The UAE cabinet, chaired by Shaikh Mohammad Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and ruler of Dubai, has approved plans that allow companies from across the GCC to open branches in the country with minimum paperwork and receive the same privileges that Emirati-owned firms enjoy. “The GCC has passed a resolution allowing companies to open branches in the six GCC member states if these companies are 100% owned by Gulf citizens and have been in the same activity for a minimum of three years. This move will boost the investment climate in the GCC and it is expected to deepen economic citizenship and improve joint investment climate,” Mohammad bin Obaid Al Mazroui, former GCC Assistant Secretary-General for Economic Affairs and currently Director of the Gulf Organisation for Industrial Consulting, said in an interview.
UAE telecom company Du said it will be paying 5% more royalty in addition to the 15% profit it will share with the federal government. The company reported a profit of AED1.31 billion ($357 million) in 2010, up from AED264 million ($71.87m) a year before. UAE’s second biggest mobile operator also posted a AED7.07 billion ($1.92bn) revenue in 2010 but analysts predict it will post a figure of AED8.8 billion ($2.40bn) as revenue for the 2011-2012 financial year while making a royalty payment of around AED440 million. However, stock markets responded negatively to the announcement made by du with shares dropping to a 7-week low.
Boeing admitted it has identified issues with the aft fuselage of its prime 787 Dreamliner planes and is working to fix the problems. “Boeing has found that incorrect shimming was performed on support structure on the aft fuselage of some 787s. We do not expect that it will affect our planned product rate increases, and that there are no short-term safety concerns,” Boeing spokesman Scott Lefeber said. The US plane maker declined to identify how many aircraft were affected by the newly discovered problem. Boeing is working on orders of more than 820 jets placed by airlines from all around the world, including Etihad Airways, Qatar Airways, Gulf Air and Royal Jordanian airlines.
According to a report released by a Beirut-based bank, Dubai will manage to overcome its debt maturities in 2012 with the help of internal cash flow, asset sale and market refinancing. The report comes in the wake of an assessment carried out by investment bank JP Morgan which also stated that Dubai’s government-related entities (GREs) will be able to pay or refinance its maturing debt that stands at nearly $14 billion. “The Arab Spring has indeed diverted tourists, businesses and financial capital into Dubai while a significant headway has been made on debt restructuring in the emirate’s government-related entities (GREs),” Bank Audi said in its report.
According to a Reuters news agency report, Dubai’s Jebel Ali Free Zone (JAFZA) is holding negotiations with Dubai Islamic Bank, National Bank of Abu Dhabi and Standard Chartered about how to repay its AED7.5 billion ($2bn) Islamic bond due in November this year. “They are likely to pay back 500 million dirhams themselves, then raise as much as they can with a loan, and then get the rest from the sukuk. It is just discussions and there is nothing on paper yet … but the way it was discussed was do the syndication first and then the sukuk. The sukuk maybe in September, after Ramadan, would be my guess,” a banking source told Reuters.
The Saudi British Bank (SABB) HSBC Saudi Arabia Purchasing Managers Index (PMI) has indicated that business activity growth levels in Saudi Arabia’s private sector registered highest levels of growth since last summer, climbing to 60.0 in January from 57.7 in December last year. The last time the index hit 60 barrier was in July last year.
(By Moign Khawaja – Editor: Arabian Gazette)