Omantel CEO resigns
Reuters has announced the resignation of Mohammed Ali Al-Wahaibi as CEO of Omantel, for personal reasons. Rumours were circulating on Twitter a couple of days ago.
A local telecommunications consultant speculated that Wahaibi had been unhappy about the government's decision in December 2008 to postpone plans to sell off 25% of its 70% share in the company.
Omantel (Oman Telecommunications) bought 65% of Pakistan's Worldcall Telecom a year ago, since when Worldcall's share price has dropped sharply. In addition, regulatory and legal issues in Pakistan have prevented Omantel from taking full charge of its investment. Reuters reported that "Omantel's net profit fell 66.9 percent in the fourth quarter" because of losses related to Worldcall.
Dr Amer al-Rawas, Chief Operating Officer of Omantel, is now acting chief executive.
A local telecommunications consultant speculated that Wahaibi had been unhappy about the government's decision in December 2008 to postpone plans to sell off 25% of its 70% share in the company.
Omantel (Oman Telecommunications) bought 65% of Pakistan's Worldcall Telecom a year ago, since when Worldcall's share price has dropped sharply. In addition, regulatory and legal issues in Pakistan have prevented Omantel from taking full charge of its investment. Reuters reported that "Omantel's net profit fell 66.9 percent in the fourth quarter" because of losses related to Worldcall.
Dr Amer al-Rawas, Chief Operating Officer of Omantel, is now acting chief executive.
BankMuscat sells stake in Indian bank
BankMuscat announced four days ago, that it had sold 40% of its holding in HDFC, an Indian bank, and proposed to sell the remainder of its holding when market conditions were right.
That seems to have come round very quickly. Today, The Hindu Business Line reported that BankMuscat had confirmed that it had sold 81% of its stake in HDFC realising RO39 in pre-tax profits. BankMuscat had held a 2.13 per cent stake in HDFC Bank as on December 31, 2008.
Apparently, Bank Muscat acquired the HDFC Bank stake when HDFC acquired Centurion Bank of Punjab in India.
The income will be welcome given that BankMuscat has forecast losses of RO4 million to RO7 million in the first quarter of this year relating to its equity portfolio, about which no further details were published. Evidently, the bank is guarding its cash flow status.
Yesterday, BankMuscat announced that it would be issuing a 20% dividend and a 30 per cent convertible bond to its shareholders for the financial year ended 31st December 2008.
So despite forecast losses, the shareholders are not to be deprived of annual income.
Although, the bank's operating profit rose 48.7 per cent to RO152.6 million from RO102.6 million in 2007, net profit for the year was only 11.2% more than that in 2007, after writing off "impairment losses" - bad loans?
That seems to have come round very quickly. Today, The Hindu Business Line reported that BankMuscat had confirmed that it had sold 81% of its stake in HDFC realising RO39 in pre-tax profits. BankMuscat had held a 2.13 per cent stake in HDFC Bank as on December 31, 2008.
Apparently, Bank Muscat acquired the HDFC Bank stake when HDFC acquired Centurion Bank of Punjab in India.
The income will be welcome given that BankMuscat has forecast losses of RO4 million to RO7 million in the first quarter of this year relating to its equity portfolio, about which no further details were published. Evidently, the bank is guarding its cash flow status.
Yesterday, BankMuscat announced that it would be issuing a 20% dividend and a 30 per cent convertible bond to its shareholders for the financial year ended 31st December 2008.
So despite forecast losses, the shareholders are not to be deprived of annual income.
Although, the bank's operating profit rose 48.7 per cent to RO152.6 million from RO102.6 million in 2007, net profit for the year was only 11.2% more than that in 2007, after writing off "impairment losses" - bad loans?
Muted response on oil price following collision in Straits of Hormuz
Two American navy vessels collided in the 54km wide Straits of Hormuz, separating Musandam, Oman, to the south and Iran to the north, on Friday 20th March.
Fifteen sailors were slightly injured on the nuclear attack submarine Hartford while the amphibious craft, New Orleans, lost 25,000 gallons of marine diesel oil. A report from the Marine Corps said that monitoring from the air showed no sign of a sheen of oil on the surface of the sea, so it's being assumed that the discharged oil has sunk. The Marine Corps report was very anxious to state that the submarine's nuclear power plant had not been affected at all.
RoPME's website has no news of any intervention to monitor spillage. RoPME (Regional Conference of Plenipotentiaries on the Protection and Development of the Marine Environment and the Coastal Areas of Bahrain, I.R.Iran, Iraq, Kuwait, Oman, Qatar Saudi Arabia and the United Arab Emirates) seemed to be much more active a few years ago.
Oil prices, which had been languishing that morning, rose by just 39 cents a barrel on the New York Mercantile Exchange. Brent prices rose 50 cents to $51.17 on the ICE Futures exchange in London, a considerably more muted response than would have been the case a year ago.
This is the second collision of an American nuclear submarine with another boat in the Straits of Hormuz in two years. USS Newport News collided with a Japanese tanker in January 2007. On that occasion, the submarine commander was dismissed because of "a lack of confidence in his ability to command."
Back in September 2005, "the attack submarine Philadelphia [ ] collided with a Turkish cargo ship off the coast of Bahrain. No one was injured in the collision."
Fifteen sailors were slightly injured on the nuclear attack submarine Hartford while the amphibious craft, New Orleans, lost 25,000 gallons of marine diesel oil. A report from the Marine Corps said that monitoring from the air showed no sign of a sheen of oil on the surface of the sea, so it's being assumed that the discharged oil has sunk. The Marine Corps report was very anxious to state that the submarine's nuclear power plant had not been affected at all.
RoPME's website has no news of any intervention to monitor spillage. RoPME (Regional Conference of Plenipotentiaries on the Protection and Development of the Marine Environment and the Coastal Areas of Bahrain, I.R.Iran, Iraq, Kuwait, Oman, Qatar Saudi Arabia and the United Arab Emirates) seemed to be much more active a few years ago.
Oil prices, which had been languishing that morning, rose by just 39 cents a barrel on the New York Mercantile Exchange. Brent prices rose 50 cents to $51.17 on the ICE Futures exchange in London, a considerably more muted response than would have been the case a year ago.
This is the second collision of an American nuclear submarine with another boat in the Straits of Hormuz in two years. USS Newport News collided with a Japanese tanker in January 2007. On that occasion, the submarine commander was dismissed because of "a lack of confidence in his ability to command."
Back in September 2005, "the attack submarine Philadelphia [ ] collided with a Turkish cargo ship off the coast of Bahrain. No one was injured in the collision."
Internet usage and e-commerce in Oman
The Arab Advisors Group of Jordan, a specialised research, analysis and consultancy company, has just published a report entitled, 'Oman Internet users and e-commerce survey 2009,' based on research carried out in January 2009.
Since the report itself costs non-members of the group US$2750 to buy, I have to rely on the published press release which has been reproduced in various media outlets in the Gulf. You can download a table of contents of the Arab Advisors' report.
The author, Mr Hussam Barhoush, was careful to emphasise his methodology, and that the results "passed rigorous quality control checks." 696 respondents were selected randomly from an email shot in cooperation with Omantel. It's not clear if the original survey request went to all registered Internet users in Oman.
On the basis of this sample, and presumably independent data from Omantel, AAG estimated the total number of Internet users in Oman who had used e-commerce was more than 158,000, representing 5.62% of the total population of Oman, and 40.2% of all adult Internet users in Oman.
The 100 page report contains various graphics showing the breakdown of Internet users by nationality, age and gender. The table of contents promises a lot, but you'd need to see the report to judge.
E-commerce users in Oman spent US$236 million online in 2008. That's roughly US$1494 per user on average. That seems to me a lot of money, given the level of salaries in country. So presumably one could assume that the people who spent online were from the wealthier segment of society.
The report doesn't appear to give details of what was actually bought online. Holidays? Flights? Investments? Banking? Bill payments? etc but it also probes the extent of use of mobile phone transactions, and whether respondents were aware of 3G services.
I was intrigued by the reference to use of VoIP (Voice over Internet Protocol) using Skype and Google Talk. While over 73% of the respondents had not used VoIP, 20.7% of the respondents did use this software in 2008! I was under the impression that VoIP services, such as Skype, were banned in Oman. How did they beat the ban? And I wonder if the report's author was aware of this ban?
Since the report itself costs non-members of the group US$2750 to buy, I have to rely on the published press release which has been reproduced in various media outlets in the Gulf. You can download a table of contents of the Arab Advisors' report.
The author, Mr Hussam Barhoush, was careful to emphasise his methodology, and that the results "passed rigorous quality control checks." 696 respondents were selected randomly from an email shot in cooperation with Omantel. It's not clear if the original survey request went to all registered Internet users in Oman.
On the basis of this sample, and presumably independent data from Omantel, AAG estimated the total number of Internet users in Oman who had used e-commerce was more than 158,000, representing 5.62% of the total population of Oman, and 40.2% of all adult Internet users in Oman.
The 100 page report contains various graphics showing the breakdown of Internet users by nationality, age and gender. The table of contents promises a lot, but you'd need to see the report to judge.
E-commerce users in Oman spent US$236 million online in 2008. That's roughly US$1494 per user on average. That seems to me a lot of money, given the level of salaries in country. So presumably one could assume that the people who spent online were from the wealthier segment of society.
The report doesn't appear to give details of what was actually bought online. Holidays? Flights? Investments? Banking? Bill payments? etc but it also probes the extent of use of mobile phone transactions, and whether respondents were aware of 3G services.
I was intrigued by the reference to use of VoIP (Voice over Internet Protocol) using Skype and Google Talk. While over 73% of the respondents had not used VoIP, 20.7% of the respondents did use this software in 2008! I was under the impression that VoIP services, such as Skype, were banned in Oman. How did they beat the ban? And I wonder if the report's author was aware of this ban?
Blue City rumbles on
I wouldn't be surprised if people yawned at yet another blog post about Al Madina al Zarqa (Blue City), but I want to mention two recent articles about the project for the sake of keeping references up to date.
To recap briefly, AAJ Holdings of Bahrain, headed by Mr Ahmed Abubaker Janahi, claims to hold 70% of the shares in Ocean Developments, the caretaker company for the 'Blue City' project, a tourist and urban mega-development proposed for the Al Sawadi area on Al Batinah, west of Muscat. See details of company holdings.
Mr Ahmed Abubaker Janahi brought his case to the attention of the Bahraini press early in February. Virtually identical articles appeared in both Gulf Daily News - Lawsuit 'is testing global confidence' and Trade Arabia - Blue City lawsuit 'testing global confidence'.
According to February's articles, "AAJ Holdings had acquired its 70pc shareholding in the project company in two stages; 58pc on May 22 2005 and 12pc on October 17, 2005."
Cyclone LLC, the Omani partner, with 30% of the shares, took AAJ Holdings to court claiming that,
Cyclone has appealed the decision. The verdict of Oman's Court of Appeal has yet to be announced.
Mr Janahi spoke of his confidence in the Omani Judiciary but also of his concern that a new expert had been appointed to adjudge the case. His lawyers had objected to the appointment of an academic from Sultan Qaboos University, who Mr Janahi says is not an accredited expert with the Ministry of Justice, nor allegedly experienced in commercial litigation. In fact, claims Mr Janahi, this is the expert's first case.
Furthermore, Mr Janahi claims that he sent a representative to company offices in Muscat following the court's verdict, in order to access company records and carry out administrative tasks, but that the representative was 'thrown out' by Cyclone's staff.
Mr Janahi maintained that global investor confidence in Oman could be tested by the prolonged dispute over ownership. Regardless of problems with the slowdown of construction and real estate development in other parts of the Gulf, he "believes the effects of the economic meltdown are less substantial in the GCC, as governments are actively involved in the regulation of investment activities and many of the regions' central banks adopt a conservative approach."
Maybe so, but the Gulf is not immune from the effects of the 'credit crunch.' Does Mr Janahi believe that government is going to step in to keep Blue City solvent? Or is he betting on taking over the company with its new management team?
The other article of note reports an interview with Mr Richard Russell, currently CEO of Blue City Company One, which has the task of delivering Phase 1 of the Blue City project, high-end residential and tourist sectors. The interview appears in this month's issue of Euromoney, which provides information briefings for financial institutions and professional investors.
Mr Russell affirms the original concept of the Blue City as a commercial centre. Indeed, he suggested that some people already speak of Al Madina al Zarqa as the potential trade centre of Oman, built on the "back of six economic drivers: tourism, entertainment, education, medicine and healthcare, sports and wellness, and trade." The scheme ties in with Vision 2020, conceived in 1995, to direct Oman away from reliance on sales of hydrocarbons as a source of revenue, towards economic diversification.
I noted that the previous CEO of BCC1, Professor Fari Akhlaghi, has been retained as an advisor to the Board of Directors.
Mr Russell was at pains to point out that the redesign of the master plan, by Norman Foster and partners, had put the project back by nine months. He says that he is now working with the ratings company Fitch, who put "$526 million of the debt on ratings watch negative in July after it fell behind revenue targets," to review the debt documentation and align it with actual sales.
Mr Russell made an interesting aside that the original design had been inefficient. Go back to review some history on the project. He did not shy from outlining the current dispute over legal ownership.
Euromoney challenged Mr Russell over freehold rights for foreigners. Mr Russell replied that Oman's laws concerning freehold and inheritance were very straightforward, without actually providing detail on what foreigners' status would be.
As I understand it, foreigners can buy property in designated tourist projects, but this does not give them a right to work in country. So you'd need a stash of cash to go and live in Oman, without being able to work there. I know that some residents with work permits have found ways around this, but that option isn't available to all.
Even though Blue City is being funded by private financing, one suspects that considerable influence is being wielded to keep the project afloat.
There are rumours that another real estate development at Yiti, on the other side of Muscat, which was being undertaken jointly between Sama Dubai and Omran, a fully government owned company with the aim of expanding tourism in Oman, appears to be in abeyance. You can still register your interest on the Sama Dubai website but you can't view the masterplan. Or at least, you couldn't when I looked earlier.
I have fond memories of camping on the beach at Yiti, overnight at Eid, with the waves breaking on the beach and the sound of gunfire as the men of the village fired off their rifles to celebrate the dawn. Bet modern tourists wouldn't experience that!
To recap briefly, AAJ Holdings of Bahrain, headed by Mr Ahmed Abubaker Janahi, claims to hold 70% of the shares in Ocean Developments, the caretaker company for the 'Blue City' project, a tourist and urban mega-development proposed for the Al Sawadi area on Al Batinah, west of Muscat. See details of company holdings.
Mr Ahmed Abubaker Janahi brought his case to the attention of the Bahraini press early in February. Virtually identical articles appeared in both Gulf Daily News - Lawsuit 'is testing global confidence' and Trade Arabia - Blue City lawsuit 'testing global confidence'.
According to February's articles, "AAJ Holdings had acquired its 70pc shareholding in the project company in two stages; 58pc on May 22 2005 and 12pc on October 17, 2005."
Cyclone LLC, the Omani partner, with 30% of the shares, took AAJ Holdings to court claiming that,
"AAJ Holdings had violated the Commercial Companies Law in Oman, which states that partners in a company shall have the pre-emptive right to acquire shares that any partner in that company intends to dispose of to third parties.The Primary Court in Muscat rejected Cyclone's case and confirmed "AAJ Holdings' shareholding in the project company and the validity of the share sale and purchase process."
Cyclone claimed that the terms of the sale offered to it to exercise its right of first refusal were not the same as the terms under which the sale of the project company shares was actually concluded."
Cyclone has appealed the decision. The verdict of Oman's Court of Appeal has yet to be announced.
Mr Janahi spoke of his confidence in the Omani Judiciary but also of his concern that a new expert had been appointed to adjudge the case. His lawyers had objected to the appointment of an academic from Sultan Qaboos University, who Mr Janahi says is not an accredited expert with the Ministry of Justice, nor allegedly experienced in commercial litigation. In fact, claims Mr Janahi, this is the expert's first case.
Furthermore, Mr Janahi claims that he sent a representative to company offices in Muscat following the court's verdict, in order to access company records and carry out administrative tasks, but that the representative was 'thrown out' by Cyclone's staff.
Mr Janahi maintained that global investor confidence in Oman could be tested by the prolonged dispute over ownership. Regardless of problems with the slowdown of construction and real estate development in other parts of the Gulf, he "believes the effects of the economic meltdown are less substantial in the GCC, as governments are actively involved in the regulation of investment activities and many of the regions' central banks adopt a conservative approach."
Maybe so, but the Gulf is not immune from the effects of the 'credit crunch.' Does Mr Janahi believe that government is going to step in to keep Blue City solvent? Or is he betting on taking over the company with its new management team?
The other article of note reports an interview with Mr Richard Russell, currently CEO of Blue City Company One, which has the task of delivering Phase 1 of the Blue City project, high-end residential and tourist sectors. The interview appears in this month's issue of Euromoney, which provides information briefings for financial institutions and professional investors.
Mr Russell affirms the original concept of the Blue City as a commercial centre. Indeed, he suggested that some people already speak of Al Madina al Zarqa as the potential trade centre of Oman, built on the "back of six economic drivers: tourism, entertainment, education, medicine and healthcare, sports and wellness, and trade." The scheme ties in with Vision 2020, conceived in 1995, to direct Oman away from reliance on sales of hydrocarbons as a source of revenue, towards economic diversification.
I noted that the previous CEO of BCC1, Professor Fari Akhlaghi, has been retained as an advisor to the Board of Directors.
Mr Russell was at pains to point out that the redesign of the master plan, by Norman Foster and partners, had put the project back by nine months. He says that he is now working with the ratings company Fitch, who put "$526 million of the debt on ratings watch negative in July after it fell behind revenue targets," to review the debt documentation and align it with actual sales.
Mr Russell made an interesting aside that the original design had been inefficient. Go back to review some history on the project. He did not shy from outlining the current dispute over legal ownership.
Euromoney challenged Mr Russell over freehold rights for foreigners. Mr Russell replied that Oman's laws concerning freehold and inheritance were very straightforward, without actually providing detail on what foreigners' status would be.
As I understand it, foreigners can buy property in designated tourist projects, but this does not give them a right to work in country. So you'd need a stash of cash to go and live in Oman, without being able to work there. I know that some residents with work permits have found ways around this, but that option isn't available to all.
Even though Blue City is being funded by private financing, one suspects that considerable influence is being wielded to keep the project afloat.
There are rumours that another real estate development at Yiti, on the other side of Muscat, which was being undertaken jointly between Sama Dubai and Omran, a fully government owned company with the aim of expanding tourism in Oman, appears to be in abeyance. You can still register your interest on the Sama Dubai website but you can't view the masterplan. Or at least, you couldn't when I looked earlier.
I have fond memories of camping on the beach at Yiti, overnight at Eid, with the waves breaking on the beach and the sound of gunfire as the men of the village fired off their rifles to celebrate the dawn. Bet modern tourists wouldn't experience that!