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Tuesday, 11 August 2009

Australians at war on Dubai Waterfront

Sunland Group says two developers misled it about their friendship and the rights to a block of land, write Rick Feneley and Royce Millar.

When three Australians started haggling over a $63 million plot of land in Dubai, one says the other two kept him in the dark.

David Brown, who was leading the Dubai branch of the James Packer-backed Sunland Group, says the developers Matt Joyce and Angus Reed omitted to tell him they were friends. Nor had they mentioned that this friendship went back to their school days at Geelong Grammar.

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INTERVIEW:Bahrain Fincl Exchange Says Saudi Key Focus-Exec

The Bahrain Financial Exchange, or BFX, plans to woo investors in oil-rich Saudi Arabia and aims to sell a minority stake to a strategic investor, the exchange's director said Tuesday.

The new bourse, licensed by Bahrain's central bank, plans to start operations in the first quarter of 2010.

"We're keen to attract players from all Middle Eastern countries, especially Saudi Arabia as it's a sophisticated financial market," Arshad Khan told Zawya Dow Jones. "Our location will help us reach out for investors there as Bahrain has been always a gateway for Saudi Arabia."

Distressed Ppty Funds Eye Dubai As Boom Turns To Bust

Al-Fahidi Fort – :en:Dubai, :en:UAEImage via Wikipedia

A growing number of distressed funds looking at Dubai real estate may signal the bottom of the market and could help revive the emirate's shattered property sector after prices plummeted 50% in less than a year.

As over-stretched borrowers who hoped to profit from the emirate's six-year property boom face up to the reality of tumbling prices, high interest rates and job cuts, some are dumping unwanted real estate. Property funds are on the prowl to snap up the bargains.

"This is definitely a positive for Dubai," said Gaurav Shivpuri, head of corporate finance advisory at real estate consultancy Jones Lang LaSalle. "We're starting to see investors calling the bottom and prices starting to stabilize."

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Middle East and North Africa markets heading for a correction, say fund managers

Fund managers investing in the Middle East and North Africa (MENA) are united in expecting a correction, according to the latest update on the sector from Standard & Poor’s Fund Services.

An example is Shakeel Sarwar, head of asset management at SICO, managers of the S&P AA rated SICO Gulf Equity Fund, who began the year with more than 50% in cash.

Sarwar told S&P Fund Services his active management of cash during the second quarter reflected his lack of conviction in the sustainability of the sharp rally in GCC markets which began at the end of February.

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Kuwait wealth fund denies Global assets deal

Kuwait's sovereign wealth fund denied it had signed a memorandum of understanding with Global Investment House to buy 20 percent of the firm's assets, state news agency KUNA reported.

"What has been reported ... is incorrect," the Kuwait Investment Authority (KIA) said in a statement late on Monday.

Kuwaiti daily Al-Jarida on Monday reported KIA had reached a deal with Global.

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Dubai banks – Moody’s review for downgrade

Moody’s review is likely to result in a one-notch downgrade for the Dubai banks

We continue to expect asset quality deterioration over the next few quarters, not only for Dubai banks but also for some Abu Dhabi banks

Short-dated Emirates NBD paper continues to offer value

Vehicle plants plan for Algeria

An Abu Dhabi investment fund isto set up vehicle and engine manufacturing plants in Algeria together with five German companies, including Daimler and MAN Ferrostaal.

Aabar Investments said the Algerian venture would be led by German engineering group MAN Ferrostaal and produce up to 10,000 cars and trucks a year in the oil-rich north African country.

Aabar and its parent, the International Petroleum Investment Company, have been among the most active of Abu Dhabi's stable of sovereign investment vehicles in the past year, acquiring stakes inDaimler, Virgin Galactic , Spanish refiner Cepsa and AIG's Switzerland-based private bank.

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ICICI Prudential Life upbeat about Gulf (Interview)

ICICI Prudential Life Insurance Company, which opened its representative office in Dubai two years ago, is buoyant on business from the Gulf.

Anup Rau, Senior Vice-President and Head of Sales of the company, is hopeful of high single-digit growth in the 2009-10 financial year as high growth is expected in the second half.

Last year saw a decline in industry growth as the economic crisis gripped the world. Amid the challenges posed by the crisis, the firm witnessed delays in premiums. "Volumes declined, but there were not many policy surrenders by NRIs in this region," Rau told Emirates Business in an interview.

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Funds loosen strings on redemption periods

Investment funds that extended redemption periods because of adverse conditions in the market have started to cut their notice periods.

The move comes in response to positive factors such as the recent market rally and improved liquidity levels following the government's measures to boost the economy.

Funds that have cut redemption periods – the time investors must wait to receive their cash when they sell a holding – include Permal, Markaz and Jabre Capital.

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DGCX currency deals hit record high

Dubai Gold and Commodities Exchange (DGCX) recorded the highest daily volume ever on August 7 for all currency futures at 7,655 contracts, valued at $583.86 million (Dh2.14 billion).

Currencies accounted for a significant part of total volume. The pound/dollar futures witnessed the highest volume this year as market participants looked to hedge themselves against volatility in the contract. Pound/dollar futures recorded 3,498 contracts, valued at $292.73m on August 7. Volume for euro/dollar touched 3,932 contracts, valued at $281.24m, while the Indian rupee reached 176 contracts, valued at $7.35m.

"DGCX is the only exchange in the region to offer currency futures contracts. Furthermore, ongoing volatility in financial markets, tighter spreads and improved volumes are encouraging more participants to trade our currency futures," said Malcolm Wall Morris, Chief Executive Officer, DGCX. "The latest record for currency volumes reaffirms that this segment is a viable alternative asset class for local and international participants. Traders are also seeing the benefit of transacting business on an exchange such as DGCX to reduce their counterparty credit risk," he said.

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Comment: Dubai needs law reform

Dubai Police BMW 5 Series - Dubai, United Arab...Image by geordieb1 via Flickr

The car parks around Dubai’s larger office complexes tell a story of plummeting activity far graver than the regular summer lull.

In contrast, business is booming at Dubai’s courts. Even the valet parking tends to fill up and buses are needed to shuttle people from a nearby park. As the tide of the city-state’s property boom has receded with the global financial crisis, a rising swell of litigation has followed.

But it is hard these days to decide which cases are legitimate and which are driven by denuded investors manipulating the legal process to wriggle out of commercial bets on the wrong side of the 50 per cent collapse in real estate prices.

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America’s Cup sets sail for calmer waters

Dubai has the Desert Classic and the Dubai World Cup, and Abu Dhabi is to host Formula One motor racing on Yas Island.

Now, with more than a hint of poetic justice, Ras al-Khaimah, the original pirates’ lair and historically a poor relation in the United Arab Emirates, is to host the America’s Cup, yachting’s oldest and most prestigious trophy.

As a result of winning the last America’s Cup in Valencia in 2007, Swiss-based Alinghi has the right to choose the location for the next race. The yachting team says it considered venues all over the world, including Brazil, Thailand, Uruguay, Spain, northern Italy and Greece.

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Four banks in UAE put on ratings review

Four UAE banks have been placed on review for possible downgrade, Moody’s Investors Service said late yesterday.

Emirates Bank International, National Bank of Dubai, Mashreq Bank and Dubai Islamic Bank will have their financial strength ratings and long-term debt and deposit ratings placed on review.

The move was triggered by the strained domestic property market, particularly in Dubai, as well as an economic slowdown forecast for this year with a modest recovery in 2010, Moody’s said.

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