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Qatari banks’ 2010 results hit record highs
Qatari banks are expected to have registered new all-time high net profits of $3.7 billion in 2010, according to the preliminary releases by the sector’s leaders. Total net profits up until September had amounted to a record $2.55 billion, supported by new regulations following the global financial crisis. Similarly, banking activity was encouraged into further diversification after conventional banks were prohibited from allocating more than 10 percent of their capital into Islamic finance. Of the best performers, Qatar National Bank, the country’s largest lender by market capitalization, posted a 41.3 percent leap in its fourth quarter profits to $410 million, bringing its yearly net profits to $1.57 billion. Al Rayyan Bank profits soared 52 percent to $250 million from $164 million in 2009. Qatar’s final positive jolt this year was winning its bid to host the 2022 World Cup. This will boost productive and commercial activity in a country whose ample liquidity is being absorbed by the financial sector.
OCI and Arab Contractors bid for Egyptian nuclear project
Egypt plans to establish four nuclear power reactors with a combined capacity of 4,000 megawatts to meet the surging demand for electricity. The first reactor is expected to be launched in 2019, while the fourth and last reactor is scheduled to start operating in 2025. For that purpose, the two largest contracting companies in Egypt, Orascom Construction Industries (OCI) and Arab Contractors, formed a joint venture to bid on Egypt’s first nuclear power plant in early February 2011, with the winning bid to be announced by end of July 2012. According to OCI’s managing director, this strategic joint venture has created a regional consortium qualified to bid on the large flow of future nuclear power plants in Egypt and the Middle East.
Jordanian economy to grow 4.25 percent in 2011
An International Monetary Fund (IMF) mission team visited Jordan on December 13 and 19 to review macroeconomic and financial developments. The mission released an aide-memoire in which it noted expectations that Jordan’s economy would grow by 4.25 percent in 2011 amid diverse signs of recovery in the country, with increasing exports, strong tourism revenue and higher capital inflows and private investments. Moreover, the IMF maintained its gross domestic product growth estimates for 2010 at 3.5 percent compared to a 2.3 percent in 2009, its weakest growth since 1989. The Fund stated that the economic recovery is expected to continue with the rising domestic activity, fiscal prudence and credible monetary management, supported by strong supervision and regulation of the financial sector. Jordan’s budget deficit is predicted to narrow to 5.3 percent of GDP in 2011 compared to an estimated 5.75 percent of GDP in 2010, while the external current account deficit is expected to expand to 5 percent of GDP in 2010 and 6.25 percent of GDP in 2011 amid higher expenditure on imported commodities.