THE GIFT OF KINGS
L E G E N D S O F T H E S I L K ROA D O N W W W. A M O U AG E . C O M
FROM THE EDITOR’S DESK
No 112
November 2009
EDITORIAL Editor-in-Chief HH Sayyid Tarik Bin Shabib Editor Mayank Singh Principal Correspondent Visvas Paul D Karra Correspondent Malcolm X Crasta DESIGN Art Director Sandesh S. Rangnekar Senior Designer M. Balagopalan Senior Photographer Rajesh Burman Photographer Sathyadas C. Narayanan Cover Design Chanjeet Singh Production Manager Govindaraj Ramesh MARKETING Group Advertising Manager Jacob George Advertising Manager Avi Titus Assistant Advertising Manager Jinu Mathew Varghese CORPORATE Chief Executive Sandeep Sehgal Executive Vice President Alpana Roy Vice President Ravi Raman Senior Business Support Executive Radha Kumar Distribution United Media Services LLC OER Presentations – Signature – Special report on The Wave, Muscat
The worst is over here are various indicators to measure the health of an economy. One could use hard statistical data like credit uptake, corporate results, government spending or oil prices. On October 21st oil touched a yearly high of $82 per barrel. Consolidated profit of the MSM30 companies stood at RO126mn in Q2 2009 – 13.4 per cent higher compared to Q1, 2009. Analysts expect these numbers to improve during Q3 2009, due to sequential gains and the base effect. Across the board, in manufacturing and services, there seems to be much cause for cheer. Cement sales are up and so are imports through the Sultanate’s ports. The Tender Board has been busy signing contracts. The government awarded contracts worth RO2.3bn by mid-October 2009. Analysts expect another RO3.2bn worth of projects to be awarded in the next few months, taking up the value of such projects to RO5.5bn by the end of 2009. Equally important are the soft indicators. The surge in footfalls that you can see in the shopping malls is a sure pointer that consumers are feeling good about spending, yet again. Going by the increasing number of vacancy ads in the papers one can safely assume that the job market is looking up. Prices in the real estate sector have also started firming up. But the biggest indicator that sentiment is getting better comes from the stockmarket. The MSM 30 index closed on September 30 at 6,572 points – a year-todate gain of 20.8 per cent. The month also saw the index touching a yearly high of 6,737. Investors both domestic and foreign have been coming back to the market in hordes pushing up the average volume of daily trade. Market multiples are up and valuation of stocks have seen a sharp re-rating. The good news finds a resonance across the globe. According to the latest IMF estimates, global GDP will expand by 3.1 per cent in 2010, 1.2 percentage points faster than it forecast in April. Global stockmarkets have rallied by 64 per cent since their trough and production has stopped shrinking in all the world’s big economies. Given the mood, one can safely assume that the slowdown is well and truly behind us. Our cover article takes a looks at this unfolding story. As we approach the 39th National Day we ask a cross section of corporate captains -- Whether the private sector is doing enough for the country? Catch the article in our National Day Special report.
Published by United Press & Publishing LLC PO Box 3305, Ruwi, Postal Code - 112 Muscat, Sultanate of Oman Tel: (968) 24700896, Fax: (968) 24707939 Email: publish@umsoman.com All rights reserved. No part of this publication may be reproduced without the written permission of the publisher. The publisher does not accept responsibility for any loss occasioned to any person or organisation acting or refraining as a result of material in this publication. OER accepts no responsibility for advertising content. Copyright © 2009 United Press & Publishing LLC Printed by Oman Printers Correspondence should be sent to: Oman Economic Review United Media Services PO Box 3305, Ruwi 112, Sultanate of Oman Fax: (968)24707939 Email: editor@oeronline.com Website: www.oeronline.com
2
November 2009
Mayank Singh
A REPORT
REACH launches website Promoting a brand in Oman involves more than just the conventional advertising mix. The focus is on below-the-line (BTL) solutions that penetrate where mass media cannot. REACH also gains from the strength of UMS – Oman’s largest Integrated marketing communication consortium with leadership position in advertising, publishing, interactive and IT solutions, distribution, media marketing and telemarketing.
REACH, an UMS initiative, has launched its official website www.reachoman.com to connect with its clients and customers more easily. REACH is completely an outof-the-box think tank, providing market activation solutions that help clients develop and enhance relationships between consumers and their brands with a 360-degree approach for the appropriate positioning of the brand. Due to the ever-increasing volume of stimuli (including advertising) in everyday life, conventional advertising messages often tend to miss their targets - or are simply not able to take them all in.
REACH pioneers in the field of integrated marketing solutions structured around customised client needs.
Firstly, the similarity between your November 2008 issue and the TIME issue of September 14, 2009. Though, one marvels at the remarkable similarity what is really creditable is the contents and thought process. I must say, what you visualised in November 2008 is echoed in September 2009. In a sense, your magazine rightfully deserves it’s place of glory under the sun. I am sure many more laurels will come your way.
OER deserves place of glory The October issue of Oman Economic Review was interesting in more ways than one. 4
November 2009
The second one is the interview of Ms Vinita Bali. For a long time, I view Britannia’s venerable position in the market with awe and inspiration. Their take-over of Al Sallan in Oman, is indeed a strategic step given the importance of the products, its location and its reach to both upper and lower Gulf. In a sense, Britannia gets a direct entry into these markets via the Oman route and will definitely enjoy
Reach provides turnkey services for events, direct marketing, promotion and door-to-door distribution, logistics & network communication. It also helps in creating ground level brand awareness through retail and merchandising.
easy access which otherwise would be a bit long and expensive. The interview really brings out the interviewee’s long term game plan, through some adept and incisive quizzing. While these were the ones that I liked most, it does not mean that the magazine does not have “meat” in the rest of the articles. All in all, a very interesting read. Kudos to you and your team for this good effort. I wish you all success. P Chandrasekhr, Group General Manager, Jawad Sultan Group of Companies
Write to us with your comments/feedback at: editor@oeronline.com
INSIDE
34
23
NATIONAL DAY
Private sector and nation building
On the occasion of the 39th National Day, five industry stalwarts speak about the corporate sector’s role
HEALTH
A life-saver Oman recently received its first batch of the H1N1 vaccine but there have been some concerns about its safety. A report
52
62
The Landmark Group is one of the largest retailers in the ME. OER speaks with Clive Freeman, the new GM of the Landmark Group in Oman
COVER
69
S T ORY
Sunshine Time
36
TELECOM
New playing fields? Mazoon Mobile and Samatel are the latest mobile resellers to enter the telecom sector
56
PERSONALITY
‘I want to fly a plane from Doha to Muscat someday’
Khalid Ibrahim A Al Mahmoud, COO, Nawras 6
November 2009
Libya diversification drive Libya is a controlled economy but the private sector is being encouraged to develop
REAL ESTATE
RETAIL
Beyond Muscat
VIEWPOINT
Good time for business Oman’s property market has found the balance it needed after being rocked by the global financial crisis, says Christopher J Steel
40
Gallery Argan & Prima Gold: Qurum shopping area, Al Bustan Palace Hotel, Muscat City Centre, Qurum City Centre and Bareeq al Shatti. Telephone +968-24797786 / 24707347 Website: www.galleryargan.com
REGULARS
66 Auto Talk
Range Rover
39 54
CARTOON CORNER
By Kannan Murali
60 72
IT
Cutting delays Phase one of the one-stop-shop cuts down turnaround time for businesses. Manal Abduwani talks about the future plans
CORPORATE PROFILE
At the forefront Al Omaniya Financial Services
ECONOMY
Let ’s get physical The healthcare industry is in the spotlight
CLOSE UP
Celebration for Saudi economy Foreign investment law has helped Saudi accession to WTO
Editorial
8
November 2009
2
Economy Watch
10
Debate
12
Business Briefs
14
Environment
22
Periscope
32
Auto News
68
Golf Update
70
Executive Wellness
71
Billboard
74
Browsing Corner
76
Newsmakers
77
Market Watch & Gizmos
78
Beyond Boardrooms
79
ECONOMY WATCH
NUMBERS EM fund flows: The money’s back The year 2009 is shaping to be a record breaker for Emerging Markets (EM) flows. EM fund purchases have now surpassed the 2007 inflow of $40.8bn in dollar terms (although at 13.5 per cent of assets this remains below 2005 at 19.2 per cent of assets). Twentysix out of the past 31 weeks have seen inflows, a nearly unprecedented run
Annual buying/ selling of emerging market funds, $bn
Annual buying/ selling of EM funds since 2003
-
0.30
15,000
% of assets 2009
0.20
0.10
5,000
GEMS
LatAm
EMEA
Asia
0.00
-5,000 -0.10 -10,000 -15,000
flows 2008
-20,000
10
-0.20
% of assets 2008
November 2009
-0.30
PG BTTFUT 3)4
Buying and selling of EM funds GEMS
Latam
EMEA
Asia ex
2005
2,037
4,022
5,821
8.390
20,270
2006
4,209
3,319
(1,877)
16,790
22,241
2007
15,223
10,153
(953)
16,045
40,827
2008
(9,548)
(5,873)
(5,216) (19,513) (40,150)
% of assets
-5.2%
-14.8%
-11.4%
-13.8%
-9.8%
2009 YTD
20,375
6,333
900
13,939
41,547
% of assets
14.1%
24.8%
4.6%
11.7%
13.5%
flows 2009
10,000
-
5PUBM C
20,000
2008 vs 2009 flows by region (absolute and % of assets)
Total
Source: Equity Strategy (Citibank)
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DEBATE
Will oil prices touch $100 a barrel in 2010? Jonathan Kornafel Director, Asia Hudson Capital Energy
Rehan Syed Head of Portfolio Management ABN AMRO Private Bank Middle East, Dubai
Will oil prices touch $100 a barrel in 2010? Oil prices certainly can touch $100 a barrel in 2010, but this would be the result of unforeseen circumstances. The global over-supply of both crude oil and finished products (paired with idling refineries and 5 million barrels of Opec spare capacity) will keep a lid on any sharp move higher. Prices will trend higher, but expect range-bound trading similar to the inactivity we recently witnessed around $65-75 for much of 2010. We expect steady buying on dips to continue moving the market higher.
Barring any jarring geopolitical scenarios, I expect it is unlikely spot oil price will touch $100 in 2010 although it is likely for the 2011-2012 timeframe given structural constraints in the oil markets. The recent run-up in oil to $80 has been driven both by demand recovery and the dollar’s collapse. Since the equity market bottom in early March, the dollar has fallen about 17 per cent against the EUR and 13 per cent against a diversified currency basket, which explains the most recent $10-15 price spike in oil.
Oil touched a yearly high of $80 per barrel recently – what impact will this have on the global economy which is recovering from a financial crisis? The global economy will continue to deal with $80 oil much as it dealt with $70 oil- adequately. Deflation in the short-term continues to be the greater risk as compared with inflation. Granted, inflation and the related and looming dollar weakness will eventually have to be dealt with, but oil will need to trade over $90 for a sustained period of time (thus the fundamental situation would need to experience a drastic change) to become a major problem again.
When oil trades above about $70 for an extended timeframe, inflation pressures compound, as the painful experience of 2007 confirms. In some countries with government subsidies, the tolerance stretches to $85 or so with the pain partially absorbed by government budgets. Nevertheless, at current oil price levels of $75-80, we think core inflation will remain in check for the next year only because of the broader deflationary trends in large sectors of the still-troubled global economy. We expect real GDP, i.e. GDP post inflation, to grow at 2.8 per cent in 2010.
What in your opinion is a good price for oil which strikes a balance between the needs of oil producing countries and consumers? At present, a range of $60-80 would most comfortably strike a balance for producers and consumers in the long-term. While oil consistently above $90 will bring dire financial dilemmas in the near-term for consumers, it would also help propel forward alternative fuel initiatives.
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November 2009
I think a price of $60-75 balances the producer-consumer tension. But what is much more important is price stability. If a $70 average is achieved by running the extremes of $40 and $140 with a downside skew, which has been the pattern of the past three years, this will compound the long term problem. There is a structural deficiency in the oil market where you have rising demand, especially from the fast growing and increasingly industrialised emerging markets, challenged by declining non-OPEC production. To offset this, greenfield and marginal production must rise.
BUSINESS BRIEFS
BankMuscat leads in electronic card payment facility NBO organises seminar on trade finance National Bank of Oman (NBO) organised a Seminar on Trade Finance for the staff of Bahwan Engineering Company (BEC), at the NBO Training Center. The Seminar, conducted by Ramalingam Murugan, NBO’s head-Trade Services, was attended by key employees of NBO’s Trade Services Section. The seminar covered trade products related to exports and imports and various options available to overcome the various trade related risks. Taqi Ali Sultan, NBO’s general manager - chief operating officer concluded the seminar by explaining the various initiatives taken by the bank in the recent past.
Omantel launches its new website Omantel recently launched its new website, with several digital services and links, which provide subscribers with privacy, security and diverse services at the same time. The launch of the new website of Omantel as a multi-purpose online portal is a product of the company’s leading position in telecommunications and information technology and its dedication to satisfy the needs and requirements of its subscribers. It is also part of the company’s efforts to disseminate the culture of using modern technology in the society and expand base of broadband users in view of the ever-increasing advancements in information technology.
ISO 22000:2005 workshop at NHI The Food Safety Academy at the National Hospitality Institute (NHI) held a workshop on ISO 22000:2005 recently. The workshop was addressed by Yaser Nazir, senior consultant at Johnson Diversey Consulting. ISO22000:2005 is a food safety management standard that specifies requirements where an organisation in the food chain needs to demonstrate its ability to control food safety hazards in order to ensure that food is safe at the time of human consumption. It is applicable to all organisations, regardless of size, which are involved in any aspect of the food chain. 14
November 2009
Consolidating its dominant position in launching innovative technology products and services which spell convenience to customers, BankMuscat, the leading financial services provider in the Sultanate, has rolled out electronic card payment facility for government services offered as part of the Sultanate’s e-governance initiative. BankMuscat recently signed an agreement with the Ministry of Justice to introduce electronic card payment facility for judicial services rendered at courts and notary public offices across Oman. Putting in place an effective and secure platform for electronic card payment, the new facility marks a major milestone as all bank cards carrying Visa or MasterCard affiliation can be used as the mode of payment at the Ministry establishments. Commenting on the agreement, AbdulRazak Ali Issa chief executive of the bank said, “BankMuscat is proud to offer its state-of-the-art card acquiring facility for the Ministry of Justice. The association brings together two leading institutions serving the nation as a family. The synergy between the two spells convenience to customers and the new facility marks yet another step by the bank to consolidate its dominant position in launching innovative products and services. “
Oman Air Commences new operations
Oman Air, the national carrier of the Sultanate of Oman launched on October 9, its non-stop scheduled services between Muscat and ParisCharles de Gaulle (CDG). The carrier now offers passengers four flights a week between Muscat and Paris. This comes on the heels of its new service between Muscat and Frankfurt on September 30 and services between Muscat and Munich on October 1. A high-level delegation from Oman Air, led by Oman Air’s CEO Peter Hill, chief commercial officer Barry Brown were in Paris for the airline’s launch celebrations. Says Hill, “Paris is one of our prime target markets, and we are really excited about the prospects of developing both business and tourist traffic on this new route.” Hill highlighted that ParisCharles de Gaulle, the latest addition to the carrier’s network, is part of a route expansion programme that will reinforce its position on long haul routes. Oman Air’s expansion, he mentioned, has been designed to run parallel with the Sultanate’s strategy of positioning itself as an upmarket leisure destination. “I am sure that the new direct link will prove very popular,” he said.
ALARGAN TOWELL
The Oberoi Resort at Al Khiran awarded “Best Architecture” by Cityscape
BUSINESS BRIEFS
Khimji’s Watches showroom OPENED PDO supports Al-Noor Association Petroleum Development Oman (PDO) announced its continued support for the Al Noor Association for Blind. PDO is to fund the acquisition of a small bus which will be used by the Al Dakhilya Region branch of the Al Noor Association. The fifteen-seat bus will be used to cover the transportation need of the association. A memorandum of understanding was signed by human resources director Mundhir bin Salem al Barwani and Mohammed bin Oudam Al Soubahi, chairperson of Al Noor Association for the Blind (Al Dakhliya Region Branch) to this effect.
Carrefour Supports Origin Oman Campaign Carrefour stores at Muscat City Centre and Qurum City Centre ran a special 10 day campaign to support and boost the sale of Omani products. From vegetables, chips, biscuits, flour and sugar to clothes, detergents and soaps, there were over 100 locally grown and manufactured items that were being sold for special reduced prices at the hypermarkets outlets. The initiative is part of the governments Origin Oman campaign that encourages residents to buy local and reap the economic, environmental and nutritional benefits of supporting local produce.
New Gulf initiative to fight protectionism Gulf Petrochemicals and Chemicals Association (GPCA), the regional umbrella organisation of petrochemical and chemical producers in the region, has launched an initiative to challenge what it described as protectionist measures in the garb of anti-dumping procedures launched by China, India and the European Union (EU) against exports from countries in the region. The GPCA’s strong statement today comes in the wake of recent moves by China and India against petrochemical exporters based in Saudi Arabia and Oman. China and India have sought to protect their domestic industries by initiating anti-dumping measures while more recently, the EU has launched anti-dumping cases against producers in the United Arab Emirates and Iran. 16
November 2009
The new Khimji’s Watches showroom was formally inaugurated on October 10 at Shatti Al Qurum by HH Sayyid Haitham bin Tariq Al Said, Minister of Heritage and Culture. The popular Swiss folklore group ‘25 Jahre Jodeldwett Geschwister Rymann’, made the evening come alive with a scintillating performance. A brilliant display of song and dance by a highly talented traditional Omani dance troupe from Sur gave a local flavour to the evening. A special book on the new Khimji’s Watches showroom, detailing the fascinating interior displays and celebrating the fine nuances that went into making it worldclass, was released on the occasion in both Arabic and English versions. Located at Al Offuq Building in Shatti Al Qurum, the new Khimji’s Watches showroom hosts the best brands in the world from the high-end watches, jewellery and accessories such as Rolex, Chopard, Cartier, Piaget, IWC, de Grisogono, Chanel, Gerald Genta, Oris, Bell & Ross and Tudor, to Vertu luxury mobile phones and Caran d’Ache writing instruments. The showroom also has the Lunettes (Eyewear) Collection comprising Versace, Bulgari, Tiffany, Mont Blanc and Tom Ford. “At Khimji Ramdas, luxury has always been a passion and Khimji’s Watches is an extension of the continuing passion,” says Anil Khimji, director, Khimji Ramdas.
ITA’S Community Knowledge CentrEs
The Information Technology Authority (ITA) has launched the Community Knowledge Centre (CKC) Project in Oman. The CKC in Salalah is the first centre to begin training sessions, with the first course having started on October 10, 2009. The CKC Project was launched with a ceremony under the patronage of HE Sheik bin Abdullah Bin Saif al Marouqi, deputy governor of Dhofar governorate. Dr Salim Bin Sultan al Ruzaiqi, CEO of ITA, in addition to other officials and dignitaries, were also in attendance. The establishment of these knowledge centres in communities across the country is part of the Community IT Training (CITT) Project which falls under the umbrella of the National IT Training & Awareness Framework Initiative (NITTA), a core initiative of ITA to transform Oman into a digital society. The main objective of the Community IT Training Project undertaken by ITA is to train Omani citizens in basic Information Technology skills in order the reduce IT illiteracy and the bridge the digital divide.
BUSINESS BRIEFS
Suhail Bahwan-Royal Wagenborg TIE-UP Shop at Areej and receive a special travel bag For your next holiday retreat, you can travel in style with a free trolley bag from Areej. To celebrate the true spirit of giving, Areej is offering customers a unique shopping experience by gifting a free complimentary travel trolley bag on purchase of RO63 or more. This special promotion is running across at all Areej stores located in the Oman from September 16, 2009, till stocks last.
Electricity Holding Company reports major success The Electricity Holding Company (EHC) has hailed as a major success the first ever Sultanate-wide campaign Switch to Save held this summer to encourage individuals, companies and organisations across Oman to save electricity and water. During the summer months EHC and the Public Authority for Electricity and Water (PAEW) has managed an intensive awareness campaign to encourage a significant reduction in the amount of electricity and water used during the peak period for demand and consumption. The awareness and education campaign has been led by the distribution of news stories, adverts and direct communication using sms and email among other methods to directly reach the Omani public.
GAC at TransOman event It was yet another occasion for GAC Oman to showcase its key activities in shipping, logistics, marine and related services at the recently concluded maiden TransOman event – transport, shipping and logistics show – held at Oman International Exhibition Centre recently. “The TransOman event, first of its kind in the country, has created a platform for logistics and transport organisations to come together and promote the industry’s principles. As logistics business is one of the key trade activities in the Middle East countries, an event of this nature would help widening its priorities further,” said Patrik Hallden, general manager of GAC Oman.
18
November 2009
Bahwan Wagenborg Heavylift & Oilfield Services is a strategic alliance between the Suhail Bahwan Group and Royal Wagenborg Group from The Netherlands, a strong multi-discipline provider of worldwide logistics services. The partners of Bahwan Wagenborg combine experience of more than a century and boast of a proven track record when it comes to multi-modal logistics projects. Bahwan Wagenborg will execute its services using state-of-the-art equipment purchased recently from leading manufacturers in Europe operating from a base near the Port of Sohar with its head office in Muscat.
Mazoon Mobile Signs with Nawras
Oman’s newest telecommunication provider Mazoon Mobile signed an agreement with Nawras to utilise its network to provide mobile services to customers throughout the Sultanate. The agreement signed by Jamil Ali Sultan, chairman of Mazoon Mobile and Ross Cormack, CEO of Nawras will give mobile end users in Oman an additional choice of service that will fulfill growing users’ expectations. CEO of Mazoon Mobile Mohamed Alhashili said the agreement is a benchmark in the Omani telecom industry that will enable Mazoon Mobile to flesh out its promise of unique and differentiated mobile services especially designed to serve the needs of the targeted segments.
OAB launches Oman Al Arabi Fund
Oman Arab Bank (OAB) has launched the Oman Al Arabi Fund, an openended equity mutual fund. OAB’s Investment Management Group, which is the full fledged investment banking arm of the Bank, will be the investment manager of the Fund. The Fund will endeavour to bring more stability into the equity market and will strive to develop the mutual fund market in the Sultanate. “At Oman Arab Bank, we strive towards providing our customers the best in products and services. The Oman Al Arabi Fund is yet another new initiative from us during these challenging times, founded on our sound banking policies,” says Abdul Kader Askalan, CEO, OAB. The Fund will invest in diverse listed securities on the Muscat Securities Market (MSM) on behalf of investors. It will also capture emerging opportunities on listed equities in other GCC countries. The Fund is designed to give investors normal equity based returns while at the same time keeping a window open for providing even higher returns.
BUSINESS BRIEFS
EXECUTIVE MOVEMENTS Zain Property launches NEW project National Bank of Oman (NBO) has appointed David Power, as general manager – retail banking from October 1, 2009. Power joins NBO from Gulf Bank Kuwait. Prior to Gulf Bank, David worked for the Standard Bank of South Africa and Nedbank for many years in a number of senior retail, private banking and offshore banking positions both in South Africa and abroad. He holds a Bachelor of Science degree in Economics and business administration from the University of Cape Town, South Africa and a Post Graduate Diploma in management from Henley Management College, UK. In his capacity as NBO’s general manager retail banking, he will be responsible for enhancing customer service and retail banking activities, as well as refining and executing the bank’s retail banking strategy. The board of directors of Bank Sohar has appointed Rashad Ali Abdullah al Musafir as the chief financial officer of the bank with effect from October 12, 2009. Rashad has been a key member in the top management team since the inception of the bank and has been heading the planning and reporting unit of the bank. Rashad has more than 12 years of experience in the banking sector in Oman. He began his career in July 1997 with the Central Bank of Oman after completing a Bachelor of Arts degree in Economics and a Bachelor of Science in Business Administration majoring in Finance from Boston University. In December 2000, he joined the finance team of Oman International Bank and served there till September 2006. During his service with OIB, he pursued his Certified Public Accounting qualifications and successfully completed all examinations of the Maine State Board of Accountancy in November 2002. Rashad has had a brief stint with the Al Madina Gulf Insurance as their chief finance manager and has also been a part-time instructor with the International Training Institute teaching various subjects for the Certified Internal Auditor (CIA) and Certified Management Accounting (CMA) certification programmes. 20
November 2009
Dar Al Zain, an affordable family orientated villa and townhouse development, measuring around 62,000 sq mtrs, at Seeb in the Sultanate’s capital was launched in an unveiling ceremony of the show villa recently. The company showcased phase I of the development whose name ‘Dar Al Zain’ appropriately translates as “House of Beauty’, including the completed show-villa. The project will be completed in four separate phases. The project is planned to be completed in its entirety by the fourth quarter of 2012. “Dar al Zain was designed and constructed around the requirements of the Omani community, more specifically Omani middle income families looking for a safe, clean and comfortable community in which to live” said Mish’al Moosa, managing director, Zain Property Development.
Salman Stores wins Thailand award
Salman Stores was awarded prestigious Thailand’s Best Friend certificate by Thailand’s Government. The award was presented by HE Abhisit Vejjajiva, Prime Minister of the Kingdom of Thailand during a ceremony at Thai Government House in Bangkok in selected global VIP partners. Maqbool Salman, chairman - Salman Corporation, received the certificate on behalf of the company. Thailand’s Ministry of Commerce has selected the exporters based on the three highest export value of each product categories in 2008 which cover fisheries, poultries, agriculture, lifestyle products, fashion products, heavy industry and trade services.
Big Business Idea winner announced
Hafidh Al Jufaili and Mafoud Al Jufaili of Twin Link won the TKM – Ernst & Young Big Business Idea Competition 2009 for their website templates idea. Abdullah Al Shuraiqi, Said Al Abri and Ghalab Al Abri of SMS Search Services; and Salim Al Mushaifri of Smart Accounting came second and third respectively. The ceremony was graced by H E Maqbool bin Ali Sultan, minister for commerce and industry and H E Sheikh Abdullah Al Bakri, minister of manpower. Speaking on the occasion Mohammed Al Maskari, director general, Knowledge Oasis Muscat said, “It is clear from the quantity and quality of competition entries we receive each year that the spirit of innovation and entrepreneurship is flourishing in Oman.” OER and AAI were official media parters of the event.
ENVIRONMENT
Oman Green Awards in December The role of businesses, institutions and individuals in environmental protection and preservation is invaluable. Its time that we applauded such initiatives
n December this year, Oman Green Awards (OGA) 2009 will honour voluntary efforts and achievements by organisations big and small, and by individuals. An independent panel of judges – experts in the field of environmental initiatives – will judge the entries. OGA, actively supported by the Ministry of Environment & Climate Affairs, Ministry of Health (Department of Environmental and Occupational Health) and the Environment Society of Oman, is a platform to honour and appreciate outstanding environmental vision, endeavours, initiatives and achievements. There are eight award categories for a company to nominate itself under. They include: zzThe Green Innovation Award The most original idea for environmental protection zzGreen Campaign of the Year - The best public awareness campaign across all mediums zzThe Green Habitat Award - For the most eco-friendly and healthy workplace zzThe Green Champion - Any person/individual who has contributed to the ‘green’ cause zzGreen Research Award - Best research in the field of environ22
November 2009
petition by listing the activities taken up by your company in the area of environment preservation, and we will guide you in the nomination process. Access is also available to the Green Champion Award form for individual nominations.
ment conservation ( e.g. alternative sources of power) zzGreen Landscape Award - Most eco-friendly landscape in terms of utility. (Real Estate Projects) zzGreen Footprint Award - For companies who have initiated measures and taken steps to effectively reduce or offset their carbon footprint zzGreen Guardian Award - For the organisation that strongly espouses the values of environmental protection, preservation and conservation through eco-friendly practices at the workplace and in the community as a whole If you are not sure about the award categories to nominate your company under, you could still enter the com-
Tell us something about what you have done in the past year or two to preserve the environment. Whether you led a project, saved something from being wasted away, did great work in spite of difficulties outside your control, OGA wants to hear about it, and express an appreciation. Ours is a planet of wonders. Nature is what we see, but we often miss the beauty and simplicity of nature because we are too busy and distracted. Its extraordinary beauties only reaffirm the countless reasons we should care about the future of life on Earth. The role of businesses, institutions and individuals in environmental protection and preservation is invaluable. Responsible and sustainable methods, adoption of environmentally sound technologies, policies and practices – these are what will protect our natural resource. Just remember, the closing date for all nominations is November 23. So, you need to get to the special website – www.oeronline.com/greenawards – and register yourself immediately!
NATIONAL DAY SPECIAL
private sector and nation building Businesses are usually perceived as being profit-driven. On the occasion of the 39th National Day, we speak to five industry stalwarts about the corporate sector’s role in the Sultanate’s development. Visvas Paul D Karra and Mayank Singh report
NATIONAL DAY SPECIAL he private sector has indeed grown and prospered sideby-side with the growth and development of the country. No doubt, such a pleasant partnership is a direct result of the wise leadership of His Majesty Sultan Qaboos bin Said. This leadership has provided Oman with unmatched security, stability and consistency of macro and micro socio-economic policies and an environment where racial harmony and equal opportunities prevail. These are, in fact, the key ingredients for any country to prosper. Before the start of oil exports in
1967, Oman’s economy was more oriented towards domestic and international trade. Imports were mainly for meeting basic domestic needs whilst exports were limited to dates, limes and fish. Interestingly, Oman at that time was also an exporter of manpower. All that has changed for the better and Oman has itself become a large importer of labour.
Sea change If you look at the progress of Oman’s private sector, in the early 1970s most of the businesses were concentrating on trading, small scale real estate
Changing Role Oman has been undergoing a gradual process of evolution and a dynamic private sector is a result of this says Dr Mohammed M Al Yousef, Group Chairman, Al Yousef Group
Wise leadership of His Majesty has provided country with socio-economic stability Industrialisation has helped private sector to boom
developments and obtaining agencies for foreign made products but that changed gradually – first towards industrialisation for import substitution and thereafter towards industrialisation for exports. The large scale industries of fertilisers, methanol, steel and LNG, are a testimony to Oman’s march towards that goal. Furthermore, the private sector has, now moved into areas where the government was hitherto the sole provider. For example, you can now see an increasing role for the private sector in health, education, electricity and water production, transmission and distribution. The role of the private sector, which in most economies is the main wealth creator, is dynamic and always changes with the various stages of development a country normally moves through. In Oman, for example, in 1970’s and 1980’s, the government was either acting as sole investor or as a major partner in setting up industries like Oman Cement, Oman Flour Mills, banks like Oman Housing Bank and Oman Development Bank, hotels etc. This role has evolved now and the private sector has become the dominant investor in hotels and tourism complexes, industries and even hospitals and clinics, universities and colleges. Although private businesses are driven by profits, and they should be, but their role in national building and socioeconomic development will always remain crucial. The role of the private sector, for example, in job creation is extremely important. Today in Oman, the private sector employs more than two thirds of the total labour force. Providing job opportunities to Omanis is the key to spreading prosperity and enhancing the quality of life.
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Mohammed Al Barwani, Chairman, MB Holding Co points to the increasing numbers of Omanis getting jobs in the private businesses as a proof of the corporate sector’s contribution to nation building
The Key Economic Driver hen I joined Petroleum Development Oman (PDO) in 1976 as a petroleum engineer, there were only four rigs with a daily production of 200,000 bpd. Thirtythree years later, PDO has over 50 rigs deployed all over the Sultanate with production peaking at 800,000 bpd. In those days, we used to think that oil production would finish by 2020, however today the production is still going strong. Definitely, the country has grown tremendously in these intervening years under His Majesty Sultan Qaboos bin Said.
if you look at the number of schools, hospitals and infrastructure development, the country has come a long way. The whole place has changed.
Again, in those days, most of the oil companies were international but today, you have a majority of local companies providing allied services to PDO. I left PDO in 1986 to start my own company. In this period, the country has changed a lot. The GDP of Oman has doubled or tripled and
The private sector of Oman is maturing nicely, comparable to any other developed nation. It has also emerged as the main job-creator. If you look at the increasing number of Omanis being employed in the private sector, it gives you an indication of the development of the private sector.
Most companies in oil and gas sector are now local GDP of Oman has shot up to unprecedented levels Need to modify labour policies for expansion of private sector
Taking out a leaf Where would India be without the Tatas, Reliances and Infosys? Where would Germany be without Siemens and BMW? In Japan and Korea, Toyota and Samsung respectively contributed to nation building. Everywhere, the private sector has been the key economic driver. Of course, we do make profits. However, if we are providing employment to thousands of Omanis and making some wealth as well, what is wrong with it? I think it is more important to highlight the contribution of the private sector to the national economy. But some of the existing labour policies have to change in order to allow the private sector to expand smoothly in the future. Like for example, we have no issues in employing any number of Omanis but we should also have the right to hire and fire. The future looks great but we should work to make it great. 25
November 2009
NATIONAL DAY SPECIAL
Main Conduit of Employment Generation A prosperous private sector will sow the seeds of employment opportunities and drive the economy to greater heights avers Kanak G Khimji, Director, Khimji Ramdas
n 1957, I travelled on a dhow from Muscat to Sur for a business purpose. It took 18 hours. You also could take the camel train between the two destinations. Today you have a superfast coastal highway along the same path, taking you to Sur in a fraction of the time it took me then. Definitely, the country has grown tremendously in the last 39 years under the benevolent leadership of His Majesty The Sultan. I can say that we are truly blessed. What makes a country is its people. Oman’s greatest asset are its people. The social fabric is multicultural and multiethnic and the people are very hospitable. It is a very open society where you can practice your own faith. When you talk of nation-building, the private sector has a very big role to play, as it is the main conduit for employment generation. A prosperous private sector will sow the seeds of employment opportunities in the country and drive the economy. Earlier only one person in a family of 10 would work, now you have four or more members of a family seeking employment.
Joint efforts The government has started public-private partnerships in many sectors. It is the responsibility of the private sector to take the country to the next level. Improving efficiency and productivity of workers will greatly contribute to the growth of private businesses. We are in a time capsule at the moment where the country is about a generation-and-a-half-old. We are celebrating 39 years of modern Oman, so if you look at the work culture there is so much more maturity Oman’s greatest assets that is required. are its people Things are however in a state Youthful nation: Just oneof change. So and-half generation old what we have not achieved in the Prosperous private sector last 39 years in will sow the seeds for terms of efficiency and productivemployment opportunities ity, will surely be done in the com Efficiency and productivity ing years. will improve in the future Looking at the future, I feel that too many holidays are hampering work flow. The government should have emergency windows for banks, immigration etc during holidays to ensure continuity of business. And the government should not specify Omanisation percentages in each sector, but look at the overall numbers employed in individual organisations.
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Socially Aware Maqbool Hameed al Saleh, Chairman, OHI Group of Companies dispels the impression that businesses are merely driven by a motivation to make profits he private sector is playing a pivotal role in the nation building process, thanks to His Majesty Sultan Qaboos bin Said’s vision. He has encouraged the private sector to play an active role in building the national economy, whereby the corporate sector has contributed as well as benefitted from the process. The private sector has been playing its role in nation building hand-in-hand with the public sector. Being a young country, the public sector set up those industries, which were priorities in the area of infrastructure and which required a huge capital investment. The government now intends to privatise many of these investments, again emphasising the role assigned to the private sector. We are now in the 39th year of the blessed Renaissance. Right from the start His Majesty provided the opportunity for entrepreneurial skills in the corporate sector to flourish. With 39 years of experience behind us, I do
The Sultanate encouraged entrepreneurial skills Profit important for businesses to flourish Bureaucracy can be streamlined
believe that businesses are fully capable of taking on the role of wealth and job creators. Any person who is doing business his or her aim is to contribute to the nation.
Profit driven growth The perception that businessmen are only driven by profits is not right. In a capitalist economy, profit is an important component for businesses to flourish. It is the profit motive which attracts risk capital to flow in, thereby growing the economy. However, there is an increasing awareness and recog-
nition that profit alone cannot be the barometer to judge business success. This is true in Oman as well. Businesses are recognising the concept of triple bottom line reporting, which has the elements of profits, sustainability and community development. To cite an example, the OHI group has two radio stations – Hi and Hala FM, while they may not be money spinners, these stations are playing an important role in information dissemination in society. When we built hotels in Sohar and Muscat in the 1970s and 1980s, it was to give tourists and business travellers adequate facilities while visiting Oman. Thus every business makes a contribution in its own way. I would not say that there are impediments to hold back the private sector. Having said that, the bureaucratic machinery would benefit with more operational streamlining, enabling a speedier decision making process. I am sure this will happen as the will to make this happen is there at the very top. 29
November 2009
NATIONAL DAY SPECIAL
Reaching Out Companies in Oman are realising that CSR is not a black hole but a worthwhile investment says Hani Zubair, Member of the Board, The Zubair Corporation
private sector in Oman has played a big role in promoting innovation and information technology (IT). While 40 years may sound like a big number, in the life of a nation or a race, it is a very short span of time. When the blessed Renaissance started in the 1970s, most of the employment was in the public sector, but gradually over the years the private sector has been playing a bigger role in employment generation. The corporate sector is working as a partner in the government’s Omanisation policy. While the policy needs to be aligned with the needs of the private sector, companies and businesses can do much more on their own. The Zubair Group has started its own Gold programme, to bring more Omanis into middle and senior management positions.
Catching on The more mature a organisation, the more it is capable in terms of corporate social responsibility (CSR). Slowly and surely people in Oman are realising that CSR is not a black hole but a worthwhile investment. It is great to see companies like Nawras and OmanMobile playing a big role in giving back to the society. The private sector will touch everyone’s lives on a day-to-day basis only if it controls the infrastructure of the country. This kind of a transfer of ownership has happened in developed economies, but the corporate sector in the Sultanate is not ready to take on that role.
Businesses need to give back Mature organisations have a bigger ability to do CSR Systems and transparency have been introduced 30
November 2009
s a part of an economy, if a business does not invest back in the economy and society then it would be self defeating. The corporate sector needs to invest in Omanis and look at developing the SME sector as it is the backbone of any economy and the biggest employment generator. The
For example, the government owned Oman National Transport Company (ONTC) manages the public transport system. Its mandate is to provide such a service for the majority of people. If this service was handed over to a private company, chances are that they may not be interested in running unprofitable routes. Finally, the government has taken great strides and we are pleased with the level of transparency and systems that have been put in place.
PERISCOPE
The Bullish Case For Natural Gas Shares Natural gas prices are cheaper than crude oil prices and the directional bias is the same as global industrial production boosts electricity demand. Moreover, as the auto sector revives worldwide and environmental activists target dirty energy such as coal, natural gas By Matein Khalid
prices can only benefit
A global campaign against carbon emission will only increase the appeal of natural gas in the energy mix relative to coal, crude oil and oil sands 32
November 2009
atural gas, without a swing producer such as Saudi Arabia to put floor under prices, plummeted as the world’s industrial production sank after the failure of Lehman and inventories reached storage capacity in the US. However, short covering and speculative buying by global macro hedge funds has led to a spike above the recent bottom in natural gas (natgas) at $3 per million British thermal units (BTU). Natural gas prices are cheaper than “energy equivalent� crude oil prices since black gold is far more responsive to global economic growth, OPEC supply cuts, risk appetites and the depreciation in the dollar. A natgas recovery will lag crude oil recovery but the directional bias is the same as global industrial production boosts electricity demand. This is medium term bullish for natgas prices. Moreover as the auto sector revives worldwide and environmental activists target dirty energy such as coal being used by China, natural gas prices can only benefit.
Supply and demand The bullish case for natural gas rests on both the supply and demand curve. As natgas prices sank, North American drilling contracted by almost 60 per cent, the worst gas drilling contraction since the oil crash of 1998/99. It is not unrealistic to expect natural gas will double from their September bottom, a pattern seen after the natgas crash of both 1999 and 2001 as industrial demand recovered from the economic recession. This is all the more true since the focal print of global industrial growth in 2010 has shifted to the emerging markets of the Pacific Basin, Brazil and India. I doubt if LNG cargos from Qatar, Indonesia or Nigeria will cap the bullish momentum in natgas prices. Moreover, shale oil (unconventional gas) or coalbed methane cannot substitute for natural gas in the short run. It is thus entirely reasonable to expect natural gas prices to surge to US$8 per million BTU by end 2010. An American or Israeli strike on Iran could even cause an immediate geopolitical panic premium in natgas prices. The global campaign against carbon
emission will only increase the appeal of natural gas in the energy mix relative to coal, crude oil and oil sands.
GAS FOR THOUGHT
Takeover mania
Natural gas prices to surge to $8 per million BTU by end 2010
It is difficult for GCC private investors to play Russian roulette in the natural gas futures markets. Natural gas exploration and production companies offer for more upside than simply buying and rolling over a NYMEX futures contract, particularly as steep contango means steeply higher prices for far end contracts. The January 2010 natgas futures contract prices a $6 per million BTU gas price. It is far more rational to buy shares of natural gas companies on the NYSE who are prime candidates for takeover bids from Big Oil. BP, ENI, Total, Statoil and British Gas have made no secret of their desire to acquire natural gas and even shale oil acreage in the US. This means takeover mania in US natural gas is inevitable. Natgas producers with the lowest cost and highest capex/free cash flow are takeover bait. Oklahoma’s Devon Energy (DVN) is a classic takeover candidate with one of the lowest unit costs in the natgas sector with valuation metrics of 11 times earnings and 1.5 times book value. It would be optimal to buy Devon Energy in the 56-58 range for an 80 target in the 12 months.
Focal print of global industrial growth in 2010 has shifted to the emerging markets of the Pacific Basin, Brazil and India spurring demand for gas Gazprom’s China deal inflates value of its ADRs It is far more rational to buy shares of natural gas companies on the NYSE who are prime candidates for takeover bids like Oklahoma’s Devon Energy (DVN)
Russian route Russia’s Gazprom is one of the world’s iconic gas companies, owner of one fifth of the planet’s gas reserves and the Kremlin’s geopolitical weapon in its relations with the EU, China and Ukraine. Prime Minister Putin’s visit to Beijing and the subsequent gas deal with the Middle Kingdom could be bullish for Gazprom shares, that trade as New York ADRs as well as in Moscow. After all, China would act as a new export market for Gazprom, whose only real current export market is Europe. The exact pricing formula that will determine Gazprom volumes to China has still not been disclosed by either the Kremlin or Beijing. It is also doubtful if China will allow its industrial constellation to become dependent on Russian gas
imports, unlike the EU. China has signed LNG contracts and has negotiated gas deals with several Central Asian producers as well as boosted its own domestic gas production capacity. I believe the current euphoria on Chinese gas has inflated the value of Gazprom ADRs to unjustifiable levels. I would sell Gazprom ADR short at 25 for a target below 20.
Gazprom is the largest natural gas producer in the world, with gas reserves that exceed 100 billion barrels per oil equivalent and enjoys a monopoly in Russian gas exports. Yet Gazprom shares are now far too expensive at current levels. The author is a renowned investment banker based in Dubai 33
November 2009
HEALTH
A genuine life-saver Oman recently received its first batch of the H1N1 vaccine but there have been some concerns about its safety. Malcolm Xavier Crasta speaks to Jihane F Tawilah, WHO representative in Oman, to see if these rumours hold any ground peaks in the northern hemisphere this winter around the month of February. Immunisation is one of the most successful methods for preventing communicable diseases. Risks from intractable diseases that took millions of lives like smallpox, diphtheria and poliomyelitis have been reduced as a result of the development of respective vaccines. Still, there are some communicable diseases such as AIDS and malaria that represent a challenge to health systems due to the lack of an effective vaccine against them.
Unwarranted fears Says Jihane F Tawilah, WHO representative in Oman, “Unfortunately, there have been rumours regarding the safety of the vaccine but the reality is that these are not based on anything scientific and is simply not true. This unwarranted scare about the safety of the vaccine is because people don’t have the knowledge from the right sources.”
Jihane F. Tawilah, WHO representative in Oman
ince our last article on the H1N1 pandemic (OER, July issue), the virus has spread quite rapidly worldwide. The latest records show that more that 2,428 people were infected, with 24 deaths, as a result of H1N1 34
November 2009
in Oman alone. However, major advancements have taken place in finding a vaccine for the pandemic. Oman was among the first countries in the region to receive its share of the doses with more on the way. The vaccination is an important step in the Sultanate’s strategy to control the virus before it
The process of vaccine production is well established and in not new, furthermore it is being manufactured by the same companies that produce other influenza vaccines. “This influenza vaccine and other vaccines are primarily the same – we are dealing with the same companies, same methods of manufacturing and the same production procedure. The only change is that they have tried to remove one particle which is specific to seasonal influenza and replaced it
Order of administration of H1N1 vaccine to the public 1. Hajjis 2. Health Workers 3. Pregnant women 4. People of all ages who are suffering from chronic diseases 5. Children between six months to two years of age 6. Children between two to five years of age 7. Children between six to 18 years of age 8. The rest of the population with priority going to colleges and educational institutes students
with a particle which is specific to H1N1 for this vaccine to become capable of giving you the protection required specifically against the disease” says Tawilah. “We are confident about the safety of all components that are in this new vaccine because all these have been tested and used for years and we know that there are no major side effects that result from it,” she adds. So far there have been 15-20 countries that have started administering the vaccine since September. China was the first country to start inoculations followed by others in Europe. Thousands of doses have been given out so far but not a single case of serious side effects as a result of the vaccine has been reported to the WHO. “Administering this vaccine should not cause any adverse side-effects besides what you might expect from any regular vaccine that you may take – such as some redness at the region of the injection, some indurations or tenderness and in rare cases it may give you a headache or slight fever for one or two days and Panadol is all that is needed to relieve you of this,” says Dr Tawilah. “This vaccine doesn’t warrant any worries because even if we know of potential serious side-effects, these will be very rare and may occur at a rate of only one-to-two per million, that is, if it happens at all.” The Ministry of Health decided to start the vaccination campaign only after receiving the necessary licenses and approvals ensuring the effectiveness and safety of these vaccines. As such, it is imperative that the vaccine be taken when required for two primary reasons. Says Dr Tawilah, “Firstly to grant yourself immunity from this disease and secondly to prevent further spread of the disease through you,” says Tawilah. Do the right thing – protect yourself, your family and your neighbour.
TELECOM
New playing fields? Mazoon Mobile and Samatel are the latest mobile resellers to
enter the telecom sector. Visvas Paul D Karra does a status check of their prospects in a saturated market
Jamil Ali Sultan, Chairman, Mazoon Mobile
early a year and a half after five Class II mobile licences were awarded by the Telecom Regulatory Authority of Oman, two more companies have got into the act. Mazoon Mobile and Samatel are resellers who finally inked pacts with Nawras to utilise the latter’s network 36
November 2009
to provide mobile services to customers throughout the Sultanate. Friendi Mobile (Arabia Connect) and Renna (Majan Telecommunications) were the first ones off the block, with an agreement to ride on Oman Mobile’s network infrastructure. That was exactly a year ago. Then, there was no news about the other three licence holders, namely Injaz International,
Kalam Telecommunications, and Mazoon Mobile. After this, word came that the Bahrain-based Kalam Telecommunications had backed out and its licence was granted to an Omani company Samatel. With three companies in waiting, curiosity grew about the network provider that these resellers would
choose. The anticipation ended, when two of the three, namely Samatel and Mazoon Mobile, signed up with Nawras giving mobile users an additional choice (once they roll out operations). Mazoon Mobile is an Omani licensed mobile services reseller formed by a joint venture between METCO (Middle East Telecom Company), a subsidiary of WJ Towell Group and Etisalcom, Bahrain. Samatel, in contrast is a 100 per cent Omani company with Sheikh Khalid Al Matani as its sole promoter.
Present market conditions Although both Samatel and Mazoon Mobile are upbeat about their impending launch, market watchers feel that it will not be easy going for these players as there are already four players operating in the mobile telephony market. While Friendi Mobile has been shrewd enough to concentrate on its target segment – expatriates from the Indian subcontinent. Renna, is on Friendi’s heels trying to get a share of the same customer base. The ensuing competition triggered a price war, forcing all the mobile operators to slash their international call rates, for fear of losing the lucrative and large expatriate population living in the country. Not to be outdone, Friendi Mobile went one step further and tied up with Idea, a mobile company operating in the southern Indian State of Kerala offering a call price that is lower than the existing call rates to calls originating and terminating with Idea. This is a strategic move for Friendi because out of the 600,000 Indians living in Oman, atleast half hail from Kerala. Arabia Connect, the parent company of Friendi, launched Halafoni, a separate brand targeting the youth of Oman directly taking on the Shababiah brand of Nawras. In this liberalised scenario, it would be interesting to see how the new mobile resellers are going to position themselves and whether they can make inroads into new segments or erode the market share of the existing players.
DOUBLE TAKE SAMATEL: Prepaid mobile service and contact centre Bundle of services for customers Launch in February 2010 MAZOON MOBILE: Attractive tariffs (not cheaper rates) Efficiency in activation of connections Launch before the end of 2009
Spadework in place Dr Wael Taher, CEO of Samatel, informs that they have a two-pronged business strategy. Not only will the company be launching a pre-paid mobile service but it will also set up a contact centre which will attract outsourcing businesses like managing services, consultancy etc. Samatel’s building in Ghala will house a 140-seat contact centre as well as its mobile operations. Another contact centre will be established in Mawaleh with a capacity of 600-700 seats.
Quality differentiator Jamil Ali Sultan, Chairman of Mazoon Mobile, commenting about the signing of an agreement with Nawras, says that this was a moment they all had been keenly awaiting. “Although, there were a few hiccups and delays in the past year with regards to the choice of partnership, we finally signed with Nawras and we are very excited about this,” he says. As far as competition is concerned, Sultan admits that the competition is tough and only players who provide quality service and real value to end users will survive. Talking about their roadmap, he hints that Mazoon Mobile’s products will spell class, “We are not going to do magic and we will not get into a price war. We will distinguish ourselves with value added serv-
To help them get the contact centre up and running, Samatel has tied up with Teleperformers -- the biggest outsourcing company in the world. Teleperformers has 75,000-plus seats in over 15 countries. For the mobile operations, Samatel has entered into an agreement with Effortel from Belgium, an MVNE (mobile virtual network enabler), which facilitates the entry of companies into the mobile reselling business. Mazoon Mobile, on its part, has partnered with major system suppliers to provide its operating platform besides the agreement with Nawras to use its infrastructure to deliver its services.
Dr Wael Taher, CEO, Samatel 37
November 2009
TELECOM ices with a stress on quality. Our approach will be different. My message to the end users is to look for quality even if it means paying a little extra money. However, there will something for everyone to enjoy, he added” In its pursuit of providing class to the masses, Mazoon Mobile is not looking at short-term gains. Being a part of the W J Towell Group the service provider can rest assured about financial support from its parent to establish the brand in the long run. Building on Sultan’s comments, Mohammed Alhashili, CEO, adds that Mazoon Mobile aims to be a model mobile reseller in the Middle East by addressing customer lifestyle needs and delivering value with unique experience to the Omani mobile market, as well as to build an organisation with the right talent and opportunities for growth.
Creating a value “We are designing our products in such a way that mobile users will cherish our SIM cards as valuable
commodity, like an ATM card, instead of throwing it away after using up the currency in it as it is happening with the present mobile companies,” says Alhashili, while talking about their strategy to take on the competition. A lot of SIM cards ‘donated’ by the current resellers as part of their promotional offers, reportedly, have been discarded by users after using up the inbuilt free currency. In this regard, Alhashili message to the mobile operators is, “let us all work on creating longterm value to the end user rather short term price promotions. “when we create a service as a voucher it does not help at all.” The reason is because, every time a SIM card is discarded, there is a customer acquisition cost, which ultimately will prove detrimental to the service provider if there is a huge turnaround in mobile users. Efficiency in activating new connections and product packaging with attractive tariffs and added values are going to be some of the unique features, which will draw
customers to Mazoon Mobile, adds Alhashili.
Telecom culture Samatel is promising to give a new definition to the market in Oman by introducing a whole new telecommunications culture. The company will not only be providing the basic mobile phone services but it will also be integrating itself into the social fabric of the country with a whole lot of services such as the contact centre, a telecom academy etc. “We will be generating a slew of economic activities which will generate a number of employment opportunities. For example, our two contact centres will be employing around 1000 people straightaway. This is discounting our mobile phone operations which will generate more jobs,” says Taher, who previously worked with Oman Mobile as contact centre manager. He then went to Dubai and worked as senior manager, sales and retention, customer care, at Etisalat before returning to Oman to head the Samatel operations. Samatel will launch its mobile services in February 2010 by which time the whole infrastructure will be ready, informs Taher, the youngest CEO of a mobile company in Oman.
Mohammed Alhashili, CEO, Mazoon Mobile 38
November 2009
“We will be offering more benefits for the same price and value added services that are not present in Oman. This could be in the form of webbased services, loyalty programmes or offering a choice of products in one bundle,” says Taher when asked about Samatel’s USP to attract customers. Offering customised solutions to a number of niche segments is an option, which Samatel may explore to target new customers. Examples of such audience are the small and medium enterprises and the media. With a tangible shift of strategy from just wooing voice-driven customers to providing value to their SIM cards, we hope that Mazoon Mobile and Samatel will be the game changers in the mobile telephony market of Oman.
INFORMATION TECHNOLOGY
Cutting procedural delays Phase one of the one-stop-shop cut down turnaround time for businesses. Manal Abduwani, DG of planning and follow up, Ministry of Commerce and Industry talks to Mayank Singh about the government’s future plans in this regard
The one-stop-shop is one of the success stories of the IT automation process in the Sultanate. How much ground has been covered by the system? There has been a strong learning curve that has gone into the one-stop-shop. We developed the idea a few years back but since it involves business process reengineering and coordination between various ministries, procedures, looking at documents, we took it stepby-step. As a start we posted people from six different agencies which are involved with approvals and permits – the Ministry of Commerce and Industry (MOCI), the Oman Chamber of Commerce and Industry, Ministry of Manpower, Royal Oman Police, Muscat Municipality and the Ministry of Environment at the MOCI. From the experience we worked on simplifying the process, enhancing the data, digital intervention and put in place a new business process mapping that would reduce the time taken. Instead of getting approvals sequentially we are now getting them simultaneously. Those activities in which foreign investors come and ask for approvals have been classified according to international ISSAC standards. We devised a single window clearance with a front office and a back office. The front office communicates with the investor, it’s the channel through which an investor comes and submits his applications with the relevant documents. This data gets captured on a digital platform, gets scrutinised and then gets passed on to the back office. The six agencies then simultaneously
QUICK LOOK World Bank’s Doing Business Report Oman’s rank: ¾¾ 2008: 120 out of 140 countries ¾¾ 2009: 77 ¾¾ 2010: 62
look at the information and process their approvals.
What have been the major achievements in the process till date? We have succeeded in doing various things. Capturing the data electroni-
cally (and immediately) was a big milestone for us. Second, we have been able to cut down on the time and process taken. Classifying the information according to ISSAC standards was another great milestone. We have created a communication link between these various agencies. In the second phase of development we are looking at the possibility of outsourcing some of these activities to third party agencies. As a start we will be outsourcing some of these activities to kiosks run by young Omanis or by Sanad clearance officers in 2009-10. We have identified ten kiosks or clearance offices and have started by giving them one kind of transaction pertaining to reserving commercial names and this has been going on for a year. For example, the front office could be given to them and they would capture the data, scrutinise it and process it to the back office on behalf of the government or the one-stop-shop. The other is to have some sort of a self service, wherein one can apply online.
How much of the process time has been cut short? The one-stop-shop serves the mass audience and everyday investments that come in. This constitutes 85-90 per cent of the investments that come to Oman or are generated by local investors. Out of this 72 per cent of the applications get processed the same day, 13 per cent get approved within two days and the rest takes more than that because they involve a visit by a government agency. Earlier this would take a week to ten days, moreover it was a cumbersome process. 39
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COVER STORY
SUNSHINE TIME
The recent rally of the MSM 30 index reflects the robustness of the Sultanate’s macro-economy. As investor confidence improves, Mayank Singh looks at the factors underpinning this trend
und managers at Gulf Baader Capital Markets (GBCM) First Mazoon Fund were being cautious about reentering the market in a big way till May 2009, but then as the market kept on posting gains they realised that the MSM30 had hit its tipping point. “Sitting on cash would have meant losing out on opportunities,” says Sankar Kailasam, senior vice president, asset management, GBCM. The fund deployed back its funds on the Muscat Securities Market (MSM), giving subscribers a 30 per cent return till September 2009. The sprint in the market is unmistakable – the MSM 30 index closed on September 30 at 6,572 points – a year-to-date gain of 20.8 per cent. The month also saw the index touching a yearly high of 6,737 on September 27. Contrast this with the low of 4,223 points recorded on January 21 and one gets a feel of how the tables have turned.
Mustafa Ahmed Jaffer, Executive Director, Vision Investment Services
Says Nabeel Sultan, director, Jawad
International Market Indices 2009 Performance 40
November 2009
US NASDAQ SEPT 30 2,122.42
US DJIA SEPT 30 9,712.28
US S&P500 SEPT 30 1,057.08
UK FTSE100 SEPT 30 5,133.90
GERMANY DAX SEPT 30 5,675.16
34.58%
10.66%
17.16%
15.78%
5.68%
Sultan Enterprises and a chartered wealth manager, “The worst is definitely over, the markets have bottomed out and are going higher.” Better oil prices and aggressive government spending have been the fundamental drivers of the stock market rally. The impact of oil prices on the fortunes of GCC economies can hardly be overstated. GCC stock markets have a 0.86 – 0.92 per cent correlation to oil prices. So when the price of black gold fell from a high of $147 per barrel in July 11, 2008 to $31 per barrel on December 23, 2008, markets across the region took a beating. The Abu Dhabi Securities Market (ADX) fell by 47.4 per cent, Bahrain Stock Exchange (BSE) by 34.5 per cent, Kuwait Stock Exchange by 38 per cent, Dubai Financial Markets (DFM) by 72.4 per cent, MSM30 by 39.72 per cent, Doha Stock Market (DSM) by 28.1 per cent and Saudi Arabia’s Tadawul index by 57 per cent in 2008. As oil prices hit new lows, there were doubts about the long term viability of carrying forward all the mega development projects that were being implemented. The price of oil also cast a shadow on the revenue generating capability of these economies. Says Mustafa Ahmed Salman, chairman – CEO, United Securities, “The panic that was created by the crash in developed markets accelerated selling pressure and caused foreign funds to withdraw their money from the markets.” This over reaction saw stocks falling to multi-year lows during the year.
The turnaround As oil prices recovered from the 30’s to the high 60’s and 70’s by mid 2009, confidence in GCC economies
Nabeel Sultan, Director, Jawad Sultan Enterprises returned slowly but steadily. On October 21, 2009, oil touched a yearly high of $82 per barrel – a scenario that few could predict three months back. Contrast this with Oman’s yearly budget estimate of oil prices at $45 per barrel and the comfort zone for the economy becomes clear. The fact that oil production for the JanuaryAugust period at 802,300 barrels per day was 6.8 per cent higher than the corresponding period of the previous year added to government revenues. The average price of oil for the period works out to $49.90 per barrel, higher than the budgeted price. “The persistent weakness in US dollar and higher demand for heating oil in the winter
months in the west are likely to keep oil prices firm. “Demand for oil continues to remain strong in Asia led by China and India,” says N Anil Kumar, vice president head of research, corporate research, FINCORP. Oil prices continue to hold firm at around $70 per barrel which augurs well for the average price in the months ahead. The additional revenues have helped the government to continue spending on infrastructure and development activities, giving a fillip to the economy. In all, the government awarded contracts worth RO2.3bn by mid-October 2009 compared to RO2.9bn awarded for the year 2008. Analysts expect
OMAN FRANCE CAC40 SEPT 30 3,795.41
INDIA SENSEX 30 SEPT 30 17,126.84
HONG KONG HSI SEPT 30 20,955.25
SINGAPORE STI SEPT 30 2,672.57
JAPAN N225 SEPT 30 10,133.23
MSM 30 SEPT 30 6,572.25
16.69%
77.53%
45.65%
51.72%
14.38%
20.79%
Source: MSM investors guide 41
November 2009
COVER STORY another RO3.2bn worth of projects to be awarded in the next few months, taking up the value of such projects to RO5.5bn by the end of 2009. This figure is the highest amongst GCC economies. “Considering that bulk of these contracts would still be a mobilisation phase, Oman as an economy would start 2010 with a healthy order backlog,” says K Gopakumar, general manager, head of wholesale banking, BankMuscat. As the private sector grapples with a slowdown due to the global financial crisis, the government has been providing the requisite stimulus to the economy. It has followed an expansionary fiscal policy with investment expenditure for the first seven months of the year going up by 18 per cent year-on-year (yoy) and total expenditure by 4.4 per cent. This has been achieved despite a 24.7 per cent drop in total net revenues during the same period in 2009. Says Mustafa Ahmed Jaffer, executive director, Vision Investment Services, “Unprecedented levels of fiscal stimulus and quantitative easing were announced and markets reacted positively to the efforts. Investor sentiment improved remarkably and markets grew increasingly immune to the flow of bad news as governments across the board car-
K Gopakumar, GM, Head of Wholesale Banking, BankMuscat
% 120
% 12 10 8 6 4 2 0 -2 -4 -6 -8 -10 -12 -14
Turnover & Volume
100 80 60 40 20 0 -20 -40 -60
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Turnover
31.22
26.87
99.61
20.70
10.75
27.01
-43.57
23.20
12.90
Volume
33.68
96.95
30.22
70.04
19.80
5.67
-50.69
31.94
23.99
-11.53
0.83
-4.64
10.81
7.24
2.03
4.17
8.53
3.58
MSM 30 Index
MSM 30 Index
MSM 30 INDEX – month-on-month movement, 2009
Source: MSM Investors Guide 42
November 2009
COVER STORY activity. Oman Cement sales during the first six months of 2009 grew by 17.5 per cent to 1.13 million metric tonnes (mt). Raysut Cement’s sales stood at 1.58 million mt, a yoy increase of 13.3 per cent. Imports through Port Sultan Qaboos has been improving sequentially indicating enhanced demand and the continued inflow of expatriates indicates job creation in the economy.
Lo’ai Badie Bataineh, DGM, Investment and Development, Oman Arab Bank ried out concerted effort to stem the rot in financial markets.” In a direct intervention the government established a RO150mn Market Stabilisation Fund in February 2009. As investors developed cold feet, the fund injected liquidity into the markets. Says Hassan Ali Jawad, managing director, United Securities and chairman of the board, MSM, “The mandate of the fund was to stabilise the market, by rotating liquidity. It helped brokerage companies which in turn helped the stock market, proving to be a win-win situation.” The fund has played its part in soothing frayed nerves on the MSM. As a flanking strategy, pension funds also started taking positions in the market. The price support provided by the these agencies encouraged retail investors and institutions to re-enter the market. Once oil prices touched $70 per barrel, foreign investors too started investing on the GCC markets. The share of foreign investors during the January-September 2009 period stood at 23.14 per cent. The value of shares bought by foreign investors
during the first nine months of 2009 reached RO441.6mn comprising 25.11 per cent of the total value.
Striking back The signs of a strong recovery are underway – cement sales continue to be robust indicating strong construction
Market ratios* P/E
P/BV
DY**
17.56
1.78
3.11
Bahrain SE
11.17
1.16
5.16
Qatar SE
13.07
2.19
4.97
Kuwait SE
22.87
1.58
1.64
Muscat SM
13.17
1.88
3.80
Saudi SE
22.41
2.19
3.12
13.03
1.29
2.78
Abu Dhabi SE
11.21
1.36
3.50
Dubai FM
14.39
1.13
2.54
Nasdaq Dubai
22.11
1.44
0.60
GCC
UAE
* On October 25, 2009 44
November 2009
The corporate sector’s numbers took a beating in Q4’08 and Q1’09 thanks to the sub-prime crisis and its aftermath. As the Sultanate’s economy gains strength the rub-off effect on companies is unmistakable. Consolidated profit of the MSM30 companies stood at RO126mn in Q2’09 – 13.4 per cent higher compared to Q1, 2009. Analysts expect these numbers to improve during Q3’09, due to sequential gains and the base effect of a poor Q3’08. For instance – profits of the MSM30 in the second half of 2008 stood at 24 per cent of the first half of 2008 and 33 per cent of the profits reported in the first half of 2009. Better balance sheet has strengthened customer confidence in the index. Says Jaffer, “Second quarter results aided the recovery as companies saw their earnings stabilise after dropping precipitously in the earlier quarters. Investors who were
** DY = Dividend Yield
Emirates Investment Holding Company hit a P/BV of 0.4. Stocks like Oman Cables fell to as low as RO0.380. The average volume of daily trade on the MSM was down to RO3mn-4mn a day in Q1’09 (from RO10-12mn a day). And the index started trading at a price earnings ratio (P/E) of six compared to 11 times earnings during the first half of 2008. Says Kailasam, “With inflation expected to rise and the asset revaluation that happened on the MSM, investors have started coming back to the stock market.” The rerating of stock prices made valuations more attractive. A fall in share prices inadvertently gave a fillip to high dividend yielding stocks like Oman International Bank (OIB), Oman Flour Mills etc.
Return of the investor
Ritesh Jesrani (L) and Riyad Ammar, Al Madina Financial and Investment Services on the sidelines entered the market on initial signs of recovery and institutions adopted a more aggressive asset allocation strategy.” Anticipation of better corporate earnings is bringing back investors to the market.
As the MSM hit new lows in Q4’08 and Q1’09, the prices of various stocks saw a steep revision. A number of investment holding companies started trading well below their book value. For example, Transgulf was trading at a price-tobook value (P/BV) of 0.3 times, Oman
As the markets lost steam, the monthly trading volume fell from RO197.4mn in September 2008 to RO55.1mn in December 2008. The fall in volumes saw a reversal in January 2009 and picked up momentum from March 2009. Says Lo’ai Badie Bataineh, DGM – Investment and Development, Head of Investment Management Group, Oman Arab Bank, “We have seen new investors coming back to the market. A number of them were attracted by dividends as Oman has historically been one of the best dividend yield markets” The return of investors helped market capitalisation to increase by 2.68 per cent to RO9.3bn in September 2009. Says Kumar, “The industrial sector started the recovery during the first
An additional factor shoring up corporate profits is the fact that most listed companies have their own portfolios on the MSM and as the stock market recovers, these gains are getting reflected on their balance sheets. Says Ritesh Jesrani, head of research, Al Madina Financial and Investment Services Co, “In 2008 several companies had portfolio investments on the MSM, when the crash happened it eroded their profits, but now as the markets recover such investments are generating secondary sources of income for these companies.”
45
November 2009
COVER STORY half of 2009. Whenever an economic recovery materialises, commodities tend to rally first.” The trend manifested during the first half of the year as cement, copper and aluminium prices skyrocketed. For example copper prices shot up from $3000 per tonne to $6500 a tonne. The boomerang in commodity prices coupled with better demand helped the industrial sector. The industrial index of the MSM now trades at a P/E ratio of 16 times, compared to the MSM’s average of 12.8; banking sectors: 12.7 and services: 10.7 times.
gcc market indices (jan-sept 2009) 33.90%
31.63%
30.72%
20.79%
7.67%
0.45%
The banking sector which boasts of a number of bellwether stocks has been through a rough patch. Large cap banks suffered as they became risk averse and cut down on corporate loans. Their international portfolios took a hit as global markets plummeted. If these were not bad enough came the news of BankMuscat’s RO66mn ($171mn) exposure to Saudi Arabia’s troubled Saad Group and Ahmad Hamad Al Gosaibi Group & Brothers. Says Gopakumar, “That (Saad and Gosaibi exposure) was a bit of a setback to us, but we are well provisioned for
-13.83%
Source: MLM
any such bad debts.” NBO and BankDhofar were the other banks which suffered impairment loses due to loans given to the Saudi groups. Adds Riyad Ammar, brokerage manager, Al Madina Financial and Investment
Services Co, “The margins of bigger banks have been under pressure due to conservative lending. If the Central Bank of Oman (CBO) insists on more provisioning due to their recent exposures then their net profits would be affected further.” The limited exposure of the Sultanate’s banking sector to overseas borrowing though proved to be a silver lining. This coupled with CBO’s regulatory initiatives like opening up of two windows worth $2bn ensured that there was enough dollar liquidity available. While the first window was in the form of a swap, the second window did direct lending against eligible promissory notes. The Central Bank also reduced the reserve requirement from eight per cent of deposit liabilities to five per cent and eased lending ratios from 85 per cent to 87.5 per cent from January 1, 2009. These measures ensured that there was no liquidity crisis in the local market. Government deposits in the commercial banks in September stood at RO1.2bn.
N Anil Kumar, VP, Head of Research, FINCORP 46
November 2009
There is enough money in the economy for short term lending (three-tosix months), but medium to long term
COVER STORY per cent of the securities traded and RO733mn in turnover. This was followed by the services and the insurance sector with 1.3bn traded shares and RO584mn in turnover. The industry sector stood at 944mn shares and RO415mn in turnover.
Global recovery
Hassan Ali Jawad, Managing Director, United Securities lending (over a year) is still difficult to come by. As governments in developed countries increase their regulatory requirements, calling for bigger provisioning in the aftermath of the financial crisis, the lending capability of banks is expected to be under pressure. As dollar borrowing has just started bankers feel that it will take six months to a year for things to stabilise. So the banking sector is still not completely out of the woods and this finds an echo in their market multiples. Says Kailasam, “Banks need a productive asset and so they have to lend.” Aware of this banks are scouting for credible parties to lend to. A consortium of six local banks – BankMuscat, National Bank of Oman, BankDhofar, Bank Sohar, Ahli Bank and Oman Arab Bank alongwith State Bank of India inked a project financing deal with Italy-based international engineering contractor Saipem and AFCONS, an Indian infrastructure firm for a contract to design a deepwater bulk jetty at the Port of Sohar, in September 2009. The total investment in the project, including a dredging component to be undertaken by Van Oord of the Netherlands amounts to RO95mn. 48
November 2009
Despite the downturn, the banking sectors clout on the MSM is apparent – in terms of the total number of shares traded during the nine months of 2009, the banking and investment sector was the most active reaching 2.6bn shares which represents 53.5
Oman has been able to weather the global financial whirlwind with equanimity as it was largely decoupled from international markets. Says V Gowribalan, portfolio manager with a reputed holding company, “If one is trying to justify the fall in the Oman market by linking it to the global market, such an argument is not tenable. Oman’s correlation to the developed markets is only 0.7 per cent. In 2008-09 the correlation was 0.87 per cent.” In terms of oil exports, 57 per cent of GCC exports goes to developing countries like China, South Korea, Taiwan and Japan. As these countries are still on a growth mode, the Sultanate does not have much to be concerned about. The Asian markets rally started in March 2009 as commodity prices recovered. China started buying commodities in a big way and that helped
Mustafa Ahmed Salman, Chairman – CEO, United Securities
Brokerage in Oman and Regional Markets Online Trading
COVER STORY sentiment all across. The commodity build helped equity markets to move up and genuine buyers came back. Big stimulus measures deployed by governments across the globe helped almost all asset classes to rally back. This is vindicated by the positive economic numbers that has been seen in the recent times – Q2’09 GDP data shows that Japan grew by 3.7 per cent; India 6.1 per cent; China 7.9 per cent; Brazil 6 per cent. Positive industry expansion data, rising consumer confidence and fall in equity volatility are some of the factors that are aiding this recovery. Emerging markets especially Asian markets have rallied more due to their structural stability. US and the EU though slipped by -1.0 per cent and -0.1 per cent respectively during Q2’09. US with its record unemployment of six million (10 per cent of the workforce) will take longer to recover. “Though economies may be decoupled, financial markets are correlated and so one cannot become solvent till the markets become rational,” adds Gowribalan. Looking ahead analysts and corporate captains are confident that the MSM will remain positive in 2010.
Sankar Kailasam, Senior Vice President, Asset Management, GBCM
Markets in the region are still trading at 13-16 times earnings, compared to emerging markets which are well
V Gowribalan, Portfolio Manager 50
November 2009
above 20 times FY’09 earnings. This offers a good buying opportunity in the GCC markets. Given the positive outlook, equities are expected to generate superior returns vis-à-vis other asset classes and investors with a medium to long-term investment horizon could consider buying equities to benefit from the current up-cycle. They should however weigh their risk-return objectives before investing in equities as they generally suffer from higher volatility over a short time frame. Says Jaffer, “We recommend retail investors to take advantage of the mutual fund route for getting exposure to the market and avoid speculating on individual stocks. Additionally they can spread their investment over a three-to-six months period to take advantage of dollar cost averaging.” If you are still sitting on cash, it may be a good time to re-enter the stock markets. Statutory warning: procrastinating a decision may turn out to be an opportunity loss in future.
VIEWPOINT
Libya-Diversification drive Libya is a controlled economy but the private sector is being encouraged to grow. with hydrocarbons forming the economic backbone of the nation there are numerous opportunities for investors
By Sridhar Sridharan
ibya is situated on the southern Mediterranean coast between Egypt and Tunisia. Its economy is heavily dependent upon the oil & gas industry with few other natural resources or industries. Agriculture is the second sector in the economy; the development of the tourism industry is also a priority. The financial, legal and commercial sectors are developing and structural reforms have been and are being implemented.
Libya has applied for membership to the World Trade Organisation (WTO) and follows the Harmonised System (HS) of import classification 52
November 2009
There is a widespread road network which supports an efficient distribution of goods to major urban centres throughout the region. Population is based along the coast and is centred in the major cities of Tripoli in the west and Benghazi in the east. Libya is a controlled economy but the private sector is being encouraged to develop. Arabic is the official business language but English and Italian are widely understood.
Economic overview Current major economic activity is centred around hydrocarbons but Libya is seeking to diversify and develop other sectors and at the same time develop its infrastructure. In the past two years it has signed major contracts for the building of a new airport, roads, housing and mixed use developments.
The government recognises the need to attract foreign investment and has made progress on economic reforms as part of a broader campaign to reintegrate the country into the international fold. It has been successful in attracting foreign direct investment especially in the energy sector.
Incentives Investment by foreign oil companies in exploration is governed by the terms of the current EPSA IV (Exploration and Production Sharing Agreement). Investment in other sectors is undertaken within the framework of the Investment Law which provides for a minimum five year corporate tax holiday for projects which fulfill one or more of the following objectives: Production of goods for export Make available positions of employment for Libyan manpower Contribute to the enhancement or development of the economy Make use of local raw materials Contribute to the growth and development of underdeveloped areas Approved tourism projects are granted a 10 year corporate tax holiday. Foreign investment is welcomed in any business sector approved by the cabinet. Approval for a project is required from an Investment Board and a minimum investment of LYD 5
million is required (LYD 2 million if the foreign interest in the investment is less than 50 per cent).
QUICK FACTS
Structure of business entities
Area: 1,759,540sq km
All foreign companies seeking to work in Libya must establish a corporate body. Historically, foreign companies established branches and they may still do so under the Investment Law if they undertake a limited number of permitted activities. However, in all other cases a Libyan joint stock company must be established in order to operate in Libya.
Coastline: 1,770 km
1. Libyan joint stock company
Legal system: Historically based upon Egyptian Law
These companies must have a minimum share capital of LYD 1 million and the foreign shareholder may own a maximum of 65 per cent of the share capital. Governance of the company by its directors and the requirement to report to the shareholders at the annual general meeting are similar to international requirements. The chairman of the Board of Directors, comprising a minimum of three members, must be a Libyan.
2. Branches of Foreign Companies A branch must bring in the foreign currency equivalent of LYD 150,000 as branch capital. The company must appoint a Libyan as branch manager.
Structures used by foreign investors The form of business entity which is set up in Libya by foreign investors can be different and is often driven by their different commercial operations and needs. Nevertheless, a company structure is commonly used for most types of businesses by foreign investors. Branches and joint stock companies are both subject to all laws of General Application. A branch and a company are formed by filing memorandum and articles of association, together with certain specified forms and resolutions, with the Secretariat of Economy. Registration of a branch normally takes a minimum of three months but would normally be less for a company. Annual formalities include the requirement to prepare an-
Irrigated land: 4,700 sq km Population: 6,310,000 (30% aged under 14) Life expectancy: 77 years Literacy rate: 86% Main cities: Tripoli (1.2m), Benghazi (660k), Misuratah (400k) Industries: Hydrocarbons
Currency: Libyan dinar = LYD (At 14 October 2009, US$1 = 1.2156 LYD) Language: Arabic
Double tax agreement There is no Double Tax Agreement between the Sultanate of Oman and Libya.
Labour availability Libya has an available, educated, and literate workforce but in certain sectors it lacks skills. The Libyan manpower department therefore requires that foreign companies undertake to employ and train national employees as a condition of working in Libya.
Social security Libya has a general social security system. Social security is payable by all national and foreign residents at the rates of 3.75 per cent of gross salary for the employee and 11.25 per cent of gross salary for the employer.
Exchange control nual financial statements and to have them audited by a Libyan Public Accountant. Such financial statements should be filed with the Secretariat of Economy and Trade but are not available for inspection by the public.
Tax implications Under the Income Tax Law, tax rates are progressive and increase to 40 per cent of profits above LYD 2 million plus Jihad Tax of 4 per cent of profits. There are no other corporate taxes on profits.
Withholding taxes There is no withholding tax on dividends or on the remittance of branch profits to a foreign head office. Resident and non-resident branches and companies, that receive royalties or similar payments or interest payments, are subject to Libya taxes. Foreign individuals are subject to tax only from income arising in Libya.
Individual Income Tax Individual income tax is levied at progressive rates, with a maximum marginal rate of 15 per cent plus 3 per cent Jihad Tax. Payments are deducted by the employer at source and paid to the authorities monthly.
The repatriation of funds from Libya is governed by exchange control regulations issued by the Central Bank of Libya. The Libyan dinar is generally not a transferrable currency but provisions exist in the Investment Law to transfer profits earned in Libyan dinars. In other circumstances, where the receipts under a contract are in a foreign currency, profits are in essence freely remittable.
Import regulations Libya has applied for membership to the World Trade Organisation (WTO) and follows the Harmonised System (HS) of import classification. Traders are subject to exchange control approval, administered by the Central Bank of Libya. Most goods may be imported into Libya though there is a list of prohibited items. Import permits are required and Libya complies with the Arab Boycott of Israel.
Summary In summary, Libya, as a developing economy provides a number of opportunities for Omani investors and exporters.
The author is a Tax Partner at Ernst & Young 53
November 2009
CORPORATE PROFILE What are the different types of financial services offered by Al Omaniya Financial Services outside of auto Finance? We do almost all sorts of financing for movable assets such as auto loans, consumer loans, corporate loans, project finance, express business loans, working capital loans, bridge loans, debt factoring, bill discounting etc. Movable assets covers all sorts of personal automobiles, commercial vehicles, earthmoving equipment, construction equipment, plant and machinery, consumer goods such as funiture, home appliances, electronic equipments, computers, etc.
AOFS has been rated as the No.1 non-banking financial company. What has made it achieve this?
At the forefront Al Omaniya Financial Services was recently rated as the No. 1 non-banking financial company in Oman. Malcolm Xavier Crasta speaks to its CEO Aftab Patel to find out the reason behind their success 54
November 2009
It is not just one simple factor but a collection of factors. You cannot build such quality in a business model over a short period of time. It is our entire philosophy which includes our belief and value system, the kind of transparency we have and how that then translates into technical things like – how your capital structure should be and what kind of manpower and HRD policy you should have. It is also not the first time that we have been rated No.1, in fact we have been consistently been rated as the best, so I believe that it has more to do with our philosophy; our management processes; the structure of our capital; the quality of business and service that we provide; the customer service that we have and also the honesty, transparency and new value added products that we bring. Unless you provide value, a customer will not be interested. And even if he walks in he will not do so for the second time. You cannot build a top quality business if your customers are not coming back and new customers are not walking in. It is the sum and substance of all these factors as a whole that determine the success of a business, not just one.
Considering the recent downturn in the automotive industry and Al Omanya’s reliance on the sector,
what has been the effect of the slowdown on the company? There has been an impact but it has been limited, simply because we anticipated the downturn. We knew that the economy works in cycles – anything that goes up must come down. You should structure your organisation efficiently and have the flexibility to manage this volatility without sustaining a severe impact; this is the hallmark of a good organisation and it is the same with us. So, while there has been an impact, it hasn’t been so great that it destabilises the organisation. Since we have provided for these contingencies, we will maintain consistent dividends and earnings.
Has the recent downturn affected the way in which you provide financing to people? Not to a substantial level – business volumes were lower because people were buying less but this was not severe enough that the organisation would need restructuring. If we had not anticipated this scenario and made serious errors in the product lineup, distribution methods and capital structures then as a consequence we would have had to make serious amendments. But, we had a very well developed and well defined product lineup and we already had a contingency plan for such a situation. As a result we did not have to make any serious changes in the way we approach customers.
What is the main purpose of your recent RO20mn bond issue? There are three main reasons for it. The first being that all financing companies have to maintain a capital of RO20mn by June 2012 and this will help us to achieve the required paidup captial. Secondly, what we are issuing is a long term bond, since we
You cannot build a top quality business if your customers are not coming back and new customers are not walking in mainly finance long term. Technically this is called matching the maturities. Thirdly this would help us augment our long term resources for the company as we believe there is enough demand in themarket to deploy this kind of funds. We have a strategy in place which will reduce the down side risk to the minimum.
What are your fail-safes to prevent problems with money not being paid back on time? In any business that deals with lending money, there are certain precautions to be taken. When you take into account the environment that you are operating in – legal, financial and cultural; and if you are careful you will acquire the book of quality assets. In spite of this there will always be some cases where such contingencies can happen and when the need arises, these problems will be handled. We pay particular attention to the business that we write and we have
systems, processes, internal control and credit scoring systems in place, therefore such problems of delinquency are at minimum and usually legal recourse is available to recover such loans. As a matter of abundant precaution, the company anticipates and provides for such contingencies. The company is therefore very well positioned to address such issues. The fact that we have completed several cycles of business validates our business models.
What is your anticipation of the market next year? I believe that, Oman in particular, should be on a growth trajectory soon. We have not been impacted as much as other markets outside the region, simply because the country as a whole is conservative and careful. Economies like these follow an anti-cyclical fiscal policy which means that in times when the revenues are low, when the private sector capital expenditure and consumption falls, it is substituted by much higher government spending. This is why we have seen projects of several billion dollars being awarded and as such the sentiment has improved. We didn’t have any problems with our banking and financial systems, in fact the government did not have to come and guarantee the deposits like was done in other countries. So, as you can see we have had several positive factors and I believe that at least by the end of next quarter we should see a moderate growth. It is very hard to state that the growth of 2008 might occur because for such a growth the entire world economy has to grow in tandem. In my opinion, as the oil prices are at a very healthy level, our reserves are good and there is a lot of construction and infrastructure spending happening, I think that at least in Oman the worst seems to be over.
55
November 2009
56
November 2009
PERSONALITY
‘ I WANT TO FLY A PLANE FROM DOHA TO MUSCAT SOMEDAY’ Khalid Ibrahim A Al Mahmoud, Chief Operating Officer, Nawras has been an integral part of the mobile service provider’s success in the Sultanate. Visvas Paul D Karra catches up with him for a tete-a-tete hen Qtel, the Qatari telecommunications company, began its expansion plans its first stop was the Sultanate of Oman, where the telecom sector was opening up. Two of Qtel’s trusted lieutenants – Khalid Ibrahim A Al Mahmoud and Ross Cormack – were sent to Oman as COO and CEO respectively. Their express brief was to compete against a well-entrenched incumbent operator. In December 2004, Omani Qatari Telecommunications Company was registered in the Sultanate and in March 2005, Oman’s second mobile operator was launched under the name Nawras and the rest as they say is telecom history.
company (in Qatar). Here, it was a new team, different country and a new culture. It was a completely different learning experience.”
Making a mark
Over the past three years, things have changed dramatically. The Qtel Group expanded its geographic footprint from two to 17 countries within the Middle East, North Africa and Asia. The parent company has over 57 million customers and Qtel directors no longer have the bandwidth to focus solely on Nawras.
Says Mahmoud, “I joined Nawras in February 2005. It was a good opportunity for me as I grew from being a senior manager in Qtel to the rank of a COO. But it was also a challenging responsibility. We were taking on an existing mobile operator and my only experience was with a monopolistic
Mahmoud’s voice doesn’t betray the tough initial days at Nawras where he had to prove the trust reposed in him. Speaking matter of factly he says, “Today, Qtel has operations in 17 countries but in those days, Nawras was its first foray outside Qatar and all the energies and focus of the parent company was on us. Ross and myself were the only connection to Qtel and we had to fit the factual information into a business plan and communicate it to the group in Qatar. Trying to strike a balance between their expectations and the challenges here was a tough ask, but we managed it.”
Vast experience Mahmoud began his career with Qtel in 1989 after getting an information technology degree from the US. Since then, he has garnered more than 16 years of well-rounded experience in the telecom sector assuming positions of increasing responsibility, ranging from IT, ISP and data management to product management and marketing in Qtel. Mahmoud’s diverse experience has stood him in good stead at Nawras. As senior manager, product management and marketing at Qtel, Mahmoud’s responsibilities were to oversee management, development and marketing of all wireline services including international, national, data, Internet and many other ancillary products. After the Emir of Qatar signed up with a number of American universities in the late 90s to establish their campuses in Doha, and with the oil and gas sector experiencing a boom, the pressure was on Qtel to establish a world class telecom network both fixed and mobile and to put Qatar on the world map, recalls Mahmoud. 57
November 2009
PERSONALITY “With my education background in IT, I worked as IT divisional manager at Qtel and was responsible for the IT strategy and introduced significant improvements in critical IT areas such as billing and customer care. Later, as the head of the Internet and data services business unit, I oversaw the implementation of Internet services and overhauling the data network operations,” says Mahmoud. Corporate business was part of Mahmoud’s profile in Qtel and as such he was exposed to understanding and segmenting corporate consumers – the most demanding segment in the business. Segmenting of the market, means getting more details and knowing what really drives demand. From a supporting role it means knowing the technologies and the financial aspects and packaging of services according to market demands. His experience in this key role played a big role in his nomination as COO of team Nawras by Qtel.
Team work In Nawras individual roles are not exactly boxed. It’s true teamwork here informs Mahmoud while saying that members of the executive committee share their views about strategic elements and operational management of the company. As per the brief from Qtel, they have to meet their targets and these could be financial, operational or HR driven. Sometimes it is very challenging to meet all of these because of a number of factors like market forces, tough regulatory environment and the constant need to keep abreast with the latest technology, all of which weigh in and have to be delicately managed. Usually mobile operators have a very short term focus and this is a common pitfall that many of them fall into due to the pressure of meeting short term objectives. “As such most mobile operators are driven by efficiencies and commercial strategies. But if you don’t have a long term vision you will have to do major technology shifts that are very costly and they hit your busi58
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QUICK FACTS 1989 – Began career with Qtel 2005 – Joined Nawras as COO Qtel experience ¾¾IT, ISP, Data, product and project management and marketing and strategy development ¾¾Oversaw management, development and marketing of all wireline services ¾¾Worked as IT divisional manager ¾¾Became head of Internet and data services business unit
ness.” Fortunately, says Mahmoud, Nawras has got the latest mobile network and is constantly adopting new technology.
Convergence imperative Being a technology man at heart, Mahmoud forecasts the convergence of mobile and fixed line services. With Nawras having bagged the second fixed line operator licence, he says that Nawras has already gone through the technology shift, adopting what is known as soft core switches which can handle fixed and mobile services seamlessly. The 3G and wimax (fixed wireless service) are merging into what is known as LTE (long term evolution). This technology means that voice and data will converge into one element and your mobile phone, fixed line and EPABX systems will all function as one. When you are in the office, you will use your landline and when you are out, it will be your mobile. The roadmap is there for all this and it will be out within three-to-five-years. Talking about the fixed line services, Mahmoud underscores the unique
working culture at Nawras saying it has resulted in exemplary performances. The company has always achieved its targets much ahead of schedule. “We have managed to have a successful operation and we plan to replicate it with our fixed line services as well,” he says. Qtel and Nawras are both driven by the overall group vision and reflect the local vision of their respective countries. In Oman, His Majesty’s Vision 2020 is the roadmap and Nawras wants to make sure that the Sultanate is not lagging behind in the telecom sector. Referring to the fixed line launch, he says, “All the projects are in place and a lot of investments have gone in. I think we will be rolling out our fixed line services in mid-2010. We will be having a separate building for the technical and IT staff somewhere close to our present office. We are of course expanding and growing our mobile segment as well.”
No time to steer His skills as a trained pilot may have played a part in steering a company like Nawras. Mahmoud holds a flying licence for a small plane. His cherishes the desire to fly a plane from Doha to Muscat someday. “One of things that I would like to do is to come to Oman in one of those small planes. But it is very tedious as you cannot fly in a straight line through Abu Dhabi and Al Ain. A small plane cannot travel at a very high altitude and flying close to the mountains is very dangerous. If you have to avoid those mountains, it may take more than four hours,” he says in jest. Presently, he commutes every week between Doha and Muscat over weekends. While in Doha he lavishes time and attention on his seven children. He specially cherishes the moments spent with his youngest two children who are twins. When asked whether he has any other leisure activity, Mahmoud avers that he has hardly any time for himself. The only time he gets is, when he goes to the gym to unwind after a stressful day at work.
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where ideas tak e shape
ECONOMY
Let’s get physical With the property market stigmatised and financial services still treated with abundant caution, the healthcare industry is in the spotlight with investment focus moving away from speculative activities towards long-term prospects like healthcare
AT A GLANCE In 2007 private sector healthcare expenditure represented just 17.5 per cent of total expenditure in the region The healthcare market of the GCC to grow by a CAGR of 9 per cent over the next 12 years, from $18bn in 2008 to $47-55bn Explosion of “diseases of affluence” in the region puts healthcare in sharp focus Over 900 genetic diseases found to be common around the Arab world New healthcare facilities in Oman Ministry of Health reviewing 22 proposals for private hospitals in and around Muscat National Diabetes Centre – currently under construction and expected to open soon RO5.2m National Genetic Centre (NGC) for research and development coming up In 2008, Oman allocated RO228m for healthcare. In 2009 budget, spending increased by 19 per cent to RO271m
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orget the ox, 2009 is the year of the swine. The H1N1 virus, popularly known as ‘swine flu’, has featured in headlines around the world for months. With the onset of the winter flu season in the Northern hemisphere it’s become even more prominent. In Oman and the wider GCC, the often sensational slant that the virus assumes in the media has only served to attract more interest to a sector that is already ripe with potential: healthcare. As investor appetite begins to slowly return, it is a sector likely to land squarely on the map of post-crisis investment patterns.
Healthcare neglected While foreign direct investment (FDI) has been rapidly increasing in Oman in recent years (it was the fastest growing destination for FDI in 2008, according to FDI Intelligence magazine), construction and real estate have attracted the lion’s share of funds, leaving the healthcare industry neglected by the private sector. In 2007 private sector healthcare expenditure represented just 17.5 per cent of total expenditure, according to the World Health Organisation (WHO). Healthcare is now entering the spotlight. According to a recent report from
By Oliver Cornock
Alpen Capital, the investment arm of the Bank Sarasin-Alpen (ME), the healthcare market of the GCC is set to grow by a CAGR of nine per cent over the next 12 years, from $18bn in 2008 to $47-55bn. With the property market stigmatised and financial services still treated with abundant caution, the health industry is being flagged for its non-cyclicality and strong built-in demand. Perhaps the only positive legacy of the global financial crisis will be a lasting reorientation of investment focus away from more speculative activities and toward long-term prospects such as this. In June of this year, two new private hospitals began operations in Oman – the Al Raffah and Kims Oman Hospital – joining Muscat Hospital, the only other privately run hospital, which opened in 2000. The government still operates the vast majority – 93 per cent – of hospitals, but the ranks of private facilities may soon swell dramatically. The Ministry of Health (MoH) has announced it is reviewing some 22 proposals for private hospitals in and around Muscat.
Healthcare demand growing But the influx of private sector attention in the healthcare industry is not merely a product of declining real estate and financial services sectors –
those pre-crisis strongholds of foreign investment. As philosopher Auguste Comte noted, demography is destiny, and Oman’s population dynamics point to a growing demand for healthcare services for years to come. Much like the rest of the GCC, the population of Oman is young and growing quickly. Over half is under the age of 20 and 83 per cent is under 35, while population growth measures over three per cent per annum. Traditionally, youthful countries are regarded as less desirable targets for healthcare development, as the elderly tend to command a greater demand for services. However, this sentiment is starting to recede due to the unfortunate explosion of so-called “diseases of affluence” in Oman and throughout the region that has accompanied the rapid rise in personal wealth over the past years. The World Health Organisation (WHO) predicts the incidence of diabetes in Oman to increase by 200 per cent by 2030. Changes in lifestyle and eating habits have led to a well-documented rise in the incidence of non-communicable diseases like diabetes, obesity and various cardiovascular ailments – all of which demand specialised care and preventive education programmes.
Addressing shortfalls Under the current five-year health development plan, which runs through next year, both preventive medicine and increasing specialisation initiatives are featured. For example the National Diabetes Centre – currently under construction and expected to open soon – seeks to address the root cause of the disease with a focus on health and lifestyle education.
Arab Genomic Studies revealed that Arabs are disproportionally pre-disposed to many genetic disorders. According to the report, over 900 genetic diseases were found to be common around the Arab world – one of the highest rates globally. While the state has certainly not neglected the development of advanced medical centres, the sheer scale of demand necessitates private sector participation. The project pipeline of the entire GCC, according to the Alpen report, is quite large, with about 200 hospitals totalling 27,000 beds. The government absorbs the majority of the cost of healthcare in the Sultanate, which is provided to Omani citizens at a nominal fee. In 2008 the state allocated RO228m – or about four per cent of total expenditure – for healthcare. Under the expansionary 2009 budget, spending had increased by 19 per cent to RO271m – the second largest year-on-year expenditure increase in this year’s budget.
Challenges ahead Despite the state’s attention to the sector, barriers to further development remain, largely in the form of shortages of skilled staff. Currently, the Sultanate relies heavily on expatriate medical professionals as the Omanisation programme and medical training facilities strive to produce enough doctors and nurses of Omani origin. The financial crisis, too, could cause some hiccups in short to medium-term sector development. While the healthcare industry itself is recession-proof, the construc-
tion industry is not and the financing options needed to build new health facilities are harder to come by. Nevertheless Oman’s economic course has remained relatively steady during the recent financial gales and the Sultanate is expected to grow by at least two per cent this year – higher than most of its GCC counterparts. With the price of oil apparently stable and predicted to go higher by the end of the year, the projected budget deficit – marked at RO810m upon its release in January – could shrink significantly. These positives will help to attract greater private sector participation in a region full of healthcare industry potential. A greater public awareness of health issues has come a long way since the start of the reign of His Majesty Sultan Qaboos bin Said (and the subsequent transformation of healthcare provision). In the meantime the demand for more specialised healthcare should remain strong, and could be significantly bolstered by the passing of a mandatory health insurance law. Speculation over the status of the law has persisted for close to a decade and it remains unclear when it will come into effect. But with or without the law, analysts around the globe will be talking about healthcare in Oman well after the H1N1 spectacle eventually drifts into obscurity. The author is Regional Editor, Oxford Business Group
Another state facility under development, the RO5.2mn national genetic centre (NGC) will encompass both research and development, as well as education and treatment facilities for genetics-related issues. It could prove to be an especially important nexus of medical research and education in the region. A recent study by the Centre for 61
November 2009
RETAIL
Beyond Muscat The Landmark Group is one of the largest retailers in the Middle East. Akshay Bhatnagar and Sushmita Sarkhel, in conversation with Clive Freeman, the new GM of Landmark Group, Oman What was the objective behind your move to Oman? It was mostly a business requirement. The Landmark Group regularly reviews its operations in various countries and it is customary to transfer personnel from one territory to another. Saibal Basu has been here as the GM for the last three years and has done a remarkable job. He is now moving on to head operations in Kuwait and I was asked if I’d like to move to Oman, to which I readily agreed.
What are your first impressions about Oman? I’m delighted to be here. It’s very different than anything you can find anywhere else. The diversity of scenery and landscape is incredible. The city 62
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of Muscat is extremely modern but at the same time it has still managed to retain its cultural heritage and it’s all extremely impressive.
What are the expectations of the group from you? My focus would be retail operations – to review where we are now, to work with the team and inject some fresh ideas into the business, listen to people who’ve been with Landmark for a long time, while trying to bring in positive changes wherever required. The Landmark Group and its Chairman Micky Jagtiani have always believed that the customer comes first and hence all that we do is based around this philosophy. Value for money merchandise at a world-class
retail environment is our single minded objective.
Do you feel there are any gaps on the customer service front? I believe that we’re mainly a customer service focused business but I know there’s always place for improvement in any business as customer expectations are always on the rise. We don’t believe that we have achieved all the levels that we aim to. Today the retail industry in very dynamic and we have to keep moving forward with the changing times. Customer service has become increasingly important for any business over the last 10 years and we at the Landmark Group constantly innovate and upgrade ourselves to satisfy the needs of the end customer.
RETAIL In what ways would you like to improve customer service? I believe it’s important that everyone in our business delivers on customer service. The only way we can do that is to make sure that we have a very strong foundation in our training. The basic is to go through core principles with every member of our team. We have to make sure that they are understood, reviewed, acted upon and delivered. The way to monitor our progress is through feedback from the customer. Based on that we make amendments where necessary and make things right. We will be introducing systems to deliver the best service in our stores. After sales and intensive staff training is high on our agenda to ensure the best follow up for customers. For example, at Home Centre we will be following up each delivery by contacting the householder, to ensure they are happy with the product and will request them for feedback on the delivery team who attended. Additionally we will have a team of technicians who will visit the customer’s house two weeks after delivery, to make additional adjustments to the furniture if required.
Give us a brief overview of the current state of operations in Oman? Currently we have Centrepoint, a destination bringing together the Group’s core retail brands under one roof: Shoe Mart, Babyshop, Lifestyle and Splash. Our business here is made up of five Centrepoint stores, three Home Centers, one E Max and three Max stores. We also have franchise brand stores, Bata and Ecco in Muscat City Centre and Dumond and Pablosky in QCC. The Max store in Sohar has just opened with good initial sales. In Salalah, we have Centrepoint and Max. Other than Sohar and Salalah, we are also looking at expanding our business into areas outside the main cities e.g. Barka and Nizwa. Our total retail space is currently just over 500,000 sq. ft. This will increase over the next few years. Training and recruiting nationals is a 64
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key focus area for us. The government has always supported us since our inception here and we are very thankful. As an organisation we are committed to social initiatives and cease every opportunity to give back to society.
How is each retail brand faring? We have a diverse range of retail goods from high fashion, baby products, footwear, furniture and electronics. The region and indeed the whole world is facing exceptional challenges arising from the global liquidity crisis. Thriving in the face of challenge is key to retail and we are trying to do just that. Countries have reacted differently to the economic crisis. But
Centrepoint in Oman llCore retail brands: Shoe Mart, Babyshop, Lifestyle and Splash. llNumber of stores: Five Centrepoint stores, three Home Centers, one E Max and three Max stores llFranchise brand stores: Bata & Ecco in Muscat City Centre and Dumond & Pablosky in QCC llTotal retail space: Over 500,000 sq. ft.
one thing is common – consumers have become more cautious. We will continue with our core principals of the widest range of goods under one roof at the most competitive prices. Our wide range of merchandise and multi-brand approach helps us stay in healthy competition. We carry out continual market research on our pricing and we make sure that we retain our position in the marketplace.
What has the growth been like for each segment? Electronics and furniture are segments which are challenging for any retailer and we’ve set our plans to
this accord for the current year. The global meltdown has indeed been a serious issue and we hope in the next few months, there will be consumer confidence returning to the market. With our main focus on value-formoney merchandise we hope to rise above the crisis.
Have you looked at changing your vendor base or renegotiated contracts with existing vendors? Landmark works on a long term strategy and that’s how the business has grown today from one store in 1973 to a turnover of $3.5 billion today. Our supplier base and negotiations of our contracts are done on a continual basis. As a company we have extremely skilled buyers, planners and merchandisers who are always looking to expand and improve our vendor base. We look at what the market is offering and listen to the needs of the customer and then address that need.
Tell us about the new logistics warehouse that you’re planning to set up. Constant innovation and upgrading is the key to the retail industry. We have to , adapt and move forward with today’s dynamic market requirements. Backend operations is the backbone of retail and ensuring steady progress in the field of supply chain management is essential for a successful retail business. We felt it was time to dedicate a standalone state-of-the-art warehouse facility, whereby we can bring in the latest innovations under one roof. For our new warehouse, we are looking at a 15,000 sq. m size facility. Accessibility to the warehouse is important to the business we are in and hence we are going to look at an area close to Muscat. We are also looking at a round-theclock warehouse management operation to increase productivity and ensure smooth running of the business and hope to achieve this in the next 24 months. We are not going to compromise on our requirements, we know what we need to achieve and we are going to go ahead and deliver!
AUTO TALK
All-Terrain Limousine For a vehicle not originally designed for the luxury SUV market, Land
Rover’s Range Rover has come a long way in the past 39 years and has built up quite a strong reputation for itself in the very same segment. Malcolm Xavier Crasta finds out if the new 2010 Range Rover lives up to its name
C
urrently in its third generation, launched in 2002, the Range Rover has been through quite a few facelifts with the largest changes taking place in 2006, when the older BMW sourced engines were replaced by Jaguar power plants. For the 2010 model as well, Land Rover has taken things up a notch with quite a few significant upgrades that make an already good SUV simply amazing.
Despite these significant changes, not much can be said about the exterior as most of it remains quite similar to the previous model. There are subtle changes though and these work quite well to distinguish the car and give it a fresher look. These changes include an updated exterior grille, bumpers, new LED and Bi-Xenon head lights and new LED tail Lights. A majority of the changes are to the interior and mechanicals. Change or no change it is hard to argue with the Range Rov-
er’s road presence. Step into the back seats through the rather small rear doors and you are greeted with the usual welcoming ambience of the HSE, surrounded by swathes of leather and rich wood, relaxing to the sights and sounds of your very own DVD screen and headset. Step into the driver’s seat and you are immediately greeted by the first, and most obvious, indication of the 2010 Range Rover – the new 12-inch TFT-
LCD virtual instrument panel. This neat little bit of kit can be both personalised and adapted to suit the current driving conditions. Aside from the instrument display and new steering mounted controls, the rest of the interior hasn’t received much of a design change but instead it has received a few significant technological upgrades and some all new options. Chief among these upgrades is the centre console mounted touch-screen navigation display. Satellite navigation is now based on a Hard Disc system that allows for more increasing reliability and accuracy thanks to data upgrades from a Land Rover Dealer. Adopting its interface from Jaguar, it now features fewer, more intuitive menus and no option is more that a few touches away. While these changes are great in their own right it is not until you get moving that the true extent of the improvements actually hit home. The first change you will notice is the sheer power of the HSE and the way in which it eats its way through the speedometer.
The reason for this immense pace can be found under the bonnet where last year’s 4.4-litre V8 has been replaced by an all-new direct-injection 5.0-litre V8. The result is a staggering 70hp bump in power for a total of 375hp, just 25hp short of last year’s Range Rovers Supercharged (The new Range Rover Supercharged sports a supercharged version of the same 5.0-litre V8 producing 501hp). Despite the increase in engine size and power, it is commendable to note that the fuel economy remains unchanged. Changes have also been made to the Terrain Response System and, along with the impressive air suspension system, provides one of the best rides in its class. It is a given that most Range Rovers sold will not be taken off-road, which is a real shame considering its terrain conquering ability. The way in which this three tonne behemoth can clamber over rocks and skim across sand is truly impressive but maybe not as much so as the ease with which it can achieve such feats. Land Rover’s
Terrain Response System is truly a wonder of engineering that uses fingertip controls on the centre console to choose settings for different driving environments. This system in combination with the Adaptive Dynamics system helps ensure that all occupants are transported in the greatest possible comfort and security regardless of the road surface and variations in driving conditions. Improvements to safety have not taken a back seat either. Included in the already extensive list of safety features is the new knee airbag for the driver along with the blind-spot monitoring available to customers. Overall, the changes are quite significant and very welcome. Its good on-road manners combined with its tremendous off-road ability make the Range Rover one of the most practical choices in its segment. Combined with its wealth of hi-tech options and reasonable price, the 2010 Range Rover is truly an all-terrain limousine and the one to have.
SPECIFICATIONS FOR RANGE ROVER Engine – 5.0L V8 Power – 375hp @ 6500rpm Torque – 510 Nm @ 3500 rpm Transmission – CommandShift 6-speed Adaptive Automatic Dimensions (l x w x h) – 4972mm x 2216mm x 1877mm Acceleration (0-100km/h) – 7.6 secs
The Gullwing is back
Welcome the Ghost Rolls-Royce Motor Cars has launched its new model, the Ghost, in Jeddah in the Kingdom of Saudi-Arabia for the first time in the region. The Ghost retains the essence of Rolls-Royce, and is engineered to be more driver-focused and powerful than any Rolls-Royce before it. A brand new 6.6 litre twin-turbo V12 engine, unique to the model, delivers a feeling of endless, surging power to the driver. The central principle of simplicity runs throughout the Ghost. Everything is designed, engineered and crafted to enhance the driving experience from the spacious design to the intuitive layout and advanced systems and technologies.
The new super car from MercedesBenz and AMG makes for an alluring proposition with its unrivalled technology package: aluminium spaceframe body with gullwing doors, AMG 6.3-litre V8 front-mid engine developing 571 hp peak output, 650 Nm of torque and dry sump lubrication, seven-speed dual-clutch transmission, sports suspension and a kerb weight of 1620 kilograms, this superlative combination guarantees driving dynamics of the highest order. The ‘Gullwing’ accelerates from 0 to 100 km/h in 3.8 seconds, before going on to a top speed of 317 km/h.
Ready for the show
Drop-Top Lambo
Volkswagen Middle East has announced it will be participating in the 10th Dubai International Motor Show 2009 taking place from 15 to 20 December 2009. Volkswagen, along with its local long-term partner Al Nabooda Automobiles, will be offering visitors the unique opportunity to see the award-winning Race Touareg and the super-athletic Sirocco GT24 at this year’s show. The complete Volkswagen model line up will feature the iconic sixth generation Golf, the new sporty Golf GTI, the thrilling Sirocco and the four door coupe Passat CC. In addition, Volkswagen exhibits will also showcase the latest Touareg R-line, Tiguan R-line, Passat R36, Phaeton, Eos, and Jetta.
The Shanfari Automotive’s Sports Cars Division launched the new Lamborghini Gallardo LP 560-4 Spyder in its exclusive showroom located at Al Khuwair. The new Spyder features a 5.2l V10 engine, which delivers 560hp, enabling the driver to reach from 0-100km/h in only four seconds and reach a maximum speed of 324km/h. It also features a permanent four-wheel drive, improved traction, handling and stability at any speed, razor sharp design, precise reactions and improved aerodynamics surprisingly suited for driving long distances with extreme performance capabilities. The car truly represents an amazing compromise between an Italian design masterpiece and a truly sporty car.
Showcasing the brand
Towell Auto Centre (TAC) has joined hands with Sohar Plaza. Under this joint partnership, TAC can now screen their Mazda brand films at Sohar Plaza and also display their two cars outside the different entrances of the most popular mall in Sohar city for a period of one year. “This new venture with Sohar Plaza reiterates TAC’s growing confidence in Sohar market as lots of new industries and businesses are being set up in Sohar and our customer base is rapidly increasing consequentially; we at TAC feel this is the right time to be seen here” says Annurag Chawla, Head of marketing and communications, Towell Auto Centre. TAC Sohar branch manager Mayank Datta added that “Sohar Plaza is the most happening place in Sohar and our products will get more prominence because of this investment since Mazda is the foremost choice of many youth in Sohar already.” 68
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REAL ESTATE
BACK TO NORMAL
The property market in Oman has found the balance it needed after being rocked by the global financial crisis, says Christopher J Steel, Managing Partner, Savills Oman. A report by Visvas Paul D Karra
man’s property market has turned around quicker than expected. And as it becomes clear, that Oman’s general economic stability will attract more businesses, the likelihood of continued expatriate arrivals is very sure – with several larger multinational companies in the UAE now actively looking at Oman as their alternative regional base. Consequently, the property market in Oman is looking at an upward curve with demand for housing – residential and commercial – being strong. It is in such a positive climate, that Savills Oman is consolidating its position as the leading player in the Sultanate’s real estate market and opened its office in mid 2009.
International service Christopher J Steel, managing partner, Savills Oman, is confident that the company in Oman will replicate the success seen in other countries. He says: “By bringing some of Oman’s most experienced real estate professionals under the umbrella of the Savills global network, we strive to provide international quality service levels with a personalised and local flavour.” Says Steel, “Savills, in my mind, is the most appropriate real estate agent for Oman because it has an international department that does nothing other than coordinate all international en-
the world. “There is a need for a good old-fashioned company like Savills to operate in Oman. Moreover, the company is publicly listed and has 18,000 people working in 244 offices all over the world. But the most attractive thing of Savills is the company ethos, “We deal with property – properly”. Talking about the challenges amidst the market dynamics in the context of the global downturn caused chiefly by the US sub-prime crisis, Steel observes that property market went through a period of boom from 2007-08 and it was entirely speculation-driven. A combination of greed factors by the buyers and over-ambition and overpricing by sellers brought down the market.
quiries and referrals and things like that. If a person comes to Savills Oman and says he wants to buy a house in New York or elsewhere, the international department will help him.” Savills in Oman provides a range of agency and advisory services including property sales and leasing, valuations, research and development consultancy and operates under the strict codes of conduct of the Royal Institution of Chartered Surveyors (RICS).
Dealing properly Steel, was with Hamptons for over 11 years in Oman, before he joined Savills, which is globally ranked as the number four real estate company in
However, Steel points out that property prices are inching upwards but you cannot generalise it everywhere as prices will vary from place to place. Ultimately, the recovery is led by end-users, he avers. As far as business is concerned, he says it is the best time to begin. The market is down but it is back to where it was before the speculative period of 2007 and 2008. It is back to normal. During that period, you could sell 200 units in just under half an hour. Now, you don’t wait for people to buy but you have to go and sell. You don’t wait for the phone to ring. But you have to call, says Steel while underscoring the need for companies to change their working strategy to get people into the buying mode once again. 69
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GOLF UPDATE
The Big Fijian
Vijay Singh has won laurels for his meticulous and planned approach to the game of golf
ijay Singh, nicknamed “The Big Fijian”, is a Fijian professional golfer who was number one in the official World Golf Rankings for 32 weeks in 2004 and 2005. He has won three major championships (The Masters in 2000 and the PGA Championship in 1998 and 2004) and was the leading PGA Tour money winner in 2003, 2004 and 2008. He was inducted into the World Golf Hall of Fame in 2006. He won the FedEx Cup in 2008.
Looking back An Indo-Fijian of Hindu background, Singh was born in Lautoka, Fiji and grew up in Nadi. A resident of Ponte Vedra Beach, Florida, he is known for his meticulous preparation, often staying at the range hours before and after his tournament rounds working on his game. Growing up, he played snooker, cricket, football, and also the island’s most popular sport, rugby. He is the son of Mohan Singh, an airplane technician who also taught golf. Growing up, he admired the swing of Tom Weiskopf, using it as an early model for his own. Two years after turning professional, in 1984, Singh won the Malaysian PGA Championship. However, his career was plunged into crisis after he was suspended from the Asian Tour in 1985 over allegations he doctored his scorecard. It was alleged that he lowered his score from one over to one under in order to make the cut, but Singh denies this, saying that in any case, it should only have resulted in disqualification from the event rather than a ban. He then saved the money 70
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Major Wins
1998 2000 2004 2000 2003 2008
PGA Championship tied for lead The Masters 3 shot lead PGA Championship Taiwan Open TELUS Skins Game Chevron World Challenge
he needed to resurrect his career and began to re-enter tournaments.
Big league In 1989, Singh won his first European Tour title at the Volvo Open Championship in Italy and finished 24th on the European Tour Order of Merit, putting his early struggles firmly behind him. He won four times in 1989,
at the Volvo Open di Firenze, Ivory Coast Open, Nigerian Open and Zimbabwe Open. He also finished tied for 23rd at the British Open. He won on the European Tour again in 1990 and did so twice in 1992. He also won several tournaments in Asia and Africa in this period. Singh entered the PGA Tour in 1993, winning his first PGA Tour event, the Buick Classic in a playoff over Mark Wiebe. That victory led to his being named the 1993 PGA Tour Rookie of the Year. After being hampered with back and neck problems in 1994, he came back to win the Buick Classic again in 1995 as well as the Phoenix Open. After playing well in 1996 (but with no victories), he won both the Memorial Tournament and the Buick Open in 1997. In 1998, Singh was victorious at the PGA Championship at Sahalee in Sammamish, Washington. He followed this up by winning The Masters in 2000, with a three-stroke victory over Ernie Els. Singh has won 22 times on the PGA Tour since turning 40 — beating the record previously set by Sam Snead. He is the second man to reach $60 million in PGA Tour career earnings, after Tiger Woods. His 34 career victories are the most on the PGA Tour by a non-American player and place him 14th on the all-time list. He has spent over 500 weeks ranked in the top 10 of the Official World Golf Rankings.
EXECUTIVE WELLNESS
The all weather workout Swimming is a great way to lose weight and build stamina at the same time
wimming is a good fitness choice for just about everyone, especially those who have physical limitations or who find other forms of exercise painful. “It is a good, whole-body exercise that has low impact for people with arthritis, musculoskeletal, or weight limitations,” says a fitness expert.
to build strength. There are naysayers who question the efficacy of swimming in burning calories. Research done on swimming showed that one tends to lose weight slowly because water submersion initiates a complex [nerve pathway] which lowers the metabolic rate. And with a lower metabolic rate, the body uses fewer calories to maintain normal function.
Water’s buoyancy accommodates the unfit as well as the fit. Water cushions stiff joints or fragile bones that might be injured by the impact of land exercises. When immersed to the waist, a human body bears just 50 per cent of its weight; immersed to the chest, it’s 25-35 per cent and only 10 per cent to the neck. Athletes use water to rehabilitate after injury or to cross-train. People with arthritis or other disabilities use water to improve fitness and range of motion and to relieve pain and stiffness.
Experts on their part maintain that swimming can be a boon for weight
Fitness Benefits Not only is swimming easy on the body, it is also a great way to get fit. Swimming uses all the major muscle groups, including the shoulders, back, abdominals, legs, hips and glutes. And because water offers 12 times the resistance as air in every direction, it helps
loss -- if one follows the same principles as with any other exercise and one challenges the body.
Getting started If you’re ready to get started, experts recommend getting a swimming coach or joining a masters swimming group in your area. Don’t be intimidated by the name; ‘masters’ just means over age 20. Masters swimming accommodates all levels, from beginners to advanced, and you don’t have to want to compete to join. This type of group supports recreational swimming for fitness, and is a great way to learn technique – which is everything in swimming. Getting the rhythm of the strokes and the breath can be overwhelming at first. Coaches break it down and take you there slowly, practicing one part at a time. If you’re a beginner, start slowly. Try to swim for 10 minutes. Build up to a 30-minute workout, three to five times a week. Include a warm-up and a cool-down, and, in the middle, challenge yourself by working on endurance, stroke efficiency, or speed. A comfortable swimsuit and a pair of goggles are all you need to start, say experts. You can even wait on the goggles if you’re not ready to put your face in the water yet.
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CLOSE UP
Saudi economy wins accolades the liberal measures encompassing foreign investment that were enacted in April 2000 encouraged foreign firms to own majority stakes in companies within the kingdom. it also helped saudi arabia’s accession to the wto in december, 2005
By Dr Jasim Husain Ali
audi Arabia has reasons to celebrate economic achievements on regional and international levels. Two global reports issued by the United Nations Conference on Trade and Development (UNCTAD) and the World Bank awarded Saudi economy the best points amongst Gulf Cooperation Council (GCC) and the Middle East and North Africa (MENA) at large. Also, the kingdom’s own statistics point out to outstanding budgetary results and economic activities.
Growing inward investments According to World Investment Report 2009, issued by Unctad, inward foreign direct investments (FDI) into Saudi Arabia amounted to $38.2bn in 2008. This translates into an increase of $13.8bn or a growth rate of 36 per cent in a single year. Much to its credit, Saudi Arabia stands out in the region when it comes to attracting FDI. The figure of $38.2bn represents 42 per cent of total FDI attracted by West Asian countries, which include GCC states, Turkey and 72
November 2009
Iran. The other top regional recipients, namely Turkey and the UAE attracted FDI worth $18.2bn and $13.7bn, respectively. To be sure, the size of FDI has increased substantially over the last few years, amounting to $24.3bn in 2007, $18.3bn in 2006 and $12bn in 2005. Conversely, inbound FDI averaged merely $245mn for the period spanning 1990 to 2000.
Welcome FDI The extraordinary progress partly reflects sustained economic reforms, which were strengthened by the official drive to join the World Trade Organisation (WTO). Saudi Arabia acceded to WTO in December 2005 following a decade-long protracted negotiation. In particular, credit must be extended to liberal measures encompassing foreign investment law (FIL) that was enacted in April 2000. The FIL grants foreign firms the right to own majority stakes in companies within the kingdom. The law also allows foreign banks to operate in the form of locally incorporated joint stock companies or as branches of international financial institutions. In addition, Saudi Arabian General Investment Authority (Sagia), which
looks after foreign investments, has put in place a one-stop-shop application process. Also, Sagia offers a 30day deadline for decisions on investment applications.
Doing business Such practices partly explain the outstanding result that Saudi Arabia achieved in World Bank’s Doing Business 2010 report. The report ranks Saudi Arabia at number 13 amongst 183 economies, the best within the entire Mena region. In fact, the report ranks Saudi Arabia as the best country in the world on the variable of registration of property. Clearly, this reflects ease of registration process. However, the report notes that Saudi Arabia has difficulty with regards to enforcing contracts, ranked as 140 globally. Certainly, Saudi authorities must overcome enforcement of contracts problem in order to send a positive signal to prospective investors.
GDP growth In addition, the kingdom’s gross domestic product (GDP) grew by a hefty 22 per cent in 2008 in current terms on the back of exceptional rise of oil prices in the first seven months of the year. GDP at current prices or market exchange rate include effects of oil price rise but exclude inflationary pressures. Oil price had reached a record $147 per barrel in July 2008. The petroleum sector, which includes crude oil and processing plus gas, is uniquely significant in the Saudi economy by virtue of comprising three quarters of exports, two thirds of treasury revenues and more than one third of the GDP. To be sure, Saudi Arabia is largest oil exporter in the world followed by Russia. One such negative point here is that Saudi economy is over-dependent on the petroleum sector.
Saudi Arabia’s GDP grew 22 per cent in 2008 on the back of exceptional rise of oil prices
power parity rates at $591bn. In short, Saudi Arabia’s GDP is second to none in the Arab world.
Budgetary surplus Still, there are other extraordinary economic results. Saudi Arabia’s budget posted a record surplus in 2008. Actual revenues increased by a hefty 144 per cent from $120bn to $293bn. Also, real total expenditures rose by nearly 25 per cent to $136bn. As a result, the kingdom posted a record $157bn surplus. In retrospect, Saudi Arabia registered surplus of $47bn in 2007 and $71bn in 2006, regarded the highest at the time. For good reasons, Saudi authorities made proper use of the surplus to reduce outstanding debt to 14 per cent of the GDP, down from 19 per cent in 2007. Often times, debts limit economic freedom of nations. In addition, the year 2008 produced other
outstanding results notably that of per capita income rising by 19 per cent to $18,847. Still, the EIU put per capita income on PPP basis at $23,692. Nevertheless, Saudi Arabia has a long way to go to attain per capita on par with Qatar, a fellow GCC member state. EIU estimates put Qatar’s per capita income in 2008 at $67,348 in market prices but $58,635 in market and PPP basis, reflecting inflationary pressures.
Addressing unemployment Yet, the authorities are expected to capitalise on the outstanding economic results notably budgetary surplus to address a pressing problem, namely unemployment. Total jobless figure stands around 11 per cent. By one account, unemployment rate is close to 25 per cent amongst females. Undoubtedly, the government cannot overlook the unemployment problem amongst locals not least due to critical demographics. Some 38 per cent of Saudis are below the age of 14 and thus many youths would enter the job market in the years to come looking for suitable employment opportunities. The challenge relates to ensuring availability of job opportunities that meet the expectations of locals notably females with regards to working conditions and remunerations. Saudi authorities need right economic choices in order to address outstanding challenges. The author is an eminent economist and Member of Parliament, Bahrain
According to figures released by Saudi Arabia Monetary Agency (Sama), the country’s GDP reached a record $468bn in 2008, undoubtedly the largest in the Arab world. However, estimates by the Economist Intelligence Unit put the GDP in purchasing 73
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BI
D R A LL B O
The biggest Al Mumayaz winner
Wansa in Oman The Kuwait based leading brand of consumer electronics and home appliances, Wansa will now be available in Oman and is being distributed by Muscat Electronics. Wansa was created a decade ago by a team of experts with over 30 years of experience in electronics, design selection and quality control. In a short period of time, it has become synonymous with quality, credibility and value for money. It enjoys market leadership across multiple categories. Products adapted to the Middle East specifications are manufactured in Europe, Middle East, Far East and Asia.
The winner of Bank Sohar’s first monthly Al Mumayaz RO100,000 jackpot prize Hamed Rashid Salim Al Shidi has been presented with his winning cheque by the bank’s DGM for Retail Banking Khalfan Al Taley in the presence of His Excellency Shaikh Ali Bin Suliman Al Shibli a member of Al Shura Council-Sohar. Al Shidi was also given the honour by Bank Sohar of conducting the 10th October branch draw in the ongoing Al Mumayaz Savings Scheme promotion. He and another customer from the Azaiba branch drew out the names of 13 winners from each of Bank Sohar’s branches who won RO1,000 each.
Oman Mobile launches iMass Volume SMS
Oman Mobile recently announced the launch of iMass Volume SMS service. Engineer Huda Al-Habsi, Senior Manager, corporate product development says: “We’re all aware that today’s commercial environment is very demanding. To succeed you need to be flexible and responsive to the market – iMass Volume SMS will enable businesses to do just that. It’ll help get marketing messages out when they’re most needed and most effective. And let’s face it, given the level of mobile phone penetration in Oman, SMS is a 74
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very potent tool, enabling mobile marketers to reach consumers across all demographics. There’s so much to be said for a good, solid mobile marketing campaign; it’s affordable for businesses of all sizes and is amazingly effective. Studies show that mobile marketing messages are typically read within an average of 15 minutes of receipt – how’s that for impact? Recall rates are assessed at over 75 per cent and on top of that, as SMS campaigns are paperfree, they’re very much a green option. What more could you want?”
Partners in physical education Khimji’s Training Institute (KTI) announced its successful educational partnership with Premier Training International (PTI – UK) to deliver the courses in Gym Instructor and Certified Personal Fitness Training. This initiative was primarily brought about to empower Omani youth who are interested in professional fitness training and education. PTI has the exclusive license to distribute and deliver the
renowned National Academy of Sports Medicine (NASM) Education, predominantly focused on the individuals who want to pursue of fitness career and health club operators who aim for high member retention and results.
Marriott Resort and Mirbat Dhofar Tourism Company has partnered with Marriott International to launch the 5-star Marriott Resort in Mirbat. Scheduled to open in the last quarter of 2009, the hotel features 234 well-appointed rooms with a choice of staying in the resort’s main building or in surrounding chalets offering studios, one- and two-bedroom configurations. Executive guest rooms and all types of suites will feature flat screen HD television along with high speed Internet access as well as Marriott’s renowned bed and bath linens, amenities, in-room mini bar and safe. Dining and entertainment options include a casual allday restaurant, a seafood restaurant, an Arabic Café, Piano Lounge, Cigar Lounge and an English Pub.
Grilled and served to perfection Succulent food fresh from the grill with classic cocktails and a great ambience is what best describes the recently opened RBG Grill. Developed under the wings of Park Inn brand, it is a bold new concept in hotel dining introduced in the Middle East for the first time by the Rezidor Hotel Group. The tempting menu offers guests a variety of international cuisine and local specialties in addition to signature grill dishes, the best in gourmet burgers, light bites, soups, salads, shakes and smoothies. Contemporary, vibrant and colourful décor, background music, TV screens for sports events and show kitchen add up to make it an inviting venue for family, friends or business travelters to enjoy.
ment, under which OOC EP will have 30 per cent and 25 per cent in blocks 18 and 41 offshore Oman respectively. Under these agreements, the two companies will commence joint exploration activities in the blocks. The agreements were signed by HE Maqbool Ali Sultan, the Minister of Commerce and Industry and Chairman of Oman Oil Company on behalf of OOC EP and Atul Chandra, Director of REP DMCC.
Real estate and glory
The full golfing experience The Muscat Hills Golf and Country Club has announced it has temporarily closed golfing operations at Oman’s first grass golf facility to relocate its Club House as it gears up to open the full 18-holes in the near future and to offer an even better experience to golfers. The Club House is being relocated as part of a number of improvements at Muscat Hills that will allow access to play the full 18-hole course in the proper sequence and ensure easy access to the driving range that is now under development. A new tarmac road is being laid that will ensure direct parking next to the clubhouse. Once the full 18-hole course is open, Muscat Hills will host major international and regional golfing tournaments and become the leader in attracting golf tourism to Oman.
The best resort hotel Shangri-La’s Barr Al Jissah Resort and Spa has been awarded the “Best Resort Hotel” during the Business
Traveller Awards 2009 held in London recently. Voted by discerning readers of Business Traveller UK magazine, these awards cover a range of essential categories including favourite airlines, airports, hotels and car rental companies and are an important recognition of achievement and exceptional levels of quality and service.
Oman Oil and Reliance Industries sign agreement
Oman Oil Company Exploration and Production (OOC EP) and Reliance Exploration and Production DMCC, Dubai (REP DMCC) have signed a farm out and joint operating agree-
The establishment of the Shaza company is in tandem with the government’s new approach and policies to build an integrated tourism sector. The project costs RO30mn and will be built on an area of 38,000 square meters. It is a five star hotel with 280 rooms and a party hall built on an area of 2600 square meter in addition to luxurious restaurants offering succulent Arabic and international delicacies. There will also be a bridge that will link the Hotel with Grand Muscat Mall, a feature that is unique in the Sultanate of Oman.
Discussing renewable energy A panel of local environment experts met at a Knowledge Oasis Muscat (KOM) Digital Nation seminar recently. They concluded that drastic changes in energy-consumption are necessary to avert a global crisis. Energy use in business and in the home was put under the microscope by panelists from Total Alignment, Five Oceans Environmental Services, Sultan Qaboos University, Oman Botanic Garden and Mazoon Environmental Services. According to the panelists, climate change and the need to manage diminishing fossil fuel reserves are today two of the biggest challenges facing the planet. There is now a scientific consensus that climate change is happening and that it is being caused by human activity. OER was a media partner of KOM Digital Nation seminar
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BROWSING CORNER
change will have many faces The book is an intriguingly woven story of everything that is happening in the Middle East, and what the Middle East is doing to the world, says Ganesh Sundararaman
s Wright is right, when she says “Islamic terrorism is no longer the most interesting, or dynamic force, in the Middle East. Islamic politics has surfaced”. The hard-core terrorists of Al Qaeeda or Islamic Jihad have repeatedly proven that they can destroy. But they have yet to provide tangible solutions or viable new models for problems plaguing the region. Regimes are increasingly unable to provide what they promised to protect their people, and they certainly provide no direction for the future. Robin Wright’s elaborate perspective of the Middle East is obviously born out of having reported from the region for years. In Dream & Shadows, she moves from one state to another, interspersing her commentary with prolific interviews with important persons in each region, particularly political personalities.
DREAMS AND SHADOWS The Future of the Middle East Author: Robin Wright
Searching assessments of the region’s complicated political and economic situation include “You cannot assume the role of business in the peace process; it has to be proven… Peace will be a two state solution but it cannot end there. We need real economic
The publication featured in Browsing Corner is provided by Turtle’s Bookstore www.turtlesoman.com
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cooperation, integration, and compensation.” The Middle East is not really one place, so change will have many faces. “Democracy” said Paul Salem, “will be a country-by-country phenomenon”. Disdain is widespread. One reads about ruptures everywhere. The splitting and the reorganisation of the PLO had been an elaborate exercise for Yasser Arafat. But that he was not popular was established by a 2004 survey that showed 87 per cent of the people felt his government was corrupt, and that its leaders were opportunists. All in all, Ms Wright’s picturisation of the Middle East reflects gaping diversities in ideology. The difference between fundamentalist, Islamist and an Islamic reference often seem nuanced. Definitions also vary by part; context varies by country. But the distinction is the essence of an emerging political trend in the Middle East. The most significant comment she leaves the readers with is the hope about the end of American influence in the Middle East…after Iraq. Robin Wright’s Dream & Shadows is not one of those un-put-downable thrillers. A must-read for those that have the interest to look beyond everything one sees right now.
Cut out this coupon from OER and present it at Turtle’s Bookshop to claim 10% discount on the book featured in the November 2009 issue, or 5% discount on all other books* (except the Airport outlet). *This coupon cannot be combined with any other in-store promotions. Offer valid until January 31, 2010. Free one hour parking on purchases of RO5 or more.
NEWSMAKERS t is not everyday that one comes across a banker, who has bridged the gap between business and art. Akshay Kumar Parija, board member and executive director, Blue Lines Shipping Pte and a banker of repute for over two decades in Oman and Kuwait has managed to close this chasm successfully. The Living Ghost a movie produced by Parija has been winning accolades on the international film festival circuit. At the 6th Independent South Asian Film Festival, in Seattle, Washington it made it to the final 16 movies which were selected for screening from 105 submissions. It went onto win an award for being the most thought provoking movie at the festival. Prior to this it received a seal and certificate of appreciation for taking on the sensitive issue of tribal exploitation at the 32nd Cairo International Film Festival.
A befitting tribute The Living Ghost, Akshay Kumar Parija’s ode
to his native state Orissa has been winning critical acclaim across the globe. Mayank Singh reports
Showing gratitude Says Parija, “I have a background in promoting art and culture from Orissa, my native state in India. This movie is a way to express my gratitude for my state.” The movie is also an effort to highlight the sensitive issue of tribal exploitation and to expose Oman on the film making market. Parija’s views found an instant connect with Prashanta Nanda, a veteran film personality, who has produced and directed Oriya, Bengali and Hindi movies over a 50 year old career. Nanda was on the lookout for a script that dealt with a meaningful subject. Moreover, he needed a producer who would be committed to such a project. Ashok Suvarna, executive director, NPA events came on board to take care of the marketing and distribution aspects of the movie. The meeting of minds led to swift action – the movie went on the floors in January 2008 and was canned by September. “We applied to seven film festivals and got selected for three. The movie was not included in the New York Art Film Festival and the Los Angeles Asian Film Festival due to a single day’s delay,” says Parija. The impact created by the movie
Quick Take The Living Ghost – On the festival circuit 6th Independent South Asian Film Festival in Seattle Won award as the most thought provoking movie on a social issue 32nd Cairo International Film Festival Got a seal and certificate of appreciation International Film Festival in Chennai To be screened
at Seattle won it a DVD contract of 250,000 copies. Out of these 200,000 DVD’s will be sold in the US and the remaining 50,000 would be marketed in Europe. The proceeds of the sales will go to the people whose cause has been showcased in the movie. Parija is working on a second venture which would showcase Oman. Having worked in BankMuscat and National Bank of Oman for 19 years, Parija feels that one should be passionate about ones work and strive for complete satisfaction of one’s customers. Having swapped customers for viewers, Parija is bringing the same zeal to movie making now. 77
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MARKET WATCH Complicated art
New king of cameras
Fitted with a self-winding mechanical movement, Instrumento N° Uno features two complications never before combined in a single timepiece: dual time zones and an oversized date calendar at 7:35 on the dial. The Instrumento N° Uno’s basic movement was customised to receive two auxiliary modules. These modules – one of which is exclusive to de GRISOGONO – include both complications. The oscillating weight of the movement features the engraved words “Instrumento N° Uno”, which are visible through the transparent case back printed with the corporate logo and brand.
The true camera phone Samsung Electronics has just launched the ‘Samsung AMOLED 12M’ (SCH-W880), the world’s first 12-megapixel camera phone with a 3-times optical zoom lens. The phone introduces powerful and innovative camera functions. Its Touch Auto-Focus (AF) feature permits users to select a focus point with the touch of a finger, after which the lens will automatically track the object, keeping it in focus even as it moves across the screen. Other features include a Smart Auto feature, Xenon flash, shake reduction, face recognition, and 4GB of built-in memory.
Travelling light The new Cosmolite offers a mix of durability, incredible lightness and absolute strength without compromising on a modern design for discerning travellers across the Middle East. A product of Samsonite’s proprietary and revolutionary ‘Curv technology (a registered trademark of Propex Fabrics GmBH) – comprising an innovative and high-performance body, the Cosmolite offers advanced impact resistance and lasting durability. The new technology is designed to guarantee unparalleled strength and lightness and caters at the same time to every traveller’s needs and requirements. 78
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GIZMOS The EOS-1D Mark IV is a high-speed multimedia performance monster with a 16-megapixel Canon CMOS sensor, Dual DIGIC 4 Imaging Processors and 14-bit A/D data conversion, all at 10 frames-per-second, with the widest ISO range Canon has produced to date. This new camera also features 1080p Full High-Definition video capture at selectable frame rates packaged in Canon’s most rugged and durable professional camera body. The crowning achievement of 1D Mark IV is its new autofocus system that starts with 45 AF points including 39 high-precision crosstype focusing points capable of tracking fast moving athletes or wildlife accurately.
The magic touch Apple’s new wireless Magic Mouse is the first mouse to use Apple’s revolutionary Multi-Touch technology. Pioneered on iPhone, iPod touch and Mac notebook trackpads, Multi-Touch allows customers to navigate using intuitive finger gestures. Instead of mechanical buttons, scroll wheels or scroll balls, the entire top of the Magic Mouse is a seamless Multi-Touch surface. Magic Mouse comes standard with the new iMac and will be available as a Mac accessory.
Seamless perfection The new iMac line features a brilliant LED-backlit 21.5 and 27-inch widescreen displays in a new edge-to-edge glass design and seamless all aluminium enclosure. The new iMac line, starting at US$1,199, is the fastest ever with Intel Core 2 Duo processors starting at 3.06 GHz, and Core i5 and i7 quad-core processors for up to twice the performance. Every new iMac ships with a wireless keyboard and the aforementioned wireless Magic Mouse.
Scaling the heights
BEYOND BOARDROOMS
Having attained his
highest position in a company till date, Hassan Ahmed Mohsin, CEO, Horizons Capital Markets shares his experience with Malcolm Xavier Crasta
assan Ahmed Mohsin has been in the finance industry for over 18 years. He started with SGRS and then moved on to Oman & Emirates Investment Holding Company where he headed the investment banking division and his responsibilities included brokerage and fund management. Mohsin continued in the asset management field moving to FINCORP and Vision Investment Services later. In fact, he was also involved in the formation of FINCORP as he was working in one of the three companies that merged to form the company in 2003 (initiated in 2001). After his stint at Vision, he decided to start his own company.
The first step “We set up Horizons Capital Markets in 2008 after getting a licence from CMA. Setting up involved a lot of major activities like raising of funds, conceptualising the business model, selecting the shareholders and the management team” says Mohsin. Despite the adverse economic situation he saw an
Favorite book: Built to Last: Successful Habits of Visionary Companies by Jim Collins and Jerry I. Porras Favourite locations: Austria, Switzerland, Alpine mountains, Ras al Hadd and Salalah
opportunity in every new development. The company worked hard on evaluating trends in investment banking sector and assessing the needs of investors. He adds, “We noticed that there was awareness of investment products. Financial assets and markets were given importance and were being appreciated in the society.” This gave him the confidence to go ahead with the plan to setup a company.
Time out Thanks to his long working hours, spending time with his family requires an extra effort. Though he makes sure that he makes up for it over weekends. When he is not spending time at work or with his family, he is usually reading or at times playing sports such as tennis, football, snooker and swimming in small groups. He also enjoys travelling, especially to Europe because of its great weather. Most of his reading is dedicated to books relating to business and management skills.
“It is important for business leaders to have a balanced lifestyle and positive thinking. Social and management skills are at times more valuable than a person’s academic qualification but it is often overlooked” says Mohsin. Other than business books he also read books on history and the interpretation of the Quran. “Although this is the first time that I have been in such a high position in a company, my experience with other companies in Oman has allowed me to carry this company through its tough initial stages and hopefully will do so for a long time to come. It is a totally different experience when you create something new and when you realise that your decisions affect so many people. This experience also changes the way you interact with your family and friends for the better, since you now think and decide for the benefit of an entire group rather than at an individual level” he concludes. 79
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