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Wednesday, 15 July 2009

RAK pondering coupon of 8-8.5% on 5-year sukuk

Ras Al Khaimah may offer a coupon of 8 per cent to 8.5 per cent on its five-year Islamic bond, a banker familiar with the transaction said.

The emirate plans to sell a 'benchmark size' issue, the banker who didn't want to be identified before the deal is completed said. Benchmark issues are usually $500 million (Dh1.8 billion) or more. Standard Chartered and BNP Paribas are managing the sale.

Ras Al Khaimah's government sold Dh1 billion ($272 million) of Islamic bonds in its first rated sale of the securities in May last year. The five-year floating-rate sukuk was priced to yield 1.15 percentage points more than the three- month Emirates interbank offered rate, data compiled by Bloomberg show.

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Update: Taqa denies plan to market bond offering

Abu Dhabi National Energy Company (Taqa) on Tuesday confirmed the company is not currently marketing any bond offering.

Taqa's statement came in the wake of a Reuters report earlier on Tuesday that said Taqa has started investor meetings to raise at least $1 billion in bonds to finance investments and repay debt due next year.

In the statement, Taqa said it has no refinancing requirement until the middle of 2010, adding that it is constantly reviewing its financing to ensure it has the optimum structure in place.

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BlackBerry users on hold for Etisalat’s explanation

For a company that makes its living out of people communicating, Etisalat has been surprisingly tight-lipped in the past few days. BlackBerry users experienced difficulties last weekend during a “routine upgrade process”.

It appears the upgrade, a software patch supposedly intended to maintain network quality, turned out to contain a bug that drained batteries, overheated handsets and left many users of the BlackBerry mobile e-mail system disconnected from their businesses. Some were literally stranded.

“The day mine crashed, I was in a deserted part of Dubai and really needed to call a cab,” said Reuven Proenca, a public relations professional. “I couldn’t call or message or e-mail, and the whole thing just reinforced the fact that we are all so dependent on our BlackBerries.”

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SAAD Sukkuk holders to set up committee

Investors in a US$650 million (Dh2,3bn) Islamic bond issued by the Saudi conglomerate Saad Group plan to set up a committee to represent their interests as the struggling firm undergoes a massive restructuring of its debt. Such committees are commonplace in debt restructurings.

In the case of the Saad Group Islamic bond, called the Golden Belt 1 Sukuk, the committee would deal with Citicorp Trustee Company, the acting trustee, and “any other relevant party”, according to a draft resolution obtained by Reuters.

A banker in Dubai who has seen the document said it was “anybody’s guess” how effective the committee would be in representing investor interests, but noted that Saad had $30 billion in assets and roughly $20bn in debt, leaving investors with a reasonable level of confidence that they would be repaid.

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Dubai bourses to draw closer

Borse Dubai, the majority owner of Dubai’s two stock exchanges, plans to integrate trading and clearing systems on the two bourses.

But it would need to overcome significant regulatory hurdles before a full merger would be possible between NASDAQ Dubai and the Dubai Financial Market (DFM), according to Jeff Singer, the chief executive of NASDAQ Dubai.

“The owner is rightfully saying, ‘Why do we have two trading systems instead of one, why do we have two back-up systems instead of one, and two clearing and two custody systems? We should bring all that together and make it one system,’” Mr Singer said.

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Brunswick brief a bellwether for change in Dubai

Alan Parker, the founder of the communications group Brunswick, has a little motto about the role of financial public relations in the delicate pas de deux between the business world and the media: “You must always avoid getting in between the actors and the footlights.”

Mr Parker, who built London Brunswick from scratch in the 1980s to become one of the biggest PR firms in the world, with offices in 15 countries, meant that he and his fellow communications executives should never become the news themselves.

Their job was to facilitate transmission of information between companies and executives, and the press, broadcast and web-based organisations that try to shed light on the business world.

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Aussies fall foul of law as Dubai slumps

MORE than 90 Australians have found themselves on the wrong side of tough Arab law in the past 18 months as foreigners continue to cop fallout from the bursting of Dubai's development boom.

The Rudd Government yesterday confirmed that 91 Australians had been arrested in the United Arab Emirates — notably in Dubai — since January 2008.

The offences range from relatively minor infringements such as non-payment of hotel bills through to allegations of bribery, fraud and espionage.

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Geithner in Saudi: Mission Accomplished, Hard Times Ahead, Sorry About Dubai Ports

Secretary of the Treasury Timothy Geithner spoke today to a not-full room in Jeddah. While the speech ranged through centuries of Gulf history and seemed designed to continue until the Saudi kingdom becomes a republic, it does open a window on current interventionist thinking. Some highlights:

It would be even worse if we weren't here:

The global economy today is going through one of the most challenging periods of economic stress in generations. On every continent, in almost every country, businesses and families have experienced a severe loss of wealth, rising unemployment, business failure.

But the policies, the economic policies that have been put in place here in the kingdom, in the region, in the United States and around the world have helped contain the crisis. It helped arrest the crisis, slowing the pace of decline in economic growth, pulling the global financial system back from the edge of failure and establishing the basis for economic recovery.

The force of the global recession is now receding, and the IMF and a range of private analysts are starting to revise up their forecasts for growth in the second half of the year and next year, and global trade is now starting to expand again.

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Can Dubai Come Back? (Opinion)

It’s official: the recession has hit the United Arab Emirates, especially Dubai, hard. Well, maybe not official official, but I’m convinced. It’s not always easy to tell what’s happening in that part of the world. With rampant intermingling of public and private funds and little transparency over who owns and owes what, appearances can be deceiving.

Most of the economic and business numbers have been pretty grim, but losses can easily be moved around, as in a game of three-card monte. For every big real estate project mothballed or scrubbed during the past six months, other highly visible projects like the Dubai Metro have continued apace, and new ones are still being announced. Even as property values started to spiral downwards and huge property companies began to look distinctly wobbly towards the end of last year, there was still so much cash sloshing around and so many big projects still being announced and built the picture was pretty unclear.

Dubai, which has built a gleaming 21st-century economy based on real estate, trade, and services literally on a patch of desert sand, has for so long defied common logic and perhaps even the laws of physics, and has produced such contradictory news since the onset of the financial crisis and recession, we might as well have tried to figure things out by reading our coffee grounds.

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BlackBerry update in UAE reportedly surveillance software in disguise

BlackBerry 8800 (Cingular VersionImage via Wikipedia

There's not much in the way of official statements on this one just yet, but is reporting that a recently pushed out update for all BlackBerry users on the UAE-based carrier Etisalat is not a "performance enhancement patch" as advertised, but rather some spyware that could potentially give Etisalat the ability to keep an eye on its customers' messages. The first suspicions about the update apparently arose when users noticed dramatically reduced battery life and slower than usual performance from their phones, which led to a bit of detective work from programmer Nigel Gourlay, who pegged the software down as coming from electronic surveillance company SS8. While it's not switched on by default, the software can reportedly let Etisalat flip the switch on phones one by one and monitor their emails and text messages -- or it could if it hadn't completely bogged down the network. Apparently, the software wasn't designed for such a large scale deployment, which resulted in the slowdown and battery drain as some 100,000 BlackBerrys constantly tried and failed to sign in to the one registration server for the software.END

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UAE economy may shrink over output cut move

The economy of the UAE is likely to contract one per cent this year, led by a decline in its oil sector as it implements Opec production cuts, Samba Financial Group said yesterday.

Economic growth in the Gulf oil exporter would likely recover to nearly 3pc next year as global conditions improve and oil production recovers, the Saudi-based bank said.

In February, Samba predicted economic growth in the UAE would slow to 0.5pc this year, from 6.8pc last year.

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Westerners wary of investing in Gulf

Western investors have grown wary about investing in the once-booming Gulf, leaving markets at risk of further short-term losses and increasingly reliant on the region's own sovereign wealth funds.

Collapsing property markets and volatile oil prices have cooled some of the ardour which western investors had shown towards the Gulf in recent years.

But oil-inspired sovereign wealth funds in the region have in some cases grown despite the financial crisis, and are looking to add stimulus to their own markets rather than risk money overseas, analysts say.

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Geithner promises to defend dollar

Tim Geithner, US treasury secretary, sought to assure Gulf nations on Tuesday about their holdings of treasury bills when he told Saudi business leaders that his country “has a special responsibility to play” in defending the value of the dollar.

He also said that the US is committed to maintaining the openness of its economy to foreign investment and to expanding international trade.

Mr Geithner, who is due to hold talks with King Abdullah and senior Saudi economic officials later on Tuesday, said his talks will focus on the two countries’ commitment to the recovery of the global economy, and efforts to speed up the G-20 reform process. Saudi Arabia is the only Arab member of the grouping of 20 major economic states.

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