Iran's threat to block the Strait of Hormuz could force countries in the region to seek more expensive, less convenient sources of commodities.

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The UAE is consolidating its position as a major growth market for water developers. Dubaiis expected to make significant progress in 2012 by venturing into independent power projects (IPPs)with the launch of the Hassyan IPP, which will set a template for future independent water and powerprojects (IWPPs) in the emirate. Private sector appetite will be encouraged by the Dubai authorities, whohave hitherto undertaken critical infrastructure projects using the state?s balance sheet; however,Dubai?s financial troubles have added impetus to its search for private financing for its power and watersector.Key themes to highlight for UAE?s water sector:The Abu Dhabi Water and Electricity Authority (ADWEA) is seeking to tap the debt markets inorder to help finance its Shuweihat 2 IWPP. In Q311 it named HSBC as financial advisor on theUS$2.2bn refinancing of its Shuweihat 2 loan and will also issue a bond in what will be a firstfor a Gulf IWPP. This offering is set to go to the market in early 2012. The move comes amid awider push by Abu Dhabi?s government entities to approach the debt-capital markets for funding? a trend we expect to continue through 2012.In Q411, the Dubai Electricity and Water Authority (DEWA) announced it had awardedcontracts worth more than US$100mn, the bulk of which will be for water related projects.However, despite the decision by Moody's Investors Service to upgrade DEWA?s corporatefamily rating and probability of default rating from Ba2 to Ba1, and the utility?s US$3bn of debtinstruments to Ba1, there are no plans to raise bonds in 2012.Abu Dhabi Sewerage Services Company (ADSSC) has outlined significant investment plans for2012 and intends to spend US$1.6bn on wastewater projects. Much of this spending will beearmarked for the enhancement of tunnels. In November 2011, the company also awardedanother significant project related to its tunnel improvement programme, having reportedlyawarded Brazil?s Odebr

The UAE?s consumer electronics devices market, defined as the addressable market for computingdevices, mobile handsets and video, audio and gaming products, is estimated to reach a value ofUS$3.8bn in 2012. This is expected to increase to US$4.7bn by 2016, driven by the popularity of newelectronic devices such as LED and 3G TV sets, 3G mobile handsets, smartphones, feature-richnotebooks, MP3/MP4 players and Blu-ray players.In H111, UAE retailers reported a surge in demand for consumer electronic products, in many casesfuelled by price cuts. Retailers partly attributed the rebound to recovering markets and an improvement inconsumer confidence, which had been damaged by the Dubai financial crash. However, price reductionsalso seemed to be a significant driver.Significant obstacles still stand in the way of a more pronounced recovery, including weak creditconditions and Dubai's onerous debt repayment schedule in 2011. The shift towards more cautiousdomestic spending patterns is likely to persist well into 2012, with overall consumption growth remainingmuted, particularly in Dubai. However, Dubai benefited most from a pick-up in the tourist trade,providing a boost to the important carry trade for electronics goods.ComputersComputer hardware accounted for 53% of the UAE?s consumer electronics spending in 2011. BMI forecasts domestic market computer hardware sales ? including notebooks and accessories ? of US$2.0bn in 2012, up from US$1.9bn in 2011. The compound annual growth rate (CAGR) for sales of computer hardware over 2012-2016 is forecast at about 6%. Stronger demand in the notebook sector is the main driver as consumers feel the benefits of aggressive channel promotions.AVAV devices accounted for about 35% of consumer electronics spending in the UAE in 2010. The addressable UAE AV device market is projected at US$1.3bn in 2012. The market is expected to grow at a CAGR of 5% between 2012 and 2016 to reachUS$1.6bn by the end o

BMI expects new car sales in the UAE to rebound significantly in 2011, despite the industry having beenimpacted by central bank moves earlier this year aimed at restricting the amount of car financingcustomers can use to buy new vehicles.BMI's view that credit restrictions will create opportunities for vehicle financing units in the Middle Eastis playing out, as dealers in the UAE launch finance programmes in response to new credit regulations.The new rules state that banks cannot lend more than 80% of the vehicle's value. Coupled with that is arestriction on the amount of credit an individual can access in relation to their monthly income. Anecdotalevidence shows that vehicle sales in the UAE fell by between 20% and 40% year-on-year (y-o-y) as soonas the new rules came into effect, as many consumers predictably brought purchases forwards to Marchand April when 100% financing was still available.However, some carmakers and dealers have since taken a pro-active approach to boosting sales with theirown financing packages. There is clearly a response to the new banking regulations in some of theschemes, which cut down the monthly instalments. Under the new regulations, loan repayments shouldnot account for more than 50% of a person's monthly income.Toyota Motor remains the dominant player within the UAE new car sales market, with the NationalSales & Marketing Manager for local dealership Al-Futtaim Motors, Andrew Squires, stating that thecompany has a market share of close to 41% in 2011 year-to-date. According to a report on the AMEinfowebsite, Squires acknowledged that the current year has been challenging, but that he was ?delighted toreport that sales have now regained a steady pace? of around 15% year on year. He was hopeful that thisrising sales trend would continue into 2012. Toyota boasts the most popular mid-size car in the UAE withits Corolla model, and its Land Cruiser and Prado models also lead their segments.Ho