Gulf Industry Magazine helps you catch up with the numbers behind economic and industrial developments in the region.
Life unthinkable without Internet, say Arabs
THE Internet continues to be one of the key drivers of economic and social development in the Arab region, transforming and redefining commercial transactions and people-government interactions; and influencing societal dynamics.
A white paper titled ‘The Arab World Online 2014: Trends in Internet and Mobile Usage in the Arab Region’ launched by the Governance and Innovation Programme at the Mohammed Bin Rashid School of Government (MBRSG) in co-operation with Bayt.com, a leading job site, focused on online behaviours, e-government attitudes, online news and service consumption, e-learning as well as the use of mobile and social media in the region.
This was based on a survey of nearly 3,000 people from 22 countries across the region.
On the evolving trends in Internet usage, Fadi Salem, the director of the governance and innovation programme, MBRSG, and co-author of the report, said: “With 135 million internet users in the Arab region today – of which 71 million actively use social media platforms, we are witnessing continued economic and social transformations.”
“While, the Arab World is finally matching the global internet penetration average in 2014, the digital divide is now taking new forms, namely the low broadband penetration, limited data availability and scarce online Arabic knowledge and content. Increased availability of public data and online Arabic content coupled with better broadband connectivity promise to drive economic growth, enhance job opportunities, increase educational prospects, increase regional trade integrations and enable better ‘smart’ cities infrastructure,” stated Salem.
“In fact, one of the key findings of the research is that ‘accessibility and connectivity’, ‘cost’ and ‘lack of content in my language’ were the top three challenges facing internet users in the Arab region. Governments and business leaders need to adapt their policies to harness this potential, in view of the ever-changing digital trends, especially among Arab youth,” he added.
Despite these challenges, a staggering 94 per cent of respondents agreed that the internet has opened doors to new learning resources, and 79 per cent said it had increased their involvement with their communities.
Nearly 61 per cent said they could not live without the internet, with 63 per cent of respondents using the Internet as a source for research at least once a day.
Global CEO ‘a myth’
THE “global CEO” as commonly thought of is a rarity and the trend world-wide seems to be “local” and “native”, according to a new study.
About 76 per cent of new CEOs in 2013 were insiders who were promoted from within the company (compared with 71 per cent in 2012). As much as 80 per cent were nationals of the same country as the company’s headquarters and 65 per cent did not have experience working abroad, said the newly released 2013 Chief Executive Study from Strategy &, formerly Booz & Company.
“Companies continue to select CEOs who are familiar faces, particularly when it comes to nationality and international experience, suggesting that the ‘global CEO’ is more mythical than real,” said Per-Ola Karlsson, senior partner at Strategy & and co-author of the report and the managing director of Dubai.
The vast majority – 70 per cent – of CEO turnovers at the world’s largest 2,500 public companies in 2013 were planned events, as opposed to forced turnovers or the result of mergers.
“The high proportion of planned turnovers is a strong signal that companies are continuing to take an active, considered approach to putting in place new leadership,” said Gary L Neilson, senior partner at Strategy& and co-author of the 14th annual global chief executive study, which examines trends and patterns among incoming and outgoing CEOs of the world’s 2,500 largest public companies.
The current study looks at women CEOs over the past 10 years as well as overall succession trends with a focus on 2013’s incoming class of CEOs.
CEO turnover at the world’s largest companies in 2013 decreased slightly to 14.4 per cent from 15 per cent in 2012 – well within the range of turnover generally expected during non-recession periods.
Saxo bank’s expectations
SAXO Bank expects the Middle East and Africa (MEA) to contribute around 15 per cent of its total revenue within five years, as the specialised investment bank looks to tap the region’s growing wealth, its co-founder and chief executive said recently.
Speaking as the Copenhagen-based bank opened an office in Abu Dhabi, its second in the UAE, Lars Seier Christensen said the bank’s revenue in the region had already grown to 10 per cent of the group total from between three and four per cent in 2009.
NBK, AlKhorayef sign deal
NATIONAL Bank of Kuwait (NBK) and Saudi Arabia-based Al Khorayef Group have signed a financing deal to arrange $56.8 million syndicated facilities with a tenor of five and a half years.
The facilities will be used by Al Khorayef Group for its project with Kuwait Oil Company (KOC) for the supply, installation, surveillance and maintenance of the electrical submersible pumping systems (ESP), which is manufactured locally by the group’s factory in Saudi Arabia.
NBK is the mandated lead arranger for this agreement while Bank Muscat is acting as a co-lender.
Dual tranche offering well received
INVESTMENT Corp of Dubai (ICD), the emirate’s sovereign wealth fund, said it has successfully priced a dual tranche issue of $1 billion in total through a six year $700 million sukuk and a 10-year $300 million conventional bond.
The dual tranche offering was very well received globally and generated a substantial order book that was more than three times oversubscribed, said a statement from ICD.
The dual tranche offering witnessed over 150 investors participating in the transaction. The sukuk offering saw the strongest demand from the Middle East which accounted for approximately 75 per cent of the sukuks, followed by Europe (17 per cent) and the remainder in Asia, it stated.
On the other hand, the longer maturity 10-year conventional bond saw more than 30 per cent of the demand come from Europe. Asia and offshore US investors accounted for seven per cent each, with the remainder placed in the Middle East, the statement added.
According to ICD, the sukuk profit rate has been set at 3.508 per cent per annum, while the coupon for the conventional bonds was at 4.625 per cent.