Middle East Business News Review – A look at today’s important financial news and business updates from the Gulf, Levant and North Africa:
Cathay Pacific announced on Tuesday it planned to place an order worth up to $4.2 billion at list prices with Airbus for its first customer version of A350-1000 wide body plane, on the second day of the Farnborough Airshow near London.
Airbus had been struggling since last years Paris Airshow to win any customers after revamping its carbon-composite A-350 plane with bigger Rolls-Royce engines and pushing back the development of the jet by two years.
Airbus insists the future 350-seat passenger jet will be much more efficient than Boeing’s 777 but is yet to make a significant dent in the 777′s hold on a lucrative corner of the jet market, just below 400 seats.
Kuwait airplane leasing company ALAFCO on Tuesday announced an order for 20 Boeing 737 MAX 8s valued at $1.9 billion at current list prices, at the 2012 Farnborough Airshow in southern England.
Boeing also racked up a multi-billion dollar deal with GE Capital Aviation Service by committing to take 75 of the upgraded Max version and 25 of the current model of the top- selling 737.
The signing ceremony was attended by ALAFCO’s chairman and CEO Ahmad Alzabin and Ray Conner, president and CEO of Boeing Commercial Airplanes.
Gulf stock exchanges witnessed the raising of more than $1 billion by a total of four initial public offerings (IPOs) during the second quarter of this year compared to three IPOs which raised $340 million in the same period last year, a report said.
According to Pricewaterhouse Cooper’s latest Capital Markets report, new listings, despite being limited to a few regional exchanges, helped soak up some of the excess liquidity in the region and attract investor appetite.
The findings revealed that the average IPO offering value rose to $276 million in the quarter compared to $39 million the first quarter and $133 million in the second quarter of 2011.
New Delhi allowed its state-run insurers to provide limited cover to Indian ships transporting Iranian oil, paving way for refiners to receive uninterrupted supplies from Tehran.
India’s Insurance and Regulatory and Development Authority (IIRDA) announced state-run insurers can replace their European counterparts, enabling at least Shipping Corp Of India to resume transporting Iranian oil, officials said.
Iran’s fleet of oil tankers is ageing due to decades-old sanctions imposed by the United States on the Islamic Republic, making it tough to keep supplies flowing to its top two crude buyers.
The Palestinian Authority is set to hold local elections in the West Bank and Gaza on 20 October after a lapse of six years, the first since 2006, an official said on Tuesday.
“The Palestinian government decided today during its meeting to hold the local, municipal and district elections on October 20th throughout the Palestinian territory,” the Palestinian official told AFP on condition of anonymity.
The decision will follow two earlier attempts for local elections last year, when the PA, based in West Bank town of Ramallah, wanted to hold the vote first in July 2011 and then in October 2011.
Managers working in the GCC are paid, on average, seven times the salary of junior employees, according to research by Hay Group.
The HR giant said the salary gap was an increase from three years ago when the average was five times.
A sustained demand for quality mid-level talent and a shortage of employees at this level are the reasons behind the wider gap, according to the consultancy.
Markit’s global business outlook survey said it expects a rise in business activity over the next 12 months while pointing out that economic expansion and sentiment was better than October’s post-crisis low.
However, hiring intentions looked bleak with only 17% more companies planning to expand over those that did not, down from a gap of 19% in February. Chris Williamson, chief economist at Markit, said: “Businesses globally have scaled back their expectations for business activity, revenues and profits growth compared to earlier in the year, which has in turn led to a deterioration in the employment outlook.”
The expectations for business activity in the euro zone dropped off, while the sentiment in the United States fared much better despite being down 69% earlier in the year.
Saudi Arabia’s oil revenues are expected to drop this year. Brent price is likely to reach $100/barrel in 2012 and $98/barrel in 2013 from $118/b in April this year. However, for Saudi Arabia, the consequences of lower oil prices are likely to be slight, according to a report by Samba.
Samba projected the Kingdom’s oil earnings at $324 billion, a 16 percent decline. Earnings are comfortably above the five-year average of $225 billion. Moreover, despite this year’s reduced earnings, a current account surplus of $148 billion, or 25% of GDP is in prospect. For 2013, Samba expects a surplus of some 18% of GDP. By the end of 2013 total net foreign assets are expected to total $827 billion, equivalent to 135% of GDP.
The report said, government’s fiscal position also remains robust. Whereas previously Samba expected a surplus of 20% of GDP, but now this will come in at 13% of GDP.
Rolls-Royce Motor Cars said on Tuesday that sales in the Middle East increased by 22 percent in the first half of 2012 compared to the same period last year.
The luxury car manufacturer said in a statement that Saudi Arabia saw “exceptional growth” from the first quarter, with the UAE, Qatar, and other markets achieving “robust growth rates”.
The Royal Air Force of Oman (RAFO) has purchased F110-GE-129D engines from GE Aviation to power its 12 new Lockheed Martin advanced F-16 aircraft.
Engine deliveries are scheduled to begin in 2013, GE Aviation said in a statement without giving a value for the deal.