Middle East Business News Review – 26 September

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

Britain-Holland propose ‘full’ financial freeze, shipping ban on Iran

Members of the European Union are discussing a sanctions proposal presented by Britain against Iran that calls for a ban on shipping and a “full” freeze on financial transactions with the Islamic Republic’s central bank, European diplomats said Tuesday.

“Most (EU) member states are largely supportive of the proposals,” a European diplomat said on condition of anonymity while another source who also asked not to be identified said that discussions are ongoing, there is still a long way to go.

Britain, France and Germany jointly urged their European Union partners last week to step up pressure on Iran over its disputed nuclear programme, agreeing new sanctions should be adopted at EU foreign ministers’ talks in Luxembourg on 15 October. Now under discussion is a London/The Hague proposal to strengthen existing punitive measures in four areas: finance, trade, energy and transport.

Arab Spring worsened situation of women in Yemen: Oxfam

A leading international humanitarian organisation has warned that women in Yemen are worse off than before the uprising that ousted long-time dictator Ali Abdullah Saleh as the country mires in deep crises.

In its latest report, entitled “Still waiting for change,” Oxfam said “four out of five” Yemeni women report that their “lives have worsened over the last 12 months.” The findings were based on a series of focus group discussions held throughout the country.

According to the report, a quarter of Yemeni women aged between 15 and 49 are “acutely malnourished,” with women of “all economic backgrounds” reporting access to food, jobs and security as “their priorities.”

Jordan signs agreement with intl consortium to generate 800MW electricity

A consortium of companies headed by Mitsubishi Corporation on Wednesday signed a 25-year deal to sell electricity to National Electric Power Co. (NEPCO) from an $800 million diesel-fired plant being built in eastern Amman.

The three-company consortium, which also includes Korea Electric Power Corp. and Wartsila Development & Financial Services Oy, was awarded the project last year, and will build and operate a diesel engine power plant in the eastern part of the capital city of Amman. The plant will have a maximum output of 600 megawatts, making it the largest reciprocating engine technology power plant in the world. Sales of electricity are expected to begin in 2014.

Tunisia lines up for $180 million loans; Ben Ali’s assets estimated $13bn

The Arab Monetary Fund (AMF) and the Central Bank of Tunisia on late Tuesday announced they have signed three loan agreements under which the Arab financial institution would grant Tunisia three loans to the tune of $180 million. The announcement came amid reports that former Tunisian dictator Zine El Abidine Ben Ali’s wealth is estimated to be around $13 billion.

Tunisian officials insisted the loans will serve to support the balance of payment, official external reserves and supporting the financial and banking sector reform programme.

According to a report carried out by the local TAP news agency, Tunisia’s ousted president possesses more than $13 billion in assets, a government commission formed to look into his wealth has found. Najob Hnane, head of the confiscation committee, said it had identified 398 holding companies, as well as several other assets, belonging to ex-president Zine El Abidine Ben Ali and his relatives. The commission chief added that many other assets are yet to be tracked down.

Bankers feeling pinch from Middle East job axe

Big banking institutions like Deutsche Bank, Credit Suisse and Japan’s Nomura Holdings are cutting investment banking jobs in the Middle East as the promise of emerging markets is overshadowed by a need to slash costs and a dearth of deal activity, a Reuters report said Wednesday.

While many financial institutions have cut junior level jobs in their investment banking teams for the region in recent weeks, the latest round includes directors and, in Nomura’s case, the head of its investment banking operations in Dubai.

Fujairah’s NBF said to replace Barclay on rates panel

National Bank of Fujairah has been chosen to replace Barclays on the panel which sets the UAE’s indicative interbank lending rates, banking sources told Reuters on Wednesday.

Barclays said in July it was withdrawing from the panel which determines the Emirates interbank offered rate (Eibor), weeks after it agreed to pay a $453m fine to US and British regulators over manipulation of the London interbank offered rate (Libor).

There has been no suggestion that Barclays tried to manipulate Eibor, which is used to price financial instruments in the Gulf’s top financial centre.

Middle East telcos mull alliance to fight Facebook

Middle East telecommunications firms are discussing the idea of creating a pan-Arab online platform that would earn them more revenue from their networks by challenging Facebook and other internet behemoths of the West.

The ambitious project faces technical and financial obstacles and may never be implemented on a large scale. But proponents argue the common language and culture shared by the world’s more than 350 mi l lion Arabic speakers, plus the webs of affiliated companies which Gulf operators own across the Middle East and North Africa, could make the project viable.

Mortgage lending grows 50% to SR 48 bn in Q2

Saudi market interest rates have edged up during the course of the year, though rates are still low by historical terms and liquidity remains plentiful. Quarterly data show strong growth in mortgage lending, though flows to construction have leveled off.

The domestic project market is buoyant, but the deteriorating external environment has meant weak export orders for some Saudi firms. Inflationary pressures have moderated and the recent rise in wheat and corn prices is unlikely to have much of an impact, according to a report by Samba Financial Group.

Vitol trades Iranian fuel oil, skirting sanctions

Vitol, the world’s largest oil trader, is buying and selling Iranian fuel oil, undermining Western efforts to choke the flow of petrodollars to Tehran and put pressure on Iran’s suspected nuclear weapons programme.

Vitol last month bought 2 million barrels of fuel oil, used for power generation, from Iran and offered it to Chinese traders, Reuters established in interviews with 10 oil trading, industry and shipping sources in Southeast Asia, China and the Middle East.

A spokesman for Vitol declined to comment before publication of this story. The firm subsequently issued a statement saying Vitol Group is in compliance with all international laws on trade with Iran.

Kuwait to pass 2012/13 budget via decree soon – KUNA

Kuwait expects to approve its 2012/13 budget by emiri decree soon, finance minister Nayef al-Hajraf told state-news agency KUNA on Wednesday.

A political stand-off in the Gulf state meant the OPEC member’s parliament has yet to approve the budget for its 2012/13 fiscal year which started in April.

“We expect the issuance of a decree on that draft at the earliest opportunity,” Hajraf said after a meeting with Emir Sheikh Sabah al-Ahmad al-Sabah and other economic officials, KUNA reported.

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