Crude at $45 may cut deficit

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OMANDAILYOBSERVER
15
TUESDAY l DECEMBER 13 l 2016
Kempinski to support Oman to
attract more quality tourists
SALEH AL SHAIBANY
MUSCAT
Dec 12: Kempinski Hotel, set to be
officially inaugurated in the second half
of 2017, aims to help Oman’s ambitions
to attract quality tourists to the country,
its General Manager told the Observer in
an exclusive interview.
Konstantin Zeuke said he would
bring in his international experience
and the proud tradition of the famous
European luxury brand Kempinski to
Oman to push forward the tourism
drive.
“Oman is an ideal destination for
tourists. We will work with the local
authorities, travel agents and tour guides
to promote the interest of the country
and highlight all the major attractions.
Kempinski has a rich tradition of
hospitality and we plan to bring it here
as part of the tourism campaign,” Zeuke
told the Observer.
Kempinski have been hoteliers since
1897 catering for luxury holiday resorts,
business and spas around the world. The
hotel’s uniqueness is designed for guests
who value five star holidays and luxury
getaways and it would work well for
Oman’s tourism plans.
Oman is an ideal destination
for tourists. We will work
with the local authorities,
travel agents and tour guides
to promote the interest of
the country and highlight all
the major attractions
KONSTANTIN ZEUKE
GM, Kempinski Hotel
Nevertheless Zeuke said, although
Kempinski follows the finest traditions
of its European heritage, under his
management, the hotel will infuse local
cultures and customs for the guests to
enjoy what Oman has to offer.
“We will be the ambassador of
Oman’s rich culture. I know this country
has a proud background. Tourists do
not come here for tall buildings or big
shopping malls. Oman is different
from other regional countries. It has a
fascinating history, beautiful beaches,
sceneries and attractive mountain
background. It is also attracting water
sports such as snorkelling and diving,
which is increasingly becoming popular
to tourists from different part of the
world,” Zeuke explained.
The Sultanate has received over 2
million tourists in 2015 and the number
of visitors has been steadily increasing at
the rate of 7 per cent per annum in the
last five years. With the current situation
of falling oil revenues, the government
is stepping up its efforts to diversify
the economy. Tourism is the pivotal
part of it. At the moment, tourism is
contributing to less than 5 per cent of
the total revenues while oil and gas over
80 per cent.
Zeuke stressed that Kempinski is not
France’s Amundi to buy Pioneer
from UniCredit for 3.6 bn euros
PARIS: French asset manager
Amundi has agreed to buy rival
Pioneer Investments from Italian bank
UniCredit for 3.6 billion euros (£3.01
billion), extending its reach in Europe
and bringing in some much-needed
capital for UniCredit.
Amundi’s share price surged
more than 6 per cent to record highs
following the announcement, as analysts
welcomed the deal, which should boost
earnings for both Amundi and majority
owner Credit Agricole, while UniCredit
shares also rose.
The Pioneer sale follows on the heels
of UniCredit’s sale of its Polish assets last
week and is expected to be followed by
the announcement of a massive share
issue this week worth up to 13 billion
euros as it seeks to shore up its balance
sheet.
“The deal is a positive for all the
parties involved. UniCredit raises
some money and Amundi boosts its
market presence,” said Clairinvest fund
manager Ion-Marc Valahu, who holds
shares in European banks.
UniCredit’s chief executive Jean-
Pierre Mustier, a former top banker
at Societe Generale who along with
Amundi’s CEO Yves Perrier managed
the creation of the French asset manager
back in 2009-2010, also signed an
agreement that gives Amundi access
The Amundi company logo is seen at their headquarters in Paris. — Reuters
to UniCredit’s distribution networks in
Italy, Germany and Austria for up to 10
years.
Amundi will finance the deal via a
1.4 billion share issue and the issue of
around 0.6 billion euros of senior and
subordinated debt, with the rights issue
to be launched in the first half of 2017.
It also has 1.5 billion euros in excess
capital.
UniCredit said the sale of Pioneer
would boost its best-quality capital
adequacy ratio by around 0.78 percentage
points and it would also receive
an extraordinary dividend payment of
315 million euros before the closing of
the sale, which is expected in the first
half of 2017.
The sale would also result in it
booking a net gain of 2.2 billion euros,
the bank said.
Amundi is on an expansion spree
following its stock market flotation
by French banks Credit Agricole and
SocGen in 2015, which resulted in
SocGen selling out, and the company is
aiming to win market share in Europe
and Asia.
— Reuters
seeking to compete with other hotels
already operating in the country but to
work with them towards common goals
and targets.
“Competition is healthy for the
country. We are here to work together
with the tourism campaign by helping
the government to achieve its objectives.
For example, I am impressed with the
Ministry of Tourism’s efforts to build
recreation, convention facilities and
more hotels, giving opportunities to
other hotel chains. Kempinski is here to
be part of the team,” he said.
He gave an example of resorts in the
Jabal Al Akhdhar which Kempinski
would work out joint packages with
them to bring in tourists to enjoy the
breathtaking views and the tranquility
of the mountainside’s life.
The Kempinski general manager
also paid tribute to the stability of the
country under the reign of His Majesty
Sultan Qaboos.
“ It is a trouble free country and that
is the other reason why Oman is an
ideal destination for many people who
want to come to enjoy a quiet holiday
and meet the friendliest people in the
region,” he added.
BCC nudges
up 2017 growth
forecast, cuts 2018
LONDON: The British Chambers
of Commerce nudged up its forecast
for economic growth next year but
downgraded the outlook for 2018 due
to inflation pressures and ongoing
uncertainty as Britain prepares to
leave the European Union, it said on
Monday.
The BCC modestly revised up
its expectations for gross domestic
product growth to 1.1 per cent for
2017 from 1 per cent after a strongerthan-expected
economic performance
following June’s vote to quit the EU
which means the economy is likely to
grow 2.1 per cent this year, roughly its
long-run average.
However, the business group said
it expected the current economic
momentum to slow over the next two
years and downgraded its GDP forecast
for 2018 to 1.4 per cent from 1.8 per
cent, as Britain continues its divorce
from the EU. The BCC’s forecast is
exactly in line with the consensus
among private-sector economists
polled by Reuters last week, and their
economic analysis is similar. Weaker
economic activity and an erosion of
real wage growth triggered by sterling’s
post-referendum slide is expected to
curb household consumption and
business investment, the BCC said.
— Reuters
Large turnout for
‘Invest in India’ forum
BUSINESS REPORTER
MUSCAT
Dec 12: Around 250 representatives of public sector organisations,
investment funds, banks, business enterprises and institutions in the
Sultanate attend the 3rd ‘Invest in India’ seminar hosted by the Indian
Embassy at the at Sheraton Oman Hotel recently.
The seminar highlighted the attractive investment opportunities in
India. Three presentations on ‘Investment opportunities in India’, ‘India’s
attractiveness as an investment destination’ and ‘India’s taxation policies and
ease of doing Business in India’, showcased the immense opportunities for
investment available in India. Sayyid Khalid al Busaidi, Chairman, Al Nab’a
Group, shared his experiences of doing business with India and explained
how the business opportunities offered by India has been benefitting Oman.
Among the dignitaries attending the event were Ahmed bin Hassan
al Dheeb, Under-
Secretary, Ministry
of Commerce and
Industry; Abdulsalam bin
Mohammed al Murshidi,
Executive President, State
General Reserve Fund
(SGRF); Sulaiman al
Rahbi, Deputy Secretary-
General, Supreme
Council for Planning; and
Redha Juma al Saleh, Vice Chairman, Oman Chamber of Commerce and
Industry (OCCI).
Indra Mani Pandey, Ambassador of India to the Sultanate of Oman, in
his welcome remarks, conveyed India’s keenness to enhance bilateral trade
and investment relations with Oman. He explained how the economy of
India has been transformed to become the fastest growing major economy
of the world and a preferred investment destination for the world business
community. With recent improvements in ease of doing business, India has
been receiving a record amount of foreign direct investment (FDI) — $44
billion during April 2015-March 2016, and $29 during April-September
2016.
Ambassador Pandey drew attention to the decline in bilateral trade
between India and Oman from $5.7 billion during the year ending March
2014 to $3.8 during the year ending March 2016, and invited business
communities of India and Oman to expand their mutual trade and
investments. He underlined that India, as always, is keen to work with
the government and business community of Oman to achieve the goal of
diversification of Oman’s economy, with focus on sectors identified through
Tanfeedh.
The ambassador also announced that the Government of India has
launched a new scheme for grant of permanent residency status to foreign
investors valid for 10 years and extendable for another 10 years. Apart from
free entry and no restrictions on the duration of stay, foreign investors are
allowed to purchase one residential property in India for residential purposes.
The spouses and dependents of investors will be allowed to work or study in
India. The only requirement is to invest RO 571,000 within 18 months or RO
1.4 million in 36 months, and create 20 jobs for Indians every year. With a
view to promote visits by Omani businessmen to India, the Embassy of India
has streamlined business visa processes and issues multiple entry visas with
a minimum six month validity.
For high-level Management of Omani companies, the embassy is issuing
visas valid for one to five years.
Philips to sell Lumileds majority share for $1.5bn
AMSTERDAM: Dutch electronics
giant Philips announced on Monday the
sale of a majority share in its Lumileds
LED lighting business for $1.5 billion,
after cancelling the spinoff earlier this
year over US regulatory concerns.
“Royal Philips today announced that
it has signed an agreement to sell an 80.1
per cent interest in Lumileds to certain
funds managed by affiliates of (USbased)
Apollo Global Management,”
the Amsterdam-based company said in
a statement.
Philips said it expected the deal to
net the firm approximately $1.5 billion
(1.41 million euros) in cash and equity.
The new move comes after Philips
dropped a planned $2.8 billion sale to
Beijing-based GO Scale in January.
“With this transaction, we will be
completing an important phase of the
transformation of our portfolio and I
am satisfied that in the Apollo managed
funds we have found the right owner for
Lumileds,” said Philips chief executive
Frans van Houten.
— AFP
Growth in global coal demand to slow over next five years: IEA
LONDON: Growth in global coal
demand will slow over the next five
years due to lower consumption in
China and the United States and as
renewable energy sources gain ground,
the International Energy Agency (IEA)
said on Monday.
The IEA said last year that the world’s
top coal consumer, China, could be
facing peak coal demand for the first
time due to measures to cap coal use
to tackle air pollution and curb excess
supply.
“In China, coal demand is in
structural and slow decline driven by
a new economic growth model and
diversification of coal,” the Paris-based
IEA said in its medium-term coal
market report.
Even though China’s consumption is
likely to have peaked, the country will
still be the largest coal user over the next
five years.
Its coal demand should decrease
slightly to 2.816 billion tonnes of coal
equivalent by 2021, compared to 2.896
billion tonnes of coal equivalent in 2014.
Globally, the IEA expects coal
demand to total 5.636 billion tonnes by
2021, compared to 5.400 billion tonnes
last year, when coal demand dropped for
the first time this century.
This equates to 0.6 per cent average
annual growth from 2015 to 2021, below
the 2.5 per cent average yearly growth
over the past decade.
“Because of the implications for air
quality and carbon emissions, coal has
come under fire in recent years, but it is
too early to say that this is the end for
coal,” said Keisuke Sadamori, director
of the IEA’s energy markets and security
directorate.
“Coal demand is moving to Asia,
where emerging economies with
growing populations are seeking
affordable and secure energy sources to
power their economies.”
The biggest growth in coal demand
will occur in India, which will have an
annual average growth rate of 5 per cent
by 2021.
After years of decline, coal prices
have rebounded sharply in 2016, driven
by a sharp cut in Chinese coal output
coupled with strong demand across the
Asia-Pacific region and in Europe.
Benchmark API2 2017 coal futures
rose by 4 per cent to $65.75 a tonne on
Monday morning, the highest level since
December 2.
In its report, the IEA forecasts
thermal coal prices to decline next year
and then remain relatively flat to 2021.
“Reasonable doubts persist on the
sustainability of current prices, given
that climate pressure continues and air
pollution is a serious issue which will
shape policies in China, India and other
emerging countries,” it said.
Coal demand in the United States
and Europe will continue to decline,
falling to 475 million tonnes and 337
million tonnes respectively in 2021.
— Reuters Locals carry coal from an open cast coal field at Dhanbad district, Jharkhand, India. — Reuters