Downpour unleashes chaos in Muscat - Oman Daily Observer

Dutch govt wins time on euro bailout deal
THE HAGUE The Dutch government
won time yesterday to get parliament's
backing for last week's euro zone rescue
plan, promising details on the package
and facing demands to have a strong
budget commissioner and more IMF involvement
in the debt crisis.
Despite anger among coalition and
opposition parties about Greece's plan
for a referendum on the rescue plan,
the Dutch parliament agreed to wait for
details how the euro zone rescue fund
EFSF would work and what powers the
commission will get to enforce budget
rules before reaching a view.
The package negotiated last week
does not need the formal approval of
euro zone national parliaments.
But with the cabinet's main ally outside
the ruling coalition, Geert Wilders'
anti-immigration Freedom Party, strongly
opposed to such bailouts, Prime Minister
Mark Rutte relies on help from the
opposition.
The opposition party Labour, whose
support is crucial for securing majority
support for the minority government,
called Greece's referendum plan a "deal
breaker" and "spontaneous self-incineration".
"The package is not strong enough,
and it is effectively wiped off the table
now that Greece has placed a bomb under
it," Labour MP Ronald Plasterk said
in parliament.
8
OMAN/INTERNATIONAL THURSDAY, NOVEMBER 3, 2011
Plasterk called for strong budget supervision
to prevent Italy's Prime Minister
Silvio Berlusconi from "throwing a
party on the costs of the EFSF fund".
Coalition parties the Liberals and
Christian Democrats said the package
was "a substantial step" in solving Europe's
debt crisis and demanded more
clarity on how to enforce the euro zone
budget rules on deficits and debt levels
and more IMF involvement.
Greek Prime Minister George Papandreou's
shock decision late on Monday
to call a referendum on Greece's bailout
angered Germany and hammered
markets edgy over the euro zone crisis.
European politicians complained that
Athens was trying to wriggle out of the
latest rescue deal.
Rutte was concerned about the referendum.
"We need to act swiftly with the escape
route. Suppose Greece says no in
a referendum — which I do not hope
because it would have enormous consequences
for Greece itself and also consequences
for Europe — then it becomes
even more urgent that we deal with the
package's other aspects," Rutte said.
Wilders, who dislikes last week's deal
and wants Greece to leave the euro zone,
told reporters he was pleased about the
referendum because it would mean "the
whole rescue package can go into the
trash bin". — Reuters
Chrysler gains traction
as US auto sales rise
CHICAGO — Chrysler gained
more ground on its rivals in
October with a 27 per cent
rise in US auto sales, outpacing
single-digit growth at Ford
and General Motors, industry
data showed yesterday.
The gains come as overall
industry sales continued to
strengthen now that supply
shortages and price increases
caused by the deadly Japanese
quake and tsunami earlier this
year have eased.
"The performance over
the past few months is not the
start of a trend. It is more of
a mini-bubble," said Jeremy
Anwyl, chief executive officer
of the automotive website Edmunds.com.
Anwyl estimates that people
put off buying at least
200,000 vehicles because of
the shortages and high prices
that began in late April and
didn't ease until September.
That should help boost
sales for the remainder of the
year, but Anwyl cautioned that
industry sales remain at historically
low levels as a result
of the deep economic down-
TOKYO — Japanese electronics
giant Sony yesterday
said it now expected a heavy
full-year loss of $1.15 billion
as it reels from the impact of a
strong yen, weak TV sales and
severe flooding in Thailand.
Sony's projected annual net
loss of 90 billion yen ($1.15
billion) reversed a forecast in
July that called for a 60 billion
yen net profit, after the company
slumped to a first-half
net loss.
The Tokyo-based maker of
PlayStation consoles and Bravia
television sets has been
struggling under the weight
of a strong yen, while wrestling
with the aftermath of the
March earthquake and now
Thailand's floods which have
dented its production there.
The company's loss-making
television business remains
a burden amid fierce competition
from rivals such as South
Korea's Samsung Electronics
and falling prices in the liquid
crystal display market.
A slowdown in demand in
the United States, Japan and
Europe has further squeezed
profit margins and put the
television industry under renewed
pressure.
Sony said that six month
sales in its consumer products
and services segment that includes
TVs, personal computers
and its PlayStation gaming
system were hit by lower de-
GCC retail industry poised
for healthy growth
From page 7
The demand and supply
factors therefore seem to be
in balance and we believe that
supply of new GLA in the future
will be sufficient to meet
demand for retail space over
the next five years.
Key Growth Drivers
There are several factors
that are contributing to the
growth of the retail sector.
Largely urbanised consumer
class with a young age profile
is likely to drive demand in
the retail market. The number
of high net-worth individuals
in the Middle East increased
10.4 per cent y-o-y in 2010,
while their financial wealth
increased 12.5 per cent during
the same period. The number
of individuals in the GCC with
more than $ 50,000 in onshore
liquid assets is expected to increase
and this will also contribute
to the growth of the
retail industry.
The region has seen substantial
investments in the
development of world class
infrastructure, tourism, and
hospitality sectors. Saudi
Arabia is expected to see 9.3
million new visitors between
2011 and 2015, while there
will be approximately 3.6 million
new arrivals in the United
Arab Emirates (UAE) during
this period. There are a growing
number of tourists from
China and India and Chinese
travelers have increased their
total spending in the UAE by
155 per cent y-o-y in 2010.
Various retail categories including
the luxury segment
turn, with a full recovery still
far from sight.
"There are a growing
number of consumers for
whom a new vehicle is becoming
a necessity, but I expect
the slope of this underlying
trend to remain modest,"
Anwyl said.
GM said it expects sales to
continue to gradually improve
and forecast that total industry
sales will hit somewhere in the
low end of 13 to 13.5 million
vehicles in 2011.
"Despite the volatility that
continues in the market, we
continue to believe that the US
economy will grow slowly,
with pent-up demand created
by four years of below-trend
sales," Don Johnson, who
heads GM's US sales, said in
a conference call.
Johnson noted that GM's
comparatively weaker per-
mand. It posted a first-half net
loss of 42.5 billion yen compared
to net income of 56.9
billion yen in the same period
of the previous fiscal year.
Operating profit plunged 81
per cent to 25.9 billion yen.
In the second quarter alone,
Sony slumped to a net loss of
27 billion yen compared to a
31.1 billion yen profit in the
same period a year earlier.
For the full year, Sony
forecast sales of 6.5 trillion
yen, down nearly 10 per cent
from its July forecast, while
revising operating profit 90
per cent lower to 20 billion
yen.
A massive data breach
forced Sony to shut down its
PlayStation Network and Qriocity
services in April with
more than 100 million customer
accounts compromised,
in a crisis that quickly followed
the March disaster.
are witnessing a robust demand
from Chinese tourists.
Strategic geographic location
and government focus on
attracting tourists have given a
massive boost to the growth of
passenger traffic in the GCC.
Apart from overnight tourist
arrivals, the region’s airports
are also witnessing a significant
inflow of international
transit passengers, making airport
retail a flourishing business.
Dubai Duty Free is already
the single largest airport
retailer in the world and Qatar
Duty Free has also shown a
very high growth rate.
Challenges
The retail sector is witnessing
increased competition
which has posed several
challenges to companies in
this highly fragmented market
to maintain market share
and keep attracting patrons.
Heightened competition has
forced retailers to consider
product diversification, attractive
pricing, and convenient
location.
Positioning shopping malls
as complete entertainment
centres and not just as shopping
outlets have become imperative
to maintain increasing
footfalls.
There is a shortage of
skilled labour in the GCC region
and it is a challenge for
the companies to attract and
retain a qualified work force.
Further, stricter norms for issuance
of new credit cards
and lowering credit limits not
only curbs the discretionary
consumer spending but also
formance this month — with
sales up just two per cent at
186,895 vehicles — was due
in part to the fact that it performed
so well in October
2011.
Its sales for the year to date
were up 15.4 per cent at nearly
2.1 million vehicles.
"The evidence of September
and October is that there is
a strong foundation in the USbased
automobile industry,"
said Ken Czubay, who heads
Ford's US sales.
"Our dealers are telling us
that consumers are coming in
with some of their oldest aged
and highest mileage trades
and the scrappage rate has
been very low in the last few
years," Czubay said in a conference
call.
"Customers are saying it is
time to get a new vehicle."
Ford's October sales rose
6.2 per cent in October to
167,803 while sales for the
year to date were up 10.9 per
cent at nearly 1.8 million vehicles.
Chrysler attributed its
strong performance to its revitalized
product line. — AFP
Sony forecasts $1.15bn loss
The firm was forced to
shutter plants in Japan after
the quake and tsunami battered
supply chains, damaged
facilities and dampened consumer
demand.
Yesterday, it said the flooding
in Thailand presented similar
problems, with its business
operations hit by "direct
damage from inundation of
Sony’s manufacturing facilities
and difficulty in procuring
parts and components resulting
from the Floods".
Production at several manufacturing
facilities has been
stopped, while it has been
forced to postpone certain
product launches.
While Japanese firms have
been seen to stage a quickerthan-expected
recovery from
the twin disasters, the rise of
the yen has hurt exporters,
eroding repatriated overseas
earnin. — AFP
impacts the overall consumer
confidence. Cost of leasing
retail space accounts for a significant
portion of the overall
costs for retailers. As the economy
is moving back on track,
rents are expected to increase
thereby reducing retailer margins
and creating a new set of
challenges for them.
Industry Trends
Consumer demand for luxury
and discretionary goods
is set to increase at a faster
pace in the near future on the
back of improving economic
growth, high oil prices and
pent-up purchases.
Development of the retail
space has been mostly restricted
to the main regional
cities namely, Dubai and
Jeddah. Other important cities
like Abu Dhabi, Doha and
Makkah & Medina have historically
experienced a shortage
in development of retail
space. However, with significant
development plans in
place for these other cities, the
GCC’s retail sector is expected
to experience a more balanced
expansion in the retail space
going forward.
Online retail is a relatively
new concept in the GCC retail
market however, online sales
in the Middle East have registered
a significant growth, and
are believed to hold a strong
potential in the future.
“We expect the GCC retail
sector to continue its pace of
growth leading to diversification
and sustained economic
development in the region,”
the report added.