Month: February 2008

Photo Speaks – Now some rest

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Photo Speaks – Now some rest

Curtain down for DSF and still the fun goes on. This was an early morning scene from the fun station at the Dubai Creek.

Prices of Selected Commodities Weekly Review dt 28 Feb 2008

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Prices of Selected Commodities Weekly Review dt 28 Feb 2008

Source : Ministry of Economics, Khaleej Times

English county cricket teams pick UAE for pre-season tournament

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English county cricket teams pick UAE for pre-season tournament By K.R. Nayar, Senior Reporter GULF NEWS Published: February 28, 2008, 00:40

Dubai: Top English county cricket teams have found UAE as an ideal venue for a pre-season tournament.

“UAE is close to UK and has the weather and facilities to play professional cricket before the start of their season,” said Matthew Jackson, the Chief Executive Officer Sports Arabia Ltd, the organiser of the Arch Trophy to be held in Sharjah and Abu Dhabi next month.

Top England Test stars like Andrew Flintoff, Marcus Trescothick, Ravi Bopara, Graham Gooch and Mushtaq Mohammad, representing five county teams, will play in the tournament.

“One of our companies, Arabian Cricket Ltd, a tour operator that specialises in organising cricket tours, organised a tour for Sussex and Essex last year.

“They enjoyed playing here. So we contacted the England Cricket board and International Cricket Council for approval to stage a tournament here. We are now sanctioned as an unofficial ICC event,” added Jackson.

“We are also staging an Under-19 English schools tournament from March 26 to 31 at the Zayed stadium in Abu Dhabi and a County Academy tournament in December,” he said.

Jackson is keen to expand the Arch Trophy next year. “This will be an annual event contested mainly by English teams but we will soon include pro teams from other cricketing nations too,” he said.

Elaborating on how he picked the five counties, Jackson said: “Sussex and Essex readily agreed as they played here last year. We approached Lancashire and Yorkshire because they are two of the biggest pro teams in the UK and Somerset as they are the English second division champions.

“We are also keen to develop cricket in UAE and invited the UAE team to gain from the experience of playing some of the best players in world cricket and help them in their quest to qualify for the next World Cup.”

Reviving a timeless tradition in Dubai

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Reviving a timeless tradition in Dubai
By Shakir Husain, Staff Reporter GULF NEWS Published: February 28, 2008, 00:39

Dubai: The almost extinct Gulf heritage in pearl trading is set to be resurrected in Dubai. However, this revival is a far cry from the old days of pearl diving when divers spent weeks searching for the treasure hidden in oysters.

When the Pearls of Arabia project is completed in two years, creating a pearl business hub on “Antarctica” at The World manmade island cluster, the new face of the pearl trade in Dubai will reflect the progress the city has seen since the pre-oil era.

Led by the Dubai Multi Commodities Centre (DMCC), Pearls of Arabia is designed to serve as a hub for retail and wholesale pearl traders. It will also become a tourist attraction in the city, which is targeting 15 million tourists in 2015.

“This project is the first stage of Dubai’s plan to re-establish the emirate as a centre for the global pearl trade,” DMCC said.

Last year Dubai set up an exchange to provide a platform for pearl trading.

The 6,000-square-metre Pearl of Arabia features a themed cultural heritage centre, a performing arts theatre, an exhibition gallery and a seafood restaurant alongside boutiques to be run by top pearl fashion houses.

Dubai will invite leading international names in the pearl industry to set up shop in the city. Visitors will travel to the pearl destination by ferries that will serve The World archipelago of 300 islands.

Officials did not get into the specifics of the project, but made their ambitions clear.

Ahmad Bin Sulayem, executive chairman of DMCC, said Dubai is seeking “inspiration from our heritage to build a brighter tomorrow”.

He said pearling was the lifeblood of Arabia less than a century ago and accounted for some 80,000 jobs in the UAE alone. Pearling represented 95 per cent of the country’s revenues.

“Pearls of Arabia presents age-old wisdom in a modern and contemporary fashion to revive the region’s historic legacy for the benefit of future generations,” Bin Sulayem said.

DMCC did not say if pearl farming will be part of the project, which is being implemented in association with Australia’s Paspaley Pearling Company.

“Historically, Dubai served as the world’s hub in the trade of fine-quality natural pearls. Now, almost 100 years later, we are delighted to collaborate with DMCC to revitalise the region’s traditional association with pearls,” said Nicholas Paspaley, executive chairman of the Australian company.

“Together, we will resurrect Dubai’s reputation as one of the world’s premier and most important pearl destinations. Dubai will present to the world the best selection of pearls and pearl jewellery that the 21st century pearling industry has to offer, and will showcase the beautiful history and story of pearls,” he added.

The UAE had some of the best pearls at the start of the 20th century, but the diving tradition died out in the wake of the wealth generated from oil.

Globally, pearl diving is a thing of the past. Australia has one of the world’s last remaining fleets of pearl diving ships. Australian divers dive for south sea pearl oysters to be used in the cultured south sea pearl industry.

However, the Pearls of Arabia is not aimed at recreating the trade in the old style. “It will be a commercial hub with a modern facade,” said Gaiti Rabbani, executive director of coloured stones and pearls at DMCC.

Industry award

Along with developing the pearl trade, Dubai will also institute an industry award that will attract global participation.

Dubai is using its strengths in the gold and diamond trade to make pearls a big business in the city.

“We will bring all elements of the jewellery trade together. We will use the same model that has been successful for other industries by offering tax-free benefits and easy rules,” Rabbani said.

She said a set of standards will also be introduced to generate consumer confidence in the pearl trade.

DMCC is looking at introducing a uniform certification for pearls, based on globally accepted quality parameters.

The certification will be developed in conjunction with leading gem certification bodies and in consultation with local and international trade players.

History: A feature of life

Arabian pearling developed with the opening of the ancient Silk Route.

In the late 1940s and early 1950s, pearl diving was a key feature of life on the Trucial coast.

Around 80,000 men earned their living from the pearling trade, accounting for up to 95 per cent of national incomes. The Trucial States had 1,200 pearling dhows, of which 335 were from Dubai.

The pearl banks were generally some distance from the coast lying at depths of 46 to 120 feet.

The pearl banks of the Gulf provide the finest pearls in the world due to the formation of the seabed, the temperature and shallowness of the water.

Pearl diving was a hazardous business as navigation was limited to the stars, a simple compass and the captain’s knowledge and experience of the pearl banks.

In the 1830-1900 period, output was worth an average of $1.75 million a year, rising to nearly $4 million in the first decade of the 20th century.

Sources suggest that in the Mumbai market, 1gm of fine Gulf pearls may have had the same approximate value as 320 grammes of gold or 7.7kg of silver in 1917.

At the turn of the last century, the UAE had a reputation for having some of the best natural pearls in the world.

By the early 20th century the pearl industry in the Gulf was at its height but it declined during the Great Depression of the 1930s and the development of the more affordable cultured pearl in 1921.

– Source: DMCC

Opec expects stock to keep increasing

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Opec expects stock to keep increasing
Bloomberg Published: February 28, 2008, 00:39

Dubai: Oil supply and demand are in balance, and a gradual rise in stockpiles will continue through the second quarter, a Gulf official familiar with Saudi Arabian oil policy said yesterday.

The oil price, which reached a record $102.08 a barrel in New York electronic trading yesterday morning, is higher than it should be and isn’t in line with supply and demand fundamentals, the official said in an interview on condition of anonymity.

Saudi Arabia is the largest influential producer within the Organisation of Petroleum Exporting Countries, scheduled to meet on March 5. “Opec is taking a cautious view of the supply and demand balance,” said Paul Horsnell, head of commodities research at Barclays Capital in London. “But it seems hard to justify a cut in production, even based on their numbers.”

Futures jumped in New York as the dollar fell to an all-time low against the euro. The UBS Bloomberg Constant Maturity Commodity Index rose to the highest ever, on gains for gold, silver, sugar, copper and coffee.

The dollar weakened to $1.5088 a euro, the lowest since the European single currency was introduced in 1999. Oil traded 38 cents higher at $101.26 at 11.54am London time.

Opec will consider all available supply, demand and inventory levels when it meets next week in Vienna, and recommendations from the group’s secretariat, the official said.

Position: Group firm on stand

A combination of economic slowdown in the US and a seasonal fall in consumption will hit oil demand and Opec will not increase output when it meets next week, the producer group’s president said on Tuesday.

“I can tell you they are not going to increase production because there are plenty of stocks,” Opec president Chakib Khelil told Reuters in the Nigerian capital of Abuja.

Adnoc to give full term crude to Asia in April

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Adnoc to give full term crude to Asia in April Reuters Published: February 28, 2008, 00:39

Singapore: Abu Dhabi National Oil Co (Adnoc) told its Asian customers that it will supply them crude oil at full contracted volumes for April, unchanged from March as expected, refiner sources said yesterday.

Demand for additional supplies from Abu Dhabi, the main oil producer for UAE, were limited for April as Asia enters the refinery turnaround season and oil demand falls, refiners added, in line with Opec’s reasoning that no more oil is needed during the second quarter.

“We got full contracted volumes,” a trader with a term lifter said.

The full allocations, and limited additional volumes, come ahead of Opec’s March 5 meeting, where members are expected to refrain from raising output due to expectations of slower demand.

Dubai fuel retailers increase price of diesel to Dh12.80 per gallon

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Dubai fuel retailers increase price of diesel to Dh12.80 per gallon By Nadia Saleem, Staff Reporter GULF NEWS Published: February 28, 2008, 00:39

Dubai: Dubai fuel retailers have again increased the price of diesel by 30 fils to Dh12.80 per gallon, making diesel in the emirate almost 50 per cent costlier than in Abu Dhabi.

A manager of a Dubai-based transportation company told Gulf News there had been an average 30-fils increase in the price of diesel every month and this had increased his business costs.

Last month diesel sold at Enoc, Eppco and Emarat filling stations at Dh12.50 per gallon, up from Dh11 in October.

“We have to spend time and resources informing commuters of price increases in transportation and then they become very upset and angry,” said the Dubai transport company manager, who did not wish to be quoted.

While Dubai fuel companies have been raising diesel prices for months, Abu Dhabi National Oil Company (Adnoc) has kept the price steady at Dh 8.60 per gallon.

Companies in Dubai have argued in the past that they are forced to revise their prices to match the rising crude prices in world markets.

Dubai-Sharjah double decker bus from Aug

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Dubai-Sharjah double decker bus from Aug
By Joy Sengupta (Our staff reporter)KHALEEJ TIMES 28 February 2008

DUBAI — Commuting between Dubai and Sharjah is all set to become a pleasure when double decker buses start plying between the two emirates from August this year.

Senior officials of the Public Transport Department in the RTA have said 70 state-of-the-art double decker buses would be plying between Dubai and Sharjah from August.These 90-seat buses are all set to provide the passengers with the much-needed luxury.

Officials told Khaleej Times that they would also start new coach buses between Dubai and Abu Dhabi and Dubai and Al Ain.

The RTA already has a fleet of buses plying between Dubai to Sharjah, but the commuters have complained that at times, they have to stand because of the lesser number of seats.

Thousands of people use the bus service from Dubai to Sharjah everyday. The RTA started the service on the Dubai-Sharjah route in May last year with 90 buses. These were later replaced by more luxurious buses.

“People can catch the new double decker buses from the Al Ghubaiba (Bur Dubai) Bus Station. Initially, we would be operating a fleet of 70 double decker buses, with 90 seats each. This means that more people can travel comfortably at one time,” said an official.

He added that the double decker buses would drop passengers at two bus stations in Sharjah — Al Jubail Bus Station and Al Rolla Bus Station.

“The new buses would be strengthening our fleet and reduce the waiting period for buses considerably. Moreover, the passengers can enjoy a more comfortable journey,” he added.

Talking about the coach buses, the official said each of them had 35 seats and would be travelling on the Dubai-Abu Dhabi and Dubai-Al Ain routes.

Here’s how you can live a happy retired life with pension plans

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Here’s how you can live a happy retired life with pension plans

Vidyalaxmi, TNN

A chief executive officer of a leading insurance company had an interesting thing to say on pension plans: “The pension plan of Indians until two years ago was to give birth to a maximum number of sons. The hope was at least one would take care of the aged parents in their golden years.” This school of thought has been challenged with the breakdown of the joint family system.

Indians rarely think they need to bear their retirement costs, nor do they expect the government to play a role. Most Indians feel that their children will bear their retirement costs. But falling fertility rates are resulting in smaller families. The growing stress of mobility in work force is impacting the joint family system and informal support systems are crumbling,” says Aviva India managing director Bert Paterson.

According to an all-India survey done by the Invest India Economic Foundation, less than a sixth of those about to retire, around 113 million by 2016, are covered by some form of pension. Pension plans are one such investment-cum-saving option offered by most insurers for your golden years. In such plans, you pay a fixed premium over a certain tenure, which is the term of the policy. Then the net premium, after all the deductions, is invested by the insurer in various instruments, depending on the type of plan.

Pension plans available

There are two kinds of plans — endowment and unit-linked. Endowment plans invest your money in fixed income products. So you may find the returns low, although safe, after discounting the inflation. The other variant is ULIPs, which invests the corpus in stock markets, balanced funds, etc. Then comes the ‘with cover’ and ‘without cover’ plans. The ‘with cover’ pension plans, as the name suggests, comes with a life cover that takes care of any untimely demise. The most commonly available plan today is the ‘deferred annuity’ plans.

In these plans, the pension does not begin immediately. You can defer it up to a period of your choice. Let us assume you buy a pension plan with a tenure of 25 years. Then your annuity/pension will begin after 25 years from the effective date of your policy. Apart from that, you also have the option of deferring your vesting age. Suppose you have opted for a pension plan, in which the annuity would start from the time you turn 45. But if you plan to work for another five years, then you can defer your vesting age to 50, says Pranav Mishra, senior vice-president & head of products, ICICI Prudential Life Insurance.

Start Early

It is also advisable to start investing early. That will help you save a significant corpus for future. There is certain cost attached to your postponement of investment.

If one delays buying a life insurance policy even by five years, the premium goes up.

Flex it

Another point check is to ensure that the plan offers flexibility so that it fits the customer’s needs as they change. The trend is to opt for a ULIP pension plan with a fixed allocation strategy.

Know the charges

Every pension policy comes at a cost. Briefly, you have a fund management charge, policy administration charge, premium allocation charge and switching charge. A switching charge, however, is applicable only after you cross the switching limit available in every policy. According to industry estimates, the policy administration charge is anywhere between 0.20% and 0.50% of the premium. It depends upon the frequency of the premium and the premium amount.

Premium can be paid annually, semi-annually, quarterly or every month. Fund management charge falls anywhere between 0.75% and 2.5% per annum and the switching charge, if any, is usually Rs 100.

Death of the policyholder

This clause may vary from policy to policy. If the policy holder dies during the tenure of the plan, then the nominee gets the sum assured or fund value, whichever is higher in case of sum assured plans. If the nominee is the policyholder’s spouse, then he/she has an option of either an annuity or a lump sum amount. In case of zero sum assured policy, the beneficiaries get the fund value.

Other options

Should you lock yourself into an annuity plan? Most neutral financial advisors say no. One reason is the annuities are taxable. Secondly the returns are also low.

You earn anywhere around 6-7% on your annuities. Today, a five-year bank deposit, which also offers a tax break on investment under Section 80C offers 8.5-10%. Other monthly income options are the Senior Citizens’ Savings Scheme (SCSS), which offer 9% and the post office monthly income scheme (POMIS) that offers 8%. But again the tenure for these instruments is six years and eight years, respectively.

“I like the concept of annuity. It covers the life risk as an investor gets payouts till his/her life ends. But the rates are even lower than bank FDs. You get around 8-9.5% interest rate on your FDs. Similarly you park your money with the insurer but you earn only 6-7%,” says Swapnil Pawar, a certified financial planner with Park Financial Advisors.

If you have saved a higher corpus for retirement, then you can look at fixed maturity plans or even debt funds as they are more tax efficient than FDs.

Rishi Nathany, another certified financial planner, says annuities are low worldwide. At least in the US, social security benefits are available for senior citizens. But in India, the senior citizens have no such option.

The fact is that annuities ensure regular cash flow in retirement years. In other cases you have to customise your plan, be it a FD or FMP for a regular stream of income.

Stock splits make stock more affordable and liquid for retail investors

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Stock splits make stock more affordable and liquid for retail investors

Prerna Katiyar, TNN

Monday morning, when Mr Gupta opened his demat account to check his stocks, he was taken aback. “What has happened to my shares? How can it fall to this level? I bought the share at Rs 1,000 and it is now trading at Rs 240! Has the whole market crashed today or is it just my stock?” he wondered.

This had happened because the company has announced a 4-for-1 stock split and extra shares were still to be delivered in his account. Poor Mr Gupta, who had missed the company announcement, kept thinking he had incurred heavy losses. So let’s make the case easier for him and find the devil in the detail.

What is a stock split?

Stock split is the process of splitting shares with high face value into shares of a lower face value. It is like getting Rs 100 note changed for two Rs 50 notes. Does it change the value of your money? Not really. But now, you also have two smaller denomination notes which would be easily accepted by small vendors. A stock split increases the number of shares in a public company. The price is so adjusted such that the market capitalisation of the company almost remains the same.

Why split stocks?

Companies usually split their stock when they think the price of their stock exceeds the amount smaller investors would be willing to pay. “It is aimed at making the stock more affordable and liquid from retail investors’ point of view,” said Indiabulls CEO Gagan Banga. Generally, there are more buyers and sellers of shares trading at Rs 100 than say, Rs 400 as retail shareholders may find low-price stocks to be better bargains. Stock splits are usually initiated after a huge run-up in the share. This run-up may be linked to the performance of the stock.