Middle East Business News Review – 9 August
Middle East Business News Review – A look at today’s important financial news and business updates from the Middle East and North Africa
Hotels and furnished apartments near the Grand Mosque in Makkah are already fully booked for the last 10 days of Ramadan commencing Thursday, with a typical room offering a view of the Kabaa – the House of God – ranging anywhere between SR 10,000-15,000 ($2,666-3,999) per night, a Saudi daily newspaper reported.
Pilgrims performing the “Umrah” pilgrimage condemned the price hike and argued that high prices make it possible for only the wealthy to stay near the Grand Mosque, dividing the holy city on pilgrims’ class lines.
Omani utilities sector, funded by both private and foreign investors, is set to get a major boost as the construction of 16 power and water projects worth $3.1bn will increase water desalination capacity in the country, improve wastewater treatment and conservation awareness, a recent report said.
The government has recognised the need to increase local desalination capacity to meet domestic water needs, and plans for a number of new projects and expansions are already in the works, Oxford Business Group said in its latest economic update on Oman.
MTN Group, one of Africa’s largest telecom companies, is in talks with South African and US officials about moving money out of its Iran business, amid tightening sanctions which are making it hard to repatriate funds, Angolan news agency said on Thursday.
Chief Executive of the Johannesburg-based MTN, which reported a 14% increase in H1 profit, said a likely devaluation of the Iranian rial could have a “severe impact” on second-half results. Reports coming from Tehran suggest the Iranian central bank is considering a devaluation to stem open market fall against the US dollar.
The South African mobile operator owns 49% of MTN Irancell, which contributes nearly 10% of its total revenue, but is facing increasing difficulties to operate in the sanctions-hit Islamic Republic.
A leading computer security firm has found a new cyber surveillance virus in the Middle East that spies on financial transactions, email and social networking activity, reports said on Thursday.
The Kaspersky Lab said the virus named “Gauss” may also be capable of attacking critical infrastructure and was built in the same laboratories as Stuxnet, the computer worm widely believed to have been used by the United States and Israel to attack Iran’s nuclear programme.
The Moscow-based firm said it found Gauss had infected personal computers in Lebanon, Israel and the Occupied Palestinian Territories. It declined to speculate on who was behind the virus but said it was related to Stuxnet and two other cyber espionage tools, Flame and Duqu.
Despite the gloomy world economy, global arms trade hit post-Cold War peak in 2012, a Russian report issued earlier this month revealed.
According to the report, Russia’s Centre for Analysis of World Arms Trade said global military equipment exports hit $69.84 billion this year, the highest level since the end of the Cold War.
Driven by complex factors including turmoil in the Middle East and huge appetite of international arms dealers, the alarming situation is likely to have huge ramifications for world peace. The trade registered a 3.84% increase to the tune of $67.26 billion in 2011, already 20% higher compared to $56.22 billion in 2010.
For a key to the recovery of Dubai’s real estate market, one need look no further than the Burj Khalifa, the world’s tallest tower, which rises out of the desert floor of the city’s gleaming downtown area.
Figures released by the Dubai government this week showed Indian citizens were the main buyers of luxury apartments and commercial space in the Burj Khalifa during the first half of 2012, spending $222m. Iranians came second with $128m.
For the Indian buyers, Dubai property is a refuge from currency depeciation that has taken the Indian rupee down about 20 percent against the US dollar since the third quarter of 2011. For the Iranians, Dubai provides a safe place to park money as international sanctions, imposed over Tehran’s disputed nuclear programme, ravage the Iranian economy.
Plans for a joint Kuwait and Iraq airline, part funded using the compensation paid to Kuwait Airways for aircraft taken during Saddam Hussein’s invasion of the Gulf state, are expected to be finalised before the end of the year.
“A Kuwaiti-Iraqi technical team is currently working on preparing the formula, work mechanism and structure of the new company to be brought to life in the near future,” sources told the Kuwait Times.
Iraq’s Cabinet last month agreed to allocate US$500m to end the long-running dispute with Kuwait over the debts of Iraqi Airways. Kuwait Airways has been seeking US$1.2bn in compensation for ten aircraft taken during Iraq’s 1990 invasion of Kuwait.
Dana Gas and its biggest shareholder and partner, Crescent Petroleum, invested $963 million in the Kurdish region of Iraq by the end of June. Abu Dhabi-listed Dana Gas and Sharjah-based Crescent Petroleum said they are in discussions with the Kurdish government for the next phase of development and expansion.
“Total production from the Kor Mor Field has grown to 70,000 barrels of oil equivalent a day. The production includes 330 million cubic feet of gas per day and 15,000 barrels per day of condensate liquids, and there are plans for further expansion,” according to a statement.
Saudi Arabian Oil Company (Aramco), the world’s largest crude exporter, is planning to invest up to US$120m a year as part of a deal with an Oslo-based investment management firm, it was reported.
The state-owned firm, which last month set up a venture capital subsidiary called Saudi Aramco Energy Ventures (SAEV), has signed an agreement with Norwegian company Energy Capital Management (ECM).
ECM previously advised Norway’s Statoil on its investments and will help Saudi Aramco gain a bigger foothold in Europe.