Search results

More than 1,000 exhibitors from 61 countries turned up to the 8-12 November Dubai Airshow, which reflected in its global status to show off some 150 aircraft on the tarmac, from agile drones made by Abu Dhabi-based Adcom Systems all the way up to lumbering Airbus A380s decked out in the liveries of Dubai’s Emirates Airline and Qatar Airways. So far, so normal: what was unusual was the lack of big new orders. Abu Dhabi-based national UAE airline Etihad Airways exercised options for two Boeing 777 freighters, but that was part of an order for 199 planes announced in 2013.

Another complex dispute over property involving well-heeled Gulfis has come to the High Court of Justice in London, where Sheikha Hind Bint Salim Hamud Al-Jaber Al-Sabah and two other claimants are pursuing a legal action involving six defendants, including the Kuwaiti royal’s sister Sheikha Salem Hamud Al-Jaber Al-Sabah and Iraqi-Emirati businessman Hussain Sajwani, chairman of UAE-based developer Damac Properties.The sheikhas’ father was Sheikh Salim Hamud Al-Sabah, described in court documents as a high-ranking professional soldier who was head of the Emiri Guard for 25 years.

Fiscal pressures resulting from low oil prices are starting to hit home, with the International Monetary Fund estimating the six Gulf Co-operation Council (GCC) states will run a combined budget deficit of 13.2% this year, and some countries – including architect of the Organisation of the Petroleum Exporting Countries policy Saudi Arabia – likely to be even further in the red. A policy response is unavoidable, but governments’ willingness to deal with the issue comprehensively remains uncertain, with only a few options authorities can realistically consider: cutting spending, raising more debt, drawing on savings and/or selling assets.

Brazilian food company BRF in early October, signed a binding memorandum of understanding with Qatar National Import and Export (QNIE) for the acquisition of part of QNIE’s frozen distribution business, valued at $140m. BRF is one of the few currently successful listed Brazilian companies; it benefits from being an exporter in a period of currency weakness and is regarded as generally well run. BRF has a long relationship with the Middle East, which is a major importer of frozen meats; BRF’s Sadia frozen chicken brand can be found in many supermarkets in the Gulf.

The deal between Tehran and the P5+1 powers over Iran’s nuclear programme should, as international sanctions are lifted, eventually make Iran the biggest economy to rejoin the global trading and financial system since the break-up of the Soviet Union over two decades ago. The World Bank has forecast that the deal will add 1m b/d of crude, reduce oil prices by $10/bbl in 2016 and drive Iran’s economic growth to 5% in 2016 from 3% this year. On 12 August, Switzerland became the first nation to remove sanctions.

Rather than gaining a bounce from the opening up of the Saudi stock exchange (Tadawul), regional equities markets have been hit hard in the past month by the global turmoil related in part to collapsing Chinese markets. In a 24 August note, Capital Economics said the worst Middle East and North Africa (Mena) region stock market performers were largely concentrated in the Gulf, notably Saudi Arabia, Abu Dhabi and Dubai.

The Securities and Exchange Commission (SEC) on 18 August announced that New York-based BNY Mellon has agreed to pay $14.8m to settle charges that it violated the Foreign Corrupt Practices Act (FCPA) by providing student internships to family members of two officials at a Middle Eastern sovereign wealth fund. Without admitting or denying the findings, the company has agreed to pay $8.3m in disgorgement, $1.5m in prejudgment interest and a $5m penalty

Qipco Holding (Qatar Investments & Projects Development Holding Company) has extended its partnership with Britain’s Royal Ascot until 2024, in what is thought to be the biggest sponsorship deal in British racing history: some estimates put the contract’s value at around £50m ($78m). Qipco, which was established in 1999 and is owned by cousins of Emir Sheikh Tamim Bin Hamad, became Ascot’s first official partner in 2014; its deal with the British institution includes two designated days at Ascot “with enhanced branding benefits”, as well as annual branding and marketing rights, and sponsorship of the King George VI and Queen Elizabeth stakes.

Ruler Sheikh Humaid Bin Rashid Al-Nuaimi has given initial approval for a ‘heritage village’ to be built behind Ajman Museum. It will be only the second ‘cultural attraction’ in the emirate, which is trying to raise its profile as a tourism venue with five-star hotel developments and plans to invest Dh2.1bn ($0.57bn) to build an international airport, with an ambitious 2018 timetable for opening. Previous plans to privately finance an airport and other infrastructure have fallen short, but Ajman tourism authority chief Faisal Al-Nuaimi expects an upsurge in projects that will bring in visitors.

Despite moves to mobilise new finance, concern is growing in Morocco about the financial health of the North African kingdom’s only refinery, operated by Société Marocaine d’Industrie de Raffinage (Samir) at Mohammedia, and its ability to remain the dominant player in the national products market. This follows the announcement of losses in 2014 and questions about the ability and appetite of the refinery’s owner, Saudi-Ethiopian magnate Mohammed Hussein Al-Amoudi, to meet heavy financial costs.

Dubai Investments (DI), 11.5%-owned by Investment Corporation of Dubai and the largest investment company listed on the Dubai Financial Market (DFM), is looking to invest in oil-rich Angola and has paid around $400m for land in Saudi Arabia, as it internationalises its growth strategy. Announcing plans to float shares in at least one of its subsidiaries in 2016, chief executive Khalid Bin Kalban told reporters in mid-March that the company wanted to build industrial zones in Angola and Riyadh, modelled on its flagship Dubai Investments Park.

Abu Dhabi Investment Authority (Adia) is investing HK$18.5bn ($2.89bn), via a joint venture with Hong Kong-listed New World Development Company (NWD), in the biggest hotel deal registered in Asia in a decade. NWD has sold Adia stakes in three major Hong Kong hotels: the Grand Hyatt Hong Kong and Renaissance Harbour View in Wan Chai, and the Hyatt Regency in Tsim Sha Tsui; they will form part of the new 50:50 Adia/NWD joint venture.

There was symbolism in the fact that petroleum and mineral resources minister Ali Bin Ibrahim Al-Naimi, for long the government’s most senior non-royal, was in Beijing as King Salman Bin Abdelaziz reshuffled his government and control of the oil industry, in moves which should have lasting impact on Saudi Arabian Oil Company (Saudi Aramco) and the industry pecking order (see page 1). The separation of Aramco from the oil ministry, and the appointment of Saudi Aramco chief executive Khalid Al-Falih as health minister and as the oil giant’s chairman triggered further speculation about Naimi’s future, which the veteran petroleum minister immediately side-stepped by focusing on relations with China, which could prove critical to the kingdom’s future economic health.

Saudi Arabia’s decision to preserve its market share over and above a high price for oil, supported within the Organisation of the Petroleum Exporting Countries (Opec) by the UAE, Kuwait and (reflecting improving relations) Qatar, is not expected to change any time soon, even if that means relations with Opec’s big net losers from the price crash – including Algeria, Nigeria, Iran and Venezuela – reach new lows in the months ahead.

Qatar Racing and Equestrian Club (QREC) has entered a ten-year sponsorship deal with Britain’s Glorious Goodwood – now rebranded the Qatar Goodwood Festival. Under the deal, total prize money for the fixture will soar to £4.5m ($6.8m) (£700,000 more than in 2014), with more than £2m going into the eight key races, and the Qataris have committed to increasing the pot year on year. The Group 1 Qatar Sussex Stakes, scheduled for 29 July, has a total prize fund of £1m, making it one of the most valuable mile races in the world.