Banking & Business Review, UAE Digest

FROM THE GATE

State Bank of India’s DIFC unit launches corporate banking

200-year old bank has 12,100 offices all over the world and more than 150 million customers

Global Fortune 500-listed State Bank of India (SBI) has started providing the full range of banking services from its base in the Dubai International Financial Centre (DIFC). SBI, which is India’s top bank, has received a full banking licence from the regulator, the Dubai Financial Services Authority (DFSA), which enables the DIFC branch to accept deposits and provide credit, subject to the regulations of the DFSA.

Over the past year, an increasing number of banking and financial institutions from major Asian emerging markets like India have been establishing a presence in DIFC.

India ’s number-one bank has also obtained a retail endorsement to its licence, which enables it to arrange investments for retail customers and offer credit to small and medium enterprises (SME).

SBI‘s DIFC branch will provide trade finance and short-term working capital loans including Letters of Credit (LC) and bank guarantees, term loans, project finance and as well as syndication of credit requirements at highly competitive rates. The branch has a special desk to handle LC related activity.

The branch can arrange and advise on the investment products of the State Bank Group and other fund houses. It can also accept deposits from non-UAE-based professional clients and corporates in US dollars, Euros and GBP.

According to Dr Omar Bin Sulaiman, Governor of the DIFC and Vice-Chairman of the UAE Central Bank, the expansion of the SBI’s services out of DIFC is a clear testimony to the vast opportunities that the region’s financial services industry offers banking firms.

The team at SBI - DIFC branch is headed by Chief Executive Officer AJ Vidyasagar, who says the bank would provide top-class corporate banking services to clients in keeping with State Bank of India’s tradition of delivering safe, and transparent and regulatory-compliant products.

“SBI has upgraded its operations in the region despite the present economic downturn, which reflects our immense faith in the potential of the UAE and the wider market and also in our own ability to do profitable business under any circumstances. The trading and industrial community in the Gulf consists of many companies with an Indian connection, which is a base for the bank to further build its business across the wider region,” Vidyasagar said.

Supported by its group headquarters based in India, SBI provides corporate banking services in the region. The bank’s Corporate Banking Group in India has extensive experience in handling credit requirements of large corporates as well as infrastructure financing. The bank is the leading lender in India for project finance, with more than 490 of India’s top corporates banking with SBI.

SBI is a 200-year old financial institution, which has earned high levels of customer trust and the respect of its competitors by following prudent banking practices. The bank has an international presence in 92 locations spread over 32 countries and continues to grow at an aggressive pace. It has around 12,100 offices all over the world and more than 150 million customers. Along with its Associate Banks, SBI has 16,900 offices and 15,000 ATMs; all of them networked. In July this year, the bank opened 154 branches and 2151 ATMs simultaneously across the country though online activation.

MONEY

Remittance industry hit by recession

Saudi Arabia remains home to region’s biggest remittance industry

Saudi Arabia leads the region’s remittance industry, with the GCC remaining one of the top five players in the global remittance industry, according to Money Transfer International. The global remittance industry was worth $550 billion in 2008.

According to a World Bank report, the total remittances sent from Saudi Arabia is estimated to have exceeded $20 billion in 2008, ranking it as the second largest country in the world (and first in GCC) in terms of remittance outflows. The US, which has been the top immigration country, is also by far the largest source of outflows, with more than $47 billion in recorded remittance transfers in 2008 while Switzerland came third at $19 billion. While no data is available from World Bank, industry experts estimate the UAE remittance market at around $10 billion in 2008 while Kuwait and Qatar markets are estimated at $5 billion each.

In most countries, migrants do not constitute the majority of the total population. However, high dependence on oil resources and relatively small population size have led the GCC countries to rely massively on foreign workers and as a result expatriates population constitute on average more than 50 per cent of the total population with the highest being UAE and Qatar (around 80 per cent) and the lowest is Saudi Arabia (26 per cent). The strong presence of large migrant population makes the GCC countries among the largest remitting countries both in terms of total value and in terms of percentage of GDP.

The Middle East has become the fastest growing region for money transfer and remittance industry. The remittances have been growing at an annual pace of more than 15 per cent in the region compared to a global growth rate of eight percent in 2008. The sustained high growth in Middle East has been driven by many factors: the tendency of low-skilled foreign workers to leave their spouses and other family members in their home-countries to avoid high-living costs in GCC countries and the cumbersome and expensive family visa process, which discourages migrant workers to settle down with their families.

Citizenship and naturalization are virtually nonexistent in GCC countries, impeding foreign workers’ settlement on a more permanent basis like their European or US counterparts. Hence, the ties between migrants and their countries of origin do not decay overtime, and the trend in workers’ remittances remains sustained, reports point out.

Although the growth had been significant in the past few years, the last two years have witnessed essential changes in the remittance industry in the GCC countries. Increasing inflation in the Gulf States has had an enormous impact on the remittances of expatriate workers and this situation has influenced all the countries that export labor to the region, especially India, Pakistan, Bangladesh, Indonesia and the Philippines.

While remittance per person has come down due to increasing inflation, as a whole remittances have increased as more people sought employment in these countries. Nonetheless, the rate of increase of remittances from Gulf countries is slowing but is still positive. Pakistan and Bangladesh for instance have witnessed accelerated growth of remittances in 2009. This is in part due to the fact that the GCC countries, a major destination for Asian migrants, have not significantly reduced hiring migrants. Besides that, other reason for growth in remittances to these countries was due to falling asset prices, rising interest rates differentials and a depreciation of the local currency of these countries against GCC currencies, which are pegged to the dollar (except Kuwait) attracted investments from migrants.

While the impact of the global financial crisis on the GCC countries has definitely not been as severe as in the west, recent news events and deeper analysis into the numbers of the banks indicates they have not come out completely unscathed. Credit shrinkage, deferment of projects, significant number of layoffs across the board and a significant number of expatriates leaving the country made headlines for the six month period between October-08 and March-09. This in turn is likely to impact the remittances from these countries significantly in 2009.

As per the World Bank forecast, the remittances outflow will slowdown from GCC due to fall in oil prices leading to overall slowdown in expansion activities, layoffs from private and public sector companies due to weak outlook. The overall sentiment has turned pessimistic resulting in job losses, the expatriates currently working have either witnessed a salary cut or a job cut resulting in lower remittances as compared to earlier.

As per the latest forecast made by the World Bank the remittances flow to developing countries are expected to drop by 7-10 per cent globally from $328 billion in 2008. The World Bank forecasts a decline of around 9 per cent in remittances from GCC due to decline in economic activity and higher cost of living in these countries.

However, there are emerging signs of a bottoming out and the economies reviving. According to the revised projections by the World Bank, global economic growth is expected to rebound to 2 per cent in 2010 and 3.2 per cent by 2011 after a contraction of 2.9 per cent expected for 2009. With oil prices rising and the investor confidence reviving there are strong sign of the GCC economies on the path of recovery. Global Investment House anticipates all this would impact the remittances from the GCC positively and expects the year 2010 shall witness a positive growth rate due to a lower base and faster economic growth as projected by World Bank.
(From a report of Global Investment House)

FUNDS

Investment community sceptical

Survey finds nearly two-thirds of fund managers believe crisis will continue

Despite improving economic indicators, senior fund managers at a wide range of leading institutional investors from more than 15 countries, with over $2.8 trillion of equity funds under management, overwhelmingly say that the financial crisis is still not over. This is according to a new global survey recently conducted by business advisory firm FTI Consulting.

The survey of more than 153 leading institutional investors revealed that:

64 per cent of respondents globally said that they did not believe that the financial crisis was over, with 31 per cent saying the crisis was over, and 5 per cent undecided.
UK , US and Australian investors were the most pessimistic with 73 per cent, 76 per cent and 80 per cent, respectively of investors believing the crisis had not ended.
Continental European and Asian (including the Middle East), investors were slightly more optimistic with 59 per cent and 62 per cent; respectively saying the crisis was not over.

According to Jack Dunn, FTI’s President & CEO, the majority of funds surveyed did not believe the financial sector has recovered since the pinnacle of collapse in September 2008. This sentiment is reflected across all regions, with US, UK and Australian investors the most pessimistic. In Continental Europe and Asia (including the Middle East) there is more optimism, but a significant majority still does not believe the sector is back on track.

“Anecdotal evidence gathered during the survey suggests that across the globe investors were still concerned that the amount of leverage in the system that caused the original problem has not been reduced. The prevailing view was that there has been so much economic stimulus that markets can not help but go up. The concern was what would happen when government money runs out,” he said.

“These findings suggest a paradox, in that despite the negative outlook, global equity markets have rallied significantly in recent months. This indicates a willingness of investors, for now at least, to focus on factors beyond the fundamental issues that caused our current economic crisis.”

Dunn said the findings reflected on-going uncertainty in world markets and highlighted challenges that would be faced by world economic leaders at the upcoming G-20 summit in Pittsburgh.

“There is no doubt that the on-going uncertainty is having follow-on effects throughout the global economy. Among US companies alone, approximately $163 billion of corporate speculative grade debt is due to mature in 2010, with approximately $266 billion set to mature in 2011, according to Standard & Poor’s research. These enormous financing requirements amidst still-fragile credit markets, and weak demand apart from government stimulus, put a premium on a company’s ability to effectively manage both public perceptions and the underlying business.“

“For many companies, this uncertainty has meant looking at alternative funding avenues, such as sovereign wealth funds, the equity markets, or more exotic capital raisings. For policy makers, it has meant reassessing the regulatory environment and executive incentives that have driven the market for many years.”

The survey was carried out by the investor relations practice of Financial Dynamics (FD), FTI’s strategic communications division. The survey was based on interviews with 153 of the largest institutional investors across the world’s principal financial markets that between them have over $2.8 trillion of equity funds under management. 21 per cent of investors surveyed were based in the UK, 20 per cent were based in the US, 21 per cent were based in Asia (including the Middle East), 34 per cent were based in Europe, and 4 per cent based in Australia.

REAL ESTATE

Developers have ‘learnt their lessons’

Following examples of survivors in other markets to build differentiated capabilities

Global strategic consulting firm AT Kearney believes that the awaited consolidation wave in the real estate industry in the UAE and GCC has started and that the developers demonstrate they are mindful of lessons learnt from past real estate cycles in other markets.

Companies that survived in these markets have built strong differentiated capabilities and diversified across the value chain to stabilize sources of revenues. In similar markets such as Singapore and Hong-Kong, which were hit strongly by real estate cycle bursts in past decades, only two to three major developers survived and reinforced themselves.

Most regional markets have been confronted with strong oversupply – which peaked last year at over 100 per cent in the high-end residential and commercial segments in some GCC countries. “With most property developers being cash-strapped, with banks restricting lending and homebuyers defaulting on payments, the primary aim of consolidation is to pool resources to enable firms survive the downturn”, says Dirk Buchta, Partner and Managing Director, AT Kearney Middle East.

Announced merger plans for Emaar and Dubai Holding; within Dubai Holding for Dubai Properties, Sama Dubai, Bawadi, Remraam and the Tiger Woods golf course; Barwa and Qatar Real Estate Investment Co; and consolidation of land from distressed developers into companies like Dubai Real Estate Corporation come as no surprise to Dirk Buchta.

However, planning for a merger is paramount to its success. He points out that almost 70 per cent of mergers fail, often due to such basics as lack of preparation, communication, unclear strategies or poor execution. For example, in Spain recently, poor timing and planning of a merger between two major developers failed, resulting in bankruptcy for the new company within six months of the merger. Of those companies that do merge successfully only 29 perdcent achieve increased profitability. If developers are to merge, they need to ensure their company is on sound ground and research their prospective partner carefully before deciding this is the best solution.

“The main objective for a merger should not be size, which makes little sense in a quality-driven business like real estate development. The merged entities will have reinforced position on different parts of the value chain, but risks will also increase. This can be linked to a stronger focus on a risky market like Dubai, in addition to liquidity issues or “doubling” activities which will have to be rationalized. It is therefore the perfect time to review the corporate strategy of the new entities, enlightened by the new market conditions and the analysis of the growth path of most successful real estate developers worldwide such as Hines in the US, Hochtief and Nexity in Europe, or Capitaland in Asia. The time of endless growth for opportunistic projects driven solely by land and cash availability is over. Developers will compete for buyers, and they need to define a convincing strategy why buyers should buy from them and not from the other developer.” says Olivier Laroche, senior manager with AT Kearney Middle East.

Mergers in the real estate sector typically fall into two categories; merging of similar companies, or merging of complementary companies. The reasons to merge two similar companies are often to achieve synergies and operational excellence or to balance risks and diversify. While mergers focusing on achievement of operational excellence have not been common in the region, mergers focusing on balancing of risks and portfolio of assets are especially pertinent for master developers with Dubai interests, who are driven by project and investment portfolio rationalization.

The other option for companies is to use diversification along the value chain. Mergers between complementary players aiming to integrate the chain both up and downstream have occurred in the region. Most successful large western developers including Hochtief and Bouygues Group, have in the past followed this diversification path through mergers, joint ventures and organic growth. Emaar has started following this path with the acquisition of Singapore-based Raffles for its education business and joint ventures in the construction, brokerage and facilities management segments for instance.

The success of the merger lies in key restructuring actions in terms of project portfolio and customer base. Deyaar has shown a lot of maturity in this field compared to the lack of transparency in the region. A detailed strategy is paramount for the development of the core business of a new entity as well as a specialization strategy on development segments like low-cost housing, hospitality or retail, where specialized players dominate the market. Careful geographic diversification, first at a regional rather than on an international level, coupled with a balanced portfolio of activities and assets – both physical and financial - will be pillars for success, in line with regional markets’ evolution and competitive landscape changes.

Successful mergers can give leading Middle East players the critical mass and a competitive edge on the international scene, based on the regional market long-term potential and easier access to liquidity than most competitors worldwide. “Defining a rigorous growth strategy for the merged entity will be key to ensure shareholder and customer buy-in, but this needs to happen before the merger is actually announced,” Buchta feels.

AT Kearney also sees definite opportunities for GCC based and managed Real Estate Investment Trusts (REITs) and similar types of investment funds to attract billions in foreign direct investment into the region’s real estate markets.

REITs are structured and regulated investment portfolios made of various real estate assets from a range of asset classes and are privately or publicly owned. Their main purpose is to give individual investors access to real estate portfolio investments without personally owning assets and to allow for asset owners to access a broader and more liquid investor base.

“REITs are a great way to bring liquidity to the market which is particularly needed in a depressed market with distressed investors, a situation the local real estate market faces at present. REITs offer transparency and confidence to the international market, making them attractive to international institutional investors as they can diversify their investment and risk.” Dirk Buchta points out.

There are other vehicles available but public REITs are traded on stock markets with available transparent regulations, making them more trustworthy and more liquid than other forms of real estate investment. Over 20 markets worldwide have REIT regulation, including Dubai since 2006, which has helped fueling growth with a global REIT market cap of over $700 billion in 2009.

AT Kearney’s findings show that, historically, diversified REITs have generated the highest margins when compared to other segments. REITs are typically a medium risk investment, delivering 6 to 8 per cent returns on average. Their minimal correlation on the long-term with other asset classes makes them an attractive investment. However, when the REIT bubble in the United States burst with a dramatic correction of prices of around 65 per cent compared to their peak in 2007 (according to CBRE research), the confidence in the tool was significantly affected. But REIT managers and investors have learned their lessons and are now returning back to fundamentals, focusing on management of existing assets rather than more risky activities, including new developments.

“An active and transparent UAE REIT market would benefit the local economy now as it provides a fresh new source of investors and capital. The valuation of real estate assets globally and specifically in Dubai are attractive, making today a very interesting time to raise funds and consolidate assets under one vehicle,” says Olivier Laroche. “Owners will also have an opportunity to divest distressed assets to reduce their risk exposure, diversify their incomes and get alternative revenue streams. Several funds are already focused on UAE and GCC to invest in income generating real estate assets. With time, more cash will become available across the globe, especially with long term institutional investor” added Matthieu de Clercq, senior manager Real Estate AT Kearney Middle East.

The most important factor according to AT Kearney is the fact that the local stock markets in the GCC need to differentiate and diversify, as well as generate new opportunities to attract international investment in real estate, other than the risky developers’ stocks picking. REIT and other investment vehicles will provide the GCC with new products, new investors, new capabilities and overall with a new segment strengthening it’s positioning as a financial hub globally.

“The fundamentals of the business today lie more in managing and optimizing revenues generated by existing assets and activities than by planning new developments. Structured REIT and real estate portfolios will force asset managers to develop long term and sustainable tenant management and care practices,” concluded de Clercq.

Roundup

Sukuk market continues to progress: S&P

New issuance of sukuk topped $9.3 billion in the first seven months of 2009 compared with $11.1 billion during the same period in 2008, Standard & Poor's Ratings Services said in a report.

"The smaller amount of issuance was due not only to the still-challenging market conditions and drying up of liquidity, but also to the less-supportive economic environment in the Gulf Cooperation Council countries, particularly in the United Arab Emirates," said Standard & Poor's credit analyst Mohamed Damak. "The medium-term outlook for the sukuk market remains positive, though, in our view, given the strong pipeline--with sukuk announced or being talked about in the market estimated at about $50 billion--and efforts to resolve the major difficulties impeding sukuk market development."

Malaysia has taken the lead as the major country of issuance for sukuk, accounting for about 45 per cent of sukuk issuances in the first seven months of 2009. Issuers in the Kingdom of Saudi Arabia have contributed another 22 per cent of sukuk issued during the same period.

The default of a couple of sukuk was possibly partly responsible for the slowdown in issuance. The silver lining was that these defaults should provide the market with useful information on how sukuk will behave following default.

The report noted that major hurdles remain on the path to sukuk market development, however, including:

•Difficult market conditions, which are slowing the planned issuance of numerous sukuk

•Lack of standardization, notably when it comes to Shariah interpretation; and

•The low liquidity of the sukuk market, which constrains investors trying to exit the market in times of turbulence or access the market looking for distressed sellers.

Islamic banks see unaffected by crisis

Global financial crisis has failed to have any impact on Islamic banking because the principles of Islamic banking did not permit speculative economic activity such as dealing in derivatives, according to Adnan Ahmed Yousef, the President and CEO of Albaraka Banking Group and the head of the Union of Arab Banks.

Terming Islamic banking as a remarkable success story in the backdrop of the general gloom in the financial sector, Yousef said Albaraka Group not only remained unaffected by the financial crisis, but also managed to increase profits this year.

Though the end of financial crisis had already begun, it will take a long time to get out of the economic crisis. “Proactive government initiatives are a precondition to get over the financial crisis. The developed countries must listen to Asian countries to avert this kind of situations in future,” he said.

Speaking of the performance of banks in the Gulf against the backdrop of the crisis, Yousef said the consolidated balance sheet of GCC banks would prove beyond any shadow of doubt that the impact of the crisis on banks in the region had been minimal. “But that does not mean we remain isolated from the rest of the world. It is indeed possible for the GCC countries to become more influential internationally. GCC will actually be the fifth major economic block in a few years provided they implement a common currency system and consolidated economic activity across the region further,” he explained.

Appreciating the development strategy followed by Dubai, Yousef said the emirate has achieved in 10 years what most Arab countries failed to achieve in 50 years. “One major factor that sets the UAE apart from most other countries in the region is that it has allowed unfettered access for foreign capital. The way the Central Bank proactively intervened in the UAE to fight the impact of the financial crisis was also a remarkable example of the UAE’s far-sightedness,” he explained.

Yousef said the central banks across the world should exchange information about corporate debts to avoid future credit crises. “It is important that the debts of corporate entities be made globally public in order for banks to avoid giving risky loans. This is something very easy to implement as all central banks have the information at their disposal,” he pointed out.

Sahba Hadipour joins Barclays Wealth

Barclays Wealth announced the appointment of Sahba Hadipour as Director to its International Private Banking team in the Middle East. He will report into Fawaz Baba, General Manager of the Dubai International Private Banking Office.

Based in the Dubai International Financial Centre, Sahba Hadipour will be a private banker focusing on the High Net Worth and Ultra High Net Worth markets in the UAE, the bank said in a statement. Within his new position, Hadipour’s experience with private equity along with his knowledge of the wealth management industry in the region will compliment the full array of the Barclays Wealth value proposition to the UAE market, it said.

Prior to joining Barclays Wealth, Hadipour was a Director, Private Equity and Wealth Management for CIC Holding (Invesco Holding) where he developed strategic relationships with UHNWI, SWF and institutional investors. In his position, Hadipour created and developed the architecture and formation of several private equity funds in the real estate, technology and oil & gas sectors. Prior to that, Sahba was with Vertical International and Coutts de Lisle Investments where he held a variety of roles.

GCC Investor Confidence Index up

After the dip last month in the confidence index, the GCC Investor Confidence Index is moving in a more positive direction, Shuaa Capital said in a report. Although only a 2.7% gain, it is nonetheless a good sign and the small change is not surprising given that August is traditionally a quiet month, it pointed out.

SHUAA Capital’s GCC Investor Sentiment Report is compiled with contributions from international and regional institutional investors and has been designed to provide the global investment community with a benchmark of investor confidence for GCC countries and track changes in investor behaviour over time.

The results of the August 2009 Report showed that after the dip last month in the confidence index, there is again a move in the more positive direction. Although only a 2.7 per cent gain, it is nonetheless a good sign, the report pointed out.

Contributing most to the positive movement were the UAE and Qatar. The UAE Investor Confidence Index was the biggest gainer in the GCC, up 4.3 per cent to 118.8 points. This makes up for some of July’s losses after the index dipped to 113.9 points. Despite the improvement, the index still lags behind June’s peak of 123.8 points. Driving the UAE Index this month was improving sentiment towards the current state of the UAE economy. Positive responses doubled to 16.9 per cent with a similar level of negative and neutral responses at 38.5 per cent and 33.8 per cent respectively.

The significant improvement in the overall GCC Investor Confidence Index was largely driven by a positive shift in the balance of investors’ perceptions of current regional economic conditions. In August this figure moved to 1.5 per cent from -15 per cent in the previous month.

The six month investor outlook for the GCC economy remains positive, with a balance of 56.9 per cent, which is a slight improvement on the previous month’s 55.3 per cent. The GCC is now ahead of both BRICs [Brazil, Russia, India, China] and Global Emerging Markets, who both recorded a lower figure of 49.2 per cent, the report pointed out.

However, it added that investors still think stock markets across most of the GCC remain undervalued with the Abu Dhabi Stock Exchange being the most undervalued with a balance of respondents of 55.4 per cent. Saudi Arabia follows closely behind at 46.2 per cent and is considered even more undervalued than last month as is also the Doha Stock Market with a balance of 44.6 per cent. Nasdaq Dubai is still seen as undervalued but to a lesser degree with a balance of 16.9 per cent, a 9.8 per cent drop. The Dubai Financial Market and the Omani stock exchange are on a par at 33.8 per cent, which is a strong improvement for both on the previous month.

Committed employees fastest to be promoted

Employees that are hard-working and have a strong work ethic are likely to be promoted the fastest within an organization, according to the new employer online poll series conducted by Bayt.com, with 30 per cent of employers agreeing that those committed to their work are likely to be most eligible for promotion. Leadership ability was also found to be a very desirable trait in an employee when it came to deciding which staff members to be promoted, with 19 per cent of employers agreeing natural leaders are the fastest to move up the organisation’s career ladder.

Surprisingly, possessing a high IQ was considered less important among the employers surveyed, with just 6 per cent agreeing that the most intelligent employees are promoted fastest, and contrary to popular belief, visibly putting in long hours does not guarantee a promotion; just 8 per cent of employers agreed that those who stay after hours will be promoted faster than those who don’t.

The ‘Job seeker promotability’ July online poll series sought to understand from employers how they undertake the process of promoting employees, and what qualities they look for when assessing an employee’s ‘promotability’.

When asked about the strategy they normally follow when conducting the promotion process, almost a third of all employers-- 32 per cent-- stated they look at an employee’s proven deliverables and make their decision based on these indicators. Eleven per cent opt for a slightly unorthodox tactic and stretch their employees to see who performs best under pressure - choosing the ‘winner’ for promotion. Furthermore, 4 per cent of employers conduct a rigorous 360-degree performance appraisal with their staff; another 4 per cent invite employees to formally apply for the higher position, while a further 4 per cent of employers conduct random interviews with employees to see who fits in best with the higher position. However, another third of employers combines a mix of each of these factors as their strategy for promoting employees.

The surveyed employers also acknowledged the problems inherent in the promotion process: 44 per cent of employers said that the biggest mistake made by employers when deciding upon a promotion is not considering leadership skills sufficiently. Another 13 per cent said that allowing just one manager to make the promotion decision is the biggest mistake in the process, while another 13 per cent agreed that not discussing the matter of promotion sufficiently with the concerned employee is an issue. Just 6 per cent of employers agreed that relying solely on the observations of the employee’s direct manager for a promotion decision was problematic, and another 6 per cent said making a promotion decision based on an employee’s performance on a specific project was an issue.

There are, naturally, a number of factors which serve to hinder an employee’s chances of gaining a promotion. The biggest source of chagrin among the surveyed employers was weak leadership skills in their employees, which caused a grievance to over a fifth of employers. Bad work ethics and laziness, unsurprisingly, also feature as a significant barrier to an employee’s chances of promotion – as agreed with by 18 per cent of employers.

Furthermore, 15 per cent of employers stated that inability to work as part of a team or being too independent at work, and weak interpersonal skills, were also major hindrances to chances of promotion.

Interestingly, lack of creativity or problem solving skills, and weak technical skills were less of a hindrance to an employee’s chance of promotion, according to 12 per cent and 9 per cent of employers respectively. The data suggests that employers might be willing to work on nurturing technical skills and creativity traits via training and development of their employees - especially if they have other strong qualities, possibly because in practice, troublesome attitudes are more difficult to change and improve than actual key skills.

Potential promotability is also considered by employers from as early on as when they make their hiring decisions. The results showed that 28 per cent of employers look for strong people skills in their potential recruits, while 20 per cent look for signs of good technical skills and ability. Another desirable quality that 16 per cent of employers look for is commitment and loyalty - perhaps from work experience in previous organisations or hobbies/ activities undertaken in a job seeker’s spare time. Desirable - but not wholly necessary - traits that employers look for in potential new staff, at 8 per cent ach, are a strong work ethic, a good character and integrity, as well as a track record of success.

Data for the ‘Job seeker promotability’ poll series was collected online between the period of 13th July and 17th August 2009, with respondents represented by employers across the Middle East.

Singapore continues to be world’s TopInternationalMeetingCity

Singapore has consolidated its reputation as the world’s preferred business events destination by clinching the top spot in the ‘TopInternationalMeetingCity’ category in the Union of International Associations (UIA) 2008 Global Rankings for the second consecutive year.

In the UIA’s International Meeting Statistics 2008 report, Singapore also moved one notch up from 2007 to third position in the ‘Top International Meeting Countries’ category behind USA (1st) and France (2nd).

The city-state also overcame stiff competition for the Asia rankings, securing the title as Asia’s top country and city for meetings for the 25th consecutive year.

The Union of International Associations (UIA) – founded in 1907 – is an independent, non-governmental research institute and documentation centre whose key activities include consolidating statistics on international organisations and their international meetings.

“This ranking underscores Singapore’s reputation as an exchange capital of the world where people, ideas and technology converge to generate business success. These accolades come at an opportune time as they put Singapore in a strong position to further expand its share of the global business events market by partnering with MICE industry partners to attract and develop successful business events centered around major growth industries in Singapore and the region,” said Jason Ong, Area Director for Middle East and Africa, Singapore Tourism Board.

Singapore hosted 637 meetings in 2008 that met UIA’s qualifying criteria – a 36 per cent increase over 2007. Notable meetings include the International Thalassaemia Conference 2008, ISNCC 15th International Conference on Cancer Nursing 2008 and the Asia Petrochemical Industry Conference.

In 2004, Singapore stood at a respectable 10th place in the ‘TopInternationalMeetingCity’ category. In 2005 it climbed to 8th place, and jumped to 4th place in 2006. In 2007 it rose to first place, with almost 30 per cent more meetings than the city in second place. In 2008 it not only maintained its position in first place, it has increased its margin to 50 per cent more meetings than the second-ranked city, according to Jcques de Mevius, Secretary-General, UIA.

Singapore is looking forward to host a number of high profile events this year including the FDI World Dental Congress, the second edition of ITB Asia and the Asia Pacific Economic Cooperation (APEC) 2009 meetings. In addition, top tier international events such as the FORMULA 1 SingTel Singapore Grand Prix and the inaugral F1 Rocks Singapore concerts are adding more buzz and dynamism to the destination.

Next year business events organisers will have even more options with new developments, such as the two new Integrated Resorts, Marina Bay SandsTand Resorts World at Sentosa, and Gardens by the Bay – Singapore’s second Botanical Gardens – , which will collectively entrench Singapore as a compelling and must-visit destination.