Middle East Business News Review – 24 September

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Today’s top business news from the Middle East and North Africa:

UAE third most financially literate nation in Middle East – survey

The latest Financial Literacy Index on Monday revealed consumers in the United Arab Emirates (UAE) have become more financially prudent over time, with their overall financial literacy ranking standing at third position in the Middle East from 6th in 2010. The survey conducted by MasterCard also said that the UAE consumers were the most informed in the Middle East when it came to knowledge about investments.

The MasterCard Worldwide Index of Financial Literacy is based on a survey conducted between 24 April 2012 and 10 June 2012 with 11,376 respondents aged 18 – 64 in 25 countries. This is the 3rd survey of Financial Literacy conducted since 2010. The survey polled consumers on three aspects of financial literacy including their basic money management skills, investment knowledge and financial planning to determine the level of basic money management skills in terms of budgeting, savings, and responsibility of credit usage. The survey and its accompanying reports do not represent MasterCard’s financial performance.

Egypt stood at first with 69 index points whereas Saudi Arabia came at second with 62 index points. Lebanon stood fourth on the table closely followed by Oman with 59 index points.

Qatar eyeing $2 billion AUX stake: sources

Qatar Holding, the investment arm of the Gulf state’s sovereign fund, is in advanced talks to buy a 49% stake in gold company AUX for about $2 billion, three banking sources said on Monday.

Batista, Brazil’s richest man, said in June that he expected to sell the AUX stake, which owns gold mining rights in Colombia, for about $2 billion by September. The gold company, created in 2010, is part of Batista’s EBX holding company.

One of the sources said that talks between the two parties are in advanced stages and an agreement may be reached as early as this month, declining to be identified as the matter has not been made public. Swiss bank Credit Suisse is advising Qatar Holding on the transaction, while Brazil’s Itau Unibanco is advising the seller, the sources said.

Iran opens forex centre to stabilise rial

Iran opened a foreign exchange centre on Monday that provides government-subsidised US dollars to import some goods as part of its bid to stabilise its falling currency.

The rial’s street value has tumbled by more than half in the last year because of US and European sanctions against Iran’s oil and banking sectors, which have cast doubt on the central bank’s ability to defend its currency.

Informal money changers have been benefitting from the rush by Iranians flocking to convert their savings into hard currencies, driving down the rial’s open-market value. This has raised the price of imported goods, contributing to double-digit inflation.

Lebanon industrial exports plummet in first seven months

Lebanon’s ministry of industry said on Monday the country’s industrial exports fell 9.5% in the first seven months of 2012 compared to the same period last year.

Industrial exports totaled $1.744 billion compared to $1.927 billion a year earlier, the report disclosed while adding that a decline of over 33% was witnessed in July alone when industrial exports reached $205.3 million, around $102 million lower than the same month last year.

Electric appliances and equipment led industrial exports in July, accounting for $35.3 million followed by metal exports worth $30.5 million. Foodstuff exports reached $29.7 million in the same month.

Abu Dhabi economic growth seen slowing to 3.9% in 2012

Abu Dhabi’s economy is likely to grow 3.9 percent this year, lagging previous forecasts, but should pick up in the next few years helped by further diversification away from oil, the Department of Economic Development said on Monday.

A drop in oil production this year is expected to curb economic growth in Abu Dhabi, the largest of the seven members of the United Arab Emirates. The department, in an inaugural report on Abu Dhabi’s development outlook, said the government should keep spending to support growth although it said the focus of spending was shifting to social projects.

Abu Dhabi accounts for 65% of UAE economic output and almost all of its oil production.

UAE committed to supply customers with oil needs – Yabhouni

The United Arab Emirates’ OPEC Governor Ali al-Yabhouni said on Monday that the UAE was committed to supplying its customers with all their energy needs.

“Markets continue to show a degree of volatility that ignores the fundamental reality that producers still have enough spare capacity to satisfy all requirements. At the same time stocks are at a healthy level, showing that there is plenty of oil in the market and in storage.”

He also told the Gulf Intelligence Energy Markets Forum in Dubai: “The UAE is firmly committed to making its own contribution to market stability by ensuring that clients have all the oil that they require.”

UAE house prices forecast to fall further in 2012

House prices and rents in the UAE are forecast to remain under pressure from new supply coming to market and the impact of distressed assets in the eurozone, a new report has said.

Property advisor Tasweek said apart from some select locations in Dubai, the UAE’s real estate sector is likely to see price falls for the remainder of 2012.

Tasweek said Abu Dhabi house prices and rents are forecast to drop by between 2-10%.

Qatar’s teachers highest paid in Arab world

Qatar has the highest paid teachers in the Arab world followed by the UAE, Kuwait and Saudi Arabia, Asharq Al Awsat reported.

Teachers in Qatar earn $80,000 per year. while in the UAE they net $60,000, in Kuwait they take in $55,000 and in Saudi Arabia they gross $50,000, the Saudi-owned newspaper reported.

The number of students enrolled at universities has soared as a result of the Arab world’s high population growth rate while the amount invested on those attending postgraduate studies remains low compared with developed countries, the newspaper reported.

Saudi GDP exceeds SR 2.2 trillion ($590bn)

Saudi Arabia’s gross domestic product exceeded SR 2.2 trillion in 2011, registering a growth rate of 31% in current prices, compared to the previous year, the General Statistics Department reported on Sunday.

The private sector GDP grew by 14.7% during the same year, the department said in a report released on the National Day. Nonoil exports rose 31% to SR 176 billion, which accounted for eight percent of the GDP, the report added.

The Kingdom’s total exports in 2011 amounted to more than SR 1.41 trillion, the department said while highlighting Saudi Arabia’s remarkable economic progress. The number of working Saudis within the age limit of 15-65 would reach 61.2% by the end of this year, against 47% in 1992, the report pointed out. Saudis within the age group of 20-40 would reach 66.4% of the total national workforce this year, it added. According to preliminary reports, the Kingdom’s GDP grew 5.94% in the first quarter of 2012.

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