bank.

“In an environment where families are worried about currency, debasing of currency values globally, where there are many different risks, families seem confident owning real estate,” Holder said, adding the bank is scouting for real estate investments in the United States and Britain on behalf of its clients.

“We also see more interest in Madrid and Spain as well on real estate,” he added.

Citi has also recently hired key personnel across Europe for its family office business. The bank namedMarkus Von Wallenberg from Credit Suisse as head of family office coverage for German speakingEurope, Thor Askeland from Barclays as head of Nordics and Francesco Lombardo di San Chirico to run Italian operations for the family unit.

“We feel comfortable that we have got to a point across EMEA region where our key family office personnel are in place,” Holder said.

Tourism is crucial to Dubai’s economy, which had a gross domestic product of around $90 billion last year; it supports the emirate’s large retail industry as well as its hospitality sector.

Occupancy at Dubai’s 599 hotels, which have 80,500 rooms combined, was 78 percent in 2012 as the number of visitors rose 9.3 percent from a year ago to 10.16 million, according to data from the Department of Tourism and Commerce Marketing (DTCM).

Helal Almarri, director-general of the DTCM, told Reuters that the emirate was likely to have more than 160,000 hotel rooms by the end of the decade and aimed to attract 20 million tourists annually by then.

Most decisions to build hotels would not be made by the Dubai government but by private companies. However, the Dubai government is active in supporting growth of the industry by providing infrastructure, marketing the emirate overseas, adjusting visa policies for visitors and expanding the network of the state-owned Emirates airline.

Saudi Arabia, India and Russia will be the main contributors to expected growth in tourist numbers, Almarri told Reuters.

“With Emirates airline and other carriers we focus very much on extending the routes to those markets,” he said.

Dubai’s main airport handled 5.85 million passengers in March, up 20.6 percent from a year earlier, according to airport authorities.

Ethiopian Airlines was the first to resume its operations and Qatar Airways, one of the world’s fastest growing airlines, is the latest to announce its continuation.

The outspoken chief of the Doha-based airline says regulators have overreacted and the plane ‘should never have been grounded’. He also tells local media he’s unhappy about their fast-paced and steady expansion plans being stifled. More specifically, the chief is upset the company’s plans to launch 15 new routes are being scuppered, meaning they’ll have to settle for 10.

“The aircraft shouldn’t have been grounded,” Akbar Al Baker told reporters at a press conference in Dubai. “I think there was a reaction by the regulators because of the unnecessary emergency evacuation of the Japanese aircraft.”

Speaking to local media as the aircraft returned to service for the first time – Al Baker said the Gulf carrier would now have to ‘claw’ back new destinations and he expects Boeing to compensate them and other affected airlines for their losses during the delay.

Although he blames the U.S. plane manufacturer, he does insist that he, like many others, has complete faith in them and the safety of their aircraft. He says he ‘really does believe’ it is one of the safest planes and even if the battery problem happened again – which he insists it wouldn’t – it would be ‘very limited and not affect safety’.

“The Dreamliner is so safe, I’ll fly with you today, and anytime,” he said.

The last couple of weeks have been hectic. With Desado still in its infant age, we have already received an overwhelmingly positive response from our customer base in the UAE.

In terms of the designs we are offering our members, the increase in sales and staff, we are overall growing exponentially. Like with an actual child though, mishaps occur (lots of tiny ones), but with a bit of training and education (and lots and lots of internal meetings), processes improve on a daily basis.

As if perfecting the site, our offerings, marketing efforts etc. were not enough; we have set ourselves an even bigger task to accomplish. We are finalising the last necessary steps to launch across the entire GCC, while simultaneously creating an Arabic version of the site to cater to the language preference of the majority of our new target audience.

Under the microscope that means improving and adjusting the base version, while at the same time translating all the required content, setting up the IT and logistics, as well as sourcing products relevant to each of the markets we are targeting. As we are very much aware, KSA is not Kuwait and Kuwait is not Qatar and, well you get the point.

Different people, different product preferences, finding the right mix is the real challenge here.

If you zoom in even further, it means even more internal meetings and last, but definitely not least, just the right amount of boost and drive, for everyone to be motivated and on track.

It is amazing to see your own venture expand, same as seeing your child grow up. There is a high level of stress involved, but the rewards are worth every effort.

Being a successful entrepreneur revolves around a certain mindset. Apart from having a very clear idea about the business model and a strong analytical & strategic thinking; you have to be a people’s person at the same time. Start-ups are crazy, stressful and time-intensive. Sometimes, you need to take a step back from looking at the business as your brainchild and acknowledge the bigger picture; a start-up only works with a great team of people involved and managing these people with a social intelligence is of the essence.

You have to get over the challenges that you come across on a daily basis and make decisions or find solutions that sometimes seem out of the ordinary. Being a rather relaxed personality definitely helps, because the worst thing that can happen, is when the head of the game in fact loses his head in the process.

What have I learned in the last few weeks? Well for one, that children grow up fast and become more and more independent, with the right amount of positive parenting. Also, the step from crib to playground might seem hard at first, but let’s face it, the playground is the much more fun place to romp around.

By Muhammad Chbib, Founder of ecommerce site Desado.com and ex-CEO of Sukar.

The plans would have appeared fanciful three years ago, when a crash in the inflated real estate market triggered a corporate debt crisis and a slew of company restructurings. But Dubai, home to an archipelago of man-made islands and an indoor ski slope in one of its shopping malls, staged a dramatic economic recovery last year, partly because of a tourism boom.

Tourist arrivals grew 10 percent and hotel revenue rose 19 percent in the first half of 2012. Some state-linked companies have been working through their debt loads while some property prices have started to rebound.

“Maybe we will try to build something a little taller,” said Mohamed Alabbar, the chairman of Dubai’s largest developer Emaar Properties, which built the 828-metre Burj Khalifa.

The tower, which dominates Dubai’s spectacular high-rise skyline, was opened in 2010 but is set to be overshadowed by the 1,000-metre Kingdom tower under construction in the Saudi city of Jeddah.

“Dubai needs another tall building. Dubai is only about 30 years old. So we have a lot of time and lot of investment left,” Alabbar told journalists at a conference.

Meydan Group and the Sobha Group, two Dubai conglomerates, separately announced a joint venture to develop a major leisure, retail and residential complex near the city’s downtown area.

The complex will include a 350,000 square metres water park, a 7-km lagoon, retail spaces, leisure and sports attractions as well as 1,500 villas.

After all, excessive absenteeism is a costly problem: not only can it cost a company in terms of profitability and productivity, it also can negatively affect other employees’ morale who may have to work overtime to deal with the increased workload of an absent employee. It bodes well for management to find ways to contain the excessive absenteeism, but is making disciplinary measures pricier really the way to do it?

I don’t think so. If a company is having a genuinely difficult time with excessive absenteeism – it is far more important to investigate the cause of this phenomenon, than to just punish an employee for displaying symptoms of a deeper problem. Why is this employee consistently choosing not to come into work? Perhaps this employee has an unfair abusive boss who pushes him to meet unrealistic targets? Or perhaps the working environment is unsatisfactory – from difficult colleagues, to poorly maintained wash rooms. Or does the employee have a personal problem for which they need to take time off to run errands which can only be done during working hours?

The list of possibilities could go on, but the first step to uncovering the issue at stake is communication. A private meeting set up in confidence can allow an employee the space to be open about the cause of their absenteeism. Next, a supervisor should mitigate, if not resolve, the cause. From redistributing the work load, investing in good infrastructure, or granting an employee some personal time off – an understanding could be reached to meet the employee half way.

It may also be a good idea for management to have a conversation with the employee’s direct supervisor. Is the supervisor well equipped and trained to understand what is at the root of her employee’s discontent? Is the supervisor doing anything to contain absenteeism? Which strategies does the supervisor currently employ to get her staff to follow company policy? An organisation which understands the limitations of its line managers may be able to address a larger issue at hand and prevent this from snowballing into a bigger issue in the future.

The simple fact is, if employees are consistently trying to find excuses not to come to work, there is something which is causing them to do so. Slapping on disciplinary measures or sick taxes is nothing but a cosmetic band-aid solution, which will not be beneficial in the long run. Management need to treat their employees as human beings, not one-dimensional robots. If an employee showed significant promise to warrant being hired, extending the courtesy of attempting to understand their psychological motivations can result in higher productivity levels.

In its simplest form, this growing epidemic is often defined as ‘attending work while sick’. And we all have that one work colleague that – regardless of the severity of his or her illness – will insist on putting their health on the line to come to the office. Naturally, the consequences of that irresponsible decision can spread, quite literally, to others.

Why? Occasionally, it’s the enormous workload rearing its ugly head, but more often than not, it is either guilt or fear. There have been several studies and polls on the subject – some of which suggest that employers, since the global crisis, have begun using it as a scare tactic – and we’ve written about a couple here.

According to Dr Layla Al Marzouqi, head of clinical governance at Dubai Health Authority, only government employees were previously charged (AED50) to obtain a sick note. Now, the new charge will affect everybody “regardless of where they are working, or their social class”.

As The National reports, this move is merely a piece in the puzzle; a part of a series of measures introduced to combat an ongoing fraudulent abuse of the system. In a nutshell, its aim is to discourage those feigning illness to skip a working day – in hopes that the charge will force them to think twice.

To further quote the report, this move has been met with ‘mixed reactions’, with one resident in Dubai describing it as ‘a tax on the sick’ and one medical practitioner ‘detesting’ the idea; saying it ‘shows distrust in doctors’.

You may be reading this thinking, if I’m really ill, then 60dhs is a price I wouldn’t mind paying – but does that mean that workers from all social classes can afford this charge? It is a classic case of an entire population being affected by the mistakes of a few.

The health authority says they’re still reviewing the actual charges and that; in the meantime, they’re open to alternative suggestions.

What are yours?

The IMF, which has sent a team of experts to the major oil producer before preparing its regular annual report on the country’s economy, has said the government needs to include the tax system in its fiscal reforms.

Income is not taxed in Kuwait, one of the world’s richest countries per capita, and water, electricity and petrol are heavily subsidised.

“The committee has rejected in its meeting to impose any taxes on citizens especially (given) that the level of public services is not good enough,” member of parliament Yusuf Zalala, head of the assembly’s financial and economic affairs committee, was quoted by the daily Kuwait Times as saying.

The IMF has calculated that Kuwait may exhaust all its oil savings by 2017 if it keeps raising state spending at the current rapid rate. The international body therefore wants Kuwait to expand its tax base, to provide stability in case of any sharp fall in oil prices.

Some members of parliament have suggested that foreigners, who make up around two thirds of Kuwait’s 3.7 million population, should pay more for services, but others have argued this would dent the country’s appeal to foreign companies.

Political infighting and bureaucracy have held up economic development in Kuwait, and its public infrastructure and services, from telecommunications to garbage collection, lag other states in the Gulf such as the United Arab Emirates and Qatar.

Come July (yes, one of the hottest months of the year), between midnight and 6am at selected stations, customers will experience first-hand what it’s like to fill up their own petrol in Dubai. Obviously, Enoc says that customer support staff will be on standby to ‘familiarise’ people with fuel dispensing; at least during the initial phase.

Last year, when ADNOC announced it would be having a go at modernising its own stations in Abu Dhabi, Kipp did describe the notion of it being popular or successful as ‘laughable’; if for no other reason than our heavy dependence on customer service. Oh, and the hot weather.

Today, we can honestly say we would love to be proven wrong.

This isn’t Enoc’s first attempt at automating its facilities. In December 2008, after a rather unpopular three-month pilot scheme, the company said it was apparent that its system was not widely accepted by customers and would not be successful.

At the time, The National echoed the disbelief and criticism of several unsatisfied customers and critics who – among other things – described the service as being too complicated. ‘Motorists were required to pay a cashier for what they expected to pump before filling their tanks. If they did not pump the correct amount they had to return to the cashier for change, or to pay the extra’, stated the report.

Kipp reckons – or at least hopes – the company is much more prepared this time around. After all, it has been nearly five years. “Over the past months, we have been modernising and updating our systems to facilitate self-service at 10 service stations. These have been selected on the basis of the footfall and location to minimise inconvenience to motorists, and enable them to become more accustomed with the new system,” Enoc’s managing director Burhan Al Hashemi said.

On a side note, the company assures that no staff will be made redundant as a result of this scheme.

Earlier this week, the Roads and Transport Authority (RTA) released a statement saying that the payment system in the three aforementioned neighbouring areas is now completely in place. To complicate matters further, some of the parking lots are classified differently and the fees are payable through text messages, silver and blue Nol cards, prepaid cards and coins. However, there are also reserved parking spaces designated for employees holding periodical memberships or passes.

In fact, the epidemic of the paid parking system has spread to residential areas, such as Jumeirah Lake Towers as well. An article in Emirates247 suggests that developers in JLT have lately started offering landlords the chance to purchase a parking spot for a rumoured AED50,000 – but there is no price cap – so it could be higher. Failing that, one can rent an additional space for Dh4,500 for a 12 month-period, D2,500 for a six month-period and Dh1,500 for a three month-period.

Kipp finds little sense in this – not that the previous state of parking was entirely functional, as more often than not you’d have a higher chance of finding a dancing mermaid than a parking space – but is the current alternative any better?

Maitha bin Udai, the CEO of RTA Traffic and Roads Agency, insists the move will have a positive bearing on the business community in the area, as it will ‘ease the traffic congestion at peak hours’ as well as prioritise the needs of employees.

“Streamlining the parking slots in this area aims to provide more effective solutions to cope with the growing traffic movement,” she said. Fair enough, but those same employees still have to shell out the cash to park, don’t they? And to make matters worse, those seasonal cards they pay for aren’t valid in other free zone areas where you pay-as-you-park.

She stressed that the RTA would book traffic violators who use the reserved parking areas, adding that the seasonal cards issued for the public parking were not valid for use in the free zone area.

All of this ambiguity and additional payment reminds Kipp of Dubai four years ago. When real estate price escalated to dangerously inflated levels, parking was the first causality. Over-charging for parking without the rationale or advantage of improving road congestion just reflects poorly on Dubai. Let’s hope the decision makers realise that before it’s too late.

Have you managed to secure your own parking slot? If not, what alternative have you taken – or have you resorted to leaving your car at home?

After all, it is the world’s longest fully automated metro network. That’s why Kerala’s Kochi Metro Rail Ltd is sending a team of officials to the United Arab Emirates to take a closer look at the metro’s technological aspects.

It is not only Dubai’s rail that they intend to study, but this week the emirate will be their starting point. To better understand the functioning and operations of metros in major cities, they’ll also be paying a visit to Paris, Hong Kong, Bangkok, Copenhagen and Singapore.

“A team led by project director, Mahesh Kumar, will head for Dubai to gain a greater understanding of the third rail system and communications-based automatic train control system (CBTC),” said KMRL managing director, Elias George. Kochi Metro is estimated to cost Rs4.43 billion and it will cover 25.523 kilometres in length.

When Dubai Metro ‘opened its doors’ in September 2009, as a city – or rather, emirate – it’s safe to say we were unanimously relieved. It was a project with brains behind it; not a luxurious dream of an elitist, but rather something the entire population could find practical. And, sure enough, in 2009, 2010 and 2011, the metro transported approximately 6.9 million, 38.9 million and 69 million people, respectively.

According to data released by the Roads and Transport Authority in Dubai, the metro carried approximately 350,000 passengers a day in December of 2012.

Arabian Business reports that the animal hotel will measure 835 square metres, will provide basic facilities for cats, dogs and other domestic pets and is currently 52 per cent complete. Kipp has also read reports stating that the hotel’s four-legged guests will have their own dressing and grooming rooms, therapy sessions, laundry services, playgrounds, air-conditioning, supervisors and vets.

Therapy sessions, laundry services and dressing rooms? Call us crazy, but that might just be a tad too much.

The animal hotel is part of a AED54.1 million project, aimed at providing services for domestic pets – and more specifically – their travelling owners. It’s due to be completed by the end of the year, possibly around November 2013.

Hussain Nassir Lootah, director general of Dubai Municipality, says he hopes the project will “boost both trade and tourism”. Owners leaving their pets behind – in glorified luxury, it appears – can also monitor them online.

So, how many types are there? And, which one best describes you?

‘Styles’ or ‘types’ serve to distinguish one individual from the next. It is what makes them unique, as they stem from within the individual and remain fairly consistent throughout life; These features define what is termed ‘personality’.

In any given workplace, you will find that it is filled with people who have different personalities. Personality types are useful for understanding what motivates the behaviours of different individuals. Management can benefit from such information in that they will be better reach all employees within a company. However, in as much as one would like to think that people fall neatly into one of the several personality types, they may well display characteristics across the different types.  (personality type depending on the situation and their personal needs.)

So, what are the different types?

Type A

Type As are not necessarily focused on, and bothered by details; for them, it’s the big picture that counts. Goal orientation and pragmatism is the approach they take to problem solving. This aspect is what makes them very competitive. Such individuals are likely to be leaders and pioneers of change, posses entrepreneurial spirit and a resilient attitude – they are prepared to take risks. People who work with type A personalities report that it can be difficult because they tend to be bossy, impatient, and take on more than one challenge at a time. The problem with this, is sometimes they expect others to mirror their behaviours. However, these individuals get results and are high achievers – management benefit from their approach and way of working, particularly in terms of meeting business objectives.

Type B

Type Bs are people who thrive from being accepted and appreciated by others. For this reason, their behaviours are characterised by being highly social and good at building relationships. They value being recognised for their accomplishments. People who work with these types, report that they spend more time socialising with co-workers rather than completing work. The inability to focus may also characterise their personality. However, they are enthusiastic and have a natural willingness and ability to influence others and to accept change. Type Bs excel in roles that enable them to sell and market products and services, which could be an aspect of most job roles.

Type C

Type Cs are detail conscious. They are likely to be less competitive compared to both type A and type B personalities. Type Cs are governed by the desire to be ‘right’. Great effort is expended to ensure accuracy. Asides this, their approach to problem solving combines logic and rationality, above all else. People who work with type Cs report that they strive to control their own behaviour, as well as those of others. As leaders, type C personalities prefer to have all information made available to them prior to making any decisions.

Type D

Type Ds have a preference for stability and routine. For this reason they may be most resistant to change, when compared to the other personality types. Engaging in a role or duty that involves them having to undertake repetitive tasks for long periods of time tend not to phase or cause annoyance to Type Ds.  Those who work with type Ds report that they are good listeners, team players and thorough. Besides this, they tend to be organised and would struggle to thrive in work spaces that are  disorganised and cluttered. Type Ds are very good at masking their feelings and may avoid expressing their emotions, even when others are trying to ridicule or take advantage of them.

Personality tests are useful for understanding more about the way you think, interact with others, and cope under stress.

Please note that what has been presented above is only one perspective of how personality can be assessed – there are a few more approaches on offer.  Either way, ALL afford individuals with the opportunity to learn more about themselves and how they relate to others. Not only can this information prove useful in our personal lives, it helps out in our occupational and professional lives too.

If you would like to try out a personality test, there are many available online. However, you should always consult a psychologist for best advice, guidance and feedback regarding such tests. A basic version of a personality test can be found via the link below:

http://similarminds.com/big-5-word-pair.html

In 2005, Google co-founders Sergey Brin and Larry Page – along with CEO Eric Schmidt – all reduced their yearly compensation to $1. And now, Mark Zuckerberg, the brain behind Facebook, the world’s most successful social network, has officially joined the club as well.

This move was revealed in the company’s IPO Filing at the beginning of this year, but only in a recent proxy filing, was it concretely confirmed, along with his decision to ‘forego any bonuses’. Last year, in addition to his $500,000 base salary, Zuckerberg received a whopping $266,101 bonus. That’s a lot to give up, but trust me; you can take back any sympathetic sentiments you may be feeling.

According to Business Insider, the 28-year-old billionaire exercised 60 million stock options when Facebook went public in May of last year. At the time, they were worth an approximate $2.3 billion – although the report adds that he sold half the stock to cover his tax bill. Currently, he’s still currently nesting another 60 million that can be exercised on November 7, 2015; at the same astonishingly low price of six cents.

On the other hand, Zuckerberg now sits on a massive loss of nearly $7 billion on paper. This is, of course, based on the 609.5 million shares of company stock he owned as of March 31. The company’s stock, since the IPO was completed last year, hasn’t closed above $38; a 29 per cent decline.

As far as public appearances and statements go, it’s always been apparent that the young entrepreneur strongly believes there’s more to life than money. He’s quite often made headlines for sprouting out seemingly noble statements like “we don’t wake up in the morning with the primary goal of making money, but we understand that the best way to achieve our mission is to build a strong and valuable company” and “we don’t build services to make money; we make money to build better services”.

He’s also insisted on numerous occasions that Facebook is free and always will be – although if you count recent developments like paying to promote your private posts to friends – then he’s sort of playing fast and loose with the word ‘free’.

King Abdullah originally announced the housing scheme in March 2011. His plan to build 500,000 homes over several years was part of a series of official steps to improve social welfare, at a time when social discontent was prompting uprisings in other Arab countries.

But the housing programme has been slow to get underway, partly because of difficulties in obtaining land – an example of how inefficiencies in Saudi Arabia‘s economy can slow its growth, despite its oil wealth. Last week’s royal decree may push the programme forward by opening up thousands of acres of state-owned land for construction.

“The decree is an important step that begins to address the gap between demand and supply of land in order to begin building the amount of units promised,” saidJohn Sfakianakis, chief investment strategist at MASIC, a Riyadh-based investment firm.

“It should eventually, as more allocations become available to the ministry of housing, bring down the price of land. Land prices, especially in Riyadh, can only come down if more land is made available as the majority of land still remains idle.”

SHORTAGE

Saudi Arabia has lagged poorer countries in providing housing to its citizens. Some 60 percent of nearly 20 million Saudis are estimated to live in rented accommodation rather than homes they own, and much of the housing is in poor condition, said Mike Williams, head of research at the CBRE property consultancy in neighbouring Bahrain.

Because of the housing shortage, rising rents have been a major source of inflation; rents nationwide rose 3.7 percent from a year earlier in March, though that was far below a peak of 29.7 percent seen in 2008. Apartment rents in Riyadhjumped 8 percent last year, estimates Jones Lang LaSalle.

Faisal al-Dekheel, a 25-year-old government employee, is one person who has grappled with the shortage. He wanted to rent a cheap apartment in Riyadh that would spare him a commute to work of up to 95 minutes, but found he would have to pay an annual rent of 60-80,000 riyals ($16,000-$21,300).

“I cannot afford such an amount. It is impossible,” said Dekheel, who eventually settled for an apartment costing 26,000 riyals a year in the distant eastern suburbs of city. “This is not an easy amount too.”

Part of the problem is that the kingdom’s wealthy have snapped up residential land plots around the country as long-term investments, making them too costly to use for lower-income housing.

Complicating the situation, many plots remain undeveloped because they were given to citizens under a previous system of land grants, and the recipients lacked the money to build on their land.

“The Ministry of Municipal and Rural Affairs has distributed around 2.2 million plots in this way, but there is no data recording how these plots have actually been utilised,” Williams said in a research report.

“There is the possibility that most of them remain undeveloped, and therefore these grants are proving insufficient in addressing housing needs in the Kingdom.”

In March, local media quoted Housing Minister Shuwaish al-Duwaihi as saying his ministry was able to obtain only a third of the land it needed to carry out housing projects. Ministry officials were not available to elaborate on his comments.

A lack of affordable bank financing is another constraint on home ownership. Partly because of Islamic sensitivities, there are no clear legal provisions for letting banks take away a borrower’s home if he defaults on a housing loan; this causes banks to charge high rates on the loans which they extend.

“The long-documented lack of security for mortgage lenders means that risk is priced into such products, making them unaffordable to all but a few,” Williams said.

INFRASTRUCTURE

Two years after King Abdullah originally announced the housing scheme, last week’s decree may finally put it into top gear. The king instructed the Ministry of Municipal and Rural Affairs to hand over municipal lands immediately to the Ministry of Housing, which was told to build infrastructure such as roads on them before distributing them to citizens, who would build homes with loans granted by the housing ministry.

The Ministry of Finance was ordered to approve funds for the infrastructure construction. The king also told other departments to provide the housing ministry with the data it needed to decide which citizens were eligible for the land grants and loans – a key issue to avoid waste and corruption.

Even if all the government agencies cooperate smoothly, however, the scale of the task means it is likely to be many years before Saudi Arabia reaches the levels of home ownership – around two-thirds – enjoyed by other rich countries such as theUnited States and Britain.

The housing ministry said in January it would need a year just to prepare the mechanism for deciding citizens’ eligibility for land grants. Administering it may be a slow process in a country where the state bureaucracy is not known for its efficiency.

Bottlenecks in the construction industry may then delay the delivery of homes. One current bottleneck is in the supply of cement; last week King Abdullah ordered the import of 10 million tonnes to ease a shortage and called for three or four cement plants to be built over the next three years, granting 3 billion riyals towards the scheme, state news agency SPA reported.

“In my calculation, I’ve put 10 years to finish the whole project,” Fahad Alturki, senior economist at Jadwa Investment in Riyadh, said of the housing programme.

With Saudi Arabia‘s population expected to grow by 2.1 percent annually in 2010-2015, well above the global average of 1.1 percent, according to a central bank report, the current housing programme may need to be followed by others. In January, minister Duwaihi told local MBC television the country needed 1.1 million housing units.

Dekheel said he was optimistic about buying his own home eventually, but was not expecting it to happen soon. “For sure I will apply to get a land and loan,” he said, adding: “It is going to take at least five years until the youth can have access to this.”

The sector’s net income slid 18 percent from a year earlier to 8.0 billion riyals ($2.1 billion) in the first quarter of this year, Riyadh-based NCB Capital calculated this week after the companies announced earnings.

Even worse, global oil prices have dropped sharply since the start of this month. That threatens to pull down petrochemical product prices later this year, hurting firms’ bottom lines.

This matters for the entire Saudi stock market, because petrochemical shares account for roughly a third of its total capitalisation.

But a closer look at the outlook for petrochemical earnings suggests it is not so grim, many institutional analysts and investors argue – meaning the market could rebound quickly if oil prices stabilise in coming weeks.

A collapse of demand for Saudi petrochemical output is not on the cards, saidFaisal Potrik, analyst at Riyad Capital, who is keeping a “buy” rating on Saudi Basic Industries Corp (SABIC) , the world’s biggest petrochemicals group.

“Demand is still there, especially out of Asia - that’s going to cushion and has been cushioning the impact of any decline in the West,” he said.

RETAIL SELLING

Heavy selling of petrochemical shares by retail investors has pushed the sector index down 4.8 percent this month, leaving the overall Saudi market flat. Saudi Arabia is far underperforming most Gulf markets; Dubai, which is not directly exposed to the petrochemical industry, is up 12 percent this month.

There has been plenty of bad news to alarm investors. SABIC said last week that it would cut about 1,050 jobs in Europe and close some operations there because of weak demand on the continent.

Demand is stronger in the United States but the revolution in extracting natural gas there is strengthening some of the Saudi companies’ competitors, by reducing the cost of the gas they use as feedstock.

Meanwhile, the price of Brent crude oil has tumbled 8 percent this month to its lowest level since mid-2012. Petrochemical prices have held up well so far this year – ethylene was around $1,490 a tonne in the first quarter, up 16 percent from the previous quarter – but they could drop if oil prices stay at current levels, since in the long term the markets are closely related.

SABIC announced last week that its net profit sank 10 percent from a year earlier in the first quarter, while sales shrank 3.3 percent. It warned that growth would probably not improve until next year.

BETTER THAN EXPECTED

But there are signs that petrochemical firms’ plight is not as bad as some investors are assuming. Although first-quarter profits dropped at many Saudi producers, most actually beat analysts’ consensus forecasts, except for when company-specific factors were involved, said Amer Khan, fund manager at Shuaa Asset Management in Dubai.

In fact, much of the drop in the sector’s profits during the first quarter was due to shutdowns of facilities for maintenance and emergencies – events that did not indicate weakness in the firms’ core business.

PetroRabigh, for example, posted a 658.1 million riyal net loss in the quarter, against a year-earlier profit of 115.8 million riyals – but the loss was due to an unexpected disruption of power and steam supplies from an outside provider. This forced PetroRabigh to halt operations.

Concern that SABIC‘s European layoffs are a sign of things to come may also be overblown. Announcing first-quarter earnings, the firm’s chief executive Mohamed al-Mady described Europe as a “special case” and said he was optimistic about growth in China improving, while the U.S. construction market – a major source of demand for SABIC‘s products – was recovering.

Potrik at Riyad Capital forecast SABIC‘s earnings per share would rise to 8.75 riyals this year from 8.26 last year, meaning the stock, which closed Wednesday at 91.25 riyals, is trading at an inexpensive 10.7 times projected 2013 earnings. He has a target price of 120 riyals for the stock.

NCB Capital has a target of 120.5 riyals for SABIC shares.

“We expect the sector’s earnings to improve in the next quarters of 2013 as most of the shutdowns ended in 1Q13,” it said, predicting petrochemical product prices would remain “broadly flat” this year – not a strong performance, but not as bad as many investors have been fearing.

“I was fired with many others when trading volumes went down,” said Ayad, a man in his 30s who worked for a securities firm in Cairo until last year. “I have been unable to find a new job as many other people working in the financial sector have also been laid off.”

Over two years after Egypt‘s revolution ousted president Hosni Mubarak, the stock market continues to sag, plagued by sluggish trading turnover, a lack of new equity issuance and the reluctance of many big foreign investors to commit money.

The effect is being felt well beyond the community of finance professionals in Cairoand Alexandria – the market is viewed as a barometer for business confidence, and its weakness is preventing companies from using it to raise money.

Although Egypt‘s economy is struggling, the market’s problems are as much political as economic. Investors feel the government is unsympathetic to them, and inclined to intervene in the market to obtain money or settle political scores.

Two official decisions this month have raised hopes that the government’s approach to the market is changing, and that it can reach an accommodation with investors. But the decisions will need to be followed by the resolution of other long-running issues for confidence to return, analysts and investors say.

PUBLIC RELATIONS

After Mubarak’s overthrow the Muslim Brotherhood, which took the lion’s share of political power, mounted a public relations campaign to reassure investors that its Islamist ideology did not conflict with their desire to make money.

By late last year the campaign appeared to be working; the main stock index, which halved in the months after the revolution, had recovered almost two-thirds of those losses.

But early this year, a series of regulatory incidents hit the market. One was a clash between authorities and Orascom Construction Industries, the market’s largest stock.

In late February the Egyptian Financial Supervisory Authority (EFSA) intervened to suspend a multi-billion dollar offer for Orascom’s Amsterdam-listed affiliate OCI NV to buy out the shares of the Cairo-listed company. The EFSA said it wanted more information about the transaction, which could result in Orascom being delisted from Cairo.

Then in early March, the government slapped a travel ban on Orascom chief executive Nassef Sawiris and his father Onsi Sawiris – two of the country’s most prominent businessmen – in a probe into alleged tax evasion by the company.

Later that month, authorities spooked the market by imposing a new tax covering investment gains on an offer by Qatar National Bank (QNB) to buy shares in National Societe Generale Bank (NSGB) – and telling shareholders about the tax only after they had agreed to sell.

Taken together, the incidents suggested the government’s attitude to the market was not as benign as it had claimed. A fledgling recovery of foreign fund inflows into the market was halted; the index is down 11 percent from its January peak.

The market is still debating authorities’ motives. One theory is that the government, with its budget deficit officially projected to rise to 197.5 billion Egyptian pounds ($28.5 billion) in the fiscal year that will start on July 1, is increasingly desperate to raise money – and that it sees the market as a tempting source of cash.

If this theory is right, the government may be disappointed. Much of the money it raises in the short term could be lost in the long term as investors become more reluctant to trade stocks and companies shy away from listing their shares on the market.

“They make less than $10 million, $9 million from this tax, a very small amount for making all this trouble,” said Karim Abdelaziz, who manages an Egyptian share fund worth 1 billion pounds at Cairo-based al-Ahly Fund & Portfolio Management.

Another possibility is that as Brotherhood-backed President Mohamed Mursi consolidates power, his administration is becoming more eager to settle political scores with businessmen who prospered under the old regime. The Sawiris, and wealthy stock market investors, fall in that category.

In the long run, that strategy could also be counter-productive, by deterring the business investment which Egypt needs to create jobs and repair its economy – and which the Muslim Brotherhood will need to retain its political support.

Abdelaziz said the Orascom tax case could lead to a lengthy court battle, which would risk scaring off more investors who were already concerned about land sales that have been revoked by the government. Authorities accuse some real estate firms of having paid too little for land because of cosy relationships with officials in the Mubarak era.

A third theory is that officials making decisions affecting the stock market, some of them new to government after being excluded from power by Mubarak, are simply too inexperienced – or perhaps too distracted by other challenges – to make policies with investor confidence in mind.

Hani Helmy, chairman of El Shorouq Brokerage in Cairo, said the government was too busy dealing with street violence, fuel shortages and power cuts to focus on helping the stock market.

“I think since the revolution until now…the stock exchange is not a priority to deal with – maybe we are number 10, number 20,” he said.

POSITIVE SIGNS

There have been two signs this month that authorities’ approach toward the market may be becoming more benign.

One was an announcement by the EFSA that the stock exchange would reinstate the buying and selling of individual stocks within the same trading session from the first week of May, in an effort to boost market volumes.

Buying and selling a stock in the same day has been banned since the revolution destabilised the market in February 2011. EFSA head Ashraf El Sharkawy said the resumption would increase the number of transactions by between 30 and 40 percent and help to alleviate “huge liquidity problems” on the exchange.

By itself, the opportunity to trade stocks more frequently will not restore investors’ faith in the government – but it does suggest that within the government, there are still officials working to improve market conditions.

The second positive sign was a decision by parliament’s economic and financial committee to scrap the tax on investment gains and return to investors the money already levied on the NSGB deal.

Abdullah Shahata, an aide to the finance minister, told Reuters that members of parliament had decided the tax would have a “negative effect on the investment climate in Egypt“.

Daniel Broby, chief investment officer of British-based Silk Invest, said the tax saga should be seen as part of a learning curve in economic management for Mursi, and was not a bad omen for the market in the long run.

“The tax imposed on stock market gains…is the sort of knee-jerk reaction that inexperienced politicians typically make and regret,” he said.

At least two more things may need to happen for the market to feel comfortable with the government. One is a resolution of the Orascom tax dispute; Orascom said on Tuesday it was “in an advanced stage of negotiations with the Egyptian Tax Authorityand will announce more details within the coming few days”.

The other thing is for the government to give clearance for a merger of Cairo-listedEFG-Hermes, the Middle East‘s largest investment bank, with QInvest of Qatar. The deal was originally signed on May 4 last year; a clause in the agreement states it will lapse after 12 months if regulatory approval is not forthcoming.

The merger is politically sensitive in Egypt because both of EFG‘s chief executives,Hassan Heikal and Yasser El Mallawany, are accused by authorities of illegal share dealings in relation to a 2007 transaction, along with the two sons of ousted Mubarak. EFG has said it will defend the CEOs.

Uncertainty over whether the deal will go ahead has weighed on EFG‘s share price and caused concern about Egypt‘s relations with Qatar, which has promised billions of dollars of badly needed financial aid to Cairo.

If such issues are resolved and confidence in the regulatory environment revives,Egypt‘s fast-growing population of 84 million could make its stock market attractive. Some institutions are already planning based on that assumption.

“We plan to open five to six branches in the provinces in the Nile Delta and UpperEgypt in the next three years to attract retail investors,” said Hussein Choucri, chairman of local firm HC Securities & Investment, which manages assets worth almost 5 billion pounds in 14 investment funds.

Fund manager Helmy said a Muslim Brotherhood victory in this year’s parliamentary elections, which are expected as early as October, might actually calm the market by giving parliament a mandate to take difficult economic decisions.

“People would accept the Brotherhood for the first two years, and judge them afterwards,” he said.

Investments went into expansion of core industries such as Emirates Steel, Arkan Building Materials Co and Agthia Group.

Since 2004, Senaat has invested about 16 billion dirhams in Abu Dhabi‘s industrial sector.

“All of this new investment is consistent with our strategy to engage in industrial projects and we will continue to invest every year,” Hussain al Nowais, chairman ofSenaat, told Reuters after announcing the company’s results.

Unlisted Senaat‘s revenues totalled 12.3 billion dirhams in 2012, up 7.2 percent over the previous year. But net profit was lower at 1.3 billion dirhams compared to 1.5 billion dirhams in 2011, mainly due to higher depreciation costs, al Nowais said.

Total assets grew 7.8 percent to 25.4 billion dirhams in 2012.

Two of Senaat‘s companies, Arkan and Agthia, are listed on the Abu DhabiSecurities Market and there are plans to list more when market conditions improve, said al Nowais.

Jet is one of India‘s top airlines, but the price paid still looks a bit generous. Etihad is paying $380 million or a 32 percent premium for its minority interest. That’s on top of a 63 percent rise in the share price since mid-September when reports of a deal between the pair first surfaced. That type of premium is usually justified by a change of control. In this case, Jet founder Naresh Goyal will remain non-executive chairman, and retain a 51 percent stake.

Goyal has obviously driven a hard bargain, even though his company badly needed the funds. The airline has to repay $400 million each year. At the end of December, Jet had $134 million of cash on total debt of $2.2 billion and had already been forced to enter sale and lease back agreements ahead of the tie-up. With Etihad, it will have a deep-pocketed partner.

The premium reflects the importance of India to Etihad. Over the past two years, the airline has snapped up minority stakes in Air Berlin, Virgin Australia, Aer Lingus and Air Seychelles, but this is its biggest and most important deal yet. Only three hours away by air, India‘s population is more than 150 times bigger than that of the UAE and can provide traffic for Eithad’s routes to the U.S., Europe, Africa and the Middle East.

The success of Etihad’s bet will depend on the capacity of the two strong characters at the head of each airline to stay on friendly terms, in order to navigate difficult political waters. Goyal long opposed the entrance of foreign airlines into India. And Etihad Chief Executive James Hogan might want a bigger say in how the Indian carrier is run after handing over cash worth two thirds of Jet’s market value. Working together, the pair could be a powerful partnership. If they ever fall out, it could be a disaster.

Industry sources, analysts and potential buyers say Boeing’s idea of revamping its long-serving 777 was rapidly gathering momentum even before British Airways signed a $6 billion order for 18 of Airbus’s new A350-1000 jets on Monday.

Airbus’s victorious climax to a three-year courtship cracks Boeing’s virtually complete hold on BA’s long-haul fleet and makes it almost certain the U.S. group will show its hand by formally offering a revamped “777X” very soon, the sources said.

Boeing’s response would mark the end of a “phoney war” between transatlantic rivals and set up a direct clash for a segment of the market projected to involve 2,000 twin-engined mini-jumbo jets worth $500 billion at list prices over 20 years.

It provides a glimpse of fierce competition that continued behind the scenes – pulling in top Boeing executives – even as the grounding of its 787 Dreamliner over battery concerns captured global headlines and drew public support from Airbus.

“I think there is pressure on Boeing to move by the (June 17-21) Paris air show,” said Adam Pilarski, former chief economist at Douglas Aircraft, which is now part of Boeing.

For years, Boeing governed a “sweet spot” in the jet market between 300 and 400 seats after pioneering two engines rather than four for long routes. Its 777 is an industry best-seller.

Now, its dominance is being challenged by the A350-1000, a larger cousin to Europe‘s answer to the carbon-composite 787, forcing Boeing to come up with changes such as folding wingtips to increase wingspan while fitting at the same airport gates.

“I think Boeing is ready to go with the 777X. We’ve been in fairly close contact with them in the last few months,” Tim Clark, President of Emirates airline, told Reuters last week in Dubai.

“They have offered (it) to us in the specifications we asked for and this is now being tested through our normal route of assessment. If we are happy we may even go with it soon.”

As head of the largest 777 operator with up to 175 jets that will need replacing starting soon, Clark is someone Boeing will pay attention to as he pushes for early decisions.

Not all potential buyers agree things will happen imminently, however. One, who asked not to be named, said Boeing needed more time to fine-tune the 777X, though basic negotiations can start while designs are still in flux.

Boeing must also consider the impact on its existing product, but is anxious not to leave the door open to Airbus. It declined to comment on the timing of a formal marketing debut.

“It is a thorough process, with ongoing robust discussions, to ensure we come to market with the right airplane, at the right time, leveraging the right technology and delivering the right economics,” Boeing spokeswoman Karen Crabtree said.

A BIGGER A350?

Critics say Boeing has dithered over the 777X, giving Airbus time to recover from a slow start, as they became absorbed in a battle for market share for smaller planes. Still, Airbus has so far only dented the mini-jumbo market with 128 new A350-1000 sales, compared with 1,294 777s of various sizes over 20 years.

“Airbus’s best friend is Boeing’s delays with the 777X,” said Richard Aboulafia of Virginia-based consultancy Teal Group.

The looming mini-jumbo war is part of a wider contest for long-haul, twin-aisle jets where Boeing is traditionally strong. The battle for 350-400 seats promises to be one of the toughest.

Boeing says the total market for twin-aisle wide-body planes is worth $2.1 trillion over 20 years. It represents a quarter of the overall jet market by volume but just under half by value.

Sources say Boeing is also offering a larger 787 called the 787-10X after a low-key decision to market it late last year. But so far no airlines have committed to the 320-seat model.

The largest version of Boeing’s revamped 777 is tipped to have over 400 seats or 60 more than the A350-1000, raising questions whether Airbus will kick back with a bigger design.

So far, Airbus argues the 350-seat A350-1000 is “lean and mean” and that the 777X would be too big for many airlines.

“Airbus will respond that the A350-1000 will do the job,” said Clark, adding the two planemakers had perhaps inadvertently arrived at a neat method of segmentation of the market.

Asked if Airbus would make the A350 bigger, the European planemaker’s sales chief John Leahy told Reuters: “No, we wouldn’t want to. There isn’t a market there (and) you can’t artificially create a market where there isn’t one.”

That doesn’t prevent a growing number of people speculating that Airbus may keep other ideas in reserve, though it is seen unlikely to reconsider its A350 strategy any time soon.

Much depends on where the market decides the “sweet spot” should be – the ideal combination of payload and range that decides whether any plane is a success or an expensive flop.

Technically, industry sources say it would be feasible to make the A350 bigger, depending on the support of Rolls-Royce which has already redesigned the engine. Its battle with 777 supplier General Electric mirrors the jet makers.

Like bigger cars, stretched jets can be economical because they burn less fuel per passenger. But stretching too much increases the risk of the tail scraping the ground on take-off, so designers have to include bigger and heavier landing gear.

Drifting above 400 seats with a new, lightweight jet could also test support for Airbus’s 525-seat A380 superjumbo.

“I think that would be a stretch too far,” a major client of both Airbus and Boeing said, asking not to be named.

Despite its euphoria over BA – “one of the most dramatic changes of culture” at the airline since it turned its back on UK aircraft in the 1960s, according to analyst Howard Wheeldon - Airbus needs more wins as Boeing mounts an all-out 777 defence.

A decision by Swiss, an all-Airbus customer, to buy 777s - as its parent Lufthansa also weighs fleet options – suggests the opportunity to capture Boeing’s lead remains tight, analyst say.

“That deal sent a signal to Toulouse,” where Airbus is based, said a senior industry source, asking not to be named.

It’s strange how at times CEOs willfully ignore marketing insights and trends and move forward based on their intuition. Let’s look at a couple of examples of doing it right or doing it wrong  Microsoft vs. Apple, and Walgreens vs. CVS.

Software giant Microsoft seemed to be convinced for a number of years that the business-to-business approach would keep it profitable. The company recently revisited that approach and changed its corporate strategy to embrace the business-to-consumer sector, a move which led to a revolution in corporate identity, but not in the brand or product lines. Things were moving so fast that the average consumer missed most of Microsoft’s messages. For example, the company killed Hotmail and introduced the web-based free email platform Outlook.com. This move seemed a bit strange to me. Hotmail already had great equity in the for-free email market. Why not add features and improve that experience? Outlook’s equity was with the Office suite; why reposition it as free web-based email? The move proved to be a deadly mistake. Though Microsoft is claiming a great number of users, I think numbers will soon stagnate. In the same vein, Microsoft outlets tried to sell the Bing search engine, supposedly to compete with Google. Google it? Or Bing it? It’s a no-brainer. Google owns the word search. The list of missteps goes on. It seems that Microsoft is exhausting its competitive advantage and draining its resources trying to chase Apple and Google. The company that led the world of software is running second or third in every category but software. This tells me that Microsoft should focus on and develop opportunities in areas it’s best at and known for if it wants to continue the legacy of Gates.

My second example is how Walgreens, the long-time pharmaceutical giant with 8,300 stores across the US, has handled the onslaught of CVS, the newcomer, now with 6,000 stores. CVS was formed in 1963, and Walgreens in 1901. Clearly, CVS has experienced phenomenal growth over the past two decades. Did Walgreens start focusing on its competition rather than on creating new opportunities? As CVS rose, Walgreens failed to innovate, and instead sought to maintain its position, while CVS, with its experience of larger retail spaces and wider offerings, offered consumers more value. The key question now is whether Wal-Mart will capture the low-priced medicine segment. It will be interesting to see how CVS and Walgreens react to Wal-Mart’s grab for that opportunity.

In the GCC, which is part of the Middle East, it has been interesting to watch three airlines—Emirates Airline, Etihad Airways and Qatar Airways—compete for the same audience, all seeking to make luxury their key concept. Emirates is by far the winning creator of that experience in the region as well as a giant player in the worldwide airlines industry. Clearly, Emirates focuses on the in-flight experience and the best destination in securing its leadership. What surprises me is how Qatar and Etihad are trying to offer the luxury concept that Emirates already owns. In what way do they imagine that this competitive approach will set them apart? Does Qatar imagine the tagline “your five-star airline” will deliver the intended essence? I think there is an enormous opportunity for these two airlines to innovate and differentiate to find new ways to serve their customers, rather than trying to imitate Emirates and contest a leadership position that brand already owns. Meanwhile, the Etihad and Qatar brands run third and fourth in the sector, and continue to be known as an option rather than a preference.

While we’re on the subject, let’s talk about Nokia and iPhone. If iPhone fails to showcase more innovations in the next year or two, Nokia could be the next leader. You think I’m crazy? Well, Nokia is heavily focused on innovation. Its only current downside is its Windows operating system, which seems limited in comparison to ISO and Android. The big question is, if Nokia were to accept Android as its operating system, would that make the innovation difference? I think that move would give Nokia new life in the smartphone category

I have always stressed that competitiveness can take you only so far, and that it will never give you the leadership position. Funnily enough, the old guard in a wide variety of sectors seems bent on taking a defensive stance, focusing on competiveness. Such efforts always fail eventually, because innovation and competitiveness are fundamentally incompatible goals.