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Wednesday, 22 April 2009

Take profits in Barclays?

We only ask because the bank’s friends in Qatar have just announced the sale of 35m shares.

From a stock exchange announcement released on Wednesday afternoon.

Exclusive: GIH’s Ghunaim says lessons have been learnt from default (Registration required)

At the beginning of the year Kuwait’s biggest investment company, Gulf Investment House, announced that it had defaulted on about $2.5 billion in
debt. It became the first big financial institution in the Gulf to default since the credit crisis began. In an exclusive interview its chairwoman Maha AlGhunaim tells Dominic O’Neill how she plans to turn the company’s fortunes around.

Two years ago Maha Al Ghunaim, the chairwoman of Global Investment House (GIH), was the darling of the Middle East’s investment community. Now, the
company she helped create is an emblem of all that has gone wrong in the Gulf.

As Euromoney saw today, however, the chairwoman is still to be found in the brand new skyscraper she built for her company at the height of the Gulf’s boom.
Much of the bank’s human capital appears to be intact too. Despite an overall reduction of 10% in the workforce, and salary cuts of up to 20% for senior staff,
no-one above the rank of vice-president has quit, according to Al Ghunaim.

Dubai home prices may fall 70%, prompting major industry restructure

Dubai house prices may slump as much as 70% from their peak late last year as demand drops and banks fail to resume mortgage lending, prompting mergers, UBS said.

“We are still in relatively early stages of the property down-cycle in United Arab Emirates,” Saud Masud, a Dubai-based analyst at the Swiss bank, wrote in a report to clients dated yesterday. “We believe risk-reward profiles are not yet compelling for investors to consider market re-entry, hence continued price declines are expected.”

Economic growth in Dubai slumped after the worst financial crisis since the 1930s hurt its property, financial services and tourism industries. The economy may contract 2% to 4% this year, Standard & Poor’s Ratings Services said in a report last month.

Wynn Resorts Gets OK To Ease Terms Of Credit Pacts

Casino giant Wynn Resorts Ltd. (WYNN) completed amendments to its credit agreements Tuesday, giving it added flexibility to weather the industry downturn.

The move come as the casino industry has been slammed by collapsing Las Vegas property values and a downturn in consumer spending and travel. Several small casino companies have either entered bankruptcy protection or are flirting with it. Others are slashing costs and struggling to cut massive debts incurred for expansions and buyouts.

Under Wynn's amendment, lenders agreed to waive leverage covenants until June 2011 and increase the thresholds after that point. The deal also provides added flexibility for its interest coverage ratios and extends the maturity on about $610 million of the remaining $697 million revolving commitments from August 2011 to July 2013, among other things.

The company has about $1.3 billion in cash and $4.5 billion in long-term debt.

Last week, MGM Mirage (MGM) and partner Dubai World reached a preliminary agreement on a plan to complete City Center, their jointly owned $8.6 billion Las Vegas project, people with knowledge of the talks told The Wall Street Journal.

The project had looked precarious after Dubai World, the investment arm of the Persian Gulf emirate, skipped two construction payments on the project worth $135 million, and sued MGM Mirage over allegations of cost overruns and mismanagement of the project. Some had feared MGM would have to seek bankruptcy protection.

Wynn shares were unchanged at $31.59 in after-hours trading Tuesday.END

Planned mega Islamic bank to cast its net wide

The planned mega Islamic bank will have its investment operations spread globally rather than restrict its activities to Muslim countries, the Saudi businessman behind the ambitious project said.

With more than $200 billion (Dh734 billion) of funds at its disposal, the as yet unnamed bank may find it easy to cast its net wide, believes Shaikh Saleh Kamel, president of Saudi Arabia's Dallah Albaraka Group, which will be one of the bank's founders.

"We will be all over the world. Economics has no one country or religion," Kamel told reporters on Monday. "We will invest where we can make profit."

Saudi Arabia lifts restrictions

Saudi Arabia has lifted all restrictions on citizens of other Gulf Cooperation Council (GCC) states engaging in economic activities and independent professions in the Kingdom.

This was aimed at accelerating the process of economic integration in coordination with the steps taken to establish the GCC Common Market. This decision was taken by a meeting of the Council of Ministers, chaired by King Abdullah Bin Abdul Aziz on Monday evening, and this was after reviewing the decision of the 28th Supreme Council of GCC leaders held in Doha last year.

The Cabinet also passed a series of regulations facilitating the transfer of jobs of people employed by maintenance, catering and cleaning companies outsourced by government departments.

Etisalat to deepen links in Pakistan

Etisalat is considering steps to deepen its involvement in Pakistan, including eventually raising its stake in the country’s largest telecommunications company, according to the UAE company’s chief and Pakistan’s investment minister.

The moves could also include pushing service further beyond major cities into rural areas and bidding for a new-generation 3G licence.

The expansion is part of a plan to see the firm reach into the four largest economies in the Middle East and 17 countries around the world.

Diversified economy can pay strong dividends

Diversification remains the key to achieving sustainable industrial growth even in the current economic slowdown, according to a new report by the Dubai Chamber of Commerce and Industry.

The study, which sets out the challenges facing the UAE's industrial sector, says the government is firmly focused on encouraging the non-oil sector.

It is particularly committed to supporting the industrial sector, which contributed 49.4 per cent to the overall economy in 2007.

Dragon Oil denies speculations of Enoc selling its stake in the firm

A top official from Dubai-headquartered Dragon Oil has denied speculations that Enoc – its majority shareholder – is planning to sell some of its stakes.

"I am not aware of any move by Enoc to dispose of its stake," Abdul Jaleel Khalifa, CEO and Executive Director of Dragon Oil, told Emirates Business. "Indeed, we are proud of having Enoc as a majority shareholder that enables us to leverage the strong relationship between the UAE and Turkmenistan. Enoc's support has played a key role in positioning Dragon Oil in where it is today."

He said the company is planning to adopt a Bermuda incorporation this year, Dragon Oil would remain headquartered in Dubai.

ADIC plans global property fund

State-owned Abu Dhabi Investment Co (ADIC) is planning to launch an international property fund, along with four other funds, to invest in firms whose valuation has been affected by the global financial crisis, its head of private equity said.

“The next two years will provide a fantastic time for private equity, a window of opportunity that you will not see in a few years to come,” Samir Assaad Samaan told reporters at a private equity forum in Abu Dhabi.

Abu Dhabi has amassed an enormous cushion of surplus oil export revenues during a six-year rally in crude prices and the government is looking abroad for investments.

Dubai focuses on local economy, investments abroad not a priority

Acknowledging the hard and real impacts of the current crisis, Dubai is now revisiting its growth targets, focusing its eyes on domestic matters and most of all – is learning from its shortcomings.

"There are certain areas that we need to improve on," Nasser Al Shaikh, Director General of Dubai's Department of Finance told Emirates Business. "The real estate sector, for example, has witnessed a huge growth after launching leasehold and freehold. We did not have an authority to look at and regulate that sector. Real Estate Regulatory Authority (Rera) was just established a couple of years ago but we did not have all the legislations in place.'

"If you look at Rera, they have quite a number of new pieces of information being launched in the past six months to regulate the real estate market," he added. "This is one of the areas that we can develop because the cycle of real estate is becoming one of the most important GDP contributors here. We need better regulations. And I think Rera is already taking those steps."

UAE firms' profit decline lowest in GCC

The global financial turbulence depressed the profits of most companies operating in the Gulf by 19.8 per cent in 2008 but the telecommunication sector emerged unscathed, according to a regional bank study.

Qatar, one of the fastest growing economies in the world, was an exception as its companies performed even better while the UAE firms recorded the lowest profit decline among the other members of the Gulf Co-operation Council (GCC), showed the study by the Kuwaiti-based Global Investment House (GIH).

Kuwait suffered most, with its companies reeling under a staggering profit decline of nearly 92 per cent.

Second tranche of Dubai $20bn bond this year

Dubai has already distributed more than half of the funds from its $10bn bond and will be issuing the second $10bn tranche within this year, a top government official told DubaiEye Radio, which is operated by Arabian Radio Network, an Emirates Business sister company.

Nasser Al Shaikh, Director General of Dubai's Department of Finance, said the $10bn bond, fully subscribed by the UAE Central Bank in February, has been loaned to several quasi-government companies at a marginal interest rate.

"All the support that we extend to is in the form of loans, the tenor of which is a bit shorter than our commitment to the central bank to ensure that we have the money paid to us before we repay it to the central bank. The interest rate is four-plus per cent, which is just a margin addition to cover our administrative costs," Al Shaikh said.

Amlak, Tamweel to restart lending

The federal government is planning to reactivate Amlak and Tamweel as two independent companies before they can be merged as one entity, Emirates Business has learnt.

In an interview yesterday, Nasser bin Hassan Al Shaikh, Director-General of Dubai's Department of Finance and Chairman of Amlak Finance, said the priority of the federal government is to reactivate the two companies so both firms can start to extend mortgages once again before working on the merger.

"As far as I know, their intention is to reactivate the two companies and then work on the merger," he said. "They don't want to merge the two companies before they activate them, which makes sense because Amlak and Tamweel – which represent more than 60 per cent of the mortgage industry in Dubai – are very important to the real estate."