Middle East Business Review – 31 January

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UAE’s Al Khaleej newspaper cited a senior central bank official as saying that interest rates on credit cards will be getting a cap at 18% very soon in a bid to curb bad loans. The paper also added that new rules will be published in February. Banks in the UAE charge the highest rates of interest on credit cards, between 27 to 36% annually, the highest in the GCC region.

DP World announced its core earnings for 2011 are according to expectations as the company registered a 10% growth in volume handling during last year. A statement released by the world’s third largest port operator said 54.7 million twenty-foot equivalent container units (TEU) during last year across all its terminals around the world, compared with 49.6 million TEUs in 2010. However, the statement noted that DP volume handling at DP World’s consolidated terminals dropped to 27.5 million TEU in 2011 compared to 27.8 million TEUs handled in 2010.

Dubai Airports announced passenger terminal at Dubai World Central Airport could start commercial operations by next year. “Operational trails for DWC’s passenger terminal are set to start during the second quarter of this year and we could see commercial passenger operations commence in 2013,” Paul Griffiths, CEO Dubai Airports, said in a statement. The top official also added that the airport, which is also running its cargo operations, handled around 90 million tonnes of freight during its first full calendar year operations. “Although the airport is in its infancy, incremental cargo traffic growth has been steady and continues to ramp up as new operations are launched,” Griffiths remarked.

Qatar Railways has announced it is pushing the issue of tenders worth $41 billion for the Doha Metro project to the second quarter of this year. The company announced in October last year that it would delay the tenders until the first quarter of 2012 in order to complete the feasibility study. It received bids from around 60 consortiums with at least two contractors each that are vying to construct four rail lines that will connect Football World Cup 2022 stadiums and the underground network in Doha. “They’re seriously considering whether this will be something people in Doha will actually use after the (2022) tournament. An underground metro takes a very long time to build. They are re-evaluating that part of the project,” a source close to the deal said on condition of anonymity.

Health ministers from the Gulf Cooperation Council (GCC) endorsed a ‘health tax’ on tobacco products in the region as part of the anti-smoking drive. “The new law is intended to reduce tobacco consumption in the GCC and envisages the imposition of a new tax called ‘health tax’….it will affect tobacco products and equipment used in its production and manufacturing…the tax will amount to 100 per cent of the product’s value,” a communiqu announced adding the new law would come into force by the end of 2012.

Twitter has announced it will be introducing support for languages written from right to left within the next few weeks. More than 425,000 volunteers contribute to the translation centre. Well make Arabic, Farsi, Hebrew and Urdu available for everyone on Twitter.com later this spring, the company said in a statement. The move comes weeks after Prince Alwaleed Bin Talal of Kingdom Holding bought a substantial stake in Twitter, estimated to be worth at least $300m, around 4% of the company which is valued at least $8 billion.

A Kuwaiti maritime official announced coast guards and naval forces of GCC nations are drawing up contingency plans to thwart any Iranian attempt to disrupt traffic in the Strait of Hormuz. Tehran issued a warning it may shut down the vital oil passageway in response to the tightening of US sanctions on its oil exports. Five of the six GCC nations – The United Arab Emirates, Qatar, Saudi Arabia, Bahrain and Kuwait – rely on the waterway to export their oil or gas products. Their exports are estimated at around 16 million barrels per day (bpd) or just under a fifth of global oil supplies – to markets around the world. “The GCC has a plan as a body – not just Kuwait separately or Bahrain or Saudi Arabia – we have a plan we just hope that everything stays safe,” Commander Mubarak Ali Al-Sabah, chief of maritime operations of Kuwaiti Coast Guard said in a statement while adding that the planning also included coordinating both between coastguards and navies of GCC countries and Western naval forces patrolling the area – including the US, Australian and French.

According to a statement issued by the International Monetary Fund (IMF), the Algerian economy fared very well last year despite politico-economic challenges, including the Libyan civil war and pro-democracy protests in the country. The IMF said it expected the country to achieve an economic growth rate of around 3 to 3.5% and a boost in GDP by 2.5%. The international institution urged the Algerian government to diversify the economy by improving the business climate and investing money in non-oil sectors in order to provide jobs to unemployed youth.

(By Moign Khawaja – Editor: Arabian Gazette)

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