Is Gold Always The Gold' Standard?

PLANET OCEAN
"Standing on the Moon looking back at Earth this lovely place you just came 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 in terms 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
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CAPITAL BUSiNESS MaGaZiNE
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EDITORS Letter
GIVINg CREDIT WHERE CREDIT IS DUE
By Hadi Khatib Executive Editor
The Its my business program between MC and INJAZ starts at a time when students are more mindful of fun and games than business, but this is ultimately the best solution for them and the societies that depend on them. At that age, they are receptive to new ideas and their thinking is not yet cemented in the traditional employee/employer behavior. In general, the school system is one that prepares students, more than anything to become employees, with a rigid set of rules and military like schedules that need to be met when the bell rings: class times, exam times, gym time, and schoolyard time. This is all coupled with education mostly based on rote learning, and answer when youre asked type behavior, where risk taking is never encouraged and team brainstorming almost inexistent. This regimented system of performance that has been in practice for generations, though needed to achieve certain aspects of learning and education objectives, does not pave the way for entrepreneurship to flourish at least not at the pace that is needed to realize the targeted growth in regional economies, financial inclusion of youth, and more job opportunities. Its my business is an initiative which on its own cannot meet the expectations of youth in schools and young adults in college where the program also plans to expand into, serving to refresh concepts learned in school and motivate them to implement them in pursuit of their dreams but one which collectively with other programs can make an impact, both measurable and meaningful. Perhaps the biggest obstacle most aspiring entrepreneurs is finding seed money, angel investors and venture capitalists. These will make themselves more available to future entrepreneurs once the overall picture of entrepreneurship is clarified and set in serious motion forward.
When MasterCard (MC), decided to join hands with INJAZ AlArab, a leading non-profit organization in the Middle East and co-member of Junior Achievement Worldwide, the immediate result was a bottom line loss for the payment industry giant and a greater challenge for the NGO who will have strain its resources to achieve more in its drive to provide experiential education and training to Arab youth in work readiness, financial literacy and entrepreneurship. MC will support INJAZ Al-Arabs Its My Business, a leading entrepreneurial mentorship program developed for youth in Lebanon and countries across the Middle East and North Africa (MENA). It will be MCs salaried staff working on company time who will volunteer their services to initially 3000 youth aged 10 or 11 and later to as many as 12,000 as the program extends from 3 to 12 countries. Here are some numbers to digest. Youth unemployment in the MENA is at an all time high of 25%, perhaps aided by the Arab Spring flu spreading from one country to the next. But even more telling is the number of new jobs needed to maintain the current levels of employment: 75 million in 2020. These figures stand as reminders of need to act and act soon at the small and medium size enterprise level (SMEs), spurring a new out of the box thinking, calculated risk taking and capital injection beyond the help of family and friends. But the problem is that if we wait for the next generation of young people to deliver this promise on their own, it might already be too late.
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VOL 7 - ISSUE 3 - 2012

38 COVER STORY
MASTER AccOmPLISHmENT MASTERCARD AND INJAZ AL-ARAB cOLLABORATE ON YOUTH CSR INITIATIVE
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20
48
INSIDE
BANKINg AND FINANcE 12 MIDDLE EASTERN INVESTmENT BANKING ANALYSIS 14 MIDDLE EAST INVESTmENT PANORAmA 2011 20 PRIVATE bANKING WORLD. MIDDLE EAST 2011 New Business and Innovation for Private Banks 24 SHIFT IN mINDSET pOSITIONS PE INDUSTRY FOR GROwTH 26 GLObAL mONETARY pOLICY 2011: QUARTERLY OUTLOOK BUSINESS PLANET 28 IS GOLD ALwAYS THE GOLD STANDARD? 30 ASIAN COmpANIES SET TO BENEFIT FROm THE EUROZONE CRISIS
32 A PIVOTAL YEAR AHEAD
Fourth Quarter Economic Outlook 36 STILL ON THE GLObAL FRONT bURNER INFORMATION TECHNOLOGY 44 CASHING IN ON ICT The Enterprise Opportunity for MENA Telecom Operators to Increase 48 DONT LET SECURITY MISCONCEpTIONS CLOUD YOUR JUDGEmENT 50 IP COmmUNICATIONS SYSTEm The Migration Map for Middle East Enterprises BEST PRAcTIcES 52 CUT THE NOISE AND CUT TO THE CHASE! Seven Tips for Streamlining Communication at Your Organization
54 TOp 10 PROjECT MANAGEmENT

TRENDS FOR 2012 Collaboration Gains Importance as Project Complexity Grows 56 EXpECTATION MATCHING Key to Customer Retention, Driving Sustainable Growth REAL ESTATE 58 MARKETVIEw: KINGDOm OF BAHRAIN ENERgY REVIEw 62 C OmmODITY RESEARCH THEmES AND OUTLOOK 64 TORRESOL ENERGY LAUNCHES COmmERCIAL OpERATIONS OF TwIN SOLAR THERmAL PLANTS IN SpAIN 66 CRUDE OIL AND THE ImpACT OF EU SANCTIONS AGAINST IRAN
STRATEgIc PARTNERS:
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68 LIVINg LUXURY: BUSINESS TRAVEL INTRODUcINg CORINTHIA HOTEL LONDON: A 21St CeNtUrY GraNd HoteL 70 LIVINg LUXURY: CAR MERcEDES M-CLASS SUV DIScLAImER
In its article selection criteria, Capital Business makes a concerted effort to publish articles from credible and veteran professionals in the business field without any bias towards the authors affiliations or business philosophy. Those articles published in Capital Business reflect the opinion of their authors and the authors opinions are not necessarily shared by the editor, or any of Capital Businesss staff or those working for Neopromo FZ LLC.
78 In the News 80 Movers & Shakers 81 Events 82 Final Word

The publishers do not accept responsibility for any investment decision taken by readers on the basis of information provided herein. The objective is to keep the readers better informed and help them decide for themselves. The information and advice contained in this publication which are provided for general use may not be appropriate for the readers particular circumstances. All rights reserved. No part of this publication may be reproduced by any means without prior written permission from publisher.
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SIGNATURE
SIGNATURE LISTINGS
Chopard re-opeNS itS BoUtiQUe iN DUBai

The House of Chopard has announced the re-opening of its new concept stylized boutique at the iconic Mall of the Emirates, a prestigious and sprawling citadel and a premier destination for luxury retail in the Emirate. Based on the idea that Chopard represents a symbiosis of century-old family traditions and high-tech creations and innovations, Mr. Thierry Despont reinterpreted the design codes in a contemporary style. His boutique concept is the perfect stage upon which to view Chopards collections now and in the years to come. This successful new contemporary and yet cosy concept has now been applied to the Chopard Boutique of Dubai, that will be the first, among the six other boutiques, to offer its customers a truly luxury experience.
OMEGA De ViLLe PreStige aNd GeorgeS CLooNeY

OMEGA brand ambassador George Clooney wore an OMEGA De Ville Prestige in his performance as Matt King in The Descendants, directed by Alexander Payne. Clooney has already won the Golden Globe for Best Actor and his nomination for an Academy Award was announced on the 24th of January. The OMEGA De Ville Prestige Small Seconds featured in the film has a 39 mm red gold case and is presented on a brown leather bracelet. The certified chronometer is powered by an OMEGA caliber 2002. The movement is equipped with a Co-Axial escapement for greater timekeeping performance.
LOUIS VUITTON: OPENING OF THE ROMA ETOILE MAISON

With the opening of the first Louis Vuitton Maison in Italy, the world renowned trunk and luggage-maker marks a major achievement in its history, and firmly reaffirms its presence in Europe. In this historical venue, which has been dedicated to cinema for almost a century, we have taken up a cultural and architectural double challenge. Without taking anything away from the prestigious past of this symbol of the Eternal City, we are embarking on a distinctive project which combines exceptional craftsmanship, art and culture in time and space. states Yves Carcelle, President of Louis Vuitton. Handmade Cinema, a documentary produced by Luchino Visconti di Modrone, directed by Guido Torlonia and written by Laura delli Colli marks the beginning of the project, showing the passion the Maison has for the craftsmen of cinema.
MoNtBLaNC: WritiNg Time - Two CeNtUrieS oF ChroNograph HiStorY eXhiBitioN at The DUBai MaLL
Montblanc and the Muse International dHorlogerie in Switzerland have teamed up to present an educational and inspirational horological exhibition in The Dubai Mall, Writing Time - Two Centuries of Chronograph History. The exhibition traces the history of chronograph development over the years since invention by Nicolas Rieussec in 1821, and aims to uphold the deeprooted principles of haute horlogerie. Visitors to Writing Time - Two Centuries of Chronograph History were offered various insights into chronograph innovations. On display were watches, movements and dials from both Montblanc and the Muse International dHorlogerie that showcase technological and creative developments over the years.
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MIDDLE EASTERN INVESTmENT BANKING ANALYSIS

Investment Banking Fees
Middle Eastern fees reached $406.8 million during 2011, a 40% decline from 2010 ($678.4 million) and the lowest year for fees since 2004. M&A fees totaled $221.2 million during 2011, accounting for 54% of the overall fee pool. M&A fees were down 37% compared to 2010 ($352.9 million). Debt capital markets fee activity in the Middle East slumped 66% from full year 2010 to $55.6 million for full year 2011. Fees from syndicated lending and equity capital markets totaled $47.8 million and $82.1 million, respectively. HSBC Holdings topped both the Middle Eastern DCM and the syndicated loan fee rankings for 2011, earning 15.4% and 10.9% of the fees
MIDDLE EASTERN IB FEE VOLUMES ($Mil) $1,600 $1,400 $1,200 $1,000 24% $800 16% $600 $400 $200 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 15% 20% 20%
Syn Loans DCM ECM M&A ECM & DCM as a % of Total IB Fees
By: Thomson Reuters
37% 34% 33% 30% 32% 26% 34%
40% 35% 30% 25% 20% 15% 10% 5%
Source: Thomson Reuters/Freeman Consulting
2009
2010
2011
0%
*Products Included: M&A (closed deals), ECM (IPO, Follow-On, Convertibles, Rights, Block Trades, ABB), DCM (ABS/MBS, High Grade and High Yield Bonds), Syndicated Loans
respectively. Goldman Sachs rose from 7th position in 2010 to top the M&A fee rankings during 2011, with $14.0
million. The Bank of America Merrill Lynch controlled 13% of equity capital markets fees in the Middle East.
Mergers & Acquisitions
Middle Eastern M&A, based on target nation, reached $10.1 billion during 2011, a 43% decrease compared to full year 2010 when activity totaled $17.7 billion. Real estate is 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 is the most active Middle Eastern country, based on target, with $4.0 billion for 39% of annual activity. BNP Paribas topped the Any Middle Eastern Involvement M&A Ranking with $10.1 billion, with Goldman Sachs in second place with $9.4 billion. Bolstered by advisory work for Aujan Industries-Beverages, RBS topped the Middle Eastern target M&A ranking in 2011. The top Middle
$6 $5 $4 $3 $2 $1 $0
TOP 5 MIDDLE EASTERN TARGET INDUSTRY BREAKDOWN

$4.8 Full Year 2011 $ bln
Full Year 2010 $ bln
$2.6 $1.7 $1.3 $1.4 $0.1 Real Estate Energy and Power Healthcare $1.3 $0.5 Consumer Staples $1.0
$2.7
Industrials
Eastern targeted deal so far this year involved the Government of Abu Dhabis investment in certain properties of UAE-based Al Dar Properties. The two top Any Middle East Involvement M&A transactions involved Middle eastern investment funds investing
in Spanish Energy & Power targets, with IPICs $7.0 billion investment in CEPSA and Qatar Holding Luxembourgs $2.7 billion investment in Iberdrola SA. BNP Paribas advised on both of the top transactions.
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Equity Capital Markets
Equity capital markets issuance reached $10.2 billion during full year 2011, a 47% increase compared to 2010 when volume reached $6.9 billion. Follow-ons accounted for 62% of 2011 activity, the top Middle Eastern ECM transaction was $3.5 billion follow-on from Qatar-based QNB. Financials was the most active industry in the Middle East during the first three quarters of 2011 with 70% of activity. Real Estate, Energy and Power and Materials collectively accounted for 24% of ECM activity. Al Rajhi Banking & Investment topped the Middle Eastern equity capital markets rankings, as solelead bookrunners for Saudi Arabiabased Jabal Omar Developments $688.0 million follow-on offering.
MIDDLE EASTERN ECM - ANNUALLY
$40 $35 $30 $25 $20 $15 $10 $5 $0
Value ($bln) # Issues 39

$0.2
104 57
99
87
69
$0.0
$3.1
$0.7
7
$0.8
20
$5.2 $11.7 $21.2 $36.2 $6.8 $6.9 $10.2
120.0 100.0 80.0 60.0 40.0 20.0

-
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
$6.9
Full Year 2010
Full Year 2011
$10.2 47.4%
Debt Capital Markets
Middle Eastern debt issuance reached $29.5 billion during 2011, down 20% from 2010 ($36.9 billion). Investment grade corporate debt accounted for 35% of all Middle Eastern DCM activity during 2011. Islamic debt issuance reached $23.9 billion from 58 issues, up 66% when compared to 2010 levels ($14.4 billion). The top Islamic issuer nation is Malaysia with 63% of the activity. Issuers in the financials sectors accounted for 66% of the DCM issuance in the Middle East during 2011. CIMB Group took the top spot in the Islamic bond ranking during 2011 with 27 issues, which raised $5.1 billion.
MIDDLE EASTERN DCM - ANNUALLY
$45 $40 $35 $30 $25 $20 $15 $10 $5
Value ($ bln) # of Issues 33 18

$4.4
69
59 36 45
49 35
11
$5.0
17
$4.2
9
$2.7
20
$8.4 $14.5 $30.9 $30.6 $15.3 $39.7 $36.9 $29.5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
80 70 60 50 40 30 20 10 0
$36.9 $29.5
-20%
Full Year 2010 Full Year 2011
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MIDDLE EAST INVESTmENT PANORAmA 2011
By: Insight Discovery
In any business, the crucial question is: what does your client really want? Insight Discoverys Middle East Investment Panorama (MEIP) 2011 examines this question for three different kinds of financial service organizations international asset management companies, international life companies and regional asset management companies. In order to find the answers, we interviewed advisers and sales individuals who are based in the six Gulf Cooperation Council (GCC) countries, Saudi Arabia, United Arab Emirates (UAE), Qatar, Kuwait, Bahrain and Oman and elsewhere in the Middle East and North Africa (MENA) region. MEIP should be viewed as a retail advisory survey which gauges the opinions of 225 advisers across the GCC.
hat is the Middle East Investment Panorama 2011?
Key Findings
What do investment advisers in the GCC countries and the broader MENA region want from the international asset management companies that they work with, and the international life and regional asset management companies? What are the more general conclusions that can be made? The Middle East Investment Panorama (MEIP) takes a systematic approach to identifying the answers.
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For international asset management companies and international life companies, the six GCC countries and to a lesser extent the greater MENA region, represent a substantial commercial opportunity. This is partly because of the ongoing growth of (mainly official) capital pools. It is also because the aggregate numbers, and wealth, of expatriate workers will increase.
Unlike in most other parts of the world, there are very few regulatory or competitive barriers to entry that international asset management companies or international life companies face. Regional/local asset management companies are often wholly or substantially owned by major international groups. The local life companies do not face competition from local/regional rivals. Several governments in the region are actively promoting the development of financial (and other) services in their respective countries. Advisers, whether they work with clients or as executives for the companies that employ them, typically need the services of international asset management companies or international life companies. In mid-2011, this is true of 84% of advisers in relation to international asset management companies and about half in relation to international life companies. However, fewer than 40% use the services of regional asset managers. Nevertheless, there is significant need for regional asset managers by advisers who are working with clients who are nationals of the MENA region. Across the region, almost 40% of advisers come from South Asia. Another 30% or so come from the UK, while one fifth come from other MENA countries (notably Lebanon, Kuwait and Jordan). This probably provides a reasonable indicator of the nationality mix of the clients who are wealthy enough to use the advisers services.
To the extent that they are buying fund (or, potentially, separate managed account) services from international asset management companies, the expatriate clients are typically looking to invest outside the MENA region. For at least a year, emerging markets equities have been the hot asset class. Commodities and infrastructure funds have also been popular. Asset classes that appear to be out of favour include single-strategy hedge funds, developed markets bonds, hedge funds of funds, cash and private equity. It may be that worldwide demand for Shariah-compliant investment and insurance (Takaful) products will grow over the coming years. Fund ratings are an important and widely used tool in relation to regional asset management companies, but less so for international asset management companies. For international asset management companies that wish to distribute their funds across the GCC and MENA countries, the identification of a correct channel is more important than the identification of the correct geographic market (or city from which to operate). Over 40% of advisers access the funds that they use directly from the international asset management companies. Another quarter buy funds directly through offshore life companies platforms. Another 15% buy indirectly through offshore life companies platforms via mirror funds. The remainder nearly one-fifth of advisers who use funds buy indirectly through a private bank or other proprietary platform.
relation to what are often quite complex products. Personal relationships and face-to-face meetings are central to the way in which advisers secure new clients to whom they can sell the products of international life companies.
6 7
Among the international asset management companies, it appears that the products and services of Franklin Templeton and J.P. Morgan Asset Management are used by significantly more advisers than those of their rivals. However, numerous advisers are working with BlackRock, Invesco, HSBC Global Asset Management, Fidelity, Schroders, Morgan Stanley Investment Management, Aberdeen, BNP Paribas Investment Partners, PIMCO and Goldman Sachs Asset Management. The leading international life companies are Friends Provident International (FPI) and Zurich International, followed by Skandia and Generali. Different companies are seen as being leaders in different products: no international life company is dominant across the entire spectrum of products.
It is particularly important that international life companies maintain a physical presence if they want to do business in the region. This appears to be the case because clients and their advisers need more hand holding and after-sales service in
The main challenge is not the geo-political situation but the unclear and changing regulatory environment. However, there are several centers across the region that are in effect competing with each other for business thanks to the various governments desire to promote the development of financial services. This means that it is reasonable to expect that, in at least one of the countries across the region (and, possibly, all of them), a regulatory environment will appear within three years that is widely regarded as presenting a major opportunity. In the meantime, the GCC and MENA countries are obviously markets where UCITS funds domiciled in Luxembourg or Ireland (or, perhaps, other European Union countries) should appeal to advisers.
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Themes and Trends for the next 12 months

The growing opportunity
Already it is possible to see what will almost certainly be the themes that dominate the Middle East Investment Panorama between now and September 2012. First, the total market opportunity will continue to grow. The expansion of the regional economies will imply larger pools of investable cash and, more crucially, greater numbers of expatriates who will need the products and services of asset management companies (be they regional or international) and international life companies. This growth, and the resilience of most of the GCC economies through the Arab Spring that has dominated headlines in the mainstream media for much of 2011, means that political issues should be even less important than they are today in the GCC countries.
management company that are not already present. It may be that the companies in question go to the Qatar Financial Centre. Alternatively, they may decide to compete in the onshore markets of the UAE or Saudi Arabia. They may decide to take advantage of the facilities of the Dubai International Financial Centre (DIFC). It does not matter: the newcomers will have seen what many others know the commercial opportunities in the region are compelling.
by the Securities and Commodities Authority (SCA) for the UAEs onshore markets.
Positive wildcards
International links
New players
A second prediction that we confidently make is that there will be high profile entries into the GCC markets by at least one international life company and at least one international asset
Thirdly, it is highly likely that there will be much greater understanding of the links between the GCC markets and those of the rest of the world. The global portability of many of the international life companies products means that they have already bought world best practice to the GCC. The MENA region (and the GCC countries in particular) will be more widely recognized as a promising market for UCITS funds that are domiciled in Luxembourg, Ireland or (potentially) other European Union countries than they are today. This will happen regardless of the details of the regulatory changes that are proposed
There are also some exciting and positive wildcards. One is that at least one international life company is publicly seen as the leader in providing products to the large numbers of NonResident Indians who live, work and save in the GCC countries. Another wildcard is that one or two of the regional asset management companies clearly become the conduit through which expatriates from MENA countries recycle their savings into regional financial markets. Another is the potential for financial services to develop rapidly in Saudi Arabia or less probably, Egypt. ABOUT INSiGHT DiSCOVErY Founded in 2007, Insight Discovery specializes in gathering market intelligence for companies through customer attitude and employee engagement surveys. Our clients are mainly from the financial services sector and include regional banks, investment banks, asset management companies, insurance companies and private equity companies. Further details are available at www.insight-discovery.com
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Thanks to you, CAPITAL Business and Business ISLAMICA magazines were both ranked number 1 in the latest findings by Ipsos-Stat- NMA UAE 2011 in reference to English Business Publications.*
8% 0.
*Source: IPSOS-STAT NMA UAE 2011
0. 0. 6%
Business Islamica Magazine
Capital Business Magazine
8%
0.
0.
0. 0. 2% 0. 2% 0. 2% 0. 2% 0. 1% 0. 1% 0. 1% 0. 1%
Other English business publications
The latest count is a true testament to what the magazines have adamantly and consistently set out to do, and now with your counted vote of condence- indeed have! Thank you
0.
3%
3%
3%
3%
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PRIVATE bANKING WORLD. MIDDLE EAST 2011

Industry experts answered the following questions at the Private Banking World Middle East 2011:
they are opting to reinvest in real estate in the west, buy gold or simply hold cash - all rather than have their assets managed. Investors have also become increasingly savvy, and are now looking for banks that can provide diversified booking centers outside of the Gulf, in places such as Geneva and Singapore.
By: Lucy Smith, Terrapin
New BUSiNeSS aNd INNovatioN For Private BaNKS

United Arab Emirates as the hub for growth in the New Markets. These include: the entire Middle East, Central Asia, Non- Resident Indians and to some extent Russia and Turkey. Our Firm has decided to develop its activities over the long term in the region and to establish Dubai as one of its three global hubs with Switzerland and Singapore.
4. We envision our presence in the
1 2 3 4
hat key challenges face the W private banking industry in the ME over the next 12 months? ow has Shariah-compliant H investing changed the investment landscape? hat will be the most important W channels for client acquisition over the next 12 months? hat measures are you taking to W overcome the talent shortage in the Middle East?
Below are the answers provided by three experts: Arnaud Leclercq | Head of Middle East, Eastern Europe & Central Asia | Lombard Odier Switzerland
challenge for the private banking industry is to understand clients needs, to develop tailor-made solutions and more than anything to gain the confidence of potential clients. We have noticed over the last 18 months that a number of them have decided to reallocate their resources to areas other than wealth management. For example,
2. Shariah compliant investing must be part of any private banking product offering today. In this view, Lombard Odier is discussing a partnership with a Shariah-compliant fund to start developing Islamic finance products. But a wealthy individual expects other expertise - such as wealth preservation and growth - from a Swiss private bank. Over the last six months, a number of Emiratis and Saudis, who have been typically invested only locally, have decided to reallocate a portion of their wealth outside of the Arab World. Wealthy Saudi individuals in particular have been leading this trend. Traditionally they have held 90% of their wealth locally, but there is a marked shift, and this is now closer to 70%. 3. We have seen an increased level of interest from the very large and wealthy families in setting up family funds outside of the region, in the shape of a reserve fund, very similar to how a sovereign wealth fund functions. There are very few private banks positioned to be able to provide this type of service and Lombard Odier is certainly one of them.
Ashraf Mazahreh | Head of Private Banking | UAE National Bank of Abu Dhabi 1. We do not know whether the worst of the financial turmoil is over or is yet to come. Looking ahead, expectations are that, this slow pace of economic growth and the uncertainty in the global economic outlook will continue in the short term.
One of the key challenges facing the private banking industry in the Middle East, within this uncertainty, is that the shift in global wealth distribution towards the Middle East will create a pressure to develop the compliance legal framework and regulatory environment. Strict adherence to compliance with increased focus on risk management and client suitability criteria remain the major challenges for the MENA private banking industry. The growing role of the client relationship manager as a trusted advisor is another challenge. Building client confidence and trust has been one of the main challenges of private
1. In the current turmoil, the key
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banks and will continue to be as such for the foreseeable future. Thus, a much greater emphasis should be placed by the private banks on staff development and training to equip them with the appropriate skills while delivering suitable advice according to client profile. Private bankerss main aim should remain on building client wealth through a well diversified investment portfolio, and not push for products. In order for private banks in the Middle East to succeed , they must upgrade
their value proposition and move from individual wealth management to a family business advisory model.
2. Islamic banking is no longer a niche offering in the financial industry, it has evolved and become a typical financial services landscape. With a greater number of players in the marketplace, public awareness of Shariah-compliant products and services is finely tuned. Given the rise in demand for Islamic solutions, NBAD as a leader in the
region and a world player in the banking industry, as well as being one of the 50 safest banks in the world, responded to this demand by creating a fully owned subsidiary; Abu Dhabi National Islamic Finance (ADNIF). Due to the evolution and innovation in the Islamic industry, many High Net Worth Individuals and institutions limited their investment mandates purely to Shariah-compliant. For example, on the debt capital markets we have seen not only regional entities
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but also international players start preparing Shariah-compliant debt issues like Sukuk to secure funding.
3. Relationship Managers should understand client profile as a basis to identify and determine profitable acquisition channels. It is crucial to have a genuine Know Your Customer (KYC), not only as a compliance requirement but also for targeting the right profile of prospects who can turn out to be profitable in return to the value added services provided by private banks. Innovative customercentric acquisition strategies will help private banks acquire quality prospects and turn them into existing clients rather than trying to focus on quantity. The challenge over the next 12 months is to retain existing clients and increase wallet share prior to acquiring prospects. Another key channel for client acquisition is the referrals from and within the organization itself. Existing clients can also be an excellent target to approach for newly launched products that meet their actual needs. A critical success factor towards client acquisition is adopting a proper CRM tool to capture leads generation and provide analytical reports for campaigns.
redundancies in the financial industry created a talent pool of supply to the
region. Many calibers were looking to relocate to the region in response to the growing demand. Having a proper talent management system in place, will build-up a comprehensive database of potential talents within the organization. Additionally, tyingup with the leading international recruitment firms will assess and identify the best talent for the right role.
such as Qatar, take additional steps in regulating the delivery of Shariahcompliant products. I expect further attempts in regulating the industry and this will definitely have an impact on the landscape.
Mones Bazzy | Head of Private Banking | Mashreq Bank 1. Key challenges will be markets and geopolitical stability. All the financial markets are witnessing extreme volatility, which by itself masks the overall trends. So where to invest, and how much to allocate to each sector is on everyones mind. On the other hand, what are the consequences of the Arab Spring on the local markets? Is it contagious and may the demands for reform spread to other parts of the Middle East, and if so, where? Is it time to diversify, i.e. invest higher than normal allocations outside the region, or should one seize opportunities and increase local investments? 2. The rise in Shariah-compliant investments has been most evident in the debt markets. The outstanding amount of Sukuk has risen sharply in the last 5 years. We are seeing countries,
3. In the world of Private Banking, I believe the most important client acquisition channel will continue to be direct contact and direct impact. However, given the turmoil and volatility of these last few years, clients are demanding more from the service providers. They demand higher transparency, more rational fees, instantaneous turnaround times, and bankers who are knowledgeable about the products they offer. 4. I actually do not believe there is a talent shortage. I also believe that the technical skills are easily transferable to our local staff. The issue is with the depth of experience in the industry which I think is short everywhere. The average age of professionals in financial services seems to drop and hence the percentage of those who experienced a previous crash is getting smaller and smaller. This must shift the value curve towards those with greyer hair!
ABOUT THE AUTHOr
Lucy Smith is Conference Manager at Terrapinn Middle East. lucy.smith@terrapinn.com
4. As a result of the financial crisis,
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SHIFT IN mINDSET pOSITIONS PE INDUSTRY FOR GROwTH

he MENA regions private equity funds industry is preparing itself for a healthier period as it positions a drive towards economic growth. According to the Zawya Private Equity Monitor, the industry raised a cumulative $25.8 billion and invested $17.1 billion during the past decade. Of this, $4.3 billion was raised in 28 funds since 2009 and more than $1.5 billion invested. Over the past three years, the MENA region has suffered the ravages of both financial and political events. The 2008 financial crisis, the Arab Spring, the Eurozone crisis, and the US debt-ceiling crisis followed by the downgrade of the US credit rating created instability across the world. This was manifested by the slowdown of MENAs overall economic growth, including that of the private equity industry. The industry has raised an average of $1.4 billion per year since 2009 to date, compared to an average of $5 billion per year between 2006 and 2008. These events caused a change in the direction of private equity firms strategic focus to sustainable business modules leading to an incremental growth. The industry is now changing its investment focus as well as adding value to companies already in its portfolios. This was clearly shown in the responses to two surveys conducted by the MENA Private Equity Association (MENAPEA) in partnership with
By: Ali Arab
What is the most important role of PE firms in their portfolio companies?

Operational advice and support Strategic planning Business development Financial support and advice Restructing 8% 2011 12% 2010 4% 21% 17% 24% 29% 28%
25%
32%
Funds raised: 2006 to 2008

Other 34% Buyout 37%
Funds raised: 2009 to 2011

Other 25%
Growth Capital 11%
Balanced Fund 18%
Infrastructure 7% Buyout 18%
Growth Capital 50%
Zawya, one in 2010 and the other in 2011. The change in strategic focus was evident from responses to the question: What is the most important role of PE firms in their portfolio companies? The industry is now looking at adding value and contributing to the growth of their portfolio companies by providing operational, strategic and business development support, three crucial elements for the growth of any company, rather than financial engineering and advice.
Private equity and venture capital have the tremendous opportunity to significantly contribute in bringing best practice and professionalism to the regional investment climate, thereby becoming the fuel of growth for the SMEs and for the creation of jobs - a desperate need for the MENA region. The industry can help facilitate a flourishing business environment, which will ultimately contribute to the emergence of SMEs and a new generation of professional and motivated entrepreneurs in the region.
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The industry is shifting gear to focus more on the growth capital needed to stimulate the regions SMEs. The below figures stand as proof of this shift. Industry players have spent the last three years preparing the ground for a promising future through raising growth capital funds, which represent 50% of the total funds raised during the past three years, compared to only 11% of the total funds raised from 2006 till 2008. General Partners and fund managers are aware of the tough fundraising environment, and the private equity industry in this region can grow and prosper only within the ambit of proper regulatory, legal and fiscal frameworks. However, the good news is that such frameworks are being debated, and the industry itself has a large role to play in creating them. In 2010, Zawya and a group of active PE and VC professionals worked together to establish and
empower a new and active assembly of professionals, the MENA Private Equity Association. It aims to bring the entire network of the regions PE and VC firms on the same page by sharing information, facilitating the growth of knowledge and thereby encouraging overall economic growth. In the wake of the unstable financial situation in the US and Europe, the MENA region - whose economies have remained relatively robust - is better positioned to receive international and local investments. The strength comes from the investable surpluses created by the strong oil-export revenues which are looking at the high potential offered by relatively underserved regional markets. The past three years have been a period of correction and change in the mindset of the private equity industry. This can only result in a stronger outlook for the industry as it positions itself for a healthier regional investment outlook. ABOUT THE AUTHOr
Ali Arab is Head of Private Equity Research at Zawya Ali Arab is Head of Private Equity Research at Zawya
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GLObAL mONETARY pOLICY 2011: QUARTERLY OUTLOOK
By: Saxo Bank
n the run up to the 2008 global financial crisis, Chinas manufacturing sector was epitomized by a predominant focus on exports resulting in a constantly rising trade surplus and a hefty accumulation of FX reserves. However, in the aftermath of the crisis, the situation has dramatically changed, partly due to a lack of external demand but also amid rising concerns that China appears to be losing its global competitive edge. A recent Blue Book report from Chinas Academy of Social Science (CASS) acknowledged that since late 2008, Chinas exports to the U.S. have been in
decline (China was knocked off its perch as the lead exporter) and China saw its first trade deficit in six years in March 2010. But what were the reasons behind this decline? In its Blue Book report, CASS suggested the major factors were government policy directives, which increased the cost of manufacturing in China, and escalating raw material/ energy costs. This forced a number of manufacturers out of business and hence exports suffered. If we take a quick, broad look at some of the inputs for end-product pricing; the cost of raw materials is one but wage costs, shipment
costs and currency pricing can also all be influencing factors, though some of these are not particularly unique to China. Specifically, raw materials and shipment costs are the same for all exporters, regardless of location, so does it boil down to wages and currencies being the major influences for end product pricing? The USA certainly has a view on this especially if you have been listening to the constant commentary about Chinas undervalued currency for the past few years. Overall Chinese exports to the US averaged $30.41 billion in 2010 and
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$31.15 billion in the first 7 months of 2011 (Source US Census Bureau) yet the CNY has risen 5.7 percent versus USD in the same period hardly a compelling argument that the exchange rate is a dominant factor affecting exports. However, when the trade surplus is compared as a share of GDP it has actually been falling since 2007 (some two years after the first de-pegging of the USDCNY rate). Yet, if we were to break down the exports in the so-called light manufacturing sector, one that is perhaps more susceptible to labor issues, then Chinas market share of US imports has been in steady decline, with a noticeably faster decline since late 2010. A report from the Boston Consulting Group in May this year suggested that the wage gap between the U.S. and China is currently shrinking rapidly and is expected to converge within the next five years. Chinese wages are currently rising between 15-20 percent per year and any other workplace with more flexible practices could eat further into Chinas competitiveness. In the above-mentioned low-end manufacturing categories, it would appear that Chinas lower-income neighbors such as Vietnam, Bangladesh and to a lesser extent Indonesia, are slowly eating into Chinas export pie (with regard to the U.S. and European export destinations). Mexico is also seeing greater gains in certain higher- value categories such as furniture and precision instruments. So it would appear that wage costs are playing a significant role in affecting Chinas competitiveness and, with inflation currently running above 6 percent annually, the pressures are unlikely to disappear soon. When it comes to the Chinese economy, exports have accounted for as much as 42 percent of Chinas GDP in 2008 (subsequently easing to 37 percent in 2010) (source US BEA) and loss of competitiveness may have serious growth implications. The 12 Five-Year-Plan has shifted focus from quality growth to inclusive growth. Outright promotion of exports has been dropped as a
th
byline (in response to declining competitiveness?) and replaced by enhancing households/citizens abilities to consume, redistributing wealth and aiming for slower but higher quality growth. Investment in industry is now targeted towards the energy generation and alternatives (sustainable power bases rather than pure manufacturing) and is perhaps testimony to Chinese authorities acknowledging falling external competitiveness and recognizing the need for more internal focused policies. In summary, China is facing an erosion of its global competitiveness with wage pressures linked to high-flying inflation being the dominant factors. The Chinese currency, and its gradual revaluation, is also playing its part and Chinas loss of competitiveness may be seen as a helpful factor in the global rebalancing process. But Chinese authorities do not see any need to panic. If they can succeed in pulling off the latest Five- Year-Plan; then this development, and its impact on the trade balance, will not be a major issue.
Syria and the North Sea have ensured higher prices compared with WTI crude which has stayed at depressed levels over the summer. All of the growth in oil demand is now stemming from Emerging Market (EM) economies and in order to determine future price movements the economic well-being of these economies will be the decider.
PRECIOUS METALS: The rally
Commodity outlook: Tricky Road Ahead as Dollar Strengthens
Commodity markets will continue to be driven by worries about the potential impact of a slowing global economy. A solution to the sovereign debt crisis has still not been found and with governments running out of fresh ideas this has caused tremendous stress on the financial system. Cyclical commodities like energy and base metals have suffered as a consequence while safe haven flows and adverse weather have been the main reasons for gains across precious metals and agricultural commodities.
in gold, which has now lasted for more than 10 years and has returned nearly 21 percent annually, is undoubtedly the worlds most powerful trend. Investors and central banks have all been competing for the yellow metal over the past two years as the global financial crisis has triggered an exodus out of other asset classes into safer assets, such as gold and silver. During the third quarter record high prices led to increased volatility which dented some of the lustre for gold as it became increasingly difficult to trade. As a result we saw investors pulling out of long positions, both in ETFs and futures during August and September and we began to see 100 to 200+ dollar corrections. The super trend however remains firmly intact and only a move below 1,500 could spoil the party for investors holding close to 3,000 metric tons through various investment vehicles.
ENERGY: The dramatic spike in oil prices earlier this year has been a major reason for the surprise slowdown in economic activity witnessed during the past six months. Increased demand drove prices higher in 2008 while this time, supply disruptions and constraints have been the culprit for higher prices. Libyan oil production will be limited for months while supply disruptions from Nigeria,
AGRICULTURE: Despite record planted acreage this crop year, poor weather and reduced quality has led to a reduced U.S. production of corn and soybeans. This has caused a strong rally of the two over the summer in order to force demand rationing through higher prices. This rationing now seems to have begun having an impact on both feed demand and export. On this basis we believe that the prices of soybeans and corn have already peaked and could settle into 13 to 14 and 6 to 7 dollar ranges respectively for the remainder, also given our forecast for a stronger dollar which could dampen exports even further.
ABOUT SaXO BaNK
Saxo Bank is a leading online trading and investment specialist. A fully licensed and regulated European bank, Saxo Bank enables private investors and institutional clients to trade FX, CFDs, ETFs, Stocks, Futures, Options and other derivatives.
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Is Gold Always The Gold Standard?

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 wont fall and the process
By: Yasin Ebrahim
used to rate whether a borrower was a credit risk was flawless. Furthermore, sophisticated financial products such as Mortgage Backed Securities (MBSs) 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.
ABOUT THE AUTHOr

Yasin 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.
International Colloquium organised by the Faculty of Business and Commercial Sciences at 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 (Ofcial 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
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ASIAN COmpANIES SET TO BENEFIT FROm THE EUROZONE CRISIS
By: FTI Consulting
sian 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
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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.
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. Its 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.
The UKs status elevated in response to the Eurozone crisis

The research from FTI Consulting highlights that the UKs reputation amongst executives outside of Europe has risen, as the UKs 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 governments 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.
countrys 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.
ABOUT THE FTI EUrOZONE POLL

Research 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.
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
ABOUT FTI CONSULTiNG

FTI 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.
Businesses call on their political leaders to help Europes 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
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A PIVOTAL YEAR AHEAD

FoUrth QUarter ECoNomiC OUtLooK
here 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.
By: SEI Investment Management Unit
Europe on the Ropes
National Competitiveness Rank
Economic 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 Germanys composite purchasing manager indices are above the recession line. Retail sales in the Eurozone have been in negative territory for several months. Labourmarket 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%.
In Exhibit 2, we note the competitive rankings of various countries based on the WEFs 12 pillars of competitiveness.
Exhibit 2: Greece Reaps the Bitter Fruits Austerity

Sources: World Economic Forum, SEI Rankings consist of 142 countries in total. Blue columns denote eurozone nations.
90 66 41 43 45 53 56
A Generation Without a Place
Most worrisome is the sharp rise in the unemployment rate of younger workers (24 years old and younger). At 21.4%, Europes youth unemployment is more than twice the Eurozones overall average. Youth unemployment has risen to an astounding 48.9% in Spain and Greece is not far behind at 45.1%.
13 9 10 11 12 5 6 7 8 1 2 3 4
19 15 16 18
26 29
36
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Exhibit 3: Ten-Year Government Bond Yields

4000 3500
Basis Points
Greece Spain
Portugal Italy
Ireland France
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 Eurozones most competitive nations - Finland, Germany and the Netherlands - which are all in the worlds 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 Funds (IMF) general fund in order to get around the European Communitys 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 Europes 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.
3000 2500 2000 1500 1000 500 0
Source: Reuters/Datastream, national sources One basis point equals 0.01%; 100 basis points equals one percent.
Exhibit 4: Brother, Can You Spare a Euro?

70 Net Percentage Tightening 60 50 40 30 20 10 0 -10 Q1 2003 Q3 2003 Q1 2004 Q3 2004 Q1 2005 Q3 2005 Q1 2006 Q3 2006 Q1 2007 Q3 2007 Q1 2008 Q3 2008 Q1 2009 Q3 2009 Q1 2010 Q3 2010 Q1 2011 Q3 2011 Q1 2012 -20 Net Percentage of Banks Tightening Credit Standards (left axis) MSCI - Eurozone Local Currency Share Price Index (right axis) 300 250 200 150 100 50 0 Stock Price Index
Sources: European Central Bank, MSCI, SEI
European Road Trip: Are We There Yet?
Europes 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,
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Expanding the ECBs Role
Finally, we need to examine the role of the European Central Bank (ECB). Under Mario Draghi, the new ECB president, policy rates have fallen onehalf 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-interestrate 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 ECBs balance sheet expanded sharply during the second half of 2011 as it engaged in emergency lending to banks (see Exhibit 5).
Exhibit 5: Central Banks Are Pumping Up

European Central Bank Bank of England Central Bank Assets, % of GDP 30 25 20 15 10 5
U.S. Federal Reserve
Sources: Bank of England, European Central Bank, Federal Reserve Board, SEI
Exhibit 6: No U.S. Recession

NBER-Dened Recession Periods Real GDP Leading Economic Indicators, Advanced Two Quarters
US: A Look Back at 2011
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.
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.
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
Looking Ahead - Mostly Positive
Positive Surprises, Bond Markets Unmoved
Exhibit 6 on the following page compares the Conference Boards 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
Sluggish 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 Citigroups Economic Surprise Index (ESI) for the U.S. against
Q1 1981 Q1 1982 Q1 1983 Q1 1984 Q1 1985 Q1 1986 Q1 1987 Q1 1988 Q1 1989 Q1 1990 Q1 1991 Q1 1992 Q1 1993 Q1 1994 Q1 1995 Q1 1996 Q1 1997 Q1 1998 Q1 1999 Q1 2000 Q1 2001 Q1 2002 Q1 2003 Q1 2004 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012
Looking 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 Reserves targeted rate for interbank lending) would stay unchanged through the year.
Percent Change over Four Quarters
15 10 5 0 -5 -10
Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011
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 greaterthan-normal preference for safety and liquidity.
Equities Buoyant, U.S. Banks Look Cheap
In 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
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Exhibit 9: Positive Surprises, Minimal Impact

Citigroup Economic Surprise Index (left axis) Benchmark Ten-Year Treasury Bond (right axis) 5.0 4.5 4.0 3.5 3.0 2.5 2.0 Jan-2007 Apr-2007 Jul-2007 Oct-2007 Jan-2008 Apr-2008 Jul-2008 Oct-2008 Jan-2009 Apr-2009 Jul-2009 Oct-2009 Jan-2010 Apr-2010 Jul-2010 Oct-2010 Jan-2011 Apr-2011 Jul-2011 Oct-2011 1.5 Annualized Yield to Maturity 100 50 Index Value 0 -50 -100 -150 5.5
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 Chinas 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.
Sources: Citigroup, Federal Reserve Board, SEI Index values greater (less) than zero indicate that reported economic data is surpassing (falling short of ) consensus expectations.
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 Europes - 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 systems loans and investments expanded by almost 5% from the start of 2011 through October 31.
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 Libyas 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 shareprice decline last year of 18.2% (in U.S. dollar terms) despite its exceptional growth. Although Chinas 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 privateproperty markets. This has caused consternation because investors are not sure how badly the financial system in China would be affected by a serious
SEIs View
SEIs 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 Swans
Emerging Markets: Shifting into a Slower Lane
At 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
As 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 Europes debt crisis, American politics and slowing Chinese growth, we should also be attentive to the emerging and as-yetunidentified risks and challenges of our times. ABOUT THE AUTHOr
SEI 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.
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BUSiNeSS PLaNet
STILL ON THE GLObAL FRONT bURNER
By: Merrill Lynch
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
he lull before the storm?
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.
The 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
Hot topic: Europe will remain a global issue
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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 twothirds 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 ECBs 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 restrain the global reach of the European crisis?
economy is likely to support continued broader banking sector loan growth.
2012 budget is the highest on record
A very strong macro performance in 2011
The bigger picture
Europe matters because of its size and the euros reserve currency status. The Euro areas 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.
The 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 nonhydrocarbon 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.
The 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 unrestrelated 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).
Large fiscal surplus achieved despite record expenditures
The 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 years 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.
Fiscal stance to remain expansionary in 2012
Saudi Arabia: A supportive 2012 budget
While 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
We 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.
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COVER STORY
MASTER ACCOmpLISHmENT
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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
My Business
provide experiential education and training to Arab youth in work readiness, financial literacy and entrepreneurship. MasterCard will support INJAZ AlArabs Its 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 Its 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 Its 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
MasterCards support to INJAZ Al Arabs entrepreneurship program deepens its commitment to further financial inclusion through the power of entrepreneurship.
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COVER STORY
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 countrys 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. 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.
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 cant 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, its 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
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Exhibit 1: SME Contribution to Economies

Percentage of Total Employment in SMEs SME Contribution to GDP
1 Hungary France Germany US UK UAE Egypt Saudi Arabia 25% 32% Averages 42% 38%
3 71% 61% 60% 55% Hungary France Germany US UK UAE Egypt Saudi Arabia
3 50% 54% 53% 52% 51%
(See Exhibit 1)
A key to accelerating job creation in the MENA region is fostering an entrepreneurial environment. Once startups mature into SMEs, they become significant contributors to employment and gross domestic product (GDP).
54%
Entrepreneurial ventures are driven by one or a combination of three factors:

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:
30% 33% 25% 16% 39% 52%
Lifestyle or passion: Entrepreneurs
54% 63% 2 Middle-Income Countries
1 Low-Income Countries
3 High-Income Countries
Note: Selected Countries (2008) Source: European Commission SME Performance Review; US Department of Statistics; OECD; UNECE; World Bank; Zawya; Booz & Company
Exhibit 2: Early-stage Entrepreneurial Activity (% of Adult Population, 2009)

24% 22% 19% 17% 16% 15% 15% 13% 12% 12% 10% 9% 9% 8% 8% 6% 6% 5% 5% 4% 4% 4% 4% 3% Arab Countries Average = 13%
Entrepreneurial activity in Arab countries is deceptively high, as it is mostly driven by necessity
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 regions entrepreneurial activity today seems robust, says Booz & Co. About 13% of the regions working population is engaged in entrepreneurial activity, far more than in the US, Germany or Japan.
Switzerland
United Kingdom
South Africa
Colombia
Saudi Arabia
Germany
Lebanon
Norway
Tunisia
Morocco
Finland
Yemen
Algeria
Jordan
Brazil
Syria
France
China
Italy
Iran
Note: The percentage of the population performing early-stage entrepreneurial activity are those people who are involved in setting up a business or owners-managers of new businesses (less than 42 months). Source: Global Entrepreneurship Monitor,2009; Booz & Company
Zein of Booz & Co. highlighted some of the MENAs 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 worlds 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 onehalf 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.
Russia
Arab Countries
Japan
USA
UAE
(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
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COVER STORY
B. Financial Enablers
These 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 regions 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. 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 Enablers
C. Business Enablers
The first ring in the ecosystem affects the entrepreneurs individual development, says Booz & Co. These personal enablers include:
The third ring in the entrepreneurs ecosystem consists of professional enablers and includes:
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.
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 startups, 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.
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Over the past 20 years, about 60 initiatives have been launched within the MENA region to promote business support.
Making Cash Flow
D. Environment Enablers
The 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:
An 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. Thats our focus, Miebach explained. MasterCards 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 its 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 thats a massive trend out there, said Miebach. Though the B2B model is what drives the companys 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. Its 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. Its about access, transactions, and driving commerce. As far as running a credit card business, thats 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 visa-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.
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 JUNiOr ACHiEVEMENT
Junior Achievement Worldwide is the worlds largest organization committed to inspiring and preparing young people to succeed in a global economy, catering to 9.3 million students annually.
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.
ABOUT INJAZ- AL AraB

INJAZ 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 workreadiness skills.
ABOUT MaSTErCard
MasterCard (NYSE: MA) is a global payments and technology company operating in more than 210 countries and territories.
45
INFORMATION TECHNOLOGY
The ENterpriSe OpportUNitY For MENA TeLeCom OperatorS to iNCreaSe

ENTERPRISE CUSTOMERS: A GROWING OPPORTUNITY As 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
CASHING IN ON ICT
By: Booz & Co.
Bahjat EL Darwiche he 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 regions fast-growing enterprise ICT opportunity.
Partner, Booz & Company
Principal, Booz & Company
Hadi Raad
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.
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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 MARKET With 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.
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Focus on SMEs to Capture Emerging Opportunity To 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 Solutions Large 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 Opportunities Beyond 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 Offerings Telecom 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 Right Regardless 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 tailormade 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 & COMpaNY
Booz & Company is a leading global management consulting firm, helping the worlds top businesses, governments, and organizations. www.booz.com
www.eminggulf.com
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Efcient Plant Shutdown & Turnaround Forum 2012

Maximising shutdown efciency with excellent turnaround strategies & people management
20th - 21st March 2012, Kuala Lumpur
EVENT BENEFITS
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 efciency 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 nancial impact while maintaining high quality, integrity and safety standards Plant 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 nancial losses. It is imperative that all personnel and departments involved understand their roles and responsibilities well.. The Efcient 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 efcient 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
John A. McLay, P. Eng., JMC Consulting, Canada Chief Executive Dr. Zulkipli Ghazali, Universiti Teknologi PETRONAS (UTP), Malaysia Senior Lecturer M. C. Bhurat, PT South Pacic Viscose, Indonesia Vice President, Expansion Projects Mohamed Daoud, Abu Dhabi Company for Onshore Oil Operations (ADCO), UAE Manager (Projects Quality), Engineering & Major Projects Naveen Goyal, Aditya Birla Management Corporation Private Limited (Aditya Birla), India Assistant Vice President
SPEAKER PANEL
Azneil Malik, PETRONAS, Malaysia Head, Turnaround Management John A. McLay, P. Eng., JMC Consulting, Canada Chief Executive Naveen Goyal, Aditya Birla, India Assistant Vice President V. G. Vachhani, PT South Pacic Viscose, Indonesia Vice President, Maintenance Mohamed Daoud, ADCO, UAE Manager (Projects Quality), Engineering & Major Projects Puli S. Saravanan, Shell, Singapore Regional Turnaround Director - East H L Gadiyar, Reliance Industries Ltd., India Vice President, Head CES Planning Kamarulzaman Alassan, Huntsman Tioxide, Malaysia Production Manager Dr. Zulkipli Ghazali, UTP, Malaysia Senior Lecturer Lee Woong Youl, SK Energy, Korea Maintenance Planning Manager Saurabh Sinha, Shell, Brunei Senior Planning Engineer
EVENT INTRODUCTION
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.
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
Endorsing Association:
Media Partner:
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Dont Let Security Misconceptions Cloud Your Judgement

By: Steve Bailey
hat 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. Its time that IT organizations rethink their position on cloud security by looking at the facts.
Making the Case for Cloud Storage
The 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
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encryption and data storage technologies to meet your needs for compliance, recovery and retention. And its 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 cloudbased 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. Its just a matter of time.
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.
A rchiving stale data to cloud-based storage to free up existing space within the data center C ost-effective Disaster Recovery for Small-and-Medium Enterprises without large upfront and operational investment C ontent indexing data before moving to cloud to meet Compliance requirements and minimize search/retrieval times during eDiscovery operations R emote office backup directly to cloudbased storage
But is My Data Safe?
Operational Benefits
While 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 todays data management problems, including: Tiering data retention to cloud storage, alleviates the need to expand data center capacity or operational costs
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 providers 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
ABOUT THE AUTHOr

Steve Bailey is the Regional Operations Director at CommVault covering the Emerging Markets region (Middle East, India, Russia/CIS, Eastern and South Eastern Europe). Steves 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 CommVaults EMEA Product Management function.
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The MigratioN Map For MiddLe EaSt ENterpriSeS
IP COmmUNICATIONS SYSTEm
By: Evren Aker
lanning any IT technology upgrade is never easy and if it happens to involve your companys enterprise communications system, it takes careful upfront planning and an understanding of whats 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. Todays 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?
Todays Enterprise Communications System
industry standards permits compatibility between the system and third party applications and that most, if not all, of the hardware equipment is nonproprietary. 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.
Most 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 todays 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
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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
must address the goals and objectives of the enterprises 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 oneon-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.
The Basics of Unified Communications
One 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 System

A 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.
The Systems Upgrade Checklist
It 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
ABOUT THE AUTHOr

Evren Aker is Pre-Sales Manager, Interactive Intelligence Middle East
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BeSt PraCtiCeS
CUT THE NOISE AND CUT TO THE CHASE!

SeveN TipS For StreamLiNiNg CommUNiCatioN at YoUr OrgaNiZatioN
By: Michael Feuer
Employees, Build Your Business, and Outwit the Competition.. In many organizations, the art of cutting to the chase has been lost. Feuer knows what hes talking about: he has been involved with launching a number of business ventures, including OfficeMax and his newest business, Max-Wellness, a recently launched onlyone-of-its-kind health and wellness retail chain concept. The lessons hes learned have convinced him that a great leaders 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 todays 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,
f you dont 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 doesnt exist just in our personal lives. Today, its 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. Were 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
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instant messaging programs, and much more. Employees can send a constant stream of information to their leaders and thats a problem thats 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. The first step in encouraging concise communication is to be straightforward about what you need. Remember, though, that one size doesnt fit all, so you may have to infuse your cut-to-the-chase request with humor or compliments to soften the message.
tagline that expresses your organizations 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 organizations pulse. When you know whats happening in real time, you can accelerate your organizations 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-whats-happening fashion.
Look in the mirror. The Golden Rule Do unto others as you would have them do unto you definitely applies to leadership and business. Its always a good idea to treat your team as participants and partners in whatever youre doingnot 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 youre 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.
Be clear about what you need.
Remember that the medium is the message. If youre like most
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 youve tackled emails and recorded messages, its time to move on to something a little less predictable: conversations. While you cant 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
Use your negatives sparingly. Say youre telling your team everything they need to know, but you still arent getting the results you want. What gives? Well, the problem might lie in how youre 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 dont increase sales next month, well have to start letting people go.)
Many leaders think that this style is more forceful and expedient, but its 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 dont come to pass), your team will come to see you as a knucklehead, and theyll start to ignore your message altogether.
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 thats 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 youre open about the level of succinctness that you want and model those behaviors yourself, youll find that most of your team will get on board quickly. And chances are, theyll also be grateful that youve 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.
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BeSt PraCtiCeS
Top 10 Project Management Trends FOR 2012

CoLLaBoratioN GaiNS ImportaNCe aS ProJeCt CompLeXitY GrowS
By: ESI International
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.
Program management will gain momentum, but resources remain in short supply Increasingly, large initiatives undertaken by corporations and government agencies are being recognized for what they are and arent: 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.
Collaboration software solutions will become an essential business tool for project teams Fueled by increasingly complex and virtual projects as well as tightened budgets, todays environment demands a more efficient way to manage communication and workflow. Collaboration is central to project
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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.
processes. The more impact the project has on reducing internal costs, the higher it will be ranked.
Learning transfer will become the new mantra, but with little structured application Learning transferthe 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. 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. 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 organizations business
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. 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 PMPs 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. 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.
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.
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HR professionals will seek assessments to identify highpotential project managers The 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 INTErNaTiONaL ESI, 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, ESIs worldwide headquarters are in Arlington, Va., USA. To date, ESIs programs have benefited more than 1.35 million professionals worldwide. For more information visit www.esi-intl.com
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BeSt PraCtiCeS
EXpECTATION MATCHING
A brands customers have similar, yet distinct interests and expectations. Retaining these customers long-term is dependent upon a brands 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 Marketers 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 customercentric 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
KeY to CUStomer ReteNtioN, DriviNg SUStaiNaBLe Growth
By: Loyalty 360
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, FSIs, 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, theres really no hope that the customer will reengage with the brand.
ABOUT LOYaLTY 360 Loyalty 360 The Loyalty Marketers 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 cuttingedge 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
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REAL ESTATE
MARKETVIEw: KINGDOm OF BAHRAIN
BY: CB Richard Ellis
Hot Topics
According to the Arab Investment & Export Credit Guarantee Corp, Bahrains 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 sectors relative health continues to provide some optimism.
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 Moodys to continue to define Bahrains prospects as negative. However, Moodys 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 Moodys 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 Kingdoms 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.
OVERVIEW
As 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,
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9.0% 8.0% 7.0% GDP Growth/pa 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2003 2004 7.2%
GDP Growth, Bahrain 2003 to 2012

7.8% 6.7% 5.6% 8.3%
6.3% 3.5% 2.6% 2.2%
3.0%
2005
2006
2007
2008
2009
2010
2011
2012 (est)
OFFICE MARKET
BD/sqm/pm
The 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
Local Class A Office Space Lease Rates Q4 2003 to Q4 2012

14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011
Class B Office Space Lease Rates Q4 2003 to Q4 2012

8.0 7.0 6.0 BD/sqm/pm 5.0 4.0 3.0 2.0 1.0 0.0 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011
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way to easing Bahrains 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. 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.
Standard 2 Bed Apartment Rental Rates, Juffair Q4 2007 to Q4 2011

800 700 600 BD/sqm/pm 500 400 300 200 100 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011
Standard 3 Bed Compound Villa Rates Q4 2007 to Q4 2011

1,200 1,000 BD/sqm/pm 800 600 400 200 -
Retail Sector
The 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 Kingdoms 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
Q4 2007
Q4 2008
Q4 2009
Q4 2010
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.
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COmmODITY RESEARCH THEmES AND 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.
By: Merrill Lynch
acro outlook
rises as Libya returns. Equally, price downside could be tempered by belowaverage 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.
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.
WTI and Brent crude oil
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
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
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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.
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. Japans nuclear power future remains uncertain. In a worst case scenario, spot LNG prices may rise to 2008 levels of $25/MMBtu.
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.
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TORRESOL ENERGY LAUNCHES COmmERCIAL OpERATIONS OF TwIN SOLAR THERmAL PLANTS IN SpAIN
orresol 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 Cdiz, 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.
By: Torresol Energy
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 Europes 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
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the innovative Gemasolar plant that started commercial operations in May 2011. Furthermore, Torresol Energys 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 SENER
SENER is a private engineering and technology group, founded in 1956 in Bilbao that seeks to offer its clients the most advanced technological solutions.
ABOUT TOrrESOL ENErGY

Torresol 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 MaSdar aNd MaSdar POWEr
Masdar is Abu Dhabis multi-faceted initiative advancing the development, commercialisation and deployment of renewable energy technologies and solutions. The company serves as a link between todays fossil fuel economy and the energy economy of the future - developing the greenprint for how we will live and work tomorrow.
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CRUDE OIL AND THE ImpACT OF EU SANCTIONS AGAINST IRAN

he 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
By: Ole S Hansen
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 Banks Senior Commodity Strategist.
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BUSINESS TRAVEL
INTRODUcINg CORINTHIA HOTEL LONDON: A 21St CeNtUrY GraNd HoteL
has worked with world-class designers, craftsmen, artists and architects to develop the distinctive soul and remain true to the Corinthia brands 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.
Restaurants
The 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 hotels 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.
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 Londons 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 citys 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
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ESPA Spa
Award-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 stones 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 Business
Located 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 Rooms
Corinthia hotel features 294 guest rooms, including 36 suites and seven spectacular penthouse suites located over two storeys, featuring private terraces with unmatched views of Londons most recognised landmarks, including the Thames, the London Eye, Trafalgar Square and Whitehall. Corinthia Londons sumptuously appointed rooms, averaging 45m2 in size, are also amongst the largest in their category in Londons 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.
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CAR fEATURE
MERcEDES M-CLASS SUV

AHEad Of iTS TiME, BY aNY MEaSUrE
Perhaps the worlds 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.
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 unibody structure encircles the passenger cabin in a highly protective network of ultra-high and high-strength steel, magnesium reinforcements and triplelayer 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.
Safety
The new M-Class comes complete with innovative options to help keep
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Plus, its remarkable foresight helps prepare you for danger. The M-Class has long been a protective showcase of SUV safety breakthroughs. PreSafe 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.
Versatility
With your choice of a new-generation 302-hp gasoline V-6 or a torquerich yet fuel-stingy 240-hp cleandiesel 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.
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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 engines torque to the wheels with the best grip, even if thats 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.
Design
From 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 handfinished 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, youre 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.
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LISTINGS
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, guilloch, 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 Repeaters movement is manufacture mechanical, with manual winding, calibre 9402 MC, certified Geneva Seal, flying tourbillion, and minute repeater.
AUDEMaRS PIGUET: RoYaL OaK

Audemars Piguets 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. Whats more? It reveals white-gold bezel screws, with 22k Gold Automatic Rotor, and luminous hour markers and hands.
IWC SCHAFFHAUSEN: TOP GUN MIRAMAR, the New piLotS watCheS

IWC Schaffhausen gets off to a powerful start in 2012: the year of the Pilots Watch. With five new models, the TOP GUN collection establishes itself as an independent formation within the IWC Pilots Watch family. The years 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 Pilots Watches collection since 2007. The elaborately equipped Big Pilots 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 Pilots Watch TOP GUN unites the clearcut instrument look of the 1940s with ultramodern watch technology. The tiny aircraft silhouette on the seconds hand creates an eye-catching signal-red highlight on the black and- white dial. The Pilots Watch Chronograph TOP GUN, which comes with a fly back function and protection against magnetic fields, is also equipped with an IWC-manufactured movement.
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A. LanGE & ShnE: SAXONIA AUTOMATIC

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 & Shne. 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 argent-hued, solidsilver 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 selfwinding movement can be admired through the sapphire-crystal caseback of the watch.
PaTEK PHIlIppE: CaLatrava OFFiCerS watCh

Patek Philippes 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-position, with relief embossed Calatrava Cross. Calatrava Officers watch reveals leather, black crocodile with contrast stitching watch bracelet and trap material.
PIaGET: The GoUverNeUr taKeS the Stage

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.
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LiviNg LUXUrY
ACCESSORIES
SamSoNite: Limited EditioN CoSmoLite CoLLeCtioN iN GoLd CoLor

Samsonite 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 Samsonites proprietary Curv technology (a registered trademark of Propex Fabrics GmBH) comprising of innovative and extremely light high-performance body, advanced impact resistance and durability.
ALFred DUNhiLLS ICoNiC BLUe MOP CUFFLiNKS

Striking 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.
LANVIN: 2012 EYewear OptiCaL CoLLeCtioN

After the recent dbut 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 brands 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.
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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 Canons acclaimed HS System technology. Shoot stunning shots wherever and whenever courtesy of the PowerShot S100s 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 Canons 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 FEaTURE
Sony 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. Sonys 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 dont 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.
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a CLoSer LooK
IN THE NEwS
MIDDlE EaST EQUITY ISSUES EnD 2011 Up 47% VERSUS 2010

Thomson 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.
InfInITI ShOwS pOSITIVE 2011 SalES GROwTh acROSS ThE MIDDlE EaST REGIOn
Japanese 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, Infinitis expansion into the Kingdom of Jordan proved a success, widening the brands geographical footprint and demonstrating Infinitis 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 sedans 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 Infinitis best selling model with an impressive 1699 units sold across the region in 2011.
ASDa cOnfIRMS FIRST GlOBal FRanchISE PaRTnERS

Asda, one of Britains 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 Asdas 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.
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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 700900 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
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 ($387.8 million) for 2010. The Groups Gross Revenues stood at BD327.0 million ($ 867.4 million) for the year, down 4% from BD340.3 million ($902.7 million) in the previous year. Further commenting on the Groups 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 & Poors Ratings Services, two of the worlds 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 Operations Additional 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 Competition Shaikh 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 twelvemonths 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.
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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 firms 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. missions will be to develop a wider network of influential digital media partners. Filling Karims 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 Karims solid foundations, explained Elie Khouri, CEO of Omnicom Media Group MENA. With Karims 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, its 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.
PromotioNS reShape OmNiCom Media GroUpS 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 OMDs 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 groups media resources in the Levant area out of Lebanon, leading OMDs Beirut office to the leadership position it enjoys today. Farhats brief is to lead the groups 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 Lebanons 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 UAEs Ziad Chalhoub has also been promoted to Executive DirectorGCC Investments. He will work closely with Farhat to drive OMDs investment agenda in the region, paying particular attention to its digital investment function. One of his
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.
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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 Dhabis real estate market. 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 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 Cityscape Abu Dhabi 2012 is where the future of Abu Dhabis 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 Dhabis real estate market.
ABU DHABI
CITYScAPE ABU DHABI APRIL 22ND - 25TH, 2012 ABU DHABI NATIONAL EXHIBITION
GLOBAL LNG SUMMIT MARCH 27TH - 30TH, 2012 SINGAPORE
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.
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 Kingdoms 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 Arabias building sector.
BUILDEX 2012 THE 14TH SAUDI INTERNATIONAL BUILDINg & CONSTRUcTION EXHIBITION MARCH 18TH - 21ST, 2012 DHAHRAN INTERNATIONAL EXHIBITION CENTER, DAmmAm, SAUDI ARABIA
WORLD EcO CONSTRUcT APRIL 22ND - 25TH, 2012 ABU DHABI NATIONAL EXHIBITION CENTRE, UAE
WORLD ecoConstruct Summit , supported by Masdar, Emirates Green Building Council (EGBC) and the UAE Council for Sustainable Development (UAEBCSD) will bring together the worlds 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.
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WWW.CAPITAL-ME.COM
FiNaL word
Gold Going to $2,200?

pattern Im seeing in oil is the same chart pattern Im 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. Were 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 Europes debt crisis. Demand for gold strengthened most of last year as Europes 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. This is the time when all the Wall Street houses come out with their yearly predictions for the markets. Its also the time when Wealth Daily does the same. Recently, I came out with Wealth Dailys oil forecast. I said oil would hit $125 a barrel. Whether or not it ends the year at that level, I dont know. But at some point in 2012, I believe oil will hit $125 based on the technical pattern Im seeing in the oil chart. And that will be the high for the year. Interestingly enough, the 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
By: Brian Hicks

(fig 1)
(fig 2)
market, according to the World Gold Council. I usually read Wall Street predictions with a skeptical and suspicious eye. But I actually think theyre spot-on with their call especially after reading the Chinese story. And the chart of gold suggests theyre 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, its 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. Ive been long gold for several years. Im 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.
Glashtte Original 165 years of watchmaking art. Sixties Panorama Date
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Is Gold Always The Gold' Standard?

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PLANET OCEAN

CAPITAL BUSiNESS MaGaZiNE

GIVINg CREDIT WHERE CREDIT IS DUE

By Hadi Khatib Executive Editor

CAPITAL BUSiNESS MaGaZiNE

VOL 7 - ISSUE 3 - 2012

32 A PIVOTAL YEAR AHEAD

54  TOp 10 PROjECT MANAGEmENT

CAPITAL BUSiNESS MaGaZiNE

78 In the News 80 Movers & Shakers 81 Events 82 Final Word

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LOUIS VUITTON: OPENING OF THE ROMA ETOILE MAISON

CAPITAL BUSiNESS MaGaZiNE

BaNKiNg aNd FiNaNCe

MIDDLE EASTERN INVESTmENT BANKING ANALYSIS

By: Thomson Reuters

37% 34% 33% 30% 32% 26% 34%

40% 35% 30% 25% 20% 15% 10% 5%

Source: Thomson Reuters/Freeman Consulting

Mergers & Acquisitions

TOP 5 MIDDLE EASTERN TARGET INDUSTRY BREAKDOWN

Equity Capital Markets

MIDDLE EASTERN ECM - ANNUALLY

$40 $35 $30 $25 $20 $15 $10 $5 $0

Value ($bln) # Issues 39

120.0 100.0 80.0 60.0 40.0 20.0

Full Year 2010

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Debt Capital Markets

MIDDLE EASTERN DCM - ANNUALLY

$45 $40 $35 $30 $25 $20 $15 $10 $5

Value ($ bln) # of Issues 33 18

Full Year 2010 Full Year 2011

ABOUT THOMSON REUTErS

CAPITAL BUSiNESS MaGaZiNE

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MIDDLE EAST INVESTmENT PANORAmA 2011

By: Insight Discovery

hat is the Middle East Investment Panorama 2011?

CAPITAL BUSiNESS MaGaZiNE

BaNKiNg aNd FiNaNCe

Themes and Trends for the next 12 months

THE ALL-NEW 2012 INFINITI FX

Business Islamica Magazine

Capital Business Magazine

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PRIVATE bANKING WORLD. MIDDLE EAST 2011

By: Lucy Smith, Terrapin

New BUSiNeSS aNd INNovatioN For Private BaNKS

4. We envision our presence in the

1. In the current turmoil, the key

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BaNKiNg aNd FiNaNCe

4. As a result of the financial crisis,

32 A PIVOTAL YEAR AHEAD

54 TOp 10 PROjECT MANAGEmENT