is gold always the ‘gold’ standard

ww

w.o

meg

awat

ches

.com

PLANET OCEAN"Standing on the Moon looking back at Earth – this lovely place you justcame from – you see all the colours, and you know what they represent.

Having left the water planet, with all that water brings to the Earth interms of colour and abundant life, the absence of water and atmosphere

on the desolate surface of the Moon gives rise to a stark contrast."– Buzz Aldrin, astronaut

More information available atOMEGA Middle East, Emirates TowersDubai, UAE. Tel: +971 4 3300455

Gold, Gold, Gold. Investors unwavering conviction that when all else fails, bet gold. Investing in gold for the moment is logical because it provides a hedge against inflation, deflation and most importantly currency devaluation.

Statistics released by the World Gold Council support the notion of ‘Gold is good’ as the research confirms that emerging economics such as Mexico, Russia, China, India, Korea and Thailand have increased their holdings of gold, thus, reducing supply and helping to boost market sentiment.

Prior to the gold price spike of March 2008, investors would have earned a healthy profit over a three year period as the value of their investment doubled. Gold as part of an investment portfolio will remain an effective inflationary hedge because it represents real value; as prices start to increase, the value of gold will appreciate. Gold is traded in U.S. dollars; a decline in U.S. dollars would result in an increased amount of U.S. dollars needed to purchase the same quantity of gold which leads to an increase in the value of gold. Prominent investment managers’, Shaun Price and Marc Lubazka of Touchstone

Large Cap Growth Fund and Aurum Advisors respectively, are of the view that investing in gold will not only serve as a hedge against the current economic uncertainty but that gold will provide the long-term growth that has recently been lacking from investors’ portfolios.

Commodity Ownership Ownership of gold, similar to other commodities, comes in two forms - direct or indirect. Direct cash investment (ownership) is expensive and time consuming. Purchasing of the underlying commodity is a rare approach as it involves storage costs, insurance expenses and valuation expenses. In addition, no income is earned representing cash opportunity cost. Returns are only earned when the commodity is sold. Indirect ownership involves investing in commodities through an investment vehicle (intermediary) or purchasing the stock or bonds of a commodity firm such as Rio Tinto. This approach allows access to commodities which would have been previously available due to capital requirements and expertise in managing the investments.

The Myth of ‘the Safe Bet’ The concept of gold being a bubble is not farfetched. As the old adage goes “what goes up must come down”. Prior to the financial meltdown of August 2007, investors’ had utmost confidence in real estate, specifically in residential

real estate investments. The false sense of

security was based on assumptions that house prices

won’t fall and the process

used to rate whether a borrower was a credit risk was flawless. Furthermore, sophisticated financial products such as Mortgage Backed Securities (MBS’s) and Collateral Default Obligations (CDOs) helped repackage these securities making it appear as a ‘riskless’ trade. Similarly, the characteristics of gold may lead investors to believe that in the current economic climate, gold is a ‘safe bet’. Investors must be aware, gold should be held as part of a balanced portfolio for diversification benefits.

To Gold or not to Gold? The U.S. government is set to continue with the quantitative easing approach which has yet to have the desired impact. Consequently, discouraging bond and equity investors with characteristics such as high inflation, high volatility, and low liquidity look set to continue.

Further support of gold investment is that it strengthens the current aims of central banks which involve stimulating growth and diversifying their foreign exchange reserves, amid fears of currency debasement. Subsequently, boosting demand for gold.

Gold as part of a balance portfolio will provide the diversification and hedging needs that investors require during these uncertain economic times of inflation, inept fiscal and monetary policies exacerbated by Euro zone debt crisis. In the near future; ‘As good as gold’ may prevail as the marquee statement among investors. Therefore, investing in gold for the moment is a “Safe Bet”, if there is one.

Is Gold AlwAys The ‘Gold’ sTAndArd? By: Yasin Ebrahim

About the AuthoRYasin Ebrahim is a freelance journalist researching developments in the alternative investment field through exposure in traditional and social media. His background in risk and investment management coupled with leading industry qualifications; Financial Risk Manager (FRM), Chartered Alternative Investment Analyst (CAIA) provide him with a sound background to explore alternative investments.

busInEss PlAnETCAPITAL BusIness MAgAzIne

29

International Colloquium

organised by theFaculty of Business and Commercial Sciencesat the Holy Spirit University of Kaslik

jointly with the Arab Society of Faculties of Business, Economic and Political Sciences

Date : April 2 and 3, 2012 (Official opening session on April 2, 2012 at 10:00 a.m.)Place : John-Paul II Amphitheater – USEK Main Campus

For registration please visit www.usekic2012.com


31

asian coMPanies set to Benefit froM the eurozone crisis

By: FTI Consulting

Asian companies are more intent on finding investment opportunities in Europe than those in the

Middle East or North America, according to research from FTI Consulting, Inc, the global business advisory firm dedicated to helping organisations protect and enhance their enterprise value.

The FTI Eurozone Poll, a survey of 800 business leaders in Asia, the Middle East and North America gauging their response to the Eurozone crisis, found

that 45% of businesses in Asia are either currently doing or looking to make strategic acquisitions in Europe in the next 12 months, compared with just 14% in the Middle East and 7% in North America.

Overall, the research highlighted a buoyant mood in Asia: Sixty seven percent of companies in the region are looking to invest in innovation, and 50% are focused on organic growth. However, it is clear that Europe is seen by Asian companies to provide more fertile ground

for acquisitions, with fewer (35%) looking at strategic acquisitions outside of the Eurozone.

Business leaders in the Middle East and North America claim less exposure towards the economic problems of Europe but are more negative. Seventy percent of executives in North America say their businesses have remained untouched by the Eurozone crisis, but of those where it has had an impact, 25% say it is negative and just 6% positive. Similarly, in the

Middle East, 38%

say the crisis has had an unfavourable impact, compared

with 16% favorable. By contrast, 73% of businesses in Asia have been

impacted, with an even split of positive and negative.

“It’s easy for businesses outside of Europe to view the crisis with a mixture of relief that they are outside of the zone yet still fear the contagion may infect their own markets”, said Mark Malloch-Brown, EMEA Chairman, FTI Consulting. “But in any period of systemic dislocation, there will be winners and losers. Asset prices now are significantly lower than they had been, meaning significant benefits for those investors alert and prepared for the risks. The next 12 months will see massive shifts in corporate ownership, creating opportunities and risks for companies both in and out of the Eurozone.”

“Our research highlights that Asian businesses have the right business fundamentals and, more important, the right mentality to take advantage of the changing landscape,” he added.

Other findings from the FTI Eurozone Poll Significant minority think the euro will not survive 2012

While the FTI Consulting research highlights that the majority of business leaders outside of the Eurozone think the euro will survive, a significant majority are less confident of its future. Nearly a third (31%) of respondents strongly or slightly agree that the euro will not last the year, with a further 64% thinking that at least one of the 17 members will stop using the currency by the end of 2012, and that sentiment was evenly spread across

the three main regions. Certainly, many companies are preparing for the worst. Sixty-three percent have or would request changes in contracts with Eurozone countries to include scenarios for exit. Furthermore, the stability of the euro is seen as a critical issue by nearly two-thirds (61%) of respondents.

The UK’s status elevated in response to the Eurozone crisis

The research from FTI Consulting highlights that the UK’s reputation amongst executives outside of Europe has risen, as the UK’s continental counterparts are seen to be more impacted by the sovereign debt crises and concerns over the currency. In total 72% of respondents to the FTI Consulting survey agree that the UK will increase in importance as a gateway to Europe, split across the regions as follows: 78% in Asia, 71% in North America and 64% in the Middle East.

While the findings support the idea of the United Kingdom as a safe haven for foreign investors, it is far from clear that the data represents a ringing endorsement for the UK government’s decision to separate itself from the euro problem. The research establishes that many executives outside of Europe want greater stability in the Eurozone, and that an overwhelming majority (83%) now believe that Germans will lead the recovery.

When asked about the performance of the leaders of the major European economies, the survey highlighted ambivalence and indicated little variation between the Big Three: German Chancellor Angela Merkel rated highest with a performance rating of 6.3 out of 10, compared with 5.6 out of 10 for both David Cameron, UK Prime Minister, and Nicolas Sarkozy, the French president.

Businesses call on their political leaders to help Europe’s economy

Business leaders outside of the Eurozone are surprisingly supportive of intervention from their own political leaders, according to the FTI Consulting research. In total, 69% of respondents agree that their

country’s leaders should support the European Union in its recovery process. The sentiment is felt strongest in Asia, where a large majority (78%) support intervention, unsurprising given its own exposure and commercial interest in the region. However, there is still strong support in North America (63%) for government intervention, even as the United States gears up for its presidential race, indicating that businesses in the United States and Canada will still feel an economic chill if the Eurozone crisis deepens.

Furthermore, there are split views on the responsibilities of business and governments to provide a solution to the crisis. A slight majority, 56%, favor the market as opposed to a government-led solution, with the Asians and North Americans most supportive at 60% and 56%, respectively, and the Middle East businesses split almost equally.

www.capital-me.com32

About FtI consultIngFTI Consulting, Inc. is a global business advisory firm dedicated to helping organisations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. With more than 3,800 employees located in 23 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management, strategic communications and restructuring. The company generated $1.4 billion in revenues during fiscal year 2010. More information can be found at www.fticonsulting.co.uk.

About the FtI euRozone PollResearch was conducted online by the Strategy Consulting and Research team at FTI Consulting from 9 to 16 January 2012 with more than 800 C-suite executives involved in strategic decisions for their private organisation. Respondents were drawn from affiliate panel databases. The three regions and countries within were selected based upon the known amount of trade they presently conduct with countries in the European Union and prospects for increased prominence. Respondents from each of the three key regions totalled 351 in Asia, 236 in the Middle East and 221 in North America. A breakdown of responses by each country involved is possible where the total number of respondents exceeds 50.


33

a Pivotal year ahead By: SEI Investment Management Unit

There is no denying that the past year was a trying one for investors. Global equity markets

were mostly lower. Global bond markets saw extreme volatility, with the debt of a few select countries (the U.S., Germany, the U.K. and Canada, to mention the most important ones) registering the only healthy returns in an investment environment that swung from risk-on to risk-off with unnerving frequency and ferocity.

Global financial markets remain fragile and subject to sharp moves. With Europe on the cusp of recession, China labouring through the downside of a property bubble, and the U.S. heading towards its most important election cycle in decades, there will be no quick end to the uncertainty that has made investing a difficult enterprise.

Europe on the RopesEconomic indicators in the Eurozone have taken a turn for the worse in recent months. Countries that use the euro as their national currency are seeing signs of outright recession. Only Germany’s composite purchasing manager indices are above the recession line. Retail sales in the Eurozone have been in negative territory for several months. Labour-market indicators have deteriorated as well, with the number of unemployed rising for six consecutive months through October and the Eurozone unemployment rate rising to 10.3%.

A Generation Without a PlaceMost worrisome is the sharp rise in the unemployment rate of younger workers (24 years old and younger). At 21.4%, Europe’s youth unemployment is more than twice the Eurozone’s overall average. Youth unemployment has risen to an astounding 48.9% in Spain and Greece is not far behind at 45.1%.

fOuRTH quARTER EcOnOMIc OuTlOOk

In Exhibit 2, we note the competitive rankings of various countries based on the WEF’s 12 pillars of competitiveness.

Exhibit 2: Greece Reaps the Bitter Fruits Austerity

1 2 3 4 5 6 7 8 9 10 11 12 13 15 16 18 19 26 29

36 41 43 45

53 56 66

90

Nat

iona

l Com

petit

iven

ess

Ran

k Sources: World Economic Forum, SEI Rankings consist of 142 countries in total. Blue columns denote eurozone nations.

European Road Trip: Are We There Yet?Europe’s search for a solution to its debt crisis has become more desperate. Although a great deal of attention has been paid to the U.K.’s veto to any E.U. treaty change, there was no reason to believe that a unanimous agreement among all 27 members of the E.U. would result in a complete and satisfactory solution to the crisis that has enveloped the Eurozone for the past two years.

The weakest members of the Eurozone are simply too indebted and

uncompetitive. If anyone knows the costs of setting things right, it would be German taxpayers. Between 1990 and 2010, the six former East German states received €1.3 trillion in government reconstruction payments under the so-called Solidarity Pact. The pact continues to cost some €80 billion per year.

In the latest rankings, Greece dropped to 90 out of 142 nations. Despite nearly two years of additional austerity and a sharp deterioration in living standards, Greece has slipped substantially in competitiveness and is now positioned,

for example, behind Lebanon and just ahead of El Salvador.

The other problem debtors of the Eurozone - Portugal (ranked 45), Italy (43), Spain (36) and Ireland (29) - are still significantly behind the Eurozone’s most competitive nations - Finland, Germany and the Netherlands - which are all in the world’s top ten. The market remains unconvinced that Greece will remain part of the European Monetary Union.

We think it is reasonable to assume that Eurozone policymakers will do all they can to create a firewall that protects Italy and Spain. The recent agreement to:(1) bolster the European Financial Stability Facility (EFSF); (2) bring forward the starting date of the European Stability Mechanism (ESM, the permanent bailout fund); and (3) contribute €150 billion to the International Monetary Fund’s (IMF) general fund in order to get around the European Community’s Treaty commitment against the direct bailout of member states, will theoretically protect the government debt of Italy and Spain for the next three years, if those countries’ governments prove unable to fund themselves through normal market channels.

An additional element of any solution to the European debt crisis is the recapitalisation of the banking system. New stress tests have been conducted, indicating some €115 billion in new capital must be raised by mid-year 2012 for banks to achieve a Tier 1 capital ratio of 9%.

Banks’ efforts to improve their Tier 1 capital ratios will also entail a reduction in assets, including loans and investments. This is almost certain to exacerbate the credit squeeze that has already hit Europe’s corporate sector.

As Exhibit 4 shows, equity markets tend to struggle when financing conditions become more difficult. However, Exhibit 4 also shows that equity markets tend to rise when lending standards ease. Thus, we may encounter a terrific buying opportunity in European stocks in the months ahead.


Exhibit 3: Ten-Year Government Bond Yields

Source: Reuter’s/Datastream, national sources One basis point equals 0.01%; 100 basis points equals one percent.

0

500

1000

1500

2000

2500

3000

3500

4000

Bas

is P

oint

s

Greece Portugal Ireland Spain Italy France

Exhibit 4: Brother, Can You Spare a Euro?

Sources: European Central Bank, MSCI, SEI

0

50

100

150

200

250

300

-20 -10

0 10 20 30 40 50 60 70

Q1

2003

Q

3 20

03

Q1

2004

Q

3 20

04

Q1

2005

Q

3 20

05

Q1

2006

Q

3 20

06

Q1

2007

Q

3 20

07

Q1

2008

Q

3 20

08

Q1

2009

Q

3 20

09

Q1

2010

Q

3 20

10

Q1

2011

Q

3 20

11

Q1

2012

Sto

ck P

rice

Inde

x

Net

Per

cent

age

Tigh

teni

ng

Net Percentage of Banks Tightening Credit Standards (left axis) MSCI - Eurozone Local Currency Share Price Index (right axis)

‘Expanding’ the ECB’s RoleFinally, we need to examine the role of the European Central Bank (ECB). Under Mario Draghi, the new ECB president, policy rates have fallen one-half of a percentage point, fully reversing the ill-advised increases that occurred in April and July 2011. In 2012, SEI forecasts additional interest-rate cuts as the ECB leans against the recessionary pressures now building in the Eurozone. Indeed, the adoption of a zero-interest-rate policy (ZIRP) is a possibility, since the ECB wants to avoid engaging in U.S. Federal Reserve-style quantitative easing as long as possible. That said, the ECB’s balance sheet expanded sharply during the second half of 2011 as it engaged in emergency lending to banks (see Exhibit 5).

US: A Look Back at 2011Looking back one year ago, we were mostly right to expect moderate U.S. economic growth, driven by a recovery in household consumption and solid gains in business fixed investment. We also thought that U.S. core inflation would remain subdued (that is, below 2%) despite a further rise in commodity prices, and that the U.S. federal funds rate (the Federal Reserve’s targeted rate for interbank lending) would stay unchanged through the year.

However, we did not anticipate the price volatility exhibited by markets, the plunge in consumer, business and investor confidence levels, or the extreme risk aversion displayed by investors in the July to September period. Although SEI correctly predicted that the U.S. stock market would be one of the better global performers, particularly against European stock markets, we were too optimistic in anticipating a move back toward the 2007 highs.

Looking Ahead - Mostly PositiveExhibit 6 on the following page compares the Conference Board’s Composite Index of Leading Economic Indicators (LEI) to the change in real (inflation-adjusted) gross domestic product (GDP). The LEI series, which is advanced by two quarters in light of its

predictive nature, seems to point to an accelerating pace of business activity as the U.S. heads into 2012. We can still be fairly confident that the U.S. economy will continue to expand at a moderate pace over the next six months and more likely than not, over the entirety of 2012.

Positive Surprises, Bond Markets UnmovedSluggish employment growth notwithstanding, the U.S. economy has been on an upswing according to the most recent data. Judging by the reactions of financial markets though, investors remain quite sceptical about the sustainability of the advance. Exhibit 9 tracks Citigroup’s Economic Surprise Index (ESI) for the U.S. against

the yield on benchmark 10-year U.S. Treasuries.

In the near term, it appears that U.S. financial markets will be held hostage to the latest developments in Europe. Bond yields in the U.S. are lower than we think they should be given general economic conditions, presumably as a result of investors having a greater-than-normal preference for safety and liquidity.

Equities Buoyant, U.S. Banks Look CheapIn contrast to the Treasury market, U.S. equities did respond positively to the improvement in economic fundamentals, posting one of their best-ever October performances before


35

Exhibit 6: No U.S. Recession

-10

-5

0

5

10

15

Q1

1981

Q

1 19

82

Q1

1983

Q

1 19

84

Q1

1985

Q

1 19

86

Q1

1987

Q

1 19

88

Q1

1989

Q

1 19

90

Q1

1991

Q

1 19

92

Q1

1993

Q

1 19

94

Q1

1995

Q

1 19

96

Q1

1997

Q

1 19

98

Q1

1999

Q

1 20

00

Q1

2001

Q

1 20

02

Q1

2003

Q

1 20

04

Q1

2005

Q

1 20

06

Q1

2007

Q

1 20

08

Q1

2009

Q

1 20

10

Q1

2011

Q

1 20

12

Per

cent

Cha

nge

over

Fou

r Qua

rters

NBER-Defined Recession Periods Real GDP Leading Economic Indicators, Advanced Two Quarters

Sources: Bureau of Economic Analysis, The Conference Board, National Bureau of Economic Research, SEI

Sources: Bureau of Economic Analysis, The Conference Board, National Bureau of Economic Research, SEI

Exhibit 5: Central Banks Are Pumping Up

Sources: Bank of England, European Central Bank, Federal Reserve Board, SEI

0

5

10

15

20

25

30

Q1

2006

Q

2 20

06

Q3

2006

Q

4 20

06

Q1

2007

Q

2 20

07

Q3

2007

Q

4 20

07

Q1

2008

Q

2 20

08

Q3

2008

Q

4 20

08

Q1

2009

Q

2 20

09

Q3

2009

Q

4 20

09

Q1

2010

Q

2 20

10

Q3

2010

Q

4 20

10

Q1

2011

Q

2 20

11

Q3

2011

Q

4 20

11 Cen

tral B

ank

Ass

ets,

% o

f GD

P

European Central Bank U.S. Federal Reserve Bank of England

entering a new, higher trading range compared to the August to September period. The U.S. economy is continuing its process of repair and rejuvenation. In addition, the U.S. banking system is in much better shape than Europe’s - capital ratios are stronger, assets are generally priced more realistically on balance sheets and the mortgage mess is slowly getting sorted out. In contrast to Europe, where assets are being sold to raise capital, the U.S. banking system’s loans and investments expanded by almost 5% from the start of 2011 through October 31.

Emerging Markets: Shifting into a Slower LaneAt the beginning of 2011, the outlook for emerging economies was relatively bright. GDP growth rates were far superior to those of the advanced countries, and capital inflows into emerging-market debt and equity were exceptionally strong. We thought that inflation would accelerate, which would elicit a tightening of monetary policy in many of these countries. In 2011, these economies continued to grow well in excess of the advanced world, although absolute growth fell somewhat short of expectations in Asia and Latin America.

While returns on emerging-market debt were solid in 2011 (up 7.35% in U.S. dollar terms as measured by the

JPMorgan EMBI-Global Diversified Index), equity markets skidded a substantial 18% in U.S. dollar terms according to the MSCI Emerging Markets Stock Index.

In recent months, the worsening debt crisis in the Eurozone has weighed especially heavily on Eastern European stock markets. India has lost significant ground as its economic growth rate has slowed while inflation continues to accelerate (the rise in consumer prices recently exceeded 8.5% on a year-over-year basis). The economic turmoil associated with the Arab Spring and Libya’s civil war hurt Middle East markets through much of the year, while the recent protests in Russia have hit stock prices in that country.

China, too, recorded a painful share-price decline last year of 18.2% (in U.S. dollar terms) despite its exceptional growth. Although China’s economy continues to grow strongly, there are developing signs of economic weakness. The pace of growth in exports, for example, has decelerated sharply as advanced economies stall, particularly in Europe. In addition, there are signs of a cool-down in previously bubbly private-property markets. This has caused consternation because investors are not sure how badly the financial system in China would be affected by a serious

retrenchment in the private-property markets. The growth rate of the money supply in China has eased considerably. Over the past 12 months, growth in M1 (which generally consists of currency in circulation, demand deposits and certain types of checking accounts) has been cut in half to an 8.5% rate of advance.

The weakness evident in many commodity prices may be a tip-off that China is experiencing a more challenging economic period than the official data suggest. On a positive note, the sharp decline in food prices over the past year has helped improve China’s inflation picture. Consumer inflation on a year-over-year basis eased to a 4.2% rate, versus readings above 6% as recently as August and September.

SEI’s ViewSEI’s Portfolio Strategy Group presently holds three key tactical views of capital markets:

1. We are neutral on stocks versus bonds.

2. We favour the U.S. versus international equities.

3. We favour high-yield fixed income versus investment-grade fixed income.

Watch Out for Those Black SwansAs the year 2012 gets underway, geopolitical developments could exert an important but hard-to-predict impact on financial markets. The Middle East remains an area of great ferment. While investors must continue to pay attention to the “known knowns” of Europe’s debt crisis, American politics and slowing Chinese growth, we should also be attentive to the emerging and as-yet-unidentified risks and challenges of our times.


Exhibit 9: Positive Surprises, Minimal Impact

1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5

-150

-100

-50

0

50

100

Jan-

2007

A

pr-2

007

Jul-2

007

Oct

-200

7 Ja

n-20

08

Apr

-200

8 Ju

l-200

8 O

ct-2

008

Jan-

2009

A

pr-2

009

Jul-2

009

Oct

-200

9 Ja

n-20

10

Apr

-201

0 Ju

l-201

0 O

ct-2

010

Jan-

2011

A

pr-2

011

Jul-2

011

Oct

-201

1

Ann

ualiz

ed Y

ield

to M

atur

ity

Inde

x Va

lue

Citigroup Economic Surprise Index (left axis) Benchmark Ten-Year Treasury Bond (right axis)

Sources: Citigroup, Federal Reserve Board, SEI Index values greater (less) than zero indicate that reported economic data is surpassing (falling short of ) consensus expectations.

About the AuthoRSEI is a leading global provider of asset management, investment processing, and investment operations solutions for institutional and personal wealth management, helping private banks, investment advisors, investment managers, institutional investors and affluent individuals create and manage wealth.

still on the gloBal front BurnerBy: Merrill Lynch

The lull before the storm?Investors continue to tread lightly in 2012. On the

whole, markets are letting off steam. Accordingly, global flows revealed that equity investors began moving into emerging markets. This brightened outlook was reflected in local markets, where expectations of interest rate cuts have been trimmed. This is especially the case in Latin America. The central bank of Chile, however, surprised expectations and lowered rates.

Meanwhile in Europe, the ECB stepped back from policy easing. The Governing

Council left interest rates at 1% but still sees “substantial” downside risks. Standing pat was also the flavor of the month in Indonesia and Poland, where rates remained at 6% and 4.5%, respectively. On the data front, industrial production prints confirmed the weakening pace of factory output at the end of last year. Manufacturing growth struck a soft tone in the UK, Euro area, Turkey and Malaysia. On the final demand side, retail sales picked up strongly in Brazil but came in below expectations in the US. In China, December loans surprised on the upside, whereas inflation continued on its downward trend.

Hot topic: Europe will remain a global issueThe European crisis remains center-stage but with hints of normalization in capital flows to emerging markets, investors have become more discriminating. The latest currency moves summarize the prevailing sentiment: greater appetite for LatAm returns and a pass on EMEA assets. This pattern conveys both caution with exposure to the Euro area and optimism on the back of the recent improvement in the US macro data. But while not necessarily dismissing the risks in Europe, this pattern suggests markets may no longer view the fallout


37

from the ongoing crisis as having global repercussions.

Confidence in the potential for a US decoupling is rising. According to the IMF, the US accounts for about one-third of both global stock and bond market capitalization. But in terms of turnover, the clout of US markets can reach two-thirds of the global total. Arguing for less anxiety on the US exposure to Europe are better economic momentum and greater policymaking efforts to redistribute liquidity. The expansion of FX swap line agreements, the ECB’s offer of unlimited long-term refinancing, and the European Council announcement that EU and other countries would channel resources to the IMF have improved the actual and prospective liquidity situation in Europe. But are these factors enough to restrainthe global reach of the European crisis?

The bigger pictureEurope matters because of its size and the euro’s reserve currency status. The Euro area’s systemic relevance means that its governance crisis is a global menace. Europe is rightly being held to account for fiscal mismanagement, but there may be bigger cracks in the background. A fundamental issue is the international allocation of liquidity. Liquidity crises are typically generated by solvency concerns. In a global context, however, this raises questions of international cost sharing. In practice, the IMF is the institution with the legitimacy to dilute the burden across its members and channel official liquidity to troubled parts of the system.

Saudi Arabia: A supportive 2012 budgetWhile the higher budgeted expenditure appropriations broadly reflect the permanent nature of the current expenditure part of the Arab-unrest related stimulus, the focus next year will be on achieving a better quality of spending. This will occur as housing appropriations and capital injections to specialized lending institutions increasingly filter into the economy. Also, this would most likely entail an increase in credit disintermediation, as recognized in the budget, but a robust non-oil

economy is likely to support continued broader banking sector loan growth.

A very strong macro performance in 2011The preliminary outturns for macro indicators for the past year, show growth was strong as a buoyant private sector expansion was underpinned by the government stimulus. The decomposition of growth however is better than expected with much stronger growth from the non-oil sector than projected. The non-hydrocarbon sector grew by 7.8% in 2011 vs our forecast of 4.9%. To put it into perspective, the reported non-oil sector growth is the highest in the last three decades. Also, unlike the 2009 stimulus where the non-oil government sector expanded by 5.2% to cushion the downturn amid weak private sector, private sector growth was buoyant and broad based. Note that the oil sector is however reported to have expanded by just 4.3% whereas crude oil production likely grew by c10% in 2011.

Large fiscal surplus achieved despite record expendituresThe MoF reports the preliminary fiscal balance was SAR306 billion (14.1% of GDP), vs our projections of SAR165 billion (7.7% of GDPe). The difference stems mainly from higher revenues (SAR1,110 billion vs SAR989 billion anticipated).

Non-oil revenues were in line with our projections (SAR77.7 billion) but oil revenues were higher than expected, due to higher than projected oil prices and production. Stimulus spending appears to have been on track, comfortably financed by high oil prices and production. The decision to allocate SAR250 billion from this year’s fiscal surplus into a dedicated account at SAMA to finance the construction of 500,000 residential units could help expedite the process and put the onus on execution of the capital spending appropriations. This also treats the transfer as an off-budgetary item in the budget presentations, conveniently bringing down the fiscal breakeven oil price by $27/bbl.

2012 budget is the highest on recordThe 2012 budgeted expenditure is the largest on record (19% increase over 2011 budget) but is below preliminary actual 2011 spending. Budgeted revenues are also the largest on record. This fits with the fact that budgeted capital expenditures are at similar levels to 2010 and 2011 budgets (though 33% higher than the last disclosed realized capex in 2010).

The increase in appropriations thus likely reflects higher current spending, in line with the continuing impact of the permanent portions of the Arab unrest-related stimulus. Fiscal revenues are budgeted at SAR702 billion, expenditures at SAR690 billion, meaning a surplus of SAR12 billion is actually being budgeted in contrary to the past few years. Capital expenditures are budgeted at SAR265 billion while current spending is budgeted at SAR425 billion.

Disclosed decomposition of spending shows appropriations for education are the largest at 24% of total (includes construction of 742 new schools), followed by health and social affairs (13% of total, includes construction of 17 new hospitals).

Fiscal stance to remain expansionary in 2012We still expect the fiscal stance to remain supportive of growth next year. We expect total actual expenditures to amount to SAR750 billion in 2012. This would represent 9% overspending (slightly below the norm given more realistic budgeting and shift of supplemental housing appropriations off-budget) and would be 6.7% lower than realized 2011 spending as one-off items from stimulus packages wane.

Our revenue and spending projections are consistent with a fiscal breakeven oil price of $78.5/bbl in 2012. We expect GDP growth of 3.3% in 2012 on higher base effect and drag from oil sector. We see a fiscal surplus of 8.6% of GDP, based on oil production of 9.3mn bpd and oil in $100/bbl handle.


Master accoMPlishMent

cOVER sTORyCAPITAL BusIness MAgAzIne

39


“My Business” is a Joint Collaboration on Entrepreneurship Program for Arab Youth between INJAZ Al-Arab and MASTERCARD Worldwide.

MasterCard, a payment industry giant, has taken the initiative to join hands with INJAZ Al-Arab, a non-profit organization in the Middle East and co-member of Junior Achievement Worldwide, both collaborating on a corporate volunteering program to

provide experiential education and training to Arab youth in work readiness, financial literacy and entrepreneurship. MasterCard will support INJAZ Al-Arab’s ‘It’s My Business’, a leading entrepreneurial mentorship program developed for youth in Lebanon and countries across the Middle East and North Africa (MENA).

The announcement was made February 8th, 2012 at an event MasterCard and INJAZ Al-Arab held at the Intercontinental Phoenicia Hotel, Beirut, marked by the attendance of H.E. Mr. Walid Daouk, Lebanese Minister of Information, Soraya Salti, INJAZ Al-Arab Regional Director and Junior Achievement Senior Vice President, MENA, Patricia Devereux, Group Head, Corporate Philanthropy and Citizenship, Michael Miebach, President, Middle East and Africa, MasterCard Worldwide, Chady Zein, Principal at Booz & Co., and Basel El Tell, Vice President and Regional Manager, Levant, MasterCard Worldwide.

“All young people deserve an opportunity to reach their full potential,” said Miebach. “MasterCard is proud to work with INJAZ Al-Arab to launch the ‘It’s My Business’ program, which we believe is a great investment in youth in Lebanon and across the MENA. Equipping the youth with entrepreneurship skills will enable them to pursue their own business, thus reducing unemployment rates and allowing them to build stronger futures for themselves and their families while positively contributing to the economic development of their countries.”

The program also has the full endorsement of the Lebanese government, allowing a mostly underprivileged public school sector to benefit from international expertise that would otherwise be of scarce availability if not an impossibility. “The introduction of ‘It’s My Business’ program in Lebanon, will provide our youth with a wealth of knowledge on financial literacy and business-related skills, which will allow them to thrive when they enter the real world.,” said H.E., Walid Daouk, Minister of Information, Lebanon.

Carrying forward the vision and inspiration behind INJAZ Al-Arab, is a profoundly committed Salti who said: “Youth unemployment in the MENA region currently stands at 25%, which is double the world average.”

Moreover, research from Booz & Company shows that on average, youth are waiting five years after graduation

MasterCard’s support to INJAZ Al Arab’s entrepreneurship program deepens its commitment to further financial inclusion through the power of entrepreneurship.


41

to find their first job. Receiving support from MasterCard allows us to address this youth unemployment crisis by improving the workforce readiness, entrepreneurship, and financial literacy skills of Arab youth. The pilot of this initiative will be implemented in Egypt, Lebanon, Morocco and Saudi Arabia, after which the curriculum will be made available throughout the INJAZ network of 14 countries.

MasterCard, having a deep corporate commitment to a philanthropy agenda, entrepreneurial education, financial education and inclusion, was also intensifying its presence and investment in the MENA region. “We looked at INJAZ and saw that they wanted to expand their core program, which had been the age range of 14-18, down to the age of 11, and this is our sweet spot,” Miebach told the

magazine. “This particular pilot program already has scale. We can’t expect 3000 students to become entrepreneurs, but we can expect them to think out of the box, take initiatives, and become positively disposed to do something about their own future. At the same time, it’s important to extend the range upwards, as students go to university, and refresh the concepts to encourage them to do something about all the things they had learned before.”

MasterCard employees will bring their skills set and market experience to the classroom, not to talk about the payments industry, but about their knowledge, transferring it to students, helping them think differently of the world. “The fundamental skills of how to set up a company, how to think about customers, how to differentiate yourself from the market, are all brought using basic concepts that these

students understand,” Miebach added. INJAZ depends on these volunteer networks that provide expertise. “We encourage volunteering and CSR within MasterCard. We free up time for our people with good incentives, and encourage entrepreneurship within MasterCard; it is about people empowerment and risk taking,” added Miebach.

MasterCard believes that economic growth and sustainability cannot be achieved without addressing youth unemployment, creating more jobs through SMEs and tangible business models that work.

Booz& Co. identified 10 imperatives that all stakeholders in the entrepreneurial ecosystem should follow to influence and improve the entrepreneurial ecosystem in the MENA region:

1. Offer a helping hand. Established entrepreneurs should give time, advice and seed funding to aspiring entrepreneurs.

2. Change behaviors and evolve the culture. Discuss entrepreneurship every day and generate hype around a handful of success stories.

3. Bring entrepreneurship to the classroom. Everyone in high school and university should learn entrepreneurial principles.

4. Bring entrepreneurship to the office. Companies should encourage employees to unleash their own talent.

5. Do not imitate Silicon Valley. Identify and leverage your country’s own unique resources.

6. Welcome new ideas. Engage domestic and foreign workers to encourage a free flow of expertise and enterprise.

7. Break the stereotype. Great entrepreneurial ideas can come from anyone in any industry.

8. Embrace the Diaspora. Tap successful entrepreneurs living abroad for their advice and connections.

9. Eliminate red tape. Governments should give many kinds of support to all types of entrepreneurs.

10. Expand the venture capital (VC) model. VCs need to go beyond funding and provide a support structure for entrepreneurs.

Zein of Booz & Co. highlighted some of the MENA’s shortcomings in terms of youth unemployment, entrepreneurship and future needs for regional nations to promote a vibrant entrepreneurial ecosystem and become globally competitive, based on a summary of ideas discussed at the World Economic Forum Special Meeting on Economic Growth and Job Creation in the Arab World, held last October in Jordan.

One of the Arab world’s top priorities in the coming years is job creation. According to the WEF, the region needs to create 75 million jobs by 2020 just to

keep employment close to current levels. The key to accelerating job creation will be fostering a business environment in which entrepreneurs can easily start new companies, spread innovation and spur economic activity in general.

Booz & Co. said that more than one-half of the population in the MENA region is under the age of 25, posing both enormous opportunities and giant challenges. But, unemployment rates are in the high double digits in most MENA countries, including a staggering 35% in Yemen.

A key to accelerating job creation in the MENA region is fostering an entrepreneurial environment. Once start-ups mature into SMEs, they become significant contributors to employment and gross domestic product (GDP). (See Exhibit 1)

Entrepreneurial ventures are driven by one or a combination of three factors:

• Lifestyle or passion: Entrepreneurs who are motivated in this way create businesses in fields where they have a particular interest, talent or knowledge. • Social good: These individuals are motivated by a social problem and use entrepreneurial principles to create, organize and manage a venture that will bring about socio-economic change for a particular group. • Fame and fortune: These entrepreneurs aim big and are driven strongly by the profit motive. In addition, Booz & Co. identified three external forces that drive entrepreneurship:

In addition, there are three external forces or circumstances that drive entrepreneurship: • Innovation: Some entrepreneurs create new demand by nourishing an innovative idea they have conceived or acquired. • Opportunity: Entrepreneurs who recognize a demand/supply gap in the market, an unmet need or an opportunity for change can seize that opportunity. • Necessity: Entrepreneurs in this category have been forced by their environment to seek self-sufficiency and satisfy their basic needs of food, shelter and security.

At first glance, the MENA region’s entrepreneurial activity today seems robust, says Booz & Co. About 13% of the region’s working population is engaged in entrepreneurial activity, far more than in the US, Germany or Japan. (see Exhibit 2)

However, this apparent entrepreneurial vigor is deceptive. More than 80% of entrepreneurs in the MENA region have very small-scale operations, with


Percentage of Total Employment in SMEs

Exhibit 1: SME Contribution to Economies

SME Contribution to GDP

Note: Selected Countries (2008)Source: European Commission SME Performance Review; US Department of Statistics; OECD; UNECE; World Bank; Zawya; Booz & Company

UK 54%

US 55%

Germany 60%

61%

38%Egypt

UAE

Saudi Arabia 25%

Hungary

France

42%

71%

54%

2

32%

1

63%

3

21 3Averages Low-Income Countries Middle-Income Countries High-Income Countries

UK

US

Germany

Egypt

UAE

Saudi Arabia

Hungary

France

16%

51%

52%

53%

54%

50%

33%

30%

25%

39% 52%

1 2 3

Exhibit 2: Early-stage Entrepreneurial Activity(% of Adult Population, 2009)

3%4%4%4%4%5%5%6%6%8%8%9%9%

10%

12%12%13%

15%15%16%17%

19%

22%24%

Arab Countries

Yem

en

Col

ombi

a

Chi

na

Mor

occo

Bra

zil

Leba

non

UA

E

Tuni

sia

Iran

Jord

an

Nor

way

Syr

ia

US

A

Sw

itzer

land

Sou

th A

frica

Uni

ted

Kin

gdom

Finl

and

Sau

di A

rabi

a

Fran

ce

Ger

man

y

Rus

sia

Italy

Japa

n

Alg

eria

Arab Countries Average = 13%

Note: The percentage of the population performing early-stage entrepreneurial activity are those people who are involved in setting up a business orowners-managers of new businesses (less than 42 months).Source: Global Entrepreneurship Monitor,2009; Booz & Company

Entrepreneurial activity in Arab countries is decep-tively high, as it is mostly

driven by necessity


43

enterprise value of less than $15,000. The high level of entrepreneurship is mainly driven by necessity – shop owners, farmers and cart sellers trying to satisfy their basic needs of food, shelter and security. Booz & Co. says there are currently about 150 existing initiatives that encourage entrepreneurial activity in the MENA region. These initiatives include technology incubators, government (25%), non-governmental organizations (NGOs 62%), networking associations for aspiring entrepreneurs and university programs dedicated to entrepreneurship. The entrepreneurial ecosystem has four success elements: personal enablers, financial enablers, business enablers and environmental enablers.

A. Personal EnablersThe first ring in the ecosystem affects the entrepreneur’s individual development, says Booz & Co. These personal enablers include:

Mentors/Advisers: Typically other entrepreneurs willing to share knowledge and real-life lessons. Informal Education: Informal education is available through various sources, such as seminars and networking events.Formal Education: Universities around the world offer entrepreneurship courses and programs to nurture a spirit of entrepreneurship.

Fewer than 10% of the universities in the MENA region offer entrepreneurial courses and a mere five actually offer a major in entrepreneurship.

B. Financial EnablersThese financial enablers or financiers include:

Equity Investors: Equity investors include family and friends, angel investors and venture capital funds Banks and SME Financing: Debt financing from banks requires collateral and usually involves a lengthy approval process since start-ups lack a track record. Microfinancing: These lenders offer very small loans to aspiring entrepreneurs in poor regions. Government Programs: These programs include funds, short-term loans, guarantees and other financing initiatives for specific industries.

The MENA region’s financial enablers are underdeveloped in particular the network of equity investors, a critical source for start-up capital in the West, which is still nascent in the MENA region, according to Booz & Co. Only 20% of local SMEs have a loan or a line of credit, the lowest percentage of any region in the world; and only 10% of their investment expenditures are financed by a bank loan, also among the lowest worldwide. C. Business EnablersThe third ring in the entrepreneur’s ecosystem consists of professional enablers and includes:

Professional Services: This is a large category that includes marketing companies, media associations, consulting firms and accounting firms. Incubators: Incubators provide office space and back-office support for start-ups, usually in return for a nominal fee and/or equity stake in the firm, until they achieve sufficient scale to afford these services on their own. Network Associations: Network associations connect entrepreneurs with experienced business people and/or consultants who serve as mentors or more formal advisers to help the entrepreneur tackle business challenges.


Over the past 20 years, about 60 initiatives have been launched within the MENA region to promote business support.

D. Environment EnablersThe final outer ring in the entrepreneurship ecosystem involves a diverse group of environment enablers: the regulatory framework, infrastructure, lobbying organizations, prevailing culture and media. Booz& co. reports:

Regulatory Framework: Government agencies and private chambers of commerce can stimulate entrepreneurship by simplifying rules and providing incentives for start-ups. However, much more reform is needed across the region in many areas. Infrastructure: The existing infrastructure in MENA countries needs upgrading to improve the start-up and business environment in general. The Internet is used by just 24% of the population in the Arab states versus 79% in the US and 67% in Europe, with average Internet speed in the MENA region (2.73 Mbps) a mere fraction of the global average of 8.69 Mbps.Prevailing Culture: Most people in the workforce value the stability of a lifetime government job over the excitement of risk taking or innovating. A survey of young people in the Gulf showed that only 9% said that “opening their own business” was their top priority in life.

About mAsteRcARDMasterCard (NYSE: MA) is a global payments and technology company operating in more than 210 countries and territories.

About InJAz- Al ARAbINJAZ Al-Arab, a regional branch of JA Worldwide®, is an organization that works with young people in the Middle East and North Africa region providing them with entrepreneurship, financial literacy and work-readiness skills.

About JunIoR AchIevement Junior Achievement Worldwide is the world’s largest organization committed to inspiring and preparing young people to succeed in a global economy, catering to 9.3 million students annually.

Making Cash FlowAn interview with Michael Bach, President of Middle East and Africa, MasterCard Worldwide, reveals the inner workings of a regional giant who sees but only one competitor: cash!

“Clearly there is significant growth potential in the payment industry. MasterCard is bringing solutions to displace cash; that is what we do for a living and what we do well. We drive growth into the markets, and the key competitor that we see out there is cash, which we try to displace every single day, simply through payment tools; smart and safe payment tools. That’s our focus,” Miebach explained.

MasterCard’s business plan is to first target banks, their traditional customers and then acquirers and merchants. This 3rd party model has been established for years, and it’s undergoing change.

“You have other players entering the payment industry, you have mobile operators coming in, have merchants extending beyond immediate merchant business models into adjacent business models, so that’s a massive trend out there,” said Miebach. Though the B2B model is what drives the company’s growth, the final consumer is ever present on the corporate mindset of MasterCard. “The MasterCard brand reflects security and trust, and there is a relationship that this brand has with the consumer. We work with the market stakeholders that we talked about and all of them talk to consumers. What do these consumers need? We are truly driven by consumer needs and we try to educate on what these needs are and could be. It’s a virtual circle, more like a B2B2C.”

MasterCard is a technology company, in the payment industry, providing payment tools to various sectors including debit cards, charge cards, pre-paid cards, mobile payment, and more. “We are bringing the benefits of payments to society and the economy.”

“It’s about access, transactions, and driving commerce. As far as running a credit card business, that’s what banks do,” clarified Miebach. In reality, banks are the ones positioned to handle responsible lending to individuals regardless of age and profession. “But generally in the region, regulators have, after 2008, driven regulations across countries in the MENA region, specifically in GCC, to enhance rules that foster responsible lending. And banks are seeking ways to balance their business models to differentiate themselves with payments vis-a-vis the consumer rather than with the credit proposition, with cards that bring mileage, give access to lounges, and other true benefits, to drive value to businesses and consumers.”

Transaction security has accompanied the payment industry early on trying to combat fraud and prevent loss to both providers and end-users. “You have the highest risk of fraud when you are not in the electronic payment world but rather the cash world. In the cash world, there is no control or transparency. In electronic payments, there are still a set of risks associated, but MasterCard has been driving security solutions that prevent fraud,” affirmed Miebach. MasterCard has pioneered industry leading tools and mechanisms to ensure authentication on the internet. “With a clear set of established rules, MasterCard brings the clarity of rules that are rigorously tested, for each business, merchant and consumer.”

The payment industry has also been paying close attention to the rise of Islamic banking. “Islamic finance is the fastest growing sector in this region. We have taken a look at that. We are a payment company with different sets of products, and by definition, a debit or a prepaid card qualifies under Islamic considerations. As we work with banks, their interest in addressing their Islamic customer set, specifically Islamic countries where you have to choose either or, such as Qatar for example, induces us to work jointly in driving their product set, specifically to their customers.”

InfORMATIOn TEcHnOlOGyCAPITAL BusIness MAgAzIne

45

cashing in on ict By: Booz & Co.

THE EnTERPRIsE OPPORTunITy fOR MEnA TElEcOM OPERATORs TO IncREAsE

The number of enterprises in the MENA region will increase, and so will their spending on

ICT, until it approaches that of their peers in Europe and the U.S. Operators can leverage their strengths to grab share in the rapidly growing SME segment, lock in key large accounts and large-scale digitization projects, and benefit from converging consumer and enterprise offerings.

The spending increase by enterprises is driven by a sea change in mobility and cloud computing needs, as well as the desire for unified and collaborative services such as enterprise social media, as smart phones and tablet PCs have gained popularity. Competition will be intense; business communication equipment vendors, systems integrators, software and online service providers all will seek to grab a share of the MENA region’s fast-growing enterprise ICT opportunity.

Telecom operators can capitalize on core capabilities to secure a share of the enterprise opportunity.

Their multiplatform network infrastructure, established relationships, wide reach, reputed brands, and access to capital will be key assets.

“Despite those advantages, MENA operators will not automatically win enterprise customers. Operators will need to approach the business market in a fundamentally new manner and create a new value proposition. They will need to refocus efforts to capture the opportunity presented by the creation of millions of new small and medium-sized enterprises (SMEs) over the next several years.

They need to expand their offering to lock in key accounts and leverage their incumbent position with government agencies,” said Bahjat El-Darwiche, Partner, Booz & Company.

ENTERPRISE CUSTOMERS: A GROWING OPPORTUNITYAs many MENA consumer telecom markets approach saturation, MENA operators hope to continue growing by putting new emphasis on their efforts in the enterprise segment. The ICT segment for enterprises in the MENA region is significantly underserved. Although enterprises account for as much as 6.5 percent of all mobile SIMs in some European countries, they average less than 1 percent in the MENA region. Yet, the MENA enterprise ICT market is growing rapidly. It will almost double within five years, from an estimated $14.8 billion market in 2010 to $26.1 billion in 2015.

Increases in both the number of enterprises and the expected ICT spend per enterprise will drive that rapid growth. According to Booz & Company, an expected number of enterprises in the MENA region will grow at a 10 percent annual rate through 2014: this will add almost 4 million new businesses to the current base of 8.25 million.

That growth substantially outpaces the growth rate of businesses in both Europe and North America. Nevertheless, ICT spending per MENA enterprise, currently one-fifth that in Western Europe and one-tenth that in the US, is bound to increase.

TAKING ADVANTAGE OF OPERATORS’ STRENGTHS Telecom operators can capitalize on six core capabilities to secure a share of the enterprise opportunity. Each

Bahjat EL DarwichePartner, Booz & Company

Hadi RaadPrincipal, Booz & Company

of these six core capabilities provides MENA telecom operators with an edge over competitors in approaching the enterprise business.

A combination of some or all of these capabilities adds up to a potent competitive advantage with enterprise customers:

1. Multi-platform network infrastructure • Telecom operators can use their multi-platform network infrastructure to deliver services on a variety of devices.

2. Established customer relationships •Through their current offerings and interactions, telecom operators have access to an established enterprise customer base.

3. Wide reach • Telecom operators use a variety of sales channels and have a strong presence across the geography they serve.

4. Large-scale program management experience • Many established telecom operators have broad experience in managing large-scale infrastructure deployment and service delivery programs with many stakeholders and interdependencies.

5. Trusted brands • Many telecom operators enjoy established brand recognition, typically in the consumer market where they have ample experience.

6. Access to capital • Particularly in the MENA region, telecom operators are

cash rich and have the means to invest in long-term, capital-intensive projects.

PREPARING TO COMPETE IN THE ENTERPRISE ICT MARKETWith stiff competition almost certain to emerge for the enterprise ICT market, MENA telecom operators need to consider the business market in a fundamentally new manner and adopt differentiated approaches to succeed in securing and maintaining clients – whether SMEs, large enterprises, or government agencies.

Telecom operators will have the ability not only to gain a foothold in these emerging businesses, but also solidify ties with individuals who work in these organizations, bolstering their consumer business.


FOCUS ON SMEs TO CAPTURE EMERGING OPPORTUNITYTo serve the SME segment effectively, regional telecom operators will first need to group customers based on behavioral characteristics such as telecom expenditures and service sophistication. “Operators need to design bundled and converged solutions that offer SMEs a one-stop-shop experience. Telecom operators could also provide SMEs software-as-a-service (SAAS) cloud applications, allowing them to meet their business needs with minimal up-front investments,” explained Hadi Raad, Principal, Booz & Company.

Because SMEs are scattered throughout the region and not clustered in one city, they are hard to reach through retail outlets. As a result, operators might consider using outbound telesales, as well as resellers that have the widespread coverage necessary to reach SMEs.

LOCK IN LARGE ACCOUNTS WITH TURNKEY SOLUTIONSLarge enterprises and key accounts typically have a large number of employees and will likely spend significantly on ICT. These customers increasingly demand turnkey solutions that address their specific business needs, such as increasing productivity, improving customer satisfaction, and cutting costs. They typically prioritize service levels over price. Large enterprises and key accounts also expect a differentiated sales and customer service experience that only dedicated account and service managers can deliver.

“To service large enterprises effectively, regional telecom operators will need to migrate from being providers of basic voice and data services to providing full ICT solutions. That entails initially expanding their product portfolio and service

offerings to deliver complete, targeted ICT solutions. The portfolio offerings need to be comprehensive and specific. In targeting large enterprises, telecom operators also need to shift from a typical account manager sales approach to a consulting relationship, acting as partners with the customers and designing turnkey solutions rather than offering off-the-shelf services,” stated El-Darwiche.

LEVERAGE GOVERNMENT RELATIONSHIPS TO CAPTURE DIGITIZATION OPPORTUNITIESBeyond the traditional enterprise market opportunity, regional incumbent telecom operators should also seek to position themselves as enablers for digital economies by leveraging their privileged government relationships and becoming the provider of choice for government ICT requirements.

Raad commented, “Applications such as smart metering, intelligent transport systems, ehealth, and education are driving transformation in traditional economic sectors. To capture large-scale projects, telecom operators need to build a deep knowledge of the economic sector they would be serving and propose ICT solutions to address their specific needs.”

USE ENTERPRISE RELATIONSHIPS TO BOLSTER CONSUMER OFFERINGSTelecom operators can ride the popularity of some end-user devices (such as iPads or BlackBerrys) and the adoption of services by key decision makers in the enterprise to promote their business applications. For instance, they can provide and promote mobile- or tablet- based applications to monitor sales performance.

GET THE SERVICE RIGHTRegardless of the targeted niche within the enterprise segment, operators

need to differentiate their value proposition by realigning their service delivery approach. For medium-sized businesses, this might mean access to around-the-clock customer service and a help desk with knowledgeable technical support, proactive maintenance, and short resolution times. Larger enterprise customers will require committed service-level agreements (SLAs) for a comprehensive range of mission-critical services.

Raad further said, “Mobile and converged communications, as well as social media and cloud computing, are driving enterprise ICT demand. Operators need to segment within each of the large enterprises, key accounts, and SME markets – and deliver a differentiated raft of services to each segment. They need to extend their portfolio beyond core connectivity services to include tailor-made solutions that address the specific needs of their targeted customers. Strategic acquisitions of providers with geographic or industry expertise is an effective way for operators to gain ground in this business and further penetrate the ICT market.”

For his part, El-Darwiche concluded: “With almost 4 million new businesses over the next 3 years, the enterprise market opportunity in the MENA region could be significant.. Enterprise revenues account as high as 25% of telecom operators’ revenues in some European markets. Operators should leverage their strengths to grab share in the rapidly growing SME segment, lock in key large accounts and large-scale digitization projects, and benefit from converging consumer and enterprise offerings.”

About booz & comPAnyBooz & Company is a leading global management consulting firm, helping the world’s top businesses, governments, and organizations. www.booz.com


47

visit our website:

www.fleminggulf.com

20th - 21st March 2012, Kuala Lumpur

Maximising shutdown efficiency with excellent turnaround strategies & people management

Efficient Plant Shutdown & Turnaround Forum 2012

Media Partner:Endorsing Association:

EVENT BENEFITS

Who WIll aTTENd

COOs, CEOs, VPs, Presidents, Directors, Heads, GMs, Senior Managers, Managers, Assistants, Supervisors, Superintendents and Engineers of Shutdown & Turnaround, Scheduling, Operations, Maintenance, Planning, Procurement, Production, HSE, Quality Assurance, Facilities, Asset Integrity

Gain insights into the best practices today from key industry players

Understand & implement the best plan suited to your organisation

Handle unplanned shutdowns & uncertainties during a shutdown

Learn from your industry peers through our interactive workshop

Maximise the efficiency of your shutdown while minimising turnaround duration

Analyse the effectiveness of your shutdown for future improvement

integrate effectively planning, execution & completion for a successful shutdown

Minimise financial impact while maintaining high quality, integrity and safety standards

EVENT INTRodUCTIoNPlant shutdowns and turnarounds will always have only one objective; executing timely shutdowns with controlled costs while maintaining the highest safety and quality standards. It is a massive undertaking that requires intricate planning and one can never be too prepared. One minor hitch will easily escalate costs and delay shutdown time; bringing huge financial losses. It is imperative that all personnel and departments involved understand their roles and responsibilities well.. The Efficient Plant Shutdown & Turnaround Forum 2012 has been exclusively tailored to address critical issues in scheduling, planning, executing and completing shutdowns. This event will discuss crucial information related to efficient planning and scheduling; maintaining skilled workforce and manpower; as well as cost and time effective methods when executing shutdowns and turnarounds. Learn from the best experts on how to spearhead your most expensive project of the year towards excellence.

adVISoRy PaNEl

SPEaKER PaNEl

azneil Malik, PETRoNaS, Malaysia Head, Turnaround ManagementJohn a. Mclay, P. Eng., JMC Consulting, Canada Chief ExecutiveNaveen Goyal, aditya Birla, India Assistant Vice PresidentV. G. Vachhani, PT South Pacific Viscose, Indonesia Vice President, MaintenanceMohamed daoud, adCo, UaE Manager (Projects Quality), Engineering & Major ProjectsPuli S. Saravanan, Shell, Singapore Regional Turnaround Director - Easth l Gadiyar, Reliance Industries ltd., India Vice President, Head CES Planning Kamarulzaman alassan, huntsman Tioxide, Malaysia Production Managerdr. Zulkipli Ghazali, UTP, Malaysia Senior Lecturerlee Woong youl, SK Energy, Korea Maintenance Planning ManagerSaurabh Sinha, Shell, Brunei Senior Planning Engineer

John a. Mclay, P. Eng., JMC Consulting, Canada Chief Executivedr. Zulkipli Ghazali, Universiti Teknologi PETRoNaS (UTP), Malaysia Senior LecturerM. C. Bhurat, PT South Pacific Viscose, Indonesia Vice President, Expansion ProjectsMohamed daoud, abu dhabi Company for onshore oil operations (adCo), UaE Manager (Projects Quality), Engineering & Major ProjectsNaveen Goyal, aditya Birla Management Corporation Private limited (aditya Birla), India Assistant Vice President

PMPT SPECIal PRoMoTIoN GIVE aWay

Two units of apple iPads (16GB) pre-loaded with the

“Turnaround Management System Checklists”

with 50 categories of turnaround management containing over

2800 checklist items.


49

don’T leT securITy MIsconcepTIons ‘cloud’ your JudGeMenT

By: Steve Bailey

What comes to mind when you think about cloud security? Do you think

about application security or protecting corporate data? Perhaps you fear virus or phishing attacks? For the past several years, cloud security has been one of the biggest concerns among IT decision makers as they consider the best way to transition applications and data out of the corporate data center and into the cloud. The real question is one of perception versus reality.

A perceived lack of cloud security can sometimes stop an IT organization dead in its tracks when they look at the cloud as an option for data storage. Many industries, like healthcare and financial services, have always been held to a higher standard than other organizations when it comes to regulatory

compliance and data retention, which prevents them from taking a “risk” on the cloud. This unjustified fear of lax cloud security also means they lose out on all of the business, cost and operational benefits that can come with storing data in the cloud.

The reality is that all of the pieces are in place to enable secure and compliant cloud-based storage environments, and

the technology is sound. It’s time that IT organizations rethink their position on cloud security by looking at the facts.

Making the Case for Cloud StorageThe economic benefits that come with storing data in the cloud are too great to ignore for any IT organization struggling with data management. Because cloud


storage providers leverage multi-tenant architectures, infrastructure costs are shared across many users. This helps lower costs substantially versus on-site solutions, which require additional provisioning, power, cooling costs, and more.

As data volumes continue to increase, many companies find themselves pushing the capacity, cooling and power limitations of their existing data centers. Meanwhile, regulations require many businesses to keep ever-growing amounts of data for compliance purposes. This three-way balancing act between capacity, compliance and cost requires a flexible, multi-tier approach that makes cloud storage an attractive alternative.

Operational BenefitsWhile many organizations benefit today from keeping online, deduplicated data copies available for fast recovery, massive growth will still require more disk and tape to contain exploding amounts of data. Cloud storage offers a low-cost tier of storage that enables several new compliance, disaster recovery, and data backup solutions. More readily available than offline vaulted data, cloud-based storage delivers these key use cases to help solve today’s data management problems, including:

• Tiering data retention to cloud storage, alleviates the need to expand data center capacity or operational costs

• Archiving stale data to cloud-based storage to free up existing space within the data center

• Cost-effective Disaster Recovery for Small-and-Medium Enterprises without large upfront and operational investment

• Content indexing data before moving to cloud to meet Compliance requirements and minimize search/retrieval times during eDiscovery operations

• Remote office backup directly to cloud-based storage

But is My Data Safe?There are many aspects to securing data in the cloud. People who move application and email servers into the cloud are concerned with spam, hackers and phishing attacks. Those who are considering the cloud to store data for long-term archiving/retention or disaster recovery are concerned with others gaining access or visibility into vital corporate data. In healthcare, organizations are concerned with regulatory compliance. There is also physical security and the specter of some nameless individual strolling into a cloud service provider’s data center and walking away with a jump drive full of intellectual property. Many IT decision-makers are worried about all of the above.

Think about the data in terms of your own data center. You have anti-virus and filtering software tools that monitor and prevent email attacks as well as

encryption and data storage technologies to meet your needs for compliance, recovery and retention. And it’s a safe bet that cloud service providers have guards protecting their physical sites.

There are a few things that you should look for, however, to ensure that your data is being protected in the cloud. Your cloud solution should include:

• Embedded encryption that secures data backup and archive data in-flight or stored within cloud storage

• Integrated alerting, reporting, and data verification functionality to help ensure that data has safely reached the cloud without the risk associated with manual scripting or standalone gateway appliances

• Native REST/HTTP integration to deliver seamless data and information management across on-site and cloud-based storage architectures

• Integrated features like deduplication and compression to enable efficient movement of backup and archive data across a network for long-term cloud storage

It is inevitable that IT organizations will turn to the cloud to keep pace with business demands. It may take time to overcome the fear inherent in handing over control of your data to someone else, but consider this, there was a time when using a credit card online invoked the same type of fear. Nobody wanted to be first to dip their toe in the pool. The technology needed to keep secure, protected and recoverable is here today and adoption will grow. It’s just a matter of time.

About the AuthoRSteve Bailey is the Regional Operations Director at CommVault covering the Emerging Markets region (Middle East, India, Russia/CIS, Eastern and South Eastern Europe). Steve’s responsibilities cover the presales and professional services functions in addition to CommVault channel development, education and growth across the Emerging Region. He has been with CommVault for a little over 10 years and has worked in many functions, both regional and at an EMEA level, most recently heading up CommVault’s EMEA Product Management function.


51

Planning any IT technology upgrade is never easy and if it happens to involve your company’s enterprise

communications system, it takes careful upfront planning and an understanding of what’s currently available since the last time you did an upgrade.

IP communications systems, based on a soft switch design, are rapidly replacing aging digital PBXs. All-in-One solutions support traditional telephony services and unified communications tools on a single centralized server; full featured contact center services may also be available. Today’s customer has the option of fully replacing their existing system or installing a co-located IP soft switch for a gradual system migration while leveraging the new technology and associated benefits. So how does

one make an informed decision when preparing an enterprise communications system upgrade roadmap?

Today’s Enterprise Communications SystemMost enterprise customers have been migrating their communication systems from traditional digital PBXs to those based on Internet Protocol (IP) communication standards. These IP communication systems support traditional telephony requirements and in addition offer customers a collection of more advanced communication services. While there are several design options available, the one of choice for most of today’s customers is referred to as a soft switch based on traditional client/server architecture topology. The advantage of this design is that the adoption of

industry standards permits compatibility between the system and third party applications and that most, if not all, of the hardware equipment is non-proprietary.

In spite of these advantages, many customers chose to upgrade their digital PBX to either an IP-enabled or Hybrid system design. This is done so as to retain a sizable percent of their earlier communications system investment. The viable option to extend the life of existing systems is to install a co-located soft switch. The customer can then execute a gradual migration of users between the two systems. It may not be an ideal situation, operating two systems, but the cost savings and performance advantages to be gained are likely to outweigh the negatives.

iP coMMunications systeM By: Evren Aker

THE MIGRATIOn MAP fOR MIDDlE EAsT EnTERPRIsEs


The Basics of Unified CommunicationsOne of the many advantages of an IP communications system is the availability of a range of features, functions, and processes collectively referred to as Unified Communications (UC). While many customers believe IP telephony and UC to be one and the same thing, in actuality, UC offerings facilitate and enhance the traditional telephony experience, not replace it. Implementation of IP communication systems provides the necessary framework for UC solutions. Many UC features and applications are enabled by Session Initiation Protocol (SIP), a prominent industry standard for IP communication systems, particularly when customers need to interface to third party solutions.

Justifying an IP Communications SystemA new IP communications system should be viewed as a business asset, not as an expense item (which many do). And as a business asset it should help reduce existing communication expenses as well as affect how the enterprise operates and competes in the competitive market. Basic justification factors fall into two categories: hard cost savings and enhanced user/business productivity (both real and perceived). The following are a few of the many justification factors for implementing a current generation All-in-One soft switch IP communications system.

Reduced hardware costs are due to: fewer common equipment hardware elements which result in lower maintenance costs; the use of non-proprietary third party hardware equipment which allows for flexibility in design choice; as well as the option of using PC-based soft phones.

Enhanced system survivability and resiliency (reducing system disasters) based on: a limited number of points of failure compared to traditional PBXs; availability of cost efficient, fully redundant and geo-distributed communication control server options; pooled media services and gateway resources; alternate transmission signaling paths among servers, gateways and endpoints.

Consolidation of multiple networked PBXs by migrating to a centralized data center system design offers numerous benefits including: fewer systems with significant hardware/software savings; easier and more manageable growth and network expansion; centralized, more efficient system administration and management; lower cost integrated voice/data network transmission services; greater user mobility across the network.

Many UC features and services are designed to automate communications. Among the many UC cost/time savings and productivity benefits are the following:

u Faster and more efficient contacts through presence management services

u Reduced messaging management time/cost through unified messaging

u Lower cost and self-managed audio conferencing services

u Simplified and more efficient access/implementation of communication system features and functions through a GUI-based soft client screen

The Systems Upgrade ChecklistIt is recommended that a comprehensive corporate communications strategy be in place well before a customer is ready to replace their aging voice-centric communication systems. This approach

must address the goals and objectives of the enterprise’s overall business strategy and identify how a new system can contribute to things such as: revenue enhancement; cost reduction; competitive positioning; market expansion; improved customer service; and Green initiatives.

Current generation All-in-One communication systems support hundreds of features and functions and it is necessary to understand and identify the distinct communication needs of many different system subscriber communities, to avoid a “one size fits all” approach.

Replacing an existing communications system can be traumatic for the majority of customers, because many system subscribers are averse to change. Identifying the current communication issues that can be addressed, corrected or improved by a new communications system will help gain stakeholder support and facilitate the migration process.

An incremental implementation approach across the enterprise network is recommended for purposes of manageability and to avoid too much change at once. Customers with large networks should consider having a mix of new and old communications system platforms for a few years, gradually migrating on a site-by-site basis according to a well defined time line.

Sufficient training services and help desk support must be provided to cover feature operations and system interfaces (desktop telephone instruments, soft phones, mobile clients). Personal one-on-one training may be mandated at the executive level and small group training for system specialists, such as attendants, system administrators, and contact center personnel is also often necessary. System upgrades are inevitable and a well thought out strategy can greatly ease the transition process.

About the AuthoREvren Aker is Pre-Sales Manager, Interactive Intelligence Middle East

cut the noise and cut to the chase!By: Michael FeuersEVEn TIPs fOR sTREAMlInInG

cOMMunIcATIOn AT yOuR ORGAnIzATIOn

bEsT PRAcTIcEsCAPITAL BusIness MAgAzIne

53

If you don’t think that our society

is experiencing a communication overload, you really are living under a rock. We can share every aspect of our lives in real time via social media. We can record all of the ups and downs of our personal sagas through blogs. We can call or text anyone at any time. And the communication avalanche doesn’t exist just in our personal lives. Today, it’s a lot easier to get in touch with coworkers and ask them for information whenever and wherever you need it. And you can share every detail of your current project with your boss just by clicking “send.” We’re much better off than we were 20 years ago, right?

Well, maybe not. According to OfficeMax Cofounder, former CEO, and serial entrepreneur Michael Feuer, innovations in communication sometimes make it more difficult to get the point across.

“Since we can say as much as we want in multiple forums these days, almost everyone including businesspeople provide too much information (or TMI) in their exchanges,” points out Feuer, author of the new book The Benevolent Dictator: Empower Your

Employees, Build Your Business, and Outwit the Competition.. “In many

organizations, the art of cutting to the chase has been lost.”

Feuer knows what he’s talking about: he

has been involved with launching a number of business ventures, including OfficeMax and his newest business, Max-Wellness, a recently launched only-one-of-its-kind health and wellness retail chain concept.

The lessons he’s learned have

convinced him that a great leader’s

management style should mirror that of a benevolent

dictator, which is not at all as scary as it sounds, because at the

end of the day, the “dictator” side of you calls the shots and makes the

difficult decisions, but your “benevolent” side does so while putting the interests of the organization, your team, and your customers ahead of your own. And part of being a benevolent dictator is requiring clear, concise communication at all levels, so that key decisions can be made quickly and effectively.

“Before today’s instant transmission of words and numbers by lightning-fast speed, you had to talk to your boss in person, on the phone, or in a hard copy report,” Feuer explains. “In all of those formats, it was in your best interest to get to the point quickly. These days, though, there are email inboxes, shared calendars and documents,


instant messaging programs, and much more. Employees can send a constant stream of information to their leaders and that’s a problem that’s bleeding into face-to-face interactions, too.”

“As a leader, you need the basic, bottom line, and you need it now. Your team members may want to provide you with excessive detail in the hope that you will recognize them as the ultimate experts on various topics. However, you must let them know that a succinct response is much more valuable.”

Be clear about what you need. The first step in encouraging concise communication is to be straightforward about what you need. Remember, though, that one size doesn’t fit all, so you may have to infuse your cut-to-the-chase request with humor or compliments to soften the message.

Overhaul voicemail and email. Asking someone to put the bottom line upfront when they report to you is a good first step, and a great place to start is with voicemail and email, since these forums are used frequently throughout the day.

“Survey your team members’ current responses for their business email and telephone messages, and prepare to be shocked by the content and length!” Feuer advises. “Then supervise the shortening process. You may even have your HR or PR department provide brief scripts for employees who have trouble keeping their messages short.”

Talk through conversations. Now that you’ve tackled emails and recorded messages, it’s time to move on to something a little less predictable: conversations. While you can’t control every word that comes out of your team members’ mouths, you can establish standards of what is appropriate. Tell them that brevity and clarity are key, and point out that these things will set your organization apart from the competition. After all, clients and callers will appreciate the chance to do as much talking and question-asking as they want.

“Also consider asking your employees to end all conversations and messages with a

tagline that expresses your organization’s best attribute,” suggests Feuer, like ‘Your satisfaction is our number-one priority,’ and ‘Getting to the point makes us better.’ At Max-Wellness, our branding tagline is simply ‘Be well.’

Get frequent updates from key people. (Simply put, micromanage.) According to Feuer, you should get regular (and of course, succinct!) updates from key people. These fast-and-frequent communications allow you to keep your finger on your organization’s pulse.

“When you know what’s happening in real time, you can accelerate your organization’s growth and prevent garden-variety problems from snowballing into disasters of Biblical proportions,” explains Feuer. “During the first 18 months of OfficeMax, I required every store to call my home seven nights a week to give me sales figures, which I recorded in a ledger. This ritual helped me to manage our growth by knowing our daily cash flow, with an emphasis on accounts payable down to the last few dollars. This protocol not only accelerated our growth but set a management style for executives to operate in a similar know-what’s-happening fashion.”

Use your negatives sparingly. Say you’re telling your team everything they need to know, but you still aren’t getting the results you want. What gives? Well, the problem might lie in how you’re delivering that cut-to-the-chase sound bite. Think about it: how many of your announcements start with a negative, followed by a litany of unpleasant consequences? (For example, “If we don’t increase sales next month, we’ll have to start letting people go.”)

“Many leaders think that this style is more forceful and expedient, but it’s actually counterproductive,” says Feuer. “If you make too many of these negative announcements, your employees will be motivated only by fear and desperation at least in the beginning. As time goes on (and presumably, a majority of your threats don’t come to pass), your team will come to see you as a knucklehead, and they’ll start to ignore your message altogether.”

Look in the mirror. The Golden Rule Do unto others as you would have them do unto you definitely applies to leadership and business. It’s always a good idea to treat your team as participants and partners in whatever you’re doing…not just as people to blame when something goes wrong. Remember that they appreciate appropriate amounts of respect and praise, and that they also enjoy being given credit for having the ability to grasp the obvious.

“If you’re not getting the results you want, you might be the problem,” Feuer shares. “Leaders, especially those nearer to the top of the organizational hierarchy, sometimes forget how it felt to be directed.

Remember that the medium is the message. If you’re like most leaders, every minute of your day is more than spoken for, and you may tend to tell your team what they need to hear, regardless of the overarching circumstances. Despite your busy schedule, try to always keep in mind that the vehicle or venue you select to deliver your directive is just as important as the point itself. Good news should be presented in an upbeat setting, and more serious subjects should be broached in a setting that’s “strictly business.”

“Delivering a serious concern about sales would be an inappropriate announcement to make at an awards event, for instance,” says Feuer. “Knowing when to say the right thing will lend your message credibility and significance.”

“If you’re open about the level of succinctness that you want and model those behaviors yourself, you’ll find that most of your team will get on board quickly. And chances are, they’ll also be grateful that you’ve cut out all the background noise.”

About the AuthoR Michael Feuer cofounded OfficeMax in 1988 starting with one store and $20,000 of his own money, a partner, and a small group of investors. As CEO, he grew it to more than 1,000 stores worldwide with annual sales topping $5 billion. He is also CEO of Max-Ventures, a venture capital and retail consulting firm, and founder and CEO of Max-Wellness, a comprehensive health and wellness retail chain that launched in 2010.

Top 10 proJecT MAnAGeMenT Trends for 2012

By: ESI InternationalcOllAbORATIOn GAIns IMPORTAncE As PROjEcT cOMPlExITy GROWs


55

As the project environment grows in complexity, project management will require team, stakeholder and executive collaboration in 2012. On-the-job application of training, custom-made project approaches, innovative project tools and smarter resource management will be essential for driving the greatest business impact. Collaboration is a common theme throughout many of the 2012 Top 10 Trends for project management, which were determined by a global panel of ESI International senior executives and subject matter experts.

1 Program management will gain momentum, but resources remain

in short supplyIncreasingly, large initiatives undertaken by corporations and government agencies are being recognized for what they are and aren’t: namely programs, not projects, which require a highly advanced set of skills supported by appropriate tools and methods to successfully execute. Yet many organizations struggle to find the right people and lack the management practices necessary to ensure success. In 2012 more investments will be

made in competency models, training, methodology development, tool use, and career pathing to ensure that professionals who carry the title Program Manager are fit for the role.

2 Collaboration software solutions will become an essential business

tool for project teamsFueled by increasingly complex and virtual projects as well as tightened budgets, today’s environment demands a more efficient way to manage communication and workflow. Collaboration is central to project


management and having a site which allows project artifacts to be created, shared, and distributed within a repository that provides Web-based access and critical functions such as automatic distribution and notification, version control, and user authentication, greatly enhances productivity.

3 Learning transfer will become the new mantra, but with little

structured applicationLearning transfer–the ability to apply training back on the job--will continue to be on the minds of PMO heads and learning and development (L&D) professionals who want their project managers to return from training ready to apply what they learned immediately and accurately to their projects.

4 Agile blends with waterfall for a new “hybrid” approach

Having moved from “manifesto to mainstream,” Agile has confronted project teams with the difficulty of implementing the experimental and hyper-collaborative approach. To transition an organization into fully adopting certain aspects of Agile, project teams are combining traditional and Agile elements to create their own hybrid approach.

5 Smarter project investments will require a stronger marriage

between project management and business process management (BPM) In the financial services industry, and specifically in the insurance sector, there will be a continued laser-like focus on performing business processes as efficiently as possible to drive down operating costs. The philosophy of BPM is fast becoming a key factor in project selection. When new projects are proposed, their value will be judged to a large extent on the impact they will have on the organization’s business

processes. The more impact the project has on reducing internal costs, the higher it will be ranked.

6 Internal certifications in corporations and federal agencies

will eclipse the PMP®With roughly 470,000 Project Management Professional (PMP®) credentials having been awarded worldwide thus far, the PMP® remains the most popular and ubiquitous credential on the planet. However, it is not the prominent credential everywhere. In the U.S. government as well as Fortune 500 corporations, a hierarchy of “internal” credentials has overshadowed the PMP® in terms of prominence. The PMP® remains important, but it is now just one rung on the career ladder to get to the top.

7 More PMO heads will measure effectiveness on business results

While introducing tools, using methodologies, mapping project management practices, sending project managers to training, and increasing the number of PMP®s in the organization are important metrics for a PMO head to collect and report on, they do not speak to the effectiveness of the PMO from a business perspective. To judge business effectiveness, PMO heads need to determine if their work has had a positive, quantifiable effect on the business in terms of troubled project reduction, lower project manager attrition, and faster time to market.

8 Good project managers will buck unemployment trends

Even though unemployment is at record levels in many countries, good project managers are hard to find. Recruiting continues even in tough economies and organizations need individuals who can perform the basics flawlessly. The hunger for project

management basics, in particular risk management, will continue to surge in 2012, especially in such countries as India and China where project manager attrition rates are disturbingly high and continuous training of new staff is critical.

9 Client-centric project management will outpace the

“triple constraint”For years, time, cost and scope were the metrics upon which the success of all projects and their managers were judged. While the triple constraints remain important, they are no longer the be-all-and-end-all for project success. While risk and quality have also been cited as additional “constraints,” the clear trend in 2012 is the value the project delivers to the organization.

10 HR professionals will seek assessments to identify high-

potential project managersThe challenge HR professionals will face is that there is no ‘silver bullet’ assessment for identifying great project managers. Existing knowledge and skills assessments are of little use since they are not designed for entry-level project manager positions. Nonetheless, candidates must be measured not only on their technical abilities, but also on the all-important business and interpersonal skills.

About esI InteRnAtIonAlESI, a subsidiary of Informa plc, helps people around the world improve the way they manage projects, contracts, requirements and vendors through innovative project management training, business analysis training and contract management training. Founded in 1981, ESI’s worldwide headquarters are in Arlington, Va., USA. To date, ESI’s programs have benefited more than 1.35 million professionals worldwide. For more information visit www.esi-intl.com

“exPectation Matching”By: Loyalty 360kEy TO cusTOMER RETEnTIOn, DRIVInG

susTAInAblE GROWTH


57

“A brand’s customers have similar, yet distinct interests and expectations. Retaining these customers long-term is dependent upon a brand’s ability to understand them when you acquire them and to use a data-centric marketing strategy to drive brand engagement and create loyal brand advocates,” says Mark Johnson, CEO of Loyalty 360 – The Loyalty Marketer’s Association. “When the expectations of both the consumer and the brand are understood and refined through a process of interactive dialogue, the ‘expectation’ is ‘matched’ and mutually beneficial outcomes and financial benefit for the brand are created.”

Expectation matching, a term coined by Loyalty 360, is when customer-centric brands create immeasurable brand loyalty and engagement by using the behavioral insights from their customers to ensure they match their disparate expectations. As Johnson explains, “Marketers believe that ‘they’ know what is best for the customers, and through countless customer experience surveys they think they understand what their consumers want. Yet, we know that people are inherently irrational and what they tell you in a feedback mechanism may not mirror their actual behavior. Marketers that successfully cultivate loyal brand advocates do so by implementing a true voice-of-customer model to get under the hood and create a

comprehensive, 360-degree view of the customers. Only when armed with this insight can marketers deliver a brand experience that matches (and ultimately exceeds) customer expectations.”

Brands that do not meet the customers’ expectations resort to using discounting, gimmicks and other methods to entice potential customers to purchase from them. This practice is not new nor the exclusive domain of Groupon, Living Social or Google; it has been around for years in the form of coupons, FSI’s, ValPak, and others.

The contention is that a brand can offer a significant discount that will

encourage customers to partake in the brand now and in the future, yet they have little or no knowledge if you will do so more than once.

Johnson believes that this ‘acquisition without expectation mentality’ is detrimental. “I would argue that you harm the brand indefinitely when, from the onset of the relationship, you tell the customer that you will give them a huge discount to purchase their brand. Doing this creates divergent expectations, and since the brand is not going to meet nor exceed customer experience baselines, there’s really no hope that the customer will re-engage with the brand.”

About loyAlty 360Loyalty 360 – The Loyalty Marketer’s Association is an unbiased, market driven, voice-of-the-customer focused clearinghouse and think-tank that is committed to bringing loyalty to the forefront as a critical marketing strategy. A trusted source for cutting-edge research, best practices, and networking opportunities, Loyalty 360 gives marketers the expert insights and guidance they need to better understand loyalty and develop programs that effectively engage their customers and employees and build stronger relationships with them. www.loyalty360.org

April 2nd - 3rd 2012Grand Hyatt Doha, Qatar

WWW.QAEIS.COM

RAISE CAPITAL FROM LEADING CLEAN ENERGY INVESTORS IN THE GCC

The 3rd Annual Qatar Alternative Energy Investors Summit (QAEIS) is hosting over 100 pre-screened investors from the Middle East, each looking for global investment opportunities in the clean energy sector.

As a participating business case, you have the opportunity to conduct a minimum of 6 one-to-one business meetings with investors who have been confirmed to have:

• A minimum investment budget of US $ 20 million• Renewable energy as their preferred sector of interest • Ultimate decision making authority to sign deals QAEIS 2012 is a dynamic capital raising initiative focusing on introducing clean energy business cases to these pre-screened investors.

To find out more visit www.qaeis.com

Supported by

for more information contact loy pinheiro on +971 4455 7963 or by email at [email protected]

Presenting Business Cases

Partners

Sustainability Research Partner

Official BusinessMagazines

Official Solar

MagazineSupported by

Official Industry

Newspaper

Official OnlinePartner

59

REAl EsTATECAPITAL BusIness MAgAzIne

MarketvieW: kingdoM of BahrainBY: CB Richard Ellis

Hot Topics• According to the Arab Investment

& Export Credit Guarantee Corp, Bahrain’s Foreign Direct Investments (FDI) may have fallen by as much as 36% during 2011, to $100 million.

• Despite the troubled political landscape, Bahrain is emerging from 2011 with an air of ‘cautious optimism’ and GDP growth that far outstrips performance in the ‘Eurozone’.

• Ratings agencies continue to view Bahrain with caution but the financial sector’s relative health continues to provide some optimism.

OVERVIEWAs a troubled 2011 draws to a close, the outlook for Bahrain appears to be one of cautious optimism. The region as a whole juggles deep rooted problems centred around unemployment, housing,

education, and other increasingly pressing socio-economic issues.

In an effort to move forward, the Bahrain authorities took the almost unprecedented step of facilitating a fully independent review of the troubles that were centred on Pearl Roundabout earlier in the year. The unresolved nature of the political landscape has led ratings agencies such as Moody’s to continue to define Bahrain’s prospects as ‘negative’.However, Moody’s rating has been tempered by its comment: ‘. . systemic risks will be mitigated by the domestic retail banks’ healthy liquidity and relatively strong capital positions.’ In short, even the ratings agencies have a foot in each camp, positive and negative.

Despite what can only be described as a difficult year, the Moody’s report noted GDP growth in Bahrain of around 2%

in 2011 and 3% in 2012 -rates that many European countries would be proud of.

In the context of reduced levels of FDI, the long-underplayed oil sector is fast emerging as key to the Kingdom’s economic future. While investment in real estate and the financial services sector wane, Tatweer Petroleum has drilled more than 200 new wells since handover of the Bahrain Oil Field in 2009, and is engaged in a fast track programme to drill another 3,600 wells over the next 20 years.

The hospitality sector has also suffered exceptionally weak performance throughout the year, exacerbated by the suspension of cruise liner visits earlier in the year. However, the cruise season restarted on December 14th and is expected to contribute 32,000 visitors by its conclusion in March.

60www.capital-me.com

OFFICE MARKETThe local Class A office market continues to be dominated by significant oversupply and weak demand. Despite this, rental rates appear to have bottomed out as landlords have now reached rental rates below which they are unwilling and unlikely to go. Incentives remain relatively rare even in largely unoccupied properties in good locations.

It is perhaps surprising how little movement there has been in a market where we might have expected a large degree of rationalisation, consolidation, renegotiation and upgrading. Despite the opportunities for all of these, the market has remained largely static as it has suffered both new supply and demand contraction simultaneously.

The less-preferred prime locations such as Diplomatic Area, which suffers from chronic traffic access, circulation and parking problems has suffered the most, with new supply lying idle and existing tenants seeking to relocate to new districts such as Seef on expiry of their current contracts. However, the costs of moving in terms of fit-outs, IT, legal and even stationery are proving barriers to movement for most businesses which have become extremely cost-sensitive in an albeit temporarily, uncertain political and economic climate.

The opportunities to create low-density business parks that would go some

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

GD

P G

rowt

h/pa

2003

7.2%

5.6%

7.8%8.3%

6.3%

2.6%

3.5%

2.2%

3.0%

6.7%

2004 2005 2006 2007 2008 2009 2010 2011 2012 (est)

GDP Growth, Bahrain – 2003 to 2012

Local Class A Office Space Lease Rates – Q4 2003 to Q4 2012

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

BD/s

qm/p

m

Q4 2011Q4 2010Q4 2009Q4 2008Q4 2007

Class B Office Space Lease Rates – Q4 2003 to Q4 2012

0.0

1.0

2.0

3.0

4.0

5.0

6.0

8.0

7.0

BD/s

qm/p

m

Q4 2011Q4 2010Q4 2009Q4 2008Q4 2007

way to easing Bahrain’s daily traffic commuting problems still exist, but need to be very carefully considered in the current climate.

The Class B and C office space that typically occupies residential apartment buildings has been less affected by market conditions over the last few years with smaller movements in rental rates and occupancy. These offices are not unsurprisingly located close to residential areas and benefit from their proximity to the homes of staff who do not need parking spaces and other facilities associated with the Class A market. There has been virtually no construction in this sector over the last decade while the demand pressures for price-sensitive and centrally located accommodation have intensified during this period.

The future of office space remains dominated by the absorption of both existing supply and new supply under construction in the major office zones of Diplomatic Area and Seef District together with new locations such as Bahrain Bay. Most planned office projects have been postponed but several remain doggedly determined to enter an extremely competitive market, hoping presumably, to meet the next cycle of demand growth.

Retail SectorThe retail mall sector in Bahrain has historically been dominated by the collection of ‘regional’ malls in the Seef and Sanabis areas which were the home for most of the Kingdom’s hypermarkets and cinemas, and benefited from Saudi weekend visitors.

However, the malls in this area have largely been ‘cannibalised’ by City Centre which was not only able to attract many of the key tenants from the other malls, but at almost double the rental rate. The remaining malls have been

faced with increasing vacancy rates and lower profile tenants and in some cases rates have fallen by almost 75% as mall management have sought to maintain both occupancy and footfall levels.

However, the growing trend across Bahrain has more recently been in the

field of ‘neighbourhood’ centres anchored by hypermarkets such as Lulu. As these centres have increasingly opened throughout the Kingdom, visitation levels to the major malls has fallen even further, and it remains to be seen how events in this sector will unfold over the next two or three years.

61

REAl EsTATECAPITAL BusIness MAgAzIne

Standard 2 Bed Apartment Rental Rates, Juffair – Q4 2007 to Q4 2011

Standard 3 Bed Compound Villa Rates – Q4 2007 to Q4 2011

About the AuthoR

This report was prepared by the CBRE Bahrain Research Team, which forms part of CBRE Global Research and Consulting – a network of preeminent researchers and consultants who collaborate to provide real estate market research, econometric forecasting and consulting solutions to real estate investors and occupiers around the globe.

-

100

200

300

400

500

600

800

700

BD/s

qm/p

m

Q4 2011Q4 2010Q4 2009Q4 2008Q4 2007

-

200

400

600

800

1,000

1,200

BD/s

qm/p

m

Q4 2011Q4 2010Q4 2009Q4 2008Q4 2007

EnERGy REVIEWCAPITAL BusIness MAgAzIne

63

coMModity research theMes and outlook By: Merrill Lynch

Macro outlook• For 2012, we see two key

global energy scenarios. In our baseline scenario, Europe goes into a modest recession and the rest of the world shrugs it off (global GDP growth of 3.5%). In an ugly scenario, Europe drags the world economy down with it (global GDP growth of 1%).

• In our view, global current account (CA) imbalances are at the heart of ongoing economic woes. In an oil supply constrained world, oil demand in CA deficit countries has to adjust lower to make room for fast growing surplus nations.

• Negative USD real rates further discourage output and investment in the oil sector, skewing regional supply responses.

• For 2012, we believe the global economy cannot afford oil prices above $130/bbl, the point at which energy as a share of global GDP reaches 9% and the world economy experiences a severe crisis. Still, we think this is unlikely to occur.

• We remain concerned that a broader Syrian conflict could rattle Middle East security, exacerbating oil price volatility.

WTI and Brent crude oil• We see limited upside to crude oil prices in 2012 as the balance improves. Global oil demand growth should be weak at 1 mn b/d, non-OPEC supply recovers and OPEC spare capacity

rises as Libya returns. Equally, price downside could be tempered by below-average stock levels.

• In 2H12, low inventories and further monetary policy loosening will likely support oil prices. Overall, we see Brent crude oil prices average $108/bbl in 2012, $101/bbl for WTI. Low inventories likely will keep Brent in backwardation.

• For 2013, the secular bull story for oil remains intact as the recovery in the global economy leaves oil markets undersupplied relative to the expected pace of economic growth. As such, we believe crude oil prices will average $118/bbl for Brent, $111/bbl for WTI in 2013.

• WTI-Brent spreads should trade at $7/bbl until 2014 as supply regularly overwhelms demand in Cushing, requiring non-pipeline transport

• Harmony seems to have returned to the cartel for now as OPEC agreed to a 30 mn b/d production ceiling for 1H12 (inc. Iraq) at their Dec meeting. OPEC will allow a stock build to prevent another oil price spike.

Atlantic Basin petroleum products• Despite strong EM demand growth for transportation fuels in 2012, we believe global demand for petroleum products will continue to be overwhelmed by CDU capacity additions. Thus, Atlantic Basin cracks

should decline further in 2012.• Global gasoline utilization rates will likely drop in 2012 given a strong bias of refiners to supply gasoline, outweighing demand.

• The outlook for distillates is relatively better, as demand continues to be supported by EM growth despite the weakness in Europe. Still, with upgrading capacity expanding strongly, any immediate upward pressure on crack spreads should be limited.

• We do not expect Atlantic Basin residual fuel oil margins to strengthen as CDU capacity growth outweighs upgrading capacity.

US natural gas• We expect US nat gas prices to stay low in 2012 given record storage levels, rampant production growth, and a weakening demand picture, particularly in light of unusually warm weather. We now see prices averaging $3.30MMBtu in 2012 with a mild recovery to $3.80/MMBtu in 2013.

• We are calling for a repeat of 2009 in 3Q12 as fear of storage containment weighs on prices. In our view, Henry Hub prices will have to drop below $2/MMBtu by October in order to curtail production growth and avoid storage containment.

• With increased onshore oil development, dry gas is becoming a by-product of oil. Combined with productivity gains, the supply glut persists.


LNG• In 2012, LNG prices will likely be supported by strong Asian demand, driven by regas capacity growth in China and India, on top of ongoing maintenance in Qatar. The lack of major supply additions until 2015 will likely keep markets tight.

• Given the premium of LNG delivered to Asia over Europe, spot Atlantic cargoes may increasingly be diverted to Asia.

• Japan’s nuclear power future remains uncertain. In a worst case scenario, spot LNG prices may rise to 2008 levels of $25/MMBtu.

Thermal coal• In our view, coal will be hit by a double-whammy in the next 6 months: a negative demand shock and steadily improving supplies. Also in 2012, we expect front-month API2 prices to weaken and the contango to widen across the API2 and API4 forward curves given physical oversupply in both the Atlantic and Pacific markets, lacklustre demand in Europe and softening economic activity in Asia.

• Medium-term, coal should continue to underpin power generation and import needs in Asia, soaking up expanding global supplies.

UK natural gas• UK nat gas balances will tighten in the summer of 2012 as LNG cargoes are increasingly diverted towards Asia, domestic gas supplies continue to decline, and as Continental Europe absorbs a rising share of North Sea gas supplies. The risk of lower LNG volumes into the UK makes it vulnerable to adverse shocks, and UK Winter 2012/13 gas prices stand to benefit.


65

torresol energy launches coMMercial oPerations of tWin solar therMal Plants in sPain

By: Torresol Energy

Torresol Energy, a joint venture between Masdar and SENER, announced at the World Future

Energy Summit in Abu Dhabi that the Valle 1 and Valle 2 plants; two identical 50 MW parabolic trough plants, located in Cádiz, in the South of Spain, had commenced commissioning in January 2012.

In October 2011, under the patronage of His Majesty the King of Spain Juan Carlos I and His Highness General Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, Deputy Supreme Commander of the United Arab Emirates Armed Forces, Torresol Energy officially inaugurated Gemasolar in Fuentes Andalucia, Spain. The facility represents a significant breakthrough in the global solar industry and an important new field of cooperation between Spain and the UAE.

The announcement was made during a press conference held by the President of Torresol Energy, Enrique Sendagorta; the COO of Masdar, Trevor Nash; the General Manager of Torresol Energy, Alvaro Lorente; the Director of Masdar Power, Frank Wouters; and the President and CEO of SENER, Jorge Sendagorta.

Construction on Valle 1 and Valle 2 began in December 2009, and was completed in December 2011. In January 2012 the plants were connected to Spanish national grid for commercial operations. Roughly 4,500 workers worked over 2,700,000 hours to build and launch the twin projects during the two construction years.

SENER led the Engineering, Procurement and Construction (EPC) contract for the two projects, as project manager, and has provided 100% of the technology and engineering for both plants. From the outset, the two plants were built sequentially, including processing various types of supplies, overseeing multiple contractors, providing quality control of the execution and, above all, planning and supervising construction as it progresses.

Each of the plants will produce 160 GWh of power per year, equivalent to the amount of power consumed by 40,000 households. Together, the two plants will cut CO2 emissions by approximately 90,000 tons/year. The thermal storage of the plants allows them to continue producing energy for 7.5 hours at full power capacity without sunlight. Solar power thus becomes a source of manageable energy capable of supplying to the grid based on power demand, regardless of whether it is day or night or if the weather is cloudy.

Along with the Gemasolar plant, the two Valle plants will help Spain contribute to Europe’s 2020 climate and energy targets which aim to reduce greenhouse gas emissions by 20%, increase the use of renewables as a primary source

of energy by 20% and reduce primary energy consumption by 20% through improved efficiency.

Torresol Energy is a company that promotes the technological development, construction, operation and maintenance of large concentrated solar power plants throughout the world. With the commissioning of Valle 1 and 2, the company has already developed three projects, including


the innovative Gemasolar plant that started commercial operations in May 2011. Furthermore, Torresol Energy’s projects have already won a number of awards including Euromoney 2009 Project Finance Deal of the Year for Valle 1 and Valle 2 plants, the US CSP Today 2011 award, “Commercialized Technology Innovation of the Year” for Gemasolar and the European CSP Today 2011 awards “Commercialized Technology Innovation 2011” and “Most Effective Project Development 2011” for Gemasolar.

In turn, SENER has also been awarded thanks to its solar solutions. At the end of 2011, SENER was awarded, mainly due to Gemasolar, the top European Business Award for Innovation. It won against nine other finalists in an extensive selection process that began in May 2011 and saw over 15,000 European companies competing for the honor.

About toRResol eneRgyTorresol Energy, an alliance between the companies SENER and MASDAR, was created with the purpose of becoming a leader in the concentrated solar power (CSP) sector, with the goal of promoting technological development and operating large concentrated solar power plants around the world.

About seneRSENER is a private engineering and technology group, founded in 1956 in Bilbao that seeks to offer its clients the most advanced technological solutions.

About mAsDAR AnD mAsDAR PoweR

Masdar is Abu Dhabi’s multi-faceted initiative advancing the development, commercialisation and deployment of renewable energy technologies and solutions. The company serves as a link between today’s fossil fuel economy and the energy economy of the future - developing the “greenprint” for how we will live and work tomorrow.


67

crude oil and the iMPact of eu sanctions against iran

By: Ole S Hansen

The EU agreed to impose an embargo on crude imports from Iran. The move which was

widely expected is part of sanctions over its nuclear intentions and in order to accommodate countries currently relying on Iranian oil existing contracts can be fulfilled until July 1st leaving them time to seek alternative suppliers.

Ahead of the announcement, six warships from America, Britain and France passed through the Strait of Hormuz and the market is now nervously awaiting the response from Tehran. Iranian authorities have over several occasions threatened to close this important strait through which some 20 percent of global oil is transported daily.

Western governments led by Britain and America have stated that they can keep the strait open and will do what is necessary to secure the safe passage of oil produced by countries within the Persian Gulf. Europe imports some 450,000 barrels a day and key recipients such as Greece, Italy and Spain will now have to look elsewhere for supplies

with attention naturally turning to Libya where oil exports have been rising steadily since the civil war ended.

The risk of a conflict that gained attention during December 2011 helped drive the price of Brent Crude up by $10 until the early parts of January before focus shifted to the fragile outlook for oil demand during the first half of 2012.

Iranian officials will probably have to tread very carefully now as the resolve by the international community has been clearly shown and they know that an attempt to block the Strait of Hormuz will most likely cause a damaging spike in prices which will hurt every oil consuming nation, including China, its biggest customer. Speculators have continued to increase net long positions in the market on the back of raised geopolitical risk and it helps to explain why the initial move higher on the announcement was not greater.

Over the coming weeks however the market will be nervously awaiting the next move from Iran and in the unlikely event it leads to a military conflict the price of oil has the potential of spiking higher by anything between 20 and 40 dollars depending on the impact on free passage through the Strait. Such a spike, if prolonged, will undoubtedly raise the spectre of a 2008 to 2009 styled global recession and oil demand could be seriously impacted thereby increasing the subsequent risk of a collapse in the price, which no one, not least Saudi Arabia would want at this stage.

Given what we now right now in terms of supply and demand we probably feel that oil prices are trading expensively but the geopolitical risk premium will stay with us for the foreseeable future leaving selling interest only in the hands of brave hearts.

About the AuthoR Ole Hansen is Saxo Bank’s Senior Commodity Strategist.

22-25 April 2012Abu Dhabi National Exhibition Centre

United Arab Emirates

Pre-register to attendVisit: www.worldecoConstruct.com/Capital2

Local and International Suppliers Summit and Training Workshops

Register now for the region’s premier event for sustainable construction products and solutions

Over 250 local and international suppliersOver 100 speakers & 12 days worth of green & infrastructure summits and training workshops30,000 construction, infrastructure, real estate professionals and government authoritiesExclusive daily tours of Masdar CityFREE seminars and demos on Future Build Open Air ShowcaseCo-located with Cityscape Abu Dhabi - the A-Z of real estate’s elite

Register FREE OF CHARGE today at www.worldecoConstruct.com/Capital2For more information contact the team on +971 4 407 2528 or email [email protected]

FEATURING

Training Seminars Showcase Co-located with

Foundation Partner Sustainable Knowledge Partner Strategic Partner Endorsed by Principal Sponsor

Future Build Sponsors

Seminars and Demos

Supporters

International Trade Exhibition and Global Summits for Sustainable and Innovative Construction

London has just gained a distinguished new landmark in the form of a graceful and historic luxury hotel. The recently opened Corinthia Hotel London, rated amongst London’s finest five star luxury hotels, combines traditional grandeur with modern freshness. Housed in a building that has stood on Whitehall Place for over a century; the luxuriously redesigned Victorian destination is

ideally located in the heart of London where guests are conveniently only a short walk from many of the city’s major attractions.

The magnificent architecture has been expertly restored and brought vividly back to life with contemporary design, the highest quality materials and wonderful interiors. Corinthia London

has worked with world-class designers, craftsmen, artists and architects to develop the distinctive soul and remain true to the Corinthia brand’s roots as a family business, fired by a passion for craftsmanship of care, devotion to detail and intuitive service.

Middle Eastern guests will be delighted by the uncompromising standards of luxury at what will surely become a London legend. Vast lobbies, high ceilings, natural light and spectacular views have been combined with inspired cutting-edge design to create iconic public spaces, elegant rooms and luxurious suites.

RESTAURANTSThe reconstructed hotel features two world-class restaurants and a destination bar. Garry Hollihead, winner of the coveted Michelin stars at three different establishments, is at the helm of The Northall. The restaurant celebrates the best of British artisanal produce, including Cumbrian short horn beef, together with an extensive selection of organic and biodynamic wines by the glass and by the bottle. The hotel’s Mediterranean speciality seafood restaurant, Massimo Restaurant & Oyster Bar, is headed by the renowned Italian chef patron Massimo Riccioli. Bassoon, the musically inspired bar designed by the award-winning David Collins Studio, serves both molecular cocktails and colonial inspired drinks from its boutique beverage library.

The heartbeat of the hotel is its Lobby Lounge, which offers a residential feel enhanced by an eclectic mix of furniture and bespoke artworks. The soaring dome in the centre is adorned with the pioneering ‘Full Moon’ chandelier, composed of 1,001 crystal baubles; it was created by Parisian designer Chafik Gasmi and produced by Baccarat, the prestigious French crystal manufacturer. Lobby Lounge guests can take afternoon tea and indulge in innovative creations by Claire Clark, a celebrated pastry chef, or enjoy an evening beverage.

lIVInG luxuRyCAPITAL BusIness MAgAzIne

69

business travelbusiness travel

introduCinG Corinthia hotel london: A 21sT cEnTuRy GRAnD HOTEl


ESPA SPAAward-winning international spa company ESPA partnered with the hotel to launch its revolutionary flagship ESPA Life at Corinthia, offering a fully integrated wellness approach alongside a luxury spa experience. Spanning 3300m2

and on four floors, this magnificent spa features 17 treatment rooms, a private Spa Suite, nail studio, indoor pool, vitality pool, amphitheatre sauna, ice fountain, marble heated lounges, private sleep pods, a state-of-the-art gym and Daniel Galvin hair salon. ESPA has enlisted exceptional therapists, naturopaths, acupuncturists and osteopaths offering guests a new level of spa and wellness in a five-star luxury setting. Situated just a stone’s throw from Trafalgar Square in the heart of London, ESPA Life at Corinthia is perfectly positioned for business clientele, leisure guests and health conscious city dwellers.

IDEAL FOR BUSINESSLocated on the mezzanine floor are six private executive level meeting rooms, conveniently linked to the mezzanine dining area of The Northall for a private lunch or dinner. Five of the rooms are fitted with a state-of-the-art high definition optical turnkey system that effortlessly allows total connectivity for media broadcasting, recording, editing and mixing.

LUxURIOUS ROOMSCorinthia hotel features 294 guest rooms, including 36 suites and seven spectacular penthouse suites located over two storeys, featuring private terraces with unmatched views of London’s most recognised landmarks, including the Thames, the London Eye, Trafalgar Square and Whitehall. Corinthia London’s sumptuously appointed rooms, averaging 45m2 in size, are also amongst the largest in their category in London’s luxury hotel market. With no restrictions on check-in and check-out times, Corinthia Hotel London has dedicated itself to providing guests with ultimate flexibility, convenience and comfort during their stay.

Perhaps the world’s most advanced SUV, the third-generation M-Class features advanced technology so fast, you have to slow it down just to follow along.

Since its inception, the M-Class has redefined what an SUV can be, with a legacy of groundbreaking safety and earth-embracing performance. For 2012, it once again shows that even on a familiar road, you can still blaze an exciting new trail.

SAFETY The new M-Class comes complete with innovative options to help keep

you on track. The Optional Distronic Plus active cruise control automatically slows down or stops the vehicle in response to car traffic ahead. Optional Blind Spot Assist and Lane Keeping Assist can help alert you to unseen vehicles in the next lane, help warn you of drifting out of lane, and with available active technology, help steer the vehicle back if you disregard the alerts.

Another exclusive Mercedes-Benz innovation; Attention Assist, can help alert the driver if it detects signs of drowsiness on longer trips. The system continuously monitors over 70 different

parameters of driving behavior in the first few minutes of a drive to establish a pattern, and can automatically alert the driver with both visual and audible warnings.

Furthermore, reinforcements surround you on every journey. The rigid uni-body structure encircles the passenger cabin in a highly protective network of ultra-high and high-strength steel, magnesium reinforcements and triple-layer construction of all eight roof pillars. Advanced crumple zones and subframe-mounting of the axles help to divert impact forces away from the passenger compartment.

CAPITAL BusIness MAgAzIne71

lIVInG luxuRy

Car Feature

MerCedes M-Class suvAheAD oF Its tIme, by Any meAsuRe

Plus, it’s remarkable foresight helps prepare you for danger. The M-Class has long been a protective showcase of SUV safety breakthroughs. Pre-Safe® is a Mercedes-Benz first that can detect conditions suggesting a collision or rollover is imminent, then adjust the front seat belts, and even close the windows and sunroof, all to better prepare the occupants in the moments before a collision.

With its advanced restraints, the pioneering air bags are nothing new to the M-Class. It was the first SUV equipped with side curtain air bags, and for 2012 it offers the 11-way protection of nine standard air bags,

including a new knee air bag for the driver. An advanced and expanded network of sensors helps detect frontal and side impacts, or even a rollover, more effectively.

VERSATILITYWith your choice of a new-generation 302-hp gasoline V-6 or a torque-rich yet fuel-stingy 240-hp clean-diesel BlueTEC V-6, the rewards of performance are yours on demand. Channeled through a paddle-shifted 7-speed automatic transmission, the torrential output of either engine is delivered with instant response and enduring efficiency.


Have peace of mind with the knowledge that the M-Class is perfectly at ease on imperfect roads. The standard 19-inch wheels team up with a 4-wheel independent multilink suspension with Agility Control, an innovation that instantly recalibrates the shock absorbers with every change in the road surface.

Always in season and in its element, the standard 4MATIC™ all-wheel drive integrates our 4-wheel Electronic Traction System. 4-ETS continually redistributes the engine´s torque to the wheels with the best grip, even if that’s only one wheel. And with a permanent 50:50 front/rear torque split, 4MATIC offers sporty handling on dry roads too.

Inside its rigid body, there is a decidedly flexible cabin. With heated 8-way power front seats and reclining rear seats, the M-Class accommodates five passengers in a haven of comfort. The rear seats flip and fold flat in a 60/40 split, to accommodate up to 71 cubic feet of cargo in a versatile variety of configurations.

With a generous 7,200-lb towing capacity when outfitted with optional hitch, the M-Class is un-swayed by the prospect of towing and can pull a trailer with confidence. The standard Trailer Stability Assist acts decisively to rein in trailer sway, helping you keep your worries behind you.

DESIGNFrom the broad swaths of sustainably forested wood trim to the impeccable stitching of the hand-fitted upholstery, every surface of the M-Class cabin reflects a deep tradition of caring craftsmanship and attention to your senses - of touch, of good taste and of well-being.

With luxury beginning where our hands finish; standard appointments in the M-Class include the rich glow of Eucalyptus wood trim and the enduring comfort of supple MB-Tex upholstery. For an elevated sense of indulgence, soft full-grain leather seating and the warm grain of Burl Walnut wood are optional. Either way, the hand-fitted upholstery and hand-finished wood reflect a deep tradition of finely tailored luxury.

User-friendly innovations keep you in touch, with a large, high-resolution color screen sitting high in the dash. It offers intuitive access to a suite of

advanced technology, from standard Bluetooth to available navigation and countless audio options, that is both easy to master and eager to help you feel at peace with your world.

The M-Class is wholly immersive, offering nearly endless listening choices. With standard USB and AUX jacks and Bluetooth audio streaming, along with optional iPod integration, Sirius XM Satellite Radio, HD Radio™ stations and a 10GB in-dash Music Register, you’re more likely to run out of roads than music in the M-Class.

The ambient illumination further enhances your sense of belonging in the M-Class cabin. From the front foot wells to the various storage compartments to overhead, a thoughtful array of courtesy and ambient lighting is standard. As a further enhancement, the Premium 2 Package includes multicolor perimeter lighting, and illuminated front door sills.


lIVInG luxuRy

CAPITAL BusIness MAgAzIne

listinGs

75

lIVInG luxuRy

AudemArs Piguet: ROyAl OAk Audemars Piguet’s Royal Oak line is presented in Stainless Steel case material. It presents automatic movement and shows hours, minutes, seconds, and date. With 3120 engine caliber, the Royal Oak collection is 39 mm case diameter and 16 mm case thickness. Its case back is transparent, sapphire crystal, and scratch resistant. It is water resistant up to 50 meters.

What’s more? It reveals white-gold bezel screws, with 22k Gold Automatic Rotor, and luminous hour markers and hands.

IWC Schaffhausen gets off to a powerful start in 2012: the year of the Pilot’s Watch. With five new models, the TOP GUN collection establishes itself as an independent formation within the IWC Pilot’s Watch family. The year’s high-flyer is the TOP GUN Miramar: a tribute to the place in California where the myth of the elite pilots was born.

The TOP GUN edition has held a permanent place in IWC Pilot’s Watches collection since 2007. The elaborately equipped Big Pilot’s Watch Perpetual Calendar TOP GUN

comes with a host of advanced features, including a perpetual calendar with its four-digit year display, moon phase display and seven-day power reserve. The Big Pilot’s Watch TOP GUN unites the clear-cut instrument look of the 1940s with ultra-modern watch technology. The tiny aircraft silhouette on the seconds hand creates an eye-catching signal-red highlight on the black and- white dial. The Pilot’s Watch Chronograph TOP GUN, which comes with a fly back function and protection against magnetic fields, is also equipped with an IWC-manufactured movement.

iWC sCHAFFHAuseN: TOP Gun MIRAMAR, THE nEW PIlOTs’ WATcHEs

“rotoNde de CArtier:” MInuTE REPEATER flyInG TOuRbIllOn WATcH The Minute Repeater Flying tourbillion watch from Carier reveals a titanium case, with beaded titanium, set with a sapphire cabochon crown and 45 mm diameter.With its sapphire crystal and sapphire case back, this watch is 30 meters water-resistant. It is distinguished by white, galvanized, guilloché, silvered open-work grid with sunray effect, and black transferred Roman numerals

dial. Its hands are sword-shaped in blued steel and is presented with black alligator skin strap and double adjustable folding clasp in an 18-carat white gold clasp.

Minute Repeater’s movement is manufacture mechanical, with manual winding, calibre 9402 MC, certified Geneva Seal, flying tourbillion, and minute repeater.


A. LANge & söHNe: sAxOnIA AuTOMATIc

PiAget: THE GOuVERnEuR TAkEs THE sTAGE

PAtek PHiLiPPe: cAlATRAVA OffIcERs WATcH

Patek Philippe’s Calatrava Officers watch line has a black, hand guilloche sunburst dial color. Its movement is automatic self winding mechanical, with Geneva Seal Hallmark. It shows hours, minutes, center sweep second, and date.

Its crystal material is sapphire, and anti reflective. Its case diameter is 38 mm. It is water resistant up to 30 meters and reveals 18k white gold fluted royal crown, two-posi-tion, with relief embossed Calatrava Cross.

Calatrava Officers watch reveals leather, black crocodile with contrast stitching watch bracelet and trap material.

The Gouverneur line by Piaget is first and foremost a subtle balance between two shapes; round and oval, which are frequently associated and have made their mark on the history of art. It also epitomizes the perfect technical mastery characterising the Manufacture de Haute Horlogerie Piaget.

Introduced within the Black Tie collection, the Gouverneur line reveals an exceptional horological mechanism enhanced by powerful formal expression. It presents three mechanical variations through automatic, chronograph and tourbillon models, each available in diamond-set pink or white gold versions.

Down to the very last detail, the SAXONIA AUTOMATIC leverages generations of Saxon watchmaking prowess to the present day. In the course of its refinement, it was not only endowed with a larger and thinner case but also with the Lange manufacture calibre L086.1, the third all-new self-winding movement developed from the ground up by A. Lange & Söhne. A noteworthy feature: a power reserve of 72 hours. It allows the owner, if so inclined, to set the SAXONIA AUTOMATIC aside on Friday evening,

indulge in a weekend of sports, and put it on again on Monday morning without having to rewind and reset it when the new week begins. The argenté-hued, solid-silver dial is framed by a gently chamfered bezel that showcases slender baton hour markers, solid-gold lancet hands, and a minute scale reduced to the bare essence. The finesse of the perfectly finished self-winding movement can be admired through the sapphire-crystal caseback of the watch.

77

lIVInG luxuRyCAPITAL BusIness MAgAzIne

aCCessories

sAMsOnITE: lIMITED EDITIOn cOsMOlITE cOllEcTIOn In GOlD cOlORSamsonite has recently launched a Limited Edition Cosmolite in bright gold color. This new Limited Edition Cosmolite complements the earlier range, which includes silver, black, blue, violet and cherry-red colors.

The Cosmolite collection, which has taken the market by storm for its lightness and strength, is set to further build on its dominance with the introduction of this attractive Limited Edition gold color.

Cosmolite offers Samsonite’s proprietary Curv® technology (a registered trademark of Propex Fabrics GmBH) – comprising of innovative and extremely light high-performance body, advanced impact resistance and durability.

lAnVIn: 2012 EyEWEAR OPTIcAl cOllEcTIOnAfter the recent début of its 2012 Sunglasses Collection, Lanvin presents its first eyewear optical collection in partnership with the De Rigo Group, under the creative guidance of the imaginative Alber Elbaz. Perfectly in line with the Lanvin style, the new exclusive glasses for men and women successfully interpret the tradition of this French Maison, which is given a modern twist with a mixture of both retro and contemporary details.

The models of the Lanvin eyewear collection reveal the brand’s special attention to research into materials and its extreme eye for detail. Horn is the star of the collection, together with gun, bronzed and golden metals featuring a special antique finishing. Jewel details along with screws, nails and small studs are the exclusive features that turn each Lanvin model into a unique and inimitable accessory. The color palette is rich in natural beige and brown nuances, with ocean blue hues, which embellish even the classic, timeless black, and havana with innovative color combinations.

AlfRED DunHIll’s IcOnIc bluE MOP cufflInksStriking blue Mother of Pearl features prominently on these exclusively designed Dunhill cufflinks. The iconic AD logo appears in the centre of each cufflink. These are great for either day or evening wear.

Moreover, the Alfred Dunhill iconic blue MOP cufflinks are polished and made of brass with palladium plating and blue mother of pearl insert.

GadGets

CANoN uNveiLs tHe PoWersHot s100 The PowerShot S100 is designed to give you the power to shoot like a professional, packed in an impressive compact body that easily slips into your pocket. Instantly capture premium quality images, from bright sunrises to starlit skies, thanks to the inclusion of Canon’s acclaimed HS System technology. Shoot stunning shots wherever and whenever courtesy of the PowerShot S100’s powerful DIGIC 5 processor which combines with an exclusive 12.1 Megapixel high-sensitivity CMOS sensor to give you superior power and performance.

Packed with powerful technology that helps you make your photos stand out from the crowd; the enhanced HS System lets you shoot photos with up to ISO 6400, helping to reduce overall blur and enabling you to shoot nail-biting sporting events at very high speeds. Images are always sharp and striking thanks to Canon’s advanced Intelligent Image Stabilizer technology.

The PowerShot S100 is ideal for shooting Full HD (1080p) movies with crystal clear stereo sound whilst the 7.5 cm PureColor II G LCD screen lets you playback and share your stills and movies in excellent quality. Aspiring photographers keen to broaden their creative horizons can make the most of a range of Creative Filters including Monochrome, Toy Camera Effect, Fish-eye Effect and Miniature Effect.

soNy LAuNCHes Wi-Fi eNAbLed s-FrAme WitH oNLiNe PHoto retrievAL FeAtureSony has unveiled its first ever Wi-Fi enabled S-Frame as part of the digital photo frame range. The new seven-inch digital photo frame DPF-W700 extends the freedom of Wi-Fi Internet connectivity, making it effortless and more enjoyable for consumers to view, upload and display their most interesting and precious photos.

Sony’s latest offering is embedded with a host of features including home network connectivity for easy viewing of photos stored on a home PC, a seven-inch resistive touch screen, support for AccuWeather forecasts to provide real time weather updates, as well as 1GB internal memory to store up to approximately 4,000 photos and card slots supporting MS Duo/SD/SDHC formats.

Similar to other S-Frame series models, DPF-W700 comes with several eco-friendly components such as LED backlight technology that uses less power to display images than typical CCFL technology without any compromise on photo quality and vibrant color display. An auto on/off timer also allows users to set their frames to turn off automatically when not in use for an extended period of time.

CisCo: LiNksys WireLess-N rANge exteNder - WireLess iN every room!Elegant and easy to use – extend your wireless range with the Linksys wireless range extender.

Smartphones and tablets have gained massive popularity these days in order to watch online video, (video) chat with friends or read the latest news from anywhere in the home. Most consumers use their wireless network but as devices become more mobile; some users discover that their wireless is not available in all rooms. Videos that buffer, pages that don’t load or apps that stop reacting – are some things most of us have experienced.

So what can you do about it? The easiest solution would be installing a range extender like the Linksys Wireless-N Range Extender. You can insert this product in a wall socket in the middle of your wireless router and the room where you need the coverage to increase and the range extender will relay the signal to reach the other room. Installation is done with the click of a button or by using the wireless setup wizard and is finished in minutes.


middLe eAst equity issues eNd 2011 uP 47% versus 2010Thomson Reuters released its 2011 investment banking analysis for the Middle East region, which revealed equity capital markets (ECM) issuance reaching $10.2 billion during the full year, a 47% increase compared to 2010 when volumes touched $6.9 billion.

Investment banking fees in the Middle East only reached $406.8 million during the whole year, which was a 40% decline compared to 2010, when fees were calculated at $678.4 million. Fees for mergers and acquisitions (M&A), which accounted for 54% of the overall fee pool, totaled $221.2 million during the 12-month period, down 37% from 2010.

Debt capital markets (DCM) fee activity in the Middle East fell 66% from 2010 to $55.6 million in 2011. Fees from syndicated lending and ECM totaled $47.8 million and $82.1 million respectively.

HSBC held the top spot in the Middle Eastern DCM and the syndicated loan fee rankings for 2011 earning $8.6 million and $5.2 million respectively. Goldman Sachs topped the M&A fee rankings during the year with $14 million. Bank of America Merrill Lynch controlled 13% of ECM fees in the Middle East.

According to the review, Middle Eastern targeted M&A activity reached $10.1 billion for the full year, down 43% compared to 2010 when activity totaled $17.7 billion. Real estate remains the most targeted industry in the Middle East with $2.6 billion, 26% of the activity down from $4.8 billion during 2010.

The United Arab Emirates was the most active Middle Eastern country with $4 billion, for 39% of annual activity. BNP Paribas topped the Any Middle Eastern Involvement M&A ranking with $10.1 billion. RBS topped the Middle Eastern target M&A ranking with $980 million.

A clOsER lOOkCAPITAL BusIness MAgAzIne

79

iNFiNiti sHoWs Positive 2011 sALes groWtH ACross tHe middLe eAst regioNJapanese luxury automaker Infiniti released its 2011 sales numbers for the region which showed overall positive growth of 5.17% over 2010 for a total number of 4569 vehicles sold in the Middle East Region. M37/56 sedans are showing enormous gains of 175.88%; becoming the fastest growing luxury model in its segment. Likewise, sales of the G37 convertible rose 54.55%.

Along with strong performance in established markets, Infiniti’s expansion into the Kingdom of Jordan proved a success, widening the brand’s geographical footprint and demonstrating Infiniti’s surging popularity in the region and its commitment to growth through inspired performance.

Leading the region was Azerbaijan, which posted an extremely large 2011 sales growth of 131.67% over 2010, followed by Bahrain at 81.06%, Kuwait at 76.48%, and Oman at 29.43%.

Dubai and the Northern Emirates posted positive growth of 19.35%, while Lebanon showed growth of 15.38%.

Following on the success of the M37/56 and G37 convertible, the EX 35 premium compact-crossover SUV surged with 26.67% better sales, while the G37 sedan’s numbers were also up 19.26%.

The all new, redesigned luxury SUV QX56 also used its opulent styling and powerful 400 horse-power V8 engine to post a strong gain of 12.30%. FX35/50 remains Infiniti’s best selling model with an impressive 1699 units sold across the region in 2011.

AsdA CoNFirms First gLobAL FrANCHise PArtNers Asda, one of Britain’s leading retailers that has 25 living stores, 23 depots and eight recycling centres across the UK, confirmed it had agreed terms with two franchise partners to explore opportunities for its fashion label George, overseas. George is now one of the largest volume retailers in the UK and sells more clothing than any other supermarket clothing retailer.

Azadea Group; a premier fashion and lifestyle retail company headquartered in Beirut, Lebanon will be responsible for the George franchise stores Asda said it would open in the Middle East.

Asda has also come to an agreement with SandpiperCI, the largest private employer based in the Channel Islands, who will be responsible for opening George franchises in both Jersey and Guernsey.

Last year, Asda announced its intention to establish a small number of George stores, and this announcement puts it on track to open these in 2012.

George currently accounts for around half of Asda’s general merchandise sales and is already a growing global brand through Walmart stores in seven countries worldwide.

A team has been established at the George base in Lutterworth to establish, build and manage the franchise stores and develop these franchise partnerships. The team will ensure it has commitments from all franchise partners to ensure the brand is sold and merchandised based around its core values of style, quality and value.

in the neWs

As announced earlier in the month, for the full year 2011, the Group reported Net Profits of BD80.0 million ($212.2 million) versus BD86.8 million ($230.2 million) for 2010, representing a decline of 8%. EBITDA for the year was BD126.0 million ($334.2 million), representing a 39% margin, versus EBITDA of BD146.2 million ($387.8 million) for 2010. The Group’s Gross Revenues stood at BD327.0 million ($ 867.4 million) for the year, down 4% from BD340.3 million ($902.7 million) in the previous year.

Further commenting on the Group’s financial results, Shaikh Hamad, said: “As of 31 December 2011, Batelco Group was free of debt and had significant cash and bank balances of BD107.9 million ($286.2 million); an increase of 24% year on year. The overall financial and operational health of the Group was also underscored in 2011 by our having received Investment Grade Credit Ratings during the fourth quarter from Fitch and Standard & Poor’s Ratings Services, two of the world’s leading credit ratings agencies. These were the first public credit ratings issued to the Group, which further enhance our position and ability to pursue even greater profitable growth in the years ahead.”

ongoing growth of the network & overseas operationsAdditional key operation highlights for 2011 included growth of the total Group mobile customer base, reaching 11 million, by 21% whilst broadband subscriber figures across the network increased by 8%. In 2011, 37% of revenues and 30% of operating profit were sourced from markets outside Bahrain.

Market leadership in Bahrain despite aggressive competitionShaikh Mohamed added: “The Group maintained a nearly 44% share of the mobile market and strong retention rates. Similarly we saw additional progress in the broadband segment in Bahrain where Batelco saw an increase of more than 50% in its wireless broadband subscriber numbers for the year.” The Group has launched exciting new products, services and technologies including the successful trial of 4G/LTE in January 2012 at the Bahrain International Air Show.

bAteLCo grouP Agm APProves bd57.6 miLLioN ($152.8 miLLioN) divideNd For 2011

Batelco Group, the leading integrated communications’ provider in the Kingdom of Bahrain with operations across seven countries, concluded the Annual General Meeting for the twelve-months ended 31 December 2011, with shareholders approving a full year cash dividend of BD57.6 million ($152.8 million), which represents a 72% payout at a value of 40 fils per share. The Group already paid 20 fils per share during the third quarter of 2011 with the payment of the remaining 20 fils per share expected on 6 March 2012.

Commenting from the AGM, Shaikh Hamad Bin Abdulla Al Khalifa, Group Chairman, said: “We are especially pleased, however, that our solid financial performance enabled us once again to deliver a substantial dividend to our shareholders, totalling BD57.6 million ($152.8 million), as recommended by the Board of Directors and approved by our shareholders. This represents a 72% payout and continues to see the Group rank among the top regional telecommunications companies in terms of dividend yields and comparative shareholder returns. ”

young populations and high economic growth rates, making them the seedbed of the emerging middle-class markets.

The attitude of assuming that success will come from the education of consumers, rather than the adaptation of products, will not bear fruit. No matter how valued or desirable the merchandize is, most newly-minted middle-class customers will not be able to afford them. It may be that an alteration in the mind set of more conventional multinational corporation executives is required, in order for them to compete for the position of industry leader by cashing in on the benefits of the middle-class market.

ComPetiNg For tHe gLobAL middLe CLAss

Thought leader Booz & Company explores the options for senior executives to take the plunge and override their hesitancies about the idea of joining the race for the global middle class market share.

In 2011, the worldwide economic phenomenon that is known as the global middle class included between 700-900 million people, all of whom had the purchasing power to become consumers of manufactured goods and services. There is one common denominator across each country in which this demographic can be found: they are all recovering from the global recession with an increasingly urbanized lifestyle.

The value chain of companies that provide this population with goods, services and infrastructure is becoming known as the global middle market. Competing for their share are three different types of company - the local upstarts who are migrating into the domestic middle market as their customers become more prosperous; the global aspirants, who have already developed products for their domestic middle market, and who are looking to expand into the global equivalent, and the multinational incumbents intent on adapting their existing product lines to capture the attractive growth opportunities in emerging middle markets.

Recognising the pace of development in the target markets is the first step towards claiming a stake and taking that all-important step up onto the leadership ladder. All industrialising countries follow an ‘arc of growth’, an evolutionary path of economic change that takes them from nascent to mature, with a critical stage of urbanisation and economic momentum in between. Countries in the ‘momentum phase’ have large, relatively



Movers & shakers

DElOITTE AnnOuncEs 30 nEW MIDDlE EAsT PARTnERs, PRIncIPAls AnD DIREcTORs Deloitte, the business advisory firm, announced the admission of 13 new partners in the Middle East, along with the hiring and promotion of 17 principals and directors in offices throughout 16 countries, in all five of its key business areas – Audit, Tax, Enterprise Risk Services (ERS), Consulting and Financial Advisory. Globally, the firm has 182,000 people - including 10,000 partners - in 150 countries.

This reflects the firm’s focus on addressing client needs in growth sectors in the region, including Energy, Oil & Gas, Telecommunications, Technology, Hospitality and Financial Services. Many specialized professionals and leaders will be seconded from the Deloitte UK firm to the Middle East Consulting practice led by Julian Hawkins, a senior partner from the UK firm. In addition, Ali Kazimi, a Deloitte UK tax associate partner, has transferred to the region to lead the ME International Tax Services Center, while Santino Saguto, joined the firm as partner in charge of the Telecommunications, Media and Technology (TMT) industry group.

nEW VIcTORIAn cOMMIssIOnER TO THE MEnA REGIOn John Butler has been re-appointed as the State Government of Victoria Commissioner to the Middle East and North Africa until 2015.

Butler was first appointed in 2009 and he is now looking forward to further developing the strong business, trade and investment links the State has with the region.

Through a variety of program and business initiatives, the Victorian Government Business Offices (VGBO) assists Victorian exporters and provides assistance to Middle East and North African regional companies and organizations to source products and services, business introductions and investment opportunities with Victoria.

The VGBOs across the world were instrumental in attracting nearly $2.8bn in Foreign Direct Investment (FDI) in Victoria in 2010/11, which created more than 6,100 new jobs.

bARclAys ExPAnDs sEnIOR cORPORATE bAnkInG TEAM

Barclays Bank PLC, a major global financial services provider,

announced the appointment of Kersi Patel as Head of Trade and Working Capital, Middle East. He will be responsible for building the Trade and Working Capital Product and Sales organisation in the region aimed at growing Barclays’ market share in these businesses. Kersi Patel joins Barclays from HSBC Bank Middle East Ltd. where he was the Head of Trade and Supply Chain for Middle East & North Africa. Previously, he has held several senior roles across trade and transactional banking in HSBC, Deutsche Bank and Emirates Bank.

PROMOTIOns REsHAPE OMnIcOM MEDIA GROuP’s InVEsTMEnT MAnAGEMEnT sTRucTuRE

Omnicom Media Group MENA, the holding of communications planning networks OMD and PHD, has named its new Regional Executive Director-Investments. Chadi Farhat, currently the General Manager of OMD’s office in Beirut, is taking over from Karim Koraytem.

Farhat has been with the Omnicom Group in the region of more than 10 years and, in that time, has built an impeccable reputation for integrity, trustworthiness and talent management. In the last five years, he has managed the group’s media resources in the Levant area out of Lebanon, leading OMD’s Beirut office to the leadership position it enjoys today. Farhat’s brief is to lead the group’s teams and trading resources across the region to even greater heights. He will start his new role on March 1 and will work closely with his predecessor over the subsequent weeks to ease the transition and ensure the most efficient of handovers. Wissam Najjar, OMD Lebanon’s Group Director-Investment, has been promoted to the role of General Manager. After several years in OMD UAE and a stint in Canada, he has worked closely with Farhat in Beirut managing their clients’ media investments. His experience in the market and the region has fully prepared him for this progression in his career. OMD UAE’s Ziad Chalhoub has also been promoted to Executive Director–GCC Investments. He will work closely with Farhat to drive OMD’s investment agenda in the region, paying particular attention to its digital investment function. One of his

missions will be to develop a wider network of influential digital media partners.

“Filling Karim’s shoes was always going to be a challenge but we are very fortunate to have talented and experienced professionals like Chadi in our group to step in, not only to ensure continuity but also to build on Karim’s solid foundations,” explained Elie Khouri, CEO of Omnicom Media Group MENA. “With Karim’s guidance and learnings, as well as his own expertise and experience, Chadi is the perfect fit for this pivotal role in our business. I know he will excel in this new challenge.”

“It is hugely exciting to be given this role that Karim has built over the years, it’s also a huge responsibility to carry on in his footsteps,” Chadi Farhat added. “One of the reasons why I chose to make the move is that I know our office in Lebanon is in very safe hands. Wissam has clearly demonstrated his abilities not only as a media professional but also as a leader. His skills, including in talent management, make him the obvious choice for this new role.”

Karim Koraytem, who decided to leave the industry after more than 15 years, will act as a consultant until the end of the year. These promotions are effective March 1, 2012.

A clOsER lOOk


events

Held under the Patronage of His Highness Sheikh Mohammed Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, Cityscape Abu Dhabi is the only annual meeting point for governmental authorities, key investors and developers, consultants, architects, designers and other real estate professionals to drive growth in Abu Dhabi’s real estate market.

Cityscape Abu Dhabi 2012 is where the future of Abu Dhabi’s master plan and key developments are being revealed. With over 25,000 participants in attendance, Cityscape Abu Dhabi is the opportunity to build and maintain your presence in Abu Dhabi’s real estate market.april 22nd - 25th, 2012

CitysCape abu dhabi

abu dhabi national exhibition

ABU DHABI

The Global LNG Summit focuses on investments and developments transforming the LNG sector globally.It brings together the full LNG value chain, from upstream liquefaction producers through to LNG shipping, regasification and gas distribution. This event outlines the key drivers

impacting LNG demand/supply, challenges and opportunities; and identifies new business opportunities in upstream liquefaction projects, FLNG developments, onshore regasification terminals, FSRU, LNG shipping, LNG marketing, trade and more.MarCh 27th - 30th, 2012

Global lnG suMMit

sinGapore

WORLD ecoConstruct Summit , supported by Masdar, Emirates Green Building Council (EGBC) and the UAE Council for Sustainable Development (UAEBCSD) will bring together the world’s foremost industry leaders, policy makers and experts to discuss, debate and share best practiceS and the most

progressive thinking on sustainable design, construction and the built environment. Internationally proclaimed figures and commentators will engage the debate at the very highest level, drawing on high profile projects and policy from around the world, to shape future strategy and location.

april 22nd - 25th, 2012

World eCo ConstruCt

abu dhabi national exhibition Centre, uae

WHY BUILDEX?

BUILDEX 2012 – the 14th Saudi International Building & Construction Exhibition, continues to provide the ultimate platform for companies to showcase their products, service and expertise.

Past editions have seen over 20,000 visitors benefit from the knowledge and products provided by an extensive group of over 215 international exhibitors. Saudi Arabia offers an extremely exciting opportunity for investors in all sectors. However, given the rapid pace at which the building & construction market is

expanding, it is a particularly promising sector.

Saudi Arabia is considered to be the largest construction market in the Middle East, and is also one of the fastest growing markets in the world. Driven by US$ multibillion spending, which comes from both the private and public sectors, it is a market which provides remarkable opportunities. With the Kingdom’s rapid population expansion, come high expectations for quality and technically advanced houses, offices, hospitals, school and universities, and it is this expectation which is driving the boom in Saudi Arabia’s building sector.

buildex 2012 – the 14th saudi international buildinG & ConstruCtion exhibition

MarCh 18th - 21st, 2012

dhahran international exhibition Center, daMMaM, saudi arabia

Gold GoInG To $2,200? By: Brian Hicks

This is the time when all the Wall Street houses come out with their yearly predictions for the markets. It’s also the time when Wealth Daily does the same. Recently, I came out with Wealth Daily’s oil forecast. I said oil would hit $125 a barrel. Whether or not it ends the year at that level, I don’t know. But at some point in 2012, I believe oil will hit $125 based on the technical pattern I’m seeing in the oil chart. And that will be the high for the year. Interestingly enough, the

pattern I’m seeing in oil is the same chart pattern I’m seeing in gold.

Morgan Stanley is predicting gold will be the best-performing commodity in 2012 and may make a new record high as investors look to secure their wealth against European uncertainty and slowing economic growth. Their price target is $2,200 an ounce… with the potential to reach as high as $2,464.

Goldman Sachs is less aggressive, but bullish nonetheless. Their price target for gold in this year is $1,940 an ounce.

We’re staying overweight on commodities as a rebound in demand revives speculation of shortages, with gold a favorite for 2012 as investors seek a hedge against Europe’s debt crisis. Demand for gold strengthened most of last year as Europe’s debt crisis widened and the U.S. Federal Reserve pledged to keep interest rates near zero until at least mid-2013. Low interest rates increase the appeal of bullion because they generally reduce the prospect of returns on bonds.

Our view on gold is driven by our view on underlying real interest rates. It is the sharp drop in price that makes it more attractive. One of the things I do to gauge the gold market is I go to coin and bullion dealers.

Hong Kong recently reported that their gold imports reached record heights as investors rushed to the precious metal before the Luna New Year in order to “hedge against financial turmoil.”

According to Bloomberg: Demand for gold is climbing in China as investors seek to protect their wealth against slumping property prices and equity markets amid an inflation rate above 4 percent. The nation overtook India in the third quarter as the largest gold jewelry

market, according to the World Gold Council. I usually read Wall Street predictions with a skeptical and suspicious eye. But I actually think they’re spot-on with their call especially after reading the Chinese story.

And the chart of gold suggests they’re right. (fig 1)

Gold is setting up a double-bottom formation after selling off late last year.You see, this pattern formed before in 2008-2009.

In fact, it’s almost the exact same formation: (fig 2)

Gold broke out perfectly from the “W” formation… and hit the precise price target is was supposed to hit. The current chart suggests a breakout to $1,950 almost exactly what Goldman is predicting.

I’ve been long gold for several years. I’m still long this year.

About the AuthoR Brian Hicks is a founding member and President of Angel Publishing. He writes about general investment strategies for Wealth Daily, Energy & Capital and the H & L Market Report. Known as the “original bull on America,” Brian is also the author of the 2008 book, Profit from the Peak: The End of Oil and the Greatest Investment Event of the Century. In addition to writing about the economy, investments and politics, Brian is also a frequent guest on CNBC, Bloomberg, Fox and countless radio shows.

fInAl WORDCAPITAL BusIness MAgAzIne www.capital-me.com

83

(fig 1)

(fig 2)

Capital ENT 280x210-E.indd 1 1/17/12 4:26 PM

Glashütte Original – 165 years of watchmaking art.Sixties Panorama Date

The Sixties Panorama Date. Retro-modern style – made in Germany. An extraordinary expressive design captures the vintage look and feel of the

1960s. Unparalleled excellence in traditional mechanical watchmaking and superbly evocative period details pay tribute to an extraordinary decade.

Find out more at www.glashuette-original.com.

GO-Senator_Sixties_Panorama_Date_210x280mm_ENG.indd 1 08.03.2011 10:04:07

is gold always the ‘gold’ standard

Economy & Finance