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Monday, 3 August 2009

$4.1 bln lawsuit against Emaar denied

Emaar PropertiesImage via Wikipedia

Samsung did not seek legal advice from law firm Al-Tamimi and Co for a claim against Emaar Properties, a lawyer from the company said on Monday, after a report claimed that the South Korean construction firm planned to sue the Dubai-based developer.

"Al-Tamimi and Co can confirm that Samsung have never sought advice for any claim against Emaar relating to the Burj Dubai or otherwise," Lisa Dale, head of Al-Tamimi's real estate and construction practice said in an emailed statement.

"In the case of the Burj Dubai project we understand that the relationship between Emaar and Samsung is excellent," the statement said.

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Moody's takes multiple rating actions on Dubai government-owned companies

Moody's Investors Service has taken multiple rating actions on four government-related issuers (GRI's) in Dubai.

The A1 ratings of DP World, DIFC Investments (DIFCI) and Dubai Electricity & Water Authority (DEWA) were placed on review for possible downgrade.

The ratings of Jebel Ali Free Zone (Jafz) were downgraded by one notch to A3 from A2 and placed on review for further possible downgrade. In addition, Moody's has withdrawn the rating for Jafz's MTN programme, under which there have not been any issuance.

The A3 ratings of Dubai Holding Commercial Operations Group (DHCOG) and the Baa1 ratings of Emaar Properties (Emaar) were unchanged and remain on review for downgrade pending the merger of DHCOG's real estate activities with Emaar.

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UAE banks – Q2 results (PDF)

Summary and recommendation
We have analysed the Q2-2009 results for six of the seven UAE banks under our coverage.
• Emirates NBD (ENBD) (A- neg/A1/AA-)(SCB credit outlook: Negative)
• National Bank of Abu Dhabi (NBAD) (A+/Aa3/AA-) (SCB credit outlook: Stable)
• Abu Dhabi Commercial (ADCB) (A/Aa3 neg/N.R) (SCB credit outlook: Negative)
• First Gulf Bank (FGB) (N.R./A2 neg/ A+) (SCB credit outlook: Negative)
• Mashreqbank (MQB) (A- neg/A2/A+) (SCB credit outlook: Negative)
• Union National Bank (UNB) (N.R./A1/A+) (SCB credit outlook: Negative)

Our main findings are that loan growth, and to a lesser extent deposit growth, continue to be relatively muted compared with early 2008; asset quality deterioration appears to be gathering pace; profitability is being negatively impacted by rising loan-loss provisions; loan-to-deposits ratios remain stubbornly high; and capital adequacy remains strong.

With the exception of the high loan-to-deposits ratio, the fundamentals of the banks appear to be sound. Although funding conditions have not returned to normal, they have improved considerably over the last six months. Our main concern relates to asset quality; over the next six to 12 months we expect it to deteriorate
and this will have knock-on effect on profits. Exposure to Saad and Gosaibi is likely to add to the asset-quality pressures of some of the banks. If current trends continue, it is possible that some of the banks will report Q4 losses.

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TAQA takes over as operator of the North Sea Brent system

TAQA Bratani, the UK arm of the Abu Dhabi National Energy Company, known as TAQA, said today it became the new Operator of the North Sea Brent System pipeline and facilities on 1st August 2009. TAQA takes over from Shell UK Exploration and Production, which held the position since the mid 1970s.

Leo Koot, TAQA Bratani Managing Director, said: “This is an excellent fit with TAQA’s growing North Sea portfolio and underlines our commitment to being a major player among the energy producers for the UK. This is the latest step in our North Sea activity program which this year already has seen TAQA increase production from our operated assets, initiate drilling and near-field exploration.

“Operating the Brent System is a serious undertaking. TAQA has recruited experienced staff and installed first class IT and systems infrastructure to enable us to advise and liaise with our Brent System Partners.”

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Dubai Real Estate Down 50% From Peak

Emirate of DubaiImage via Wikipedia

The decline in Dubai property prices slowed in the second quarter and prices are nearing the bottom after falling almost 50% since their peak late last year, a widely-watched index of Dubai property prices showed Monday.

Prices fell 9% during the second quarter of the year from the previous quarter -- the slowest rate of decline since the property downturn started in the emirate during the third quarter of 2008, U.K.-based real-estate consultancy Colliers International said in its quarterly price index, which collates mortgage transactions on properties open to foreign ownership since the start of 2007.

Year-to-year prices have slumped 48% since the second quarter of 2008 and are down 50% from their peak in the third quarter of 2008 amid ongoing concerns over job security, financing, project delays and cancellations, according to the index which is compiled using mortgage transaction data from financial institutions accounting for 60% of the mortgage market in Dubai.

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Kuwait's Al-Raya to cooperate on U.S. lawsuit

Kuwait-financier Hazem Al-Braikan deadImage by Kuwait-Ra'ed Qutena via Flickr

Kuwait's Al-Raya Investment Co, whose CEO was found dead last month, said on Monday it will cooperate with the U.S. authorities in a lawsuit filed against it over allegedly improper stock trades.

"The company would like to declare to the public and to its shareholders that it will cooperate with all regulatory authorities with regard to allegations from the SEC," Al-Raya said in a statement received by news agency Reuters.

Al-Raya said its board has been investigating the lawsuit filed against it by U.S. securities regulators despite the death of Chief Executive Hazem al-Braikan.

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Will GCC stock markets recover this autumn? (Re-post)

The timing of Ramadan this year means that the traditional post-holy month return of investors to GCC stock markets is put back until the last few days of September.

The big question then is whether this will herald a stock market upturn. Last autumn regional stock markets collapsed by up to 70 per cent and have been bouncing along the bottom for the past eight months, although the past two months have shown a slight recovery on the back of higher oil prices.

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Bank Islam Awaiting Capital Injection Of RM216 Million From Dubai Group

Bank Islam Malaysia Bhd is still waiting for capital injection from its Middle East shareholder, Dubai Invesment Group (DIG) in its move to boost risk-weighted capital ratio (RWCR) and strengthen its capital.

Managing director Datuk Zukri Samat said DIG, which owns 40 percent of Bank Islam, has until September 15 to put in the money.

"So far, only Tabung Haji has put in the money and DIG has a deadline until September 15 to do so," he told reporters on the sidelines of the IFN 2009 Issues & Investors Forum here Monday.

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SAMA: Saudi Banks will have priority in repayment from Saad & Gosaibi (Re-post)

It is said that Saudi Arabian Monetary Agency (SAMA) has decided to discriminate in the resolution of Saad Group and Gosaibi saga. This is especially disappointing since Saudi Arabia is leading the way on the unified currency front, while acting selfish when it comes to conflict resolution. Reports suggest that SAMA will require the two groups to FIRST repay Saudi creditors then pay the rest. Considering the significant Emarati exposure, this has added to the already escalated tension between Saudi Arabia and the UAE. Recall that the UAE withdrew from the Gulf Monetary Union after the selection of Riyadh as the host of the Gulf Central Bank (GCB) (Press here for more details)

Moreover, this agreement is said to limit bank losses to 20-50% of PAR as the Saad and Gosaibi have some liquid assets that would be sold to cover part of their debt. SAMA expressed that they will NOT allow the bankruptcy of any Saudi bank. “The Saudis will do anything to prevent any damage that might harm the reputation of their banking system” Phillip Doba, Standard Charted.

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Sovereign wealth funds return to the fray

Sovereign wealth funds are regaining their appetite for deals in western markets after making the lowest number of foreign investments during the first quarter since 2005, following a series of disastrous bets in high-profile public companies.

State-owned investment funds from oil-rich countries and Asian exporters made just 26 investments worth a total $6.8bn in the first three months of the year, according to Monitor Group, the advisory firm, and Fondazione Eni Enrico Mattei, an international research centre.

That represents a fall of more than 50 per cent on the number of investments made in the first quarter last year, highlighting their retreat from international markets.

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Ajman Bank plans to subscribe to Dubai bonds' second tranche

Ajman Bank, which has Dh1 billion in cash from its public issue proceeds, is considering to subscribe to a part of the second tranche of $20 billion (Dh73.46bn) high-yield bonds of the Government of Dubai, said a senior bank official.

This may probably make Ajman Bank the first UAE bank to invest in the high-yield bonds issued by the Government of Dubai to meet the liquidity needs of government-linked entities.

Speaking to Emirates Business, Ali E Alshaqoosh Al Mueen, Acting Chief Executive Officer of Ajman Bank, said the bank is cash rich and needs to invest in some profitable venture. It could invest in the Dubai Government bonds, he said.

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Silver Air suspends operations

Nine months after securing its air operator's certificate from the GCAA (General Civil Aviation Authority), Silver Air, the Dubai-based private charter company, has suspended operations effective yesterday, according to a top company executive.

"Effective August 2, 2009, Silver Air is suspending its current operations due to a complete re-organisation of the company," Tim Lee, Commercial Director of Silver Air, told Emirates Business.

In a sudden move, that comes at a time when the global air travel industry is on a rapid decline succumbing to the economic downturn, the company has asked all its employees to surrender company property such as full uniform, company ID, mobile phones and airport passes and so on, according to a source.

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Gulf Bank loses $20m as loan provisions climb

Kuwait's Gulf Bank made a net loss of 5.9 million dinars (Dh75.32 million) in the second quarter after the bank raised first-half provisions for loans to defaulting Saudi Arabian borrowers.

The lender did not identify the borrowers in a statement announcing its results yesterday, but said it had booked 58.6 million dinars in provisions in the first half of the year without giving a figure for the second quarter.

Regulators and bankers are grappling with the fallout from a multi-billion dollar debt restructuring at the two large Saudi family businesses, Saad Group and Ahmad Hamad Algosaibi and Brothers, seen as the biggest blow to hit the Middle East since the start of the global financial crisis.

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Kuwait property sales plunge 47%

Kuwaiti property sales plunged 47 per cent in the second-quarter compared to the year earlier period, as a result of the global financial crisis, official data showed on Sunday.

Property sales in the Gulf Arab state fell to 280.8 million dinars (Dh360m) from 529.1 million dinars in the second quarter last year, it showed.

“The economy is not growing and is decelerating, you have job destruction and job destruction would lead to higher population risk which will in turn add to the uncertainty on the real estate side,” said Saud Masud, a property and construction analyst at UBS in Dubai.

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Joint venture wins contract to build Al Ain aircraft plant

A joint venture between two construction firms from Germany and the UAE says it has been awarded a contract to build a 21,600 square metre composites plant in Al Ain, a flagship project for the Abu Dhabi Government’s aerospace plans.

Max Bogl of Germany and Zarooni Transemirates are building the facility for Strata Manufacturing, a subsidiary of Mubadala Development, which is an investment arm of the Government.

A Mubadala representative acknowledged the awarding of the contract, but declined to disclose its value.

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Iran woos China for oil, gas cash

Struggling under US-led economic sanctions, Iran is increasingly turning to China for cash to invest in oil and gas development.

For Beijing, the unprecedented opportunity to strengthen ties with one of its biggest oil suppliers coincides with a broader Chinese thrust to secure access to energy assets in the Middle East and Africa. Recently, it has pursued deals mainly in Iran and Iraq, snapping up opportunities left by many western oil companies.

In Iran, the run of Chinese deal-making continues to gain momentum.

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Workers to be banned if they lose labour cases

Workers who lose cases in labour courts will be banned from working in the country for a year, the Ministry of Labour said last night.

In a statement published on the ministry’s website, Saif al Suwaidi, the acting director of labour affairs, said the move was an attempt to cut the number of malicious cases filed.

He said sacked labourers were taking advantage of the rule that currently allows them a temporary work permit while a labour dispute is pending.

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MOODY’S has mapped the geographic spread of the worst global downturn since the Depression. All of North America is in recession now. In Europe only Norway, Slovenia and Slovakia have avoided a similar fate, although Moody’s reckons these countries are on the brink of a downturn. Emerging Asia looks cheerier, although the small export-led economies of Singapore and Hong Kong are shrinking, as are Malaysia and Thailand. Even the BRICs are looking a bit diminished, with downturns in both Brazil and Russia. At least India and China are growing (the latter at a pace that is causing worries about overheating). Data for Africa are spotty but the continent’s biggest economy, South Africa, is in recession. The IMF expects global GDP to shrink by 1.4% this year, with rich countries’ economies contracting by around 3.8%.

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