Middle East Business News Review – 5 November

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

British PM in the UAE to secure arms deal

British Prime Minister David Cameron is in the United Arab Emirates to kickoff a three-day trade visit to the Middle East aimed at securing major UK arms deals with Gulf Arab states.

The Downing Street issued a statement in which it said the aim of the trip is to build a “reinvigorated partnership” with Middle Eastern leaders and to secure new military deals worth billions of pounds.

The Conservative leader is in Abu Dhabi to persuade the UAE to buy 60 of BAE’s Typhoon jets in a deal that could be worth more than $4.81bn. He is scheduled to fly to a military airbase near Dubai, where a RAF Typhoon squadron is positioned, to promote the aircraft to military and political figures from the UAE.

Top Abu Dhabi banker becomes new chairman of UAE central bank

Top Abu Dhabi banker Khalifa Mohammed al-Kindi is the new chairman of the United Arab Emirates’ central bank, a statement from the bank after a board meeting showed on Monday.

Sultan Nasser al-Suweidi remains governor of the bank for now, according to the bank statement, although his term, which expired in July, has yet to be officially renewed.

The chairman, who heads board meetings and has the final say on policy decisions, is involved in strategic decision-making, while the governor steers the bank’s day-to-day operations and represents it at high-level international events.

Qatar’s Msheireb awards $411m contract

Qatari developer Msheireb Properties said on Monday it has appointed Brookfield Multiplex Medgulf as the main building contractors responsible for a key part of its QR20bn ($5.49bn) Msheireb Downtown Doha project.

Under the terms of the agreement, valued at QR1.5bn ($411m), Brookfield Multiplex Medgulf, a consortium of Brookfield Multiplex and Medgulf, will be responsible for the construction of all the substructure and superstructure works involved in Phase 1C of the project.

The $5.5bn Msheireb scheme will transform a 31-hectare site in the centre of Doha, recreating a way of living that is rooted in Qatari culture.

ALAFCO orders 20 Boeing jets in $1.9bn deal

Kuwait-based airplane leasing company ALAFCO and Boeing confirmed an order for 20 Boeing 737 MAX 8s valued at US$1.9bn at current list prices.

The order, first announced as a commitment at the Farnborough Airshow in July, makes ALAFCO the first regional carrier to commit to the new fuel-efficient airplane.

Investcorp to buy Danish luxury firm for $140m

Bahrain-based alternative asset manager, Investcorp, is buying Danish luxury retailer Georg Jensen for US$140m, Investcorp’s spokesman confirmed on Monday.

The Financial Times reported the deal earlier on Monday, quoting Hazem Ben-Gacem, Investcorp’s European private equity head, who will co-chair Georg Jensen, as saying Investcorp planned to expand the Danish brand in Asia, especially China.

The deal, which is expected to close on Monday, will be cash-only and fully paid by Investcorp, said Firas El Amin, head of corporate communications.

Kuwait to spend $100bn on oil projects over 5 years

OPEC member Kuwait plans to spend some $100 billion on oil projects inside and outside the Gulf state over the next five years, a top oil executive said Monday.

“Around $100 billion has been earmarked for oil projects … 60 percent of it on upstream projects inside and outside Kuwait,” CEO of national oil conglomerate Kuwait Petroleum Corp. Faruq al-Zanki told reporters.

The expenditure is part of the emirate’s long-term strategy to raise output capacity to 4.0 million barrels per day from the current 3.0 million, Zanki said on the sidelines of the Kuwait Energy Projects conference organised by the Middle East Economic Digest (MEED).

Iraq signs gas exploration contract with Pakistan Petroleum

Iraq announced on Monday it has signed a final gas exploration contract with Pakistan Petroleum to explore gas block 8, covering an area of 6,000 square km in Diyala and Wasit provinces in eastern Iraq.

Iraq, holder of the world’s 10th-largest gas reserves, said the gas will be used in the domestic market, mainly for power generation, with the option of exporting gas once domestic needs are met.

Saudi air force in $4bn Boeing fighter jet deal

US aerospace giant Boeing Company has secured a contract valued at US$4bn to modernise the Royal Saudi Arabian Air Force’s fighter jet fleet, according to the Pentagon.

The procurement order covers conversion of 68 existing F15S jets to the new F15S-A configuration. The Pentagon said the work, expected to be completed by December 31, 2019, would be done at Robins Air Force Base in Georgia.

The contract also provides for four base stand-up kits, which include spares and support equipment needed to achieve operating capability for the fighter jets.

Lebanon’s 4G network conversion under way

Lebanon will complete linking telecom switchboards to a fiber-optics network in April 2013, paving the way for the launchof the fourth generation of mobile networks in major cities, the telecommunications minister said over the weekend.

“Switchboards across the country will be linked through a comprehensive fiber optics network … The Lebanese would feel a qualitative shift in [Internet connections] speed,” Nicolas Sehnaoui said at the opening ceremony for a newly completed fiber optic network operations center.

The NOC is a part of a project conducted by Swedish telecommunications equipment maker Ericsson, which last year won a $6.3 million first phase bid to set up Lebanon’s Optical Transport Network.

Middle East airlines posting strong air traffic growth

The International Air Transport Association (IATA) announced that Middle Eastern airlines by far witnessed the strongest traffic growth in September, with demand hitting 13.3% year-on-year.

The region registered a growth rate of 17% in August due to seasonal impacts, including Ramadan, dampening traffic. The IATA report comes at a time when global aviation industry is facing a slowdown in the rate of traffic growth.

International demand for passenger traffic was up 4.1% compared to September 2011. For air cargo, demand growth was even weaker at 0.6%. The growth trend in air travel started to flatten in the second quarter, with no growth in passenger market between April and August.

 

 

 

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