Makkah 'Smart City' Project to Start next Year

From Khaleej Times, “The implementation of infrastructure projects to develop Makkah into a smart city would start next year…”

Turn Makkah into a smart city? As oppose to? Was Makkah an “idiot” city before?

Marketing marketing. Please use sensible words.

It’s time to buy media companies, enough of financial institutions!

For long, we, Middle Eastern Investors, took a passive investment approach in the stocks and bonds of global companies. More recently, we threw a big chunk of our oil money in ailing US & European financial institutions. Did we invest due to Western political pressure or we thought it made business sense to invest? I do not have enough evidence to figure out the answer.

Consider ADIA’s $7.5 billion investment in Citigroup. When the deal was struck in Nov 07, it was viewed as a bargain when Citi’s shares were trading at $30 per share. I do not know what a bargain is when Citi is currently trading at $3.50 per share (88% down from Nov 07). Other examples are roughly the same, of course in negative.

We had enough of financial institutions. It is time to diversify. Oh, did I mention that the New York Times Co. is up for sale? How come we are NOT interested? With all the bad publicity that we are getting in the American and European press, it makes political sense to buy into media companies. Since we are going to lose 88% of our money anyway, why not at least get some intangible benefits such as good publicity?

However, I will not recommend an investment that does not make business sense. I am sure there are other media companies in dire financial circumstances and are disparate for cash. Find one that makes business and media sense and invest for the long-run (i.e. greater than 10 years).

Imagine buying Fox News Channel, or the CNN? Waw

Gulf Finance House Admits to Offer Unsuccessful Projects to its Investors in the Past

In a recent telephonic interview with Zawya, Jinesh Patel, a senior executive director at Gulf Finance House, said:

“Conditions around the world are very challenging now but good opportunities are there and we will be very selective," Patel noted, adding that GFH will only offer to clients what the bank believes would be "ultimately successful".

Ultimately successful? Does he mean that previous projects were ultimately unsuccessful? Very strange.

Why do we need foreign farm lands? It's a losing proposition

Recently, few GCC countries began purchasing farm lands in foreign countries to secure food imports and reduce cost of food (thus lower inflation). Qatar is buying 40,000 hectares of farm land in Kenya, while UAE and Saudi Arabia reportedly bought farm lands in Pakistan and Sudan for the same purpose. While I understand the rationale of our governments, the mechanics of these agreements are fragile. First, it is a bad publicity for our governments to be seen buying lands from poor countries to feed the already over-weighted populations of GCC citizens. It’s like taking the bread of a beggar to feed the son of the king.

Second, if global food shortages occur, and famine struck farm land countries, these agreements will not be honored, precisely at the exact time that food is required. The governments of Kenya, Pakistan, and Sudan will nationalize these farms to feed their citizens, a valid pretext, or else their citizens will perish and revolutions will take place.

So what’s the point of buying these lands? In good times, you can buy food from anywhere, and in bad times, the farms will be nationalized and we will lose our investments and food source.

In any case, we are an obese nation; we should cut on our food imports.