Streamlining the idea
Big Business Idea Competition launch event spells out game plans for participants

The Big Business Idea Competition (BBIC) start-up evening in July provided entrepreneurs who attended the programme with enough food for thought to get their business plans rolling. The evening began with an introduction to the competition with an RO6000 prize, which is organised by The Knowledge Mine, Ernst & Young and the Information Technology Authority, and supported by Ericsson, NCR, National Bank of Oman, Nawras, isurf.co.om and TheWeek. This was followed by a presentation by Tanuj Paruthi, executive manager, Transaction Advisory Services Group, Ernst & Young, on how to write a business plan. Paruthi described a business plan as a living document that must be updated to adapt to current thinking. “It’s a road map for what your company wants to achieve. It includes everything from your products/services and your operating model, to how much you want to borrow, and how and when you will repay.”

Mohammed al Rasbi, founder and CEO, R&D, who was the next speaker, talked about the practical steps to starting a start-up from his own experience. “When I started, I was the founder as well as the receptionist, the accountant and the PRO. You’ve to be able to multitask. Also, time management is crucial.” Rasbi added that entrepreneurs should be choosy about their clients and stick to their prices.

Habib Hanna from NCR, Hisham al Zubaidi from ITA and Eyhab al Hajj from Nawras, all stressed on the importance of entrepreneurs to the economy. Hanna hoped that entrepreneurs would lead the way in exporting information and communication technology out of the region. Hajj talked about the key performance indicators that Nawras, which he said was a large-scale start-up, implemented to ensure its growth. The programme ended with a Q&A session for participants.

The closing date for BBIC is September 2. For more details on the competition, log on to www.kom.om/bbic.

BANKMUSCAT PROFIT RISE BY 33 pc DURING THE FIRST HALF
BankMuscat has achieved a net profit of RO28.03mn during the first half of the year 2006 as against a net profit of RO21.08mn reported in the first half of 2005, thus recording an impressive growth of 33 per cent.

Net interest income increased by 33.2 per cent from RO34.55mn for the first half of the year 2005 to RO46.02mn for the corresponding period in 2006. Non-interest income has grown from RO11.31mn for the first half of 2005 to RO14.90mn for the corresponding period in 2006, reflecting a growth of 31.7 per cent. The operating expenses have inreased by 21.2 per cent in the first half of 2006 as compared to the corresponding period in 2005 mainly due to increase in manpower costs as a result of increased business activities and expansion of business lines.

Impairment for credit losses was RO8.11mn for the first half of 2006 as compared to RO9.84mn for the corresponding period of 2005. The basic earnings per share on an annualised basis works out to 67.3bz for every 100bz share of the bank. The bank’s net loans and advances of RO1,555mn as of June 30, 2006 has grown by 27.3 per cent as compared to the position as of June 30, 2005. Customer deposits grew by RO323.7mn or 26.9 per cent from RO1,201mn as of June 30, 2005 to RO1,525mn as of June 30, 2006. Savings deposits have registered an impressive growth of RO82.7mn.

By leaps and bounds
National economy is booming with the GDP achieving 24 per cent growth

Ahmed bin Abdul Nabi Macki, Minister of National Economy and deputy chairman of the Financial Affairs and Energy Resources Council, stated that the sultanate’s economy has grown rapidly during 2005. Total government revenue grew by 11.6 per cent to touch RO4,510.5mn in 2005 from RO4,040.2mn in the previous year. The minister attributed a remarkable impro-vement in financial performance to significant increase in international oil prices and control over government spending.

The sultanate’s budget surplus stood higher at RO302.9mn in 2005 from RO230.3mn in 2004, showing a growth of 31 per cent. Public debt was reduced by 22.8 per cent in 2005 and as a result, the ratio of general debt to total domestic products was 8.6 per cent in 2005 as against 19.1 per cent in 2000.

The gross domestic product (GDP) of Oman grew by 24 per cent to RO11.817bn in 2005 from RO9.527bn in the previous year. Macki said the major sectors in the sultanate contributed to the growth of Oman’s economy in 2005.

The value addition of oil operations in 2005 reached RO5,796.2mn as compared to RO4,016.1mn for 2004, indicating a growth of 44.3 per cent. Macki added that the value addition of non-oil activities rose to RO6,190.8mn during 2005, compared to RO5671mn in 2004, showing a 9.2 per cent rise.

Average price of Omani oil per barrel reached US$50.26 last year from US$34.42 p/b in 2004. Macki stated that added value of gas extraction activity stood at RO422mn, which contributed 3.6 per cent of total GDP.

This was attributed to an increase in price of gas sales to Oman LNG in 2005. It was also aided by better gas consumption by government. On the performance of Omani economy on non-oil activities, Macki said the added value of process in basic chemical industries, for example, rose to RO542.8mn, a growth of 27.8 per cent over 2004.

SOHAR BUZZ
Majan Gulf Properties (MGP) and International Gulf Development and Contracting Company (IGDC) recently signed an agreement for the Sohar Residential and Commercial Project, a RO56mn venture that will be spread across an area of 1mn square meters. The project, which will include residential as well as commercial components, will see the construction of the Al Bustan furnished deluxe apartment complex and residential villa compounds. The projects represent the first major developments of their kind in Sohar. H E Dr Rajiha bint Abdulameer bin Ali, Minister of Tourism, and H E Sheikh Mohammed bin Abdullah al Harthy, Minister of Transport and communication, were among those present at the signing ceremony.

Mohamed al Marzougi, CEO, Majan Gulf Properties, says that work on the projects will commence in September and will be completed within three years. The Al Bustan furnished deluxe apartment complex and the residential villa compounds will be built at an estimated cost of RO16mn and RO40mn. Marzougi signed the agreement along with Youssef Wehbe, general manager, IGDC. MGP, established in 2004 and headquartered in Sohar, has sales representatives in Kuwait, Bahrain, UAE and Egypt. IGDC is the construction com-pany established by MGP and the Lebanese Infrastructure Construction Company (ICC), member of Doumit Group, for the development and execution of work.

unions to be allowed
His Majesty issues Royal Decree amending Labour Law, paving way for formation of trade unions

His Majesty Sultan Qaboos bin Said has issued Royal Decree No. 74/2006 amending some provisions in the Labour Law. The decree cancels all that contravenes or contradicts with its provisions. The decree shall be published in the official gazette and shall take effect from its date of issue. Says Abduladheem Abbas, chairman of the main representative committee, “It is a big step which gives us more chance to interact with international labour unions and it will play a vital role in creating awareness about trade unions.”

According to the decree, Article 3 ‘repeated’ will be added to the current Article 3. The new article states that “the employer has no right to impose any form of compulsory or coercive work”.

Article 107 states that the minister will issue a decision that will allow collective bargaining for settling group labour disputes or improving work conditions or increasing production. Article 123 will be added to chapter 10 of the Labour Law. The new article states that failure to observe Article 3 ‘repeated’ will result in imprisonment of up to one month and a fine of RO500 or either of them. The penalty will be doubled in case of recurrence.

The following will replace chapter 9 of the same. Article 108 states that employees can form unions to defend labour rights and take initiatives to improve working conditions. According to Article 109, the different labour unions will together form a national labour union to represent the Sultanate at local, regional and international meetings.

Article 110 states that the smaller unions and the national labour union will have their own independent jurisdiction with effect from the date of registration with the ministry. They will have the right to carry out their duties without fear of external interference into their affairs. The minister will issue the regulatory norms on forming and registering the unions and the national labour union. Says Abbas, “The new law also puts more responsibility on workers as they need to realise that we are working for the benefit of the country and being a part of a union does not give anyone a right to damage national interest. According to Article 110 ‘repeated’, union representatives shouldn’t be subj-ected to dismissal or any other kind of punishment for their union role. Article 112 states that emplo-yers, who try to take any measures that prevent the employees from using his union rights or hinder the formation of unions and the national labour union will be subject to maximum of one month imprisonment and RO500 fine or either of them.

NBO ACHIEVES 97 pc GROWTH IN NET PROFIT
Customer deposits increase by 12 per cent as compared to the corresponding period in 2005

National Bank of Oman (NBO) has announced net profit of RO13.1mn for the first six months of 2006. These results confirm that the bank has continued to achieve significant progress with its growth strategy. The net profit for the first six months of 2006 has increased by 97 per cent compared to the same period of 2005.

Says chairman Sheikh Suhail Bahwan, “NBO’s results for the first six months of 2006 reflect balanced growth across all our businesses. Total assets grew 16.6 per cent to RO918mn from RO787mn as on June 2005 and 5.5 per cent as compared to RO870mn as on December 2005. Net loans and advances increased by RO88mn (16 per cent) to RO630mn as compared to December 2005.

Customer deposits increased in the same period by RO73mn (12 per cent) to RO689mn from RO616mn in December 2005. Net inte-rest income grew by 15.3 per cent to RO16.6mn and non-interest income climbed by 73 per cent to RO8.7mn. Our business continues to grow, generating sustainable growth for our shareholders.”

In order to support the growth in oper-ations, increases in cost of RO1.5mn over the same period in 2005 was recorded. This increase, along with the planned increase in the coming months on people, process and brand, is considered essential so as to enable the bank’s progress towards its goal of higher business volumes and profits.

Alliance Housing Bank seeks customer feedback
As part of a research project by Arabian Research Bureau, over 500 customers of the Alliance Housing Bank (AHB) are being contacted to measure how well they perceive the bank’s brand values to accurately reflect its working principles and range of services. The research project, which will be carried out over the next two months, involves a team of trained researchers and interviewers canvassing the opinions of a cross-section of customers on a variety of brand-related topics, such as strength of recognition, values and innovative thinking.

AHB has a wide and varied customer base. It is the GCC’s first private sector housing bank, with a dedicated corporate team that also handles customised employee housing loan schemes for a set of prestigious clients. Says Karim Boukarroum, head of marketing, AHB, “We have worked hard to establish our position as a specialist provider of housing-related financial services in an extremely competitive market, and a great deal of our success is due to a genuine ability to listen and react to customer feedback. We pride ourselves on a solid, professional but forward-looking and creative approach, and continuous research such as this is vital in ensuring that we remain on track with both the market conditions and our customers’ expectations.”

OMAN ON POSITIVE GROUND
CBO statistics show that total deposits at commercial banks have risen by 17.8 per cent

Monetary and banking developments in Oman remained stable and supportive to the commercial and financial performance of commercial banks during 2006. Balance sheet of the operating banks in Oman by the end of May 2006 stated that money supply registered a positive rise of 16.9 per cent to reach RO4,094.1mn.

Credit granted to private sector, which constitutes 95 per cent of total credit, rose by 18.2 per cent. Foreign assets at commercial banks rose by 20.8 per cent, reaching RO1,038.2mn by the end of May 2006. Statistics issued by the Central Bank of Oman (CBO), stated that the total deposits at commercial banks rose by 17.8 per cent to reach RO4,101.4mn by the end of May 2006, compared to RO3,483.1mn by the end of May 2005. Total of major capitals and commercial banks provisions increased from RO552.1mn in May 2005 to RO719.6mn in May 2006.

Money markets in Oman showed surplus in cash during 2006. To absorb the cash surplus, CBO issued deposit certificates and pumped cash in the market, sometimes by re-buying of securities. Bank investments in deposit certificates increased from RO258.9mn in May 2005 to RO301.9mn in May 2006. Cash supply rose considerably by 23.5 per cent and 19.7 per cent respectively by the end of May 2006, compared to its ratio by the end of May 2005.

Cash outside the banking institutions increased by RO61.1mn while deposit under demand increased by RO188.9mn. Saving deposits and credit in Omani riyal and foreign currency deposits rose by 17.8 per cent.

Increase on cash demand was attributed to increase by 17.6 per cent in net foreign assets of the banking institution, while net domestic assets rose by 23.3 per cent in May 2006, compared to its level in May 2005. Interest rate on US dollar increased due to the Omani riyals and US dollar fixed exchange rate.

The average of interest rate on deposit certificates increased from 1.824 per cent by the end of May 2005, to 2.533 per cent by end of May 2006. Interest rate on Omani riyal loans increased from 0.796 per cent by the end of May 2005 to 3.455 per cent by the end of May 2006. Average of interest rate on Omani riyals deposits slightly increased from 1.15 per cent by the end of May 2005 to 1.48 per cent by the end of May 2006, while average of interest rate on Omani riyals loans decreased from 7.42 per cent by end of May 2005 to 7.26 per cent by end of May 2006.

AUTO ALLIES
A potential alliance between General Motors and Renault and Nissan promises to change the automotive market

The frenzy over a possible alliance between General Motors and automaker partners Renault SA and Nissan Motor Company moved into a quieter phase with a July 14 meeting between the chief executives of the companies, Rick Wagoner at GM and Carlos Ghosn at Renault and Nissan. The meeting resulted in a timeline that puts to rest, at least for the time being, furious speculation over the fate of the companies, their leaders, the auto industry and its global workforce.

In a joint statement, GM and Renault-Nissan said they would work together for approximately 90 days to see if they should work together for the long term. “Following this review, the companies will consider whether further exploration of the alliance concept is warranted,” the statement said, and went on to add, “It is important to let our teams work on this review without distraction and, therefore, we will not be providing further public comments about it at this time,” ascribing the words to both Wagoner and Ghosn.

For the automotive industry, a broad deal could be historic and market-changing. But without details, the implications are less clear. Billionaire Kirk Kerkorian, GM’s largest shareholder, had suggested the massive global alliance in public letters to the three companies on June 30, two weeks after bouncing the idea off Ghosn at a dinner in Tennessee. Kerkorian is believed to be impatient with Wagoner’s progress in improving GM, which lost US$10.6bn last year but earned US$445mn in the first quarter of this year.

Many analysts see the suggestion as a ploy to replace Wagoner, who has been busy executing a turnaround plan, with Ghosn, who rescued Nissan from near-bankruptcy and now runs the France-based Renault and the Japan-based Nissan. Ghosn, one of the most respected executives in the industry, has denied any interest in running GM.

Ghosn has said there will be teams of specialists at all the companies who will be charged with studying the opportunities and feasibility of the plan. He has already suggested a range of opportunities to share operations, from advanced power trains to North American manufacturing facilities.

OIL RUSH
Crude oil rose from a record close as concern mounted that escalating violence in the Middle East may threaten supplies from the region that provides 30 per cent of the world’s oil. In late July, crude oil for August delivery rose as much as 71 cents, or 0.9 per cent, to US$77.74 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at US$77.58 at its highest.

On July 14, oil rose 33 cents, or 0.4 per cent, to a record close of US$77.03 a barrel after touching US$78.40, the highest intraday price since trading began in 1983, earlier in the session. Prices rose four per cent in early July and at the July 14 close were 33 per cent higher than a year ago.

G8 group extends time for trade-talk agreement
Group of Eight (G-8) leaders has called for a concerted effort to conclude five year old trade talks and gave World Trade Organisation (WTO) director-general Pascal Lamy another month to suggest a way in which to reach an agreement.

Heads of government from the world’s eight leading industrial powers joined their counterparts from Brazil, China, SA, Mexico and India for a mee-ting in July in an attempt to give momentum to negotiations that started in Doha, Qatar. The statement after the meeting said that the trade talks must be conclu-ded by the end of the year, before the US negotiating mandate runs out.

A WTO meeting in Geneva ended on July 1 without agreeing on formulas to cut duties on farm and industrial goods as negotiators refused to make new concessions. The summit is being attended by the leaders of the US, Japan, Germany, Britain, France, Italy, Canada and Russia. French president Jacques Chirac said the US should reduce agriculture subsidies and stop export aid.

AirBOURNE FOR SUpREMACY
Airbus-Boeing battle gets aggressive at Farnborough International airshow

The recently-held 2006 Farnborough International airshow was an apt battleground for the world’s aviation industry giants – Boeing and Airbus – an arena to size up their respective strengths. At the world’s leading biennial aviation industry event, a record-breaker lining up of 1,500 exhibitors from 35 countries were on show for more than 300,000 visitors.

At the time of going to press, European plane maker Airbus had announced orders for more than 60 new jets, outstripping US rival Boeing in the number of deals unveiled at the Farnborough International Airshow, but not in their value. Boeing had picked up orders for just 14 new jets.

Since the show opened, Airbus had received orders or commitments for 85 planes, worth about US$6.3bn. Boeing had gained orders and commitments for 76 aircraft but sold more larger jets than Airbus, topping US$10bn in new business.

All values are based on catalogue prices, since the discounts that airlines typically negotiate aren't disclosed.

The majority of the orders announced at the show were for Airbus's A320-family single-aisle passenger jets.

DOING JUST FINE
European Commission fines Microsoft US$357mn for failing to comply with an antitrust order

The European Commission’s US$357mn fine in early July was meant to punish Microsoft for not sharing technical information about its hugely profitable Windows operating system with competitors, as it was ordered to in a European antitrust ruling in 2004. Neelie Kroes, Europe’s competition commissioner, said the fine was justified because Microsoft had for two years failed to supply information in a way that would allow rival software makers to make their programmes work smoothly with Windows. The information-sharing order in the European antitrust ruling was meant to ensure fair competition in the market for data-serving software that powers Internet applications and corporate data centers, where Microsoft’s server software competes with offerings from IBM, Oracle, Sun Microsystems, Red Hat and other companies.

Microsoft is appealing the fine. It is also appealing the 2004 antitrust ruling in Europe, and the much larger fine of more than US$600mn that was part of that ruling.

In letters to the company this year, the European authorities also raised concerns and asked questions about Windows Vista, the next version of the operating system, focusing on Microsoft’s plans to build in new Internet search features, security software as well as document formats.

WIRELESS GETS MORE COMPACT
Researchers at Hewlett-Packard have developed a tiny wireless data chip that can store up to 100 pages of text and could ultimately be used in a variety of consumer and commercial applications.

Developed over four years by HP Labs’ campus in Bristol, England, the chip is about the size of the head of a match and could potentially store a patient’s medical chart on a hospital band. There are no questions about the chip’s long-term potential, though it is difficult to predict what applications will be developed and what could be called the ‘killer application’ for this. Consumers could store audio commentary, music or short videos on such a chip, affixed to a printed digital photograph.

Devices to read and write data on the chip would then eventually be embedded in cell phones, handheld computers, personal computers, printers, or small standalone readers. The chip would bridge the digital and physical worlds since the digital data will be attached to the physical object it is related to. Palo Alto, California-based HP, plans to take the technology to industry standards bodies in hopes of it being welcomed across the technology sector. While broad commercial applications are at least two years away, HP will license the technology to partners, customers and rivals well before that.