Middle East Business News Review – 4 October

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

Oman announces desalination plants worth $400m

An Omani government official announced on Thursday there are plans in place to build three desalination plants at a cost of about $400 million to meet the soaring demand for water.

An official working for the ministry of water, power and electricity told Reuters that Duqm, Sur and Sohar have been chosen as the locations for the multi-million projects. He estimated that Oman’s water consumption is rising 5% annually.

Egypt owing billions to foreign oil, gas companies

Egyptian oil ministry is in the midst of negotiating new payment deals with foreign oil companies, which are among the leading investors in the country, oil executives said on Thursday adding that the government is $6-7 billion behind in payments to the companies for oil and natural gas purchases made by the state-owned Egypt General Petroleum Corporation.

A New York Times report said the companies were told they will get paid within two months, but the money has not been transferred from the coffers yet.

EU to ban Iran gas imports soon – report

Diplomatic sources told Reuters on Thursday the European Union is considering a ban on Iranian gas imports into Europe as part of its efforts to ratchet up pressure on Iran over its nuclear programme.

EU member states are said to be working on a package of sanctions against Iran with a goal of formally adopting them at a meeting of foreign ministers on Oct. 15 in Luxembourg, the report said adding that the diplomats reached a preliminary deal on late Wednesday to ban gas imports, the first measure to win approval in the package, which also consists of various finance and energy-related proposals.

Japan-Tunisia sign new tourism agreement

Tunisia and Japan announced they are entering a deal to promote tourism in southern Tunisia, according to an agreement signed by the Ministry of Tourism and Japan International Cooperation Agency (JICA) on Thursday.

According to ministry sources, a package will be formulated to promote tourism in the Tunisian Saharan regions of Tozeur and Kebili, and Japanese tourists will be offered attractive deals and offers.

The three-year campaign, which will be started very soon, is an initiative taken by JICA and is being funded with an investment to the tune of 5.4 million dinars (approx. $3.44 million). The project hopes to attract attention to the southern regions of Tunisia and promote tourism products and natural resources in these regions.

Morocco, Spain vow further cooperation amid economic turmoil

Spanish Prime Minister Mariano Rajoy led a top level delegation to Morocco to hold talks with Moroccan officials on economic ties in Rabat on Wednesday. The two Mediterranean neighbours harbour deep differences over several political and historical issues despite a friendship treaty signed two decades ago.

However, Rabat and Madrid are enjoying strong social and commercial ties since January when Spain became Morocco’s top economic partner, a spot that was occupied by France for many decades. Moroccan and Spanish officials insist that prospects for closer cooperation are promising.

Emirates Airline takes delivery of its 25th A380 superjumbo

Dubai’s Emirates Airline took delivery of its 25th Airbus A380 superjumbo on Wednesday, the carrier announced.

The arrival of the double-decker, wide-body aircraft, of which Emirates is Airbus’ largest customer, occurred at the same time as the Dubai carrier took delivery of its 78th Boeing 777-300.

The new aircraft will immediately be deployed into service across Emirates’ network of 126 destinations in 74 countries. In total, Emirates took delivery of three A380 aircraft on Wednesday and said it plans to increase the fleet to 31 by the end of the year. Emirates has a total of 90 A380 jets on firm order, and it has 216 aircraft, worth $62bn, still to be delivered.

Abu Dhabi’s Mubadala back in the black

Abu Dhabi’s Mubadala Development Company moved into the black during the first half of 2012, recording a net profit of AED851.5m (US$231.8m), compared to a loss of AED1.183bn during the same period the year before, it was announced on Thursday.

As its revenue overall increased 18 percent year-on-year to AED16bn, driven mainly by GlobalFoundries, Mubadala Petroleum, Mubadala Aerospace assets and Yahsat, the government-owned investment vehicle also received an equity injection of nearly US$5bn from the Abu Dhabi government during the first six months of 2012.

This brings the total cash injected into the company to AED112.299bn (US$30.57bn), the results added.

Qatar eyes stake in Morgan Stanley’s commodities unit

Qatar Investment Authority, the country’s sovereign wealth fund, is in talks to buy a majority stake in Morgan Stanley’s commodities unit, it was reported on Thursday.

The claim was published by the Financial Times, citing people familiar with the potential deal. However, no price was quoted for the deal.

The QIA, the most active Middle East sovereign wealth fund in recent years, has spent 5.7 billion euros on real estate since 2007, almost 80% of it in London and Paris, according to a report published in August by market analysts at Real Capital Analytics.

Kuwait rate cut unlikely to spur lending without political deal

Kuwait’s unexpected 50 basis-point interest rate cut will help reduce borrowing costs for businesses but is not going to be enough to kick-start bank lending without a lasting solution to the country’s political crisis.

In the first such move since February 2010, the central bank (CBK) said late on Wednesday that it was lowering its discount rate to 2%, aiming to bolster the banking sector and support the economy.

Egypt T-bill yields steady after delay in IMF talks

Yields on Egyptian 182-day treasury bills edged up and held steady on 364-day bills at an auction on Thursday, suggesting a recent slide in rates may have run its course for now until Egypt agrees an IMF loan to shore up its finances.

Egyptian borrowing costs had fallen sharply in recent weeks as a new government stepped up efforts to secure $4.8 billion from the International Monetary Fund.

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