Middle East Business Review

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Etihad, UAE’s national flag carrier, is tipped on taking a stake in Air Berlin, Germany’s second-biggest carrier. German media is rife with reports that Etihad is eyeing a minority stake in shape of a capital increase. Speculations helped Air Berlin’s shares soar up to 5.7 per cent during Wednesday’s trading.

Reports coming from neighbouring Saudi Arabia said plans of connecting holy cities of Makkah and Madinah are being laid out by a joint Saudi-Spanish consortium. Dubbed as the Haramain rail project, the luxury trains will run between the two Holy Shrines on a 480km line serving and estimated 166,000 passengers daily. The two-hour long train journey will consist of 13 coaches with air-conditioned first, business and economy classes available.

The 8th Dubai International Film Festival (DIFF) will unroll its red carpet to A-list Hollywood and Bollywood celebrities like Tom Cruise, Simon Pegg, Peter Weir, Anil Kapoor, Shah Rukh Khan and many other top Arab and Asian actors. The festival will see the screening of 171 movies from 56 different countries including the premiere of Mission: Impossible – Ghost Protocol and Don2. The highlight of the festival is the prestigious Muhr Awards that carries a hefty prize money of AED 2.2million ($600,000).

Moody’s Investors Service claimed in a report that Dubai and its state-owned non-financial companies have an outstanding debt of $101.5 billion and will need further financial support for their upkeep. Moody’s said the government has about $27.9bn of direct debt, with more than two-thirds ($18.45bn) of it acquired to capitalise the Dubai Financial Support Fund. The report further added that excluding government guarantees, state-owned organisations owe approximately $68.6bn in outstanding debt.

Meanwhile, Merrill Lynch Wealth Management said GCC states will face strong headwinds in 2012 due to weak growth and eurozone sovereign debt crisis. The report added that compared to the economies of developed nations, whose average growth will be around 1.1 per cent, GCC nations will still grow at a rate of 3.9 per cent in 2012 down from 6.9 per cent this year. “The pressing need for mature economies to reduce debt, combined with weak business spending and soft asset prices, threatens to result in a global recession. However, a worldwide slump can be avoided,” Bill O’Neill, author of Merrill Lynch’s Year Ahead 2012 report said.

International Air Transport Association has altered its forecast in the wake of eurozone crisis estimating that global aviation industry could suffer losses to the tune of $8 billion in 2012. The biggest risk facing airline profitability over the next year is the economic turmoil that would result from a failure of governments to resolve the eurozone sovereign debt crisis. Such an outcome could lead to losses of over US$8 billion- the largest since the 2008 financial crisis, said Tony Tyler, IATAs Director General and CEO.

Saudi oil ministry has announced the discovery of commercially viable quantities of natural gas reserves in its Empty Quarter and Red Sea region. “Although we continue to explore the kingdom’s oil and gas potential and resources, this does not mean we will immediately start production from the newly discovered fields, it only means determining resources available in the kingdom for future use when needed,” Ibrahim Muhanna, an oil ministry advisor, said in Riyadh.

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