Executive Magazine

The Blonde on the Billboard

by Rana Hanna May 1, 2007

written by Rana Hanna

You must have seen her. She’s blonde, fair andclear-skinned, blue-eyed with a perfect pout and an evenmore perfect nose. She’s staring at you frompractically every billboard in Beirut and urging you to takeout a “Plastic Surgery Loan” from First National Bank, sothat you too can look perfect.

Going under the knife to give you that edge—personally orprofessionally—is no longer a taboo. Beauty is no longergenetic luck. It has become attainable and affordable, andFirst National Bank have just made it even easier to getthere.

In fact they’ve made it very easy. As long as you earnover $600 a month and can afford to pay it back within 24months (with 6% interest), the patient-to-be can borrow upto $5,000 within 48 hours, with no down-payment required.You can have any procedure you want, from laser eye surgeryto orthodontics via laser hair removal and botox. Hate thatgut? Get rid of it!

The ad itself, part of a bigger brand awareness campaign, issomething of a marketing coup and has the whole towntalking. Among the hundred or so daily calls that the bankhas been receiving since the launch of the campaign, areinquiries from CNN and the BBC, who, like everyone else,noticed the blonde on the billboard and decided it was aquirky story.

While many who believe that we should not tamper with whatHe gave us, or feel that as a society we are heading toShallowsville, it would not be fair to accuse First Nationalof exploiting vanity—buying a car is also a style statement.It is merely responding to a demand that reflects the needsof a population that places high value on looking its best.Each year the Lebanese spend a fortune on cosmeticprocedures and First National expects to approve hundreds ofloans. And it’s not only the women. Over a third of thecalls that the bank has received have been from men.

According to FNB, the product is not new and had been indevelopment since 2004 and was scheduled to launch on 28July 2006. The project was delayed because of the summer warbut after the guns fell silent, the bank noticed that demandhad not diminished; quite the contrary, it increased.

It transpired that the war had proved the perfect window fora quick surgical procedure. Social events were kept to aminimum—a combination of decorum and danger had seen tothat—and so there was ample time to recover from a minorprocedure. Others had more pressing needs, especially thoseinjured during the war—burns and facial disfigurement andthe like—and who could not pay for a procedure without aloan and FNB have gone to some lengths to explain this.

Still there is the billboard picture of the perfect blondestaring at me telling me that I can now get the makeover ofmy dreams and live the life I’ve always wanted.

It’s nice to be a looker but is it a factor in success? Wellapparently yes. Many studies have shown a positivecorrelation between beauty and professional success, bettermarketability, better positions in the workplace, highersalaries and even stronger political prospects (baldleaders, for example, are perceived as lacking in that finaldollop of charisma).

In Lebanon, plastic surgery is available on every streetcorner, it is relatively affordable and the doctors areexcellent. And with the country so depressed at the moment,it’s probably a good idea to give yourself a littlesomething to feel good about. The Lebanese have proved, onceagain, to be above all hardship. The trophy wife mantra usedto be “when the going gets tough, the tough go shopping.” Inour case, when the going gets tough, we sign up forRhinoplasty.

RANA HANNA admits to having had plastic surgery

May 1, 2007 0 comments

Comment

Ruffing it, Bahrain style

by Paul Cochrane May 1, 2007

written by Paul Cochrane

A recent trip to Bahrain, what should have been a fairlyrun-of-the-mill interview with a CEO to discuss the launchof the Middle East’s first sports car plant turned intosomething rather different from the usual chat over coffeein a hotel lobby.

I was informed just an hour before the interview by theassistant to Alois Ruf, the owner of Germany’s highperformance sports car company Ruf, that I was to meet himout at the Bahrain International Circuit (BIC), home of theFormula 1 racetrack and the location for Ruf’s $20 millionfactory.

When I arrived at the VIP section of the Formula 1 track,my eardrums were subjected to the magnificent roar of adozen Lamborghinis straining at the leash. I hadunexpectedly gate-crashed the Speed Trip, one of the BIC’s200 annual events, at which owners of super cars and Ducatimotorbikes use their machines for what they were meant for:pushing the pedal to the metal and not worrying about overlyzealous traffic cops.

Lined up in the pit stop off the racetrack were the Ruf RKCoupe and Ruf Rt 12, which both looked pretty much likeunmarked Porsche 911s. This was not far from the truth, withthe chassis modeled on the Porsche, but everything else,from the electrics to the engine, completely refitted andseriously supercharged.

Talking with the head engineer while waiting for Mr Ruf toshow up I asked if either of the Ruf cars could take on oneof the Lamborghinis going hell for leather around the track.“The silver one no, the blue (RK Coupe), sure.” With the RufRK Coupe topping 220 mph and the Ruf Rt 12 reaching a mere189 mph, its no wonder Ruf is highly sought after cars bycar enthusiasts in the know.

In business since 1939, Ruf is not well known outside of caraficionado circles but those who can afford them buy them.

Ruf has had a 20-year relationship with the Bahraini royalfamily, inviting sheikhs over for test drives and servicingmodels at the Pfaffenhausen base in Germany. Indeed, LotharDrescher Ruf-Bahrain’s General Manager used to supervise theservicing of the royal family’s sizeable car pool.

With the Gulf awash in petrodollars, Bahrain close to SaudiArabia, a tax-free haven and with the region’s only F1track, Bahrain was a natural choice for Ruf’s first factoryoutside of Germany.

With plans to manufacture 20 cars a year by 2008, Ruf willsoon be pumping out 100 “boutique super cars” a year by 2012for export worldwide.

Ten days later, I was back in Bahrain for the opening of thefactory and in the short time I had been away the Ruffactory had been transformed, lights flooding out of thewindows into the desert, and pools of water shimmeringaround the entrance.

Following the arrival of Crown Prince Sheikh Salman binHamad Al Khalifa and his entourage of assorted sheikhsdecked out in black abayas, a surprise was in store for the200 guests.

Heralded by the revving of a powerful engine coming frombehind the seated audience a sleek, silver matt sports cardrove up to the stage and out swung Alois Ruf from hiscompany’s latest creation—the $450,000, 375 km/h Ruf CTR3.

If rubbing shoulders with royalty and not having a sizeableenough bank account to afford a car like the CTR3 didn’tinform me of my lowly financial position, nothing can putyou further in your place than not attending the Formula 1,and certainly if one is not watching the grand prix from theBIC’s VIP viewing tower.

“Are you coming to the Formula 1?” asked a rather lovelyBrazilian lady. “It’s so much fun up in the VIP box,mingling with the sheikhs and bumping into walls and PrinceAndrew saying, ‘Ah, here are the Brazilians!’ No? Shame.”

Shame indeed, so I headed for the parking lot chomping on afree cigar to locate my rather staid mode of transport totake me back to Manama.

PAUL COCHRANE is a regional business writer based in Beirut

May 1, 2007 0 comments

Consumer Society

Plastic makes perfect: Beirut banks boost

by Executive Staff May 1, 2007

written by Executive Staff

Money talks,” thus reads the clever ad for the Alfa Blom MasterCard. And money talks all right, as this particular card co-branded with the mobile phone operator offers the card holder 60 minutes of free talk time upon issuing the card and an additional 5 minutes for every $100 spent. The Blom initiative is but the latest addition to Lebanon’s ever growing number of credit cards and incentive schemes.

As general conditions and interest rates among credit cards rarely vary, banks increasingly rely on loyalty programs and consumer incentives to reward existing card holders, and attract new clients. Air miles, chocolate boxes, wine bottles, coffee pots, hair dryers, watches and cash paybacks: you name it, banks offer it … As long as you just use that card.

For nearly 5 years, Blom has offered a more regular loyalty program: as the card holder uses his card to purchase goods, he collects points that can be redeemed for gifts, varying from kids toys to airline tickets. In addition, when purchasing at a selected group of retailers, he automatically takes part in a kind of lottery and he may become the lucky winner of a lucrative gift. In Europe and the US, using the credit card to pay for the smallest items is increasingly becoming the norm. Why not? Somewhere down the line there will be an air ticket.

According to Dr. Gladys Younes, head of BLOM’s Communication and Investor Relations Department, the bank has long resisted entering the co-branded market, as it preferred to work with a group of retailers, rather than a single partner. “The telecommunication industry however, is a consumer magnet in both Lebanon and in the world,” he said.“We have always viewed a co-branded card with a major telecom player as a partnership that can add major value. A brand like Alfa embraces a customer database that is at least as big as ours.”

One of the lowest debts in the world inLebanon

The Alfa BLOM MasterCard is the first of its kind in theMiddle East and seems a perfect deal for all parties involved, as it promotes purchasing and using the BLOMMasterCard, as well as subscribing to the Alfa classic line, instead of buying units.

Currently, there are an estimated 100,000 cardholders inLebanon, with an average credit debt of some $30 per capita, which is one of the lowest ratios in the world. As a comparison, in Saudi Arabia the average debt per credit cardholder is $161, in Britain $5,188 and in the United States$9,312. In other words, the Lebanese credit market still has an enormous growth potential and it should not come as a surprise therefore that banks continue to launch new offers and incentives.

According to Philippe Hajj, Head of Fransa bank’s RetailBanking Division, most credit cards offered by Lebanese banks are quite similar. “What differentiates them is mainly the cost, conditions, and benefit packages related to them,”he said. “That is the reason banks are reviewing their pricing, while adding benefits to their cards.”

Fransa bank recently launched its “Cash-Back” loyalty scheme, which allows card holders to redeem the points collected by credit card purchases by cash money, which will be credited directly to their cards upon their request. For every dollar spent, one gets a point, which in its turn is good for $3 cents. Hajj emphasized however, that point clients may still prefer to redeem their points at MEA, Aishti or MTC touch.

Standard Chartered Bank and Credit Libanais both offer elaborate gift schemes. Standard Chartered offers 100 points for every $100 spent. With 5,000 points, the card holder can start redeeming from a range of household items and other gifts. Credit Libanais offers 10 points for every $100spent. Rewards range from wine to travel insurance and even a home theater.

For its part, Byblos Bank has devsied the Cool Card. No doubt, aimed at introducing younger customers to the benefits of credit cards, it offers retail discounts and enters cardholders into prize draws.

Incentive schemes well-received

According to Alain Hakim, assistant general manager ofCredit Libanais business and marketing development division, the bank’s incentive scheme has been well received, although“cardholders remain mostly oriented towards cash withdrawal rather than purchase settlement.”

Although a potential client would first look at a card’s interest rate and charges, he may be tempted to opt for a credit card that promises him a reward, said Hakim. “A credit card in need can be a friend indeed,” he said. “If a cardholder can be disciplined enough to use his credit card for his day-to-day purchases, while keeping money aside to pay his bills at the end of the month, then it can be a win-win situation.The savvy consumer can earn interest on his savings for that month, while receiving cash back or free-of-charge incentives from the card provider.”

In addition to an elaborate gift scheme, Audi Saradar Bank recently introduced an air mileage program. For every $100spent by Visa or MasterCard, the card holder gets 10 points.With 500 point he or she is entitled to a chocolate box, with 50,000 points a free air ticket to Amman or Cairo.

“Many institutions have implemented loyalty programs, yet few have fully understood the nuances and challenges involved,” said Niovi Daoud of Audi Saradar’s CommunicationsDepartment. “Many believe a good loyalty program can virtually run by itself, that once you’ve set it in motion, you can sit back and enjoy the ongoing success. In reality, we’ve found that programs should be continually modified in order to fit clients’ lifestyles.” To do so Audi Bank offers dozens of different cards and incentive schemes.

Blom Bank’s Younes could not agree more with his Audi Bank counterpart. “The US market, the world’s most developed in terms of credit cards, is composed of 50% co-branded cards,”he said. “The Lebanese market has at least 15 co-branded programs. Are these 15 institutions in Lebanon capable of generating enough volume? For a co-branded program to be profitable, at least 3,000 cards should be generated and sold. Even more, should be generated if the co-branded card is to have generous and often expensive features. That is why we find that many banks issuing co-branded cards are doing so for prestige purposes rather than business reasons.”

HSBC offers its Premier Credit Card holders 3 points for every dollar spent, which can then be redeemed to acquire electronics or luxury goods. However, to obtain a PremierCard one is required to have $75,000 in savings or have a combined credit balance of home loan, savings and other assets of at least $100,000.

According to HSBC’s Cards Executive, Omar Farhat, the bank’s loyalty and incentives program is not meant to be a recruitment program, but meant to reward existing clients and thus build up client loyalty.

“We try to differentiate our card from others mainly through our services,” he said. “So, we offer card holders a24-hours help desk worldwide, as well as a travel insurance that meets requirements for a Schengen visa. In addition to the points scheme, we occasionally do special campaigns, in which we offer card holders such things as cinema or concert tickets.”

Music to their ears!

May 1, 2007 0 comments

Editorial

An honest man, badly drawn

by Yasser Akkaoui May 1, 2007

written by Yasser Akkaoui

While corporate governance continues to be the hot topic ina region with a still-evolving corporate culture, it isinteresting to note that even the supposed arch-exponents ofthe practice sometimes fall foul of the standards theyimpose.

George Bush-appointed World Bank chief and noted neocon,Paul Wolfowitz, appears to have been a victim of a campaignto discredit him over the treatment of his girlfriend, alsoa senior World Bank member, who, to avoid a conflict ofinterest, was found a plumb job at the US State Department.Despite the hullabaloo, the ex-deputy Secretary of State ofDefense, appears to have acquitted himself honorably and Iam sure that many Arab politicians and high ranking figuresare still wondering what all the fuss was about.

But the case highlights two interesting issues: First itshows just how important it is to walk the line in terms ofpersonal conduct and setting an example to all. Second,after the deeply flawed Seymour Hersh feature in thenormally stringent New Yorker, in which he accused the Bushadministration in not doing its homework and funnelingmonies to groups with al Qaeda-esque profiles backed by theLebanese government of Fuad Seniora, it is yet anotherexample of the deep-seated level of anti-Bushfeeling in certain corners of the Americanestablishment.

Wolfie was, as they say in London, stitched-up, even thoughhe did his best to play the collision of his private andpublic life by the book.

The new Arabia

This month we also doff our caps to the tremendous stepsmade state-owned enterprises in Dubai in particular and theUAE in general in turning what could easily has been left asa flabby desert outpost, living off dwindling naturalresources, into a muscular trading giant, real estate tyroand tourist heaven.

Its bilateral economic ties with China and India are aclear indicator of Dubai’s intentions to become a globalplayer by seeking out alliances with 3 billion newcapitalists, while its real estate giants are already atwork in the dragon kingdom, exporting their particular, andspectacular, brand of development know-how. From being anexpat backwater as recently as the early 90s, Dubai hasbecome a genuine holiday destination—the third most popularwith UK travelers—and a global venue for blue chip sportingevents that attracts the biggest names and fattest purses onthe planet.

It proves that a lot can be achieved by micro-managing themacro-economy if there is a strong ruling class with avision.

One wonders what Adam Smith might say to such a plan.

May 1, 2007 0 comments

Comment

Flashes in the neo-con pan!

by Peter Speetjens May 1, 2007

written by Peter Speetjens

Muslims living in Holland should tear the Koran in half, as half of the book advocates violence, thus maverick Dutch politician Geert Wilders recently suggested, subtly adding:“If Mohammed lived here today, I could imagine chasing him out of the country tarred and feathered as an extremist.”

This was the latest in what has become an extensive repertoire of Wilders’ “wisdom” on immigration and Islam. He has also held forth on headscarves and mosque building, and it is this populist and provocative approach that has brought him headlines as well as friends and foes in equal measure. His nicknames include: bulldog, crusader, street fighter and, on account of his carefully waxed LouisXIV white locks, the Blond Dolly of The Hague.

Having left the liberal party in 2004, which he thought“too left,” Wilders went on to establish his Freedom Party, with which he won 9 out of 150 parliamentary seats during the 2006 elections; and according to a recent poll, Wilders would win seats, if elections were held today.

Latest in a series of political grandstanders

However, one would gravely underestimate current trends inHolland by writing off Wilders as a noisy crank, thrown out by the exotic tradition of Dutch coalition-based politics.Wilders is but the latest in a series of very colorful, if highly controversial politicians, who have played the anti-immigration card for significant political gains and triggered a wind of change, transforming the Dutch Kingdom from one of Europe’s most progressive and welcoming states into a country with the toughest immigration laws on the continent.

It all started at the end of the 1990s with the emergence of the flamboyant Pim Fortuyn, a former communist turned liberal university professor with a love for designer suits and controversy. Warning of “an Islamization of Dutch culture,” even though Muslims make up but 5% of the population, Fortuyn was the first to put immigration and integration firmly on the political agenda. He was shot dead in May 2002 by a Dutch environmentalist.

Next to carry the anti-immigration and anti-Islam flag was Ayaan Hirsi Ali, a Somali refugee who was granted political asylum in 1997 and who entered parliament for the LiberalParty in 2002, under a storm of criticism, as she had always been a member of the Labor Party. Ali was and still is a very ambitious woman and, like Fortuyn, emphasized the“backwardness” of Islam, especially regarding women.

Loyal to her new liberal party masters, Ali also called for tough immigration laws, until in May 2006 it was discovered that the 37-year-old had lied about her past. She had not lived through and survived the Somali civil war, but in fact attended one of the best schools in Kenya. Too much of a political hot potato for her party, Ali withdrew quietly from mainstream politics and accepted a job with the ultra-right American Enterprise Institute.

With Fortuyn killed and Hirsi Ali gone, only Wilders remains. Often called “the new Fortuyn”—a title he vehemently rejects—Wilders wants to be seen as` his own man.“I want people to judge me on who I am,” he stated during a visit to the United States. “I am Geert Wilders. What we share is our anger that the popular voice is not being translated into policy.”

The last sentence says it all. Like Fortuyn before him,Wilders claims that Dutch politicians have lost touch with“the street.” To back up his often outrageous comments,Wilders likes to refer to “the millions outside(parliament)” who think like him. Fortuyn claims he dared to say what “most people” only dare to think. Such populist references to “the silent majority” have had often disastrous consequences in the past. At the height of its popularity in 2003, Fortuyn’s party took only 17% of Dutch seats, while Wilders could only claim 6% in 2006.

The purpose of Wilders’ trip to the United States was to meet a number of neo-con and Christian right groups. “I want to explain what’s going to happen in Holland and ask for support—political support, maybe financial support, all the support possible.” Wilders is in dire need of support, mostly monetary, as he is no longer part of the well-offLiberal Party, and has become painfully aware of the fact that a political party cannot live on screaming headlines a lone. Yet, although the new breed of Dutch politicians can rely on some sympathy among America’s conservative elite, it is unlikely they are to receive much cash.

First of all, institutions linked to the US government will think twice before financing a Dutch opposition party, while Holland belongs to America’s most loyal allies in the so-called War on Terror. Secondly, conservative Holland is not quite yet conservative America. Wilders may be anti-Islam and cherish a free market ideology, yet he lives in a country that has formally embraced gay marriages, abortion, euthanasia and a liberal drugs policy.

What does this mean for the future of Wilders? Well, on the short term, he will no doubt continue to provoke headlines.Yet on the long term, a combination of limited finances and equally limited political experience will see the FreedomParty follow in the footsteps of Pim Fortuyn’s party, which failed to win a single seat in the 2006 elections.

PETER SPEETJENS is a Dutch writer and freelance consaltant

May 1, 2007 0 comments

Lebanon

French shipping firm with Lebanese roots boosts Beirut’s port activity

by Executive Staff May 1, 2007

written by Executive Staff

The rise of Beirut Port with strong growth of freight volumeand earnings since late 2004 is partly due to the Frenchshipping firm with Lebanese roots, CMA CGM. With claims tobe the world’s third-largest container shipping line sinceacquiring Delmas—another French shipping line with strongAfrican business—in 2006, CMA CGM has demonstrated a visionfor its Beirut location that includes on the one hand aproject to construct a new office building and on the otherhand involves the group’s reliance on Beirut as a port ofcall and transshipment hub.

However, the company’s two recent activities—finalizing athree-year contract with the Beirut Port Authority at thestart of 2007 and laying the cornerstone for the newregional operations building with capacity for 400 employeesat the port’s free zone in April—are in no way interlaced,insists the general manager for CMA CGM (Compagnie Maritimed’Affrètement-Compagnie Générale Maritime) in Beirut,Georges Kurban who told Executive that it is “wrong” to askabout the two issues in one question.

Building in Beirut

In the core of the matter, the company’s decision to buildits own offices in Beirut is the older of the two moves andrelated to its global strategy. “The project has beendecided long time ago because this is our homeland, wherethe roots and origins of CMA CGM are. This step is withinthe process of the image of the company to have offices invarious parts of the world,” Kurban said.

Other office development projects of the firm include a newoperations center in Marseilles and a regional office inAlgiers, as well as a building in the American seaportVirginia Beach. While the international center of CMA CGMactivities will expand in Marseilles, the Beirut premiseswill also house Merit Corporation, the holding companythrough which CMA CGM’s Lebanese founder and presidentJacques Saade and his family control the shipping firm andseveral smaller sister companies involved in freightforwarding, overland transport, real estate ownership, andtrade in office supplies.

Active for decades

The company has been active in Beirut for decades, Kurbansaid, serving clients in Lebanon and the hinterland. Itexpanded its activities significantly in recent yearsthrough adding the port to its weekly shipping service onthe route that originates in the industrial ports ofnorthern China and Indonesia’s Port Kelang and offersservice to Jeddah, the Mediterranean, and Northern Europe,and last November on the reverse route from Europe to theFar East that also facilitates shipments from Beirut toJeddah and other Red Sea ports.

The weekly stops which CMA CGM secured through its newcontract with the Beirut Port Authority brought business andjobs to the port. When total container movements at the portin January and February increased by 70% from the sameperiod a year ago to over 154,000 twenty-foot-equivalentunits (TEU), transshipment activities by CMA CGM and itslarger rival MSC, which also transships at Beirut, can beexpected to have contributed significantly to the strongrise in traffic, on top of increases in Lebanon’s nationalexports and imports that have given some hopeful indicationsfrom the start of this year.

Kurban did not specify the number of containers which CMAvessels has loaded and unloaded in Beirut per month sincethe company started calling on the port on both legs of itsnorth China route but he confirmed that volumes coming fromChina are generally larger than the volumes traveling theother way.

The importance of the contract that secures CMA CGM’susage of the Beirut Port container terminal at Quay 16clearly lies in the fact that it brings transshipmentbusiness. Attracting major shipping lines to make Beirut ahub for regional traffic was one of the main objectivesbehind the expansion and rehabilitation of Beirut Port thatstarted in the 1990s and resulted in an operationalcontainer terminal with the installation of modern gantrycranes about three years ago.

On the strength of these cranes, which can transfercontainers between CMA CGM’s 6,500 TEUs carrying mothervessels and four (on average) smaller feeder vessels perweekly visit, the company serves its clients in easternMediterranean ports between Mersin in Anatolia and Damiettain Egypt from Beirut. In total, the hub operation coversseven ports in Turkey, Syria, Cyprus, and Egypt.

Beirut’s evolution into a successful transshipment centershows how much the port could achieve after years ofinfighting and various obstacles to its start of containeroperations were removed. It also proved skeptics—which in the past few years have included members of theshipping industry and the port administration—wrong in theirassumption that cargo increases at the port would mainly bedriven by terminating trade and not by transshipment trafficto other destinations.

Beirut’s ‘gift of nature’

For Kurban, the reason why Beirut could win the businessof major shipping lines is a mixture of the liftingcapacities, trained operators, and what he called a “gift ofnature”. “In comparison with other ports in the region,Beirut has new terminal and services that other ports cannotoffer. It also has a natural advantage in the water depth atthe quay that other ports cannot provide,” he said.

However, Kurban added that the gantry cranes of Beirutwith their 60-ton lifting capacity could soon enough beensurpassed by regional deployment of cranes with 100-toncapacity that can move containers at higher speed. Dependingon cargo flows and the services they offer, other nearbyports thus could in future successfully angle for becomingregional hubs.

He sees the future of shipping on global scale influencedpositively not only by China but also by the development ofcountries such as India and Vietnam or Latin Americancountries which claim greater manufacturing roles. “Theshipping industry from 20 years ago is totally differentfrom the shipping industry today, because of the developmentof the countries and the development of bigger and fasterships that offer better revenues and lower costs,” he said.He expects good development of the shipping and freightforwarding industry to continue further “but I believe noone can give you a date” on how long the industry will boomas it did in recent years.

With about 1% of the company’s global work force basedhere, Beirut cannot be expected to be an overpoweringrevenue factor in the books of CMA CGM. The company,according to its results presentation for last year fromMarch 2007, achieved a worldwide turnover of $8.4 billion ona shipping volume of 5.9 million TEUs, representingincreases of 33% and 28% respectively, as the groupintegrated the Delmas company from January 1, 2006. Netprofits last year increased by 5% to $611 million.

Growth strategies of CMA CGM include more acquisitionsworldwide, a near-term increase of its fleet to over 300vessels (on the back of accomplishing a 50% increase in itsfleet size to 286 vessels at the end of last year), andopening of new routes. In North Africa, the group has boldplans for Algeria, including financial services and railservices. In the Middle East, Iraq is a country where Kurbansees a strong role for CMA CGM as soon as the situationimproves, based on the company’s long presence andexperience in the area.

Kurban, on whose desk sat a brochure on an expansionproject of Lattakia Port at time of his interview withExecutive, said that the company’s growth plans for theEastern Mediterranean include operations in Syria andbidding for port projects there and wherever attractivecontracts are being offered. CMA CGM, which manages Maltaport under an exclusive agreement and has operatoragreements in 15 ports overall, had been a bidder for thecontainer terminal operator contract at Beirut Port but didnot win the deal.

In this age when the position of Beirut is that of a portcompeting with several others for a regional role in theEastern Mediterranean and the idea of ever seeing a sizeablecommercial fleet of Lebanese-flagged ships is remote, thefamily-run CMA CGM group built by entrepreneur Jacques Saadeinto a modern-day shipping firm with 11,500 employees (andan active global employer of Lebanese) is the closest thingto a Phoenician maritime trader empire which one can find inthe early 21st century.

May 1, 2007 0 comments

Lebanon

Retailors join forces

by Executive Staff April 12, 2007

written by Executive Staff

Major Lebanese businesses, such as Aïshti, Bank Audi, ABC, Patchi, MEA, BankMed, InterContinental Phoenicia, Virgin Megastore, Global Refund and CityMall have joined forces in a new campaign dubbed “Bhebak Bil Rabih,” (I Love You in Spring.) Promoting Lebanon as a tourist and shopping destination in a conference held on March 1, business owners highlighted the activities planned, including fashion shows, festivals, prizes, car giveaways and more. Participants took, however, a stern stance against both the Lebanese government and politicians, who were taxed with irresponsibility for their failure to solve the ongoing political deadlock paralyzing the BCD (Beirut central district) since the beginning of December.

“In this year alone, we have witnessed a 70% drop in activity. We’re currently trying to compile loss estimates, while our lawyers study different options, including a possible lawsuit,” said Tony Salameh, chairman of the Aïshti department stores. “A committee mainly responsible for looking into rental, electricity and tax expenses with a possible waiver of companies’ payments will be also formed.”

Michel Ferneyni, owner of La Posta, said Lebanon’s political situation presented an unfathomable paradox that started first with the “ongoing dialogue” resulting in the closure of the BCD, followed by “pacific demonstrations,” which crippled the country’s economy. According to participants, to date, over 80 companies have closed down, most of them permanently. Rumors also circulated about the Habtoor Hotel being put up for sale.

Paul Ariss, president of the Syndicate of Restaurant Owners, who met recently with leaders from all political factions, announced that the prime minister’s office had formed a committee, including representatives from the economy, tourism and finance ministries as well as leaders of industry associations to look into possible solutions. In addition, he asked the government to subsidize no interest, medium and long-term loans for existing businesses.

“The greatest damage done is not merely to Lebanon’s economy, but to its image as well, as the people are increasingly losing faith in their country,” concluded Ferneyni. “Many employees, even those with a secure job in Lebanon, are opting for a career abroad, and will never be coming back.”

April 12, 2007 0 comments

Lebanon

Radio Orient goes global

by Executive Staff April 12, 2007

written by Executive Staff

Radio Orient, aka Izaat Al Shark, has become the first Arabic language radio station broadcasting worldwide. In its January issue, Forbes included the station, which is owned by Future TV, as number 17 on its list of the top 40 brands in Middle East. This month, in order to take advantage of its new global reach and maximize its coverage, the station is revamping its grid of programs, bolstered by three major shows as well as a prime entertainment program called “With a Stars.”

Available all over the MENA region through its internet and satellite networks, the radio station is using local channels to retransmit its programs. “In some countries they’re even retransmitted in full,” said Elie Rahme, manager of Radio Orient in Lebanon. The program grid has been modified to take advantage of its new global coverage, including the morning show (airing during peak drive time in Australia), the afternoon show (broadcast in the morning in the US), and the night show. The program “With a Star” features a different Arab star every week, with giveaway prizes that have participants calling in from the all over the world.

Although Rahme did not reveal international market penetration figures, he stated that the international audience participation to the station’s various programs is substantial. “The fact that people call from the United States, Iraq, Australia or Africa provides us with a clear idea of the station’s global reach,” he explained.

Radio Orient is supported by a staff of 17 employees based in Lebanon, with the sound operators and editors shared with Future TV. The joint features of the TV and radio stations explain the unified overall marketing approach, however, it should be pointed out that they do not share advertisement booking deals. “People advertising with Future TV will not necessarily use our radio network, because each medium achieves a different type of exposure,” explained Fayez Bizri, Future TV’s financial manager.

According to Bizri, Radio Orient complements Future TV’s network by reaching beyond the traditional televised medium. “Whether they’re at work or driving in their cars, most people have access to a radio. This exposure will likely increase in countries where driving distances are longer,” says Bizri.

When asked about the cost of the worldwide reach of Radio Orient, Bizri did not disclose any figures, saying, “It is difficult to tabulate leasing, licensing and marketing expenses involved in the process.” He did state, however, that the most advanced technology had been used to place the radio station on the satellite system.

Further bolstering Radio Orient’s appeal is the growth of Future TV’s network. “The TV station expansion plan includes the addition of a 24-hour news channel – scheduled to air in April or June – which will definitely benefit Radio Orient by providing up-to-the-minute reporting,” said Rahme.

During April, Future TV will witness another major overhaul besides its new expansion plan and program grid, when current Chairman Nadim Munla will be replaced by BankMed executive, Samir Hammoud.

April 12, 2007 0 comments

Financial Indicators

Global economic data

by Executive Staff April 12, 2007

written by Executive Staff

Obesity

Percentage of population aged 15 and above with a MBI greater than 30, 2003 or latest available year

More than 50% of adults are now defined as either being overweight or obese in no less than 10 OECD countries: the United States, Mexico, the United Kingdom, Australia, the Slovak Republic, Greece, New Zealand, Hungary, Luxembourg and the Czech Republic. By comparison, overweight and obesity rates are much lower in the OECD’s two Asian countries (Japan and Korea) and in some European countries (France and Switzerland), although overweight and obesity rates are also increasing in these countries. Focusing only on obesity, the prevalence of obesity among adults varies from a low of 3% in Japan and Korea to a high of 31% in the United States.

Based on consistent measures of obesity over time, the rate of obesity has more than doubled over the past twenty years in the United States, while it has almost tripled in Australia and more than tripled in the United Kingdom. The obesity rate in many Western European countries has also increased substantially over the past decade.

Gender differences are striking. Over all countries, more men are overweight than women, but in just over half of OECD countries, more women are obese than men. Taking overweight and obesity together, the rate for women exceeds that for men in only two countries—Mexico and Turkey.

Forest

Forest and other wooded land

As a percentage of land area, latest available year

The percentage of land covered by forest and other wooded land varies widely from country to country: from shares of over 60% in Finland, Sweden, Japan and Korea to 10% or less in the United Kingdom, the Netherlands, Ireland and Iceland.

Long time series are required to capture changes in forest areas. Increases are generally due to active government policies of land afforestation while decreases may be caused by fires, clear-felling of forests without replanting, and conversion of forest land to residential, agricultural and other uses.

The area of forests and wooded land has remained stable or has slightly increased at national level in most OECD countries and has remained stable in the OECD as a whole. However, forest areas have been decreasing at the world level due in part to continued deforestation in tropical countries.

Tsunami aid

DAC member country responses to the tsunami disaster

Millions of US dollars

The unprecedented humanitarian response to the Indian Ocean tsunami prompted governments, international organizations, private individuals, charities and companies to pledge $13.6 billion to the affected countries. Of that, $5.3 billion was from OECD member governments, and a further amount from private citizens in OECD countries.

Donor governments and the European Commission have committed $1.7 billion to emergency aid and $1.9 billion to longer-term reconstruction projects, to be spent by 2009. More than 90% of the emergency aid—nearly $1.6 billion—was spent in the nine months immediately following the disaster. For reconstruction, $473 million has been spent, leaving $1.4 billion committed and in the pipeline for spending over the coming years.

Together, Indonesia and Sri Lanka have received more than 60% of the funds committed so far.

Government debt

General government gross financial liabilities

As a percentage of GDP

From 1990 to 1996, government gross financial liabilities were rising in most countries. Since then, government debt has been decreasing as a percentage of GDP in many of the 27 countries in the table. There are, however, exceptions: government debt ratios continued to increase particularly fast in Japan and Korea and significantly in France, Germany and Greece. Korea’s government debt ratio rose by over 7% per year from 1990 to 2003, but this is measured from a very low initial rate and by 2003, Korea’s government debt ratio was still among the lowest in the OECD.

In 2004, government debt ratios exceeded 100% in Greece, Italy and Japan and was close to 100% in Belgium. Most countries were in a band between 40% and 70%, with three countries reporting debt ratios of under 20%—Luxembourg, Korea and Australia.

April 12, 2007 0 comments

Financial Indicators

Regional equity markets

by Executive Staff April 12, 2007

written by Executive Staff

Beirut SE: Blom (1 month)

Current Year High: 1,625.45 Current Year Low: 1,168.36

Between Feb. 28 and March 16, the BSE saw a spike in hope, as much as spikes go in a coma. The index moved from a year low of 1,168.36 points in late February to 1,248 points on March 16, basically driven up by talks between the opposing sides in the Lebanese political quagmire. As the voices announcing impending solutions faded, so did the traders’ enthusiasm and the third week pushed the BSI lower, to 1,224.19 points on March 26. Research, which Dubai-based investment bank Shuaa conducted on Audi Saradar banking group and concluded with a Neutral recommendation, led Audi to shoot back and claim that the fair value of its stock is significantly better than the $61.09 calculated by Shuaa. Audi shares closed at $63 on Mar 26.

Amman SE (1 month)

Current Year High: 7,407.15 Current Year Low: 5,267.27

The Amman Stock Exchange moved sideways in a range above 6,200 points to close at 6,219.51 points on Mar 26. Arab Bank made headlines, beginning with having to deny a story in a US newspaper that warmed up allegations from a lawsuit that the bank had been used to finance “terrorism.” Later in March, the bank said it halted negotiations on a share sale to a strategic investor thought to be Emaar Properties, and the Jordanian government was said to be increasing its shareholding in Arab Bank in order to keep the Hariri family shareholders from buying up a controlling stake. The stock saw some lively trading in March, with a downward drift. Real estate firm Taameer Jordan was one of the main volume movers toward the end of March. Its share price regained in the second half of the month what it had given in the first half.

Abu Dhabi SM (1 month)

Current Year High: 4,648.80 Current Year Low: 2,899.43

The Abu Dhabi Securities Market could not sustain the gains it had made in late February when it clawed its way above 3,000 points. The index dropped by 4% between March 1 and its close of 2,939 on March 25. At the end of the month, property and energy stocks were on the sunny side of the ADSM while banking values were selling. National Bank of Abu Dhabi, which issued 40% cash dividend and 30% bonus shares on March 22, traded down by 11% in the week between March 19-26. Banking news from neighboring Dubai with its impending merger between Emirates Bank and National Bank of Dubai mean the NBAD will, upon completion of the merger, lose its claim to being the biggest bank in the UAE.

Dubai FM (1 month)

Current Year High: 6,987.91 Current Year Low: 3,675.93

The DFM had a bad month in March, as its index weakened by almost 13% to a new year low of 3,675.93 points on March 25, from 4,207.51 points on Feb. 25. The DFM’s own shares started trading. Emaar, which pleased some analysts with a lower than expected dividend of 20% but disappointed stock owners with the move, traded down and was pushed even to a 12-month low of AED 10.60 on March 25 after Dubai Holding said it will acquire 28% in Emaar through a land-for-shares deal. Shuaa Capital bought back 3 million shares and the stock jumped 10.8% on a single day with high trading volume before sliding again.

Kuwait SE (1 month)

Current Year High: 10,812.30 Current Year Low: 9,164.30

The Kuwait Stock Exchange had a period of growth as its index strengthened by almost 6% to 10,341.3 points on March 26 from 9,769.2 points on Feb. 27. Telecommunications events supplied major influences on the KSE. In the beginning of the month, the share price of Kipco got a boost from the company’s extraordinary profit from selling shares in Kuwaiti mobile operator Wataniya to Qatar’s Qtel. Shares of MTC, the leading telco in Kuwait, advanced 15% to KWD 3.20 on Mar 26, from KWD 2.79 on Feb. 28. At the end of March, MTC emerged as highest bidder in the contest for Saudi Arabia’s third mobile phone license.

Saudi Arabia SE (1 month)

Current Year High: 17,730.96 Current Year Low: 6,916.85

The Saudi Stock Exchange ended a month of modest gains and sideways movements with a splash of cold water. The TASI lost 522 points, or just over 6%, on March 26 in its worst one-day drop since falling 6.3% on July 19 of last year. Sell-offs on March 26 included blue chip companies and leading banks such as Sabic, Al Rajhi Bank, SEC, and the two telcos. For the month, the market moved from 8,356.48 points on Feb. 27 to 8,098.36 points on the evening of March 26. Insurance industry IPOs came in a bundle of five simultaneous subscription offerings worth combined SAR 266 million. The Saudi government created a new $320 million company to operate the SSE, with a long-term view of taking the bourse public.

Muscat SM (1 month)

Current Year High: 5,956.46 Current Year Low: 4,657.16

After a slide in February to 5,781.1 points on Feb 26, the Muscat Securities Market went down by 216.73 points, or 3.7%, between Feb. 26 and March 14 before regaining some ground to close at 5616.24 on March 26. The sultanate’s primary market raised new expectations as four companies announced IPO plans. Besides engineering firm Galfar’s OMR 60 million flotation, Oman Merchant Bank and government-owned investment firm Takamul (in May) and Oman Oil Marketing Company are the IPO candidates for 2007. Additionally, Al Omaniya Financial Services will float a two-year OMR 8 million convertible bond.

Bahrain SE (1 month)

Current Year High: 2,251.15 Current Year Low: 1,996.68

The Bahrain Stock Exchange closed at 2,130.71 points on March 26, down by 0.6% when compared with its level on Feb. 27. The index had dipped lower in the middle of the month but things appeared uneventful and volumes were once again low. Esterad Investment Company moved up 12% in the second half of March and Nass Corp saw some volume toward the end of the month. Mobile phone operator Batelco announced the purchase of 20% in Yemeni network SabaFon for $144 million.

Doha SM: Qatar (1 month)

Current Year High: 9,878.10 Current Year Low: 5,825.80

The downward movement of the Doha Securities Market slowed but did not cease and the DSM index slipped 3.5% to 6,060.16 points on March 26 from 6,277.1 points on Feb. 27. This performance put the DSM again as the GCC’s largest underperformer for the year-to-date with a drop of 15% since Jan. 1. After dividend events, banking stocks such as Ahli and Commercialbank paced the market’s downward trend in the later part of the month. Qtel, which initiated the purchase of 51% in Kuwait’s Wataniya telecom, stabilized toward the end of the month. Nakilat continued its rise that started in February and gained 18% in March. DSM market authorities suspended a brokerage for one month for violating regulations.

Tunis SE (1 month)

Current Year High: 2,712.33 Current Year Low: 1,861.15

The Tunisian Stock Exchange in March traded sideways on a high plateau and the Tunindex closed at 2,610.14 points on March 26, about 100 points below its year high from Feb. 9. Tunis International Bank participated as lenders in a 55 million euros project finance facility for a new residential project in Libya, the first such finance arrangement in Libya’s real estate sector.

Casablanca SE All Shares (1 month)

Current Year High: 11,552.97 Current Year Low: 6,563.27

The Moroccan exchange broke through the 11,000 points line in early March and scaled further index gains to close at 11,478.87 points on March 26 in continuation of its rise which brought its gain for the year to date to a tidy 21%. Morocco’s central bank said it expects commercial banks in the country to be compliant with Basel II rules by this summer. With ongoing reforms, the central bank also hinted that a loosening of restrictions on investing in foreign bourses might be on the books, which might take steam out of the Casablanca Exchange and its extended rally.

Cairo SE: Hermes (1 month)

Current Year High: 65,135.08 Current Year Low: 41,965.37

The Cairo and Alexandria Stock Exchanges entered the month with a week of downward motion to the 61,000 points level but the index moved back up and closed at 63,859.80 points on March 26. While Telecom Egypt shares made some gains in late March on news of higher 2006 results and a very faint outlook of a secondary 20% flotation in a few years’ time, Orascom Telecom Holding received three regulatory decisions against its MobiNil affiliate and got disqualified from bidding for the third Saudi mobile license, with rumors going wild on the reasons. Al-Watany Bank found several suitors interested in buying a strategic stake. Emaar Properties subsidiary Emaar Misr said it would file a complaint over a CASE decision refusing to list its shares.

April 12, 2007 0 comments