Inflation in Gulf to touch 8 percent in 2008: IMF

April 2nd, 2008 - 7:57 pm ICT by admin  

(Gulf Business Capsule)

Dubai, April 2 (IANS) The inflation rate across the Gulf nations is likely to touch 8 percent this year, up from 7 percent in 2007, according to the International Monetary Fund (IMF). “The factors driving inflation in the Gulf Cooperation Council (GCC), especially in Qatar and the UAE (United Arab Emirates), are housing rents, and a substantial increase in food prices,” the Khaleej Times Wednesday quoted Mohsin S. Khan, IMF director of the Middle East and Central Asia, as saying at a conference organised by the Emirates Centre for Strategic Studies and Research (ECSSR) in Abu Dhabi.

Khan called upon five of GCC’s six members - the UAE, Oman, Bahrain, Qatar and Saudi Arabia - to retain their dollar pegs at the same rates for the time being. Kuwait is the sixth member of the alliance.

“At the moment since inflation is not driven by dollar depreciation, focusing on de-pegging or revaluation is not the solution,” he said.

According to Khan, with about $2 trillion in assets invested abroad and denominated mainly in US dollars, the Gulf states risk losing about $400 billion in the value of their holdings if they were to revalue by 20 percent.


Etihad Airways posts record Q1 results

UAE’s second national carrier, Etihad Airways, achieved a record-breaking first quarter performance and is on track to achieve its 2008 target of carrying six million passengers, the airline said.

The Abu Dhabi-based airline carried 1.4 million passengers in the first three months of 2008, compared to one million for the same period in 2007, an increase of 40 percent.

“The performance of Etihad during the first quarter of 2008 has been outstanding, breaking all previous records,” the airline’s chief executive James Hogan said.

“As we continue to expand our global network and strengthen our schedule, we remain confident of achieving our target of carrying six million passengers by the end of the year.”

Etihad has launched one new destination in 2008, starting flights to Beijing March 30.

In the summer, the airline will also begin flying to Kozhikode and Chennai in India, after securing flying rights earlier this year to four new destinations in that country.

Etihad is currently finalising plans to commence flights to Jaipur and Kolkata.


New fund to open Middle East market for Japanese, Asian investors

Fullerton Fund Management Co, a fully owned subsidiary of Singapore’s Temasek Holding, has announced the launch of a $160-million MENA Asia Fund in association with EFG-Hermes Asset Management.

“The new fund aims to provide Japanese retail investors and Asian private banking clients an opportunity to participate in the fast rising economies of the Middle East, with an emphasis on the growing economic synergy between the Middle East and Asia,” the Gulf News quoted Fullerton chief executive Gerard Lee as saying.

“A partnership like this allows both Fullerton and EFG-Hermes to leverage on our combined years of experience and knowledge of the local markets in Asia and the Middle East.”

Although the fund will focus on specific investor groups in Japan and other parts of Asia, Fullerton and EFG-Hermes hope that in the future similar funds based on Middle East equities will find place in the institutional and individual portfolios from around the world, according to the report.

“Both EFG-Hermes and Fullerton have been innovators within their respective regions with long and successful track records,” said Hashem Montasser, managing director and head of EFG-Hermes Asset Management.

“This initiative will allow clients to benefit from this alliance as they diversify their investments into the Mena region, with EFG-Hermes’ local investment experience and leveraging on Fullerton’s network in Asia,” he said.

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