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|By Arabian Post Staff| GCC sovereign debt issuance is expected to reach US$53 billion in 2018, surpassing last year’s US$49.5 billion, according to Fisch Asset Management, a Zurich-based asset manager.

“GCC sovereign debt issuance has had another strong first half, with the two multi-tranche sovereign bond transactions of Saudi Arabia and Qatar leading issuance of over US$30 billion in the hard currency market,” Fisch Asset Management said in a report. “The Zurich-based asset manager believes that full-year issuance could surpass last year’s levels.”

Saudi Arabia, which has issued $11 billion worth of debts in the first half of the year, is expected to issue $5 billion worth of debts by the end of the year. Qatar has already issued $12 billion worth of debt while Oman is expected to add $1 billion to the already issued $6.5 billion this year. During the second half, Kuwait is expected to issue $8 billion while Abu Dhabi might issue $5 billion, followed by Bahrain with $3 billion and Dubai with $1.5 billion.

Philipp Good, CEO at Fisch Asset Management, said,  “This robust performance by the GCC primary markets stands out as particularly strong when compared to the broader emerging market trend, where aggregate issuance is lagging significantly behind 2017 levels. The emerging market segment has faced considerable headwinds this year, which have included higher US interest rates, weaker local currencies, and intensified threats to free trade. These factors, among many, have negatively impacted the performance of external debt products. These negative returns have, in turn, impaired inflows. Nonetheless, we do expect performance and inflows across emerging markets to improve meaningfully in the second half of the year, and we expect the GCC to continue issuing at a brisk pace.”

Fisch noted the potential inclusion of the GCC region in the JP Morgan EMBI Index, with official phase-in expected to commence in early 2019, to be particularly relevant. The contemplated combined index weighting for the region may be more than 12 percent, as compared with the current allocation of 0 percent.

Good continued: “To put the significance of this potential weighting into context, the combined weighting of index heavyweights China, Russia, and Brazil is currently just over 11 percent. This index inclusion will have a very positive impact on the investment demand dynamic for the GCC, as index-based funds will allocate more capital to the region – a process that has already begun, as confirmed by the recent positive price action of the GCC’s sovereign bonds.”

Fisch believes that Kuwait is likely to contribute meaningfully to the remaining issuance total in 2018. Although such issuances are not catalyzed by raised regional debt ceilings alone, improved oil prices are set to play a critical role in the demand and supply dynamic for Kuwait and the wider GCC, having a direct impact on multiple budgetary factors across the region, as well as driving positive investor sentiment.

In addition to Kuwait, Saudi Arabia may also consider returning to the market. The Kingdom already came to the market with a jumbo-sized transaction, as did Qatar. Fisch believes that the Saudi sovereign may opportunistically tap the markets again in the second half, while Qatar is less likely to return. On that basis, GCC sovereign issuance for the remainder of the year is likely to be dominated by Kuwait, Saudi Arabia and possibly the UAE.

While the GCC region has, in the past, traded at a tighter credit spread relative to other emerging market peers, the sharp correction in oil prices in 2015 has reversed that relationship, with the GCC region trading with a higher risk premium versus the broader peer group. Fisch views current trading levels as attractive, particularly so given the recovery in energy prices.

 Good concluded: “Looking at the emerging market asset class in the context of the broader markets, we believe that the asset class deserves a higher portfolio allocation than it currently enjoys. A combination of predominantly robust fundamentals, along with much more compelling valuation characteristics, mean that emerging markets will offer plenty of attractive opportunities as 2018 progresses. We expect each region in the emerging market space to offer a unique set of risks and opportunities. In many ways, it can be argued that the risk-reward dynamic is particularly compelling for the GCC region.”

|By Arabian Post Staff| GCC sovereign debt

|By Arabian Post Staff| Abu Dhabi Securities Exchange (ADX) has announced the distribution of more than AED 23.4 billion in cash dividends to around 406 thousand investors on behalf of listed companies in 2018. The cash dividends paid out by listed companies increased around 5.5% compared AED 22.2 billion in the year 2017. This announcement is a confirmation of ADX’s success in providing a distinct investment climate and a stable trading environment for investors and listed companies.

 ADX holds a market leading position as a distributor of cash dividends to investors. Stock listed on ADX account for 5.8% of cash dividends paid out globally. This strengthens the Exchange’s position as a preferred listing destination and the high levels of competitiveness.

ADX has also witnessed a rise in the net institutional investments by 4.5% in the first half of 2018, reaching AED 947 million, compared to 908 million for the same period in 2017. Additionally, the number of institutional investors registering in ADX amounted to 271 in the first half of 2018, compared to 256 in the same period of 2017, an approximate increase of 6%. This brings the total number of institutional investors in ADX to more than 7900 with 5900 being foreign institutions and 2000 local institutions.

Chief Executive of ADX, Rashed Al Blooshi emphasized the Exchange’s commitment to applying the best international standards and practices, by ensuring that investors and shareholders in the listed companies receive cash dividends, which reinforces ADX’s position as one of the leading financial markets to provide a stable environment and strong investment opportunities for both foreign investors and nationals.

In 2018, ADX distributed AED 23.4 billion in cash dividends to 406 thousand eligible shareholders in listed companies with 222 thousands of those investors being UAE nationals. Whereas the remaining recipients of cash dividends, 184 thousand, being foreign nationals. ADX also distributed cash dividend to 4500 domestic and foreign institutional investors.

The Banking sector accounted for the highest value of cash dividends paid out, with 52.6% and a total value of AED 12.3 billion; followed by the Telecommunication sector with 30.5 % of total dividends paid out and a total value of AED 7.1 billion, and the Energy sector with 4.6 % of total dividends paid out and a value of AED 1.1 billion of the total amount of the total dividends paid out. The Real Estate sector trailed with around 4.6% of total dividends paid out and a total value of around AED 1.1 billion, and Industrial sector ranked fifth with 2.2% of total dividends paid out and a total value of around AED 529 million; whereas the Investment & Financial Services sector came in sixth place with 1.7% of total dividends paid out and a total value of AED 393 million.  The Services sector followed with almost 1.7% of total dividends paid out and a total value of around AED 393 million.  The Insurance sector ranked eighth with almost 1.6% of total dividends paid out and a total value of around AED 368 million, ranking at the ninth place was the Consumer staples sector with 0.5% of total dividends paid out and a total value of AED 114 million.

ADX maintains its efforts in ensuring sustainable development in the Emirate of Abu Dhabi, and is committed to achieving Abu Dhabi’s plan to develop the financial services sector, attract investments and enhance the environment for doing business in the Emirate. ADX deploys the latest and most secure technology in the distribution of cash dividends. These systems are designed to encourage investors to reinvest at least part of their dividend payment back into the market, through increasing investor confidence.

The market capitalization of listed companies increased by 6.5% to reach AED 485 billion by the end of the first half of 2018, compared to the same period in 2017. The market value of shares owned by UAE investors by the end of the first half of 2018 reached AED 415 billion compared to AED 383 billion in the same period of 2017, an increase of 8.5%. The market value of shares owned by foreign investors reached AED 46 billion by the end of the first half of 2018 compared to AED 43 billion during the same period of 2017, which is an increase of 7.5%.

ADX made it mandatory for all listed companies to deposit the cash dividends to be distributed to shareholders in its bank account within five working days, following the decision of the General Assembly or Board of Directors, and ADX’s conditions and procedures.

|By Arabian Post Staff| Abu Dhabi Securities Exchange

By James M. Dorsey

An offer by a Saudi-backed bank to lend financially strapped Pakistan US$4 billion is likely intended to bolster Saudi influence when former international cricket player Imran Khan is sworn in in the coming week as the South Asian country’s next prime minister.

The offer was most immediately related to a statement by Asad Umar, Pakistan’s new finance minister-in-waiting, that Pakistan would decide on whether to seek a bailout from the International Monetary Fund (IMF) or friendly nations such as China and Saudi Arabia by the end of September.

Pakistan reportedly is looking to possibly ask the IMF for a US$12 billion bailout package. The country’s foreign exchange reserves have plummeted over the past year. Chinese loans have so far kept Pakistan afloat.  Pakistan’s currency, the rupee, has been devalued four times since December and lost almost a quarter of its value.

It was unclear whether the loan by the Jeddah-based Islamic Development Bank (IDB) would be in addition to IDB’s activation in late July of a three-year US$4.5-billion oil financing facility for Pakistan intended to stabilize the rupee-dollar exchange rate in the interbank market that has largely remained under pressure. The International Islamic Trade Finance Corporation (ITFC), an IDB subsidiary, at the same time rolled over a loan to Pakistan of $100 million.

Nonetheless, the offer even before Mr. Khan takes office, is also related to Saudi uncertainty over what his rise to power means geopolitically for the kingdom’s bitter rivalry with Iran, Pakistan’s neighbour.

A populist, Mr. Khan appears to be something of an enigma when it comes to Saudi Arabia, a close ally, and Iran. Saudi Arabia likely takes heart from the fact that Mr. Khan appears to be socially a conservative.

But in terms of Iran, Mr. Khan, whose Pakistan Tehreek-e-Insaf (PTI) party won the most votes in July 25 elections, has suggested that he may adopt a more independent course.

In a phone call with Iranian President Hassan Rouhani, Mr. Khan this week accepted an invitation to visit Tehran. Mehdi Honardoost, Iran’s ambassador to Pakistan, was among the first diplomats Mr. Khan met after his election victory.

Mr. Khan met days earlier separately with Saudi ambassador to Pakistan Nawaf bin Said Al-Malki. Mr. Al-Malki said Saudi Crown Prince intended to visit Pakistan soon in a bid to strengthen bilateral relationship.

In a post-election televised speech Mr. Khan made a point of discussing his country’s relationship with Saudi Arabia and Iran.

“We want to improve ties with Iran. Saudi Arabia is a friend who has always stood by us in difficult times. Our aim will be that whatever we can do for conciliation in the Middle East, we want to play that role. Those tensions, that fight, between neighbours, we will try to bring them together,” Mr. Khan said.

The prime minister noted in separate remarks that “if any country needs peace right now, then it is Pakistan… (Saudi Arabia) has stood by us in our toughest times. We would like to be a reconciliatory state and help them resolve their inner tensions.”

Saudi Arabia has so far given no indication that it is interested in mediated efforts or a negotiated resolution of its dispute with Iran. If anything, Saudi Arabia has welcomed US President Donald J. Trump’s withdrawal from the 2015 nuclear agreement that curbed Iran’s nuclear programme and his efforts to economically strangle the Islamic republic with harsh sanctions.

Saudi Arabia has also created building blocks in Pakistan’s troubled Balochistan province to stir unrest among Iran’s ethnic groups should it opt for a more aggressive anti-Iranian strategy

In a sign that Mr. Khan’s room to manoeuvre may be limited, Pakistan’s military earlier this year agreed to send troops to Saudi Arabia on a “training and advise mission” that would according to a military statement, not expand beyond the kingdom’s borders. Pakistan’s parliament rejected in 2015 a Saudi request that it authorize Pakistani troops to participate in its troubled military campaign in Yemen.

Nonetheless, Saudi Arabia is likely to be concerned about the possible appointment as defense minister of Shirin Mazari, a controversial academic, who last year criticized in a series of tweets the fact that Pakistani general Raheel Sharif commands the 41-nation, Saudi-sponsored Islamic Military Counter Terrorism Coalition (IMCTC).

Earlier, Ms. Mazari asserted that Pakistan should not cooperate in Saudi Arabia’s alleged pursuit of a US agenda and should instead forge ties to Iran and India.

“US always speak about promoting democracy but it supports an entirely different policy in the Middle East. We should review our foreign policy as Saudi Arabia is acting on a specific agenda. Pakistan should not become party in this agenda and we should establish cordial relations with all neighbours like India, Iran and Afghanistan,” Ms. Mazari said.

Ironically, controversy about Ms. Mazari focused on her advocacy two decades ago of nuclear strikes on Indian population centres in the event of a war between the two countries. Mr. Khan has suggested that he was willing to go the extra mile to improve relations with India.

By James M. DorseyAn offer by a Saudi-backed

|By Arabian Post Staff| Ras Al Khaimah Petroleum Authority (RAKPA), the regulator of the petroleum sector in the Emirate of Ras Al Khaimah (RAK) in the United Arab Emirates, is seeing a high level of interest from Indian companies to qualify for the 2018 RAK licensing round.

Growing demand in the Indian market and the unique opportunity for Indian companies to explore and develop oil and gas in previously untouched areas of RAK, which is geographically close to India, has resulted in RAKPA is seeing strong levels of interest from many leading Indian oil and gas companies.

In response to interest from Indian firms, officials from RAKPA and RAK Gas (RAK’s national oil company) are holding meetings with representatives and senior management from the country’s major oil and gas companies.

The licensing round covers four shallow-water offshore blocks and three onshore blocks. These seven blocks represent strong exploration opportunities, with the presence of 10 working oil and gas fields located in a 10-kilometre radius pointing to tangible evidence of the existence of oil and gas.

“We are seeing a positive response to this licensing round from Indian oil and gas companies that have a proven track record of experience in the industry and are eager to explore Ras Al Khaimah’s oil and gas potential,” said Nishant Dighe, Chief Executive of RAKPA and CEO of RAK Gas.

“Indian firms have increasingly shown a strong interest in finding and developing new hydrocarbon reserves. The licensing round will welcome bids from companies with successful operations across the sub-continent and overseas.”

The third largest consumer of oil and petroleum products after the United States and China and the fourth largest Liquefied Natural Gas (LNG) importer after Japan, South Korea and China, India is also home to second biggest oil refinery in Asia.

Indian oil and gas companies generate billions of dollars in revenue and have established themselves among some of the biggest and most important supermajors in the world.

The country currently imports more than 80 percent of the oil it needs for industrial and household use, with demand expected to grow at a Compound Annual Growth Rate (CAGR) of 3.6 per cent to 458 Million Tonnes of Oil Equivalent (MTOE) by 2040.

Mr. Dighe added: “This licensing round represents a great opportunity for Indian oil and gas companies to expand their portfolios into one of the most stable countries in the Middle East. Ras Al Khaimah and the UAE more generally, has seen significant investment from Indian companies, and Indian oil and gas companies that take part in the licensing round will discover a business environment that is both modern and investor-friendly.”

Launched in April, the licensing round has been attracting some of the world’s most successful oil and gas companies.

Once their interest has been expressed, Indian firms will be able to access the results of RAK Gas’s latest broadband 3D seismic analysis covering 2,200sqkm and as well as legacy onshore seismic data. This data is available for viewing by appointment at data rooms in RAK and London.

Another boost to Indian companies interested in oil and gas concessions in RAK is the easy access to an extensive network of existing petroleum infrastructure, a new attractive production sharing agreement governing the petroleum rights, and security of purchase of produced gas. Indian companies will also be able to export their oil production to India or other international markets.

RAKPA is managing the licensing round in accordance with the directives of His Highness Sheikh Saud bin Saqr Al Qasimi, Member of the Supreme Council and Ruler of Ras Al Khaimah.

|By Arabian Post Staff| Ras Al Khaimah Petroleum

|By Allan Leinwand|

According to a recent research report from PwC, Artificial Intelligence (AI) is expected to account for approximately 13.6% of the United Arab Emirates’ GDP in 2030. However, AI is seen by many as being either a hero or a villain. On one hand, AI is currently driving nearly every CIO’s agenda because it intelligently automates work processes, making it possible to do things that have never been done before. But on the other, many workers are scared of the rise of AI as they believe it is rising from humble beginnings to become a villain that will steal their jobs.

The truth is that some jobs will be lost, but many more will be created. It is important to understand that fundamentally, AI is not strong at creative, interpersonal or physical work. It will be used for “decision support, not decision making.” So lets debunk a few myths.

Reduce and simplify

As workers, we want to use automation to get our jobs done. AI will free us from having to psend long hours analyzing data and invest that time in achieving a better work-life balance.

Information technology, manufacturing, financial services and human resources will all see significant improvement and productivity gains because of AI. These industries have many repetitive tasks that can be easily automated, helping workers become more productive. For example, AI can streamline the onboarding process of a new employee. It can alert HR when background checks are completed, and aid them with the creation of benefits packages and employment contracts. It can help IT order and provision new equipment. Similarly, it can help the employee complete and send tax forms and direct deposit information to finance.

The Mundane

Workers want to move to more meaningful roles. In fact, according to the Society of Human Resource Professionals, workers, particularly Millennials, want to “create outcomes within meaningful projects and may become impatient with mundane tasks.” AI can automate the more mundane tasks allowing for new jobs to be created that are more fulfilling, strategic and meaningful. AI can help workers be more productive and efficient at their jobs, while learning new skills. In addition, AI can help workers become better organized, reducing stressors, improving productivity and overall job satisfaction.

Financial compliance is a great example of this. Until recently, the creation of expense reports and review of submitted expenses was a very manual, mundane process requiring hours and hours of review. In the cases of expense report review, only a sample of expense reports could be reviewed in order to hopefully identify some patterns of fraud in submissions. Now, not only can AI generate the invoices, but it can sort through the hundreds of expense reports, invoices and other transactions and identify potential areas of fraud, waste and mistakes by employees, vendors and others for humans to further investigate, saving their companies billions of dollars each year.

Customer satisfaction

The idea behind AI is to create more satisfied customers. Because workers can focus more on the interpersonal and creative parts of their jobs rather than the more mundane, they will treat customers better. In customer support cases, this will be done by employing AI to identify and provide a solution for the issue and utilizing a human who can react to nuances for interpersonal communications. Customers will develop loyalty because their needs are met and issues are resolved quicker, more efficiently and with a personal touch.

Let me give you an example. Years ago, many companies implemented phone trees to help route support calls more efficiently. All of us have been frustrated to get to the end of the menu realizing that we must press “star” in order to go back to the previous menu in order to talk to the right person. While this is automated support, it didn’t employ a combination of people and AI to do so. Rather than having to press the right button to move forward, imagine answering a few questions at the beginning of the call describing what the issue is or what you want to accomplish, and immediately being routed to the correct person (yes, person) who will help you or to the right menu telling you store hours. This will speed up support, improve loyalty and create better satisfaction for customers.


One of the biggest benefits of AI is the convenience to customers. AI allows nearly every aspect of business to occur faster, from identifying and fixing support issues so that workers don’t have to drive into the office on weekends to fix a server, to providing more accessibility to information, services and more.

As an example, there seem to be ATMs on nearly every corner and more bank branch locations than ever before. However, bank teller jobs have not been eliminated because of the rise of ATM machines. Yes, there may be less tellers in general, but their jobs are more valuable to customers and their employers. When one walks into a branch at a bank, there are dozens of workers providing better value-added services with shorter lines helping customers to be more satisfied with the convenient service provided. More than likely the work these employees do have higher margins, enabling them to make more money for both themselves and their local branches.

In summary, while AI might result in loss of certain jobs, it is more likely that the amount of work each worker will need to complete will be reduced and simplified rather than eliminated. Employees will feel more satisfaction in what they do because they can focus less on the mundane and more on the strategic. Customer satisfaction will increase because customers will have more human interactions, faster, with people who know how to resolve issues they have. In addition, customers will have more convenience than ever before.

(Writer is  CTO, ServiceNow )

|By Allan Leinwand|According to a recent research

By James M. Dorsey

The failure of Western allies to rally around Canada in its dispute with Saudi Arabia risks luring the kingdom into a false belief that economic sanctions will shield it from, if not reverse mounting criticism of its human rights record and conduct of the war in Yemen. It also risks convincing Saudi Crown Prince Mohammed bin Salman that acting with impunity will not impinge on his efforts to attract badly needed foreign investment.

In a sign of the times, Canada was this week not the only country to take a critical approach towards Saudi Arabia. Weeks after announcing the withdrawal of Malaysian troops from the 41-nation, Saudi-sponsored Islamic Military Counter Terrorism Coalition (IMCTC), Malaysian defense minister Mohamad Sabu ordered the immediate closure of the Saudi-backed King Salman Centre for International Peace (KSCIP).

The Saudi-funded centre was established during a visit to Malaysia last year by King Salman to project the kingdom as a leader in the fight against political violence and the promotion of peace. The establishment of the centre constituted a shift in Saudi Arabia’s soft power strategy that for decades was premised on generous global funding of ultra-conservative strands of Sunni Muslim Islam.

The centre would have also helped extend Saudi influence in Southeast Asia by bringing together Islamic scholars and intelligence agencies in an effort to counter extremist interpretations of Islam in cooperation with the Saudi-funded Islamic Science University of Malaysia, and the Muslim World League, a Saudi governmental non-governmental organization that long served as a vehicle for global propagation of ultra-conservatism.

The Saudi-Canadian spat erupted after Canada’s ambassador to the kingdom, Dennis Horak, called on Saudi Arabia to release detained women activists, including Samar Badawi, the sister-in-law of a recently naturalized Canadian citizen, Ensaf Haidar. Ms. Haidar is married to Ms. Badawi’s brother, Raif Badawi, who was arrested in 2012 and sentenced to ten years in prison and 1,000 lashes for promoting freedom of expression and women’s rights.

The spat follows similar incidents with Sweden in 2015 and Germany in November of last year and is not dissimilar to approaches adopted by other autocracies like China which has responded similarly on issues such as Taiwan, the South China Sea and the deployment of a US anti-missile system on the Korean peninsula.

Saudi Arabia withdrew its ambassador to Sweden after Swedish foreign minister Margot Wallström criticized the kingdom’s human rights record, including the sentencing and flogging of Mr. Badawi, and cancelled an arms agreement.

Similarly, Saudi Arabia recalled its ambassador in response to German criticism of the kingdom’s attempt to interfere in Lebanon’s internal affairs by putting Lebanese prime minister Saad Hariri under house arrest and forcing him to resign. The Saudi attempt backfired, and Mr. Hariri later withdrew his resignation.

In an indication that Saudi Arabia’s intimidation tactics may be boomeranging, Germany in January said it was “immediately” stopping approving arms exports to anyone participating in the war in Yemen, including Saudi Arabia.

The Hariri incident as well as Saudi lobbying against US President Barack Obama’s nuclear deal with Iran, President Donald J. Trump’s decision to move the American Embassy in Israel to Jerusalem, and what veteran Middle East journalist Brian Whitaker described as “hurling abuse at Qatar” puts Saudi complaints about interference in its internal affairs on thin ice.

In an editorial, The New York Times noted that the Saudi measures against Canada were “the kind of move that, in the past, would have immediately elicited a firm, unified opposition from the West. So far, there’s hardly been even a whimper of protest.”

The paper went on to say that “it’s not unusual for countries to balk at external criticism. But this Saudi retribution is unnecessarily aggressive and clearly intended to intimidate critics into silence… The Saudis claim that the Canadian statement is ‘an overt and blatant interference’ in its internal affairs, but that argument is specious… Under Prince Mohammed, the Saudis have…not been shy about speaking out about, or directly intervening in, the affairs of other countries, including Yemen, Bahrain and Qatar.”

In effect, the Saudi attempt to bully governments into refraining from criticism constitutes an attempt to curtail the sovereignty of others by dictating to them what they can and cannot say.

To the kingdom’s detriment, it also blows incidents out of proportion that otherwise would have likely gone unnoticed. Few would have taken note of Mr. Horak’s comment on Twitter had Saudi Arabia not put a glaring spotlight on them.

As a result, Saudi Arabia’s harsh Saudi response to the Canadian ambassador’s remarks, like earlier arbitrary arrests in the last year of hundreds of activists, religious figures, and prominent businessmen and senior members of the ruling Al Saud family on a host of charges ranging from treason to corruption and apostasy, threatens to further undermine investor confidence in the kingdom’s adherence to the rule of law.

The Saudi assertion that Canada had interfered in its internal affairs ignores the kingdom’s legal obligations as a signatory to various international human rights treaties that override national sovereignty as well as its role in the United Nations Human Rights Council that operates on the principle of governments monitoring and criticizing each other’s human rights record.

Saudi journalist Jamal Khashoggi, who last year went into voluntary exile in the United States despite being critically supportive of Prince Mohammed’s social and economic reforms and having close, long-standing ties to the Al Saud family, warned that Saudi Arabia was in effect cutting off its nose to spite itself.

“Saudi Arabia simply cannot afford to alienate any other sections of the global community in the midst of its unpopular military engagement in Yemen… Most importantly, Saudi Arabia’s economic transformation requires more friends than enemies. For MBS to achieve the economic and transformative vision that he espoused on his foreign tour, he needs to use ways and means that investors are accustomed to. If business executives fear a backlash over any possible criticism regarding their investment, the new vision of Saudi Arabia would be in serious jeopardy,” Mr. Khashoggi said referring to Prince Mohammed by his initials.

By James M. DorseyThe failure of Western allies to

DP World today announces the signing of the acquisition of 100% of the Unifeeder Group for €660 million from Nordic Capital Fund VIII and certain minority shareholders. Based in Aarhus (Denmark), Unifeeder operates the largest and most densely connected common user container feeder and an important and growing shortsea network in Europe, serving both deep-sea container hubs and the intra-Europe container freight market. The Group reported revenue of €510 million in 2017 and EBIT margins in line with other asset-light logistics operators. The acquisition is subject to regulatory approvals and expected to be earnings accretive in the first full year after completion. It will be financed from existing balance sheet resources and is expected to close in 4Q 2018.

The acquisition of Unifeeder will further enhance DP World’s presence in the global supply chain and broaden our product offering to our customers – the shipping lines and cargo owners – with a view to ultimately reduce inefficiencies and improve the competitiveness of global trade. The current operations of Unifeeder are complementary to DP World’s existing business and provides future growth opportunities.

Unifeeder, founded in 1977, is an integrated logistics company with the largest and best-connected feeder and growing shortsea network in Northern Europe with connectivity to approximately 100 ports. The company provides efficient and sustainable transport solutions for international container shipping lines between international and regional ports and shortsea services to cargo owners with fully multimodal door-to-door solutions, combining seaborne transportation with road and/or rail. The business is cash generative and operates on a highly flexible cost base.

DP World today announces the signing of

|By John Hardy|

Just ahead of the US jobs data on Friday, the People’s Bank of China hiked reserve requirements on CNY forwards (for onshore institutions) a move clearly aimed at stemming the one-way CNY depreciation ahead of the 7.00 level in USDCNY and as the CFETS-defined RMB basket reached the bottom of its range from a year ago.

The requirements went into effect today and haven’t triggered additional volatility beyond the sharp correction from new highs on Friday. Given this move, the focus on the 7.00 level takes on added importance as the market gauges to what degree China is mobilising the CNY in its trade spat with the US after announcing $60 billion of tariffs on US products. That move is guaranteed to elicit the next pointed response from President Trump whipping up populist sentiment on the campaign trail for Republican candidates in the upcoming midterm elections.

Note that China reports its FX reserves for July overnight and as we indicated on Friday, there is a very different spin on the situation depending on whether those reserves rose (doubtful, but if so, a strong signal of CNY weakening intent), stayed more or less the same (yawn), or shrank more than expected (a sign of capital flight and China losing control of the situation at some level).

The US data Friday saw a surprising turn of events. Payrolls and earnings data were indifferent and in-line, but the headline grabber (or at least what should have been the headline grabber as we are surprised how little the market reacted) was the July ISM Non-manufacturing survey dipping sharply to 55.7 vs. 58+ expected and versus  59.1 in June.

This is one of the worst month-to-month drops in the survey’s history, though we have seen mysterious dips before that were one-off affairs – it will take another monthly print for a sense that a trend is developing as well as other data that bolsters evidence that, as the growth pessimists claim, the US consumer is “tapped out”.

The most noted driver in G10 FX coming into this week is the weak euro, most likely on the increasing nervousness as Italy’s budget talks are under way. Italy’s leaders met last Thursday and the finance minister Tria made promising noises on obeying the EU’s maximum 3% deficit guideline, while Lega leader Salvini is loudly promising flat tax and basic income measures that will make it impossible to come anywhere near that limit. A showdown inevitably looms and traders are justifiably nervous. Bloomberg reports that Salvini claimed that the government will block “speculative attempts to influence growth trends” without specifying how.

In France, May’s meeting with Macron garnered no fresh sterling volatility or takeaways. Prominent Tory politician Liam Fox claimed that the risk of a no-deal Brexit are now 60-40 owing to the EU’s intransigence.

(Writer is Head of FX Strategy, Saxo Bank)

|By John Hardy| Just ahead of the US jobs

By James M. Dorsey

Message to Abu Dhabi, Riyadh and Tel Aviv: Not to worry, US President Donald J. Trump has no intention of meeting his Iranian counterpart, Hassan Rouhani, unconditionally.

On the contrary, Mr. Trump’s surprise announcement that he is willing to talk to Mr. Rouhani is likely part of a plan formulated almost a year before he returned to government service by his national security advisor John R. Bolton.

The announcement took many by surprise and threatened to reinforce the impression, even among America’s closest friends in the Middle East, that Mr. Trump was a supportive but unpredictable and unreliable ally.

His offer to talk to Mr. Rouhani appeared to put in doubt his withdrawal in May from the 2015 international agreement that curbed Iran’s nuclear programme and re-imposition of harsh economic sanctions aimed at destabilizing, if not toppling Iran’s government.

Mr. Bolton’s plan suggests otherwise.

He published his plan, drafted at the request of Mr. Trump’s then strategic advisor, Steve Bannon, in August of last year after he had lost hope of presenting it to the president in person.

The plan meticulously lays out the arguments Mr. Trump employed to justify the withdrawal from the nuclear agreement and steps the United States should take to garner international support for the sanctions regime.

“Iran is not likely to seek further negotiations once the JCPOA is abrogated, but the Administration may wish to consider rhetorically leaving that possibility open in order to demonstrate Iran’s actual underlying intention to develop deliverable nuclear weapons, an intention that has never flagged,” the plan said. JCPOA is the acronym for the nuclear accord’s official designation, the Joint Comprehensive Plan of Action.

Mr. Trump’s surprise announcement hardly proves the allegation that Iran intends to develop a military nuclear capability, but it does constitute an attempt to gain the moral high ground and weaken European, Russian and Chinese support for the agreement by demonstrating that Iran is recalcitrant and unwilling to come to the table.

The president’s offer puts Iran in a bind. Refusal to talk serves Mr. Trump’s purpose. An agreement to engage would have increased domestic hardline pressure on the Iranian president and involved him in discussions that given US policy had little chance of success.

US Secretary of State Mike Pompeo and Rouhani advisor Hamid Aboutalebi said as much in separate statements in the wake of Mr. Trump’s offer.

“If the Iranians demonstrate a commitment to make fundamental changes in how they treat their own people, reduce their malign behaviour, can agree that it’s worthwhile to enter in a nuclear agreement that actually prevents proliferation, then the president said he’s prepared to sit down and have a conversation with him,” Mr. Pompeo clarified.

Mr. Aboutalebi suggested that Mr. Rouhani would be willing to meet Mr. Trump if he demonstrated “respect for the great nation of Iran,” returned to the nuclear deal, and reduced his hostilitytowards the Islamic republic.

Mr Aboutalebi was probably referring not only to Mr. Trump’s long-standing anti-Iranian bluster as well as his withdrawal from the agreement and re-imposition of sanctions, but also to Mr. Bolton’s plan that appears to embody the guidelines of the president’s policy.

“With Israel and selected others, we will discuss military options. With others in the Gulf region, we can also discuss means to address their concerns from Iran’s menacing behaviour,” the plan suggests.

Few believe that either the United States or Iran wants a direct military confrontation.

Mr. Bolton as well as other associates of Mr. Trump have however been unequivocal in their calls for regime change in Tehran and their support for demands for the violent overthrow of the Iranian government by an Iranian exile group that is well-connected with Western governments and political elites but has little apparent support in Iran.

So has Saudi Prince Turki al-Faisal, the former head of the kingdom’s intelligence service and past ambassador to Britain and the United States, who is believed to often echo views that Crown Prince Mohammed bin Salman prefers not to voice himself.

Mr. Bolton’s plan contains building blocks for attempts to destabilize Iran not only by squeezing it economically but also by spurring insurgencies among the country’s ethnic minorities.

The plan envisions official US support “for the democratic Iranian opposition,” “Kurdish national aspirations in Iran, Iraq and Syria,” and assistance for Baloch in the Pakistani province of Balochistan and Iran’s neighbouring Sistan and Balochistan province as well as Iranian Arabs in the oil-rich Iranian province of Khuzestan. It also suggests expedited delivery of bunker-buster bombs to US allies.

Mustafa Hijri, head of the Kurdistan Democratic Party of Iran (KDPI), met last month during a visit to Washington at the invitation of the Trump administration with Steven Fagin, the then head of the State Department’s Office of Iranian Affairs, who has since been appointed counsel general in Erbil in Iraqi Kurdistan.

The KDPI has recently stepped up its attacks in Iranian Kurdistan, killing nine people weeks before Mr. Hijri’s meeting with Mr. Fagin. Other Kurdish groups have reported similar attacks. Several Iranian Kurdish groups are discussing ways to coordinate efforts to confront the Iranian regime.

A Saudi think tank, believed to be backed by Prince Mohammed, called last year in a study for Saudi support for a low-level Baloch insurgency in Iran.

Pakistani militants have claimed that Saudi Arabia has stepped up funding of militant madrassas or religious seminaries in Balochistan that allegedly serve as havens for anti-Iranian fighters.

Said Iran scholar Ahmad Majidyar: “Iran’s south-eastern and north-western regions – home to marginalized ethnic and religious minorities – have seen an uptick in violence by separatist and militant groups… Sistan and Baluchestan can be a breeding ground for local militant and separatist movements as well regional and international terrorist groups.”

By James M. DorseyMessage to Abu Dhabi,

|By Arabian Post Staff|An Arbitral Tribunal of the London Court of International Arbitration  confirmed the illegitimacy of the Government of Djibouti’s action of seizing control of the Doraleh Container Terminal from DP World. The LCIA Tribunal has ruled that Doraleh Container Terminal’s Concession Agreement “remains valid and binding notwithstanding Law 202 and the 2018 Decrees”. Law 202 and the referenced decrees were devices enacted by Djibouti to seek to evade Djibouti’s contractual obligations, and these have been found to be ineffective in law. DP World will now reflect on the ruling and review its options.

On 22 February 2018, the Government illegally seized control of the Doraleh Container Terminal from DP World, who designed, built and operated the terminal following a concession awarded in 2006. The Terminal is the largest employer and biggest source of revenue in the country, has operated at a profit every year since it opened, and has been found to have been a “great success” for Djibouti under DP World’s management.

The illegal seizure of the Terminal followed the Government’s campaign to force DP World to renegotiate the terms of the concession. The Concession terms were found to be “fair and reasonable” in 2017 by another LCIA tribunal led by Lord Leonard Hoffmann, Peter Leaver QC and Sir Richard Aikens, all highly respected English jurists.

Following the enactment of Law No. 202 in Djibouti, which purports to empower the Government to terminate its infrastructure agreements, DP World was compelled to commence a new arbitration in February 2018 seeking a declaration that the Concession Agreement was valid and binding on the Government. The Tribunal, comprised of Professor Zachary Douglas QC, has definitively confirmed that the Concession Agreement, which is governed by English law, remains binding and in force notwithstanding the Government’s purported termination of it under Law 202.

DP World is a leading enabler of global trade and an integral part of the supply chain. It operates multiple yet related businesses – from marine and inland terminals, maritime services, logistics and ancillary services to technology-driven trade solutions.

With a portfolio of 78 operating marine and inland terminals supported by over 50 related businesses in over 40 countries across six continents with a significant presence in both high-growth and mature markets, the company enjoys strong relationships with governments around the world, working in partnership to strengthen economies through investment in infrastructure and the implementation of smart trade solutions.

|By Arabian Post Staff|An Arbitral Tribunal of

|By Arabian Post Staff|  Global DP World Limited handled 35.6 million TEU (twenty-foot equivalent units) across its global portfolio of container terminals in the first half of 2018, with gross container volumes growing by 4.8% year-on-year on a reported basis and 6.0% on a like-for-like basis.

The first half of 2018 continues to see an upswing in global trade and all three DP World regions delivered growth, particularly our terminals in Europe and Australia. The UAE handled 7.7 million TEU in 1H2018, remaining broadly flat (+0.2%) year-on-year.

At a consolidated level, our terminals handled 18.6 million TEU during the first half of 2018, a 4.0% improvement in performance on a reported basis and up 4.5% year-on-year on a like-for-like basis.

Group Chairman and Chief Executive Officer, Sultan Ahmed Bin Sulayem, described the result as encouraging performance in the first half of 2018 with all regions continuing to deliver growth. However, as expected there has been a deceleration in the growth rate in 2Q2018 due the tougher year-on-year comparables, where 2Q2017 grew 10.7% year-on-year driven by market share gains from the new shipping alliances, he said.

“Nevertheless, the robust performance across all regions continues to be an affirmation of our strategy to deploy relevant capacity in key markets and operate a diversified portfolio. We are pleased to see our terminals in Europe and Australia continue to deliver growth and still expect to see increased contributions from our new investments in the second half of the year.

“Whilst geopolitical headwinds and recent changes in trade policies continue to pose uncertainty to the container market, first half volume performance demonstrates that our portfolio is well positioned to deliver growth. We continue to focus on delivering operational excellence and disciplined investment to remain the port operator of choice as well as strengthening our product offering to play a wider role in the global supply chain as a trade enabler,” he said.

|By Arabian Post Staff|  Global DP World Limited

By James M. Dorsey

China appears to be shifting gears in its multi-billion dollar Belt and Road initiative. Long projected as driven by economics and the benefit of infrastructure linkages, China appears to be increasingly adding a security component to the initiative against the backdrop of President Xi Jinping positioning of his country as a superpower rather than a developing nation.

The emergence of a security component is not only highlighted by the establishment last year of China’s first foreign military base in Djibouti, but also in its stepped-up security cooperation with Afghanistan and other Central Asian nations that border on its north-western province of Xinjiang.

China’s security focus is driven by concerns about national and religious aspirations in Xinjiang of Uyghurs, an ethnic Turkic Muslim group that has long looked westward toward Central Asia and Turkey rather than eastward towards Beijing.

China has sought to radically alter Uyghur identity by introducing a 21st century repressive surveillance state that invades the privacy of Uyghurs and sends tens, if not hundreds of thousands to re-education camps where indoctrination is designed to install Chinese rather than Uyghur nationalist or Islamic values.

China’s security focus on Afghanistan and Central Asia is intended to counter Uyghur militants who have moved to the region after the defeats suffered by the Islamic State in Syria and Iraq and the group’s establishment of a base in Afghanistan and the Pakistani province of Balochistan.

It also aims, together with efforts to cut off contact between Uyghurs and their Central Asian brethren, to fend off the influence of non-violent Uyghur Diaspora groups who have been resident in Central Asia for decades.

Uyghur fighters speaking in videos distributed by the Islamic State have vowed to return home to “plant their flag in China.” One fighter, addressing evil Chinese Communist infidel lackeys,” threatened that “in retaliation for the tears that flow from the eyes of the oppressed, we will make your blood flow in rivers, by the will of God.”

The Islamic State threats and migration of East Turkestan Islamic Movement (ETIM) fighters from Syria and Iraq to the Afghan province of Badakhshan raises in China’s mind the spectre of a return to the 1990s, a period of protests and attacks in Xinjiang, when the Taliban government allowed Uyghur militants to operate from its territory.

Some analysts argue nonetheless that China is more worried that Uyghur militants operating from Afghanistan may pose a greater threat to the China Pakistan Economic Corridor (CPEC), at US$50 billion plus a Belt and Road crown jewel and its single largest investment, than to Xinjiang.

China also fears that the militants could expand from Afghanistan into Central Asia and particularly Tajikistan. The Afghan-Tajik border is 1,357 kilometres long, two thirds of which is in Badakhshan, while the Tajik-Chinese borders runs for 414 kilometres compared to only 76 kilometres along the Afghan-Chinese frontier.

The analysts note that Chinese scholars participating in March in a European Council on Foreign Relations (ECFR) conference doubted whether militants would be able to infiltrate Xinjiang from Afghanistan.

Militants have repeatedly targeted Chinese assets and personnel in Pakistan. At least one Uyghur was involved in a 2016 suicide bombing of the Chinese embassy in the Kyrgyz capital of Bishkekwhile a Uyghur gunman killed 39 people in an attack on an Istanbul nightclub in January of last year.

Chinese security cooperation has so far concentrated on joint counter-terrorism operations with Afghanistan and Tajikistan. It first became apparent with reports that Chinese troops were joining their Afghan counterparts in patrolling the Wakhan Corridor, a tiny strip of Afghanistan bordering the on Xinjiang.

China earlier pledged US$ 70 million in aid for Afghan counter-terrorism efforts. The Chinese scholars participating in the ECFR conference said Chinese border control assistance extended beyond the Wakhan Corridor to the Badakshan-Tajik border.

China agreed two years ago to fund and build 11 military outposts and a training facility to beef up Tajikistan’s defense capabilities along its border with Afghanistan that hosts a large part of the main highway connecting Tajikistan’s most populous regions to China.

China has since stepped up the sharing of intelligence with Tajikistan on issues related to political violence, religious extremism and drug trafficking.

The Chinese defense ministry announced in April that China, Pakistan, Afghanistan and Tajikistan would perform joint counterterrorism and training and exercises that focus on real combat experiences.

China and Afghanistan agreed last year to lay a cross-border fibre-optic cable that like in the case of Pakistan could pave the way to export China’s model of a surveillance state to Afghanistan.

“China will strengthen military exchanges and anti-terrorism cooperation with Afghanistan to ensure security between the two nations and the region,” said Xu Qiliang, deputy chairman of China’s Central Military Commission.

Mr. Xu was speaking in December on the sidelines of a meeting of the Chinese, Afghan and Pakistani foreign ministers designed to ease tensions between Kabul and Islamabad and integrate Afghanistan into CPEC. Pakistan has so far resisted sharing CPEC glory with Afghanistan.

China hopes that a resolution of Pakistani-Afghan disputes would pave the road to a Chinese mediated resolution of the Afghan war that would allow the Taliban to share power.

On a visit to Xinjiang in January, Chinese defense minister Chang Wanquan vowed to “firmly maintain Xinjiang’s stability” and “build an iron wall to enhance border defense.” President Xi Jinping reiterated the need for a “great wall of iron” in March.

Pan Zhiping, head of the Central Asian Studies Institute at the Xinjiang Academy of Social Science, argued that “China’s approach is always to stabilise bordering countries.  If the CPEC links up to Afghanistan, it can ultimately be a gateway to Iran and the Indian Ocean.”  

Afghanistan and Central Asia, regions that most immediately impact the security of Xinjiang, are likely to be first steps in what Chinese Foreign Minister Wang Yi described as China’s intent of “resolving hotspot issues with Chinese characteristics.”

Greater emphasis on the Belt and Road’s security component would also be in line with Mr. Xi’s assertion last month that China was ready to “lead in the reform of global governance.”

China scholar Elizabeth Economy said Mr. Xi’s “ambition is most evident close to home.” Ms. Economy was referring to policy in the South China Sea, Hong Kong and with regard to Taiwan. It is becoming equally evident in China’s other near abroad: Afghanistan and Central Asia.

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and co-host of the New Books in Middle Eastern Studies podcast. James is the author of The Turbulent World of Middle East Soccer blog, a book with the same title as well as Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario,   Shifting Sands, Essays on Sports and Politics in the Middle East and North Africa, and the forthcoming China and the Middle East: Venturing into the Maelstrom

By James M. DorseyChina appears to be

|By Arabian Post Staff| After a landmark ruling in Germany last week that social media accounts can be inherited by a person’s beneficiaries, DIFC has announced that those who register inheritance Wills with the authority can include such assets in their Wills. 

Lawyers and lawmakers around the globe have been grappling with the legal status of online assets, not just personal data on sites such as Facebook or YouTube, but also valuable resources such as holdings in cryptocurrencies.

To ensure that a person’s wishes are fully respected, the head of the DIFC Wills Service Centre is urging registrants to include clear instructions in their registered Wills to ensure that their virtual estates are disposed of in the same way as their tangible assets, such as houses and bank accounts. For Europeans who have Wills registered with the DIFC Courts and who have elected German law to govern their Will, the ruling has immediate and direct relevance.

 Sean Hird, Director of the DIFC Wills Service Centre, said: “The law on the disposal of online assets is changing fast with the latest ruling out of Germany showing the direction that lawmakers are now taking. 

 “Rather than leaving a Will silent on such matters, and hope the law will evolve in a way consistent with your wishes, it makes sense to leave  clear instructions in your Will on who should and shouldn’t have access and ownership to your accounts when you pass away. 

 “In a survey we carried out last year, we asked UAE residents if they would want to protect and pass on their digital footprint and social media legacy, an overwhelming majority (89%) said they would want their social media accounts to be deactivated.  The surest way of achieving this is through express provisions in a registered Will.  

 “For those who do wish to pass on their accounts, they should consider the practical steps that they can do while still alive to ensure that their chosen beneficiary can access the accounts eg by allowing passwords or other information to be stored in a safety deposit box, or in a written document held by a lawyer.

 In this recent German case, the Federal Court ruled that heirs have the right to access the Facebook accounts of deceased relatives, saying a social media account can be inherited in the same way as letters.  A principle that commentators feel would apply to other social media accounts. 

 The Karlsruhe court decided that the mother of a 15-year-old girl who died after being hit by a train could access her Facebook account to discover if she had been contemplating suicide. The social media giant had opposed the case on privacy grounds.

 Sean Hird added, “Although the law is evolving in a clear direction, there nevertheless remains this underlying tension between respecting the privacy of an account holder and the rights of relatives and legatees.”

 “We advise all those registering a Will at the DIFC Courts to think carefully about what they would want to happen to their social media accounts and make clear provision for this in their Will”.

 The ability to register a Will at the DIFC Courts is available to both UAE residents and non-residents allowing them to apply their chosen home country law to govern how their personal assets will be distributed after their death.

 Without a registered Will, assets located in Dubai and RAK will be divided among relatives according to a pre-determined formula, following Islamic sharia principles.

|By Arabian Post Staff| After a landmark

|By Arabian Posst Staff| Etihad Aviation Group (EAG) CEO Tony Douglas and Jiangsu Provincial Overseas Cooperation and Investment Company Limited (JOCIC) Chairman Luo Hua inked a Memorandum of Understanding (MoU) for a strategic partnership during Chinese President Xi Jinping’s three-day state visit to the United Arab Emirates.

The two sides plan to cooperate on a wide range of areas in order to better support the development of the China-UAE Industrial Capacity Cooperation Demonstration Park (China-UAE Industrial Park) in Khalifa Port, Abu Dhabi, including air logistics, procurement, mutual promotion on respective premises and digital channels.

The MoU envisages that EAG will provide the companies investing in the China-UAE Industrial Park with preferred air transportation and cargo rates on the routes and services between China and other cities on Etihad Airways entire network. JOCIC and the companies of the China-UAE Industrial Park also designate Etihad Airways as their preferred airline.

Under the agreement, EAG and JOCIC, the management company of the China-UAE Industrial Park, will jointly explore marketing opportunities through appropriate promotional channels in China and the UAE to promote the China-UAE Industrial Park, Abu Dhabi’s friendly investment environment for Chinese companies as well as Abu Dhabi’s unique geographic advantages and Etihad Airways’ convenient network, which supports China’s Belt and Road Initiative.

In addition, EAG will enjoy special rates on the products produced and manufactured by Chinese companies at the China-UAE Industrial Park.

Tony Douglas, Etihad Aviation Group Chief Executive Officer, said: “China is a strategically important market for Etihad. We feel extremely honored to forge such a strategic partnership with JOCIC so as to serve the development of the China-UAE Industrial Capacity Cooperation Demonstration Park, and better foster the Chinese companies within the Industrial Park.”

“The partnership will demonstrate the long-standing commitment of Etihad, the national carrier of the United Arab Emirates, to acting as a bridge for economic and cultural exchanges between the UAE and China, as well as to strengthen the position of Abu Dhabi as an aviation hub to connect China with the economies along the Belt & Road Initiative by leveraging our strong global network,” Mr. Douglas continued. “It also exemplifies our pivotal role in the Abu Dhabi government’s plan to strengthen the infrastructure and transport sectors in Abu Dhabi, in line with the Abu Dhabi Economic Vision 2030.” “This is only the beginning. We look forward to making more contributions to the project,” Mr. Douglas added.

Luo Hua, Chairman of Jiangsu Provincial Overseas Cooperation and Investment Company, said: “The China-UAE Industrial Capacity Cooperation Demonstration Park is a major project under the Belt and Road Initiative. It represents an important consensus reached by the leadership of China and the UAE to strengthen international industrial capacity cooperation between the two countries.

“We look forward to working closely with Etihad Aviation Group by leveraging its diversification of business, convenient network and innovation advantages to drive the continued success of the China-UAE Demonstration Park,” added Chairman Luo.

Established in July 2017, with a 50-year agreement signed between Abu Dhabi Ports and JOCIC, the China-UAE Industrial Park has successfully achieved investment agreements with 16 Chinese companies, totaling US$1 billion in value. The Chinese companies investing in the Industrial Park come from various sectors, including new energy sources, aluminum processing, machinery manufacturing, trade and logistics, metallurgy, building materials, chemicals, packaging, and food and beverages.

In May 2018, Abu Dhabi Global Market (ADGM) also signed an MoU with JOCIC to establish a comprehensive financial service platform to better integrate financial resources to service the development of the China-UAE Industrial Capacity Cooperation Demonstration Park. The Industrial Park aims to become a major window and platform for China’s investment and trade cooperation with countries in the Middle East, Africa and Europe.

Etihad Airways currently operates daily flights between Abu Dhabi and China’s four main gateways — Beijing, Chengdu, Shanghai and Hong Kong.

|By Arabian Posst Staff| Etihad Aviation Group

By James M. Dorsey

This month’s inauguration of a fibreoptic cable linking Pakistan with China could prove to be a double-edged sword. Constructed by Chinese conglomerate Huawei Technologies Co., Ltd, the cable is likely to enhance both Pakistan’s information communication technology infrastructure as well as the influence of Chinese authoritarianism at a moment that basic freedoms in Pakistan are on the defensive.

The $44 million, 820-kilometre underground Pak-China Fibre Optic Cable links Rawalpindi with the Chinese border at Khunjerab Pass and is backed up by a 172-kilometre aerial cable. A second phase of the project is likely to connect to the port of Gwadar in Balochistan, a key node in China’s US$ 50 billion plus infrastructure-driven investment in the South Asian state, dubbed the China Pakistan Economic Corridor (CPEC).

The cable is expected to provide terrestrial links to Iran and Pakistan and serve as a conduit to the Middle East, Europe and Africa through hook ups with submarine cables.

The inauguration of the cable came days after China launched two satellites for Pakistan from the Jiuquan Space Center in Inner Mongolia, to provide remote sensing data for CPEC.

The satellites are expected to monitor natural resources, environmental protection, disaster management and emergency response, crop yield estimation, urban planning and provide CPEC-related remote sensing information.

The prominence of Pakistani military officers, including General Qamar Bajwa, Pakistan’s top military commander and Major General Amir Azeem Bajwa, the head of the Special Communications Organisation (SCO), at the inauguration underlined the cable’s strategic and potentially political importance.

Pakistan’s military sees the cable as a way of ensuring that the country’s in and outbound traffic does not traverse India. Major General Bajwa told lawmakers last year that the current “network which brings internet traffic into Pakistan through submarine cables has been developed by a consortium that has Indian companies either as partners or shareholders, which is a serious security concern.”

The key to the cable’s potential political significance lies buried in the Chinese-Pakistani vision that underlines CPEC against the backdrop of Chinese concern about the messiness of Pakistani politics and the People’s Republic’s support of what it sees as the behind-the-scenes stabilizing role of the country’s powerful military.

A leaked draft outline of the vision identified as risks to CPEC “Pakistani politics, such as competing parties, religion, tribes, terrorists, and Western intervention” as well as security. “The security situation is the worst in recent years,” the outline said.

The vision appears to suggest addressing security primarily through stepped up surveillance  based on the model of a 21st century Orwellian surveillance state in parts, if not all of China, rather than policies targeting root causes and appears to question the vibrancy of a system in which competition between parties and interest groups is the name of the game.

The draft linked the fibreoptic cable to the terrestrial distribution of broadcast media that would cooperate with their Chinese counterparts in the “dissemination of Chinese culture.” The plan described the backbone as a “cultural transmission carrier” that would serve to “further enhance mutual understanding between the two peoples and the traditional friendship between the two countries.”

Pakistan’s Ministry for Planning, Development, and Reform said at the time that the draft “delineates the aspirations of both parties” 

The cable’s facilitation of aspects of the Chinese surveillance state and soft power strategy occurs in a country in which feudal and patronage politics dominate the countryside and the military has sought to severely curb media coverage in the run-up to elections scheduled for July 25.

Democracy has become a terrifying business in the villages of Pakistan. Elections might change the federal and state governments, but the feudal and punitive power structures in the countryside don’t change. The feudal lords offer allegiance to the new ruler and continue to oppress the poor villagers,” said Ali Akbar Natiq, a scholar, poet and novelist who returns every two weeks to his home district of Okara in Punjab, in an article in The New York Times.

The media crackdown involves censorship of TV channels, newspapers and social media, including preventing the distribution of Dawn. An English-language newspaper, Dawn was established by Pakistan’s founder Mohammed Ali Jinnah before the 1947 partition of British India, as a way for Muslims to communicate with the colonial power.

Cable operators were advised to take Dawn’s TV channel off air, advertisers were warned to shy away from the paper while its journalists were harassed. Other journalists and media personalities have been kidnapped or detained by masked men believed to be linked to military intelligence.

Columnist and scholar S. Akbar Zaid said last month that he was advised by Dawn that the paper could no longer publish his column “because of censorship problems that they are facing with regard to the military and its agencies. They say that the threats are very serious,” Mr. Zaid said.

Daily Times journalist Marvi Sirmed reported that her home was burgled and ransacked last month. The intruders took her computers, smartphone, and her passport as well as those of members of her family but left valuables such as jewellery untouched.

Pakistan’s military has denied cracking down on the media although it conceded that it was monitoring social media.

Bloggers, including well-known journalist Gul Bukhari, are among those who have been detained and released in some cases only weeks later.

A guard in a detention centre where five bloggers were held last year for three weeks, alongside ultra-conservative militants, told his captives:, according to one of the detainees: “You are more dangerous than these terrorists. They kill 50 or 100 people in a single blast, you kill 600,000 people a day,” a reference to the 600,000 clicks on the bloggers’ Facebook page on peak days.

In an editorial published after months of harassment Dawn charged that “It appears that elements within or sections of the state do not believe they have a duty to uphold the Constitution and the freedoms it guarantees. Article 19 of the Constitution is explicit: ‘Every citizen shall have the right to freedom of speech and expression, and there shall be freedom of the press.’ The ‘reasonable restrictions’ that Article 19 permits are well understood by a free and responsible media and have been consistently interpreted by the superior judiciary.”

The paper went on to say that Dawn “considers itself accountable to its readers and fully submits itself to the law and Constitution. It welcomes dialogue with all state institutions. But it cannot be expected to abandon its commitment to practising free and fair journalism. Nor can Dawn accept its staff being exposed to threats of physical harm.”

At the bottom line, Pakistan’s new fibreoptic cable promises to significantly enhance the country’s connectivity. The risk is that visions of Chinese-Pakistani cooperation in the absence of proper democratic checks and balances threaten in Pakistan’s current political environment to undermine the conditions that would allow it to properly capitalize on what constitutes a strategic opportunity.

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and co-host of the New Books in Middle Eastern Studies podcast. James is the author of The Turbulent World of Middle East Soccer blog, a book with the same title as well as Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario,   Shifting Sands, Essays on Sports and Politics in the Middle East and North Africa, and the forthcoming China and the Middle East: Venturing into the Maelstrom

By James M. DorseyThis month’s inauguration of a

This 9A0-385 exam leads to the Adobe Experience Manager 6 Architect certification. It assesses the knowledge and skills of a candidate in helping clients realize the value in the Adobe solutions. This test is ideal for individuals who have current or previous experience working as Adobe Experience Manager Business Practitioners. Someone with this job title should be able to do the following:

  • Organize digital assets of guide developers on the integration needed to meet business objectives
  • Create business requirement documents that developers can use in the creation of an AEM website
  • Create web pages based on the components that developers have created
  • Use tagging to meet business requirements
  • Manage multiple micro-sites
  • Define use cases
  • Create segments
  • Operateversions
  • Use workflows

The 9A0-385 exam contains 50 questions that an applicanthas to complete within 95 minutes. The passing score for the test is set to 550 out of the possible 700. You can register for the exam at the PSI testing center.

The objectives of the test help you understand the tasks that will be measured in the actual exam. Here are the exam objectives of AEM certification test:

  • Understanding digital marketing concepts
  • Creating and operating a website with AEM
  • Working with web content and digital asset management tools

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It is not mandatory for you to complete training before you take the exam but it is advisable for you to complete it to have a better chance of its passing. Here are 4 top resources that you can usefor this Adobe exam:

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Tips for Passing the 9A0-385 Exam

There is no sure way for you to pass this exam or any other tests for that matter but with a proper preparation, you may succeed. Here are the tips for passing this Adobe certification exam:

  • Complete the training

When it comes to training, there is no shortcut. Although it is possible for you to sit for the exam without completing the training of the course, you may end up experiencing knowledge gaps when you take the test. This could be catastrophic as you may end up losing out on the passing score because of a concept that you would have learned during your training. The training stage is important because you get to understand what the course is all about at a pace that is easy for you to understand. This eventually helps you when you are studying on your own.

  • Review the objectives of the exam

The exam objectives will always help you know the topics to focus on when you are revising for the exam. When you come across different study materials, you will be able to sieve through their contents and concentrate on the material that is relevant to the test. This will save you the time that you would have otherwise wasted reading on areas that do not contribute to the total percentage of the exam. Develop a study plan that is aligned with the exam objectives and you will never go wrong. This is the best way to prepare for this certification test and have a greater chance of passing it.

  • Review all study materials

There are so many materials you can use to study for your exam. Some you get free online from while others you have to pay for to gain access. It may be tempting for you to get a book and settle for it as your sole study material but you will be limiting your scope of knowledge. There are preparation guides, videos, training sessions, and practice questions and answers that you can use to prepare for the exam. You need to check out every study resource for you to identify the one that works for you. Because they are not the same, you can find the one that captures your learning style out of all of them.

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This is an exam that heavily depends on your level of experience hence you need to use your experience to answer the questions in the exam. The questions are scenario based which means that you will be required to answer them in a manner that you would respond if you were in a professional setting. Your skills are your greatest weapon and rather than stressing so much on grasping the concepts taught in the training course, you should be focused on polishing your skills in order to ensure that they work for you and not against you during the exam.

  • Use practice exams and questions

The concept of practice makes perfect cannot be overemphasized but it remains the best way to prepare for your exam. The more questions you try to answer, the more you get used to the type of questions that you are likely to encounter in the exam. Practice tests help you familiarize yourself with the exam atmosphere and help you learn how to manage your time because they are timed in the same duration as the actual exam. You can find out how ready you are for the test and make any necessary adjustments in areas that you do not completely understand.


Passing this 9A0-385 exam will get you the certification which goes a long way in building your career. You therefore need to prepare for it in the best way possible if you hope to succeed. Since the candidates are already experienced professionals, this gives you an advantage because you are already familiar with industry standards. You are in a better position to succeed, so just go for it. Good luck!

This 9A0-385 exam leads to the Adobe

|By Arabian Post Staff|Hindustan Infralog Private Limited (HIPL), a joint venture between DP World and the National Investment and Infrastructure Fund (NIIF), announced closure of the transaction to acquire 90% stake in Continental Warehousing Corporation (Nhava Seva) Ltd.

CWCNSL’s founders, the Reddy family, will retain the remaining 10% shareholding and will remain involved in the business operations. It is the first investment of HIPL, the recently created investment vehicle between DP World and NIIF to invest up to US$ 3 billion in ports, logistics and related sectors.

CWCNSL was founded in 1997 and is a leading integrated multimodal logistics provider of Warehousing, Container Freight Stations (CFS), Inland Container Depots (ICD), Private Freight Terminals (PFT) and integrated logistics solutions. CWCNSL’s logistics network is spread across key strategic locations in India covering a total area of over 400 acres and providing over 660k TEU (twenty-foot equivalent units) capacity. In addition, CWCNSL’s wholly owned subsidiary Delex Cargo India Private Ltd provides door-to-door logistics solutions including freight forwarding, 3rd party logistics, express logistics and hub-and-spoke model of delivery across 54 locations in 40 cities.

In India, DP World has been operating container port terminals since 1997 and was instrumental in building the first Private-Public Partnership (PPP) project for the Government of India. DP World is currently present at six locations in India with over 6 million TEU of gross capacity and also operates container trains connecting ports to the hinterland.

|By Arabian Post Staff|Hindustan Infralog Private Limited

|By Arabian Post Staff| Noon, the Middle East’s homegrown digital marketplace, announced the launch of two entities in China, one on the mainland and the other in Hong Kong, kick starting noon’s Asia operations.

In China, noon aims to establish a trusted network of high-quality Chinese brand owners with unique offerings, to bring the best range of products to customers in the Middle East.

A dedicated noon team, with support from Chinese counterparts, has been working on the ground to meet directly with local brand owners and cultivate valuable business relationships, showcasing noon’s attentive and unique approach to digital commerce. To further grow local partnerships, noon will also be soon establishing a permanent office space in China.

Mohamed Alabbar, founder of noon said: “China’s booming e-commerce market has one of the most active marketplaces in the world. noon is fully embracing the opportunity to work closely with leading Chinese manufacturers to bring a high quality, value driven assortment to the region. We’re also looking to partner with top brand owners and marketplace platforms to help us curate a wider and more diverse assortment of products for our customers in the Middle East. As always, customer experience is at the core of all that we do.”

Noon has also been working with a leading financial services company that provides secure online money transfer and digital payment services, to guarantee efficient payment solutions to Chinese sellers and facilitate the process of doing business in the Middle Eastern market. Furthermore, noon is expanding its logistics capabilities in China and the region to ensure smooth and fast delivery of Chinese brands to Middle East customers.

As a customer-focused and Arabic-first e-commerce platform, noon brings a growing product assortment thanks to connections with the local, and global, retail community. noon presents a compelling alternative retail choice through its website or dedicated iOS and Android apps.


|By Arabian Post Staff| Noon, the Middle

By James M. Dorsey

Saudi Crown Prince Mohammed bin Salman could well dash expectations that he is gunning for a break with Sunni Muslim ultra-conservatism rather than a shaving off of the rough edges of Wahhabi ideology that has been woven into the kingdom’s fabric since its founding more than eighty years ago.

Prince Mohammed has fuelled expectations by fostering Islamic scholars who advocate a revision of Wahhabism as well as by lifting a ban on women’s driving and creating space for entertainment, including music, theatre, film, and, for conservatives, controversial sports events like wrestling.

The expectations were reinforced by the fact that King Salman and Prince Mohammed have called into question the degree to which the rule of the Al Sauds remains dependent on religious legitimization following the crown prince’s power grab that moved the kingdom from consensual family to two-man rule in which the monarch and his son’s legitimacy are anchored in their image as reformers.

To cement his power, Prince Mohammed has in the past year marginalized establishment religious scholars, detained critics and neutralized members of the elite by arresting relatives, prominent businessmen, and officials and stripping them of much of their assets.

In doing so, Prince Mohammed has subjugated the kingdom’s ultra-conservative religious leaders through a combination of intimidation, coercion and exploitation of religious dogma particular to a Saudi strain of ultra-conservatism that stipulates that Muslims should obey their ruler even if he is unjust. Islam “dictates that we should obey and hear the ruler,” Prince Mohammed said.

In an optimistic projection of Prince Mohammed’s changes, Saudi researcher Eman Alhussein argued that the crown prince’s embrace of more free-thinking scholars has encouraged the emergence of more “enlightened sheikhs,” allowed some ultra-conservatives to rethink their positions, enabled a greater diversity of opinion, and fundamentally altered the standing of members of the religious establishment.

“The conflicting and different opinions presented by these scholars helps demolish the aura of ‘holiness’ some of them enjoyed for years… The supposed holiness of religious scholars has elevated them beyond the point where they can be questioned or criticized. Ending this immunity will allow the population to regain trust in their own reasoning, refrain from being fully reliant on scholarly justifications, and bring scholars back to Earth,” Ms. Alhussein said.

The crown prince’s approach also involves a combination of rewriting the kingdom’s religious-political history rather than owning up to responsibility and suppression of religious and secular voices who link religious and social change to political reform.

Some Saudi scholars argue that the degree of change in the kingdom will depend on the range of opinion among religious scholars. They suggest that change will occur when scholars are divided and stall when they speak with one voice. The wide range of opinion among Islamic scholars coupled with Prince Mohammed’s autocratic approach would appear, according to the argument of these scholars, to largely give him a free hand. Reality, however, suggests there may be other limits.

“Prince Mohammed is unlikely to pull off a break with the Wahhabi religious establishment because the clerics have proved to be resilient and have displayed a great capacity to adapt to transitions and vagaries of power… The crown prince’s public denunciations of extremist ideas and promises to promote moderate Islam have been interpreted as a renewed desire to break with Wahhabism. A closer reading shows that Prince Mohammed primarily condemns the Muslim Brotherhood and jihadists and exonerates Wahhabism,” said Nabil Mouline, a historian of Saudi religious scholars and the monarchy.

Mr. Mouline went on to say that “the historical pact between the monarchy and the religious establishment has never been seriously challenged. It has been reinterpreted and redesigned during times of transition or crisis to better reflect changing power relations and enable partners to deal with challenges efficiently.”

Predicting that Wahhabism would likely remain a pillar of the kingdom in the medium term, Mr. Mouline cautioned that “any confrontation between the children of Saud and the heirs of Ibn Abd al-Wahhab will be destructive for both.”

Prince Mohammed has indeed in word and deed indicated that his reforms may not entail a clean break with Wahhabism and has been ambiguous about the degree of social change that he envisions.

He has yet to say a clear word about lifting Saudi Arabia’s system of male guardianship that gives male relatives control of women’s lives. Asked about guardianship, Prince Mohammed noted that “we want to move on it and figure out a way to treat this that doesn’t harm families and doesn’t harm the culture.”

Similarly, there is no indication that gender segregation in restaurants and other public places will be formally lifted any time soon. “Today, Saudi women still have not received their full rights. There are rights stipulated in Islam that they still don’t have. We have come a very long way and have a short way to go,” Prince Mohammed said.

Multiple incidents that illustrate contradictory attitudes in government policy as well as among the public suggest that liberalization and the restructuring of the elite’s relationship to Wahhabism could be a process that has only just begun. The incidents, moreover, suggest that Prince Mohammed’s top-down approach may rest on shaky ground.

Prince Mohammed last month sacked Ahmad al-Khatib, the head of the entertainment authority he had established after a controversial Russian circus performance in Riyadh, which included women wearing “indecent clothes,” sparked online protests.

Complaints of creeping immorality have in the last year returned the religious police, who have been barred by Prince Mohammed from making arrests or questioning people, to caution unrelated men and women from mixing.

The police, officially known as the Commission for the Promotion of Virtue and the Prevention of Vice, said in a statement in 2017 that it was starting “to develop and strengthen fieldwork.” It said its officers would have a greater presence on “occasions that require it,” such as school holidays.

Saudi sports authorities in April shut down a female fitness centre in Riyadh over a contentious promotional video that appeared to show a woman in figure-hugging workout attire. “We are not going to tolerate this,” Saudi sports authority chief Turki al-Sheikh tweeted as he ordered that the centre’s license be withdrawn.

A Saudi beauty queen withdrew last December from a Miss Arab World contest after being attacked and threatened online.

Holders of tickets for a concert in Jeddah by Egyptian pop sensation Tamer Hosny were surprised to receive vouchers that warned that “no dancing or swaying” would be allowed at the event. “No dancing or swaying in a concert! It’s like putting ice under the sun and asking it not to melt,” quipped a critic on Twitter.

Shireen al-Rifaie, a female television, was believed to have fled the kingdom in June after the General Commission for Audio-visual Media said she was being investigated for wearing “indecent” clothes during a report on the lifting of the driving ban for women. Ms. Al-Rifaie’s abaya, the garment that fully cloaks a woman’s body, was blown open as she was filming on a street a report on what the lifting of the ban meant for women.

While women celebrated last month’s lifting of the ban, many appeared apprehensive after activists who had campaign for an end to the ban were arrested calling into question Mohammed’s concept of liberalization. Many said they would stay off the streets and monitor reactions.

Police in Mecca said barely two weeks after the lifting of the ban that they were hunting for arsonists who had torched a woman’s car. Salma al-Sherif, a 31-year-old cashier, said the men were “opposed to women drivers.”

Ms. Al-Sherif said she faced abuse from men in her neighbourhood soon after she began driving in a bid to ease her financial pressures. “From the first day of driving I was subjected to insults from men,” she said. Ms. Al-Sherif was showered with messages of support on social media once the incident became public.

“While the lack of concerted resistance thus far towards women driving may in part speak to a more progressive and younger Saudi society, it would be remiss to assume that those opposing such policies have disappeared from view altogether,” cautioned Sara Masry, a Middle East analyst who attracted attention in 2015 for her blog detailing her experience as a Saudi woman living in Iran.

In adding speed and drama to the Al Saud and the government’s gradual restructuring of its relationship to Wahhabism, Prince Mohammed was building on a process that had been started in 2003 by then Crown Prince Abdullah.

At the time, Prince Abdullah organized the kingdom’s first national dialogue conference that brought together 30 religious scholars representing Wahhabi and non-Wahhabi Sunnis, Sufis, Ismaili, and Shiites.

Remarkably, the Wahhabi representatives did not include prominent members of the kingdom’s official religious establishment. Moreover, the presence of non-Wahhabis challenged Wahhabism’s principle of takfir or excommunication of those deemed to be apostates or non-Muslims that they often apply to Sufis and Shiites.

The conference adopted a charter that countered Wahhabi exclusivity by recognizing the kingdom’s intellectual and religious diversity and countering the principle of sadd al-dharai (the blocking of the means),a pillar of Wahhabism that stipulates that actions that could lead to the committing of a sin should be prohibited. Sadd al-dharai served as a justification for the ban on women’s driving.

Saudi Arabia scholar Stephane Lacroix sounded at the time a cautionary note that remains valid today.

“It…seems that part of the ruling elite now acknowledges the necessity for a revision of Wahhabism. It has indeed become clear that only such a move would permit the creation of a true Saudi nation, based on the modern and inclusive value of citizenship—a reality still missing and much needed in times of crisis. However, the sticking point is that this ideological shift must go hand in hand with a radical reformulation of old political alliances both at home and abroad. And therein lies the problem,” Mr. Lacroix said.

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and co-host of the New Books in Middle Eastern Studies podcast. James is the author of The Turbulent World of Middle East Soccer blog, a book with the same title as well as Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario, Shifting Sands, Essays on Sports and Politics in the Middle East and North Africa, and the forthcoming China and the Middle East: Venturing into the Maelstrom

By James M. DorseySaudi Crown Prince Mohammed

By James M. Dorsey

The Pakistani government’s removal of a virulently anti-Shiite militant from its terrorism list at the very moment that an international money laundering and terrorism finance watchdog was deciding to put the country on a watchlist highlights Pakistan’s struggle to come to grips with militancy.

The decision by the Financial Action Task Force (FATF) that was reported by Pakistani media but has yet to be announced by the group itself also puts China’s ambiguous attitude towards Pakistani militants on the spot.

It further raises questions about attitudes of Crown Prince Mohammed bin Salman’s Saudi Arabia attitude towards Pakistani militants.

Like China, Saudi Arabia has adopted contradictory attitudes towards Pakistani militants, supporting those that serve its geopolitical objectives while seeking to neutralize militants that either threaten its interests or are of little value to the kingdom.

Saudi Arabia and China paved the way for this week’s decision to put Pakistan on FATF’s grey list by acquiescing in February to a FATF decision to give Pakistan three months to clean up its act.

The grey listing means that Pakistan’s financial system will be designated as posing a risk to the international financial system because of “strategic deficiencies” in its ability to prevent terror financing and money laundering.

Pakistani officials downplayed the significance of the grey listing, noting that the country was able to float international bonds, borrow from multilateral bodies, receive or send remittances or conduct international trade when it was listed between 2012 and 2015.

In March, then finance minister Miftah Ismail told the national assembly that the listing would not affect Pakistan’s economy and at best cause the country embarrassment.

Pakistan, nevertheless, sought to evade listing by issuing this month a directive that strengthened its anti-money laundering and terrorism finance controls.

The government earlier cracked down on entities associated with Hafez Saeed, an internationally designated terrorist, who is believed to be responsible for the 2008 attacks in Mumbai in which more than 160 people were killed.

Pakistani officials suggested that they had evaded blacklisting by presenting a 26-point action plan that would address FATF’s concerns in the next 15 months.

The plan promised that Pakistan would share with FATF its steps to counter the Islamic State, Al Qaeda, the Taliban and the Haqqani network; efforts to halt the transfer of funds to militants via couriers; work to enhance the capacity of prosecutors; and moves against illegal money changers and cross border smuggling of currency.

The Pakistani effort however did not stop the government from removing Muhammad Ahmed Ludhianvi, the head of Ahl-e-Sunnat Wal Jamaat (ASWJ), from its terrorism list on the day that FATF was discussing Pakistan in Paris.

ASWJ, which is fielding dozens of candidates for Pakistan’s July 25 elections, is the successor of long-banned Sipah-e-Sahaba, a virulently anti-Shiite group that has close ties to Saudi Arabia.

“Some things are natural. It’s like when two Pakistanis meet abroad or someone from Jhang meets another person from Jhang in Karachi. It’s natural to be closest to the people with whom we have similarities… We are the biggest anti-Shiite movement in Pakistan,” Mr. Ludhianvi said in 2016 over a lunch of chicken, vegetables and rice.

Mr. Ludhianvi sits at the intersection of both Pakistan and Saudi Arabia’s two-pronged attitude towards militancy.

Madrassas or religious seminaries operated by ASWJ in the Pakistani province of Balochistan that borders on Iran have benefiited from an injection of funds from the kingdom in the last two years, according to militants.

The source of the Saudi funding remains unclear but is believed to have tacit government support despite Prince Mohammed’s propagation of an undefined form of moderate Islam, a cutback in Saudi funding of ultra-conservative Sunni Muslims worldwide, and the kingdom’s stepping up its economic cooperation with Afghanistan in a bid to isolate both Iran and the Taliban.

Saudi ambiguity is matched by a similar Chinese haziness in its attitude toward Pakistani militants.

China’s sincerity will be put to the test when later this year the United Nations Security Council is likely to again debate designating Masoud Azhar, a fighter in the anti-Soviet jihad in Afghanistan in the 1980s and an Islamic scholar who is believed to have been responsible for an attack in 2016 on India’s Pathankot Air Force Station, as a terrorist.

China has repeatedly vetoed Mr. Azhar’s designation. China shielded Mr. Saeed from being listed by the UN prior to the Mumbai attacks.

Men like Messrs. Saeed and Azhar serve China’s interest of keeping India off balance as well as the People’s Republic’s relations with the powerful Pakistani military, which it views as a more reliable partner than Pakistan’s unruly and rambunctious politicians.

Complicating the equation is the fact that Chinese and Saudi selective support for Pakistani militants works at cross purposes.

China’s focus on India does not threaten Saudi interests but Saudi support of anti-Shiite militants in a region that is key to China’s US$50 billion Belt and Road-relative investment in Pakistan could put Balochistan’s already fragile security at risk.

The question is whether Saudi and Chinese acquiescence in FATF’s grey listing of Pakistan signals that the two countries may have second thoughts about their ambiguous approaches to Pakistani militants. If so, that may be the key to untying Pakistan’s knots in its struggle with militancy.

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and co-host of the New Books in Middle Eastern Studies podcast. James is the author of The Turbulent World of Middle East Soccer blog, a book with the same title as well as Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario,  Shifting Sands, Essays on Sports and Politics in the Middle East and North Africa, and the forthcomingChina and the Middle East: Venturing into the Maelstrom

By James M. DorseyThe Pakistani government’s removal

|By Arabian Post Staff|Dubai World Trade Centre (DWTC) announced up to 70 per cent reduction on licensing and incorporation fees within the DWTC Authority (DWTCA), a free zone offering offshore licenses for businesses, and One Central, the lifestyle development at the heart of Dubai’s Central Business District, to spur business and benefit multi-sector growth.

DWTC’s programme seeks to provide highly competitive offerings with the twin objectives of supporting the inward flow of greater FDI and accelerating private sector contribution to Dubai’s GDP in line with the directives of  Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to reduce the cost of doing business in Dubai thereby cementing its position as the global investment destination of choice, and ably complementing the consequent series of economic stimulus policies and regulations recently approved by  Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council.

“The UAE’s bold economic initiatives demonstrate the strength and resilience of its economy, which is agile, open and inclusive. DWTC’s commercial propositions are designed to support the government’s mandate on reducing fees to scale down the cost of doing business for the private sector and to offer a viable ecosystem that supports sustainable, long-term success, as well as attracts regional and global headquarters to consolidate and relocate their operations at considerable scale to Dubai. The significant reductions in licensing and incorporation fees further support The Executive Council of Dubai’s recently announced wide-ranging policy measures, and will collectively increase the competitiveness of, and the ease of doing business within the DWTCA free zone,” said Helal Saeed Almarri, Director General, DWTCA and Dubai Tourism and Commerce Marketing (DTCM).

DWTCA’s revised fees will witness a decrease of 50-70 per cent on FZ registration and licensing fees, with a 40-50 per cent reduction on immigration related service fees depending on the scale of business operation; dramatically lowering the fixed and ongoing costs of doing business for new and existing companies, consequently enabling accelerated ROI for the FZ entities. This programme will seek to support and sustainably aid the attraction of a larger scale of HQ operations relocating to Dubai, thereby delivering not only greater economic value for Dubai but also bringing in more talent to live and work here in line with UAE Vision 2021, which calls for the development of a competitive knowledge-based economy.

The UAE is currently ranked 17 out of 137 countries and continues to lead the Arab world in terms of competitiveness, rising seven places over its 24th ranking in 2012-13, and consistently scores high across the pillars of institutions, infrastructure, goods market efficiency, labour market efficiency and business sophistication.

“The commercial incentives deployed by DWTCA present an incredibly compelling opportunity for businesses to accelerate their growth trajectory and their geographic reach, combined with the ability to leverage the strength of our long-standing international reputation as a business networking hub driving multi-sector trade and innovation. We are committed to expand and enhance our platform to nurture creative thinking and knowledge sharing across businesses, as we increase the attractiveness of Dubai as the global business destination of choice for the international investment community and global talent,” Almarri pointed out.

|By Arabian Post Staff|Dubai World Trade Centre

|By Arabian Post Staff|Dubai-based KEF Infra, part of the KEF Holdings owned by Non-Resident Indian billionaire Faizal E. Kottikollon, has merged with Katerra, a US-based family-owned construction technology business to create a US$3.75 billion conglomerate with US$8.5 billion order book.

Prior to the merger, KEF Infra had US$250 million orderbook and $400 million work in the pipeline in India where the company gradually started to change the construction sector with technology-powered building solutions through off-site precast technology that saves up to 40 percent construction cost and 50 per cent time savings with nearly zero wastage.

“The merger creates a strong synergy between two forward-looking technology companies and we are happy with the way the process has gone through,” Faizal E. Kottikollon, Chairman of KEF Holdings – a diversified business conglomerate that bear his initials – said in an interview with Gulf Property.

“Following the merger, KEF Infra will become KEF Katerra Middle East that I will head and also liaise with the management of Katerra on spearheading investment into the Middle East and South Asia.”

Following the merger, Faizal E. Kottikollon will be the board member of Katerra and chairman of KEF Katerra Middle East, while remaining chairman of KEF Holdings – an entity that is owned by him. Although he did not reveal the details of the merger, it was ‘a cash and equity’ deal in which Faizal becomes a shareholder in the global company in exchange of merging KEF Infra with Katerra and a significant cash payout – to the tune of ‘several hundred million dollars’ – according to a news agency.

The merged entity will now have a team strength of 3,600 people with orderbook of $3.75 billion and US$8.5 billion works in the pipeline.

Faizal E. Kottikollon had earlier launched KEF Infra in 2014 by setting up a ‘construction factory’ at Krishnagiri in Tamil Nadu with an investment of $100 million that paid off handsomely and started to change the labour-intensive construction sector with significant value addition powered by technology.

|By Arabian Post Staff|Dubai-based KEF Infra, part

|By Arabian Post Staff| The Sharjah Petroleum Council (SPC) announced it is inviting petroleum exploration and production companies and investors to bid in an inaugural onshore acreage licencing round covering three Concession areas.

SPC has appointed Sharjah National Oil Corporation (SNOC) to conduct the licencing round, which will open on 25th June,offering companies 30-year contracts with a 10-year extension.

“Sharjah has always strongly supported private investment, providing the appropriate economic environment to encourage sustainable development, employment and business opportunities for the benefit of the people. New partnerships in petroleum exploration and development will enhance and strengthen these policies,” stated  Sheikh Ahmed Bin Sultan Al-Qasimi, Deputy Ruler of Sharjah and Chairman of SPC.

Sharjah is offering three Concession Areas; A, B and C (image below), located in the producing Thrust Zone play trend, including an un-appraised deeper gas discovery below the Sajaa gas-condensate field (Area A). SNOC is currently preparing to drill a well in Area B as operator and is also offering participation in this exciting near-term exploration opportunity.

Hatem Al Mosa, SNOC’s CEO, said, “We are delighted to have made significant progress with our ongoing explorationprogramme and look forward to conducting a successful licence round in order to accelerate it together with suitable partners”.

Newly acquired extensive 3D seismic (shot in 2016 and fully processed in 2017 and early 2018), significantly improved the imaging of the fold thrust belt and early indications are emerging of potentially large, undrilled leads & prospects and untested plays.

SNOC Exploration & Production Manager, Masoud Al Hamadi, commented, “SNOC has embarked on an ambitious exploration drive in order to unlock the potential of our onshore acreage. Early results of the recently acquired high specification 3D seismic are encouraging and we look forward to pushing ahead with drilling operations”.

Significant capacity is available in existing SNOC field infrastructure, gas-condensate processing and export facilities and all suitable field discoveries can be tied into the existing plant in order to generate early cash flow at lower CAPEX, with SNOC to purchase the hydrocarbons.

The new Licence Round is adopting a globally-competitive fiscal regime, which ensures that smaller fields are highly commercial and larger accumulations also generate very attractive returns.

Commercial documents (a Concession agreement and Joint Operating Agreement) have been prepared and will be available for review in the SNOC Data Room from the 4th July, together with the relevant technical data including the 3D seismic.

Bidding instructions are available online at and the window for bids will close on 18th November 2018 with the winning bidder(s) announced shortly thereafter and contracts effective from 1 January, 2019.

|By Arabian Post Staff| The Sharjah Petroleum

|By Arabian Post Staff| Abraaj Holdings, Abraaj Investment Management Limited and Colony Capital, Inc., through the Group’s Joint Provisional Liquidators, PricewaterhouseCoopers and Deloitte, announced that they have reached agreement on the principal terms for the sale and purchase of the Group’s Latin America, Sub Saharan Africa, North Africa and Turkey Funds management business and the Group’s Limited Partnership interests in the underlying Funds, along with staff in the eight offices being transferred under the terms of the deal.

Colony has also agreed to oversee, on an interim basis, other Group Funds that are not being acquired so that the Group and all its stakeholders have a comprehensive global solution in place.

The agreement has received in principle regulatory approval and is expected to close upon approval from the Grand Court of the Cayman Islands as well as other customary consents. The transaction is expected to complete by July 1.

Colony is a leading global investment management firm. Colony has significant holdings in the healthcare, industrial and hospitality sectors, in addition to other private equity and debt investments, with an embedded institutional and retail investment management business. It was founded by Thomas J. Barrack, Jr. in 1991.

Abraaj was founded in 2002 by Arif Naqvi and emerged to become a leading private equity investor in growth markets with a regional footprint spanning Latin America to South East Asia. The Group has investments which include a portfolio of mature businesses covering diverse sectors including financial services, FMCG, industrials, healthcare, education, manufacturing and logistics.

Tom Barrack, Executive Chairman, Colony Capital, Inc. said, “We are delighted to have crafted this comprehensive global solution for Abraaj and its stakeholders and sincerely hope that this can enable the process of rebuilding on all sides and also bring an end to the speculation that has swirled around Abraaj over the last months.”

Arif Naqvi, Founder, The Abraaj Group added, “The appointment of the joint provisional liquidators and the start of the process of restructuring this business that we operated across diverse markets is a moment of introspection, but also one of satisfaction, knowing that the teams that have been nurtured over the years and the businesses that we were proud to invest in now have a clearly defined future and a good home that will become the custodians of the next phase of this journey.”

Selcuk Yorgancioglu and Omar Lodhi, Co-Chief Executives of Abraaj Investment Management Limited said,” We are pleased to join the Colony platform and team which allows us to continue building our businesses in the fast-growing markets that we have been committed to for over two decades.”

Michael Jervis, Partner at PricewaterhouseCoopers and Joint Provisional Liquidator of Abraaj Holdings, said, “This is an important milestone towards achieving the overall objectives of the Provisional Liquidation and restructuring as set out in the Court Order. We shall be consulting with our creditors in the coming days on this planned transaction prior to seeking the approval of court.”

Stuart Sybersma, Partner at Deloitte and Joint Provisional Liquidator of Abraaj Investment Management Limited (“AIML”) said “We are pleased to have agreed a sale of certain of AIML’s business units and assets in such a short timeframe, allowing, in line with our restructuring mandate, for these business units to continue to trade and ensuring continuity of service to investors and employment for the members of staff employed in these regions.  The next step is to seek sanction of the Cayman Islands Court for the transaction, which will be undertaken on an expedited basis.”

|By Arabian Post Staff| Abraaj Holdings, Abraaj Investment

According to the latest Reidin Residential Property Price Indices, the index for all residential estates decreased by 1.1 points, from 245.2 to 244.1, which represents a decline of 0.47 per cent in May 2018. Prices also went down by 5.77 per cent year on year. Apartment sales prices registered a decrease in May 2018 with a drop of 0.42 per cent month on month, and 5.53 per cent year on year. Dubai Villa Sales Prices also dropped 0.84 per cent month on month and 6.78 per cent year on year.

The Dubai Residential Property Rental Price Index for all residential estates decreased by 0.9 points, from 87.4 to 86.45 which represents a decrease of 1.02 per cent in May 2018 and 8.43 per cent decline year on year. Apartment rental prices registered a decrease in May 2018 with a 1.05 per cent drop month on month and a 7.93 per cent decline year on year. Villa rental prices registered a decrease in May 2018. Prices decreased 0.74 per cent month on month and 11.18 per cent year on year.

Gross rental yields for Dubai remained relatively steady when compared to the previous month.  Gross rental yield for all residential estates and apartments both went 0.1 point down and reached 6.9 per cent and 7.3 per cent respectively. Villas stayed stable at 5.2 per cent. Price-to-rent ratio for all residential real estates and apartments in Dubai increased 0.1 point and reached 14.9 and 14.1, respectively. While price-to-rent ratio for villas decreased to 19.7 years from 19.8 years, month on month.

The Abu Dhabi Residential Property Sales Price Index for all residential estates decreased by 0.4 points, from 90.5 to 90.1, which represents a decrease of 0.36 per cent in May 2018 and a 7.30 per cent decrease year on year. Apartment sales prices registered a decrease in May 2018 with a drop of 0.57 per cent month on month and a 8.37 per cent decrease year on year. Villa sales prices registered an increase and went up 0.32 per cent month on month and 3.86 per cent decrease year on year.

The Abu Dhabi Residential Property Rental Price Index for all residential decreased by 1.0 points, from 86.1 to 85.1, which represents a decrease of 1.18 per cent in May 2018. Prices decreased 10.88 per cent year on year. Apartment rental prices registered a 1.55 per cent month on month decrease and a 11.85 per cent year on year decrease. On the other hand, villa rental prices increased vaguely by 0.02 per cent month on month but decreased 7.24 per cent year on year.

Gross rental yields for Abu Dhabi stayed stable for all residential estates at 6.9 per cent month on month. Gross rental yields for apartments decreased from 7.2 to 7.1 per cent. Gross rental yield for villas stayed stable at 6.0 per cent. The price-to-rent ratio for all residential real estates in Abu Dhabi increased to 15 years. For villas, the price-to-rent ratio went up from 17.1 to 17.2 years, and for apartments, the price-to-rent ratio increased to 14.5 years from 14.3 years.

According to Residential Property Price Indices, apartment sales prices in Ajman registered a decrease in May 2018 with a drop of 1.93 per cent month on month, and 2.01 per cent year on year. Apartment sales prices in Ras Al Khaimah registered a decrease in May 2018 with a small drop of 0.27 per cent month on month and 2.17 per cent year on year. Sharjah apartment sales prices registered an increase in May 2018 by 1.28 per cent month on month and 3.87 per cent year on year.

Ajman apartment rent prices registered a decrease in May 2018. Prices decreased 1.84 per cent month on month and 7.06 per cent year on year. Ras Al Khaimah apartment rent prices registered a decrease in May 2018. Prices decreased 2.06 per cent month on month and 10.47 per cent year on year. Sharjah apartment rent prices registered a decrease in May 2018. Prices decreased by 2.04 per cent month on month and 6.46 per cent year on year.

Gross rental yield for apartments in Ajman stayed stable at 8.7 per cent when compared to the previous month. Gross rental yield for apartments in Sharjah decreased by 2 points and reached 5.3 per cent. In Ras Al Khaimah the yield decreased to 7.6 per cent. Price-to-rent ratio for apartments in Ajman did not change and remained steady at 12.0 years. While price-to-rent ratio for apartments in Sharjah registered a hike to 19.4 years from 18.7 years, month on month; the ratio for Ras Al Khaimah rose to 13.7 from 13.5 years.

According to the latest Reidin Residential Property

Dubai property developer Danube Properties announced the launch of its 11th project, a Dh550 million Lawnz at the International City.Construction of the project is expected to start in 2018 with completion in 2020. Lawnz is Danube Properties’ first project at the International City and its first gated complex.

“This is our biggest project so far that will add 1,064 units to our existing portfolio and we are all excited to launch the project at the International City that has a very vibrant community,” Rizwan Sajan, Founder Chairman of Danube Group, said. “This is our second project launch this year and comes after three months of the launch of the Dh300 million Jewelz that adds 463 units offering more than 15 percent return on investment, which has been a runaway success in terms of sale.

The Dh550 million Lawnz offers 1,064 residential units, ranging from studio, one and two-bedroom apartments. The project is  located at the International City Phase 1. The  amenities include a 3.8 Acres Promenade which offers Canal, Sunken Plaza, a fully equipped health club, swimming pool, steam and sauna room, multi-purpose hall, jogging track, barbecue deck, badminton court, multi-purpose court and a high tech surveillance system for the protection and security of the residents. The property also comes with a 42 metres wide entrance and outdoor cinema.

Among the residential units, 50 percent of the units are studio apartments while 40 percent are one-bedroom apartments and 10 percent are two-bedroom apartments.

The building design and architectural aesthetic was created to reinforce the design strategy of Danube, which helps maximise the living space while delivering convenience of community living. The project dedicates 50 percent space to open areas with an emphasis on greenery and landscapes.

Danube has delivered 831 properties so far including the handover of 302 units within Glitz Residences 1 and 2 and 358 in Glitz Residences 3 as well as 171 townhouses at Dreamz project till March 2018. It will deliver a further 870 units later this year.

Danube Properties, part of the Danube Group, entered Dubai’s real estate market in June 2014 with Dreamz at Al Furjan – which was sold out at launch. Established in 1993, Danube Group, the UAE’s largest supplier of building materials and home furnishing, this year celebrates 25th anniversary.

In 2017, Danube awarded five construction-related contracts with a combined value exceeding Dh392 million a year it started delivering homes. These include a Dh221 million main construction contract recently awarded for Miraclz Tower near Miracle Gardens at Arjan that will host 599 units including 591 apartments.

 Danube Properties also awarded a Dh146 million contract for the main construction package for the Resortz project. The 17-month contract will see the project gets ready for occupancy by the second quarter of 2019. Resortz will host 444 units including 419 apartments, 25 retail outlets, landscaped environment that appears more like a five-star resort, than a residential compound.

Danube Properties has so far launched 11 residential projects, of which four have been delivered, two are getting ready for delivery while four others are at various stages of construction and one in tendering stage.

The company has one of the fastest development-to-delivery ratio in the region’s real estate market where timely delivery of properties remains a major challenge. That way, Danube Properties’ performance in construction and delivery is helping strengthen buyers’ trust in real estate.

Dubai property developer Danube Properties announced the

|By Saifur Rahman, Executive Editor|

UAE Central Bank said, it has downgraded seven money exchanging houses for violating the Central Bank’s regulations, including Anti-Money Laundering rules.

The UAE has 140 money exchange houses with 835 branches spread across the length and breadth of the country while some of the exchange houses have branches in other countries.

Following the downgrading, Taher Exchange Est., Al Hadha Exchange LLC, Al Hemriya Exchange Company LPC, Dubai Express Exchange, Sanaa Exchange, Cosmos Exchange and Bin Bakheet Exchange Est. have now been restricted to deal in sale and purchase of foreign currencies and travelers cheques only.

“Based on this decision, the above exchange houses were prohibited from conducting any activities relating to remittances or payment of wages. This decision comes after the failure of these exchange houses to regularize their status during the grace period granted by the Central Bank,” a statement said.

The Central Bank said, “It will not tolerate violations of financial institutions to its regulations and instructions, and the Central Bank alerts not to remit funds or pay of wages via the above exchange houses.”

Between January and September last year, foreign residents in the UAE sent Dh121.1 billion to their home countries or other recipients abroad. The total remittances for the first nine months of the year is 2.1 per cent higher than the Dh118.6 billion cash that moved out of the UAE during the same period in 2016, UAE Central Bank data shows.

Expatriates from India transferred the bulk of the cash home, with beneficiaries in the Asian country receiving Dh15.46 billion in remittances, representing more than a third (37.9 per cent) of the total outbound fund transfers.

|By Saifur Rahman, Executive Editor| UAE Central Bank said,

Dubai Government’s trade licensing body – the Department of Economic Development (DED) – said, it has exempted companies and business establishments in Dubai from all fines imposed on them and granted them time till end of 2018 to renew their licenses.

“The DED launched a package to make it further easier for businesses to clear fines and renew their licenses. The package will allow businesses to pay their fees and fines in easy instalments, freeze their trade license for a year and seek an amicable settlement with DED on commercial violations,” it said in a statement issued on Saturday.

“The service package is part of enabling businesses to overcome obstacles and benefit from a credit facility that would allow them to maintain their competitiveness. DED had recently exempted companies and business establishments in Dubai from all fines imposed on them and granted them time till end of 2018 to renew their licenses.”

The move comes after Abu Dhabi and Dubai governments have announced a number of stimulus packages to create employment and sustain businesses. However, in Dubai, the announcements are more on the lines of offering leniency in paying fines or reducing fines and fees – in order to help struggling companies continue their business activities amid declining demand and business activities.

The move comes a few months after the government raised fees and introducing a 5 percent value-added-tax (VAT) that has adversely affected businesses.

The new package allows for the payment of license renewal fees and accumulated fines through convenient instalments within 12 months. DED is extending the facility in co-operation with its strategic partner aafaq Islamic Finance and a number of local banks. Business owners can approach any of the DED service centres located throughout Dubai or visit the DED website for more details on the facility.

Mohammed Al Shehhi, Deputy CEO, Corporate Support Services sector in DED, said: “The Department of Economic Development is committed to enhancing competitiveness in Dubai through extending value added facilities that help business owners continue their activity and sustain their business. Eliminating all obstacles faced by companies is important to developing the economy and creating a competitive environment conducive to investment in Dubai.”

The licensee can benefit from the instalment if fines and fees have been accumulated for more than a year. Investors can apply for the fees not to be paid and avoid fines in case they wish to temporarily freeze doing business while retaining their license.

The waiver applies to fines issued before 14/04/2018 and for fines issued after this date license holders can take advantage of the offer of amicable settlement and payment in instalments. The licensee who requests amicable settlement must not have benefitted from any other exemptions following the first fine issued after 14/04/2018. As such license holders are entitled to a 50% reduction in the basic value of penalties issued for the first violation.

Al Shehhi added that revitalizing businesses and offering improved flexibility to businessmen and investors are a top priority for DED. “Facilitating payment of fees and fines as well as license renewals will eventually enable Dubai to attract investors and reinforce itself as a global trading and economic hub.”

Al Shehhi stressed that the new service package is an opportunity for investors and businessmen seeking to renew or their licenses or clear their penalties. It will allow businesses to go past hurdles and focus on growth and seeking further investments thus creating more new job opportunities.

Dubai Government’s trade licensing body – the

|By Matein Khalid| Crude oil prices plunged by 7% in two sessions as Saudi Arabia and Russia confirmed that they would release 1 million barrels a day in the wet barrel markets. Speculative froth in the oil futures markets vanished, to be replaced by a new trading calculus based on the realities of supply and demand – as well as the unknowable (and unquantifiable!) arc of geopolitics. A market that was in panic due to the loss of Venezuelan output and President Trump’s withdrawal from the JCPOA Iran nuclear deal has just concluded that there is no supply shortage and the shale wildcatters of the Permian Basin, Marcellus and the Bakken ensure that US output will continue to rise. The sharp rise in the US dollar against the Euro, emerging market currencies and industrial commodities also suggests a deflationary chill whose ominous implications must be missed by the Powell FOMC as it positions for the seventh rate rise since December 2015.
The geopolitical risk premium that spiked after May 12 has compressed as oil traders realize that a catastrophic new war in the Levant is not imminent. Unlike Teddy Roosevelt, Trump waves a big stick while definitely not speaking softly and the art of the deal is embedded in this surreal White House, not Sun Tzu’s art of war. True, US sanctions will hit Iran oil exports but, like the loss of Venezuela output, this will be offset by higher production in other oil provinces. Once again, the nemesis of an oil bull run is higher out in the US and some non-OPEC producers like Mexico, Columbia and Azerbaijan.
Saudi Arabia, despite the Aramco IPO and the most expansionary State Budget in the history of the Kingdom, has no wish to trigger a global recession that would eviscerate oil demand. Russia, sanctioned and demonized in Washington and the chancelleries of Europe for the annexation of Crimea, the military interventions in Ukraine and Syria, cyber-espionage in the US Presidential election, the attempted poisoning of FSB renegade spy Sergei Skripal, also desperately wants rapprochement between the Kremlin and the EU. Both the princes of the House of Saud and the siloviki/oligarchs of the Kremlin have no interest in an oil shock that could trigger a US/Europe recession and wreck havoc in the emerging markets.
Thanks to the Saudi brokered OPEC and Russian (Ropec?) oil deal in 2016, the global glut is gone and the crude oil market has balanced. Iraqi and US oil output will surge in the months ahead to offset tight global inventories. This means crude oil prices could well fall to $56 – 60 on Brent. At this price point, Saudi Arabia will not seek to restrain OPEC output and US shale oil output would not be uneconomic. This price reflects fundamental macro realities, not hedge fund speculative mania.
After such a violent trend reversal on credible fundamental news (Saudi/Russian output curve eases to offset the loss of Iran/Venezuelan exports) means the world’s “paper oil” speculators, who trade 1.5 billion barrels a day or 15 times the crude stored in supertankers and onshore terminals, will go short oil. This will precipitate consistent selling. The Trump White House wants lower gasoline prices in the US the summer driving season that began on Memorial Day weekend and in an autumn whose endgame is a Congressional midterm election. Trump’s strong support for Saudi Arabia’s national security interests in the Arab world is also a factor behind Riyadh’s policy U-turn on supply cuts. After all, Tweeter-in-Chief attached OPEC for “artificially” raising oil prices. It is no coincidence that a Saudi-Russian (Al Falih-Novak) plan to raise output was unveiled to the world at the St. Petersburg economic conference, Putin’s Davos on the Neva! The fact that they did not wait for the next OPEC-Russian summit in Vienna on June 22 demonstrates the priority Moscow and Riyadh place to their new shift in oil policy.
The 10% fall in Deutsche Bank last week means the German mega bank is the next systemic risk in the financial markets. The Fed has branded Deutsche’s US subsidiary as troubled and its shares have fallen 42% in 2018, more than even Italy’s battered banks. I will never forget that the collapse of Lehman Brothers coincided with a $100 plunge in the price of crude oil. Will the autumn of 2018 be a ghastly replay of the autumn of 2008, when the lights went out in global finance?

Currencies – The contrarian bullish case for Canadian dollar 

The Canadian dollar was the natural victim of King Dollar, the recent decline in oil prices, the money markets softness on interest rate expectations from the Bank of Canada and a surprise GDP miss. However, the real shocker of the week was the Trump White House’s decision to impose tariffs on steel and aluminium imports from the EU, Canada and Mexico – and Ottawa’s decision to retaliate against American metal imports. It is a farce that the Commerce Department has used national security as the smokescreen to impose sanctions against one of America’s oldest, closes allies. This suggests a near term agreement on NAFTA is not on the horizon, though disagreements on a “sunset clause” does not necessarily preclude a final deal. Yet it is undeniable that the tone of Ottawa – Washington trade diplomacy has deteriorated and the loonie’s cost of protection in the foreign exchange options market has risen. The blowout 223,000 May nonfarm payrolls data will pressure the Canadian dollar as June FOMC rate hike is certain. Yet I am convinced that the Canadian dollar is undervalued in the 1.30 – 1.32 range. Why?
One, rate expectations have softened excessively in the past month. Though the Bank of Canada was on hold at its interest rate conclave, there is no doubt that Ottawa can and will shadow the Yellen Fed’s monetary tightening over time.
Two, Planet Forex has priced in a dire endgame to the NAFTA trade talks in Washington. Yet Justin Trudeau and Foreign Affairs Minister Freeland have offered significant trade concessions to Trump and a NAFTA deal can and will happen. This will trigger a global buying wave in the Canadian dollar.
Three, the significant improvement in Canada’s terms of trade in 2018 is not reflected in current levels. The last MFR projects $60 West Texas and $40 Western Canada select, well below current levels. Lumber and soft commodities prices also contribute to better Canadian terms of trade. This fact alone suggests no premature central banking ease in Canada, a factor that will reinforce a bullish tone to the Canadian dollar.
Four, Canadian money market forwards imply only one rate hike in September. Yet this makes no sense given the momentum in domestic economic growth data, positive smoke signals from NAFTA and resilient, even strong domestic data driven by commodities markets. Two rate hikes until December seem far more likely, a scenario that is bullish for the loonie. La Bella Italia is always a wild card for investors and central bankers, but I believe domestic data, NAFTA, housing and terms of trade will be the main factors that will influence the Bank of Canada’s strategic rate setting calculus.
Five, Chicago futures speculative positioning data reinforces my cautious optimism. The downtrend line from the 1.46 lows in mid-2016 suggests the Canadian dollar faces technical support at the 1.30 – 1.32 levels.
Six, Governor Poloz has made it clear that his main policy focus is his 2% inflation target, not the violent mood swings of Club Med politics. The Bank of Canada statement was unambiguous that “higher interest rates will be warranted to keep inflation near target”. The Canadian central bank noted its 2% GDP growth forecast and pointed to the gasoline price driven rise in inflation above 2%. It does not surprise me that the implied probability of a July 11 rate hike by the Bank of Canada has risen from 53% to 75% after the Ottawa central bank conceded that the economy has outperformed in all sectors apart from housing relative to its earlier expectations. I find it significant that events in Turkey, Argentina or global equities did not preclude a hawkish Bank of Canada statement. This is bullish the loonie.
There are three scenarios where I can envisage a freefall in the Canadian dollar, possibly to as low as the 1.46 – 1.48 levels we saw two years ago. One, a Lehman like banking shock in Europe. Deutsche Bank has $25 billion in capital and 1.8 trillion in liabilities. Its share price has plunged from 90 Euros in 2007 to 9 now. The cognoscenti of international finance have obviously bailed out of the German banking colossus that has hemorrhaged shareholder value. Two, a collapse in oil prices. Three, a major blow up in the $2 trillion Canadian household debt time bomb. If these events happen, the Canadian currency will be fool’s gold and no place to hide for Gulf investors.

Stock Pick – A Barclays – Standard Chartered bank merger has no strategic rationale 

It a major banking deal brewing in the City of London? The grapevine contends that Barclays chairman John McFarlane is under pressure from activist shareholder Edward Bramson’s Sherborne fund, which has accumulated a 5.4% stake in the three century old former Quaker High Street bank that Bob Diamond morphed in the early 2000’s into Britain’s only bulge bracket global investment bank Bramson wants Barclays to shrink or even sell Barclays Capital, its investment banking crown jewel, to release $40 billion in dedicated capital to the unit. This is anathema to Jes Staley, the bank’s American, ex J.P. Morgan Master of the Universe CEO.
McFarlane and Staley would prefer to blunt Bramson’s activist thrust by making a takeover bid for Standard Chartered, a bank that never recovered from disastrous lending spree to Indian steel oligarchs and colossal mismanagement by its senior executives in London, Hong Kong, Singapore and the Gulf under former CEO Peter Sands, ultimately ousted by pressure from Temasek, the Singapore sovereign wealth fund that is its largest shareholder. Stan Chart has not really recovered since Sands’s ouster. Revenues have fallen 20% since 2014 while overhead is still bloated. CEO Bill Winters, another J.P. Morgan alumnus has been unable to boost the bank’s return on equity above its cost of capital or deliver a credible growth strategy.
Barclays would be delighted to get access to Stan Chart’s $56 billion in Asian deposits and its franchises in some of the hottest banking markets in the Pacific Rim. Yet a $90 billion merger would necessitate a stock swap that might not be palatable to Temasek or other Stan Chart shareholders since Barclays shares trade well below tangible book value due to its pathetic ROE, multiple legal swords of Damocles and history of boardroom palace coups and CEO regicide. Stan Chart’s culture is unique in UK finance and there is no real regional overlap with Barclays, now that it has decided to exit Africa and the Middle East to focus on Anglo-American corporate and investment banking. Barclays shareholders would be hugely diluted by an offer for Stan Chart at a time when they desperately want management to boost dividends and profits, not engage in self-serving deal making. It is also doubtful if a takeover bid from a bank that faces US Justice Department and FCA charges over the 2008 emergency capital raising scheme, whose four former top executives face criminal charges in the case, whose celebrity CEO Bob Diamond was grilled in the House of Commons and fired by the Bank of England’s diktat after the LIBOR manipulation scandal would send Stan Chart shareholders into paroxysms of delight. Zero plus zero still equals zero. A failed bid for Stan Chart would mean the axe for McFarlane, Staley and possibly the corporate and investment banking franchises. This is an irony since Staley survived the whistleblower scandal with a mere £640,000 fine from regulators and settled the US mortgage misselling scandal for $2 billion, not the feared $5 billion with Justice. The Crown Court also dropped the Serious Fraud Office (SFO’s) criminal case against Barclays, removing a threat to its UK banking license, though Justice, SEC and FCA probes into the 2008 fund raising in the Gulf remain live. None of this makes me sanguine about the odds of a Barclays cash and share bid for Standard Chartered Bank.
Size matters in global banking, yet a “Godzilla strategy” alone will not solve the myriad problems faced by Britain’s two historic but troubled money center banks. I do not believe these banks will merge in the proximate future. There is no evidence that either bank has engaged advisors, lawyers, white knights or political allies or creditor syndicates for an imminent deal. Yet Edward Bramson’s Sherborne can well goose Barclays share price once it unveils its restructuring (shrinking?) blueprint. Standard Chartered remains they juiciest takeover bait in international banking, a Cinderella waiting from a kiss from a fairy tale prince names Jamie, not Jes!
A blowout May payroll number and the formation of a new Italian government in Rome means the bear market in US Treasury debt resumes with a vengeance. A 3.8% unemployment rate and 0.3% average hourly earnings means the Powell Fed has reached the limits of its dual mandate. This means a certain interest rate hike at the June FOMC, the September FOMC and possibly even the December FOMC. This makes domestic US banks with floating rate notes and excess capital a no brainer. Bank of America rocks!

​ |By Matein Khalid| Crude oil prices plunged

By James M. Dorsey

A look at a decade of failed social, economic and political reform in Jordan goes a far way to explain recent mass anti-government protests demanding the resignation of the government.

The protests, prompting concerns about the survival of the Hashemite dynasty, also bear witness to the fallout of the region’s epic power struggles and the pitfalls of government failures to respond to long-standing discontent that has been simmering across the region just below the surface.

Pent-up anger and frustration with governments that have failed to deliver public goods and services were at the core of popular Arab revolts in 2011 that initially toppled the leaders of Tunisia, Egypt, Libya and Yemen.

If anything, the Jordanian protests in a Middle Eastern nation viewed as relatively stable, have defied notions that the brutal rollback of Egypt’s successful revolt and the bloody conflicts wracking Libya and Yemen as well as Syria have cowed the region’s public into accepting autocratic rule as the best of all evils.

The protests target corruption and a proposed tax bill that protesters say will reduce living standards in a country with double digit unemployment, 21 percent of the population living below the poverty line, and finances and services burdened by the influx of more than 2 million refugees, including 600,000 plus Syrians.

The bill would raise taxes on employees by at least five percent and on companies by between 20 and 40 percent in line with the terms of a three-year $723 million dollar loan from the International Monetary Fund (IMF) that Jordan secured in 2016.

Jordanians have seen repeated price rises on staples such as bread and increased taxes on basic goods like electricity and fuel since the beginning of this year. The Economist Intelligence Unit earlier this year ranked Jordan’s capital Amman as one of the most expensive in the Arab world.

The writing has been on Jordan’s wall since the 2011 protests when in a seismic shift of Jordanian politics, tribal leaders took their criticism public rather than relying on traditionally secret, behind closed-door interactions with the country’s monarch.

The change in tactics that in the current protests has brought a wide swath of Jordanians irrespective of whether they are of Palestinian or East Bank tribal descent on to the streets bears a cautionary note for regimes across the region.

Scores of prominent East Bank Jordanian tribal leaders signalled the change in an unprecedented public letter to the king in February 2011 that accused King Abdullah’s glamorous Palestinian wife, Queen Rania, of corruption.

The leaders charged that Queen Rania, “her sycophants and the power centres that surround her” were dividing Jordanians and “stealing from the country and the people.” It warned King Abdullah that if he failed to tackle corruption and introduce reform “similar events to those in Tunisia and Egypt and other Arab countries will occur.”

The letter and a 2011 Carnegie Endowment for International Peace report written by former Jordanian Deputy Prime Minister Marwan al-Muasher constituted early warnings of what is at the core of the current protests: a popular demand for a government that garners public support by catering to popular social and economic aspirations as well as demands for political participation.

Mr. Al-Muasher argued that King Abdullah’s efforts to squash protests in 2011 by projecting himself as a reformer failed to secure a public buy-in, in part because he was unwilling to relinquish chunks of his power.

Perhaps most fundamentally, Mr. Muasher, in comments that are particularly relevant today with Prime Minister Hani Al-Mulki’s imminent resignation, warned that cosmetic changes won’t do the job.

“The selection of several prime ministers did not lead to serious progress on reform… Reform needs reformers who are cognizant of the need for an orderly, gradual process but are also committed to a serious roadmap that would lead to true power-sharing through strong legislative and judicial bodies,” Mr. Al-Muasher said.

“All efforts to open up the political system have been thwarted by a resilient class of political elites and bureaucrats who feared that such efforts would move the country away from a decades-old rentier system to a merit-based one. This group accurately predicted that reform would chip away, even if gradually, at privileges it had acquired over a long period of time in return for its blind loyalty to the system. It thus stood firm not just against the reform efforts themselves, but also in opposition to the king’s own policies,” Mr. Al-Muasher added.

As a result, King Abdullah, despite consistently trying to strike a balance between the requirements of reform and the hesitancy expressed by many of his more traditional supporters, ended up at almost every bend of the road appeasing the conservatives at the expense of the reforms he was seeking to implement.

In the process, the king raised questions about how serious he was about reforms, in part by seemingly conceding defeat from the outset.

“Sometimes you take two steps forward, one step back. There is resistance to change. There is a resistance to ideas. When we try to push the envelope, there are certain sectors of society that say this is a Zionist plot to sort of destabilize our country, or this is an American agenda. So, it’s very difficult to convince people to move forward,” King Abdullah told CNN’s Fareed Zakaria in 2010, a year before the 2011 protests erupted.

King Abdullah may no longer have the luxury of lamenting opposition to reforms. Although conscious of the fact that Jordan has been spared the destructive violence that has wracked its neighbours, Jordanians may this time round not be pacified by cosmetic measures like Mr. Al-Mulki’s resignation and the temporary rescinding of price and tax hikes.

“While it is easy to argue that citizens want bread before freedom, economic liberalization took place without the development of a system of checks and balances and resulted in the benefits of economic reform being usurped by an elite few… Economic reform must be accompanied by political reform, such that institutional mechanisms of accountability are developed to monitor excesses and ensure benefits are made available to all,” Mr. Muasher cautioned in 2011.

King Abdullah’s current need to win public support rather than pacify the public has been compounded by tectonic shifts in the Middle East that have reduced the value of Jordan, a country that is dependent on foreign aid, to its traditional allies such as Saudi Arabia and the United Arab Emirates and driven a wedge between them on key policy issues.

With Gulf states liaising directly with Israel, Jordan is no longer needed as an interlocutor. The same is true of Jordan’s ability to leverage its geography in the wake of the defeat of the Islamic State in Iraq and a growing acceptance that Syrian president Bashar al-Assad is winning his country’s brutal civil and proxy wars.

Jordan’s usefulness in resolving the Israeli-Palestinian conflict has also diminished because of US president Donald J. Trump’s policies that have effectively dashed hopes for a two-state solution.

Adding to King Abdullah’s woes is pressure on Jordan’s labour market as a result of economic reform in Saudi Arabia and other Gulf states that involves a push to reduce reliance on foreign and expatriate labour.

Jordan’s refusal to back Israeli and Saudi support for Mr. Trump’s approach coupled with his rebuttal of Saudi pressure to join the one year-old Saudi-UAE-led economic and diplomatic boycott of Qatar and more recent symbolic overtures to Iran have won it little sympathy in Riyadh and Abu Dhabi and cost it badly needed financial aid.

Said Jordan scholar Sean Yom: “The real heart of public outrage is not about tax brackets, but something far broader – the notion of the state radically scaling back its end of the social contract and not providing anything in return. From the monarchy’s perspective, it has little choice. Nonetheless, the prospect of more social turmoil makes the search for a new geopolitical conduit to survival even more pressing.”

Survival could well mean that Jordan forges closer ties to countries like Iran, Turkey, Qatar and Russia – a prospect that is raising concern in Jerusalem, Riyadh and Abu Dhabi.

Already, Jordan’s smouldering discontent has Israeli and Western intelligence analysts worried. Even if it may seem at best a theoretical notion, some have nonetheless begun to ponder the survivability of Jordan’s Hashemite dynasty.

That may be a scenario too far. What is beyond doubt, however, is the fact that King Abdullah’s options are narrowing as he walks an ever more tightly spun tightrope.

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and co-host of the New Books in Middle Eastern Studies podcast. James is the author of The Turbulent World of Middle East Soccer blog, a book with the same title as well as Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario,  Shifting Sands, Essays on Sports and Politics in the Middle East and North Africa, and the forthcoming China and the Middle East: Venturing into the Maelstrom


By James M. DorseyA look at a