Month: November 2007
Abu Dhabi estimated to generate additional $800b in cash flows
BY HASEEB HAIDER KHALEEJ TIMES
ABU DHABI — Abu Dhabi is estimated to generate $800 billion worth additional cash flows during the period 2005-2020 due to high oil prices in the international market, said a consultant.
Kito de Boer, managing director, ME Mckinsey & Company, said GCC region sans Abu Dhabi would add another $1200 billion cash flow to make a total of whopping $2 trillion worth of financial resources chiefly due to bullish oil market.
Sharing his views at a panel discussion during a two-day ‘Abu Dhabi Conference 2007’, being organised by MEED, he said this additional cash flow would offer more business opportunities.
Earlier, Khaldoon Khalifa Al Mubarak, Chairman, Abu Dhabi Executive Affairs Authority (EAA) and CEO Mubadala Development Company, gave a comprehensive overview of Abu Dhabi’s economic ambitions and government reforms process. He said Abu Dhabi has a clear roadmap for economic development.
The future economic strategy of the emirate focuses on real estate, setting up of heavy industry and exploring potential of high-end tourism, infrastructure development under Vision 2030, he added.
In the oil sector from current level of 2.7 million barrels per day Abu Dhabi is keen to raise production to 4 million bpd by 2020. A major development project would be announced in near future, under which nation’s huge sour gas resources would be explored.
Moreover, a number of petrochemicals projects would be developed besides setting up of heavy industries like aluminium smelters etc.
“Abu Dhabi wants a cluster of industries to be developed once aluminium smelter comes online in Taweelah, where a industrial city is being developed,” the chairman EAA said.
Osteoporosis – Prevention is the key
By Priya Mathew
Dr Ayman Mofti
IT HAS NOT YET captured the imagination of the health fanatics in this part of the world the way more ‘popular’ diseases such as cholesterol or blood pressure have. But then, Osteoporosis and its implications haven’t been under the media glare for long even though its complications have been making life difficult for human beings, especially, the female of the species, for ages.
“For many years there was no easy tool to diagnose the condition characterised by low bone mass due to thin bone and large holes in the bone, which in turn makes the bone fragile and prone to fracture. Furthermore, there was no effective treatment for the condition until about eight to ten years ago,” says Dr Ayman Mofti, Rheumatologist with American Hospital Dubai.
That might explain to some extent why the media chose to give Osteoporosis the royal ignore all these years. But that has added to the misconceptions people harbour about the condition.
Osteoporosis, as we know it, falls into two categories, primary and secondary. The most common one is primary Osteoporosis which is not associated with any other disease. It usually occurs in post-menopausal women due to the drop in hormones leading to bone loss.
Men too are candidates for osteoporosis but it happens at a significantly older age, mainly in their late sixties and early seventies.
The main problem with Osteoporosis is that it goes unnoticed as it does not have any symptoms. “Many people believe that pain is a symptom of Osteoporosis. But actually it is the complications that arise due to Osteoporosis that cause the pain. And the complications can vary from broken vertebrae or fractures that cause severe pain and immobility to spinal deformities in the form of humps,” says Dr Mofti.
Statistics say that 1 in 3 menopausal women develop some kind of fracture due to osteoporosis that will in some way threaten the longevity of their lives.
Of all fractures, hip fracture is the most serious complication as about one fourth of women who have had hip fractures die within a year. About half of them have difficulty walking on their own and become totally dependent on others.
Though hip fractures carry a high mortality rate, the most common fracture due to osteoporosis is the vertebral fracture. Something as delicate as coughing or sneezing is known to cause the collapse of the vertebral bone in women with severe osteoporosis.
No wonder Dr Mofti lays great emphasis on preventing fractures once diagnosed with Osteoporosis. “Studies have shown that about 35 per cent of menopausal women develop some kind of fracture that may impact their lives. You can imagine the enormity of the situation when you compare the figure for men belonging to the same age bracket. It is a mere 14 per cent. And hip fractures take the cake in terms of mortality rate. So extra care has to be taken to prevent fractures.”
That would include rearranging the furniture layout of the room if it is not patient friendly as tripping and falling forms a major cause of fractures. Another factor that needs to be taken care is the eyesight. If plagued by vision problems, no time should be lost in rectifying them. If certain types of medication, especially medicines for blood pressure make you dizzy, consult your physician and have them replaced by more favourable medicine.
Prevention is better than cure
As with any other medical condition, the age-old adage of prevention is better than cure holds true for Osteoporosis as well.
In order to prevent Osteoporosis, you need to know whether you are at risk of developing Osteoporosis.
Though one cannot do much about the genetic make up as well as the fact that one is a woman naturally progressing towards menopause, there are a whole lot of other risk factors that can be altered to prevent the onset of Osteoporosis.
Inadequate Calcium intake particularly during young age would affect the amount of bone reserves one would have in old age.
An average person requires about 1000-1500 mg of Calcium a day. Young people who drink milk everyday and consume dairy products would easily get the required quantity. But children with lactose intolerance would need to take Calcium supplements in order to build up optimum bone reserves.
Sedentary life style with little or no exercise, especially weight bearing exercise, increases the risk for developing Osteoporosis.
Habits such as excessive smoking and drinking also put you at risk for Osteoporosis.
Certain medications such as high doses of cortisone used for a long time (3 months or longer) or high therapeutic dose of thyroid hormone supplement are said to affect the bones leading to osteoporosis.
Small built women who weigh less than 55 kg are also at the risk of developing Osteoporosis.
Vitamin D deficiency can also lead to Osteoporosis. A person is supposed to have 400-800 international units of Vitamin D every day. Its deficiency either due to mal-absorption or due to less exposure to sun can cause softening of the bone which in turn makes the bone more fragile. Vitamin D deficiency is more evident in women in this part of the world as they spend most of their time indoors and whenever they venture out they are covered from head to toe by their traditional dress.
Osteoporosis is a silent disease. Majority of the people come to know they have Osteoporosis only after they break a bone or two. That is why Dr Mofti insists on regular check ups for postmenopausal women for Osteoporosis. Women deemed to be at a higher risk should be screened for it every one or two years while women with lowered risk should be screened once in five years.
Currently, the most accurate method available to diagnose Osteoporosis is the DEXA test that measures the bone mineral density. It uses a measuring unit called T-score which compares the bone density of an individual with that of an average young adult of the same sex. The T-score can tell the extent of risk you are at for developing Osteoporosis.
If the T-score turns out to be -2.5 or higher, the person can be considered to have Osteoporosis. Further evaluation is recommended to find out whether the patient has primary or secondary Osteoporosis.
“Many people are still very reluctant to take a test for Osteoporosis. It might be due to their ignorance about the impact of Osteoporosis. That’s where the media has a significant role to play. If people are made aware of the consequences of Osteoporosis the way they know about the ill-effects of cholesterol or blood pressure, it would be easy to tackle the problem,” says Dr Mofti.
And it is not as if you have to pay through the nose to conduct the test for Osteoporosis. It costs as much as a comprehensive test for Cholesterol, which would vary from Dhs 250 to Dhs 500.
“Ideally, we need medicines that would rebuild bone as well as medicines that would reduce the bone loss. Medicines that would actually build up the bones are still understudy while we have several medicines which reduce bone wash out,” says Dr Mofti.
Hormone Replacement Therapy is also recommended as a preventive and therapeutic medicine for Osteoporosis though it requires longer period of treatment. Though it has its benefits it has its limitations in that it cannot be used in women who are predisposed towards deep vein thrombosis and breast cancer.
Exercise is also recommended before and after the diagnosis of Osteoporosis. Weight bearing exercises such as lifting weight, walking, etc which put pressure on the bones would do a lot of good as it stimulates the bone.
Eliminating the risk factors would also go a long way in controlling Osteoporosis. It is never too late to quit smoking, cut down alcohol consumption and increase Calcium and Vitamin D intake. All these would help but not as effectively as it would have if implemented before being diagnosed with Osteoporosis. Remember, prevention is the key element in tackling Osteoporosis.
Smoking mothers lead to fat children: study
TOKYO – Children whose mothers smoked even in early stages of pregnancy are at nearly three times greater risk of obesity later in life, according to a Japanese study.
While researchers do not know the exact correlation, it is possible that the children whose mothers smoked were deprived of nutrition in the womb, the study said.
The survey was done over a period of nearly two decades by a team led by Zentaro Yamagata, professor at Yamanashi University’s School of Medicine.
It covered some 1,400 women in Japan who gave birth between April 1991 and March 1997. The researchers then collected data on about 1,000 of their children when they entered fourth grade at age nine or 10.
The risk of obesity was 2.9 times higher among children whose mothers smoked when they were three months pregnant or in earlier stages of pregnancy compared with children of non-smoking mothers, the study showed.
The results “indicate smoking during pregnancy, even in the early stages, can affect the health of children over a long period of time,” Yamagata said.
Researchers can “speculate” that children who had been poorly fed in the womb would stock up on nutrition after they were born, he said.
“But we don’t know the truth. What is important here is to stop smoking,” he said.
The results of the study were announced at a meeting of public health experts in Japan last week and will be carried in a North American magazine to be published in December.
UAE to boost oil production capacity by start of next decade
WAM Published: November 28, 2007, 13:27
Dubai: The UAE plans to increase its oil production capacity.
Government owned news agency WAM said the oil output of the UAE is expected to rise from 2.7 million to 3.5 million barrels per day at the beginning of the next decade.
It’s refinery capacity, which currently stands at 600,000 barrels per day is expected to rise to 1.1 million in the near future.
The UAE has 8.1 per cent of the world’s oil reserves as well as an estimated gas reserve of Six trillion cubic metres.
Abu Dhabi to supply extra crude
Reuters Published: November 29, 2007, 00:20
Singapore: Abu Dhabi will supply full term volumes of crude oil to its Asian customers for January and additional barrels to at least three buyers to meet winter demand, lifters said on Wednesday.
This is only the second month since November 2006 that Abu Dhabi, the main producer in Opec-member the UAE, is supplying additional volumes, but the move may not herald the organisation’s plan to lift output again when it meets next week.
“We received the notice. It is full volume and a small incremental,” one term lifter said.
Abu Dhabi occasionally sells extra crude to its term buyers in Asia, its main export market, although the exact volumes to be supplied this time were not immediately known.
Opec is meeting in Abu Dhabi on December 5 and is under pressure to supply more crude to world markets to stop prices from breaching new records and put further strain on the global economy.
While top Gulf Opec officials have expressed deep concern at prices threatening to top $100, they reiterated that markets were well supplied and steered clear of saying whether Opec would raise production at its policy meeting.
The incremental Abu Dhabi supplies for December came after a sharp cut-back in November due to offshore oilfield mainten-ance, and were in line with Opec’s decision to boost daily output by 500,000 barrels from November 1, which failed to stop prices from rocketing.
Two lifters confirmed receiving written notice that they would get full term volumes for a second month in January.
Four lifters said they had not requested extra barrels, while three others had asked for additions, leaving it unclear whether Abu Dhabi will supply more crude to Asia for January than for December.
But unlike the December barrels, Adnoc did not not actively offer additional volumes for January. It may also not be able to satisfy all requests for additional crude, with one lifter saying it had sought a full additional 500,000-barrel cargo but received less.
Adnoc set to resume production at Lower Zakum West next week
Bloomberg Published: November 28, 2007, 00:31
Abu Dhabi: Abu Dhabi National Oil Co (Adnoc), the biggest oil-producer in the UAE, will resume production from its 280,000 barrel-a-day Lower Zakum West field on December 6, a company official said.
The field, which produces more than 10 per cent of the UAE’s daily oil output, has been completely shut since the end of October for the installation of a gas facility.
The new facility will inject gas into the oil wells to exert pressure in the reservoir so more oil can be pumped out.
Adnoc, the second-larg-est Arab oil company by production, reduced its output this month by a quarter, or about 600,000 barrels a day, because of planned maintenance at the Upper Zakum, Lower Zakum West and Umm Shaif oilfields.
Umm Shaif has resumed production, the official, who declined to be identified because of company policy, said. Lower Zakum includes Lower Zakum West and Lower Zakum Central.
Zakum Central continues to produce about 60,000 barrels a day while the rest of the field undergoes maintenance, the official said.
Lower Zakum and Umm Shaif are operated by Abu Dhabi Marine Operating Co, also a unit of Adnoc.
An Adnoc official responsible for maintenance at the Upper Zakum field declined to confirm output at that field had resumed. Upper Zakum, which contributes about 200,000 barrels a day to UAE daily oil production, is operated by Adnoc unit Zakum Development Co.
The UAE, the third-largest oil exporter in the Organisation of Petroleum Exporting Countries, is planning to raise oil output to four million barrels a day from about 2.6 million barrels a day at present.
Dubai: Emirates National Oil Company (Enoc) Board yesterday appointed Saeed Abdullah Khoury as its chief executive officer effective from December 1.
Khoury takes over from Hussain Sultan, who retires as group chief executive of Enoc, a position he held for 35 years since the group’s start-up.
Ahmad Humaid Al Tayer, Enoc’s vice-chairman, said: “With 28 years’ experience in Adnoc, Khoury is an expert in both upstream and downstream activities in the Emirates and is well placed to be a strategic implementer for Enoc’s growth.”
Khoury said: “We will continue to focus our activities to remain an important player in the local and international energy industry.” He added: “Enoc already operates many international businesses, which will be a major focus of our growth in the future, and will help to extend our excellent brand vision across the world.”
With a strong industry background, Khoury has been responsible for several industry achievements and is set to spearhead the future growth of the leading oil and gas company.
Abu Dhabi is biggest stakeholder in Citigroup
Gulf News Report Published: November 28, 2007, 00:31
Dubai: The Abu Dhabi Investment Authority yesterday became the biggest shareholder in the Citigroup following an acquisition of 4.9 per cent shares worth $7.5 billion in America’s largest bank.
Through this deal Abu Dhabi displaces Saudi Prince Alwaleed Bin Talal as Citi’s largest shareholder. Prince Alwaleed acquired his Citi stake in 1991 when the bank struggled with Latin American loan. Currently, Alwaleed holds 3.97 per cent stakes worth an estimated $6 billion.
The fresh capital injection by Adia will shore up Citi’s balance sheet, which has been hurt by some $6.8 billion of writedowns and losses in the third quarter, and the potential for another $11 billion in the fourth quarter.
Following the deal Citigroup shares gained 1.3 per cent to reach $30.18 by noon yesterday. On Monday, Citi shares closed at $29.80 on the New York Stock Exchange. Citi’s market value has fallen by more than $100 billion this year. “We see in Citi a highly respected company with a premier brand and with tremendous opportunities for growth,” said Shaikh Ahmad Bin Zayed Al Nahyan, Managing Director of ADIA.
Analysts said yesterday that the share sale might also signal an end to the freefall in US financial stocks following this summer’s credit crisis.
“There will be more such investments,” said Giyas Gokkent, head of research at the National Bank of Abu Dhabi. “The other [Gulf] buyers will likely play the same white-knight role,” he said.
The Abu Dhabi Investment Authority is buying equity units, which will be convertible into Citi shares at a price of up to $37.24 a share between March 15, 2010 and September 15, 2011.
15 financial problems at a glance!
When it comes to psychology and financial behaviour, India does not have too much of research papers. Hence we are forced to turn to the US or UK for such research work.
US studies have summarised financial problems and have found the following to be the most common of financial problems:
~ Not planning: The single biggest problem for most people is that they just do not plan their finances. It just keeps coming and going. Even if they are not happy about the results of what they have done so far, they do not change the way things are done.
~ Overspending: Many people with not very high incomes have very high ambitions. This is likely to get them to grief. Most of this problem is because the salesmen in most shops do not tell you the price of a product, they only tell you the EMI — so anything from a plasma TV to a luxury home on the outskirts of the city are made to look cheap! After all at Rs 2,899 a month does a plasma TV not look cheap?
~ Not talking finance at home: Children are kept away from the finance topics at the dining table. Finance is perhaps the second most taboo topic at home! So many children grow up without knowing how much of sacrifice their parents have gone through to educate them.
~ Parents spending on education and marriage: There are just too many kids out there who believe that they need to worry about savings, investment and life insurance only at the age of 32 plus. This means your father, father�in-law or a bank loan has funded your education and marriage. Kids should take on financial responsibility at a much younger age than what is happening currently.
~ Marriage between financially incompatible people: Most marriages under stress are actually under financial stress. Either the husband or the wife is from a rich background and the other partner cannot understand or cope with the spending pattern. It is necessary to match people financially before marriage.
~ Delaying saving for retirement: “I am only 27 years old why should I think of retirement” seems to be a very valid refrain for many 32 year olds! Every year that you delay in investing the greater the amount that you will have to save later in your life. Till the age of 32 it might be feasible for you to catch up, but after some time the amount that you need to save for retirement just flies away.
~ Very little life insurance: With all the risks of life styles, travel, etc. illness and premature death are common. We all have classmates who had heart attack at the age of 32 but still pretend that we do not need life or medical insurance. We buy car insurance because it is forced upon us, but we ignore life insurance! Imagine insuring a Rs 10 lakhs car, but not insuring (or under insuring) the person who is using the car — and paying for it, that is, you!
~ Not prepared for medical emergencies: Normally big emergencies — financially speaking — are medical emergencies. Being unprepared for them — by not having an emergency fund is quite common. Emergency fund has now come to mean the credit card — which is good news for the bank, not for the borrower.
~ Lack of asset allocation: Risk is not a new concept. However, it is a difficult concept to understand. For example when the Sensex was 3k there was much less risk in the equity markets than there is today. However at 3k index people were afraid of the market. Now everybody and his aunt wants to be in the equity market — and there are enough advisors who keep saying, “Equity returns are superior to debt returns.” This is true with a rider — in the long run. It is convenient for the relationship manager to forget the rider. So there could be a much larger allocation to equity at higher prices — to make for the time missed out earlier.
~ Falling prey to financial pitches: The quality of pitches has improved! Aggressive young kids are recruited by brokerage houses, banks, mutual funds, life insurance companies, etc. and all these kids are selling mutual funds, life insurance, portfolio management schemes, structured products, et al. Selling to their kith and kin helps these kids keep their jobs, and there is happiness all around! These kids, themselves prey to financial pitches, have now made it an art when they are selling to their own natural ‘circle of friends’ and relatives.
~ Buying financial products from ‘obligated persons’: This is perhaps one of the worst things you can do in your financial life. A friend, relative, neighbor, colleague who has been doing something else suddenly becomes a financial guru because they have become an agent! They, in great enthusiasm, sell you a financial product and promptly in 2 years time give up this ‘business’ because it is too difficult. You are saddled with a dud product for life! What a pity. Charity begins at home, not financial planning.
~ Financial illiteracy: Most people do not wish to know or learn about financial products. They simply ask, “Where do I have to sign” — so buying a mutual fund is easier than buying life insurance! Selecting products based on the ease and simplicity of buying is a shocking but true real life experience in the financial behaviour of the rational human being!
~ Ignoring small numbers for too long: What difference will it make if I save Rs 1,000 a month? Well over a long period it could make you a millionaire! So start early and invest wisely. It will make you rich. That is the power of compounding.
~ Urgent vs important: Most expenses, which look urgent, are perhaps not so important — the shirt or shoe at a sale. That luxury item which was being offered at 30 per cent discount is such an example. These small leakages are all reducing the amount of money you will have for the bigger things like education or retirement.
~ Focusing too much on money: Money is no longer a commodity to buy things. It is a scorecard of one’s life. That will cause stress, and yoga might help. However if you will seek a branded yoga teacher — so that your friends think you have arrived, yoga it self could cause financial stress!