In our continuing pro-active efforts to keep investors apprised of the most relevant and timely information on Alfa and its target markets, AGORACOM is pleased to present you with this latest Industry Report.

Alfa International Holdings Corp. conducts all its real-estate development business activities through its wholly owned subsidiary, Journey of Light, Inc. (JOL) A Memorandum of Understanding (“MOU”) between JOL and the Sultanate of Oman was announced August 01, 2005 for the construction of a tourism and residential real-estate development project called Omagine with a presently projected construction cost of approximately U.S. $1.6 billion.

Please find below an article which was published on July 12, 2006 in the Daily Star which focuses on middle eastern regional news. The Daily Star on-line edition is the Web`s leading source of Lebanese and regional news. Updated daily, this site brings together an unmatched combination of high-quality content and powerful interactive capabilities. The site allows you to access continuous regional and Lebanese news coverage on politics, business, religion and much more.

Regards,

AGORACOM Investor Relations

To read the entire article, please use the following link:

http://www.dailystar.com.lb/article.asp?edition_id=10&categ_id=3&article_id=73866#

Wednesday, July 12, 2006

Gulf region will ride energy boom to new heights

By Henry T. Azzam

Commentary by

The economies of the Gulf region continue to exhibit signs of strong growth despite the sizeable drop in share prices in the first half of the year and the recent uptrend in short term interest rates. After growing at an average of around 8.5 percent in 2003, 5.9 percent in 2004 and 6.8 percent in 2005, real gross domestic product (GDP) growth for the region is forecast to grow at a healthy 6 percent this year. The UAE is believed to have recorded the highest real GDP growth last year at 8.5 percent, followed by Qatar`s 8 percent, Saudi Arabia`s 6.8 percent, Kuwait`s 6.5 percent, Bahrain`s 6.2 percent and Oman`s 4.5 percent.

The index of the GCC stock markets dropped by around 28 percent since the beginning of the year and by more than 50 percent from the peak attained in late 2005. In other international stock markets the losses incurred following the burst of stock market bubbles came to an end within a year. For example, America`s NASDAQ dropped by 59 percent from its peak in the first year after the bubble was burst before stabilizing. The Hang Seng index of the Hong Kong stock market was down 58 percent within a year of reaching its peak before establishing a new base. We expect the region`s stock markets to reach the trough of their current down cycle later this year. However, the uptrend that is likely to follow will not be anywhere close to the boom conditions seen in 2003-2005.

The positive outlook of the Gulf Cooperation Council (GCC) countries` economies will be affected only marginally by the sharp slide in share prices. The decline in the ``wealth effect`` of shareholders in the region will have some impact on overall consumption expenditures, but this will be more than compensated for by the expansionary fiscal policies followed by the governments of the region.

The combined inflation average of the six GCC countries was as low as 0.8 percent in 2002, 1.3 percent in 2003, and 1.8 percent in 2004 before rising to 2.7 percent in 2005. The rate is projected to edge slightly higher to 3 percent this year. A breakdown of the aggregate figure shows Qatar had the highest inflation rate in the GCC in 2005 at 8.8 percent, followed by the UAE at 5.4 percent, Kuwait at 4.2 percent, Bahrain at 3.3 percent, Oman at 1.9 percent and Saudi Arabia at 0.4 percent. It is expected that the UAE will have the highest inflation rate this year at around 6.5 percent and Saudi Arabia the lowest at 1 percent.

Strong economic activities and the surge in bank credit facilities are behind the expected upturn in inflationary pressures. Higher import prices due to the weaker exchange rate of the US dollar - and the Gulf currencies pegged to it - vis-a-vis the European and Japanese currencies have also contributed to higher consumer prices. The surge is real estate prices across the Gulf countries will not show up in the region`s inflation figures as these are not featured in the consumer price indices. Rent, on the other hand, constitutes a sizeable percentage of these indices. Only when real estate prices start feeding into higher rents, similar to what Dubai has been experiencing recently, would real estate related inflationary pressures become more visible.

Oil prices have risen from an average of $35 a barrel in 2004 to $53 a barrel in 2005 and are expected to reach an average of $65 for the current year, an increase of more than 20 percent on last year`s average. Total oil revenues this year are estimated to reach $400 billion for the six Gulf countries, up from $320 billion in 2005. External current account surpluses reached $170 billion last year, accounting for 28.3 percent of GDP, up from just 12.9 percent of GDP in 2003.

Nominal GDP growth rates are expected to surge this year, supported by high oil and gas prices. After growing at an average rate of 25.7 percent in 2005 to $597 billion, this year`s nominal GDP for the GCC states could exceed $700 billion. Saudi Arabia saw its nominal GDP grow from $215 billion in 2003 to $307 billion 2005 and it is forecast to hit $350 billion this year. The kingdom used part of its oil surplus to reduce its huge domestic debt, while other Gulf countries used the surplus to increase their foreign asset accumulation. Saudi government debt dropped from 82 percent of GDP in 2003 to 46.5 percent last year and is forecast to decline further this year to 27 percent of GDP. According to the International Monetary Fund, Kuwait`s foreign assets grew from $60 billion in 1995 to well over $150 billion recently, while UAE`s foreign assets are estimated at more than $400 billion.

The world is coming to terms with the new phenomenon of persistently high growth in the GCC regions similar to the booms in China, India and Russia. All sectors are expected to do well, especially banks, brokerage firms, insurance companies, telecommunications and IT companies, construction and related manufacturing, petrochemicals, pharmaceuticals, fast food, consumer durables, entertainment, tourism and various professional services among others. All this will have a profound implication for businesses operating in the region and the way they should be managed in such a high-growth environment. Management needs to change both its outlook and approach and the question that each CEO and chairman in the region should ask himself is the following: Do I have the team, the financial resources, the strategic plan and the business acumen needed to seize the opportunity?

Managing in a low-growth environment is different than when economic growth conditions are surging and expected to be sustainable. Instead of being opportunistic and reactive, management needs to be forward looking and proactive. Hiring of staff and the firm`s expansion plans should be based on long-term considerations. Each company should have its strategic plan in place, with annual budgets constituting an inherent part of it.

Business leaders today are in a better position to assess the risk/return profile of the Gulf countries, putting more emphasis on their growth potential and less on regional risks. While the economies of the region will remain sensitive to adverse developments and uncertainties in the short term, nevertheless they are expected to maintain the current uptrend for several years to come supported by the positive outlook for the world oil market.

What the region needs now more than at any time before is visionary leaders in business and politics who can look beyond the short-term obstacles and current uncertainties to a new and more resilient Middle East assessed on a medium- to long-term perspective.