Middle East Business News Review – A look at today’s important financial news and business updates from the Gulf, Levant and North Africa:
Qatar and The United Arab Emirates are leading the Middle East for the second year running in overall innovation, a report said which calibrated the performance of 141 economies around the world on the basis of their innovation capabilities and results.
The report, titled Global Innovation Index 2012 (GII): Stronger Innovation Linkages for Global Growth was published jointly by INSEAD, the leading international business school, and the World Intellectual Property Organisation (WIPO), a specialised United Nations agency. Alcatel-Lucent, Booz & Company, the Confederation of Indian Industry (CII), as well as an advisory board of eleven international experts also contributed the GII 2012 findings.
Latest IATA data showed on Wednesday 55 world airlines posting a combined loss of $1.5 billion, and overall global profits in the first quarter of 2012 falling significantly. The Middle East carriers were the only ones to post a 15.2% growth with a 4.5% increase in demand. In stark contrast, European carriers suffered maximum net losses followed by those in the Asia-Pacific region.
The most-profitable airlines were in North America, followed by those in Latin America and the Middle East.
Load factors for the Middle Eastern airlines at 74%, the second-weakest among regions, but were 0.4% higher than April.
Omani finance ministry official on Wednesday said higher than expected oil prices will help reduce OR1.2bn ($3.1bn) budget deficit projected for 2012.
The Gulf nation sold its oil at an average price of $115 per barrel in the first five months of 2012, the finance ministry statement said. It added that revenue peaked around OR5bn ($12.99bn) during the same period.
Oman posted a 1.5 billion rial ($3.8 billion) budget surplus for the Jan-Apr period of this year thanks to a surge in oil revenues. Inflation also dropped to 3% in April, the Gulf country’s economy ministry data showed last month.
Iran has convened a meeting with world powers in Istanbul in search of a diplomatic solution to the nation’s nuclear work. The Islamic Republic considers the international sanctions that target its energy and finance industries as ‘illegal and irrational’.
The core issue in the negotiations is whether Iran will stop enriching uranium, and move current stockpiles out of the country to show that it is not planning to produce atomic weapons.
Western powers contend that Iran is hiding its nuclear weapons programme, with US and Israel refusing to discount the possibility of military strikes on Tehran’s atomic installations.
The independent Tunisian media authority on Wednesday announced it is shutting down citing its failure to achieve objectives due to interference by the Islamist-dominated government.
“The body does not see the point in continuing its work and announces that it has terminated its work,” said Kamel Labidi, who heads the National Body for the Reform of Information and Communication (INRIC).
Labidi justified the decision by saying the government had reverted to “censorship and disinformation.” The post-Ben Ali government created the INRIC in January last year to reform the media sector, and particularly state controlled organisations, to guarantee press freedoms restricted during the last 27 years.
Dubai Duty Free said on Wednesday it had successfully concluded its debut international financing deal to fund its expansion plans. The airport retailer said in a statement that it had secured a $1.75bn, six-year senior unsecured syndicated credit facility, comprising a conventional term loan facility and Islamic facilities.
It said the financing will fund the on-going expansion of Dubai International Airport, adding that the deal closed significantly oversubscribed, with support from a syndicate of 26 international, regional and local banks.
Port operator DP World said on Wednesday it was forced to hand over its 60% holding in Adelaide’s container terminal to Flinders Port after the Australian firm exercised its right to buy the stake.
The stake sale was triggered by a transaction entered by the state-owned Dubai firm last year to sell 75% of its Australian operations to private equity firm Citi Infrastructure Investors (CII) for $1.5bn.
Flinders, which owned the remaining 40% in the terminal, received the rights to acquire the DP World stake following that deal.
Etihad Airways has announced that revenues rose by 31 percent to $1.25bn in the second quarter, helped by a 34 percent rise in passengers to 2.55m during the same period.
The Abu Dhabi-based airline cited its growing network of codeshares and strategic partnerships as a major factor behind the results. It said that recent deals had helped add 800,000 passengers to its network, contributing $281m.
Iraq’s cabinet has approved a $9 billion supplementary budget for the 2012 fiscal year, only months after parliament decided on a $100 billion budget in February.
The original budget was drafted based on an average world oil price of $85 and 2.6 million barrels per day in exports. However, the ongoing turmoil with Iran is causing instability in world oil prices. Brent crude has been traded above the price predicted for Iraq’s budget, advancing $3 to over $100 per barrel on Tuesday following Iran’s announcement about closing the Strait of Hormuz.
Turkey implemented a new commercial code at the end of June to establish a corporate governance tactic that meets international standards for the business sector. The new code, officials say, will change the structure of companies’ boards of directors and increase investor confidence in the business environment of Turkey, which will be in line with EU legislation.
The motivation to change the code came from a shift in corporate governance, which increases investor confidence and ensures the stability of the business sector. Additionally, as Turkey negotiates for member in the European Union, it must synchronize its laws with the standards held by the EU.