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Saturday, 16 May 2009

Dubai private equity firm to raise US$4 billion for new fund

UAE. Abraaj Capital, a Dubai-based private equity investor, is aiming to raise US$4 billion for a new fund to invest in the Middle East, North Africa and South Asia as it seeks to benefit from “attractive valuations.”
“We raised about US$2.5 billion at the first close,” Abraaj Executive Director Omar Lodhi said in an interview at the World Economic Forum at the Dead Sea in Jordan.
This year and 2010 will be “very exciting years” as valuations in the private equity market follow the fall in public markets with a lag, Lodhi said.

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Peter Riddoch on the record (Damac, Dubai)

Damac CEO Peter Riddoch tells his side of the story to Construction Week in an exclusive, no-holds barred interview on Damac’s new projects and why it courts controversy.

Is this a good time to launch projects?
Some people will look at a glass that is half empty. We will always look at it half full. When you do that, you’re more able to find positive ways to move forward.

And what is the new scheme?
Something that we’ve been working on pretty hard, particularly during 2009, is what we call our Recovery Program. We’ve been very committed to the construction and delivery timetable of our projects; in fact we called last year the year of construction.

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Economic Recovery Still Months Away: Roubini, Rogoff

Islamic/Shariah Investment Terms (Definitions courtesy of UK Islamic Finance Council)

The language:

Fatwa: A ruling made by a competent Sharia scholar on a particular issue where fiqh (Islamic jurisprudence) is unclear. It is an opinion, and is not legally binding.

Halal: Activities thaty are permissible according to Sharia. In Islam there are activities, professions, contracts and transactions that are explicitly prohibited (haram) by the Quran or Sunnah. Barring those designated as haram all other activities, professions, contracts etc are halal.

Riba: Usually riba and interest are used interchangeably. Riba, in all forms, is prohibited in Islam.

Tabarru: A donation covenant in which the participants agree to mutually help each other by contributing financially.

Salam: A contract in which advance payment is made for goods to be delivered at a later date.

Shirkah: A contract between two of more people who launch a business or financial enterprise to make a profit.

Sukuk: Similar to a conventional bond, with the key difference being thatthey are backed by an asset. The asset will be leased to the client to yield the return on the sukuk.

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Islamic investing in the limelight

The Islamic investment industry might be in its developmental stage, but it is growing rapidly. At the same time, the strict rules governing the types of investments that can be considered Islamic have meant that, after 18 months of global meltdown, the performance of many shariah-compliant funds looks pretty good when judged against their non-Islamic peers.

“This is a baby, it really is an infant industry and it is fascinating because of that,” says Michael McMillen, a partner in the Dubai office of the law firm Fulbright & Jaworski and an expert in Islamic finance who lectures on the subject at the University of Pennsylvania Law School and the Wharton School in the United States.

Ten years ago Islamic investment barely existed, Mr McMillen says. Three developments within a couple of years triggered the industry’s rapid growth. First, in the mid 1990s, Islamic scholars decreed that it was permissible to use multiple contracts, rather than only one, when constructing an investment product. Second, Dow Jones in 1999 secured a fatwa that enabled it to produce Islamic indexes. Finally, sukuk (see box in article) emerged as a form of finance in 2002.

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Not an easy ride for idle taxi drivers

Shiraz Alishah and dozens of fellow taxi drivers spend an hour each morning smoking and gossiping in the car park behind Wafi Mall.

Their queue of potential customers has shortened so much they say it is pointless to begin looking for passengers until the afternoon.

“Maybe one or two hours, we don’t see any passengers,” says Mr Alishah, 28, a Pakistani who has worked in Dubai for little more than a year. “Dubai is not like before.”

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U.S. banking crisis may last until 2013: S&P

A day after saying big U.S. banks probably needed to raise only one-fourth the capital demanded by the government, Standard & Poor's said the nation's banking crisis has "merely entered a new phase" and might not end before 2013.

The credit rating agency said the industry is being propped up by hundreds of billions of dollars of government support, especially for lenders considered too important to the financial system to fail.

While efforts to spur lending, take bad assets off banks' balance sheets, and restart the market for packaging and selling securities may help the sector, S&P said banks will have a tough time surviving absent a bigger capital cushion than regulators require.

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Guest post: Another view on the UAE nuke deal

I may be disqualified from replying to Joe Cirincione's article, since I have actually been to the U.A.E. and discussed its nuclear program with the people actually implementing it. This will take all the fun out of any comments I make. But the piece does raise a number of questions that I think are worth addressing.

1. Is there a nuclear arms race in the Gulf and Middle East? Is interest in nuclear power really driven by the need to counter the Iranian program?

It is probably not coincidental that so many countries in the region, many of them Sunni, have suddenly decided to pursue nuclear power. However, it is probably also not coincidental that these grandiose plans coincided with $150-a-barrel oil and with the fact that booming electricity demand was causing them to consume the lifeblood of their economies at home. But, are these countries really racing and if so is nuclear power for electricity generation the way they are racing to match the Iranians? For the most part, I'd say no.

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Report: Milan Poised For Takeover By Billionaire Ruler Of Dubai

The rumours that Milan were trying to sell stakes in the club first emerged in February, when it was alleged that Sheikh Mansour Bin Zayed Al Nahyan, the owner of Premier League side Manchester City, had started negotiations with the Rossoneri.

The club immediately rubbished the speculation, but La Gazzetta dello Sport today suggests president Silvio Berlusconi has now agreed to sell shares to Mohammed bin Rashid Al Maktoum, the Prime Minister of the United Arab Emirates and the Emir of Dubai.

It is claimed that Al Maktoum will pay around €500 million to take a 35 per cent stake in the Rossoneri.

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Dubai's DIC CEO says crisis still not hit bottom

Dubai International Capital (DIC), an investment firm owned by the ruler of Dubai, said on Friday the global crisis had not hit bottom, but there were still opportunities for investing in firms with potential.

"I don't think we are in a deep depression but we are in a serious recession that will take a few years to take through," Chief Executive Sameer al-Ansari told Reuters.

DIC, which is owned by the ruler of Dubai and controls around $13 billion in assets, is one of the group of Gulf Arab funds and investment vehicles that have lost billions in the financial crisis through stakes in top Wall Street firms.

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Foreign sovereign wealth funds look to Dubai bond

Dubai has received interest from sovereign wealth funds 'beyond the region' for the second tranche of the $20 billion bond it expects to launch this year, the emirate's finance chief said on Friday.

'Immediately after the issuance of the first tranche, we did receive interest from entities beyond the borders of the UAE. Our only issue is that... we will not issue the second tranche until it is needed,' Nasser al-Sheikh told Reuters Financial Television on the sidelines of the World Economic Forum at the Dead Sea in Jordan.

'We are in talks with some sovereign wealth funds and some financial institutions who have expressed their interest... We have continuous dialogue with a number of them... beyond the region.'

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Torture video case tests UAE justice

Emirates of the UAEImage via Wikipedia

The footage begins with an assault rifle allegedly being fired by a member of the United Arab Emirates’ ruling family, bullets throwing up clouds of sand as they smash into the desert, just inches from the cowering body of an Afghan grain trader.

The scene then moves on to the Afghan being beaten with a cattle prod and plank of wood and concludes with a 4x4 vehicle being driven over his battered body.

The video lasts just minutes and was recorded more than three years ago. But for the UAE, an oil-rich nation desperate to hold itself up as a model international business hub, it has thrown up a critical test.

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More pain to come for Mideast economies

The Middle East is not yet through the worst of the economic crisis because non-performing loans are likely to rise and the full impact of declines in tourism and remittances has still to be felt, experts warned on Friday.

Masood Ahmed, director of the Middle East and Central Asia at the International Monetary Fund, predicted that the level of NPLs would increase in the second half of the year.

He said the most banks in the region were relatively well-capitalised and could expect support from their shareholders if needed. But he added: “We should be watching what is happening in the banking sector.”

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Etisalat to bid for Morocco Meditel stake

Emirates Telecommunications Corp will bid for a stake in Morocco’s Meditel as it looks to expand in the Middle East and Africa, the telecom chairman said on Friday.

Emirates Telecom (Etisalat) will also continue to pursue the telecom licence in Iran it was stripped of last week, Mohammed Hassan Omran told Reuters on the sidelines of the World Economic Forum at the Dead Sea in Jordan.

”We are looking for opportunities in the Middle East and Africa, especially at this time there are some good assets,” Mr Omran told Reuters Television. ”Assets are becoming cheap ... we see them becoming more cheap in coming months.”

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Iraqi oil minister rejects Kurdish oil plan

Iraqi Governates and DistrictsImage via Wikipedia

Iraq’s oil minister has stepped up a dispute with the country’s northern Kurdish region over control of the country’s oil resources, saying Baghdad would not pay foreign companies for their oil exports from autonomous Kurdistan.

Hussein Shahrestani said the Iraqi government was under no obligation to ensure that the companies were paid for oil sent through pipelines from Kurdistan into Iraq and then exported by the Iraqi government to international markets.

“If [the Kurdish oil minister] can get a dollar out of the [Iraqi finance] ministry, let him call me,” he told the Financial Times.

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