Saudi Arabia became the largest importer of defence equipment last year, surpassing India, consultants IHS said.

Inbound shipments jumped 54 per cent in 2014 when Saudi Arabia also became the top trading partner with the US, the biggest exporter, Englewood, Colorado-based IHS said in a report Sunday.

Saudi Arabia will import 52 per cent more defence equipment this year, to $9.8 billion, it said. Boeing was the top company exporter last year, followed by Lockheed Martin and Raytheon, according to the report.

Global defence trade rose for a sixth consecutive year to $64.4bn, with demand from emerging economies for military aircraft, IHS said. Saudi Arabia and the UAE, the fourth-largest importer, spent $8.6bn on defence systems last year, more than Western Europe combined, IHS said.

“Growth in Saudi Arabia has been dramatic,” Ben Moores, senior defense analyst at IHS Aerospace, Defence & Security, said in the report. “An escalation of regional tensions in the Middle East and Asia-Pacific” helped drive global demand, he said.

India and China followed Saudi Arabia in the list of top importers. Russia’s exports are expected to drop from a record in 2015 with major programmes closing and falling oil prices affecting clients such as Iran and Venezuela, IHS said.

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Apple has been added to the Dow Jones Industrial Average, ending a banishment that kept the world’s largest company out for years before a stock split made its shares palatable to the price-weighted measure.

The changes will push the number of technology-related companies in the 30-member gauge to six and boost their influence even more as Apple joins Microsoft, Intel, International Business Machines, Cisco Systems and Visa. AT&T is being kicked out after falling 4.5 per cent in 2014. The changes will take effect after the close of trading on March 18.

“The Dow is supposed to be the dominant companies in each different sector of the economy and I don’t think anybody can argue that Apple isn’t by far the dominator in the phone sector,” said Michael Chadwick, who manages US$150 million as the chief executive of Chadwick Financial Advisors in Unionville, Connecticut.

“The digital age is taking over. It’s going to be a function of those who can adapt and change.”

The Dow average’s weighting methodology, which links a stock’s influence to its share price, had long barred Apple from joining the gauge. The timing of Apple’s addition hinged on not just its own 7-for-1 split last June but also Visa’s 4-1 split scheduled for March 19 of this year, according to David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices.

Stocks in the index are selected by a committee of Wall Street Journal and S&P Dow Jones Indices representatives based not on quantitative rules but on the companies’ reputation, relevance to investors and growth record.

“As the largest corporation in the world and a leader in technology, Apple is the clear choice for the Dow Jones Industrial Average,” Mr Blitzer said.

Apple’s split brought the stock price closer to the median price in the Dow and the Visa split will reduce the technology weight and make room for Apple, Mr Blitzer said.

“The DJIA is price-weighted, so extremely high stock prices tend to distort the index while very low stock prices have little impact,” Mr Blitzer said.

AT&T’s removal will leave Verizon Communications as the only telephone stock in the Dow.

AT&T shares fell 1.5 per cent on Friday. Apple closed higher by 0.2 per cent.

“There’ll be some surprise that AT&T is the name that’s being removed and Verizon is being kept,” said Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities.

“From the historical standpoint, AT&T represents an American institution. To see that leaving the Dow is somewhat of a psychological blow. In terms of impact on the stock itself I don’t think it’s going to be overly significant.”

Charles Dow, the co-founder of the Wall Street Journal publisher Dow Jones, devised the Dow average in 1896 to provide a clear view of the stock market and “barometer of the times”, according to the S&P Dow Jones Indices website. It originally included American Tobacco, General Electric and 10 other companies before expanding to 20 companies in 1916 and 30 in 1928.

Apple’s Dow entrance makes it only the second among the three largest US companies by market capitalisation to be included in the gauge. Class A shares of Google, the third- largest US company, closed at $581.44 on Thursday, effectively making them too expensive for inclusion in the Dow average.

The last Dow reshuffling took place in September 2013 when Goldman Sachs Group, Visa and Nike replaced Bank of America, Hewlett-Packard and Alcoa. The changes boosted the influence of financial-related companies to five.

At $126.41, Apple’s shares will get the sixth-biggest weighting in the gauge, with a 4.3 per cent share, according to data compiled by Bloomberg. AT&T was the fourth-smallest stock, priced at $34 with a weighting of 1.2 per cent. Goldman Sachs will have the highest weighting following Visa’s split and Apple’s addition, based on current share prices.

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I have been reading about medical insurance in Dubai and am trying to find out if it is compulsory. I’m unsure whether it has been implemented officially or if it has been put in force as obligatory for employers to provide this for Dubai-based employees. If so, is it the employer’s responsibility to cover the employee only, or do they also have to provide cover for their family? DW, Dubai

Mandatory medical insurance for Dubai employees is being introduced in several phases. Companies with more than 1,000 employees have had to have suitable cover in place since October 31 last year; those with 100 to 999 employers must have cover in place by July 31 this year, and companies with fewer than 100 employees have until June 30 next year. It is the responsibility of the sponsor to provide medical insurance for everyone else no later than June 30 next year, and this includes spouses, dependents and domestic workers. Employers are obliged to provide cover for their staff only, so, for example, an employed man may have his own insurance provided by his employer but will be responsible for arranging cover for his wife, children and maid by the deadline. All plans will need to comply with the new Dubai Health Authority rules, and note that both providers and advisers must have specific authorisation to provide plans and advice.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai with more than 20 years of experience. Contact her at keren@holbornassets.com. Follow her on Twitter at @FinancialUAE

The advice provided in our columns does not constitute legal advice and is provided for information only. Readers are encouraged to seek appropriate independent legal advice

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Emirates Airline is putting together a top team from its legal, strategic and financial departments to respond to allegations made by US airlines that it had used unfair business methods to become one of the leading forces in global aviation.

Tim Clark, the Emirates president, is planning to fly to Washington soon to meet US department of transport officials and attempt to head off any changes to federal legislation regarding the open skies policy.

The detailed allegations were contained in a briefing to selected journalists late last week.

“We are very confident that we can debunk all those arguments quickly and robustly,” said a spokeswoman for the airline.

Emirates, Etihad Airways and Qatar Airways were named in a 55-page report made public by three US airlines – American, Delta and United – and other US aviation industry organisations in a Washington conference call. The National and other Arabian Gulf media organisations were excluded from the “invite only” conference call organised by a lobbyist firm last Thursday.

When The National requested dial-in details the newspaper was told: “This is an invite-only event, thanks.”

The report accused the three of using unfair business methods and prohibited financial subsidies to contravene the open skies rules that govern international aviation.

The US airlines want to change the rules that have until now ensured a liberalised global aviation industry. An Etihad spokesman declined to comment until the airlines had properly reviewed the report. All three Gulf airlines have rejected similar allegations.

Mr Clark said: “We have only just got a copy of the white paper prepared by Delta, United and American – which, to date, has been presented only to select officials and journalists.

“We will provide a response when we’ve had the opportunity to fully review the allegations, and are confident that any allegation that Emirates has been subsidised is totally without grounds.”

Qatar Airways had not replied to a request for comment at the time of going to press.

The report said: “Fuelled by massive government subsidies, state-owned Qatar Airways, Etihad Airways and Emirates are aiming to dominate global aviation by exploiting open skies policy.

“These three airlines, wholly owned by their governments, are using unprecedented subsidies to exploit their open and unfettered access to the US market. This threatens our US airline industry, airline jobs and the US economy,” the report authors wrote.

“Over the last decade alone, Qatar, Etihad, and Emirates collectively have received more than $42 billion in subsidies and other unfair benefits from the governments of Qatar and the United Arab Emirates, according to a recent investigation. Those subsidies are in violation of open skies policy and put thousands of US airline jobs at risk.” Then the report breaks down the subsidies it alleges have been given to the three Gulf airlines over the past decade.

The biggest alleged subsidy is $12.4bn in “interest-free loans and shareholder advances” it claims were given to the airlines; next is $11.2bn in “equity infusions, grants and future committed subsidies”, followed by $8.8bn of “interest savings from government loan guarantees and interest-free loans”.

The report claimed that a $3.1bn benefit came from “a union ban resulting in below market labour costs”, and smaller amounts from “government assumption of fuel hedging losses” ($2.4bn), “subsidised airport charges” ($2.3bn) and “passenger fee exemption, rebates and miscellaneous subsidies” ($1.8bn).

The US carriers’ report states: “The three [Gulf] carriers’ routes to the US have not meaningfully increased passenger traffic; they only serve to displace US airline market share and shift good US aviation jobs overseas.

“In fact, every lost international round-trip route by US carriers because of this subsidised competition equals a net loss of more than 800 US jobs.”

Danny Sebright, the president of the US-UAE Business Council, said that “the big three US airlines should stop complaining and start competing”.

A report from the trade body last year identified more than $16bn in benefits each year to the US, supporting more than 100,000 jobs and generating more than $1.6bn in taxes.

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Engineers working on the Solar Impulse 2 hope to test cutting-edge technologies to the limit when the plane departs from Abu Dhabi in its bid to complete the first round-the-world solar-powered flight.

Staff from the Swiss company ABB will be working alongside the pilots in monitoring the state-of-the-art green technology used in the flight.

Masdar, the Abu Dhabi renewable energy company, is the host of the project and shares Solar Impulse’s long-term commitment to reinforcing the importance of innovation in achieving sustainable development.

Three ABB engineers will be embedded in the Solar Impulse 2 project, attempting to fly the 2,300-kilogram aircraft entirely powered by lightweight solar panels across two oceans, to a dozen cities, and travel about 40,000 kilometres.

“The project uses new technologies that could be implemented in various ways,” said Tamara Tursijan, a Serbian-born ABB engineer, who is part of the vast ground team accompanying the mission in a separate plane.

“For example the pilot flies in an unpressurised cabin. When he’s 9,000 metres high, it’s minus 40 degrees outside so we’ve had to make the cabin out of special insulating foam which is very light. So these materials are something that can certainly be used again.”

Ms Tursijan is part of a team of 20 masterminding the erection of a vast 10,000 cubic metre tent-like mobile aircraft hangar used to cool and protect the unique aircraft in the event of unscheduled stops or a lack of infrastructure.

She said that the engineers will employ powerful fans to inflate the double-skinned balloon-like hangar which protects the plane from winds, rain, heat and dust. Putting the tent up takes about five hours.

“The plane has to be light so that it can hold its own weight with a small amount of energy,” she said. “The problem is that if we have wind or a sandstorm, for example, then we need the mobile hangar to protect the plane. Also the solar panels are on the top of the plane so it needs to be kept clean and protected from dirt and sand.

“An additional problem for the plane is too high temperatures during the day, because it is made out of carbon fibre and the connections between different carbon fibre parts cannot stand very high temperatures.”

However, despite the cutting-edge thinking going into the project, Ms Tursijan said that the chances of seeing commercially viable solar flights in the near future are low.

“Will we have solar planes in 10 years? I don’t think so. But there’s a different point to this project,” she said. “This is more about communicating to the world that solar technology is not something out of science fiction. It is being used today and it can be very powerful.”

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United Arab Bank will benefit from a stream of job seekers from other parts of a world still characterised by anaemic economic growth, even if oil prices dampen some parts of its business, said its chief executive Paul Trowbridge.

As a result the bank’s business will probably be compensated by extending credit to other segments such as individuals, he said.

Speaking at his office in Sharjah, Mr Trowbridge said: “We’re seeing population growth increase here. I am getting a stream of CVs from Europe because this is a much better place to be in than Europe professionally.

“There are a large number of people who have come here from other Middle East and North African countries, particularly an emphasis on North Africa because the UAE and the Gulf region is better off than other countries.”

Many banks, including UAB, reported record profit for 2014 amid strong economic growth driven by government spending. UAB’s net income advanced 9.6 per cent last year to Dh605 million from Dh552m in 2013 as the bank benefited from record low interest rates that encouraged individuals and companies to take out loans to fund everything from cars to homes as well as corporate expansion.

But many economists, including those at HSBC and Standard Chartered, have lowered their 2015 forecasts for Arabian Gulf countries.

StanChart expects the UAE economy to grow 3.8 per cent this year, slowing from 4.5 per cent last year. And that may start reflecting in bank earnings this year, analysts said.

Behind the lower expectation of economic growth is the fall in demand for hydrocarbons. Crude oil has lost about 50 per cent since prices peaked last June amid an increase of supply from North American producers and waning demand from big emerging markets such as China.

The UAE is the eighth largest producer of crude oil in the world and the federal government relies on crude oil exports to fund more than 60 per cent of its budget.

Still, the IMF has forecast global growth of 3.5 per cent this year, giving the UAE an edge over most other countries around the world.

And within the UAE, it is expected that some emirates will be more affected than others with Dubai, which does not rely on oil exports, outperforming those that do.

And economists said the part of the country’s GDP that is not heavily dependent on hydrocarbons to make money will continue to flourish, including transport and tourism.

“Some of the things that have driven economic growth, the weighting to them has changed,” Mr Trowbridge said. “The reliance on oil prices being where they are has necessarily fallen off. It has been replaced by other factors. Dubai’s airport has become the world’s busiest, and that brings with it huge employment, more people out here, more consumption of goods.”

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The first commercial freight train journeys in the Western Region moved a step closer yesterday when Etihad Rail, the developer and operator of the UAE’s national railway network, handed over control of the network’s control centre in Mirfa to the operator Etihad Rail DB.

Etihad Rail DB, the joint venture company formed between Etihad Rail and the German DB Schenker in March last year, will manage the operation and maintenance of the first phase of the UAE’s national railway network from the control centre.

Construction of the 264-kilometre Etihad Rail first phase, which will transport more than seven million tonnes of granulated sulphur a year, was completed at the start of the year and trains are currently running on a trial basis.

Eventually the US$11 billion network is expected to span 1,200km, connecting all of the emirates and connecting it to Saudi Arabia and Oman.

“The control centre is at the core of the railway network,” said Faris Saif Al Mazrouei, the Etihad Rail chief executive. “The qualified staff members working in the control centre are responsible for the overall control and command of the system including all train movements, and this move is an important step forward for the project.“

A delayed 628km second phase linking Dubai and Abu Dhabi is expected to be awarded over the coming months after it was first tendered in July 2012.

Etihad Rail is part of ambitious plans to open a 2,177km long GCC-wide rail network which would link all six GCC states by rail for the first time.

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The Beirut-based lender BankMed has opened an office in the Dubai International Financial Centre (DIFC) as it expands in the region to drum up business from the Lebanese diaspora.

The bank, which also has operations in Turkey and Iraq, joins an increasing number of emerging market banks at the DIFC including Chinese and Indian financial institutions.

While BankMed has carved a niche funding small and medium sized enterprises (SMEs) it will also offer other financial services such as asset management and taking deposits, said the chairman Mohammed Hariri.

The bank’s wholly owned brokerage subsidiary MedSecurities has also opened shop in the DIFC with BankMed.

“We are not here to compete with the big local or international banks,” said Mr Hariri. “We are a medium-sized bank. We believe that we have a certain niche, attracting a lot of the Lebanese diaspora all over the world to expand into the emirates, and try to have a special niche for our activities.

“We will be concentrating on lending to SMEs in a big way because this is our model in Turkey [and] Iraq. Due to our presence in Iraq, Dubai is a natural hub for us to connect through that and Turkey,” he said.

The UAE has been striving to bolster support for SMEs. Even though they represent almost 92 per cent of the total number of companies and provide more than 86 per cent of jobs in the private sector, they are the recipients of only about 4 per cent of total lending in the country.

BankMed’s office in the DIFC officially opened on February 9 with a staff of about 14, said Mr Hariri.

The lender entered Iraq two years ago and has offices in Baghdad, Erbil and Basra, while it has been in Turkey for the past 10 years.

Future acquisitions would probably be in Lebanon, where BankMed is among the top five biggest banks by assets, he said.

“I think most acquisitions will be in Lebanon because we have grown to a good size,” Mr Hariri said.

“Future growth will be through acquisitions, but opportunities are limited,” he added. “A fast- growing area for us is Turkey. We bought a bank in 2005 and today we are growing quite rapidly, so I believe that this will keep growing. Iraq is another area and we are hoping that Dubai will also be a growth area.”

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Crowded malls can take the fun out of shopping, so one start-up decided to put it back in.

The Dubai-based Mr Draper offers an online grooming service for men where they can discuss the look they want with a stylist, who then assembles a customised set of clothes and couriers the box direct to the customer.

Technology comes into play during the feedback process. When returning the package, customers can comment online on each of the items, with the information used to personalise future packages by knowing exactly what sizes, fits and cuts work best for them.

“We wanted to make shopping convenient for men,” says Mahmoud Gao, the 30-year-old co-founder and managing partner of Mr Draper. The Syrian-American started the company a year ago along with business partners Tiba Al Damen and Mary Freij in Silicon Oasis.

When a customer signs up for the service, he is assigned a stylist. If the conversation takes place by phone or email, details about measurements, style and budget are discussed. Depending on the look the customer wants – casual or classic, for instance – the stylist prepares a box of clothes with between 12 and 15 items, such as T-shirts, jeans, shoes and shirts. Customers also have the option of uploading photographs or the image they want to portray.

Men then have five days to try out the clothes, and are charged by the number of items they eventually keep. The advisory and delivery are free of charge and the interactive nature of the contract raises the company’s grasp of each customer’s needs.

“We now have a better understanding of what they want, and preferences here include colour chinos, blazers and pocket squares,” Mr Gao says. “Because of social media people are out there more, and many want to get a great sense of style.”

The company works with 18 brands of clothing and accessories from the United States, the Netherlands, Italy and France. The prices of the boxes are in the mid to high range, varying between Dh3,000 and Dh10,000.

About 2,500 people have so far signed up for the service, and the two stylists at Mr Draper have sent out about 2,000 boxes of clothes. Around 70 per cent of the customers opt for the boxes to be delivered to their doorsteps. And Mr Draper has delivered in Dubai, Abu Dhabi, Sharjah and Ras Al Khaimah.

A majority of the customers are western expats such as British, Americans and French, followed by Arab expats, Indians and Emiratis.

To date most of the company’s marketing has been via word of mouth and Facebook. It has also run advertising videos inside elevators at 48 towers in Dubai Media City, Jumeirah Lakes Towers, DIFC and Jumeirah Beach Residence.

The company, which expects first-year revenues of about Dh1.5 million, measures commissions for the stylists on the number of items a customer keeps.

“We have disrupted the way men do shopping,” Mr Gao says. “It’s all online and all in the hands of the customers.”

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Crowded malls can take the fun out of shopping, so one start-up decided to put it back in.

The Dubai-based Mr Draper offers an online grooming service for men where they can discuss the look they want with a stylist, who then assembles a customised set of clothes and couriers the box direct to the customer.

Technology comes into play during the feedback process. When returning the package, customers can comment online on each of the items, with the information used to personalise future packages by knowing exactly what sizes, fits and cuts work best for them.

“We wanted to make shopping convenient for men,” says Mahmoud Gao, the 30-year-old co-founder and managing partner of Mr Draper. The Syrian-American started the company a year ago along with business partners Tiba Al Damen and Mary Freij in Silicon Oasis.

When a customer signs up for the service, he is assigned a stylist. If the conversation takes place by phone or email, details about measurements, style and budget are discussed. Depending on the look the customer wants – casual or classic, for instance – the stylist prepares a box of clothes with between 12 and 15 items, such as T-shirts, jeans, shoes and shirts. Customers also have the option of uploading photographs or the image they want to portray.

Men then have five days to try out the clothes, and are charged by the number of items they eventually keep. The advisory and delivery are free of charge and the interactive nature of the contract raises the company’s grasp of each customer’s needs.

“We now have a better understanding of what they want, and preferences here include colour chinos, blazers and pocket squares,” Mr Gao says. “Because of social media people are out there more, and many want to get a great sense of style.”

The company works with 18 brands of clothing and accessories from the United States, the Netherlands, Italy and France. The prices of the boxes are in the mid to high range, varying between Dh3,000 and Dh10,000.

About 2,500 people have so far signed up for the service, and the two stylists at Mr Draper have sent out about 2,000 boxes of clothes. Around 70 per cent of the customers opt for the boxes to be delivered to their doorsteps. And Mr Draper has delivered in Dubai, Abu Dhabi, Sharjah and Ras Al Khaimah.

A majority of the customers are western expats such as British, Americans and French, followed by Arab expats, Indians and Emiratis.

To date most of the company’s marketing has been via word of mouth and Facebook. It has also run advertising videos inside elevators at 48 towers in Dubai Media City, Jumeirah Lakes Towers, DIFC and Jumeirah Beach Residence.

The company, which expects first-year revenues of about Dh1.5 million, measures commissions for the stylists on the number of items a customer keeps.

“We have disrupted the way men do shopping,” Mr Gao says. “It’s all online and all in the hands of the customers.”

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