POWER

LETTERS
The regions top business
minds predict the year ahead
THE
VOLUME 16
ISSUE 08
DECEMBER 2011
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1996-2011
!$GB Dec 2011 FINAL.indd 1 11/29/11 10:17 AM
the explorer ii
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PLANET OCEAN
"Standing on the Moon looking back at Earth this lovely place you just
came from you see all the colours, and you know what they represent.
Having left the water planet, with all that water brings to the Earth in
terms of colour and abundant life, the absence of water and atmosphere
on the desolate surface of the Moon gives rise to a stark contrast."
Buzz Aldrin, astronaut
AVAILABLE AT:
OMEGA Boutiques: BurJuman Deira City Centre
Dubai Mall Mall of the Emirates Mirdif City Centre
Sahara Centre Waf and at select Rivoli Stores.
Toll Free: 800-RIVOLI
PO17_C322_Gulf bus dps.indd 1 11/20/11 3:31 PM
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PLANET OCEAN
"Standing on the Moon looking back at Earth this lovely place you just
came from you see all the colours, and you know what they represent.
Having left the water planet, with all that water brings to the Earth in
terms of colour and abundant life, the absence of water and atmosphere
on the desolate surface of the Moon gives rise to a stark contrast."
Buzz Aldrin, astronaut
AVAILABLE AT:
OMEGA Boutiques: BurJuman Deira City Centre
Dubai Mall Mall of the Emirates Mirdif City Centre
Sahara Centre Waf and at select Rivoli Stores.
Toll Free: 800-RIVOLI
PO17_C322_Gulf bus dps.indd 1 11/20/11 3:31 PM
PanoMaticCounterXL 20x26.5 magazine.pdf 1 11/17/11 4:58 PM
GULF BUSINESS / 7
GCC Today
14 Regional news, people, numbeRs and events

oPINIoNS
24 matein Khalid
The Arab world needs to rethink its development model.
26 dR tommy weiR
People leadership is the need of the hour.
28 taReK miKnas
Change is the way forward for the ad industry.
CoNTENTS
12.2011
years
1 9 9 6 - 2 0 1 1
14
COVER DESiGN: ROUI FRANCISCO
48
LEAdING BUSINESS
mINdS FORECASt thE
REGIONS FORtUNES
FOR 2012.
POWER
LETTERS
WHATS IN STORE FOR 2012?
THE
9-10,12 Contents.indd 7 11/27/11 3:29:18 PM
8 / dECEmBER 2011
BRIEFING
30 banKing
UAEs bankers are packing up their suitcases to head home.
32 libya/gCC
Is the Gulf happy with Libyas rising oil production?
34 aviation
GCC airlines went on a shopping spree at the Dubai Air Show 2011.
37 FinanCe
The regional Sukuk market enjoyed a record year.
41 Commodities
Is gold losing its shine?
45 RaK
The Northern emirate draws in foreign investors.

FEaTURES
66 the aRab spRings long night
Its been a long road for revolution in the Arab region. Can the Gulf
countries help their neighbours during the crucial transition?
74 pRoFile: Flydubai
fydubai CEO on why the airline is expanding its horizons.
80 siR RoCCo FoRte hits abu dhabi
British hospitality tycoon launches a fve-star hotel in the capital.
84 a veRy publiC love aFFaiR
Can Emiratisation succeed in the UAEs private sector?
80
CoNTENTS
37
66
30
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bwa.pdf 11/23/11 12:22:23 PM
10 / dECEmBER 2011
CoNTENTS
doWNTIME
99 tRavel
Explore history at Shanghais art deco palace, the Peace
Hotel.
102 CRuise
Reviewed: BMW 6 Series 650i.
104 aRt
Christies unveils new sales format in the Middle East.
106 booKs
Gulf Business rounds up a selection of business reading.
109 plaCes to be
Cantonese restaurant Hakkasan opens its doors at the
DIFC.
daTa CRUNCh
93 stats
Regional mergers, acquisitions and bond issuances.
REGULaRS
110 events
The Gulfs top business conferences.
112 gulF business pReFeRRed hotels
A selection of the regions top rooms.
114 in youR shoes
Doug Speck, senior vice president, Volvo.
99 109
EdIToR-IN-ChIEF
Obaid humaid Al tayer
GRoUP EdIToR aNd MaNaGING PaRTNER
Ian Fairservice
GRoUP SENIoR EdIToR
Gina Johnson
SENIoR EdIToR
Guido duken
EdIToR
Alicia Buller alicia@motivate.ae
BUSINESS EdIToR
Jonathan Sheikh-miller jonathanm@motivate.ae
BUSINESS WRITER
Aarti Nagraj
EdIToRIaL CooRdINaToR BUSINESS
hilda dSouza hilda@motivate.ae
aRT dIRECToR
tarak Parekh tarak@motivate.ae
dESIGNER
Charlie Banalo charlie@motivate.ae
JUNIoR dESIGNER
Roui Francisco rom@motivate.ae
PhoToGRaPhERS
Farooq Salik; Naveed Ahmed; Vikram Gawde; Victor Besa
CoNTRIBUToRS
Ryan harrison; Rom miclat; Peter Shaw-Smith; thomas
Board; Adrian mourby
SENIoR PRodUCTIoN MaNaGER S Sunil Kumar
PRodUCTIoN MaNaGER C Sudhakar
PRodUCTIoN CoNTRoLLER Binu Purandaran
GENERaL MaNaGER GRoUP SaLES
Anthony milne anthony@motivate.ae
SENIoR advERTISEMENT MaNaGER
Abraham Koshy abraham@motivate.ae
advERTISEMENT MaNaGER
Ajay mathews ajay@motivate.ae
dEPUTy advERTISEMENT MaNaGER
melroy Noronha melroy@motivate.ae
GENERaL MaNaGER aBU dhaBI
Joe marritt joe@motivate.ae
SENIoR SaLES ExECUTIvE aBU dhaBI
hamdan Bawazir hamdan@motivate.ae
Printed by Emirates Printing Press, dubai
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motivate-adh@motivate.ae
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EdIToRIaL SyNdICaTIoN dETaILS
tel: + 971 4 2824060, gb@motivate.ae
104
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21972GE_Gulfbusiness27x20.6SolarE.indd 1 11/16/11 5:36 PM
14 / DECEMBER 2011
UAE TodAy
To MaRk ThE 40Th annivERsaRy of iTs founDing,
wE havE DEDiCaTED ThE opEning Two pagEs of gCC
ToDay To ThE uaE.
98
76.51
69%
100
The number of oil barrels in billions that the uaE is
proven to have, amounting to nearly 10 per cent of the
worlds oil reserves.
The 2011 estimate in years of the average life expectancy
in the uaE, according the Cia world factbook.
The percentage of the uaEs gDp last year that foreign
trade accounted for, according to the countrys Minister
of foreign Trade, sheikha Lubna al Qasimi.
The area in square miles covered by ajman, the
smallest emirate in the uaE, situated between
umm al Quwain and sharjah.
The UAE turns 40,
but life is just beginning
in the course of world history, 40 years is a mere blink of an eye.
kings and queens have reigned for longer, even wars have been
waged for longer and yet the speed of development has been so
breathtaking, it is hard to believe the uaE is still so young.
The discovery of oil in abu Dhabi in the early 1960s was a
seminal moment for the seven emirates that would eventually
form the uaE in 1971 and much of what has been achieved is
undeniably on the back of this wealth. But the ambition and vision
of the countrys leaders, from sheikh Zayed bin sultan al nahyan
onwards, have been vital in driving the nation to a point where its
gDp exceeded $300 billion in 2010.
The list of achievements is constantly increasing and it cuts
across every sector. Emirates airline will become the worlds
largest operator of wide-body aircraft by 2015; the abu Dhabi
investment authority is one of the worlds biggest sovereign
wealth funds; the country boasts the worlds tallest tower and the
largest shopping mall; the Dubai international financial Centre
is a major international fnancial hub; Masdar is a pioneer in the
feld of renewable energy and the country has become a venue for
leading sports events from golf to f1.
Last year, the government set out a vision to become one of
the best countries in the world by 2021. arguably, the dream
could become a reality a lot sooner than that.
14-22 GCC Today.indd 14 11/27/11 2:03:35 PM
guLf BusinEss / 15
UAE TodAy
2,268,000
Dhs52.2m
1985
The number of knots in the worlds largest hand-knotted carpet that covers the
foor of the main prayer hall at the sheikh Zayed grand Mosque in abu Dhabi.
The selling price of licence plate number
1 auctioned off in abu Dhabi in 2008,
which holds the record for being the
worlds most expensive number plate.
The year in which Emirates airline, with a start-up
capital of $10 million, made its frst fight, k600, from
Dubai to karachi on october 25.
$600bn
The amount that the uaEs foreign assets
are predicted to be worth by the end of 2012,
according to the washington-based institute
for international finance.
14-22 GCC Today.indd 15 11/27/11 2:03:38 PM
16 / DECEMBER 2011
GCC TodAy
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Gemstone bathtub
fetches Dhs6.4mn
DDF in 16% sales spike
The Le Grand Queen bathtub,
made from the Caijou gemstone,
managed to sell for Dhs6.4
million at this years Dubai
International Jewellery Week.
The gemstone is apparently
known for its strong healing
properties. Organisers claim
that the luxurious bathtub is the
frst of its kind in the world.
Dubai Duty Free (DDF) has posted
a sales total of $1.16 billion for
the frst ten months of the year,
a 16 per cent increase over the
same period in 2010. Perfumes
accounted for 14.6 per cent of all
sales, generating $169 million, with
gold close behind on $133 million.
On the Radar
Gulf IPO market remains fat
The market for initial public offerings
(IPO) in the GCC remained sluggish during
the third quarter of the year with only
two listings in the region, according to
PricewaterhouseCoopers (PwC). Both the
IPOs were in Saudi Arabia and raised a total
of $219 million, with Hail Cement raising
$131 million and United Wire Factories raising
$88 million.
Steve Drake, head of PwC Capital Markets
Middle East, said that IPO activity in Q3 had
followed the same sort of flat levels as had
been seen in the second quarter. There were
just three listings in the region during Q2.
This is to be expected over the summer
months and through Ramadan, with any IPO
activity we are likely to see being in the fourth
quarter or more likely into 2012, Drake said,
adding that Saudi Arabia was the strongest IPO
market in the region.
The turmoil we are witnessing in Europe
and the US is having an inevitable impact on
the regional credit markets as investor appetite
in the two economic zones for Middle East debt
has historically been strong, Drake said. It
is likely that we will see lower debt issuance
volumes or perhaps a shift towards a heavier
Asian market bias for issuers, he added.
aref hagras, the CEo of Diyar al-Muharraq,
a kfh-Bahrain subsidiary, has stated the
company will announce, towards the end of
2011, several new projects that will include
four residential and commercial real estate
developments.
al-hagras also noted that the projects will
provide suitable housing for various segments
in Bahraini society as well as provide a boost
to the commercial development of the island
state which has been a centre of political
upheaval as part of the arab spring.
You can start an
airline with one
aircraft and i can
make moneY for
You in one month.
Ghaith al Ghaith, CEO flydubai speaking
at a media roundtable at the Dubai Chamber of
Commerce and Industry.
SOAPBOX
Kuwaits Agility Q3
down 42%
Kuwait-based logistics company
Agility posted a 42 per cent
decline in third quarter net proft
as revenues from its freight
forwarding business dropped.
Net proft for the three months
ending September 30 amounted
to a total of $29.4 million, down
sharply from the $50.5 million
earned a year ago.
diyAr offErs
BAhrAin projECTs
g
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GCC TODAY REgionaL nEws, pEopLE, nuMBERs anD EvEnTs
14-22 GCC Today.indd 16 11/27/11 2:03:41 PM
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18 / DECEMBER 2011
GCC TodAy
g
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MUBAdAlA BUys EMi sTAkE
ADIB prices $500m Sukuk
How to rule
the world like...
Oman Oil has signed an initial pact with the Steel Authority of India (SAIL) to
jointly set up a gas-based steel plant in Oman with an estimated investment of
$3 billion. The plant will have a capacity of three million metric tonnes a year,
according to Indias steel minister Beni Prasad Verma.
The two government-owned firms are still finalising the feasibility report and
are planning to sign a final deal in the next six months.
The abu Dhabi islamic Bank (aDiB)
has priced its $500 million 2016
islamic bond, one of the banks
running the deal has confirmed. The
sukuk, listed in London, will yield 3.78
per cent. Citigroup, hsBC holdings,
nomura, the national Bank of abu
Dhabi and standard Chartered were
the lead managers on the deal.
aDiB held several investor meetings
in asia, Europe and the Middle East
last month before issuing the sukuk.
The lender is currently looking to
shariah-compliant funding sources as
more traditional markets dry up due
to global financial concerns.
The bank sold a $750 million, five-
year sukuk in october 2010.
sukuk issuance in the gCC region
has gone up sharply in 2011 it
increased to $14 billion during the first
seven months of the year, as opposed
to $4.45 billion in the corresponding
period last year, according to Zawya.
coms sukuk Monitor.
Promote yourself
Cruise is in Dubai this month for the first
screening of Mission: impossible ghost
protocol at the Dubai international film
festival. The star ensures that he is always
in the spotlight such as on oprah winfreys
show in 2005 when he jumped on the couch
professing his love for katie holmes.
Do your own stunts
from dangling dangerously outside the 124th
floor of the worlds tallest tower, the Burj
khalifa, to jumping off a car travelling at 60
miles per hour, Cruise insists on doing his
own stunts.
Diversify
in 1993, Cruise partnered with his former
agent paula wagner to form Cruise/wagner
productions and the company has since
co-produced many of his movies.
love Dubai
after shooting in Dubai for Mi4, Cruise
praised the city on his blog. My family
and i spent our evenings at the water park,
go-karting, indoor skiing, shopping, scuba
diving, camel riding, desert dune bashing and
we still didnt fit in all that there is to enjoy!
he said.
brinG in the cash
Though he is not the top-grossing actor at
the moment, he shares the ninth place with
Tim allen in forbes 2011 highest paid actors
list. Between July 2010- 2011, the actor
managed to pocket a cool $22 million.
Oman Oil joins hands with SAIL
ToM CrUisE
Mubadala Development, the
investment arm of the Abu Dhabi
government, has taken a stake
in British music publisher EMI
as part of a consortium led by
Sony/ATV. The deal, worth $2.2
billion, will give the investment
consortium rights to EMIs
publishing division.
The companys recording
division will be taken over
by Vivendis Universal Music
Group for $1.9 billion. EMI was
auctioned off by Citigroup and
includes popular artists such as
the Beatles, Coldplay, Katy Perry,
Rihanna and Norah Jones.
Norah Jones
14-22 GCC Today.indd 18 11/27/11 2:03:43 PM
01301 Gulf Business FP 11/14/11 4:09 PM Page 2
Composite
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20 / DECEMBER 2011
GCC TodAy
Ford doubles GCC sales
Ford saw a 55 per cent sales growth in the
GCC this year and has just opened a $53
million spare parts centre in Jebel Ali.
Its a great year for us, said Hussein
Murad, the director of sales at Ford Middle
East. We are making money, making profits
and selling a lot of cars.
All our new products Explorer, Taurus
and Edge have experienced high demand;
almost five times the supply for these
products, he said.
The firm is putting
aside worries about
another recession
hitting the region
and hitting demand.
We cant control the economy, said Paul
Anderson, Ford Middle Easts director of
marketing. So we have to focus on the things
we can control and that is simply introducing
the best products that are available so that when
consumers do buy, Ford is their choice.
adac completes upgrade
PROJECT focus
The abu Dhabi airports
Company (aDaC)
has completed the
refurbishment and
upgrading of Terminal 1 at
abu Dhabi international
airport. The project
included an increase in the
number of check-in and
immigration counters, in
addition to the expansion
of the retail and food and
beverage space.
The project was carried
out over ten months as
part of the programme
to expand the airports
capacity and meet
anticipated traffic growth.
The airport is presently
undergoing a major multi-
billion dollar expansion
plan which has seen the
construction of a second
runway as well as a third
terminal building. as the
emirates flag carrier Etihad
airways develops, the
airport is eventually hoping
to be able to handle 20
million passengers a year.
as part of the
improvements, there has
been a 40 per cent increase
in the number of counters
in the passport control area,
while the airports hotel and
hospitality lounges have
been refurbished.
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On the Radar
TAQA sees sharp
rise in Q3 net proft
Emke in Saudi expansion
UAE based oilfeld services
provider Topaz Energy and Marine
has established a $380 million
fnancing deal with the Standard
Chartered Bank and the DVB Bank.
The arrangement involves the
frms offshore support vessel
division, Topaz Marine, and $125
million of the money will be used
to fund ships under construction
or new vessels.
TAQA, the Abu Dhabi National
Energy Company, has said its
third quarter net proft more
than doubled to Dhs537 million
from Dhs218 million during the
same period a year ago.
The biggest push came from
oil and gas revenues, which rose
68 per cent when compared
to the third quarter of 2010, to
reach Dhs2.74 billion.
The UAEs Emke Group is planning
to expand in the Saudi Arabian
retail sector through its chain
of Lulu Hypermarkets. Emke is
looking to open new stores in
several locations in the kingdom
including Dammam, Jubail,
Riyadh, Makkah and Madinah.
Emke is already present in Oman,
Qatar, Kuwait and Bahrain.
Topaz raises $380m
14-22 GCC Today.indd 20 11/27/11 2:03:45 PM
guLf BusinEss / 21
GCC TodAy
UAE BoosT for
rolls-royCE
GCC and the world
Dhs1 billion
STATS
ThE aMounT ThaT wiLL BE
invEsTED To RELoCaTE ThE 2013 DuBai
aiRshow To a nEw vEnuE aT DuBai
woRLD CEnTRaL.
Mideast group buys Uk hotels
Capital hill hotels, an unnamed Middle East investor with
a worldwide portfolio of hotels, has purchased two more
in Londons west End The sanderson and the st Martins
Lane hotel for around $300 million.
Morgans hotels group, the 50 per cent owner of the
properties alongside an affiliate of walton street Capital,
will continue to manage the hotels on a long-term basis as
part of the deal.
The deal should be completed before the end of the year.
i know the difficulties, the
negatives, the positives, i will not
hang on to power. whoever hangs
on to power i think is crazY.
Yemens President ali abDullah saleh told France
24 television that he would leave office within 90 days of an
agreement with the GCC.
SOAPBOX
The oman oil Company and south koreas gs Eps
have signed an agreement with the korean province
of Chungnam to build the fourth phase of the Dangjin
power plant at a cost of $536 million. The facility isnt
expected to come on stream until the end of 2014 and
it will have an output of 800 megawatts.
oman oil holds a 30 per cent share in the plant,
while gs Eps owns the remaining 70 per cent and is
the operator.
oman oil, gs eps deal
Rolls-Royce Motor Cars witnessed a 70
per cent increase in uaE business this
year, said the firms CEo at the Dubai
Motor show. The premium uk carmaker
also saw 30 per cent growth across the
region this year.
our biggest market is the us,
followed by China, the uk and the uaE.
The Middle East contributes between 12
per cent to 15 per cent to global Rolls-
Royce sales, said Torsten Mller-tvs,
CEo, Rolls-Royce Motor Cars. Dubai is
now our biggest market in the world for
customisable cars, nearly all the cars in
the uaE are tailor-made.
Last year Rolls-Royce sold 2,711 cars
globally, and this year the CEo expects
to sell 3,000 cars on the back of
heightened consumer confidence and
increased emerging markets demand.
Between 2010 and 2011 people were
more comfortable with the economy,
but predicting future developments is
difficult as we are not immune to global
economic shake-ups, said Mller-tvs.
Rolls-Royce is part of the BMw
group, along with Mini. The german
holding firm recently posted
impressive financial results, claiming
the strongest third quarter in its
history. BMws Q3 pretax profit
jumped 21 per cent to $2.26 billion,
beating analyst estimates.
14-22 GCC Today.indd 21 11/27/11 2:03:46 PM
22 / DECEMBER 2011
GCC TodAy
Saudi Arabia has signed a bilateral agreement with South
Korea to cooperate in the development of nuclear energy. The
agreement was signed in Seoul, according to a statement by the
King Abdullah City for Atomic and Renewable Energy.
The pact includes scientific, technological and economic
cooperation between the two nations, and will involve the
design, construction, operation, maintenance and development
of nuclear power plants in the kingdom.
Saudi Arabia signed similar agreements with France and
Argentina earlier this year, while the kingdom is also in talks
with Russia, China, the US, the UK and the Czech Republic
regarding further tie-ups.
Saudi signs nuclear pact
30
seconds on the business of
LOGISTICS
is logistics big business
in the UAE?
Yes, the UAEs geographical
position enables it to
facilitate major movements
between the Eastern and
Western hemispheres.
And with high quality
infrastructure in place,
logistics is also a highly
competitive business here.

how quickly can parcels be
couriered around the world
from the UAE?
The country is a hub for all the largest courier
companies in the world Fedex, DHL, TNT
and Aramex. All these companies have frequent
connections all over the world on a daily basis.
has the rapid development of the UAEs aviation
sector boosted the logistics industry?
Although the infrastructure is in place, I believe
that the UAE is yet to witness a positive impact
primarily due to the global economic climate. In
the long run, it should prove extremely beneficial.
regionally, which countries offer the best
growth potential?
Saudi Arabia offers great growth potential thanks
to increasing domestic demand. And with Qatar
hosting the World Cup in 2022, demand for
logistics services in the country will be high.
does parzel offer any special service to its customers?
Parzel offers the automated delivery point system,
through which our customers can make bookings
online and use our machines to drop off or pick up
their parcels.
how does it work?
Customers are required to register on the Parzel
website, and they are then assigned a unique
identification number. They can use this number to
book domestic and international shipments online.
Qtel raises stake in starhub
Qatar Telecom (Qtel) has said that
asia Mobile holding, the investment
arm it jointly owns with singapore
Technologies Telemedia,
has increased its stake
in singapores integrated
communications company
starhub by 7.45 per cent.
The deal brings asia Mobile
holdings stake in starhub
to 56.55 per cent and Qtels
effective stake to 14.14 per cent.
The move is aimed at
taking advantage of growth
opportunities
to boost its
presence in
southeast
asia, according
to nasser
Marafih, Qtels
group CEo.
interviewed BY jOnAThAn ShEIKh-mILLEr
oBAid Al QAhAsh
CEo, parzel
King Abdullah City for Atomic
and Renewable Energy
14-22 GCC Today.indd 22 11/27/11 2:03:49 PM
.



@




ABS
i-VTEC
1.8



VSA


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ABS
i-VTEC
1.8



VSA


24 / DECEMbEr 2011
OpiniOn
COMMENT
The Asian tigers offer a new way forward for the strife
ridden Arab world.
Matein Khalid is fund manager in a
royal investment offce and a writer
in fnance and geopolitics.
Lessons for ArAb economies
tThe developmenT model of The AsiAn
tigers has created vibrant capitalist enclaves across the Pacific Basin.
The Asian economic miracles emerged from the traumas of war, foreign
invasion, revolution, ethnic slaughter and mass poverty. In Asia, historical
traumas deliver economic growth.
The Arab world experienced multiple traumas as the colonial era
ended. Israels creation ended in a military debacle in 1948 and the
expulsion of the Palestinian refugees. Syria experienced more than a
dozen coups dtat before the Assad regime consolidated power in a
nightmarish dictatorship that is now fighting for its survival. Egypt
reeled from the 1952 Free Officer coup, the Suez crisis, Nassers Soviet
alliance, the June 1967 disaster and the loss of the Sinai to the IDF, the
assassination of Sadat, an Islamist uprising in Upper Egypt in the 1990s
and now the revolution in Tahrir Square.
Iraqs modern history is terrifying, from the murder of the Hashemite
King Faisal in 1958 to Saddams wars against Iran and Kuwait, the Baathist
genocide against the Kurds and repression against the Shia, the 2003
American invasion and the terrorist/death squad bloodbath of 2004-2006.
Kuwait was invaded by Iraq in 1990. Lebanon survived the 1975-90 civil
war. Jordan was almost split apart in Black September. Algeria lost a
million people in its anti-colonial war against France and another 200,000
in its civil war of the 1990s. Yemen had multiple civil wars even after
unification. Gaddafis Libya was just surreal.
Yet trauma did not produce economic miracles in the Arab world.
Why? The answer does not lie in autocracy alone since Taiwan, Thailand,
South Korea and Indonesias economic miracles occurred under military
dictatorships. Why do Silicon Valleys supply chains for cellphones, laptops
and disk drives lie in Taipei, Bangkok, Penang and Pusan, not in Cairo,
The fall of Three auTocraTs in 2011
by people power uprisings armed
wiTh TwiTTer, facebook and al
Jazeera have changed The rules of
The game.
Amman, Damascus and Algiers? Why did the Arab
world not create an Infosys, a Samsung, a Singtel or
a Taiwan Semiconductor?
Trauma led to an obsessive focus on economic
development in Asia but not in the Arab world.
Why? Firstly, the petrodollar bonanzas since
the 1970s have created rentier economies and
entrenched dictators. I see Joseph Stieglitzs oil
curse in the rubble of Tripoli and Baghdad. Socialist
policies ruined economies, as in Baathist Syria or
the FLNs Algeria. The Arab-Israeli wars nurtured
mukhabarat states that were run by secret police
elites clueless about the capitalist ethos. An Arab
intellectual elite did not emerge to persuade the
pinnacles of power with a vision for reform, though
President Mubarak sought legitimacy in pro-market
reforms after the 2004 devaluation of the pound.
Huge state bureaucracies made privatisation
dangerous for Arab governments afraid of legions of
jobless youths. The education systems in the Arab
world were unable to create a Bangalore, let alone a
Singapore. The Cold War subordinated economics to
geopolitics. Intra-Arab trade was miniscule. Political
instability led to the export of more than $1 trillion
worth of private Arab capital to the West.
The exceptions to the dismal economic tragedies
of Arab history were small Gulf microstates that
created trading, logistics or finance hubs, notably
Dubai, Qatar and Abu Dhabi. Bahrain replaced
Beirut as the offshore banking hub of the Middle
East in the 1970s but has now lost its allure after
the tragic events of 2011. Kuwait is paralysed due
to a continual power-struggle between the National
Assembly and the government.
Saudi Arabia leveraged its crude oil windfall to
initiate a $130 billion development programme and
$60 billion worth of arms purchases. The prices of
crude oil and LNG are the most attractive measures
of growth, not entrepreneurship or high tech
innovation. The Arab world desperately needs to
rethink its development model, as the fall of three
autocrats in 2011 by people power uprisings armed
with Twitter, Facebook and Al Jazeera have changed
the rules of the game. History has finally gone fast
forward with a vengeance in the Arab world and the
stakes are nothing less than regime survival.
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24 Column Matein Dec2011.indd 24 11/27/11 12:01:15 PM
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26 / DECEMBER 2011
OPINION
COMMENT
Following a year of global surprises, being a better leader
should be the priority in 2012
are you a people person?
i
ts hard to believe that another year
is coming to a close. When I reflect over the year it has been exciting,
exhausting and definitely unexpected. Coming into 2011 few would have
predicted the defining events of the Arab spring, Japanese Tsunami and
the escalating debt crisis. The year has raised lots of questions for leaders.
At the end of each year, I pause and reflect on a particular dimension
from the previous 12 months. Last year, I pondered insights I gleaned from
CEOs. This year I am reflecting on the questions I was asked. Here are a
few of them:
Repeatedly throughout the year, senior leaders asked, How can we
enhance our culture? Having rightfully recognised that they did not have
the culture that was going to enable their business to achieve its future
success, these leaders were ready to embark on creating the future culture.
Some organisations claimed they had no culture, but this is not true. Every
organisation has a culture even though it may not be clearly stated or
what they want. But they still have one.
The first step was to settle on the vision for the future. Then we worked
with these organisations to state what the shared values, attitudes and
practices will be. While this was a fun and exciting project for most
organisations, it will fall short of the desired outcome unless socialisation
happens, bringing the created culture to life through the employees. This
happens best through the highly specialised practice of identifying and
bringing to life the desired leader behaviour.
Another question was, What do we need to do to grow greater than
the market growth rate? Numerous times I was asked this. The formula
is simple, but putting it into action is very challenging, as it requires a
Some organiSationS claimed they
had no culture, but thiS iS not true.
every organiSation haS a culture
even though it may not be clearly
Stated or what they want. but they
Still have one.
metamorphosis in leadership actions.
First, you need to understand where your
fail point is. Most businesses use their existing
operating box as the measure on how far to push
the boundaries. This orientation only allows for
incremental growth. If you think of growth as going
beyond the outline of the square then you are limiting
your opportunity based upon the past. To visualise
this, draw a square on a piece of paper representing
your current size. Now draw a dotted line around
the square that is at least two times the size of the
square. Lets assume this is your fail point. The area in
between the square and your fail point is your growth
zone. Instead of allowing your growth potential to be
defined by yesterday, allow it to go to the fail point.
Second, you need to understand the workforce
practice of creating competitiveness through surplus
value. This is a very simple concept but ignored daily
across the region. Draw an X and Y axis. The X axis
is workforce input (hours worked) and the Y axis is
sales output (units created, service, products, whatever
you sell). Currently there is equilibrium between the
two. So the errant thinking is in order to increase
the output, then you need to increase the input
accordingly. This thinking will keep the equilibrium
but to increase your competitiveness you need to move
to surplus value, which is the output growing at a
greater rate than the input.
A repeat question for 2011 was What does it
mean to lead a multi-national workforce? Leaders
need to be aware of and understand the following
realities: first-generation corporate societies, market
life stage starting points and adjustments, being
multi-lingual in one language and managerial honour
and shame. These are the hallmarks for successfully
leading a multi-national workforce.
As I reflect back over the year there is one question
that I was not asked much about How do I become
a better people leader? Surprisingly, the basic of
people leadership is currently a differentiator across
the region. Leaders lead people, not processes or
strategies (you create those).
People leadership is the cornerstone of becoming
competitive through surplus value and accelerating
ahead of the market growth rate. I
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Dr Tommy Weir, advisor on
fast-growth and emerging
market leadership, and
author of The CEO Shift
26 Column WeirDec2011.indd 26 11/27/11 12:50:41 PM
28 / DECEMbEr 2011
OpiniOn
COMMENT
Einstein said the defnition of insanity is doing the same thing
over and over again and expecting different results.
Tarek Miknas FP7 Group CEO
The ad indusTry musT change
weve been saying for
years that it couldnt go on like this. We knew it had to change. We
knew things werent being done right. It was our guilty little secret
something that made us feel constant discomfort. And despite knowing
all of this, we just kept doing things the same old way. It was easy, it
didnt make waves, it was the way a lot of powerful people wanted it,
and lets face it we were making good money.
Am I talking about the Arab world in general? Or am I talking about
the Arab worlds advertising industry? Its not hard to tell. Im talking
about both.
Theres one thing we all know by now, one thing we have to face up
to now: the old way of doing things is over. From that slap in the face in
Tunisia, through Tahrir Square, the Pearl Roundabout, and on to Algiers,
Sanaa, Jordan, Oman, Libya, Syria and elsewhere its all over. And
accordingly, for anyone who cant face up to this - its over too.
Clients, creatives, media planners, suppliers all of us are going to
have to do one thing. And thats listen. And once weve done this, were
going have to do another thing. We have to change. We have to hear
what were being told by our people, who are not, and never have been,
just consumers. They are our partners. They want it done right; they
expect accountability and honesty; they expect to be treated with respect;
they expect to be told the truth; they expect to be listened to; they expect
to be engaged and they always hope to be part of the solution.
So the whole debate about digital as the way forward has to become
a thing of the past. After weve seen the life-altering videos shot on
mobile phones, the monumental influence of Facebook and Twitter, any
brand that hasnt got mobile and online at its heart from now on, is
Weve got to foster the belief
in partnership, mutual respect,
education, clear objectives and
fair reWards.
taking the same kind of risks as Mubarak.
That said, being present in the right channels
isnt the only challenge the quality of the work
shown across all media, including digital channels,
television, outdoor, in print and everywhere else,
just has to become better. We all have to do what
we should have been doing all along the good
stuff; the work thats honest; the work that people
relate to; the work thats a conversation and not an
order; the work that (oh yes) wins awards for the
right reasons.
Weve also got to do something a lot of us
havent yet considered. Weve got to treat one
another properly. Weve got to foster the belief
in partnership, mutual respect, education, clear
objectives and fair rewards.
Weve always known we had to change at
some point. What we know now is that we
wont survive if we dont. On the inside, on the
outside, in our behaviour, in everything we do.
This includes our motivations lets stop looking
at short-term profit, and lets tap into the power
of creative communication and its ability to make
things better.
Todays conversations are about solutions.
Thats what our partners want and thats what our
consumers (also partners) want. The briefs we take
from clients should be how to help solve a business
issue and the result, in any form, be it a television
commercial, a microsite or a subtle product
placement, should be a good result.
Nobody could have predicted the changes that
were to take place in our region and nobody did.
Its time we question our structures, our recruitment
policies, our integration models and most
importantly, build a sustainable ethos to keep the
faith inside and out.
We know it wont be easy. We accept that it may
be misunderstood and it may well give us problems
on the bottom line for a while.
But theres one thing thats crystal clear as we
look around our region today its time. And its
our time.
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28 Column Tarek Miknas Dec2011.indd 28 11/27/11 12:51:08 PM
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GB AD HIGH RES.pdf 1 10/26/2011 1:40:11 PM
30 / DECEMBER 2011
briefing
REgional tREnDs, analysis anD viEws
The reTurn of remoTe bankers
cash drought
shrinking investment fees have
forced global frms to send bankers
home from the uae. but will they be
welcome back?
B
attered, bruised and growing
weaker, the Gulfs investment
banking sector is in a sorry state. in
the past few months the signs of alarm
have multiplied, with some analysts
suggesting that the sky is falling.
stock market volumes have sunk to
all-time lows and M&a deal activity
has almost dried up. Meanwhile,
concerns are mounting over the health
of the global economy, in particular the
calamitous eurozone.
international investment banks that
spent the Gulfs boom years hiring and
the post-recession period firing are now
retreating fast. in the past few months,
Crdit agricole, deutsche bank and
Citigroup have all relocated their top
playmakers back to London.
Perhaps the most high profile was
deutsche banks Christopher Laing, head
of equity capital markets for the Middle
east and africa, who was moved back to
London after three years in dubai. Citis
regional head of equities adam Key was
also sent home to the uK.
Others, like nomura and Goldman
sachs, have cut jobs in equity-related roles.
international banks are growing
increasingly tetchy with the outlook for
the region and are unwilling to maintain
significant regional teams, recruitment
experts say. Youre going to see the
return of suitcase banking, with bankers
flying in when a deal emerges, said ally
Ho, head of the Middle east financial
services practice at Pedersen & Partners,
a dubai executive search firm. Most
institutions in 2008 said well give it two
years and make a decision. What weve
seen over the last year is those decisions
being made. Most people have tried to
string it out, but last year was extremely
difficult for deals and now they dont
have a choice, she added.
suitcase banking worked in the region
for a period until around 2007, when
it became apparent that banks needed
to cultivate relationships with local
tExt By Ryan HaRRison
1
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30-31 Briefing Fleeing bankers.indd 30 11/27/11 12:51:53 PM
gUlF BUsinEss / 31
BAnking briefing
There are banks in
The region ThaT are
suffering because
Their main revenue
sTream is equiTy
markeTs. The only
way banks can meeT
Their financial
obligaTions is To
decrease cosTs. of
a banks profiT and
loss, 60 per cenT To
80 per cenT is made
up of salaries.
companies. senior executives
were transferred and equities teams
expanded in anticipation of a burst
of activity and revenue. this failed
to materialise. Over recent years the
value of stocks traded on Gulf bourses
has nose-dived. turnover in the GCC
dropped to $296 billion last year
compared with a high in 2006 of $1.6
trillion, according to Markaz, a Kuwait-
based investment bank.
Fees earned by investment banks in
the Middle east fell 42 per cent to $320
million in the first nine months of the
year from $551.1 million during the
same period in 2010, according to new
York-based research firm Freeman & Co.
total fees in 2011 are 71 per cent lower
than in the first nine months of 2008,
when fees peaked at $1.1 billion.
shane Phillips, head of the Mena
practice at headhunter stanton
Chase, said: trading volumes and
investments in the Gulf are all down,
so the size of offices in the region will
be contracting. this could also ricochet
into other sectors.
there are banks in the region that
are suffering because their main revenue
stream is equity markets. the only
way banks can meet their financial
obligations is to decrease costs. Of a
banks profit and loss, 60 per cent to
80 per cent is made up of salaries,
Phillips added.
its easy to get carried away though,
he says. Cut backs are big news,
but there is hiring taking place in
investment banking, especially within
risk management, compliance and
operations.
also, theres buoyant demand for
staff in private banking, private equity,
personal banking and other stable
growth areas.
saudi arabia is seeing a huge boom
in personal finance, car loans, credit
cards, and home loans thanks to a
change in mortgage legislation. there is
an increasing number of private equity
firms investing in these personal finance
companies and as that gains momentum
they will naturally be increasing
headcount, said Phillips.
analysts argue that there were too
many bankers in the region at the height
of the boom and the current retraction
is also too aggressive. High government
spending and oil output is likely next
year, which bodes well for economies
in the Middle east and north africa.
the World bank raised its 2011 growth
estimate for the region to 4.1 per cent
from 3.6 per cent in september.
Cecile Hofer, co-managing partner
of financial headhunter taylor Hofer,
added: Historically, banks have always
hired very quickly and let people go very
quickly. this behaviour at the moment is
nothing new.she added.
Pressure to make savings at home
has left international players with little
investment bank nomura recently
disbanded its Dubai-based equity
research team of several people as a
result of low trading volumes, although it
said some leading regional companies will
continue to be covered by London-based
analysts.
Frances Crdit agricole closed its
M&A unit in Dubai this year, aiming to
manage deals from elsewhere. It came
after news that investment banking fees
in the Middle East declined 35 per cent
to $316.6 million in the third quarter
compared with the same period a year
earlier, data from Reuters found.
Zurich-based EFg international said
it is closing its offces in Dubai and Abu
Dhabi as it conducted a global review of
its business.
HsBC, Europes biggest bank, said it
will stop offering brokerage services to
retail investors in the UAE and focus on
institutional clients. The bank will also
close its consumer operations in Kuwait
as part of a strategic review.
Meanwhile, four investment bankers
from Crdit agricoles MENA operation
Kanhaiya Rathi, Kawtar Benkhraba,
Pravin Chelluri and Rami Barazi have
been hired by UBs in Dubai. They will be
working for the Swiss banks corporate
advisory group, reporting to Albert
Momdjian, according to reports on
Bloomberg.
Credit suisse dissolved its Middle East
equities research team.
closing time
choice but to step back from the region.
but its hard to imagine that local
investors and businesses will welcome
back the same banks with open arms
when they decide to return.
30-31 Briefing Fleeing bankers.indd 31 11/27/11 12:51:53 PM
32 / DECEMBER 2011
BRIEFING LiBYA/GCC
After GAddAfi
back to black
Libyas surprisingly speedy return
to oil production could spark mixed
feelings in GCC countries.
TExT By Ryan HaRRison
A
s dramatic comebacks go,
Libyas return to oil production
stands out as remarkable. the country
has left analyst forecasts in its wake to
restore vital oil fields in record time.
already producing 600,000 barrels a
day of oil in late November, Libya is in
the process of restarting another giant
field to help push the total close to
800,000 by the end of the year, according
to the chairman of Libyas National oil
co., Nuri berruien.
most analysts, including some at
the international monetary Fund, had
predicted the country would achieve
less than half that amount. it contrasts to
iraqs long struggle to resume production
after suffering serious damage to its
oil facilities.
oil states in the Gcc may have found
it difficult to join in the celebrations of
Libyas return to form. earlier this year
they unilaterally decided to increase
production to compensate for the loss
of Libyan supplies. but its inevitable
now that they will face pressure to
reduce their output, which means less
revenue. relations over oil between the
Gcc and Libya have been icy so far, but
at a crucial meeting of Gulf arab oPec
producers in december things could turn
frostier. Libya said recently oPec majors
should cut production to make room for
its returning marketshare. Production is
expected to grow to full capacity by the
end of 2012 or early 2013.
if the behaviour of Libyas new
government is anything to go by, Gcc
oil officials will have a fight on their
hands at the meeting. it has not shown
Gulf arabs any preferential treatment
with the awarding of oil contracts.
instead, companies including Western
players Halliburton, schlumberger and
baker Hughes are making regular trips
to the country and are rumoured to
be on the brink of returning to full-
time work. meanwhile, according to
Uk media, representatives of Libyas
National transitional council called city
executives to a central London hotel to
drum up british interest in the massive
opportunities on offer.
simon Wardell, director of global oil
at iHs cera, said: the transitional
government wants to move as quickly
as possible to get oil back up and
running. and as such are not thinking
too much about from where they can
bring oil companies. in the short term,
Libya is looking at companies that have
experience, especially service companies
that can switch things back on quickly.
those firms will go in first. in the longer
term there are potential concessions to be
had on contracts for Gulf states that were
more supportive of the regime that got
into power.
He added that Libyas strength would
displace the Gulfs revenues from oil as
governments are forced to make room
for its increasing marketshare.
What Libyas National oil co.s
berruien means precisely when he said
in London last month that he would
favour our friends for new contracts,
is still unclear. Unquestionably, its
likely to cause a stir in the international
community, especially given that Libya
has 46 billion barrels of untapped oil
reserves the largest in africa and eighth
largest in the world.
the biggest headache for Gcc oil
producers is likely to be if Libyas
continued convalescence coincides with
an economic meltdown in the eurozone.
if global growth sinks then it could pull
oil prices down with it.
theres no doubt that the next few
months will see the Gcc carefully eyeing
the eurozone crisis, especially how it will
be resolved. it could have a huge impact
on revenue for oil producers as well
as hindering their chances to fight for
marketshare with Libya.
Libya has not shown Gulf
Arabs preference with
awarding oil contracts.
a
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32 Briefing Libya.indd 32 11/27/11 12:52:53 PM
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TOM FORD mAW11_DUBAI_GULF BUSINESS_DECsp 150L/S APRVL 1 PDF
TRIM:206 X 276 ISSUE:12/01/2011 TFDUBAIGULFBIZNS PREP BY MT
34 / DECEMBER 2011
Dubais upbeat air show
Cleared for landing
Last months aviation fair surprised
the world with a spritely book of orders
from Gulf airlines.
TExT By pETER shaw-sMiTh
70 Airbus A350s, 40 777-300 ERs and six
Boeing freighters on order, for a total of
239 wide-body aircraft worth more than
$92 billion. However, Emirates was coy
about the timing and financing of the
Boeing 777 orders, which will likely be
spread out over the next decade.
Sheikh Ahmed called the 777 the
backbone of the Emirates fleet, but
of the total global A380 fleet of 60
delivered and 243 on order, Emirates
has 16 in service and 74 on order,
making it easily the largest operator
of the superjumbo. It is not difficult to
envisage the threat level perceived by
the worlds leading Western airlines
from the formidable power Emirates
has gained by its access to two of the
globes most potent aircraft.
W
HIlE tHE SuBduEd global
macro-economic outlook is giving
many international businesses cause
for concern, clearly no one has told
Emirates or the powers that be in dubai
about the scale of the downturn. At
press time, orders totalling $63 billion
were announced at dubai Air Show 2011,
underlining the extent of the regional
aviation boom, and making the event
a much bigger success in financial and
order-book terms than that of 2009.
In dubai Air Show 2011s headline,
HH Sheikh Ahmed, chairman and chief
executive of Emirates Airline, announced
a day One order for 50 Boeing 777-300
ERs worth a list price $18 billion, with
options on 20 more, worth $8 billion, for
a total of $26 billion. this was the biggest
single order in the history of the American
manufacturer and a boost after its travails
with the 787 dreamliner.
As the largest operator of the 777 in the
world, Emirates has played an important
role in development of the airplane and its
input over the years has been invaluable in
the development of the 777 programme,
said Jim Albaugh, president and CEO of
Boeing Commercial Airplanes.
In addition to the 50 777-300 ERs
ordered, Emirates has 73 Airbus A380s,
Emirates announced $26 billion
worth of orders at the show
34-35 Briefing Airshow.indd 34 11/27/11 2:08:46 PM
GULF BUsiNEss / 35
aviation BRIEFING
GE Aviation won $14 billion of engine
orders at the show, some $6 billion of it
devoted to the supply and maintenance,
repair and overhaul [MRO] of the GE90-
115B engines to be installed on the new
Emirates 777-300 ER jets.
the other eye-opening deal to emerge
from the air show involved the tactics of
Qatar Airways chief, Akbar Al Baker, in
facing down Airbus in negotiations over
pricing for a its A320neo order. In the
end, he chose 50 A320neos, with five
A380s thrown in, at list prices of $6.4
billion, and was said to have humiliated
Airbus with choice language referring
to delays in the A350 programme. In
addition, Florida-based Spirit Airlines
signed a deal for 45 A320neos and 30
A320s worth $6.8 billion.
the MRO market in the region looks
set to boom with several players hoping
to cash in on the boom in regional civil
aviation. Emirates Group signed a long-
term leadership training agreement with
Rolls-Royce, allowing Emirates top
uAE national managers to take part in
Rolls-Royces leadership and business
management development programme in
the united Kingdom.
Abu dhabis Mubadala is already an
established player in aviation through
several joint ventures, including wholly-
owned Abu dhabi Aviation technologies
in the capital, and a 70 per cent stake
in Zurich-based SR technics. the
Advanced Military Maintenance Repair
and Overhaul Centre (AMMROC) is a
joint venture for defence aircraft MRO
with Sikorsky, to which lockheed Martin
entered in January.
Aviation lease and finance company
AlAFCO of Kuwait increased its order
for A320neos to 50 from the 30 originally
signed at the Paris Air Show in summer.
Airbus said the value of the deal at list
price was $4.6 billion. the company
also took out options on 30 more. It also
completed the transfer of six dreamliners
to Oman Air.
On day five, the Air Show was
inundated by 700 Emirati students from
uAE colleges and universities sporting
colourful scarves and regalia sampling
the atmosphere of the show in a Futures
day designed to underline the appeal of
careers in the aviation industry.
With a 25-country office network
already in existence, Aircraft broker CB
Aviation announced the opening of a
new office in dubai, and named Saeed
Al Mansouri as its vice president for the
Middle East and Africa. We are focusing
efforts on these regions, which, according
to global statistics, will see growth rates in
local tourism and aviation touching 20 per
cent of global figures, Al Mansouri said.
It is said that the volume of investment
in projects in the Middle East will exceed
$330 billion over the coming years.
dubai Airport Expo is to be demolished
to make way for another terminal at
dubai International and the dubai Air
Show 2013 will take place at dubai
World Central in Jebel Ali. Sheikh Ahmed
confirmed that Middle East Business
Aviation 2012 will also take place at the
new Jebel Ali complex. With the two
events now alternating each autumn,
dubai has firmly established itself as one
of the worlds leading market places for
the aviation industry. With a fourth major
terminal facility under construction at
dubai International, the relocation of the
air show looks set to offer the government
of dubai the option to build a fifth at
dubai International.
looking ahead, the contrast between
Chapter 11 bankruptcy rumours among
uS carriers and the inexorable ascent of
the Gulf carriers could not be starker.
Congestion and red tape are not making life
for the European carriers any easier either,
and governments looking to be on the take
from passenger activity in the form of ticket
taxes and environmental charges are only
making the struggle more difficult.
this is nothing short of a major
re-alignment of market shares and of
economics of both scale and capacity
use, since the new mega airports in the
Gulf area suffer no flying restrictions,
allowing the best utilisation of the newest
and most technologically-advanced fleets
found anywhere in the world, wrote
dr. Wolfgang thome in a report for EtN
published last month.
Akbar Al Baker, CEO of Qatar Airways
akbar al baker was said to have humiliated
airbus with his choice language as he attacked
the plane maker for delayed production.
34-35 Briefing Airshow.indd 35 11/27/11 2:08:49 PM
C E N T R A L B A N K O F T H E U A E

INTERNATIONAL BANK
ACCOUNT NUMBER
S a f e r a n d s e c u r e b a n k t r a n s f e r s
IBAN, the mandatory bank account number for payrolls/salaries,
remittances and e-payments, is now effective.
The International Bank Account Number (IBAN) is a 23-digit alphanumeric sequence that has
become the ofcial standard for money transfers (including salaries, international remittances
and e-payments) in the UAE. Your IBAN will be automatically generated and communicated to you
by your local bank.* If you have not received your IBAN by now, please contact your local bank.
Visit www.centralbank.ae
*If you have multiple bank accounts, you will receive multiple IBAN notications.
SECURITY
is what IBAN means
to my business
GULF BUSINESS / 37
finance BRIEFING
Sukuk on the riSe
the islamic funding tool has enjoyed another record
year as Gulf funding needs grow.
T
he Middle east sukuk market
exits 2011 in a jolly mood. Funds
raised through sukuk will rise three-fold
this year, to heights last enjoyed before
the financial crisis.
the current problems of non-islamic
indebted european nations have
contrasted nicely with the emphasis
that sukuk, or islamic bonds, place on
a balanced, risk-sharing and asset-based
approach. indeed, islamic finance fans
insist that Western economies could
learn a thing or two about the use of the
conventional sense. sukuk issuers pay
bondholders with the cashflows generated
by specific assets, which are put into a
special-purpose vehicle as part of the
deal. its structured this way to avoid the
islamic prohibition on interest payments.
With conventional bonds, a business
would pay interest to the bondholders,
and eventually redeem the bond.
the beauty of sukuk is that they are
linked to revenue producing assets, in
other words, the real economy, says
Yusuf de lorenzo, an independent
shariah scholar. if the revenue stops,
the assets are the backstop.
More importantly, the concept
behind sukuk is that they are not debt
instruments, but hybrids that look
and perform like bonds when they are
actually a form of equity investing.
thus, investors buy a share of a business
and effectively become the issuers, the
governments, partners in a business
enterprise, he adds.
Others say that no matter how you
spin it, companies are still on the hook
to their islamic bondholders. debt is
debt. and in the Gulf, property developer
Nakheel has been the cause of a lot of
this scepticism. it could be argued that
Safe aS houSeS?
TExT By RyaN HaRRISoN
shariah-compliant debt instruments in
GCC countries and other Muslim regions.
Nearly $17 billion was raised through
sukuk in the first nine months of 2011,
according to saudi arabia bank NCB, an
impressive departure from around $7.6
billion in 2009 and $6.1 billion in 2010.
in 2007 the climax of a six-year boom
for Gulf states sukuk issuances hit
$18.7 billion.
some in the islamic finance world say
the big appeal of sukuk is that technically
a company is not issuing debt in the
Over $5 billion in Gulf Sukuk will
change hands in 2012.
The concepT
behind Sukuk iS ThaT
They are noT debT
inSTrumenTS, buT
hybridS ThaT look
and perform like
bondS when They are
acTually a form of
equiTy inveSTing.
37-38 Briefing Sukuk.indd 37 11/27/11 2:10:51 PM
38 / DECEMBER 2011
BRIEFING Gcc
Few would argue that a sovereign issue
in a country with the worlds sixth largest
Muslim population could be catalytic. Yet
globally, Malaysia still accounts for the
lions share of the sukuk market, by most
estimates about two-thirds. in the first nine
months of 2011 it issued $43.5 billion, or
69 per cent of the world total. eleven other
countries contributed the rest. the six GCC
states issued a combined $16.1 billion or
25 per cent of the total. New entrants this
year include Yemen, iran and Jordan.
the GCCs total would have been more
but experts say it was hindered partly
by the unrest in the many parts of the
MeNa region.
as 2012 arrives, the Gulf is expecting
a sprinkling of new issuances. Most
surprising perhaps is Bahrain, which is
expected to sell a $1 billion sukuk in
the international markets, a brave move
considering political violence continues
to flare up in the Kingdom.
Meanwhile, dubai islamic mortgage firm
tamweel has suggested it will consider
issuing a multi-million dollar sukuk, hot
on the heels of a similar announcement by
al hilal Bank in september.
if next year turns out to be anything
close to the growth witnessed this year,
there are plenty of signs for optimism.
the contrast between eurozone debt
woes and the GCC islamic bond market
could get sharper.
sukuk are less risky, up until the point
that the issuer defaults.
still, sukuk have proved wildly
successful among Gulf investors that
crave an alternative to speculative, debt-
leveraged Western banking models.
Many say the islamic finance
vehicles popularity is drawn from its
mass appeal. Jawad ali, law firm King
& spaldings managing partner for its
Middle east offices, says: sukuk is a
safe play in the Gulf because you dont
alienate investors. its open to non-
islamic investors and shariah compliant
ones equally.
the prospect of huge construction
bills for mass infrastructure projects has
forced many Gulf states to turn to sukuk.
Qatar, which faces perhaps the most
daunting task, will increasingly use the
islamic instruments for project finance.
some will be corporate sukuk, issued
by individual companies, but there is
a stampede of governments looking to
issue sovereign sukuk.
Qatar is expected to spend around
$100 billion over the next five years to
prepare and deliver the infrastructure
required to support the huge influx of
visitors forecast to attend the 2022 FiFa
World Cup. the construction sectors in
saudi arabia and Kuwait are estimated
to spend $420 billion and $63 billion,
respectively, over the next three years.
sukuk fever has spread beyond
the GCC, with rumours that the
governments of egypt and libya will be
next on the list to take the plunge. Both
will use sukuk for their massive rebuild.
in the wake of the revolution that
toppled egypts long-time leader hosni
Mubarak, the country faced a serious
financial crunch and a funding gap that
totalled more than $12 billion. it would
be the 80 million Muslim nations first
sovereign sukuk, after three decades of
restrictions from Mubaraks regime that
stunted the islamic finance industry.
Neil Miller, global head of islamic
finance at KPMG, says: its a chance
to inject new capital into a country that
needs new capital. if egypt did issue
a sukuk it would play into the overall
narrative of Middle east islamic finance
strengthening, versus the might of
Malaysia, he adds.
Sukuk iS a Safe
play in The gulf
becauSe you donT
alienaTe inveSTorS.
iTS open To non-
iSlamic inveSTorS and
Shariah complianT
oneS equally.
sukuk pIpElINE 2012
IssuER CouNtRy sIzE
aCWa Power International Saudi arabia $300 million
Etisalat Sukuk Company UaE $1 billion
Saudi Electricity Company Saudi arabia $1 billion 1.5 billion
al Hilal Bank UaE $500 million - $1 billion
Dubai Bank UaE $500 million (rumoured)
abu Dhabi Islamic Bank UaE $544.5 million (rumoured)
abu Dhabi Commercial Bank UaE $95 million (rumoured)
Sakana Holistic Housing Solutions Bahrain $50 million (rumoured)
Dar al Dhabi Company Kuwait $363.1 million (rumoured) Holding
00 million struck since Easter.
37-38 Briefing Sukuk.indd 38 11/27/11 2:10:51 PM
18.11.2011 15:14 PDF/X-1a-2001 (QUADRI_300dpi_tx_vecto) fogra39
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41 / DECEMBER 2011
BRIEFING commodities
Is the yellow metal losing steam or
gathering momentum?
TExT By yaDullah ITallah
The gold conundrum
uncertain times
downgrade, a worsening Eurozone
sovereign debt crisis and the lacklustre
performance of many assets drove
investors to increase holdings in gold in
order to protect their wealth.
Given golds proven risk mitigation
properties, it is likely that investors
will continue to seek protection from
economic uncertainty, which shows
no signs of abating. The long-term
fundamentals for gold remain strong
with a diverse and growing demand
base coupled with constrained supply-
side activity.
Overall, gold demand reached an all-
time high in value terms, rising $57.7
billion in the third quarter, with gold
bars and gold exchange traded funds also
posting robust growth.
Goldman Sachs, the global investment
banking giant which usually calls
correctly on commodities, has raised its
three-month forecast by seven per cent
to $1,760 an ounce, six-month forecast
by 5.8 per cent to $1,830 and 12-month
forecast by 3.8 per cent to $1,930.
As we expect, gold prices will
continue to be driven in large measure
by the evolution of US real interest rates
G
Old AppEArS TO have calmed
down after a breathless run earlier
this year that saw prices run up 22 per
cent and promised to cross the $2,000
an ounce barrier for the first time. But
the rally stalled the minute the price
hit $1,900.16 in August. Since then,
the yellow metal has dithered and
remained directionless.
Opinion remains divided on where
the yellow metal is headed next: gold
bugs say that with the world (or at least
the EU) going to hell in a hand basket
the legendary safe haven metal is just
taking a breather before its next incline.
Gold naysayers point to the fact that
gold has lost its steam, evidenced by the
fact the metal did not break all records
after Standard & poors downgraded
US sovereign ratings and the EU has
careered over the edge in the past
few months. Instead, gold prices have
remained range-bound along the $1,700-
1,800 band.
The important point to note is that
gold has gone nowhere and that offers
some clue as to where its headed.
For one thing, lets put things in
perspective: gold has risen by 600 per
cent over the past decade. The fact that
prices havent crashed and are holding
steady suggests that this rally has more
bite than the gold doubters would like
to believe.
Second, there is continued buying
of the yellow metal. lots of it. Central
banks, often seen as key drivers of gold
prices, bought nearly 150 tonnes in the
third quarter, the highest in four decades,
according to the World Gold Council
(WGC). The banks have been net buyers
of gold since last year, piling into the
metal as a way to boost their foreign
exchange reserves.
Unsurprisingly investment demand
for gold was a key driver during the third
quarter, said Marcus Grubb, managing
director, investment, at the WGC.
To be fair, the WGC is a lobby group
for gold producers and it has a tendency
to talk up the merits of the yellow metal.
Still, Grubb has a point: Increasing
levels of inflation, the US credit rating
1
2
3
R
f
The price of gold has risen
by 600 per cent over the
last decade.
41-42 Briefing Gold.indd 41 11/27/11 12:53:58 PM
Gulf BuSINESS / 42
commoditiesBRIEFING
and with our US economic outlook
pointing for continued low levels of
US real rates in 2012, we continue to
recommend long trading positions in
gold, the bank said in a note to clients,
adding that the Eurozone debt crisis
could further push gold upwards.
US Global Investors, a mutual fund
investment company, says negative
real interest rates in the US will propel
investors to seek gold for its perceived
safe haven qualities.
Gold and the US greenback are
negatively correlated and its probably fair
to say that much of the commodity price
spike is due to the US Federal reserve
printing dollars with sheer abandon.
So its no surprise that gold prices
have been reined in as the US dollar
recently turned into a safe haven due
to the EU crisis and, paradoxically, the
US downgrade.
But French bank Socit Gnrale
notes that the dollars safe haven tag has
limited appeal as the Federal reserve
could embark on a third round of
quantitative easing by the end of the year
or early 2012.
The bank has cut its outlook for gold,
but not by much.
For 2012, we now expect gold prices
to average $2,175 an ounce, versus
$2,275 in the previous forecast.
In the short term, analysts expect a
burst of central bank buying and the
holiday season to boost gold prices.
Toronto domino Bank, Canadas
second largest financial institution, does
not sit on the fence when it comes to the
prospects of gold:
We expect precious metals to be a
top performer in 2012, with gold prices
heading towards $2,100. History shows
that easy monetary policy and economic/
financial stress are supportive for gold
prices and this environment is likely
to persist throughout the next year, the
bank notes.
In addition, the much touted love of
the Indian and Chinese consumer for
gold should also ensure prices hold up.
But Indian jewellery demand was
down 26 per cent during the third
quarter, which sends a contradictory
signal that consumers are slowly being
priced out, leaving only speculators
jumping on the gold bandwagon. We can
be certain that these investors will exit at
the first sign of trouble.
While its tough right now to find
analysts who are bearish on gold, investors
would do well to move with caution.
First, we are in a new era of global
financial market volatility, which makes
historical technical charts redundant.
Markets have vacillated from ecstatic
highs to depressing lows, and it is
possible that a few key decisions in
Washington and Brussels could dissipate
the dark clouds hovering over the global
economy, leaving gold with little cover.
Second, if the global economy
continues to meander, investors will
be keen to take profits from their gold
holdings to compensate for losses
elsewhere, keeping prices in check.
Third, as gold has risen 600 per
cent over ten years, even a mid-sized
correction may not be unwarranted
and may not signal the complete
and utter decline of the precious metal.
But investors who move in at current
prices could find themselves staring
down a cliff.

alifarabia.com
Gold buGs say that
with the world
(or at least the eu)
GoinG to hell in a
hand basket the
leGendary safe
haven metal is just
takinG a breather
before its next
incline.
18 Nov 06
200
400
600
800
1000
1200
1400
1600
1800
2000
18 Nov 07 18 Nov 08 18 Nov 09 18 Nov 10 18 Nov 11
$

o
n
c
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0
41-42 Briefing Gold.indd 42 11/27/11 12:53:58 PM
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pal zileri.pdf 9/27/11 12:33:36 PM
016_TE_B2B_GulfBiz_20.6x27cm_ENG.indd 1 10/24/11 4:32:02 PM
GULF BUSINESS / 45
RAK BRIEFING
The northern Emirates feisty annual
business conferences are drawing in
new investors.
TExT By PETEr Shaw-SmITh
RAK To ThE fuTuRE
investment
happened overnight. When an Emirates
pilot, who was paying for a new villa at
RAK Properties, said in 2007 he loved
the idea of not having to bother with the
traffic and fumes of Dubai in his daily
routine any more, you could sense a
unique selling point.
Last year, after teaming up with
international event promotion group
Horasis, Sheikh Saud put on the Annual
Global Arab Business Meeting in Ras
Al Khaimah.
Led by chairman and one-man team,
Dr. Frank-Jurgen Richter, Horasis has
been organising events around the
world for six years and this year puts on
conferences in Valencia, Luxembourg and
Zurich. Switzerland-based Horasis has
been active since 2005.
W
HEn you LiVE up the road
from World Conference Central,
trying to attract people to come to
your own more modest symposia is a
challenge. Resourceful Ras Al Khaimah is
undeterred.
Sheikh Saud bin Saqr Al Qasimi,
Supreme Council Member and Ruler
of Ras Al Khaimah, is nothing if
not a canny host. Since taking over
management of the emirates affairs in
2003, he has presided over a flowering of
its economy, now $4.5 billion in size.
Downtown RAK is not for the faint-
hearted. With poor roads, and little
more than a mall and a quaint and
dated version of the Hilton Hotel, most
people encounter it only if they fancy
camping on the Mussandam Peninsula or
a chat with one of the struggling cement
company CEos.
But the Hamra Resort continues to
blossom, with several new amenities and
the picture postcard vistas are almost
a match for the best that Dubai has to
offer. The new Palace Hotel is the height
of luxury, sumptuous townhouses stretch
as far as the eye can see, and a new
aqua-park and apartment developments
- including an offshore island - are going
up along the seashore.
The effort to promote RAK has not
RAK gateway project.
45-46 Briefing RAK.indd 45 11/27/11 2:32:50 PM
46 / DECEmBEr 2011
BRIEFING RAK
RAKs business model Relies heAvily
on inwARd investment: officiAls sAy
thAt 39 peR cent of investoRs ARe fRom
indiA, 19 peR cent fRom the middle eAst
excluding the gcc, And 15 peR cent fRom
the gcc itself.
i chose RAK as the emirate has great
potential, says Dr. Richter. And we
usually chose locations with a resort
character. Ras Al Khaimah is an ideal
location to hold our Global Arab Business
Meeting. The Ruler is a great supporter.
in truth, the quality of the debate
at the conference did not match that
sometimes encountered when the big-
hitters converge on Dubai. The outcome
of the discussions seemed to be that the
volatility caused by the Arab Spring was
no bad thing for resourceful Middle East-
based entrepreneurs. But as a platform
for investment in RAK, it was perfect.
i have attended a number of Horasis
meetings, including last years event in
RAK. They represent a great networking
and learning platform, says Wolfgang
Lehmacher, partner and managing
director for Greater China and india,
of CVA, a global strategy consulting
boutique. They are international
and local at the same time, allowing
participants to realise views beyond
the snapshot of the regional situation
and intentions.
At a lunch served in two packed
adjoining restaurants, a Greek PhD from
Cambridge university set out her desire
to commercialise her companys cancer
research - and how possibly to involve
RAK educational institutions. An indian
businessman earnestly entreated a Dubai-
based Emirati over his latest business
plan. A German iT executive who divides
his time between Paris and Hong Kong
said RAK, with more information, might
be worth a second look. An indian
banker and fund manager took Sheikh
Saud to one side to impress on him the
need to improve local education.
Recent regional consolidation has
corrected unsustainable [projects] and is
refocusing business on fundamentals,
says Mr. Lehmacher. This makes for
solid perspectives in the region. Ras al
Khaimah offers exactly this perspective.
it is a dynamic emirate, intending to
invest in knowledge management and
education. RAK represents fertile ground
for many businesses.
RAKs economy has held its own
during the downturn and new projects
and warehouses spring up regularly. its
business model relies heavily on inward
investment: officials say that 39 per cent
of investors are from india, 19 per cent
from the Middle East excluding the GCC,
and 15 per cent from the GCC itself.
Dr. Khater Massaad, who built the
largest ceramics company in the world,
RAK Ceramics, was on hand to explain
that the RAK investment Authority, which
he also heads, is home to over 9,800
companies, of which 800 are industrial.
Total industrial investment in RAKiA to
date exceeds $3.5 billion, he said.
Alex Thomas, general manager,
marketing, at RAK investment Authority,
pointed to increasing migration from
GCC companies as a key to RAKs recent
economic success, although he could
not comment on uAE companies moving
to the emirate. Costs are an important
factor, he said.
RAK has proved remarkably adept at
attracting foreign investment and has
seized every opportunity to sell its brand
internationally. Why did Dr. Richter
choose RAK over Dubai to host his
event? Probably because he realised that,
ultimately, more new businesses would
be incubated as a result.
We are not a conference organiser,
says Dr. Richter. Conference organisers
usually invite a few star speakers. And
500 people sit and applaud. We want to
involve everybody in an active dialogue;
thats the reason we include so many
boardroom dialogue panels. Participants
usually stay on during the whole
meeting, [as opposed] to conferences
where speakers come and leave.
And as the new enterprises
mushroom in RAKs industrial zone,
you can see why.
Sheikh Saud bin Saqr Al Qasimi, Supreme Council
Member and Ruler of Ras Al Khaimah.
45-46 Briefing RAK.indd 46 11/27/11 2:32:51 PM
48 / DECEMBER 2011
Its been a spellbIndIng year. as the arab world fought
for freedom, the wIder world battled economIc woes and
an uncertaIn future of Its own. Gulf Business asked the
regIons top busIness mInds what the future holds In 2012.
THE POWER
compiled BY alicia buller
illustrations BY rom miclat
48-65 CEO Letters.indd 48 11/27/11 2:19:05 PM
GULF BUSINESS / 49
cover story
LETTERS
48-65 CEO Letters.indd 49 11/27/11 2:19:17 PM
50 / DECEMBER 2011
- the organisation of the petroleum
exporting countries (opec) was
founded in Baghdad, iraq, in 1960
by fve countries. currently, it has 12
member countries.
- opec countries supply about a third
of the worlds oil.
- recently, the organisation cut its
global economic growth forecast for
2012 to 3.6 per cent from 3.7 per cent.
fast facts
Abdalla Salem El-Badri,
Secretary General, OPEC
our 2011 World Oil Outlook, which was
released in November, OPEC Member
Countries are expected to invest close to
$300 billion in 132 upstream investment
projects through 2015.
Moving forward, of course, remains
challenging. But such investments are,
as I have often said, the lifeblood of
the oil industry. Without investments
now in exploration, production and
expanded capacity future supplies
may not materialise and future needs
may not be met. And this is something
neither consumers nor oil producers
can afford.
Our Member Countries know this very
well. That is why OPEC consistently
expresses its interest in ensuring the
security of supply to all consumers
and, through its Member Countries,
maintains a commitment to investments
in new projects.
While the current global outlook
provides little security to producers and
investors, we must remember that future
oil supply depends on ongoing and timely
investments in capacity expansion. They
are central to ensuring future supply.
What motivates us is, of course, an
interest in satisfying the worlds energy
needs and striving towards stability in
the market. This is what our Member
Countries always try to keep in mind,
in line with our broader organisational
mission. It is only in this way that OPEC
can continue to be ready to act when
necessary despite what the global
outlook may show.
G
iving an assessment of
the global oil outlook for
the short and medium-term
is notoriously challenging.
But offering views on the outlook for
investments in the industry, especially
given recent economic and financial
developments around the world, is even
more difficult.
Continuing unemployment and a
manufacturing slowdown in the US, as
well as a growing sovereign debt crisis
in Europe, have recently prompted OPEC
to revise down its economic growth
forecasts for 2011 and 2012 and,
consequently, oil demand. And despite
rapid growth in developing countries,
great uncertainties remain about a
sustained and broad-based recovery in
the major oil-consuming countries of
the world.
There is also the ongoing challenge
of not having a sufficiently stable crude
price environment. Our industrys growth
requires prices that are neither too high
nor too low and which are stable
enough to continue to attract investments.
We should not forget the experience of
2008 when extreme volatility resulted in
prices rising to nearly $150/b and then
falling to around $30/b by the end of the
year. This led to the postponement or
cancellation of more than 30 investment
projects across our Member Countries.
Despite the complex nature of the
economic challenges, our Member
Countries have an ongoing commitment
to capacity investments. According to
energy
48-65 CEO Letters.indd 50 11/27/11 2:19:19 PM
GULF BUSINESS / 51
2
011 has been quite an
eventful year for the global
economy, but the UAE has
weathered the turbulence
well and largely remained insulated from
the impact of the Eurozone crisis. The
UAE financial services industry, being
the barometer of the overall economic
climate of the country, reflected this
stability, which is evident from the
reasonably good performance posted by
UAE banks for the first nine months of
the year.
However, during 2011 there was a
visible shift in the thinking and strategy
of most UAE banks. Having overcome
the impact of the 2008 financial crisis,
banks in the UAE have shifted their
focus internally and have been working
to strengthen their systems, processes,
structure and risk management policies.
Banks are, in general, looking
internally for improvement opportunities.
Most of them are revisiting and
re-shaping their medium to long-term
strategies, revamping their distribution
strategies and identifying areas for future
growth. In short, they are spending time
and efforts to build strong fundamentals
to face the new economic reality.
The after effects of the economic
upheaval witnessed in 2011 in the
Western economies will impact the fast
growing economies of Asia, which are
expected to slow down in 2012. This
will affect the UAE and I expect flat
performance or marginal growth for the
UAE banking sector in 2012.
- mashreq is the second oldest bank
in the uae (after dubai islamic
Bank), with total assets of dhs70.9
billion and net profts of dhs756
million in the frst nine months of
2011. the bank is listed on the dubai
Financial market.
- mashreq introduced the frst atms
and credit cards to the uae.
- the bank opened its 54th branch in
umm suqeim, dubai, this year, which
includes a mashreq Gold centre.
fast facts
h.e. Abdul Aziz Al Ghurair,
chairman, Mashreq
Customers will be more demanding
and banks will be under competitive
pressure. Margins will compress,
customers will demand flexibility,
and won't accept a one size fits all
approach. Banks will be expected to
come up with innovative solutions to
meet customer demands. To be able
to compete effectively in a market,
where growth is flat and customers are
demanding, banks will need reorganise
themselves in line with the needs of their
customers. Quality customer service will
be the major differentiating factor.
Since the financial crisis of 2008,
the global regulatory environment has
changed forever and this will ensure that
banks behave more responsibly. Risk
management will take precedence over
profitability and considerations. Liquidity
and capital management will be the first
priority for banks.
Finally, let me add that changes in
the banking regulations and fiscal
discipline, introduced during the last two
years, will make the UAE banking sector
stronger and will foster long-term growth
in the country.
The after effects of
the economic upheaval
witnessed in 2011 will
affect the UAE, with flat
performance or marginal
growth for the UAE
banking sector in 2012.
banking and finance
48-65 CEO Letters.indd 51 11/27/11 2:19:21 PM
52 / DECEMBER 2011
H. E. Mohamed Alabbar,
chairman, Emaar Properties
r
eal estate, like just about
everything else in life,
is cyclical. The eternal
challenge for homeowners,
investors and developers is figuring
out which way the cycle is moving, and
when it is most likely to shift direction.
Because in real estate, as in life, we all
want to be ahead of the curve.
We want to buy when the cycle is
down, and sell when its up. And, as
developers, we want to build for not
just current but also future demand.
That sounds awfully simple.
Unfortunately, real estate cycles are
complex things, influenced by countless
factors, both local and global, that make
them hard to predict.
So what do we do? Generally,
we study historical trends, current
leading indicators and ongoing price
fluctuations to assess, as best we can,
the direction of the cycle.
Thats one option. Another is to
focus less attention on the vagaries of
the market and, instead, zero in on
underlying demand, asking ourselves:
What do people really need, right now
and in the future, that they cant get?
So lets step back for a moment and
look at our region with a birds eye view.
What do we see? A lot of young people,
including millions who need good jobs
and just as many who require quality
homes for themselves and their families.
Our region needs sustainable jobs and
affordable homes. Its hard to miss this
plain fact.
My belief in fundamentals, in the
importance of going back to basics,
is one of the reasons why Emaar,
which has traditionally focused on
affordable luxury developments,
recently launched a new subsidiary - Al
Dawahi Development, a next-generation
developer of value housing projects
across the Arab world.
At a time when the housing shortage
in some of the fastest growing cities in
the Middle East is estimated at over five
million units, Al Dawahi Development
will address the huge demand for
value housing. Creating a new category
of homes and communities that
provide value to young families, we
will create self-sufficient communities
that fulfill the aspirations of Arab youth
and their families.
A back of the envelope calculation
will show that if we can build
40,000 homes annually, it would take
at least 100 years to meet pent up
demand. Clearly there is room
here for not just Al Dawahi, but many
more developers to enter the
market of value housing. However, it
is important for developers to
implement the right business model
that works on volume and a good
supply chain that offers the best prices
for building materials.
Three years after the worlds financial
system nearly collapsed, we need to
go back to basics. After all, as any
builder knows, every project must start
with a strong foundation.
uae-founded property titan emaar
has built some of the country's most
striking landmarks, from the world's
largest tower, Burj Khalifa, to the
world's largest mall, dubai mall.
recurring revenues from the
hospitality and shopping malls
businesses of emaar accounted for
nearly 41 per cent of total revenue in
the frst nine months of this year.
Founded in 1997, emaar is listed on
the dubai Financial market.
fast facts
real estate
48-65 CEO Letters.indd 52 11/27/11 2:19:22 PM
GULF BUSINESS / 53
banking and finance
standard chartered bank is
headquartered in london, uK, with
over 85,000 staff in 70 countries
and around 3,000 employees in
the mena region.
- the bank paid $5.76 billion in
salaries last year, a 17.3 per cent
increase on 2009.
fast facts
V. Shankar,
ceo, Standard Chartered, EMEA ANd americas
In 2012, I expect the world to remain
interesting. We live in an inter-
connected world. If the developed West,
which still accounts for two-thirds of
the global GDP, grows at a low or
negative rate, it will impact the
developing world as well. The world
will also keenly watch events in Egypt,
Syria and Iran. Asia will continue to be
the fastest growing region, driven by
growing consumerism in China, India
and Indonesia.
Once Basel III and the panoply of other
banking regulations are implemented,
the minimum capital requirement for
banks will be almost four times as high
as before the crisis. Many will respond
by deleveraging their balance sheets and
retreating to home markets. Banking
sector profitability could be under
pressure from reduced loan demand and
hedging activity.
Standard Chartereds strategy in 2012
will be much the same as that we have
pursued over the last decade. We will
maintain our focus on our core growth
markets in Asia, Africa and the Middle
East. We will stand by our clients. We will
continue to be disciplined on costs, capital
usage, liquidity and risk management.
These strategies are hardly novel.
However, our sustained performance
has proven that focusing on the basics
of banking and being true to our brand
promise of being here for good delivers
results. So expect more of the same from
us in 2012 and beyond. In banking it is
good to be predictable and boring!
2
011 has been a challenging
year for the banking industry.
Banks around the globe
have had to contend with
changing economics, shifting political
winds and a plethora of new banking
regulations. The Eurozone turmoil, US
sovereign downgrade, the Arab Spring
and unprecedented market volatility were
just a few of the challenges. Whereas the
2008 post-Lehman crisis was a genuine
banking crisis, the current one is arguably
a political and sovereign crisis that is
stressing the banking system. And it is
unclear where this will all end.
Looking ahead, what is clear is that
some fundamental shifts are taking place.
The economic centre of gravity
is shifting from West to East. While the
West contends with an ageing population
and high debt levels, the East has
favourable demographics and growing
financial reserves. South-South trade
and investment flows are driving the
global economy.
A new Silk Road is being spun from
Asia to Latin America. The Middle
East is well placed to benefit from this
shift as it has a favourable geographic
position and trading in its DNA. This
should help create millions of jobs. The
Arab spring highlighted that a potential
demographic dividend can become a
debacle if we dont create enough jobs
for our young people. The Middle East
needs to diversify away from its reliance
on energy and ensure education puts a
greater emphasis on employability..
48-65 CEO Letters.indd 53 11/27/11 2:19:24 PM
54 / DECEMBER 2011
aviation
tim clark,
president, Emirates airline
H
ere at emirates we are
always looking forward. We
have a detailed growth plan
that will take us many years
into the future.
In 2011, the global airline industry
took a hit from multiple areas. Shifting
global economies, political unrest
and soaring fuel prices are factors we
cannot always plan for. We do our best
to mitigate their effect on our business
but the reality is that we do not have
the power to stop them; we simply
have the resilience and determination
to weather them. You cannot plan for
adversity but you have to be smart
enough to expect it and work your way
around it.
2011 was a challenging one for
Emirates with the incredible high of
our record breaking full-year results
in March, followed by a dip in our
half year profits in up to September.
The excruciatingly high price of fuel
has had a detrimental effect on our
half year profits, yet despite this we
remain on our strong growth trajectory
as one of the fastest growing airlines in
the world.
At Emirates we are looking ahead
to 2012 with cautious optimism. The
world economy is currently suffering
from disequilibrium.Next year, we
expect the global economy to begin
to balance itself out again and we are
well poised to capitalise on this. We
have the network, the aircraft and,
importantly, the drive to do so.
Despite the global slowdown Emirates
has not halted our own growth as
evident in our recent order for 50
Boeing 777s, made during Novembers
Dubai Airshow.
World markets are continuing to
develop. Many airlines are still stuck
in the 1990s mind-set and have taken
far too long to react to the worlds
newest and fastest growing economies.
India, China, Africa and Brazil are fast
becoming the global powerhouses of this
millennium. Adaptation is the key to
survival for any business and we have
always been quick to react and take
advantage of these global shifts.
In 2012, markets in Africa and South
America will further push themselves
forward. Africa in particular is a resource-
rich land. The business is there, its just a
matter of being bold enough to go there
and grab it. We already have 19 African
destinations and in February next year we
will launch Lusaka and Harare taking us
to 21. The fact that other airlines are only
just waking up to this opportunity-rich
land is to their own detriment.
There is no great secret to our success.
It is the collective hard work of our
employees that has propelled Emirates to
become the worlds largest airline.
We are optimistic about the next 12
months as we continue to move forward
with implementing our growth plans.
The whole aviation industry has taken a
hit this year but with the right planning
in place I am certain that 2012 will be a
better year for all of us.
fast facts
emirates was launched in 1985 with
two leased aircraft. today, the carrier
has a 160-plus feet of airbus and
Boeing aircraft. the carrier also
placed an order for an additional
50 Boeing 777s during the dubai
airshow in november, with the deal
being valued at $18 billion.
the airline fies to more than 100
destinations in over 60 countries,
and employs a cabin crew of around
12,000 people.
the airline announced that its net
profts for the frst half of the 2011
fscal year fell by 76 per cent, thanks
to increasing fuel costs and foreign-
exchange losses.
48-65 CEO Letters.indd 54 11/27/11 2:19:25 PM
GULF BUSINESS / 55
banking and finance
Rick Pudner,
CEO, Emirates NBD
t
he past year was dominated
by a number of significant
macro events both regionally
and globally, including the
Arab spring, the tsunami in Japan, the
US debt ceiling issues and, of course, the
ongoing sovereign debt crisis in Europe.
The local and regional economies have
not been immune to these developments
and this was reflected in weaker private
sector activity and consumer confidence,
while access to international capital
markets was affected by heightened
global uncertainty and risk aversion.
Nevertheless, the region has been
relatively resilient in the face of these
challenges as growth has benefited from
increased oil production as Saudi Arabia,
the UAE and Kuwait stepped in to offset
the decline in production from Libya, as
well as higher oil revenues.
In the context of this macroeconomic
backdrop, the UAE banking system
has similarly been resilient with
capitalisation and liquidity levels
remaining extremely healthy and
mid single-digit average operating
profitability year-to-date. This was
achieved despite relatively subdued
private sector loan growth and continued
balance sheet de-risking in the aftermath
of the 2008 global credit crisis. During
2011 the UAE banking sector also faced
additional regulatory tightening from the
Central Bank.
Looking ahead to 2012, the
macroeconomic environment remains
challenging and the global outlook is
still uncertain. Regional private sector
activity will depend to a large extent on
continued stimulus from government
spending, as well as global growth in
2012. In addition, Libyan oil production
is expected to revert to more normal
levels over the next few months, which
suggests that GCC oil production is
likely to decline, or at best remain flat,
providing a headwind to growth in the
region next year.
The uncertain outlook for next year
will have implications for the UAE
banking system and the evolution of
business strategies. Firstly, volatility and
uncertainty will likely remain for some
time which means that speed of decision
making and execution becomes a critical
success factor. Secondly, private sector
activity and loan growth is expected to
remain relatively subdued, which implies
greater competition for underwriting
opportunities and pressure on banks net
interest margins. As a result, strategies
are likely to focus on building and
developing fee-generating businesses,
improving customer service and delivery,
enhancing credit appetite in selected
sectors and refocus to under-penetrated
segments. At the same time, optimising
operating costs and efficiency as well as
balance sheet management will remain
high on the priority list. Finally, we
may see a pickup in local and regional
mergers and acquisitions activity as
banks seek diversification and growth or,
alternatively, to strengthen vulnerabilities
in parts of the banking system.
the bank was formed by a merger
between emirates Bank international
and the national Bank of dubai in
2007, and boasts the largest asset
base in the Gcc dhs286.2 billion as
of the end of 2010.
the uaes largest bank, emirates
nBd saw its shares rise 20 per cent
this year.
the bank has 132 branches and
around 700 atms across the uae.
fast facts
48-65 CEO Letters.indd 55 11/27/11 2:19:27 PM
56 / DECEMBER 2011
logistics
- the integrated logistics frm
employs around 22,000 people
in 550 offces spread over
100 countries.

- agility was created in Kuwait in
1979, and is currently a publicly
traded company with close to $6
billion in annual revenue.
- the companys commercial
business, Global integrated
logistics (Gil), is headquartered
in switzerland.
fast facts
Tarek Sultan,
CEO, AGILITY
2
011 has been an
extraordinary year and while
we hope for more stability
in 2012, this by no means
looks certain. Against a backdrop of
global economic uncertainty, emerging
markets continue to offer good prospects.
Agilitys biggest revenue gains came from
the Middle East, Asia, Eastern Europe
and Latin America. Our strength in such
markets is a differentiator for us and is
key to Agilitys long-term growth.
The Arab Spring has clearly
transformed the Middle East. Over the
long-term, I remain bullish on prospects
for the region, with new governments
hopefully becoming more responsive to
the need for growth and development
and more private sector oriented than
they have been in the past. They
will need to create jobs to satisfy the
demands of their people. In the short-
term, our industry is focused on getting
essential goods and services through.
Even while there is conflict, people need
to eat, obtain medicines and so on,
and our job is to secure supply chains
around those critical items. Having our
roots in the Middle East helps we have
experience working under extremely
challenging and difficult operating
environments so we continue to not
only to function but to perform well,
delivering for our global customers.
2011 was also marked by the sheer
scale of catastrophe that occurred in
Japan in March. Compounded by other
serious natural disasters across the year
and the massive business disruption they
trigger, the logistics industry has really
woken up to the need to engineer supply
chains which are tougher and more
resilient just-in-case supply chains
and not merely just-in-time.
So the industry is looking at factors such
as diversified production and distribution
that help remove the risk of single-point-
of-failure as well as increased flexibility
in the flow and routing of goods.
Given the volatility we have seen in
2011, I anticipate a continuation of the
mixed global economic picture in 2012
with emerging markets moving ahead
and more developed markets continuing
to struggle. As a reflection of this, we
will see continued trade lane growth in
the Far East and in the Middle East a
trend set to continue for several years
into the future. Trade lanes will also
increase between the Middle East and
emerging markets such as Brazil and
India. As the Agility Emerging Markets
Logistics Index predicted, we will see
the continued rise of near-sourcing
markets like UAE, Mexico and Turkey,
while in Asia, economies such as
Indonesia, Malaysia, Thailand, Vietnam
and Cambodia will continue with their
strong development.
But while we have good reason
to be upbeat, uncertainty in the
global economic picture means that
we will remain cautious and
conservative, streamlining the
organisation to boost efficiency, while
looking to grow revenue organically.
48-65 CEO Letters.indd 56 11/27/11 2:19:29 PM
GULF BUSINESS / 57
aviation
- abu dhabis government-owned
national carrier began operations
in 2003.
- etihad plans to break even this year.
- the airline currently fies to 86
cities, and is planning to add six
new destinations over the next
six months.
fast facts
james hogan,
CEO, etihad airways
a
t etihad airways we are
excited about 2012, concerns
about the global economy
not withstanding.
Now eight years old, we have
established ourselves as one of the fastest
growing airlines in the world and as a
brand to watch.
We have been named Worlds Leading
Airline at the World Travel Awards for
two years in a row, which is a measure
of our commitment to product and
service excellence, and we continue to
strive to improve our offering both on
the ground and in the air.
Importantly, the financial strategies
that we put in place as long ago as 2006
are maturing and delivering results,
and we expect to deliver sustainable
profitability next year, after reaching
break-even in 2011.
In terms of the wider industry, 2012
will be a very interesting year as Gulf
carriers continue to assert themselves
globally in difficult financial conditions,
particularly in the West.
It goes without saying that the
performance of the industry is closely
linked to the health of the global economy.
Historically, when the average global
economic growth rate has slowed to less
than two per cent, the aviation industry as
a whole has struggled to prevent losses.
With the global economic growth rate
for 2012 widely forecast to be perilously
close to two per cent, the International
Air Transport Association (IATA) has
recently stated it expects the industry
to make weak net profits: $4.9 billion on
revenues of $632 billion, which represents a
net margin of just 0.8 per cent.
Although the brunt of austerity is expected
to be felt in the Eurozone and North America,
with developing economies expected to fare
considerably better, airlines in the Middle
East are certainly not immune to the effects
of slowed growth in the West.
A slowdown in any market into which
Middle East carriers operate will inevitably
be felt in decreased numbers of passengers
travelling for leisure or business. Cargo
volumes could also be hurt by slowed
international import/export trade.
Oil prices in 2012 are expected to remain
volatile. We will continue our policy of
hedging, providing a buffer of certainty
against price spikes.
As we always have, we will work hard
to navigate the economic landscape and
to respond quickly to changed realities.
In this respect, we are fortunate that
our comparative youth allows us more
flexibility and agility than many traditional
legacy carriers we are what I call a new
wave carrier, still operating with a clean
sheet of paper.
Our agility, along with the strength of
Abu Dhabi and its increasing importance
as a business and leisure destination, and
the millions of potential travellers on our
doorstop not only in the Gulf, but also
the huge markets of India and China will
ensure that in 2012, we are not only well
positioned to weather global economic
difficulties, but to emerge well placed to kick
on when the eventual upturn comes.
48-65 CEO Letters.indd 57 11/27/11 2:19:30 PM
58 / DECEMBER 2011
fast facts
- the airline, the oldest in the region,
turned 61 this year, and is fully owned
by the Kingdom of Bahrain.
- Gulf air recently added three new
destinations in saudi arabia and
is also negotiating with the indian
government to launch new routes
into the country.
- Gulf air's falcon logo appeared on
the shirts of the premier league club
Queens park rangers for three years,
after the airline signed a 7 million ($11
million) deal with the team in 2008.
aviation
Samer Majali,
ceo, Gulf Air
i
t is strange, if not unusual,
that despite a meagre 1.2 per
cent profit margin there is so
much competition in the aviation
business. It is even more peculiar to
see the global interest in this industry
despite all the challenges it presents.
It is an industry that is anything but
volatile, anything but predictable.
Yes, unpredictability seems to be
the name of the game in this business.
From fluctuations in the price of oil
over the last decade and the periodic
increase in aviation fuel prices
pushing up the operating costs, price
wars among competitors eating into
each others revenue, flash strikes by
industry workers leading to grounding
of entire fleets and creating chaos
among thousands of travellers, the
industry is in a predicament.
And who would have thought that
a sleeping volcano in far off Iceland
would erupt and cripple the aviation
industry for almost four weeks
resulting in millions of dollars loss in
revenue? Added to this woe was the
recent unrest in the Middle East and
North Africa that resulted in hundreds
of airlines reducing and cancelling
flights, creating a huge dent in their
revenue and profitability? The list
seems endless.
We have experienced a rollercoaster
ride in our business in the last ten
years with a mix of economic crises
and geo-political events, as well as
brief spells of recovery. For the first
time since 1998, the industry achieved
an EBIT margin in excess of five per
cent in 2010. Last year proved to be
fairly a good year for airlines with
their profit margin touching 2.9 per
cent but, once again, we will see a dip
in 2011 with industry pundit forecasts
even tougher for 2012.
However, there are booming
economies that present huge
opportunities for the aviation business
to grow, particularly China, India and
in Brazil. China, alone, is expecting to
increase its number of aircraft to
4,500 in the next five years from its
current 2,600, while India's domestic
aviation market has tripled in the past
five years.
But standing out from this, and
standing tall, is the Middle East aviation
industry. Though not immune to the
above said uncertainties, the Middle
East has emerged as the strongest
growing region in the global aviation
market. Its geographically strategic
location, connecting the East and the
West enabling easy access to some of
worlds largest growing economies, its
hub and spoke business model of the
GCC airlines that connect practically
every part of the world through modern
airports and, of course, the ability to
invest in the latest aircraft have all made
the global aviation business take notice
of this region.
Yes, the industry may witness
turbulence and storms but the future
belongs here.
48-65 CEO Letters.indd 58 11/27/11 2:19:32 PM
GULF BUSINESS / 59
banking and finance
term economic growth in the region
remain strong, particularly in the
GCC, due to the abundance of natural
resources and youthful populations,
as well as the benefits of economic
integration through the GCC Common
Market and larger Free Trade Area.
DIFC, with its modern infrastructure,
free zone status and international
legal system, is uniquely positioned
to support this growth in the region.
in 2011 growth came from the
Middle East and Asia, reflecting the
continuing global shift in economic
focus towards the East.
DIFCs strategy in 2012 will
remain focused on supporting our
existing clients with the expansion
of their regional business and their
presence in the Centre. We will also
maintain our global drive to attract
new business to the Centre from
Asia, Brazil, India, North America
and Europe.
Abdulla Mohammed Al Awar,
CEO, DIFC Authority
dubai international Financial
centre is a federal fnancial
free zone that provides a
platform for businesses and
fnancial institutions.
the diFc has independent
civil and commercial laws and also
runs its own court. the diFc courts
are, in fact, witnessing more cases
rising from nine in 2008 to 36
in 2010.
the diFc authority also includes
a risk-based regulator, the dubai
Financial services authority (dFsa),
which grants licences and regulates
the activities of all the institutions
in diFc.
fast facts
t
his year will be regarded as
a critical moment in the
history of the Middle East
and North Africa and the
development of its economies. 2011 will
come to be recognised as the beginning
of a long-term process of sweeping social,
political and economic reforms that will
have far-reaching consequences for every
aspect of life in MENA, including business
and commerce.
Throughout 2011, DIFC has continued to
grow by connecting the regions emerging
markets with the developed markets
of Europe, Asia and the Americas. Our
role during such an unprecedented year
of change has been to provide a stable
platform supporting the growth of regional
operations of corporations and financial
institutions from around the world.
Indeed, Dubai continued to climb
the top ranks of international financial
centres, and was ranked eighth in both
the Bankers (FT Business) ranking
of international financial centres and
the Xinhua-Dow Jones International
Financial Centres Development Index
2011. Despite the unrest in several
MENA countries, DIFC has experienced
a 10 per cent increase in the number of
companies operating from the Centre
compared to last year. The growth of
new member firms in DIFC reflects long-
term opportunities in the region.
In its latest economic forecast, the IMF
has estimated that growth will slow from
3.9 per cent in 2011 to 3.6 per cent in
2012. However, the prospects for longer-
Despite the unrest in
several MENA countries,
DIFC has experienced a
10 per cent increase in
the number of companies
operating from the Centre
compared to last year. The
growth of new member
firms reflects long-term
opportunities in the region.
48-65 CEO Letters.indd 59 11/27/11 2:19:34 PM
C
M
Y
CM
MY
CY
CMY
K
Tudor.pdf 11/24/11 5:31:22 PM
GULF BUSINESS / 61
asda'a Burson-marsteller was
founded in 1999, and includes six
teams operating in corporate,
fnancial, public affairs, consumer
marketing, technology and
healthcare sectors.

the frm is part of the menacom
Group, owned by Wpp, a global
communications services network.

asdaa'a clients include emaar (Burj
Khalifa launch), dubai international
Film Festival and Ford middle east.
fast facts
Sunil John,
CEO, ASDA'A Burson-Marsteller
i
f public relations is the art
of reputation management, then
it seems clear that the industry
needs to take its own PR a lot more
seriously. Like the proverbial cobblers
children who go without shoes, public
relations firms worldwide and especially
here in the Middle East ignore the fact
that their professions own reputation is
generally on par with that of ambulance-
chasing lawyers and used-car salesmen.
Worldwide, the PR industry employs
about 60,000 people, generating around
$9 billion in annual fee revenues. At a
time when related sectors like advertising
are suffering a global crunch, our
business remains robust.
Yet we remain our own worst client.
Seen as either subservient to media,
or as masters of the dark art of spin,
we need to address with seriousness of
purpose our fundamental image problem.
Our own future depends on it, especially
here in the Middle East.
PR is relatively new to the Arab world.
Yet, by 2009, barely a decade after the
profession first became institutionalised
here, total fee revenues reached
approximately $150 million. Today, the
overall value of the industry, including
work done by in-house communications
departments, stands at about $500
million. If current trends continue,
there is every reason to believe that
the industry will be worth $1 billion
annually within a decade.
That may sound like a fantastic growth
curve, and in many ways it is. But we
could grow even more rapidly if we
more clearly communicated what we
actually do, as well as the tangible
value it provides the clients we serve.
ASDAA Burson-Marsteller, the firm I
lead, recognised early the importance
of managing the image of our industry,
and of our own company. That is why,
for example, we have been investing in
conducting the annual ASDAA Burson-
Marsteller Arab Youth Survey since
2008. The largest study of its kind of the
regions largest demographic, this survey
is our contribution to the important,
ongoing dialogue about the future of the
Arab world.
A decade ago, about three-quarters
of our clients were multinationals
seeking to raise their profile in the
Middle East, while the remaining
25 per cent were local firms keen
to communicate their success. Ten
years later, those numbers have
been reversed: this trend, towards
localisation, is an important indicator
of the health of the regional PR sector,
which shows that locally-based firms
increasingly appreciate the value such
consultancy can provide them. In the
Arab spring, at a time communication
has never been more critical to
regional governments and companies.
Perhaps this is a sign, after all, that
our industry is finally on the verge of
gaining the respect it deserves and
that, as the one-time cobblers children,
we will be able to stride confidently
into the future.
public relations
48-65 CEO Letters.indd 61 11/27/11 2:19:35 PM
Swiss
values form the backbone of our approach
to Private Banking. Reliability, attention to
detail, thoroughness these are the essential
principles that enable us to offer our clients
solutions of lasting
quality.
Ramzi Charaf, Private Banking
Bank Vontobel (Middle East) Ltd.
Liberty House, Ofce 913
Dubai International Financial Centre
P.O. Box 506814
Dubai, United Arab Emirates
Telephone +971 (0)4 703 85 70
Telefax +971 (0)4 703 85 01
Bank Vontobel (Middle East) Ltd. is regulated by the DFSA to provide nancial services to Professional Clients within the scope of its Licence.
Persons other than Professional Clients, such as Retail Clients, are not the intended recipients of this communication and must not act upon or
rely upon the content of this communication.
Bank Vontobel (Middle East) Ltd. is duly incorporated as a company limited by shares under the laws of the DIFC.
GulfBusiness_270x206_Charaf_en.indd 1 18.10.11 10:37
GULF BUSINESS / 63
technology
- symantec is the largest maker of
security software for computers.
the company is headquartered
in california, and is a Fortune 500
company and a member of the s&p
500 stock market index.
- the security frm has announced $6.19
billion in revenues so far this year and
employs over 18,500 people.
fast facts
Enrique Salem,
president & CEO, Symantec
a
s we approach 2012,
mobility, virtualisation and
cloud computing are three
big trends driving change
in IT. At the same time, organisations
are grappling with a growing amount
of information and an increasingly
toxic threat landscape. These trends are
giving IT an opportunity to rethink their
approach to make their organisations
more efficient, more scalable and more
cost effective.
As information becomes more
accessible across more devices
such as PCs, smartphones, and tablets
the workforce experiences better
productivity. More and more were
seeing personal devices connected
to the business network, creating
tension between individuals that
want to ensure personal privacy
and IT that wants control of the
corporate information.
Virtualisation is another trend that
continues to accelerate. As businesses
move to virtualise business critical
applications, there is immense
pressure to secure and manage these
environments. It is essential to manage
your backups, manage storage and
to ensure systems remain highly
available as you would with a
physical environment.
The need to better secure information
and the fact IT organisations have more
to do with less money is driving the
mindset shift to cloud computing, the
third big trend transforming IT. There
are significant benefits for organisations
looking at Software-as-a-Services (SaaS)
solutions like higher availability and
reduced CAPEX. Most of the adoption
of cloud services today is around email,
security or virtual desktops, but that is
just the beginning.
While IT is looking at how to leverage
these three trends, they are also dealing
with explosive data growth. In 2010, we
predicted data would grow 40 per cent,
in reality it grew 62 per cent. Most of this
is unstructured and the challenge comes
in getting a grip on the data, ensuring
we know what is important, where data
is, who is accessing it and how can we
eliminate redundant information.
As threats evolve to become much
more targeted, no network or individual
is immune. Both KSA and the UAE have
featured in the top five globally for spam
and virus levels. We are no longer in a
position where we can ignore the threats.
The truth is businesses cant afford the
cash losses, intellectual property or
downtime that result from an attack.
Those firms that start with protecting
people and information will be the ones
poised for success.
Both Saudi Arabia and the
UAE have featured in the top
five globally for spam and
virus levels. We are no longer
in a position where we can
ignore the threats.
48-65 CEO Letters.indd 63 11/27/11 2:19:37 PM
64 / DECEMBER 2011
law
established in 1989, al tamimi &
company is the largest law frm in
the middle east region today.
al tamimi employs more than
360 staff, with offces throughout
the uae in dubai, abu dhabi and
sharjah as well as in iraq, Jordan,
Kuwait, saudi arabia and Qatar.
the team regularly represents
clients such as dubai World and
landmark properties
fast facts
Husam Hourani,
Managing partner, AL Tamimi & co
i
n my opinion, 2012 will be an
extremely important year for
lawyers and law firms in the
GCC, UAE and specifically in
the emirate of Dubai. It will mark the
implementation of a major change to
Dubai law that came into effect on
31 October 2011, which is the opening
up, to all local, regional and foreign
companies, of the jurisdiction of the
DIFC Courts, an independent English
language common law court. In addition,
from November 2011, banks and financial
institutions will be able to utilise foreign
law contracts (or DIFC law) with
greater certainty that this choice will be
recognised in the UAE through the DIFC
Courts. I expect many international law
firms will start to encourage their clients
to choose the DIFC Courts.
We will also see several new laws
and regulations that have been in the
drafting or consultation stage come
into effect in 2012 which will have a
major impact on the Dubai Financial
Market, Abu Dhabi Stock Exchange
and NASDAQ Dubai. SCA has issued
consultation papers on short-selling,
liquidity provisions, securities lending
and borrowing, market-making,
investment fund incorporation and
marketing of foreign funds in the UAE.
I do believe this will generate
substantial activities in both local and
regional markets.
We also expect the long awaited
Commercial Companies Law to be
amended and enacted in the first
quarter of 2012. This
has been under review
since 2006 and will
have a major impact
on the capital markets
and the conversion of
businesses into public
joint stock companies,
as well as on share
option schemes, family
businesses and the
setting up of investment funds.
In addition, we expect new laws
that will have a significant impact
on business in the UAE to include
the regulation of the management
of investment activity; an additional
protocol for IAEA agreement; new
guidelines for coastal development; a
new energy law; rules regarding cash
declarations; new child protection
legislation and changes to industrial
ownership and consumer protection law.
We also expect the DIFC to enact new
legislation covering labour, employment,
data protection, real property and non-
profit incorporation.
The Commercial Companies law
will have a major impact on the
capital markets and the conversion
of businesses into public joint stock
companies, as well as on share option
schemes, family businesses and the
setting up of investment funds.
48-65 CEO Letters.indd 64 11/27/11 2:19:39 PM
GULF BUSINESS / 65
telecommunications
- the emirates integrated
telecommunications company,
du, began operations in 2006,
breaking the monopoly held by etisalat
in the uae.
- at the end of september this year,
du held a 45 per cent share of the
mobile market in the uae.
- as of october 2011, the company
said that it provided services to
over fve million people and about
40,000 businesses.
fast facts
Osman Sultan,
CEO, DU
2
011 has been a year full
of milestones for us big
and small. Our focus this
year was three-fold on
our customers, to improve their overall
communications experience, our
employees, to motivate and reward them
for their contribution to the growth of
du, and very importantly to create
value for our shareholders and investors.
For our customers, we specifically
strengthened our network capabilities
by upgrading and rolling-out our
HSPA+(4G) network that promises a
vastly superior user experience. Apart
from significant updates to our existing
plans, this year we also launched
several plans and schemes that tackle
new segments such as one designed for
Emiratis and women entrepreneurs.
For our employees, who constitute
human capital and are our primary
assets, we undertook several initiatives
to maximise their productivity and
motivation in our journey to make
them feel proud of their work and
contribution. We did this by training
them, helping them focus on their
personal goals, offering them the
right resources and work environment
to achieve their goals at work. Last
but not least, we streamlined
benchmarks and processes to reward
the high performers.
We understand the faith our
shareholders and investors have in du,
and our teams focus has always been
to continue our growth and efficiency
story and thereby create further value
for our shareholders and investors. Im
glad to note that we didnt disappoint
them. Our companys good will in
the market is at a new high and our
scrip continues to be among the good
performers in the financial markets.
In 2012 I believe we will see a
continuation of this years trends. Our
customers are better informed and
demand quality and better value. It is
our intention to become the preferred
telecommunications company in the
country, through constant innovation
and delivery of the latest telecom
technologies. We will continue to
invest in our employees our biggest
assets, and further empower them to
bring out the best of their capabilities.
And we will be mindful of the value
that we create for our shareholders
and investors, for they are the ones we
are answerable to.
We understand the faith
our shareholders and
investors have in du, and
our teams focus has always
been to continue our growth
and efficiency story and
thereby create further
value for our shareholders
and investors. Im glad
to note that we didnt
disappoint them.
48-65 CEO Letters.indd 65 11/27/11 2:19:40 PM
66 / DECEMBER 2011
TEXT BY jonathan sheikh-miller
Last year Tunisia lit
the fre for uprisings
across the Middle East
as nations fought for
regime change. Now
comes the most diffcult
part. As countries teeter
on the brink of transition,
can the Gulf help support
other Arab nations in the
midst of change?
revolution
The long road TO
66 / DECEMBER 2011
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66-72 The Arab Spring.indd 66 11/27/11 2:24:11 PM
GULF BUsiNEss / 67
T
he familiar hubbub emanating
from the busy cafs and
eateries at the Dubai
International Financial Centre
(DIFC) during a typical lunch hour,
somewhat belied the fact that a little
earlier, in a conference centre just down
the corridor, some of the regions most
respected economists had used words
such as challenging, dangerous
and contagion to describe the current
global economic landscape at a time of
dramatic upheaval across much of the
Arab world.
Those attending the official launch
of the International Monetary Funds
(IMF) latest Regional Economic Outlook
were left in little doubt of the onset of
major political and social change. But
one word that particularly resonated was
transition, with so many countries
in the MENA region either fervently
seeking regime change, or having already
achieved it.
Speaking after the event, Dr. Nasser
Saidi, the DIFCs chief economist,
suggested that those member states of the
Gulf Cooperation Council (GCC) presently
unaffected by the uprisings could offer
stable financial support to those nations
in transition and, in so doing, could
partially offset the impact upon them of a
likely downturn in Europe.
At a time in which Europe is facing
a slowdown, the North African
countries of the Mediterranean, for
whom Europe is a major trade partner,
are going to have even more difficulty
in their transitions. Indeed, transition
itself already presents economic
difficulties, so if Europe enters
recession, then the impact on them is
going to be more severe.
If we can create and strengthen links
with the GCC that will be to the benefit of
creating stability and ensuring a relatively
smooth transition. GCC countries can
become engines of growth.
Saidi believes that, in time, the GCC
should be expanded and nations such as
Egypt and Yemen, both very much in the
midst of upheaval, should be invited to
join, along with Jordan and Morocco.
In time, in the same way Europe
turned to greater economic integration,
where you had the likes of Germany and
France driving that, you have to think
about who will be the drivers of Arab
economic integration and, in my mind,
it is the GCC.
Masood Ahmed, director of the
IMFs Middle East and Central Asia
Department, also sees a close synergy
developing between the oil exporters
of the GCC and the emerging and
resource poor nations in the region with
investment, remittances from expatriate
workers in the Gulf and even from direct
budgetary financing.
Both Saudi Arabia
and the UAE have
provided financing
to Egypt, as has
Qatar too. All these
countries have begun
to engage and I
believe the pattern
of these links, both
in terms of official
financing and even
more in cross-border
investment, is only going to grow in
coming decades.
The regions oil importing nations,
which include the likes of Egypt, Tunisia
and Syria (each at various points of
transition or potential revolution), will
be hoping the GCC can step up and
offer genuine assistance. According to
the IMFs Regional Economic Outlook,
the MENA regions oil importers will see
their GDP growth slump from 4.5 per
cent in 2010 to just 1.4 per cent this year,
with a prediction of a very modest 2.6
per cent in 2012.
The IMF report highlights that, due
to the political uprisings in several of
the oil importing nations, tourism and
capital inflows have taken a big hit this
year, while high commodity prices have
eroded external reserves. For the oil
importing countries as a whole, fiscal
deficits are expected to widen by 1.5 per
cent of GDP in 2011-12.
Saidi stressed that the oil importers
need to find more than $150 billion in
financing requirements between now and
2013 and he couldnt see where that was
going to come from.
For countries undergoing revolution
or regime change, generating significant
amounts of capital can take years. Saidi
referred to research undertaken by the
World Bank to explain how it can take
four or five years for a country to move
out of the transitory stage and, while
it does so, output and investment both
decline markedly. How the political
change comes about also makes a big
difference to a countrys future prospects.
Countries in which you get peaceful
transitions tend to recover faster and
the recovery tends to be permanent.
And you have a greater restoration of
civil rights, property rights, economic
rights and therefore investment picks up.
So peaceful transitions tend to lead to
substantial increases in the chances of
economic recovery.
On the other hand, if you have
violent transitions, the outcomes are
much less protection of property rights,
much less protection of civil rights. And
therefore recovery does not take place
as quickly as otherwise and it is not
necessarily sustained.
Saidi believes Libya, an oil exporter
and the focus of by far the bloodiest
and most destructive revolution in the
region to date, faces severe challenges
as the presence of natural resources and
significant social inequality can cause
additional problems.
arab spring
saidi believes Libya, an oil exporter
and the focus of by far the bloodiest
and most destructive revolution in the
region to date, faces severe challenges
as the presence of natural resources and
significant social inequality can cause
additional problems.
66-72 The Arab Spring.indd 67 11/27/11 2:24:12 PM
68 / DECEMBER 2011
in pOWEr
1. MUAMMAR GADDAFi - LiByA 2. ZiNE EL ABiDiNE BEN ALi - TUNisiA
3. HosNi MUBARAK - EGyPT 4. ALi ABDULLAH sALEH - yEMEN 5. BAsHAR
AL-AssAD - syRiA 6. KiNG ABDULLAH BiN ABDUL-AZiZ AL sAUD - sAUDi
ARABiA 7. KiNG HAMAD BiN isA AL KHALiFA - BAHRAiN 8. NAssER MoHAMMED
AL AHMED AL sABAH - KUWAiT 9. QABoos BiN sAiD AL sAiD - oMAN
Bloody civil war ended
when Muammar Gadda
was caught and seemingly
executed by baying mob.
National Transitional Council
announced liberation on
October 23.
STATUS: Regime toppled
LibYa
Where it all began. Mohamed
Bouazizi set himself on re,
President Zine El Abidine Ben
Ali ed and an Islamist party won
the recent elections.
STATUS: New elections complete
TUnisia
How the region
changed in 2011
This year saw decades of iron rule challenged by the masses.
This tectonic shift in history is not over yet. Gulf Business looks
at the unfolding stories of the region's rulers.
in pOWEr
in pOWEr
DECEasED OUsTED
1
On TriaL
5
6
in pOWEr
8
in pOWEr
9
2 3
7
rEsignED
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66-72 The Arab Spring.indd 68 11/27/11 2:24:22 PM
GULF BUsiNEss / 69
arab spring
Angry protests across the country were
met with erce crackdown and many
deaths. Despite widespread international
condemnation, Bashar al-Assad clings to power.
STATUS: Severe unrest
Protests against President Ali
Abdullah Saleh were met with
violent resistance and lead to
assassination attempt. After
reneging several times, Saleh has
signed peace deal and will quit.
STATUS: Severe unrest
Protests about salary levels
and jobs were largely focused
on Sohar, with several deaths
alleged. Private sector pay
has been boosted and 50,000
government jobs promised.
STATUS: Stable
The conservative kingdom
has seen protests over
labour rights, in support of
Shia opposition in Bahrain
and by women seeking
the right to drive cars.
STATUS: Stable
Despite free food rations and
gifts of $4,000 per citizen,
demonstrations and strikes
have occurred as protestors
seek removal of Prime Minister
amid corruption accusations.
STATUS: Unrest growing
KUWaiT
YEMEn OMan saUDi arabia
Protests centred on Tahrir
Square led to the resignation
of Hosni Mubarak who is now
on trial. Aggressive response
to new demonstrations led to
resignation of government.
STATUS: Severe unrest
EgYpT
Demonstrations about political
freedom and equality became a
call for King Hamads overthrow after
violent raid on Pearl Roundabout.
New report alleges use of excessive
force on the protestors.
STATUS: Moderate unrest
baHrain
sYria
66-72 The Arab Spring.indd 69 11/27/11 2:24:22 PM
The immediate outlook for Libya
appears daunting and its success in
getting oil production up and running has
been vital. Its output was virtually idle
for many months and yet hydrocarbons
make up 70 per cent of the countrys GDP
and a massive 95 per cent of its exports.
International sanctions, which were in
place while Muammar Gaddafi resisted the
desire for change, hit the non-oil segment
of the economy and, according to the IMF,
real GDP is expected to contract by more
than 50 per cent in 2011.
On-going political uprisings are
occurring in Syria and Yemen, while
Bahrain has been the scene of numerous
protests and demonstrations and is far
from pacified. The significant loss of life
in Syria and Yemen suggests problematic
transitions, as and when there is
regime change, and already both are
suffering economic contraction. The IMF
predicts that Yemens GDP growth, which
was eight per cent in 2010, is likely to
move into negative territory this year
while its rate of inflation will spike to 18
per cent in 2012, by far the worst in the
Arabian Gulf.
Bahrain, another oil exporter and a
GCC member, has suffered a severe slump
in its hospitality sector due to the political
tensions and its fiscal balance is well
in the red at beyond minus seven per
cent. But Masood Ahmed sees a distinct
difference in its economic situation when
compared to that of Libya.
The events in Bahrain earlier this year
have had an effect on economic activity
and continue to do so. But, at the same
time, the oil part of Bahrains economy,
which is a large part of GDP and an even
larger portion of government revenues
and exports, has continued to function.
But the wider global economic worries
could create extra challenges for the
island state as its fiscal break-even oil
price is now approaching $100 a barrel,
Countries in which you get peaceful transitions
tend to recover faster and the recovery tends to
be permanent. And you have a greater restoration
of civil rights, property rights, economic rights and
therefore investment picks up.
Dr. Nasser Saidi, chief economist, DIFC
Hope seems a long time coming
for the region's protestors.
70 / DECEMBER 2011
arab spring
C
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66-72 The Arab Spring.indd 70 11/27/11 2:24:25 PM
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72 / DECEMBER 2011
arab spring
a rise of around $25 a barrel since 2008,
and it is close to present spot oil prices.
In terms of a global slowdown, if
there is a reduction in oil prices, that
would naturally translate into budgetary
consequences for Bahrain as it would for
other countries.
The fiscal break-even oil price could
represent a worry for those MENA
countries affected by political transition
and seeking the anticipated substantial
financing from the cash rich Gulf.
The UAE, for example, now has a
fiscal break-even oil price of around $80
a barrel and this is a massive leap of
$60 in just three years and if oil prices
tumble for an extended period, as they
may well do in a severe global downturn,
the country may become less inclined
to channel investment to needy regional
partners at a time when it would need to
tap into its own reserves.
Irrespective of the potential for
investment from the likes of the GCC,
the key requirement right now for
countries in transition is to carefully
manage the expectations of the general
population and keep them anchored.
Masood Ahmed explained that a big
challenge moving forwards is to balance
social cohesion on the one hand with
maintaining macro-economic stability on
the other.
The key requirement right now for countries
in transition is to carefully manage the
expectations of the general population and
keep them anchored.
A common theme among all emerging
markets in the region, whether in
transition or not, is the need to
generate employment opportunities.
The expansion of the private sector and
effective infrastructure development
projects can be ways of doing this but
Dr. Saidi sees a huge task ahead.
We have countries in which 60 per
cent of the population is below 25 years
of age and the unemployment rate
is reaching 30-40 per cent and at the
same time we know that we need to be
creating some 80 million jobs over the
next decade. Thats about as many as
weve created since the 1950s.
One of the panellists at the IMF launch,
V. Shankar, the CEO of Standard Chartered
Bank, Europe, Middle East, Africa and
Americas said quick, precipitate action
was needed in the countries in transition
to placate the population and this
effectively meant job creation.
It is nice to talk about diversification,
improving governance and all the
good things you need to do, improving
education, improving healthcare. But
remember all of that is long-term stuff. It
is going to take 15-20 years for the benefits
of all that to actually come through to the
vast majority of the population.
For Shankar, if the new governments
of the nations in transition do not
provide these quick wins, then the
Arab spring could rapidly become a
winter of discontent.
V. Shankar, CEO, Standard Chartered Bank,
Europe, Middle East, Africa and Americas
Oil importing nations,
such as Syria, will be
hoping the GCC can offer
genuine assistance.
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66-72 The Arab Spring.indd 72 11/27/11 2:24:29 PM
74 / DECEMBER 2011 74 / DECEMBER 2011
74-78 flydubai.indd 74 11/27/11 2:27:30 PM
GULF BUSINESS / 75
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their winter holiday season, when
their traffic is at a peak, Russia is
particularly important and it does have
huge potential because the cities we are
serving have had very little link to this
part of the world, unless you travel via
the capital, so our direct flights are both
essential and unique.
Ghaith suggested as many as 12
further Russian cities could be added to
flydubais route map in time but the four
presently served comprise 11 per cent of
Russias 143 million strong population.
Peter Grimsditch, editorial director
of the Oxford Business Group, says Al
Ghaiths present focus makes sense.
The growing Russian middle-class is
a fertile market for Dubai. Many are
staying away from one of their favoured
destinations Egypt until they see it
settling down more.
This leaves Dubai and Turkey to
mop up the extra traffic because of the
Egyptian fallout. There is certainly a
lot of seats to be filled with Russian
tourists and flydubai's targeting of
fydubai CEO Ghaith al Ghaith tells Jonathan
Sheikh-Miller why even a potential global
double dip wont spoil his bold expansion plans.
non-traditional cities in the former
Soviet Union has a very good chance of
producing good business.
Al Ghaith believes the airlines
coverage of the Middle East is well
developed but he has pinpointed other
tempting markets including the Indian
sub-continent and Africa where the LCC
is not in enough places.
A recent Middle Eastern
Megacarriers report by the Boston
Consulting Group highlighted the growth
of regional LCCs as a possible threat
to the seemingly relentless success of
the likes of Emirates Airline and Qatar
Airways. But Al Ghaith does not think
his carrier, or any other budget airline,
is a threat to the short-haul ambitions of
the full-service airlines.
I think we supplement all the airlines
that are sharing this market. In this part
of the world, we look at competition
positively and it is an open market, so
the more the merrier. The more services
and airlines there are, the better it is for
the customer.
GRAVITY
DEFYING
profile
GULF BUSINESS / 75
A
s Ghaith Al Ghaith, the
CEO of flydubai, one of the
worlds fastest-growing low
cost carriers (LCC), laid out
his views on his airlines rapid ascent
at the Dubai Chamber of Commerce
and Industry, row-upon-row of trading
dhows rocked rhythmically just outside
on Dubai Creek a reminder that much
of the citys development has stemmed
from transportation and trade.
flydubai is barely 30 months old and
it is as modern as the wooden dhows
are traditional but just like these vessels,
Ghaiths airline is looking to span large
areas of the Arabian Sea, Indian Ocean
and beyond. Recently, the carrier has
been targeting the Commonwealth of
Independent States and the former
republics of the Soviet Union, with four
routes into Russia and three into the
Ukraine, but Ghaiths vision is spread far
and wide.
We are growing at 360 degrees and
we are growing into different regions.
But at the moment, at the start of
74-78 flydubai.indd 75 11/27/11 2:27:33 PM
Gulf Business Ad.indd 1 11/21/11 1:48 PM
GULF BUSINESS / 77
profile
However, Al Ghaith did well not to
bristle at the suggestion that Air Arabia is
the largest LCC in the region with its 70
destinations and 29 A320s in operation.
flydubai is fast approaching it on the rails,
with its 45 destinations and 20 Boeing
737-200s, and some aviation experts
predict Al Ghaiths carrier will not take
long to surpass its Sharjah-based rival
and in less than half the time it took Air
Arabia to build up its own impressive
fleet and network. Al Ghaith was suitably
diplomatic about the neighbouring
emirates budget carrier.
We are always striving to be the
number one airline, you always want
to be the best. What Air Arabia has
done over the past eight years has
been fantastic and they have definitely
encouraged other airlines, as have
Emirates and Etihad. We actually go
forward on each others success.
Air Arabia has just posted a 26 per
cent dip in its Q3 profits as the Arab
spring disruptions and higher oil prices
have eaten into its revenues. Does Al
Ghaith think an eventual merger of these
Ghaiths view. Emirates and Etihad
manage to coexist. And like southeast
Asia, eastern Europe and India have
seen in the past decade or so, there's
money to be made catering to the vast
population of people whose wealth has
advanced to the point where they can
afford to fly. Lower fares plus rising
wealth equal a lot of new customers.
Al Ghaith also emphasised there is
plenty more growth potential in the Gulf
regions LCC sector, pointing to the fact
that budget airlines have cornered up
to 50 per cent of the market in the likes
of the US and Europe, while in the Gulf
market share is less than ten per cent.
Peter Grimsditch sees the Arabian
Gulfs location as a considerable
advantage to Air Arabia and flydubais
prospects. There is a vast population
within four hours flying distance of Dubai
and certainly there is plenty of room for
these two to expand a lot more yet.
Just as the Arab spring has hit the
fortunes of one of the Gulfs two most
dominant LCCs, it has also impacted on
the other, and with flydubai having a
total of six routes into Egypt and Syria,
Al Ghaith admitted things have not been
entirely straightforward.
It has worked both ways. First of all,
we are in the airline business and the
safety of our customers, aircraft and staff
are our number one priority. So you only
operate if that is secure. Secondly, it has to
make sense economically, so if there are
any on-going problems you reduce your
capacity and that has affected everyone
across the board, including flydubai.
But it is easy to take away capacity
and put it somewhere else. There is no
doubt there has also been a positive
effect due to these unfortunate problems
and the UAE has directly benefitted
because it has been seen as safe.
The regional geo-political tensions
and crises have also played their part
in keeping oil prices at high levels and
Al Ghaith was frank about how airlines
need to deal with the issue.
Fuel is the most important cost for
any airline, in fact it makes up about 40
per cent of costs, so any changes, up or
down, affect everyones bottom line, so
you cannot manage it, or escape from it,
without taking some drastic action. So if it
goes up, you have to raise your
prices because if you dont, you
are not respecting your business and you
are not being honest with yourself.
Speaking at an earlier roundtable
event, alongside the Russian Business
Council to promote the newly launched
routes into Russia, Al Ghaith revealed
that flydubai was close to breaking even,
less than three years after its launch, and
in the context of its aggressive expansion
policy and plane acquisitions. Al Ghaith
said 2012 would be the year in which the
carrier would actually make a profit.
With the whole world braced for a
potential downturn, Al Ghaith feels
Dubai is now better equipped to
deal with a recession in the likes of
the Eurozone and the US due to the
fydubai is on course to make a proft by the end of 2012.
two budget airlines, which are based just
a dozen kilometres or so apart, is likely?
I cannot foresee a consolidation in the
future. I mean in the time there has been
an aviation sector in our region how
many consolidations have there actually
been? So I dont think so.
John Scholle, a senior economist
at IHS Global Insight concurs with Al
In this part of the
world, we look at
competition positively
and it is an open
market, so the more
the merrier. the more
services and airlines
there are, the better it is
for the customer.
74-78 flydubai.indd 77 11/27/11 2:27:34 PM
profile
rehabilitation it went through in
2008-9 and he predicts positive growth.
My personal opinion about the
situation, I think we will have a strong
economic outlook in this part of the world.
I think whats happening now, especially
with the European situation, thats making
people careful and the outlook for the rest
of the world has to be very cautious.
Nevertheless, Al Ghaith insists flydubai
will keep to its bold expansion strategy
regardless of whatever the outcome is
in terms of any economic slowdown as
the airline still has a way to go in order
to reach the scale needed to fulfil its
potential. At the recent Dubai Airshow,
Al Ghaith revealed flydubai is weighing
up additional orders and is considering
the A320neo and the Boeing 737 MAX.
I think the future as far as the
airlines are concerned is positive because
we are in a country that depends on
transportation as part of our DNA.
Emirates
QatarAirways
Etihad
SaudiArabianAirlines
LowCostCarriers
Egyptair
ElAl
GulfAir
RoyalJordanian
OmanAir
Others
Middle east air traffic dynaMics
2
5
%
1
1
%
7
%
7
% 6
%
4
%
4
%
2
%
2
%
2
%
3
0
%
All flights
departing to, from
or within the
Middle East
SOURCE thE BOEING COMpaNy
74-78 flydubai.indd 78 11/27/11 2:27:34 PM
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80 / DECEMBER 2011
The famous hotelier is taking talk of over-supply
in his stride, writes Jonathan Sheikh-Miller
ABU DHABI
looks to
SIR ROCCO
L
aunching a new five-star hotel in the very
week one of the key property developers in
your chosen destination decides to scale back
one of the citys main future tourist attractions
is pretty unfortunate timing.
But that was the fate which befell British hospitality tycoon
Sir Rocco Forte last month when he launched the Rocco Forte
Hotel Abu Dhabi. However, Sir Rocco isnt alone in opening
a new property at a time when the UAE capital is seemingly
adopting a cautious approach to building up its tourism
sector. New hotels such as the Monte
Carlo Beach Club, the $250 million
Park Hyatt, Jumeirah at Etihad Towers
and Starwoods St.Regis have all either
already opened their doors or are about
to greet their first visitors.
The Abu Dhabi Real Estate Overview
Q3 2011 by real estate services firm Jones
Lang Lasalle predicts that around 2,000
new hotel rooms will be added to supply
in Abu Dhabi either by the end of this
year or early in 2012. At present there
are around 12,000 hotel rooms in the city
and this is expected to grow by 50 per
cent to around 18,000 by late 2013.
The fact the Tourism and Development
Investment Company (TDIC), the joint
80-83 Rocco Forte half page.indd 80 11/27/11 2:30:04 PM
GULF BUSINESS / 81
profile
80-83 Rocco Forte half page.indd 81 11/27/11 2:30:07 PM
82 / DECEMBER 2011
hotels due to the delays on Saadiyat
Island cooling the continued growth in
the number of visitors to Abu Dhabi
alongside an on-going increase in the
number of new hotels.
In light of the delay of the Saadiyat
Island cultural centre, and the increase
in rooms available in town, competition
amongst hotels will be fierce. However,
the major adverse impact will be for
the older hotels since they will have
challenges competing with new products
coming to the hospitality market.
The world is on the brink of a
possible recession and the potential
spillover effects could impact upon
several markets. For Bartz, the present
financial situation would give him pause
for thought if he were contemplating a
new hotel in Abu Dhabi. I would not
like to open a new hotel now due to the
pressure to perform and the potential
downturn of business as it will be very
difficult to establish a quality hotel
operation in such economic conditions.
Sir Rocco Forte, with his hotels official
opening on November 7 aimed squarely
at cashing in on the F1 Grand Prix the
following weekend, recognises that the
global situation presents a further challenge
to his new project but understandably he
sees plenty of upside potential.
The wave-shaped Rocco Forte
Hotel Abu Dhabi was designed by
W.S. Atkins and Partners.
opening of new hotels as a positive sign.
We are seeing continued growth in
the number of visitors each year, and
we are attracting more and more visitors
from new markets.
The opening of new hotels by leading
hotel brands is a great indicator of the
strength of Abu Dhabi as a destination
and will help to boost interest in the city.
Sascha Bartz, the GM of the Park
Rotana and the Park Arjaan by Rotana,
which opened at the end of 2009,
revealed that while his hotels rates had
dropped, revenues and occupancy rates
were both increasing. But Bartz still
foresees issues for some of the citys
owners of Fortes new hotel along with
the Al Farida Investment Company, has
decided to delay large aspects of its
Saadiyat Island development is also far
from ideal. The TDIC is to push back the
opening of the three blue-chip museums
earmarked for a project intended as the
capital citys cultural centre. The Louvre
Abu Dhabi will open first but that is
unlikely to happen before at least 2014.
But Sir Rocco remains unfazed by the
competition emerging in the hotel sector.
The expansion in luxury bedrooms
in Abu Dhabi over the next six months
is significant and there is no doubt that
there will be a supply/demand imbalance
in the short-term.
But inbound tourism is growing at a
very rapid rate and occupancies in the
current year have been extremely high.
It will not take long for a more balanced
market to return.
The Abu Dhabi Tourism Authority
has released figures that back up Sir
Roccos argument. The city has targeted
receiving a total of two million visitors
in 2011 and by the end of September
more than 1.5 million guests had
checked in, a 14 per cent increase year-
on-year, and this has generated a six per
cent rise in revenues to $838 million.
Similarly, Fortes prediction of an over-
supply issue in the immediate future
also appears accurate. A recent survey
by TRI Hospitality Consulting revealed
that while demand is moving in the right
direction, average room rates (ARR) most
certainly are not. In the 12 months to
September, ARRs plunged more than 20
per cent in the UAE capital, even while
demand rose by a solid 7.1 per cent in
the same period. Jones Lang Lasalle has
estimated that so far this year the current
ARR across the city is Dhs 570.
Bugra Berberoglu, the GM of Abu
Dhabis Emirates Palace, stated the hotel
was enjoying steady occupancy and
room rates and he pointed to events
such as last months F1 Grand Prix and
the Volvo Ocean Race as attractions
which will help boost levels in
forthcoming months and he regards the
The expansion in
luxury bedrooms
in Abu Dhabi over
the next six months
is significant and
there is no doubt
that there will be
a supply/demand
imbalance in the
short-term.
80-83 Rocco Forte half page.indd 82 11/27/11 2:30:08 PM
profile
These are unprecedented times
and they required an unprecedented
response. Of course we keep a close
eye on regional and international
developments and travel trends, but
we remain committed to the expansion
strategy in the Middle East.
We are pleased to see a healthy
economy in Abu Dhabi and to see both
leisure and corporate hotel business
continuing to grow with 70 per cent
occupancy in the city, year to date. We
expect this to remain similar in the
forthcoming year.
Forte sees the Middle East and North
Africa (MENA) region as offering
serious potential for his Rocco Forte
Hotels group. Sir Rocco is planning to
open hotels in Jeddah, Marrakech, Cairo
and Luxor in the next few years.
The new hotel in Abu Dhabi may
be Fortes first venture in the Gulf but
well-heeled Arab visitors to Europe
are already familiar with what he
has to offer. Although we have not
yet completed our growth in Europe,
opening properties in the Middle East
is a natural progression for us. This is
especially the case given that we are
seeing so many of our current guests
travel from the MENA region and our
brand is increasingly well-recognised in
the region.
Although Abu Dhabis growing tourism
sector may be experiencing a few
teething problems, with project delays
and hotel room over-supply, hospitality
analysts such as Chiheb Ben Mahmoud,
executive VP head of hotel advisory,
Middle East for Jones Lang Lasalle, can
see positive benefits.
Abu Dhabi, as a destination, might
be facing the challenge of the luxury/
upscale perception, and positioning,
which would not help to place it on the
general leisure travel market map. The
softening of the rates should help to
make it more affordable and budget-wise
more tourist friendly.
The issue for high-end hotels such as
Fortes in the medium term, while supply
is plentiful, could be whether to open up
to a wider market to bolster occupancy
rates and revenue or attempt to maintain
a level of exclusivity.
But Mahmoud believes Abu Dhabis
layout, comprising an array of distinctly
separate locations, will help hotels and
destinations to create their own niche in
a competitive market place.
When it comes to location, the
unique configuration of Abu Dhabi
makes it rather a collection or
constellation of micro destinations
rather than a uniform one. The
Corniche, Saadiyat Beach and Yas
Island, for example, all have unique
characters and could soon develop their
own followings.
80-83 Rocco Forte half page.indd 83 11/27/11 2:30:08 PM
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Can Uae nationals be enticed
to join private businesses asks
Jonathan Sheikh-Miller.
pushing
the private
sector
84 / DeCemBeR 2011
A
s Gulf Business hits the newsstands, the
UAE will be in the throes of celebrating its
40th anniversary. There is little doubt the
accelerated growth of many of the fledgling
countrys business sectors, from ultra-
modern free zones to aviation, is highly
impressive as it utilises the leverage provided by its oil revenues.
But like some of its older and resource-poor cousins in the
Arab world, mounting unemployment among its younger
generations is becoming increasingly troubling for the UAE.
When the countrys Labour Minister, Saqr Ghobash, chooses
to tell a G20 Labour and Employment Ministerial Meeting
in Paris in September that dealing with local employment
issues takes precedence over the on-going fall-out of the 2009
economic downturn, then the scale of the problem is clear.
There are presently close to 40,000 unemployed UAE
nationals, according to the Ministry of Economy, and last
84-91 Emiratisation.indd 84 11/27/11 2:32:05 PM
jobs
gULF BUsiNess / 85
Local employment issues remain at
the top of the governments agenda.
84-91 Emiratisation.indd 85 11/27/11 2:32:08 PM
86 / DeCemBeR 2011
year the overall unemployment rate
hovered at around 12 per cent, with
the figure significantly higher among
those aged 15-24.
A familiar debate centres around
nationals having a reticence about
taking up jobs in the private sector
and this argument was seemingly
borne out by statistics released
earlier this year by the Abu
Dhabi Department of Economic
Development, which revealed that
Emiratis make up only 6.1 per cent of
private sector employees in the city.
Ghobash has stressed that he
believes unemployment in the UAE is
fundamentally optional and if an Emirati
cannot find the right post in a public
sector job then that individual might not
immediately seek a comparable post with
a private sector firm.
But opportunities exist. Major
Emiratisation drives by a host of firms
take place regularly and they have had
some positive results. Etihad Airways now
has 143 UAE national cadet pilots and 58
graduate managers, while the Abu Dhabi
Islamic Bank states that 44.5 per cent of
its workforce is made up of local talent.
Lama Ataya, the chief marketing
officer at recruitment consultancy Bayt.
com, said such policies are slowly having
an impact and a sizeable number of
firms are keen to recruit more nationals
right across the region. The findings in
our July 2011 poll Localisation Hiring
Policies in the GCC show that 33 per
cent of respondents reported having
senior Emirati citizens working in their
companies. In the same survey, 31
per cent of respondents said that their
companies plan on hiring more Emiratis
in the coming year.
Ataya also pointed out that Bayt.
coms Job Index Survey for October 2011
revealed 49 per cent of employers are
looking to hire by the start of next year
which is positive for anyone seeking
employment, whether local or expatriate.
So with jobs available and UAE
nationals being actively encouraged to
get involved why have relatively few
thus far taken up the opportunity?
Dr Jasim Al Ali, human resources
director at the Dubai Department of
Economic Development, explained that
family circumstances were a key factor.
There are a number of young people
from mostly middle ranking families who
dont feel they necessarily have to work
because their families have resources. So
they can be less motivated to work and
their expectations are very high so its
hard for them to find what they want.
Dr Al Ali also stressed that peer
pressure can play a part and so taking
what might be generally perceived as
a lower level job, with its associated
limited benefits, could act as a barrier
to some UAE nationals joining the
private sector.
Ahmad Al Shaikh, the chairman of
Ducab, a Dubai based cable manufacturer,
was recently quoted as saying it was
difficult to attract UAE nationals into
semi-skilled or blue-collar positions.
Dr Al Ali believes some Emiratis will
presently seek to pick and choose the
job opportunity that appeals to them and
challenging roles on the factory floor
What the private
sector needs to do
is start focusing on
high knowledge jobs
for UAE nationals
and, in a way, not take
the easy route to their
emiratisation needs,
for instance via
secretaries and public
relations officers.
33 per cent of respondents to a recent
Bayt.com poll said that senior Emiratis
worked in their frm.
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84-91 Emiratisation.indd 86 11/27/11 2:32:11 PM
were unlikely to be an option. This type of work involves
difficult physical conditions and so it is less attractive. So
youd need to put in a rewards system that will attract
national employees. If not, there are many office-based jobs
which will have better working conditions or environment
and better pay, so these will be more popular.
Khaled Al Maskari, senior training officer at the Abu
Dhabi Statistics Centre, feels that more Emiratis are now
engaging in what might be seen as less glamorous
positions. Many UAE nationals who reside in the Northern
Emirates are working in the oil and gas sector in Abu
Dhabi as technicians and foremen and these are essentially
lower skilled positions.
One of the key attractions is that after five years of service,
they are given an opportunity to pursue their education.
I know of many cases where UAE nationals, who hold
a higher diploma, have accepted work in lower skilled
positions. This was because they were struggling for
several years to find suitable jobs which reflected their
educational qualifications.
Al Maskari added, however, that while more Emiratis
are moving into a host of positions, at various levels, the
private sector can still present a challenge to female local
job seekers.
Female nationals can have a particular problem with
private sector jobs because they can have long hours into
the evening and with a strong sense of family tradition and
family values, they are not really encouraged to pursue this
type of work.
Khalid Al Ameri, a writer on social, emiratisation
and youth development issues, thinks the increasingly
well-worn argument that UAE nationals simply look
to government jobs for their personal benefits is now
beginning to lose credence as the public sector begins to
evolve and modernise, offering new recruits the chance to
develop and grow and this is proving popular.
In all honesty, I think the real barrier to the private
sector isnt the private sector itself but the increasing
attractiveness of the government sector and the new
age government sector companies that are run as
private organisations like Mubadala for example. A lot
of these government organisations now have a strong,
internationally educated workforce, global operating best
a Uae national will not always
choose the public sector for their
perceived benefits, it is in part the
fact that a UAE national will want
to support the continued growth
of their country.
jobs
84-91 Emiratisation.indd 87 11/27/11 2:32:11 PM
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008_Gulf_Bussiness_270x206_F_DUB.indd 1 19/09/2011 09:41
practices and work environments that are both competitive and
offer good development options.
But many government ministers and public servants have
conceded that the public sector only has a finite amount of
opportunity and it is becoming overloaded with UAE nationals
seeking suitable posts. The bottom line is that the private sector
is a major part of the future for Emirati employment and the
challenge is to encourage more to take the plunge.
Khalid Al Ameri suggests a way in which the private sector
can look to adapt its recruitment policy. What the private
sector needs to do is start focusing on high knowledge jobs for
UAE nationals and, in a way, not take the easy route to their
emiratisation needs, for instance via secretaries and public
relations officers. This may require more effort and costs on
their side but in the end it will be worthwhile for them to play
a core part in creating a talent pool of UAE nationals that are
graduates of their organisation.
Another key initiative, according to Mark Timms, a director
at the Gulf Recruitment Group, could be translating the
many government ministers have
conceded that the public sector only
has a fnite amount of opportunity
and it is becoming overloaded with
nationals seeking suitable posts.
jobs
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84-91 Emiratisation.indd 89 11/27/11 2:32:14 PM
jobs
ideology of why an individual might choose to work for a
government entity into the private sector framework. A UAE
national will not always choose the public sector for their
perceived benefits, it is in part the fact that a UAE national
will want to support the continued growth of their country.
Create more roles in the private sector around corporate
social responsibility (CSR) and you may have the right
platform to start attracting more UAE nationals.
Overcoming social issues which are partially linked to
cultural tradition is an obvious challenge but more and more
Emiratis are assessing their career paths and development
more intensively and Khalid Al Ameri thinks the private sector
also needs to evaluate the local work force more adeptly.
The private sector has always been somewhat of a
second option as one would always question the culture of
an organisation, as in how it has adapted to the UAE, and
one would always choose where you feel most comfortable,
especially for fresh graduates starting their careers. The
private sector needs to spend more time learning about the
people and how best to approach them, and where to appoint
them in the organisation.
Firms with strong CSR agendas may fnd
it easier to attract UAE nationals.
R
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U
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R
s
84-91 Emiratisation.indd 91 11/27/11 2:32:15 PM
GULF BUSINESS / 93
DATA CRUNCH
TOP DEALS AND GCC ECONOMIC INDICATORS
TOP DEALS GULF BUSINESS
2200
8

Sony Corporation of
America; Sony/ATV Music
Publishing LLC; Mubadala
Development Company
PJSC; David Geffen; GSO
Capital Partners LP; and
Jynwel Capital Limited
Aker Solutions ASA
Specialist Services Group
EMI Music Publishing
Limited
X3M International Inc
(Well intervention
technology business)
Labtech Services Ltd
and OIL Engineering
Middle East LLC
A group of investors led by Sony Corporation of America, has entered into a definitive
agreement to acquire EMI Music Publishing Limited from Citigroup, for $2.2 billion.
Citigroup Inc, the listed US based company headquartered in New York, is a financial
services group. EMI Music Publishing Limited, also US based and headquartered in New York,
is a music publisher. The bidder group consists of Sony Corporation of America, a US based
subsidiary of Sony Corporation, the listed Japan based manufacturers of video and audio
products; Sony/ATV Music Publishing LLC, the US based joint-venture between Sony and the
estate of Michael Jackson; Mubadala Development Company PJSC, the listed United Arab
Emirates based investment vehicle of the Government of Abu Dhabi; Jynwel Capital Limited,
the Hong Kong based investment company; GSO Capital Partners LP, the US based fund
of the Blackstone Group, a US based private equity house and David Geffen, a US based
private investor.
Terms: The group will pay a total of $2.2 billion. Sony Corporation of America will invest
approximately $325 million in EMI Music Publishing and will own a 38 per cent stake in
conjunction with the estate of Michael Jackson.
Financing: The acquisition will be funded by senior credit facilities arranged by USB
Investment Bank.
Rationale: The transaction is in line with Citigroups strategy of maximising EMIs value and
Sonys objective of having access to entertainment content.
Post-completion: Sony/ATV Music Publishing and its management team will help oversee EMI
Music Publishing on behalf of the group.
Background: On November 11 2011, Citigroup announced the sale of the Recorded Music
Division of EMI Group Limited to a group of investors including Universal Music Group Inc, the
US based producer and distributor of music and video CDs and DVDs, and Vivendi SA, the listed
France based provider of media and telecommunications services, for $1.9 billion.
Aker Solutions ASA, the Norway based company engaged in the provision of engineering and
construction services, technologies and product solutions, has agreed to acquire the well
intervention technology business of X3M International Inc, the United Arab Emirates based
provider of down-hole intervention service tools and technology products, for a consideration
of $8 million. This acquisition will grow Akers well intervention technology and service
portfolio worldwide as well as increase its presence in the Middle East market. This acquisition
will also expand Akers product portfolio and customer base.
Specialist Services Group, the UAE based company engaged in supply modular buildings and
packaging for the hydrocarbons industry, has acquired OIL Engineering Middle East LLC, a
UAE based provider of pipe work, pressure vessel and steel structure fabrication engineering
and manufacturing facilities and services, and Labtech Services Limited, a UK based company
engaged in designing, engineering, hiring and manufacturing offshore fire and blast protected
modular enclosures and skid mounted process equipments, from Global Energy Group Inc,
a UK based contracting and service based company supporting the international energy
industry, for an undisclosed consideration. The acquisition will enable Global to consolidate
its UAE operations and further focus on resource management, site services and rig repair
or refurbishment services. Also, the acquisition will enable Specialist Services to enhance its
engineering skills and manufacturing resources in key global oil and gas centres.
DEAL VALUE ($M) BIDDER TARGET DEAL DESCRIPTION
93-94, 96-97 DATA CRUNCH DEC2011.indd 93 11/27/11 2:37:18 PM
94 / DECEMBER 2011
ARRIVALS TO THE UAE

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Notes: Deals are based on the geography of target, bidder or vendor being in the Middle East, for the period between September 19, 2011 and October 16, 2011. Based on announced deals,
including lapsed and withdrawn bids. Where deal value is not disclosed, the deal has been entered based on turnover of target exceeding $10 million. Activities excluded from the table include
property transactions and restructurings where the ultimate shareholders interests are not changed. Source: Mergermarket. All dollar ($) amounts indicated above are in US dollars.
GULF BUSINESS QUARTERLY M&A ACTIVITY
FROM 2004 TO 16 NOVEMBER 2011
BREAKDOWN: TAKEOVER ACTIVITY BY SECTOR AND VOLUME
MIDDLE EAST ANNUAL M&A ACTIVITY
FROM 2004 TO 16 NOVEMBER 2011
GULF BUSINESS ACTIVITY BY INDUSTRY SECTOR
YTD 2011 VALUE
GULF BUSINESS ACTIVITY BY INDUSTRY
SECTOR YTD 2011 VOLUME

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Real Estate
6.2%
Defence
0.6%
Energy, Mining
& Utilities
7%
Consumer
3.9%
Consumer
9.3%
Pharma, Medical
& Biotech
11%
Pharma, Medical
& Biotech
11.2%
Construction
1.2%
Leisure
0.9%
Financial Services
4.2%
Financial Services
4.2%
Defence
0.9%
Leisure
4.7%
Energy, Mining
& Utilities
4.0%
Real Estate
2.8%
Contruction
5.6%
Transport
0.9%
DEAL VALUE ($M) BIDDER TARGET DEAL DESCRIPTION
Berlinwasser China
Holdings (49% Stake)
Metito Metito, the United Arab Emirates based water management solutions provider, has
announced it is to acquire a 49 per cent stake in Berlinwasser China Holdings (BCH),
the Hong Kong based company operating wastewater concessions in China, from
Berlinwasser International AG (BWI), the Germany based water supply and disposal
services company, for an undisclosed amount. BCH, with annual revenue of $40
million, is a joint venture of Metito and BWI, who have 51 per cent and 49 per cent
stakes in BCH respectively. Metito funded the deal from preference shares issued in
2010 and with debt financing from HSBC. The deal will result in Metito catching the
opportunity for further business expansion in China where there is a high demand for
wastewater treatment management.
TMT
16%
TMT
15.9%
Industrials & Chemicals
39.3%
Industrials &
Chemicals
21.5%
Real Estate
6.2%
Business
Services
9.7%
Business
Services
12.1%
93-94, 96-97 DATA CRUNCH DEC2011.indd 94 11/27/11 2:37:20 PM
96 / DECEMBER 2011
In association with
525
TOTAL RETURN INDEX
HSBC/NASDAQ DUBAI MIDDLE EAST
The HSBC/NASDAQ Dubai Middle East Total Return
Index tracks the total return of an emerging Middle
East sukuk/bond portfolio. Total return takes into
account the income from coupon payments, in
addition to any appreciation/depreciation in the
price of the security.
SOVERIGNS
CORPORATES
BANKS
SUKUK
ISSUER COUPON MATURITY CURRENCY MID PRICE YIELD MOODYS S&P
Abu Dhabi Govt 5.5% 4/08/2014 USD 109.50 1.41% Aa2 AA
Dubai Govt 6.7% 10/5/2015 USD 102.25 6.04% NR NR
Dubai Govt 7.75% 10/5/2020 USD 103.50 7.21% NR NR
Qatar Govt 4% 1/20/2015 USD 105.75 2.10% Aa2 AA
Bahrain Govt 5.5% 3/31/2020 USD 94.38 6.38% NR BBB
Egypt Govt 5.75% 4/29/2020 USD 97.25 6.17% Ba1 BB-
Morocco Govt 4.5% 10/5/2020 EUR 90.63 5.89% NR BBB-
ISSUER COUPON MATURITY CURRENCY MID PRICE YIELD MOODYS S&P
Taqa 4.75% 9/15/2014 USD 104.38 3.11% A3 NR
Aldar 10.75% 5/27/2014 USD 109.50 6.58% B3 B
Dubai Holding L+37.5bps 2/1/2012 USD 97.75 13.00% B3 NR
DEWA 6.375% 10/21/2016 USD 103.25 5.61% Ba1 NR
Qtel 3.375% 10/14/2016 USD 101.13 3.12% A2 A
Qatari Diar 5% 7/21/2020 USD 107.75 3.93% Aa2 AA
SABIC 3% 11/2/2015 USD 100.75 2.80% A1 A+
Mumtalakat 5% 6/30/2015 USD 98.38 5.50% NR BBB
MBPS 11.25% 11/15/2015 USD 83.50 17.14% NR B+
KIPCO 8.875% 10/17/2016 USD 108.75 6.74% Baa3 BBB-
ISSUER COUPON MATURITY CURRENCY MID PRICE YIELD MOODYS S&P
ADCB 4.75% 10/8/2014 USD 104.50 3.10% A1 A
NBAD 4.25% 3/25/2015 USD 103.88 3.02% Aa3 A+
Emirates NBD L+450bps 4/30/2012 USD 100.00 5.00% A3 NR
HSBC Bank ME 3% 10/21/2015 USD 99.38 3.17% A1 NR
CBQ 5% 11/18/2014 USD 105.25 3.14% A1 A-
Saudi British 3% 11/12/2015 USD 101.00 2.73% NR A
BBK 4.5% 10/28/2015 USD 93.75 6.32% Baa2 NR
ISSUER P.D.A* MATURITY CURRENCY MID PRICE YIELD MOODYS S&P
TDIC 4.949% 10/21/2014 USD 105.63 2.91% A1 AA
ADIB 3.745% 11/04/2015 USD 101.88 3.23% A2 NR
Dubai Govt 6.396% 11/03/2014 USD 100.63 6.16% NR NR
DIFC L+37.5bps 6/13/2012 USD 93.50 13.15% B3 B+
JAFZA L+130bps 11/27/2012 AED 92.00 11.48% B2 B
DP World 6.25% 07/02/2017 USD 102.00 5.82% Baa3 BB
Emaar 8.5% 08/03/2016 USD 100.75 8.30% B1 BB
Dar Al Arkan 10.75% 02/18/2015 USD 90.63 14.47% NR BB-
Nakheel 10% 08/25/2016 USD 72.50 19.03% NR NR
MAIN REGIONAL BONDS: CURRENT PRICES
THE EXPERTS
VIEW
On closing a primary bond or sukuk issuance i.e.
where they are first sold to investors - an active
trading period begins. Investors look to buy and
sell in the secondary market to ensure they end up
with the credit exposure they initially intended.
When acting as a joint lead manager on a new
issue, we are expected to act as market makers
providing two-way executable prices to both buyers
and sellers.
However, what weve seen recently is the
emergence of two themes. Firstly, as the macro-
economic environment causes banks to re-assess
their business strategies, some international banks
have pulled their regional trading teams out of
the region. This has impacted their ability to trade
MENA bonds on the ground with the same degree
of local knowledge, presence and focus.
Secondly, by not being in the local flow of bonds,
the direct sales relationship with regional investors
starts to taper off. This will inevitably start to
impact on the reach of a bank when placing a bond
in primary issuance.
The danger is that, with no regional support, the
securities risk becoming illiquid and languishing at
wide levels, which would form a poor benchmark
and impact the issuer when they come back to
the market. Additionally, with a reduced regional
presence banks risk focusing on too narrow a range
of buyers.
How can the market manage this? There is
little that can be done to influence the global
strategies of the international financial institutions.
However, the remaining active participants will
now need to work harder to maintain a level of
active engagement bridging the
flows between the regional and
international issuer community
to ensure regional bonds remain
relevant in a global market place.
GEORGES ELHEDERY,
Head of global markets,
MENA, HSBC
Issued by HSBC Bank Middle East Limited. Regulated byJersey Financial Services
Commission. All figures quoted are sourced from Bloomberg and HSBC and are
correct at the time of publication. Past performance is an not an accurate guide to the
future. This information is general and does not take into account your circumstances,
objectives or needs. You should consider these matters and consult your financial
advisor prior to making any investment decisions. For professional assistance, contact
HSBC on 800 40 4443.
151
150
149
148
147
146
145
144
143
142
141
18-31 Aug 2011 1-30 Sept 2011 3-31 Oct 2011 1-18 Nov 2011
93-94, 96-97 DATA CRUNCH DEC2011.indd 96 11/27/11 2:37:24 PM
GULF BUSINESS / 97
UAE INFANT RETAIL SECTOR
SECTOR ANALYSIS
GEOGRAPHIES CATEGORIES 2010-15 CAGR
Saudi Arabia Designer clothing and footwear 4.1%
Saudi Arabia Infants designer clothing 6.3%
United Arab Emirates Designer clothing and footwear 4.3%
United Arab Emirates Infants designer clothing 3.7%
THE LUXURY
BABY BOOM
LUXURY CLOTHING
DISPOSABLE INCOME / NO. OF BABIES IN UAE
SOURCE: Luxury Goods: Euromonitor from trade sources/national statistics
In 2011, designer clothing and footwear
including infant designer clothing remained
the largest category covered by Euromonitor
Internationals luxury goods research, with
womens designer dresses and skirts leading
the way. Valued at Dhs3.5 billion in 2010,
designer clothing and footwear accounted
for an impressive 42 per cent of overall
luxury goods sales. Nonetheless, the UAE
designer clothing and footwear category was
the second worst hit out of the 26 countries
covered by Euromonitor Internationals luxury
goods research, after Japan, which saw a
real terms decline of 30 per cent. Despite
the crisis, Dubai Fashion Week took place in
2009, 2010 and 2011, after the success of the
2008 edition.
On the other hand, childrens clothing and
footwear in the UAE remained recession-
proof, recording very high growth between
2005 and 2010 including 15 per cent value
growth in 2009 when the financial crisis was
at its peak. With high disposable income in
the country, coupled with a large availability
of designer brands for children, Emirati
families continued to spend on designer
brands for their children, in particular babies,
whilst trading down on other products.
This trend is expected to continue well into
the future, with Euromonitor International
expecting an 18 per cent compound annual
growth rate over the next five years, with
sales estimated to reach Dhs17 million by
2015 for infant designer clothing.
This trend extended to the food industry
where organic premium baby food is
gradually becoming mainstream especially in
Dubai and Abu Dhabi. Hipp
by Hipp GMBH & Co. in
particular is leading the
segment with significant
shelf space.
SANA TOUKAN
Research manager,
Euromonitor
Like many of the GCC markets, the UAE is very much a label me environment,
where brands are regarded as a symbol of social status and success. More than
a third of residents in the UAE are likely to purchase a luxury product at least
once a year, a proportion that is much higher than in many other markets across
the world. This is mainly due to high disposable income levels in a country made
up of a majority of young working expatriates. The UAE populations demand
for luxury has brought all major luxury brands to this market, many of which
entered the GCC region for the first time through Dubai.
For instance, designer clothing and footwear is very much driven by the
countrys business environment, where, amongst the higher rankings, all
employees are expected to be impeccably dressed during meetings and working
hours, and where designer clothing and footwear is the standard work attire. The
UAE, and especially Dubai, is also very much characterised by its bling aspect,
making personal appearance very important.
2011 2012 2013 2014 2015
1,200,000
1,000,000
800,000
600,000
400,000
200,000
500
505
510
515
520
525
No. Babies (0-4yrs)
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SALES GROWTH IN SAUDI ARABIA AND UAE
93-94, 96-97 DATA CRUNCH DEC2011.indd 97 11/27/11 2:37:38 PM
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A
M
GULF BUSINESS / 99
TRAVEL DOWNTIME
A very modern city where tradition still survives
I
f ever a hotel has seen history, it is the Peace Hotel in
Shanghai. Built in 1929 by Sir victor Sassoon, this art Deco
palace hosted Charlie Chaplin and Marlene Dietrich. Noel
Coward wrote his play Private Lives during a stay at the Peace
Hotel although in those early days, when Sir victor lived in
his suite below the hotel's famous triangular green roof, it was
known as the Cathay.
Nowhere was the Jazz age celebrated in such style than
on the Bund, Shanghais waterfront, and the old Cathay was
at the centre of the fun. victor Sassoon saw the hotel as a
place to celebrate - as well as accumulate - his wealth. In the
ballroom, lined with priceless Lalique glass, he threw fancy
dress parties. One event required Shanghai's expats to come
dressed as castaways. another time the theme was circus
with Sir victor as the master of ceremonies. The citys best
jazz band played downstairs in a bar which Sir victor had
CHANGING SHANGHAI
decorated with beams and panelling to look like an english
pub. elsewhere the hotel gleamed in geometric marble, lacquer
and chrome, a true masterpiece of art Deco extravagance.
But history caught up with the old Cathay Hotel in 1947
when a reuters correspondent staying at the hotel woke
early and saw soldiers working as a chain gang loading gold
bullion from the Bank of China next door on to a waiting ship.
General Chiang Kai Shek was giving up the fight with Maos
communists and was fleeing to Taiwan. With Communism the
hotel gained a new name, the Peace Hotel. Sassoon fled to the
Bahamas and much of his palace on the Bund was divided up
into offices. fortunately very little of the art Deco original was
actually destroyed. When the hotel reopened last year, guests
were amazed to find they were stepping back into Shanghai in
the 1930s.
The hotels Dragon Phoenix restaurant now looks exactly
DOWNTIME
TRAVEL, STYLE, CRUISE, BYTES, HOTELS & SCENE
P
H
O
T
O

L
I
B
R
A
R
Y
Peace Hotel at night
Mont Blanc
TExT BY AdRIAN MOURBY
99-100 Travel-Shanghai.indd 99 11/27/11 2:31:31 PM
100 / dECEMBER 2011
DOWNTIME TRAVEL
as it used to, although twelve layers of
paint had to be meticulously removed
to get down to the original pale
green ceiling with its embossed red
Chinese dragons. all thats missing is
the emperors Table, a long wooden
structure at which Sir victor hosted
his guests as they ate overlooking the
Huangpu river. The biggest thing that
has changed is the view. When Sir
victor used to look across the river
to Pudong, he gazed down on a poor
marshy area of farms and fishing boats.
Now the same view rears up with more
and more skyscrapers every year.
Nevertheless, Shanghai has succeeded
in retaining most of the colonial
buildings from the 1920s and 30s
along the Bund. In those days this
was the third biggest financial centre
in the world. The stately Hong Kong
and Shanghai Bank was said to be the
Shanghai haS Succeeded
in retaining moSt of the
colonial buildingS from
the 1920S and 30S along
the bund. in thoSe dayS
thiS waS the third biggeSt
financial centre in the
world.
Huangpu river
A restaurant boat on the Huangpu river. At night the
river is lit up with highly decorated boats that sail
north from the ferry terminal, along the length of
the Pudong shore and then change course in front
of the Peace Hotel to return along the Bund.
Yu Yuan Garden Bazaar
In the Yu Yuan Garden Bazaar, visitors can see
Layang Pian, a form of Chinese peep show, being
performed. Dating from the mid-19th century,
Layang Pian was very popular in the 1920s and 30s
but declined under Communism. The puppeteer
Weitian Shi has revived this art form in the bazaar
and provides all the voices himself.
Zhouzhuang
An old industrial canal through Zhouzhuang has
now become a major tourist attraction. Visitors
can shop the length of the town, eat at a waterside
restaurant and then take a boat back to the coach
park. Chinas 13th-century canal system originally
reached as far north as Beijing.
most beautiful building in asia when
it opened in 1921. The Customs House
has a clock face based on Big Ben, the
old Bank of Taiwan looks like a Greek
temple and the North China Daily News
office could have stepped out of 1930s
New York.
all these buildings are framed by
new development that is going up
at a staggering rate. No guidebook
to Shanghai stays accurate for long.
Nevertheless the city is now protecting
what remains of the Shanghai Sir victor
knew. The buildings of the colonial era
french Concession have all been turned
into trendy boutiques. The old shops
and restaurants around Yu Yuan Garden
are a major attraction for Chinese and
foreign visitors alike, and outlying towns
like Zhouzhuang have been restored to
offer tourists a bucolic day out. Glamour
has definitely returned to Shanghai.
CHINA
Shanghai
North Korea
South Korea
East China Sea
Taiwan
Macau
Hong Kong
Hainan
The lobby at the Peace Hotel
99-100 Travel-Shanghai.indd 100 11/27/11 2:31:39 PM
43 Photographers coming soon to all leading retail outlets in the Gulf
and at booksarabia.com
43 Photographers features captivating images of the UAE from Motivate
Publishings rich archive of published photographers, and also from new talent
discovered through a nationwide competition. The product an unconventional
collection of images documenting this thriving land
on its fortieth anniversary.
43_Photography_Ad_GolfBiz.indd 1 11/28/11 3:21 PM
102 / DECEMBER 2011
The turbo-packed 650i is ideal for a corporate racer
Stately power
L
aunched in March this year, the
BMW 6 Series 650i convertible feels
more corporate, more grown-up than
its predecessor. a sturdy, regal frame
replaces its former chassis which was
sporty but divisive. at over 16-foot-
long and two tonnes in weight, the
new model is wieldier than its former
incarnation, but the Bavarians have still
scored a winner with extremely seductive
styling. The cars long lines, muscular
19-inch wheels and updated shark nose
all hint at the power and engineering that
lies beneath.
unlike BMWs more obviously sporty
models the Z4, for example the
car feels smoother, heavier and more
TEXT By AliCiA BullER
controlled but, at the same time,
more automated. depending on your
feelings about being a real driver, your
answer to this will determine whether
the 650i is right for you. This high-
end, automated car yields the fruits of
decades of German r&d with a swish
eight-gear responsive automatic gearbox
and powerfully-assisted steering and,
frankly, there isnt a gadget or gizmo this
wonderful car doesnt possess. (can you
guess which side im on?)
The over-riding uSP of the 650i lies in
its sheer, belting power. Make no mistake
this stately-looking car is a 400bhp+,
turbocharged, rear-wheel-drive V8 road
monster. even the smallest push on the
accelerator pushes hard on the G-force-
meter. add to this the satisfying burble
of the frequently shifting gearbox and
youre in for a fast, race-like drive. This
cars oomph is staggering, with a speed
of 0-62mph in 5.0 seconds.
The 650i also offers the dynamic
driving control option, allowing you
to customise the drive to your own
settings including classic, comfort,
dynamic and sport. These four options
will dramatically alter the parameters,
such as accelerator pedal response,
the shift points of transmission and
power steering response (as well as fuel
consumption). in conjunction with the
optional active drive chassis control
system, you also have the option of
selecting individual settings for the
shock absorbers.
The 650i possesses a high-quality
interior anchored with burnt-red leather
upholstery and a cockpit-esque range of
buttons and griddles. But while this car
is relatively comfortable (for the front
seat passengers, at least the backseat
space is minimal), its not the ideal
everyday car. The thrill of the 650i lies
in its painstaking attention to detail, its
horsepower and its head-turning beauty,
not in its boot space or versatility.
as you might expect, this car is not
cheap, in terms of its fuel consumption
(26.4mpg) or initial cost. But if youve
got cash to burn, literally, and youd like
to cover longish distances al-fresco
style with the wind in your hair then
this is the fast and safe car for you.
according to BMW market research if
youre shopping for the 650i model, this
is likely to be the third or fourth car in
your garage. congratulations.
Price: Dhs 490,000
DOWNTIME cruise
102 Downtime-BMW dec2011.indd 102 11/27/11 2:08:54 PM
Dubai
an aerial tour
Dirk Laubner
104 / DECEMBER 2011
DOWNTIME ART
Christies auction house has unveiled a new sales format to lure
younger buyers, writes Jonathan Sheikh-Miller.
under the hammer
T
he inTermiTTenT sound of gavel on lectern was heard
recently at dubais Jumeirah emirates Towers hotel when
global auction house Christies conducted its modern and
Contemporary Arab, iranian and Turkish Art sale.
The event was particularly noteworthy as it marked the launch
of a new sales format for the middle east with the regular part
i sale featuring renowned regional artists such as mahmoud
said, Charles hossein Zenderoudi, Fateh moudarres, mohamed
ehsai and Parviz Tanavoli among the higher value lots, being
supplemented by a new part ii sale.
michael Jeha, md of Christies middle east, explained that the
new approach gave a platform to new artists. This was the first
time that we had divided our sales into a part i and part ii format.
This allowed us to offer a much greater diversity of works, with
estimates from $1,500, and to include artists who had never been
offered for sale at public auction before.
Another part of the rationale behind the new format was that
the lower prices in the part ii sale, when compared to some
of the six figure estimates in the part i portfolio, would enable
younger collectors to begin securing valuable pieces of art at more
affordable levels.
Jeha said that the part ii sale was a success on the night and
the work of several uAe national artists was well received. There
was such a great buzz before the sale as new collectors came to
see what we had on offer. on the night of the sale it was really
gratifying to see some of those new faces bidding in the sales
room, often sitting alongside some of the artists themselves. i was
particularly pleased to see a group of five works by young emirati
artists sell so well all setting new records for their work.
one particularly striking piece by an emirati, The Last Look by
Lateefa bint maktoum, achieved a price more than 30 per cent
above its upper estimate, when it sold for $12,500. other local
artists featured included Lamya Gargash and saeed Khalifa.
But, of course, it was in the part i sale where the big money
changed hands as $5 million worth of sales were concluded more
than double the amount raised in the part ii sale. The highest
grossing piece was an untitled oil on canvas work by the iranian
artist sohrab sepehri from his Tree-Trunks series, which flew past
its initial estimate of $250,000-$300,000 and sold for $662,500 a
world record at auction for the artist.
mahmoud saids oil on canvas piece Petite Fille DAssiout
was not far behind sepehri, with the egyptians work fetching
$650,000. Both of these lots were sold to private middle
eastern investors.
overall, the auction achieved good results with 83 per cent of
lots selling despite the present economic worries and more than $7
million was raised. But for michael Jeha, one of the most satisfying
aspects was the reaction to the part ii sale. Thirty-nine of the
artists represented in the sale were under 35 years of age and this
dynamic was reflected in the audience.
Sohrab Sepehris highest
grossing piece goes up
for sale.
104 Downtime ARt.indd 104 11/27/11 2:09:46 PM
106 / DECEMBER 2011
DOWNTIME BOOKS
Ideas and InnovatIon
Thomas Board reviews one title that aims to harness new ideas and
another which explores one of the most creative thinkers of modern times.
T
he TiTle of the book
promises a lot. But will
it deliver?
Belsky provides
no guidance for judging the
quality of your ideas, but
instead focuses on why
most ideas never happen.
he cites examples of arguably
poor ideas, well executed,
that have made their impact
regardless. its actually a
rather encouraging thought
and as he says, the most
potent forces that kill
off new ideas are our
own limitations.
Belsky soon draws you
in with his insights into the
forces that drive creatives,
and their creations, forward.
he ushers us through
a commendably practical
collection of views about
managing ideas, harnessing
resources and community, as
well as leading others
and oneself. having
tried many productivity
and time management
systems, i found his Action
Method for prioritising and
managing projects striking
in its simplicity.
his set of leadership
principles for turning ideas
into reality are refreshingly
straightforward and you
cant really argue with
them. however, you may
be disappointed by the
superficial skim over some of
these topics. Belskys writing
is so task-focused that even
developing self-awareness
and reflection is tagged as an
important to-do!
f
irsT leTs pick up on
the titles reference to
secrets. Very little about this
book is a true revelation to
anyone who followed Jobs
career until his recent untimely
demise. likely readers of this
book will presumably be
amongst his many admirers.
As such, many will have at
least watched online as Jobs
presented product launches or
followed Apples press coverage,
bought Apple products or
perhaps seen his now famous
2005 commencement speech
at stanford University. The
so-called secrets might be more
for exploring Jobs philosophy
and approach. At the end of
in conclusion, he is
provoking us to commit,
driving us towards action
and focusing our attention
on what will make the
difference. so if you have a
habit of having ideas rather
than implementing them, this
might be the wake-up call
you need.
if, on the other hand, you
are battling your inner selfs
excuses and doubts about
self-expression, try The War
of Art by steven pressfield.
or if you want quick-result
solutions for psychological
barriers like procrastination
and motivation you might
enjoy 59 seconds by
richard Wiseman.
each chapter he then reflects
on what can be learned and
applied by us mere mortals.
The 7 principles are:
Do what you love
Put a dent in the universe
Kick start your brain
Sell dreams not products
Say no to 1000 things
Create insanely great experiences
Master the message
The book is a starting point
for understanding the Apple
story and Jobs leadership.
But, if you want insight into
Jobs thoughts and personal
experiences, you will not find
it here.
accurately described as analysis.
This takes nothing away
from the book, however.
carmine writes in a highly
engaging style that provides
a compelling and fast-paced
read. he introduces us to his
distillation of seven principles
underpinning Jobs approach
to business and life. from
the start, we are immersed
in stories that illuminate
carmines opinions, drawing
on a wide range of sources.
innovation is clearly a big
topic. so rather than trying
to create an innovation blue
print, carmine wisely settles
106 Book reviewDec2011.indd 106 11/27/11 12:47:49 PM
GULF BUSINESS / 109
PLACES TO BE DOWNTIME
1
Golf fans should take some time out
to watch the fnale of the European
Tour as it unfolds at Jumeirah Golf
Estates from December 8 to 11.
Players ranking in the tours top 60
will play in the $7.5 million Dubai
World Championship, after which
just the top 15 players will share in
The Race to Dubais additional $7.5
million prize fund.
British singer Sade turns back the
clock in the UAE capital on Friday,
December 16 as she performs
songs from her back catalogue
spanning the last three decades.
Concert-goers can expect to hear
some of the pop vocalists early
hits including No Ordinary Love,
Sweetest Taboo, Its a Crime and
Smooth Operator.
Although the Christmas holiday
season can get expensive, with
presents to buy, The Spa at The
Address Dubai Marina is offering
a special deal. On booking three
treatments, youll get 30 per cent
off your frst spa treatment, 40 per
cent off the second and the third will
be half price.
You dont have to leave Dubais
business hub to unwind. The Ayyam
Gallery at the Dubai International
Financial Centre has several
exhibitions throughout December,
including the large-scale ink
paintings on paper and video
installation by Iraqi artist Sadik
Kwaish Alfraji. His anonymous
everyman fgure illustrates the
artists philosophical musings on
life and the plight of humanity,
in a manner that is both thought
provoking and quietly beautiful. The
exhibition runs until December 15.
If you happen to be in the business
quarter of Dubai on Christmas Day,
with a craving for turkey and all
the traditional trimmings, then
head to Traiteur at the Park Hyatt,
Dubai where there will be a spread
of seasonal choices alongside
free-fowing champagne and live
entertainment.
hakkasan
1
2
3
4
5
European Tour: Dubai
World Championship
Sade, Live on Yas Island
Triple your indulgence
Nothing, Nobody
Christmas Day, Traiteur
Brunch at the Park
2 4
TEXT By JoNaThaN ShEIkh-mILLEr
3
M
ichelin-starred cantonese fine
dining restaurant hakkasan opened
its doors on november 17, in the Jumeirah
emirates towers hotel in the heart of the
dubai international Financial centre. located
in the Boulevard, on the ground level of
the hotel, hakkasan is approached via an
impressive slate stone corridor.
one of the restaurants most attractive
features during the citys cooler months is
its outside terrace, which features wooden
pavilions surrounded by a wall of vegetation,
creating the feel of a luxuriant, luscious
garden. designed by Gilles and Boisseur, the
venue also includes two private dining rooms
inside as well as the ling-ling lounge with its
distinctive black, gold and white styling.
abu dhabi based property investment
company tasameem owns hakkasan, which
was originally founded in london in 2001,
and a restaurant opened in the Uae capital in
June last year. ceo niall howard is confident
the new location in dubai will prove just as
popular and heading the hakkasan dubai
kitchen is chef de cuisine Pang Pin lee from
hakkasan abu dhabi, who boasts more than
ten years experience in gourmet cantonese
cuisine and the art of dim sum.
lee has crafted several dishes specifically for
the Uae market which complement familiar
hakkasan signature dishes such as Peking
duck with royal Beluga caviar, steamed dim
sum platters and grilled Wagyu beef with king
soya sauce.
despite only opening last year, hakkasan
abu dhabi has attracted a loyal following
and the likes of Morgan Freeman and Uma
thurman have enjoyed its cuisine, while the
restaurant picked up three gongs at the Whats
on awards 2010. although the hakkasan
brand can be found in a varied number of
locations including Miami and Mumbai, plans
are in place to open yet another eatery in new
York early next year.
109 Downtime-Places to be DEC2011.indd 109 11/27/11 12:49:56 PM
110 / DECEMBER 2011
REgulaRs EvEnts calEndar
aIRPORT EXPO, 15-17 DECEMBER, 2011
unITEd aRab EmIRaTEs
Abu Dhabi
December 4-7 e-Tagging for HSE and Asset Management in Oil and Gas Le Royal Meridien, Abu Dhabi iqpc.com
5-7 World Green Tourism Abu Dhabi National Exhibition Centre smg-online.com
5-8 The National Exhibition for Small & Medium Enterprises
(SME 2011)
Abu Dhabi National Exhibition Centre al-hader.com
11-13 World Health Care Congress Middle East 2011 Abu Dhabi National Exhibition Centre worldcongress.com/middleast
Dubai
December 4-7 The Mobile Commerce Forum Le Royal Meridien Beach Resort & Spa iqpc.com
4-7 Rotate 2011 Dusit Thani Hotel iirme.com
5-7 Middle East Industrial Gas Conference 2011 Jumeirah Beach Hotel terrapinn.com
12-14 Gulf Traffic Dubai International Convention & Exhibition Centre iirme.com
12-14 Future Concrete 2011 Ritz Carlton, DIFC acts-int.com
12-14 Invest Nigeria The Address Dubai Mall iirme.com
13-14 Financing the Middle East: a Loans Market Perspective JW Marriott Hotel iirme.com
Sharjah
December 12-14 Gulf Maritime Expo Centre Sharjah expo-centre.ae
QaTaR
December 4-7 Sustainable Construction Qatar 2011 Oryx Rotana, Doha iqpc.com
4-8 20th World Petroleum Congress Qatar National Convention Centre, Doha 20wpc.com
Oman
December 5-7 Food & Hotel Oman Oman International Exhibition Centre, Muscat omanexpo.com
saudI aRabIa
December 4-6 Saudi Water & Power Forum Hilton Hotel, Jeddah thecwcgroup.com
4-7 Saudi Broadcasting Business Forum Holiday Inn, Riyadh, Al Qasr iqpc.com
11-13 Cityscape Riyadh Riyadh International Convention & Exhibition Center iirme.com
11-14 Saudi Infrastructure Jeddah Centre for Forums & Events thecwcgroup.com
11-15 The 29th Riyadh Motor Show Riyadh International Convention & Exhibition Center recexpo.com
W
hile international demand for property has
slowed down, the indian property sector is booming.
real estate in india has seen growth at a rate of 10 per cent
per annum and with it theres been an ever-increasing demand
for property shows from non-resident indians in the Uae.
the show is now bi-annual and Junes eighth edition recorded
a footfall of 17,000 visitors as 50 leading indian developers
featured 250 projects and generated business worth $58 million.
Unitech limited, the hiranandani Group and Godrej
Properties are some of the real estate firms amongst the 60 plus
exhibitors. the show offers plenty of opportunity for acquiring a
general know-how of the different investment options, financing
sources and legal guidance to buying property in india.
INDIAN PROPERTY SHOW
TExT By hilDa Dsouza
Jordan. . . . . . . . . . . . . . +962 6 5684 771
Kuwait . . . . . . . . . . . . . . +965 2473 5419
Morocco . . . . . . . . . . . +212 522 480 269
Oman . . . . . . . . . . . . . . . +968 2448 7841
Qatar. . . . . . . . . . . . . . . . . +974 4666 655
Saudi Arabia. . . . . . . . . +966 1 257 3030
Turkey . . . . . . . . . . +90 212 465 3156/54
UAE Dubai . . . . . . . . . . . +971 4 3365065
UAE Abu Dhabi . . . . . . . +971 2 6419055
2011 Lcensees of Dollar Rent A Car, Inc.

110 Calendar DEC2011.indd 110 11/27/11 1:00:53 PM
Fairmont Dubai and Fairmont Bab Al Bahr, Abu Dhabi, have you on the guest list with a bag full of festive surprises
this season. From Fairmont Brunch specials and take home roast turkey with all the trimmings, to extra special
goodies in all of our dining venues, this festive season is sure to be jolly.
Visit any of Fairmont Dubai and Fairmont Bab Al Bahrs exclusive restaurants and lounges or enjoy a nights
stay in one of our luxurious guest rooms from 3 - 31 December and enter the Whats in the bag? rafe draw and you
could be winning a ve night safari at three luxurious Fairmont resorts in Kenya or ve nights at the renowned
Fairmont Singapore.
For more information please visit Fairmont.com/uae
Fairmont Dubai +971 4 311 8316
Fairmont Bab Al Bahr +971 2 654 3333
FIND OUT WHAT WE HAVE IN THE BAG THIS FESTIVE SEASON
111102FA-BOTH PROPERTIES-PRINTAD.indd 1 11/2/11 4:40 PM
112 / DECEmbEr 2011
regulars GB preferred hotels
GULF BUSINESS HOTELS COLLECTION
HOTEL LOCATION KEY UAE QATAR SAUDI ARABIA
ABU DHABI This hotel is created
to provide the very best of traditional
Arabian hospitality. This unique jewel of
luxury and tranquility, offering magnifcent
services, awaits you for an unforgettable
visit to Abu Dhabi.
Tel +971 2 508 0555
Fax +971 2 508 0429
ABU DHABI Conveniently located
adjacent to Khalifa Park, the property
offers 318 luxurious rooms and suites,
6 world class dining venues, 6 meeting
rooms and spacious ballroom with day
light access and outdoor terrace.
Tel +971 2 657 3333
Fax +971 2 657 3000
park.hotel@rotana.com
DUBAI This 394-room hotel boasts 10
dining and entertainment venues a superb
spa and unrivalled meeting facilities.
Tel +971 4 332 5555
Fax +971 4 332 4555
dubai.reservations@fairmont.com
ABU DHABI offers 192 spacious
rooms and suites, state of the art
conference and business center, as well as,
a multipurpose gym, indoor pool, and the
exclusive Cristal Spa.
Tel +971 2 652 0000
Fax +971 2 652 0001
res.auh@cristalhotels.ae
cristalhotelsandresorts.com
DUBAI Tailored to the savvy business
traveller, with large comfortable beds &
hi tech facilities. A vibrant collection of
cafes, bars & restaurants; state-of-the-art
conference facilities, a fully equipped gym
with ample parking.
Tel +971 4 427 1000
Fax +971 4 427 1001
cu@mediaonehotel.com
DUBAI Located in the centre of Dubais
business district and just fve minutes
away from DIFC, Jumeirah Beach, Burj
Khalifa and Dubai Mall, this 500-room hotel
offers you a convenient access the must
see and must go places in the emirates.
Tel +971 4 323 0000
Fax +971 4 323 0003
reservation@emiratesgrandhotel.com
DUBAI Offers 301 luxuriously appointed
guest rooms and suites, nine restaurants
and bars, health club and spa, tennis and
squash courts and outdoor swimming.
Tel +971 4 343 8888
Fax +971 4 343 8886
sldb@shangri-la.com
DUBAI Rising high above the fringe of
Media City on Sheikh Zayed Road, Fraser
Suites Dubai enjoys panoramic views
with superb 1, 2 & 3 bedroom apartments,
lifestyle facilities, relaxed dining in Aqua
Caf and the exclusive Awazen Spa.
Tel +971 4 440 1400
Fax +971 4 440 1401
reservations.dubai@frasershospitality.com
RAS AL KHAImAH This is a
superbly designed four star hotel complete
with Al Nakhla restaurant, the stylish
Flamingo bar, the vibrant Club Acacia, a
pristine pool serving as a backdrop to
varied and exciting Theme Nights, the
luxurious O-Zone Spa, and high-energy
Oxygen Gym.
Tel +971 7 243 4421
Fax +971 7243 4429
DUBAI Discover a new attitude hotel
directly linked to the regions ultimate shopping
destination amidst Dubais sophisticated
metropolis. Elegant 481 guestrooms
complemented with chic dining experiences
awaits both leisure and business guests.
Tel +971 4 702 8000
H7337@accor.com
pullmanhotels.com
Al RAhA BeAch hotel PARK RotANA ABU DhABI the fAIRmoNt DUBAI cRIstAl hotel ABU DhABI
meDIA oNe hotel emIRAtes gRAND hotel shANgRI-lA
fRAseR sUItes DUBAI
AcAcIA hotel PUllmAN DUBAI
mAll of the emIRAtes
DUBAI Offering 161 furnished units
ranging from 81 sqm to 160 sqm, 3
dining venues, 3 multi-purpose meeting
rooms, recreation facilities & a majestic
landscaped area around the temperature-
controlled pool.
Tel +971 4 437 7888
Fax +971 4 437 7999
welcome.oak@layia.net
lAyIA oAK hotel & sUItes
DUBAI Located on Sheikh Zayed
Road, this hotel is a sleek architectural
masterpiece of steel and glass. It
redefnes the business hotel category,
seamlessly combining form with function,
high technology with unparalleled luxury
and elegance with effciency.
Tel +971 4 330 0000
jumeirah.com
JUmeIRAh emIRAtes toWeRs
Our lOcatiOn
DOHA Superbly located in the
prestigious West Bay area and within
easy reach of the city centre. With its
various dining options, 257 guest rooms
and suites, private beach and a 24-hour
state-of-the-art gymnasium, it is an idyllic
setting for business and leisure.
Tel +974 4484 4444
Fax +974 4483 9555
INteRcoNtINeNtAl DohA
DOHA Located on the Corniche Road,
opposite the Museum of Islamic Art,
the hotel offers 154 rooms and suites,
a business centre and meeting rooms.
Recreation facilities are also available.
Tel +974 4429 1111
Fax +974 4429 1100
moevenpick-doha.com
mveNPIcK hotel DohA
RIYADH The frst 5 star Holiday Inn
hotel in the Kingdom, with 289 new and
trendy accommodations, huge lobby with
W-Fi access, outdoor pools, sauna, Jacuzzi
and health club. Also has state-of-the-art
meeting rooms, 24-hour business center
with professional secretarial support.
Tel +966 1 450 5054
Fax +966 1 450 5056
holIDAy INN RIyADh, IzDIhAR
Gulf business magazine is available in all of these exclusive GCC hotels
Is YoUr hotel lIsted oN thIs pAGe?
become one of Gulf business Preferred Hotels and beneft
from the exposure to our extensive GCC readership.
Contact: nayeem@motivate.ae
tel: +971 4 205 2290, Fax: +971 4 2827593
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apec.pdf 1 11/30/11 2:03 PM
114 / DECEMBER 2011
REgulaRs in your shoes
J
ust off the shores of Alicante, spain, the fortunes of six
world-class sailing teams were cast to the ire of the sea last
month. the Volvo ocean Race remains the most challenging
water rally on the planet, and is often the only race an olympian
athlete would dream of conquering next. In nine months, the
sailors are tasked with mastering 72,000 kilometre of the worlds
most treacherous oceans from Cape town, to Arabia, to China, to
America, and finally to Ireland.
As usual, the Volvo ocean Race departed from a pleasant part
of europe in Autumn; but rather less usual this year was the
smaller number of competitors. As companies around the world
reined in marketing spend, the race lost a number of sponsored
boats. But in a nautical nod to the worlds shift from the West to
east, for the first time in history, an Arabian boat joined the fray.
Azzam, Abu Dhabis sleek black yacht, led by double olympic
silver medallist Brit Ian Walker, also carries Adil Khalid, the first
emirati sailor to join the race.
While Azzam experienced some boat-build challenges and has
resigned from leg one of the challenge, some consolation lies in
the fact that Abu Dhabi is set to provide the first Middle east
stopover in the races history this year. the sailors are expected
Alicia Buller sails into the sunset with Volvo
senior vice president, Doug Speck
AND WERE OFF...
to reach the emirates balmy climes just
in time for a spectacular New Years
party, along with the teams from Camper,
Groupama, Puma, team sanya and team
telefonica. the Arabian hospitality will be
welcomed as crews recover from life on
the edge: no fresh food is taken on board;
the temperature varies from -5 to +40
degrees Celsius; and only one change of
clothes is permitted.
Its an expensive business owning
a race. so expensive that Doug speck,
senior vice president for marketing, sales and customer service
at Volvo Cars, said hes keeping those figures close to his chest.
We think its good value for us we look at what we contribute,
but we also look at what we get back from a media perspective. If
we didnt think there was a good return from it, we wouldnt be
contributing. this is the biggest sponsorship initiative that were
involved in, he says, surveying the glittering Alicante port from
the spectator boat.
As well as the considerable cash involved, Volvo contributes
technological insight, global operations and hR expertise to the
race, which happens once every three years. the investment in
technology is often carried back into the cars.
We share a lot of technical findings, including communication.
Its a very complicated thing keeping in touch with the boats,
and keeping in touch with the media. Were learning a lot about
how we can connect to the boats and, ultimately, how our cars
can become more connected as well. Its all part of the package,
added speck.
the dent in Volvos marketing budget from the race is salved
somewhat by the amount that each host destination contributes
along the way. In addition, Volvo enlists a host of secondary
sponsors to help support the race costs.
however you split it, the potential for visceral brand association
is unlimited. the drive, the expertise and the boundary-breaking
bravery of the sailors is rare and astonishing something that
reaches right into the well of our deepest aspirations. And, for
even a little of that gold dust to stick to a brand, is priceless. or,
at the very least, worth a few tens of millions of dollars every
three years, as a certain automaker knows.
abu dhabi hospitality
will be welcomed as
sailors recover from
life on the edge: no
fresh food is taken on
board; temperatures
vary from -5 to +40
degrees celsius and
only one change of
clothes is allowed.
114 In Your Shoes.indd 114 11/27/11 2:33:34 PM
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UAE Gulf Business PUWA1441_270x206.indd 1 11/21/11 3:48 PM