Ramadan starts inflation surges… September 1, 2008
Posted by mylastresort in analysis, qatar, saudi arabia.Tags: Food, Gulf, inflation, Islamic, qatar, Ramadan, saudi arabia
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In Saudi Arabia a report stating that personal loans rose 25% ahead of the start of Ramadan (Islamic month of fasting) due to the rise in food prices. Another report in Qatar reveals that the prices of fruits and vegetables have risen 30% to 45% ahead of the start of the holy month. It is clear that businesses are exploiting the religious month and deliberately hiking prices of necessary products. It is also apparent that the prices are being fixed so that competition cannot discount such items. It is clear that no government intervention via subsidies, control, or import fees will take place since some powerful individuals tend to benefit the most from the lower class burdens.
Agility gets new contract August 25, 2008
Posted by mylastresort in analysis.Tags: Agility, Contract, Gulf, investment, kuwait, Tenders, US Military
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Kuwaits Agility, the Gulf’s largest logistics company, has just announced that it had won a contract worth $140 mil over the next 7 years with the US Marine Corp. Agility is expected to store, distribute, and maintain exquiptment at 20 US bases around the world. The contract is valid for 1 year but can be renewed for up to 7 years.
Stock price unchanged as of the announcement @ 1.080
Gulf Countries Delay Currency Union June 10, 2008
Posted by mylastresort in analysis, bahrain, qatar, saudi arabia.Tags: Central Bank, Currency Union, gcc, Gulf, Gulf Cooperation Council, Single currency
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Central bank governors from the Gulf Cooperation Council (GCC) agreed to form the nucleus of a joint central bank by 2010 in a major step forward for monetary union but signalled that the new common currency would be delayed (as explained in previous posts) and not launched by the 2010 target.
Record-high inflation in all the countries in the GCC is threatening to derail the project. Central bank governors from the GCC laid out a roadmap leading toward common monetary institutions before 2010. It seems very optimistic that with all the economic dilemma’s we are facing the Gulf the central banks still believed that we could form the single currencyCurreny Union by 2010.
Dollar peg will not help inflation June 2, 2008
Posted by mylastresort in analysis, qatar, rumors, saudi arabia.Tags: Abu Dhabi, currency, Dirham, Doha, Dollar, Gulf, Henry Paulson, inflation, Pegs, qatar, Riyal, Treasury Secretary, uae, US
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According to U.S. Treasury Secretary Henry Paulson abandoning the Gulf’s currency pegs to the dollar will not solve their vexing inflation problems. Speaking to reporters on his plane from Qatar to UAE, Paulson said the Gulf rulers in the region have… “quite an awareness that the peg does not influence inflation to a significant degree… They recognize that inflation is the overriding issue. Ending the peg is not the solution to the inflation problem.”
Economic policy is not a politcal decision that can be altered via public relations, it is a sovereign matter. Paulson stated that he could not rule out any moves by Gulf states to abandon their peg’s.
Oman index at record highs June 2, 2008
Posted by mylastresort in analysis.Tags: Amwal Investment, Gulf, investment, oman, Omani Index, Ominvest, Record, Shantonu Roy, Shell Oman Marketing, Stocks
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“There are reports in local newspapers that Voltamp’s IPO is oversubscribed six times”- Shantonu Roy, Amwal Investment
Gulf currencies collapse 40% April 8, 2008
Posted by mylastresort in analysis, bahrain, qatar, rumors, saudi arabia.Tags: AED, bahrain, BHD, Central Banks, Currencies, Dirham, Dollar, Dubai, gcc, Gulf, kuwait, KWD, oman, OMR, qatar, Revaluation, saudi arabia, Saudi Riyal, US
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Many have called for a revaluation of Gulf currencies from the historical dollar peg. The flood of liquidity and rapid inflation has been hailed as a warning to the falling interest rates, decline of the US Dollar, and record high oil. The loss in value of the Gulf currencies has been partially responsible in the rise of inflation. The inflationary pressures, which should govern an increase in rates by the central banks, have created markets so liquid that deposits are being quoted at negative rates. The list below shows the Gulf currencies depreciation, in value, due to the Dollars decline.
Single Currency: The biggest influence, Saudi Arabia April 7, 2008
Posted by mylastresort in analysis, saudi arabia.Tags: Dollar, economy, gcc, Gulf, Influence, Peg, Riyal, saudi arabia
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I view the Gulf countries as each dealing with their own dilemma regarding the unified currency, but on the forefront would be the Kingdom of Saudi Arabia, for the following reasons:
- Biggest, most influential country in the GCC
- Radical influence of Islam (preventing the country from flourishing)
- Uncontained inflation
- Non-existent political reform
- Fixed US Dollar peg, with no expectation of revaluation
- Weak economical agenda
The actions of the Saudi monarchy govern not only their peoples, but influence the entire Gulf. Any actions by the monarchy, or demands, will be more than likely be granted by the smaller Gulf neigbors. Basic commodity prices rose approximatley 20-25% this month in Saudi Arabia, regulations have remained poorly maintained, rather than resolving the problems, government interventions seem to be cycling the problems to other sectors in the economy.
Gulf currency reform meeting today April 6, 2008
Posted by mylastresort in analysis, bahrain, qatar, saudi arabia.Tags: Arab, Central Banks, Dirhan, Governers, Gulf, oman, qatar, Reform, Riyal, saudi arabia, Single currency, uae
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The Gulf central bank governers last meeting was six months ago. In the meeting the governers decided not to revalue their currencies in anticipation of a single currency union (plan of 2010). Since their meeting:
- UD Dollar has fallen 14% against the Euro
- US Federal Reserve lowered rates 6x
- Inflation in the Gulf has almost doubled
As Saudi Arabia claims that it has no currency reform plans, Qatar and UAE, have publicily announced that they are rethinking their pegs. It will be interesting to see how todays meeting turns out…
Gulf central bankers to discuss revaluation April 3, 2008
Posted by mylastresort in bahrain, qatar, saudi arabia.Tags: Arab Gulf, bahrain, Bank, Central Bank, Doha, Governers, Gulf, inflation, kuwait, Meeting, oman, qatar, Revaluation, Revalue, uae, United Arab Emirates, US Dollar
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On April 6 and 7 Gulf central bank governers plan to meet to discuss removing obstacles to planned monetary union at a meeting in Doha, Qatar. The Gulf countries are under pressure to revalue in the quickest time to minimize effects on their economies. The countries are planning a joint revaluation against the dollar in an effort not to hinder plans for a single currency in 2010.
The implementation of new regulations along with discussions into the depegging. Weak Gulf currencies are dettering foreign labor from choosing jobs in the region. Recently foreign workers called a strike to demand higher wages as inflation soars.
“The meeting will look into the matter of preparing for monetary union between states of the Gulf Cooperation Council, and ways to speed up performance and remove obstacles”
- Central bank of Kuwait statement
The 6 Arab gulf countries will be meeting to discuss the revaluation of their currencies against the US Dollar, amid soaring inflation and falling interest rates.
