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Friday, 19 June 2009

Troubled Saad slashes stake in UK builder

Saad Group company logoImage via Wikipedia

British housebuilder Berkeley Group Holdings said investor Saad Group has cut its stake in the company by a further 6.7 million shares, according to a filing to the stock exchange on Friday.

The filing said Saudi Arabia's Saad had reduced its stake from above 14 percent to just under 9 percent, or 11.3 million shares, after sales at an unspecified price on June 10 and June 17.

This follows a sale by Saad of 16 million shares in the construction group at a discounted 701 pence earlier this month and is a retreat from a stake of nearly 29 percent at the end of April.

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France hopeful of sale of 60 Rafale jets to UAE

Dassault Rafale B at Paris Air Show 2007Image via Wikipedia

France said on Friday it was pleased with the progress of what could be the first sale of Dassault Aviation's (AVMD.PA) Rafale fighter jets to a foreign buyer after the United Arab Emirates detailed its requirements.

"The President, who is closely following the talks that are under way with the United Arab Emirates for the purchase of 60 Rafale planes, is pleased that the dossier is making progress," the Elysee palace said in a statement.

Earlier on Friday, state news agency WAM said the UAE military had told France of its requirements for the fighter.

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UAE rivalry strikes false Biennale chord (Weekend reading)

Riding high on recent publicity surrounding its plans for architecturally daring mega-cities for the arts, the United Arab Emirates (UAE) is participating for the first time in the Venice Biennale .

In fact, there is not just one Emirati pitch in the prestigious arts festival's most coveted area - the Arsenale - but two; a national pavilion in the name of the Emirates and a platform for the country's capital, Abu Dhabi.

But if the pavilion is national by name, you would be forgiven for mistaking it for a showcase for the UAE's most high-profile emirate, Dubai.

GCC set for oil windfall as prices rise -GS

Gulf Cooperation Council (GCC) countries and Russia could enjoy large windfalls if oil prices rose to as much as $63 per barrel this year and $90 next year, Goldman Sachs analysts said, adding they saw brighter prospects for the Gulf Arab nations when compared with Russia.

Goldman's commodities research analysts have raised their oil price forecasts to $63/bbl from $50.5/bbl for 2009, and expect prices to reach $90/bbl in 2010, given intensifying supply constraints in the hydrocarbon sector and a likely return of demand.

While the six-member GCC and Russia are both battling the current downturn, Russia is at a much less favourable spot to gain from a return of the petrodollars, Goldman said.

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Middle East companies help bail out debt-ridden UK property firms

Middle Eastern foreign investment has accounted for the most recent flow of capital into London, investment experts say.

Companies from the Gulf Co-operation Council (GCC) have stepped in at the 11th hour to bail out UK companies deep in debt.

The Oman Investment Fund (OIF), a subsidiary of the government of Oman, recently completed the largest real estate deal of 2009 in the UK capital, with a value of Dh2.6 billion.

Qatar purchases bank property investments

Qatar has bought the real estate investments of local banks after earmarking 15 billion riyals (Dh15 billion) to buy their portfolios, the central bank governor said on Thursday.

The government said in May it would offer to buy the bank's property portfolios and loans to support a sector suffering from price declines and guarantee continued growth in the world's top exporter of liquefied natural gas.

"The programme has been implemented, funds have been allocated to eligible banks and payments have been made according to conditions," Shaikh Abdullah Bin Saud Al Thani said, the state-run Qatar News Agency reported.

Bahrain's housing market holds up well

While the world waits with bated breath to see what the future holds for the housing market, the small island nation of Bahrain is weathering the global slowdown and offering investors with cash to spare value for money.

Sale prices for property in Bahrain have certainly dipped with lower transaction values apparent, but, according to industry experts, this is good news for prospective buyers.

In 2008, Bahrain's residential property market enjoyed a record year of expansion with growth fuelled by strong indigenous demand, a relaxation of foreign ownership regulations in certain areas of the country, strong levels of liquidity in the regional market and improved financial options.

Corporate GCC on the right track (Interview)

The financial crisis in the global economy has brought into sharp focus the need for effective risk management strategies and implementation of corporate governance standards to avoid the complications which have occurred at various levels.

The Gulf Cooperation Council (GCC) is still in the nascent stages of the development of good governance standards according to Dr Nasser Saidi, the executive director of the Hawkamah Institute of Corporate Governance based at the Dubai International Financial Centre, for which Saidi is also the chief economist.

Saidi has previously served as Minister of Economy in Lebanon, and as deputy governor of Lebanon's Central Bank. Hawkamah's mission is to help regional countries and companies to develop well-integrated corporate governance frameworks.

Emirates Steel to swallow rivals

Emirates Steel Industries (ESI) will build a number of billion-dollar plants and acquire Gulf rivals in a bid to become the region’s biggest steel company within five years, executives said yesterday.

But the company will first need to address the refinancing of a US$500 million (Dh1.83bn) bridging loan that falls due next summer, officials said. They were speaking at the inauguration of ESI’s integrated steel operation in Musaffah, which was led by Sheikh Mohammed bin Zayed, the Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces.

ESI now has capacity to produce 2 million tonnes of steel a year, which will grow to 6.5 million tonnes by late 2013 or early 2014, said Hussain al Nowais, the company chairman. “We will continue to grow by expanding capacity and by acquisition,” Mr al Nowais said.

Law will help nation co-ordinate finances

The new law on government debt marks an important step forward in the UAE’s economic course. The legislation, passed on Wednesday by the Federal National Council, enables the Federal Government to borrow by selling bonds and establishes limits on that government borrowing.

This mirrors efforts elsewhere in the US and Europe to put the brakes on government borrowing. In the US, for example, the state of California has recently found itself saddled with so much debt that ratings agencies are saying it is dangerously near default, after the financial crisis crippled the state’s income and made new sources of cash scarce. Officials say the UAE’s new law is designed to prevent such a situation from happening here, by limiting the amount of money that individual emirates can borrow on their own.

Aside from regulating the country’s debt levels, the new law will also have the added benefit of allowing the Government to create a situation in which it can use the bonds to control money supply. By selling bonds denominated in local currency, the Government can effectively mop up any excess money flowing through the economy. If the Government deems it necessary to do the opposite, it could effectively inject cash into the country.

Paris tweets and reveals Midas touch in Dubai

Rarely before in history has a person been so perfectly matched with a building as when Paris Hilton checked out the Hotel Atlantis on the Palm this week. Its garish pink exterior and heart-shaped facade could have been designed with the slender hotel heiress in mind.

Her reaction, which once might have gone unrecorded among the whirring of a thousand camera shutters, has fortunately been preserved for posterity. “Dubai is amazingggggggg!!! Huuuuuugeeee!” she twittered. Whole travel books have been written without such detail and gusto. Paris in Dubai! Huge! The downturn is over, Paris says so, and we can all breathe a sigh of relief.

Few people polarise public opinion quite as much as Ms Hilton. A female friend of mine dismisses her as a “bimbo”. Others are less polite. But those of us in the writing game should reflect that while we turn out perfectly crafted sentences for a pittance, she is flown halfway across the world in first class by Emirates Airline because they know she will give them valuable publicity. What does she say that is so priceless? Judge for yourself from her Twitter posts: “About to take off, so excited!” “My bed … Huge … So Comfy.” “This airline is Amazing.”

Mashreqbank admits lending to Saudi groups

Mashreqbank became the first UAE bank to admit to lending exposure to the Saudi family trading groups at the centre of an international credit default crisis.

The bank, which is owned by billionaire Abdul Aziz al Ghurair, said it was working with clients based in Saudi who were “facing problems”, and had taken legal action to protect its interests.

“Mashreq is aware of a number of problems faced by Saudi-based clients and has taken legal action to protect its interests when appropriate and is actively working with such clients, their advisers, regulators and other banks in an effort to resolve the matter,” the bank said in an e-mailed statement.

Mubadala aircraft 'made in the UAE'

Mubadala Development, the strategic investment arm of the Abu Dhabi Government, is planning to use its stake in an Italian aircraft maker to build a new business aircraft in the emirate.

The plan, for the second half of next decade, would mark one of the most ambitious entries into aircraft manufacturing in 50 years – since the Brazilian government launched Embraer – and make the Emirates the first Arab country to design and build an aircraft from scratch.

It would also mark an evolution for Mubadala, from investing in aerospace firms, to producing specialised aircraft parts, to becoming a full manufacturer.
“We have ambitions to become an original equipment manufacturer with a target of 2016 to 2018,” said Homaid al Shemmari, the associate director of Mubadala’s aerospace business that represents about 10 per cent of the company’s asset base. Mubadala wants to use its 31.5 per cent stake in Piaggio Aero Industries, based in the northern Italian coastal city of Genoa, to acquire the required knowledge and capabilities, Mr al Shemmari added.

GE reassures over finance unit

General Electric on Thursday sought to allay fears that the Obama administration’s plan for financial regulatory reform would force a spin-off of its finance arm, reiterating its commitment to “retaining GE Capital”. GE, whose shares have dropped more than 6% in the past two days, also took aim at a proposal in the regulatory plan, arguing that erecting a firewall between financial and non-banking activities at the same company would be “unnecessary and unwise”.

The World's Top 10 Mega-Yachts (Weekend reading)

As the world's largest yacht glided out of Blohm + Voss shipyard in Hamburg, Germany, last week, crowds of onlookers watched the vessel and, perhaps, dreamed of who was onboard the mega-cruiser.

Reports have surfaced that Russian billionaire Roman Abramovich is the proud owner of the 557-foot ship, which Blohm + Voss Industries would not confirm.

"Our company is not allowed to talk about it," a company representative said.

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Oil at $50 will help economy, hinder investment: UAE

An oil price of $50 a barrel may help the global economy recover faster, the UAE oil minister said, but could deter investment in capacity
among non-OPEC producers according to International Energy Agency estimates.

"$50 will hopefully help the economy to recover more quickly," United Arab Emirates Oil Minister Mohamed al-Hamli told reporters on the sidelines of an energy conference in Dubai.

Hamli said the UAE, an OPEC member and the world's third-largest oil exporter, would go ahead with capacity expansion projects but that the decline in oil prices placed the burden on producers to invest in anticipation of future demand.

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UAE's Damac confirms exits Malaysia land deal

Dubai real estate promotionImage by Yo Ghurt via Flickr

Dubai-based developer Damac Properties on Thursday confirmed it would not complete a Malaysia land deal with UEM Land Bhd due to the financial crisis, and would focus on projects already under construction.

The news follows a statement from UEM (ULHB.KL) on Wednesday saying the proposed deal had been allowed to lapse. [ID:nWNAS6803]

In June 2008, the real estate firm signed a $122 million sales and purchase agreement with UEM for land to build a waterfront and marina project in Iskandar, Malaysia.

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UAE introduces bank regulatory code

The United Arab Emirates central bank on Friday published corporate governance guidelines for UAE banks aiming to introduce best international practise to the financial sector and rid the country of a reputation for poor internal financial controls and boards compromised by conflicts of interest.

The guidelines, which come after the UAE made up to Dh120bn ($5.5bn) available to support financial institutions through the global financial crisis and help stave off major liquidity issues in the sector, will help to address some investor concerns about internal controls as the tough operating environment creates pressures such as rising loan defaults.

“Good governance is essential for the long-term success of a bank and good governance depends largely on the skills, experience and knowledge of the directors,” said Sultan Al Suwaidi, central bank governor, in a foreword to the 84-page document. “If a bank fails it affects the whole economy, so directors are the guardians of financial stability.”

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