Investment News: Money Morning » Emirates http://www.moneymorning.com Investment News Provider Sat, 21 Nov 2009 18:52:59 +0000 http://wordpress.org/?v=2.8.4 en hourly 1 MGM Mirage Steps Into the Fray Again, Partners With Abu Dhabi To Develop $3 Billion Resort http://www.moneymorning.com/2007/11/12/mgm-mirage-steps-into-the-fray-again-partners-with-abu-dhabi-to-develop-3-billion-resort/ http://www.moneymorning.com/2007/11/12/mgm-mirage-steps-into-the-fray-again-partners-with-abu-dhabi-to-develop-3-billion-resort/#comments Mon, 12 Nov 2007 12:46:30 +0000 admin http://www.moneymorning.com/2007/11/12/mgm-mirage-steps-into-the-fray-again-partners-with-abu-dhabi-to-develop-3-billion-resort/ From Staff Reports

MGM Mirage (MGM) will partner with the Mubadala Development Co. to develop the MGM Grand Abu Dhabi resort.

This latest MGM-headed project is projected to cost $3 billion and will be owned by Mubadala, which is wholly owned by the government of Abu Dhabi. MGM Mirage will develop and manage the project for a fee. The property, aimed at the high-end market, will have "unparalleled views of the city skyline" and "stunning panoramic views of the waterfront," the companies said in a joint statement.

The project should open in 2012.


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The 50-acre development on a waterfront site on Abu Dhabi Island will hold a non-gambling MGM Grand hotel, as well as two additional luxury hotels – giving it 1,200 luxury rooms. The MGM Grand Abu Dhabi also will feature an arena with up to 12,000 seats, restaurants and retail locations, high-dollar waterfront residences, private-yacht slips, and other entertainment-related facilities.

That 50-acre project is actually the first of three phases, and could create a project that ultimately covers 150 acres.

"We are thrilled that our first project with Mubadala will create a destination and icon for Abu Dhabi," MGM Chief Executive Officer Terry Lanni said when the project was announced.

The deal comes after Dubai World, a holding company for the Persian Gulf state, recently acquired a nearly 5% stake in MGM, and agreed to pony up $2.7 billion for a 50% stake in CityCenter, a 76-acre development in Las Vegas slated to open by 2009. Dubai World’s private-equity arm, Istithmar, is also involved in a joint venture with MGM and Kerzner International Holdings Ltd. to develop a multibillion-dollar Las Vegas resort that also is slated to open in 2012.

The arena at the MGM Grand Abu Dhabi will likely host well-known performers from the Middle East region, as well as well-known Western acts that often appear at MGM Mirage’s casino properties in Las Vegas – such as headline pop-music stars, and such as headline acts as Cirque du Soleil.

Sales of the luxury residential sites – apartments and villas – will help offset construction costs. That’s just what’s happening with the CityCenter project, where $3 billion of the $7.8 billion in construction costs are being offset by residential-property sales.

Abu Dhabi, the richest of the oil-laden United Arab Emirates, has a large expatriate population, and is aiming to transform itself into a global tourist destination.

Alcohol will be served throughout the complex, but some Las Vegas offerings, such as the Crazy Horse Paris topless revue at MGM Grand, will not be part of the plan.

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]]> http://www.moneymorning.com/2007/11/12/mgm-mirage-steps-into-the-fray-again-partners-with-abu-dhabi-to-develop-3-billion-resort/feed/ 0 Boeing Refurbishes 500th Super Hornet Fighter Jet, Makes Plans for Looming Dubai Air Show http://www.moneymorning.com/2007/11/06/boeing-refurbishes-500th-super-hornet-fighter-jet-makes-plans-for-looming-dubai-air-show/ http://www.moneymorning.com/2007/11/06/boeing-refurbishes-500th-super-hornet-fighter-jet-makes-plans-for-looming-dubai-air-show/#comments Mon, 05 Nov 2007 23:01:52 +0000 admin http://www.moneymorning.com/2007/11/06/boeing-refurbishes-500th-super-hornet-fighter-jet-makes-plans-for-looming-dubai-air-show/ By William Patalon III
Managing Editor
Money Morning

The Boeing Co. (BA) announced that it’s delivered its 500th modified F/A-18 Super Hornet jet fighter-bomber to the U.S. Navy from the company’s Aerospace Support Center at Cecil Commerce Center, located near Jacksonville, Fla.

Boeing also detailed its plans for the upcoming Dubai Air Show, which opens Sunday and runs through to Thursday. It has emerged as one of the world’s key commercial air shows. And Dubai has emerged as a market investors must keep watching as the Middle Eastern nation continues to expand its sphere of economic and financial influence.

The "Super" New Hornet

The Cecil airfield – a former U.S. Naval air station – functions as a "drive-in/fly-out" facility that allows the modified fighter jets to be made available for deployment as soon the upgrade and modification work is finished.

To modernize and overhaul the jet fighters, Boeing and prime contractor Northrop Grumman Corp. (NOC) have been installing upgraded avionics and making key technological and structural enhancements to F/A-18s since the center opened in September 1999.

With more than 900 F/A-18s in U.S. Navy and Marine Corps squadrons, there’s still plenty of modification work to be done. The modifications bring the older planes up to par with the more-recently built "marks," or versions, of the Super Hornet. Inspectors look for cracks, corrosion and fatigue to determine if the life of the aircraft can be safely extended. The oldest and most heavily used Hornets are in the midst of an extensive inspection process aimed at boosting each aircraft’s lifespan from 6,000 to 10,000 flight hours.

Newer Hornets at Cecil Field receive upgraded display systems, miniaturized global-positioning system (GPS) receivers, helmet-mounted cueing systems and more advanced radios. The modifications give the Hornet improved communication and information systems and allow the F/A-18 strike fighter to carry the latest weapons, including the newest missiles and "smart bombs."

In January, Boeing’s Cecil Field facility will begin modifying F/A-18 C- and D-model aircraft for the U.S. Navy Blue Angels flight demonstration team, which has flown the A- and B-model Hornets since 1986.

"Cecil Field is vital to the health and performance of the U.S. Hornet fleet," said Mike Rudolf, Cecil Field F/A-18 programs manager. "We’ve proven for almost eight years that we can successfully perform modifications and repairs and return aircraft to the customer very quickly. That’s important for the [fighter pilot] in the field who depends on us to deliver improved capability. The bottom line is: We get the jets out on time."

The cost of new defense programs are soaring into the stratosphere. Aircraft programs are among the most expensive of all. As these costs rocket, retrofitting and modernizing existing aircraft has become a key strategy embraced by all branches of the U.S. military so that each service can stretch its budget allotments by keeping weapons systems in service for many additional years – if not for additional decades.

Indeed, consider the case of the U.S. Air Force Boeing B-52 Stratofortress, a high-winged strategic jet bomber that was brought into service in the middle 1950s. The B-52, also known as "The BUFF" – for Big Ugly Fat Fellow – has been retrofitted and modernized a number of times, which is the main reason it’s still a frontline aircraft – even though it’s much older than most of the men who fly them.

The company’s Cecil air station facility has reduced its work force in recent years as Navy programs on other aircraft have wound down, but Boeing is pursuing other work for the center. One possible source of work: The V-22 Osprey, the so-called "tilt-rotor" aircraft that the U.S. Marine Corps flies.

"We’re going to continue to grow Cecil Field," Don Davis, Boeing’s senior manager for naval integrated logistics support systems, said in a statement.

Demonstrations at Dubai

At the Dubai Air Show, Boeing intends to highlight a range of the products and services that have been contributing to the parent company’s record sales. The show will spotlight a wide range of offerings across Boeing’s commercial and defense divisions. The show opens Sunday and runs through to Thursday.

"Boeing is proud of a partnership with the Middle East that stretches back more than a half century, and we are committed to meeting the needs of our customers throughout this fast-growing region and to further developing and expanding our long-term partnerships," said Tom Downey, a Boeing senior vice president.

Boeing has long considered the Dubai Air Show to be one of the world’s premier aerospace exhibitions, which is why the firm said the exhibition will be well-staffed with people, products and services.

On the defense side, the company said it will showcase the capabilities of such fighter planes as the F-15E Strike Eagle and F/A-18 Super Hornet. Static displays will include the regional debut of Boeing’s 737 Airborne Early Warning and Control aircraft, in addition to the E-3 AWACS, the B-1B Lancer jet bomber, the C-17 Globemaster III military transport aircraft and a UAE Land Forces AH-64A Apache attack helicopter. On the commercial side, Boeing customer Royal Jet will display a Boeing business jet.

Boeing’s schedule begins on Saturday, with a press conference featuring its airliner division. On that same day, Boeing’s Integrated Defense Systems unit, with its Saudi Arabian partner Alsalam Aircraft Company, will co-sponsor the Middle East Air Chiefs conference.

On Tuesday, Boeing Capital Corp. will host a financiers and investors conference, recognizing Dubai’s role as an emerging center for global finance.

Issues With Emirates Airlines

Boeing executives may well use this time to try and overcome an emerging problem with the Dubai-based Emirates Airlines, a sought-after customer. Emirates says the U.S. airliner maker may fail to land a 100-plane contract worth $20 billion because of the airline’s belief that the biggest version of the much-hyped Boeing 787 Dreamliner lacks sufficient "thrust," or power, from its General Electric Co. (GE) engines.

According to a report by the Seattle Post-Intelligencer and Bloomberg News, Boeing’s 787-10, a 310-seat version of the under-development Dreamliner, doesn’t yet meet Emirates’ needs, airline President Tim Clark said. The Dubai-based airline would operate the plane to destinations including Los Angeles.

"It needs more thrust," Clark told Bloomberg during an interview in Cannes, France. "It’s not a view shared by Boeing, but my instinct tells me it needs more."

Meanwhile, Boeing nemesis Airbus SAS got an order from International Lease Finance Corp. for 20 A350 widebody jets, fewer than analysts expected and smaller than the company’s contract for Boeing’s 787. Even so, the deal is worth $4 billion at list prices, sources told Bloomberg.

Deals with the Los Angeles-based International Lease Finance are closely watched as the leasing firm is viewed as a bellwether customer in assessing the popularity and potential success of new models of aircraft. The firm placed an order for 12 A350s in 2005 before Airbus voided the deal by modifying the airplanes. ILF agreed to buy 52 787s in June, following an initial order for 22 in 2005.

Emirates is weighing the 787-10 against the Airbus A350-900 and may order as many as 100 planes, a deal with a potential value of $20 billion at list prices, Clark said. Concern about GE’s GEnx engine might mean that the carrier won’t reach a decision by the time of the air show, where it had originally intended to make an announcement, he said.

Rick Kennedy, a spokesman for the Fairfield, Conn.-based GE, told Bloomberg that the company was "gratified Emirates is interested in the Genx. [But] at this juncture, it’s premature, because the 787-10 hasn’t been formally offered to airlines."

Boeing has more than 700 orders for the Dreamliner, valued at about $120 billion. On Oct. 10, the first delivery was pushed back by six months after supplier problems and parts shortages made it clear the original schedule was unrealistic.

All Nippon Airways Co. will get the first plane in November or December 2008.

While the delayed 787 still will be delivered five years before the Airbus A350 – a controversial program that’s undergone five revisions – Emirates’ Clark said the Airbus airliner has benefited in terms of design, aerodynamics, materials and propulsion.

"The A350 is now an airplane we’re prepared to study seriously," Clark said told Bloomberg. "They listened, and from what we see of the A350, now it’s an essentially good airplane, and it matches the 787 offering from Boeing."

Rolls-Royce Group PLC (RYCEY) offers engines for both the A350 and the 787, and has a more powerful entrant whose thrust output may better satisfy the Emirates Airlines’ requirements, Clark said. Still, the CEO said he would prefer to have a choice. However, GE and Airbus have yet to reach an engine-supplier agreement.

Boeing’s Buyback and Dividend Payout

Boeing last week announced plans to buy back as much as $7 billion of its common stock, the latest leg of a share-repurchase program under which the aerospace company has bought back $8 billion worth of its shares since the program was resumed in 2004.

The aerospace-and-defense-contracting company also declared a regular quarterly dividend of 35 cents a share, payable Dec. 7 to shareholders of record as of Friday (Nov. 9).

Boeing is the No. 1 U.S. exporter, and is a stock that several of Money Morning’s contributors and advisory panelists have identified as one of the globally focused U.S.-based companies investors might want to research further [In fact, to see a copy of our special investing research report, "Investments for a Weak Dollar World," one of several of our research reports that list Boeing among the U.S.-based companies that will really benefit from the falling greenback, please click here. The report is free of charge].

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]]> http://www.moneymorning.com/2007/11/06/boeing-refurbishes-500th-super-hornet-fighter-jet-makes-plans-for-looming-dubai-air-show/feed/ 0 Emirates Telecommunication Eyes Controlling Stake in Oman Telecommunications http://www.moneymorning.com/2007/10/19/emirates-telecommunication-eyes-controlling-stake-in-oman-telecommunications/ http://www.moneymorning.com/2007/10/19/emirates-telecommunication-eyes-controlling-stake-in-oman-telecommunications/#comments Fri, 19 Oct 2007 11:25:39 +0000 admin http://www.moneymorning.com/2007/10/19/emirates-telecommunication-eyes-controlling-stake-in-oman-telecommunications/ From Staff Reports

Dubai-based Emirates Telecommunication Corp., the third-largest Arab telecommunications company, said it is interested in buying a controlling stake in state-controlled Oman Telecommunications Co., also known as Omantel.

News of the possible interest from Emirates Telecom, more generally referred to as Etisalat, sent Omantel’s stock up 10%, to a 21-month high, Reuters reported.

"Are we interested? I say yes," Jamal al-Jarwan, chief executive of Etisalat International Investments, told Reuters. "Oman is a growth market, and there are synergies for us in the Middle East."

In 2005, Omantel lost a large portion of its market share and customer base to rival Nawras. On Oct. 3, the Omani government said it would cut revenue royalties and shuffle management to prepare for a long-term investor such as Etisalat to step in. Since then, Omantel’s stock has gained 31%.

Last week, the Middle East Economic Digest reported that the Omani government could sell as much as 19% (worth roughly $590 million) of the company.

Etisalat’s coverage area reaches from Pakistan to Nigeria, but domestic cell phone customers account for more 60% of the company’s revenue.

In the past three years, the company has spent more than $6.5 billion on foreign acquisitions. And those properties appear to be paying dividends, as the company reported a $1.5 billion profit in the first nine months of 2007. Overall revenue in the first nine months of the year reached approximately $4.17 billion. That represented an increase of 30%, the company said in a statement.

Neither Etisalat or Omantel are SEC registered, and therefore aren’t available for U.S. investors to buy into. Even so, the strong growth is important because Dubai is a market that savvy U.S. investors are watching very closely.

"Dubai is one of the world’s most sophisticated investors," and is investing heavily in Asia, with a special focus on China, says Keith Fitz-Gerald, a professional trader and Money Morning contributing editor who is a well-known Asia-investing expert.

Dubai is making investments throughout the world via its state-run investment fund, and through other investment vehicles – including a high-profile deal to buy into MGM Mirage (MGM), the U.S.-based gaming-and-hotel company. That deal alone should stand as proof that U.S. investors should closely watch Dubai’s investment strategies – and even look to profit where possible, Fitz-Gerald said in a recent interview. [For our report detailing why Fitz-Gerald recommends MGM as low-risk play on China, please click here. The report is free of charge].

 

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