Middle East Business News Review – 21 August
Middle East Business News Review: Top Business News from the Middle East & North Africa
Banks in the United Arab Emirates are filling the gap left by European institutions pulling back from the country’s loan market – a trend that benefits local lenders even as margins face pressure and regulation weighs on growth, a report published by Reuters said on Tuesday.
Lending in the UAE, the second biggest Arab economy, grew just 1.8% in June from the end of December, according to central bank data.
But most local banks reported loan growth that exceeded the market rate. Six of the eight largest local banks by stock market capitalisation did so, led by First Gulf Bank with a 6% rise and Mashreq, up 5.1%. Even smaller local banks appear to be profiting from the pullback by European banks, which are becoming more conservative globally because of financial pressures at home.
Qatar tops the list of average disposable income vs petrol expenditure with residents spending just 0.4% of their disposable income on petrol, followed by Saudi Arabia at 0.98%, Kuwait at 1.2% and Bahrain at 1.81%, according to research by a British money website.
Although the cost of petrol is Venezuela is the lowest in the world, study conducted by This Is Money.co.uk suggests Middle Eastern nations are the real winners – spending a far lower percentage of their average monthly disposable income on fuel.
Israeli economy may suffer an estimated $11.7 billion in shape of economic damages if it attacks Iran and wages a war with the Islamic Republic, a report said on Tuesday.
The conflict could also cost the Israeli economy an additional $5.96 billion annually over the following five years, according to the study by BDI-Coface, a business and credit information company based in Bnei Brak, outside Tel Aviv.
Egypt’s foreign reserves would jump by $6.8 billion to $21.2 billion in the coming period, an official at the Central Bank of Egypt told a state-run paper on Tuesday.
The anonymous official told the state-run newspaper Al-Gomhurriya that reserves are expected to soar after Qatar delivers $1.5 billion, the second batch of its previously announced deposit to the CBE.
Qatar said on Saturday it would deposit $2 billion. Egypt has only received $500 million. The country’s foreign reserves began a steep decline last year when a popular uprising that toppled Hosni Mubarak led the central bank buy Egyptian pounds to support the currency.
Abu Dhabi has been chosen as the preferred bidder for 42 UK-based Marriott hotels after making an offer of £620m (US$973m), according to reports in the UK.
State-backed lender Royal Bank of Scotland Group have taken control of the properties following loan defaults and the Abu Dhabi Investment Authority has been named as the preferred bidder, according to a report by UK-based trade magazine Property Week.
Last month, the Sunday Times reported Qatar and Abu Dhabi had both been in talks to buy the hotel.
Etihad Airways has raised its stake in Virgin Australia Holdings Ltd to 6.1 percent, from five percent last month, according to an announcement by the Australian Securities Exchange.
The acquisition of further shares pushed the Abu Dhabi airline closer to the 10 percent limit approved by Australia’s Foreign Investment Review Board.
The Abu Dhabi-based airline paid $10.6m for more than 24,000 additional shares over the past three weeks, according to the ASX document.
British energy services company John Wood Group is working hard to resolve problems with two key contracts, including one in Oman, that are holding it back, its chief executive said on Tuesday.
Delays in a contract with Petroleum Development Oman have ratcheted up losses on the project and weighed on John Wood’s shares, but the company said that it expects improvement in the next year.
It said that losses in Oman would be $15-$20m in 2012.
Glencore’s $30bn bid for miner Xstrata is not a “must-do deal” its chief executive said on Tuesday, in the company’s strongest suggestion yet that it will not yield to key shareholder Qatar’s demands for an improved offer.
Ivan Glasenberg, speaking as the commodities trader reported a smaller than expected drop in first-half profits, expressed exasperation with Qatar Holding, which has been in a stand-off with Glencore since the sovereign wealth fund surprised the market by demanding an improvement to Glencore’s offer of 2.8 new shares for every Xstrata share.
Qatar has built up a stake of almost 12% in Xstrata since the deal was announced in February, well short of Glencore’s 34% holding but enough to block the takeover deal at a vote next month.
Gatehouse Bank, the UK subsidiary of Securities House Kuwait, said on Tuesday it is the new owner of the Debenhams department store in Leeds city centre in the north of England.
The sharia-compliant investment bank bought the 107,000 sq ft building for £33.4m ($52.6m) from accountancy firm KPMG, receiver to a failed Irish property company.