Blog

Saturday, July 29, 2006

Oil to reach $125 a barrell

Accordng to Adam Sieminski of Deutsche Bank, we could be seeing $100 a barrel pretty soon. With the conflicts still going strong, the perception of the bulls is that will touch $125.

"Market commentators still seem to view the prospect of $100-a-barrel oil as shocking," he says in a research note. The options market is reflecting a more blase attitude to this risk; $125 oil is the new target for bullish trades."

But with Angola and Azerbaijan looking to increase their production over the medium term, there should be some longer term stability that is not fully dependant on the Middle East, although the Middle East will always play a big part in the "oil game".

Friday, July 28, 2006

The Sheikh Zayed Road Pics Redux

You've seen the before and after pictures of Sheikh Zayed Road, probably about a hundred times, but you haven't seen it like this (you need flash installed):



Courtesy of SignalStrong

Thursday, July 27, 2006

In tribute of online video



courtesy of Veoh

There's a market for this in the UAE for sure

Encorporate a shela instead of the headband, and you have a mega market in the Gulf.



From Popgadget

Wednesday, July 26, 2006

Two Websites to Pass the Time



With no more YouTube, I got a little desperate.

A rival for Dubai Creek and Steven Wilkins

Just heard about a new book called "The Drive to Dubai" by Julie Till

Description

When his father is arrested in Dubai, Kareem has to move fast. He must show that his father is not a thief – and prove that his family is honest. For Kareem is going to marry the beautiful and intelligent Samira Al-Hussain, and she could never marry someone from a bad family.

So Kareem and his brother get to work quickly – with a little help from Samira.


If anyone has read it, let me know what it is like. Maybe Dallas Austin was reading the book on the plane in to Dubai.

Abu Dhabi's Economy

Some numbers out today: Abu Dhabi's GDP for 2005: USD:82.14bn. That's huge. If we assume that 39.4% of the population lives in the emirate of Abu Dhabi and take the population estimate of 4.7m for the whole of the UAE, we get a GDP per capita figure of more than USD.44,000. That is a big number. Abu Dhabi still makes the bulk of the GDP in the UAE, a lot more than Dubai, and this predominantly due to Oil. But, with Abu Dhabi looking to focus on the non oil sector also, with the set up of a JV tourism venture, work starting on Shams by Sorouh, and the focus on the Industrial Zones, the capital emirate will still be a significant player, economy wise, no matter how large Dubai eventually becomes. And while the bombs keep falling, the oil price hovers around that 75 dollar mark, which will further increase Abu Dhabi's GDP for next year. I'm not sure that ironic is the right word to use.

E-readiness and the UAE Knowledge Economy

Two interesting reports of note that came to my attention today, that are related. Firstly, the Economist Intelligence Unit e-readiness rankings for 2006. This places the UAE as 30th in the world and number 2 for the MEA region, after Israel. E-readiness is, to quote from the report:

...the “state of play” of a country’s information and communications technology (ICT)infrastructure and the ability of its consumers, businesses and governments to use ICT to their benefit. When a country does more online—or, as is increasingly the case, wirelessly—the premise is that its economy can become a more transparent and efficient one. Our ranking allows governments to gauge the success of
their technology initiatives against those of other countries. It also provides companies that wish to invest in online operations with an overview of the world’s most promising investment locations.

The e-readiness rankings are a weighted collection of nearly 100 quantitative and qualitative criteria, organised into six distinct categories measuring the various components of a country’s social, political, economic and of course technological development. The underlying principle behind the rankings is that digital business is at its heart business, and that for digital transactions to be widely adopted and efficient they have to thrive in a holistically supportive environment. E-readiness is not simply a matter of the number of computers, broadband connections and mobile phones in the country (although these naturally form a core component of the rankings); it also depends on such things as citizens’ ability to utilise technology skillfully, the transparency of the business and legal systems, and the extent to which governments encourage the use of digital technologies.


To end consumers, who face conflict with Etisalat regarding pay mechanisms, service provision, blanket banning of sites such as flickr, youtube, myspace and the like, this ranking doesn't appear to be make sense. But, looking at it from a broader sense, things are starting to come together in the e-economy. Of course there is a long way to go, but this ranking probably fits about right. What is sad is that the UAE could be even higher, but was hindered due to a relatively low score in connectivity rather than factors concerning infrastructure. What this means is that access and affordabilty are low scoring. It also takes into consideration Voip, which is currently not allowed in the country. Some would say that the weighting is skewed because of the high score that the UAE received in business environment, but in totality, the core accurately places the UAE,especially is you look at those placed close to it.

The other report worth looking at is the one released by Madar Research (free sign up required to obtain the full 116 page report). The report, entitled United Arab Emirates Knowledge Economy 2006, provides an overview of the UAE and the separate emirates, in relation to institutional, infrastructural and human resources components of a knowledge economy. There is also a "roadmap" recommendation that the UAE is likely to take to position the country amongst other global players.

The report is actually very well written, and puts ICT in context amongst all the major factors in the economy and in comparison to the region. The precursor concerning the UAE context is succinct and to the point and provides an excellent overview to anyone wanting a snapshot of the country, talking of the general themes of economic diversification, construction, budgets, free trade and the like. And while the bulk of the report centers on the knowledge economy, it is worth a look. The reason why I believe it to be good is that it sticts to the facts, and doesn't really look to have an agenda, apart from providing good quality research. And, in places, it is critical where it needs to be, from a point of pointing out discrepancies where the UAE could do better. Despite all this positive gusto, this report demonstrates very clearly that there is a growing divide between the two powerhouse emirates of Abu Dhabi and Dubai with the others. However, if you have a few minutes to spare, this is a worthwhile read, especially for the information junkies, like myself.

Tuesday, July 25, 2006

Who likes who in the Middle East?

While the UAE is pretty passive in its allegiances (i.e. you won't see any active play, although there may be some things going on behind the scenes), being in the Middle East means that you should really know what is going in. For years I have struggled with who is linked to who, who gets on with who etc etc. And then, as if by magic, Slate produce this amazing Middle East Buddy List showing the relationship between the various parties involved. Ingenious.

Click here to view the interactive version of the diagram below:

Sunday, July 23, 2006

Residential Predictions

Does anyone really know what is going on with demand and supply of residential units in Dubai? It is notoriously difficult to predict the current state of affairs, with a variety of small and large scale projects being announced. Add to that the changes, delays, and cancellations, and you may find it a little difficult to find a base case to start from. Furthermore, similar sounding projects all focused around sun, sand, water, and the like, it seems as if someone is joking with you so that you don't know what the state of play actually is.

I don't know who Prime Research are, but they have published some interesting numbers on residential unit completion:

2006 - 40,000
2007 - 52,000 (65,000)
2008 - 63,000 (66,000)

In isolation you would be forgiven if this doesn't mean anything to you. But let's thrown in this paragraph from menareport:

Prime Research's base case demand and supply forecasts imply a shortage of c.a. 12,000 residential units in 2006, followed by a supply excess of c.a. 6,000 and 33,000 units in 2007 and 2008 respectively. Rents and prices are thus expected to follow an upward trajectory in 2006. The marginal imbalance foreseen in 2007 leads us to believe that the general perception of a severe correction in the medium term is incorrect. Adjustments in prices are likely to vary from segment to segment, with a continued shortage in villas and medium to low end apartments expected to support prices in these sectors. Within the high end apartments segment, fundamentals, such as location and quality, are expected to determine the extent, if any, of correction. Rents, on the other hand, are more likely to witness a downward adjustment as a result of increased vacancy and greater acceptance of mortgage finance.

What does this mean? Crucially, if the numbers are to believed, and in my opinion, they look reasonable, supply is beginning to meet demand. With further completions due in future years, this should mean that rents and prices should stablise. Your landlord wont be able to charge you the excessive rents of recent years. Well maybe he will, but they are unlikely to increase in the same way as they have over the previous years. For the average Joe, this is good news as if your rent is too high, you will move elsewhere. This is all well and good, but is it too late?