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Sunday, 16 August 2009

Dubai Hldg Restructures To Cope With Econ Crisis

Sheikh Mohammed Bin Rashid Al Maktoum - World ...Image by World Economic Forum via Flickr

Dubai Holding, part of the business empire of the emirate's ruler Sheikh Mohammed bin Rashid Al Maktoum, Sunday said it's further consolidating its operations to cope with a downturn in the economy.

The company, that plans to merge its troubled real estate units with Emaar Properties PJSC (EMAAR.DFM), said it will pare down its business to concentrate on property, business parks, hospitality and investments.

The restructuring is "in order to remain competitive," Dubai Holding Chief Executive Ahmad Bin Byat said in an emailed statement.

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Dubai house prices plunge into uncharted territory

Just one year ago, property prices in Dubai were surging to record peaks undeterred by a real estate slump in major markets, but they have since gone into free fall and have yet to find the bottom.

Market watchers in the former Gulf boomtown differ slightly on the magnitude of the decline so far, but all seem to agree that the prices of Dubai property, which was selling unchecked over the past three years, should drop further.

"The decline in prices still has a little bit to go before bottoming out," said Sana Kapadia, vice president of equity research at the regional investment bank EFG-Hermes.

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UAE to see strong economic growth in 2010 -cenbank

The United Arab Emirates economy will see strong economic growth in 2010, recovering from a contraction in 2009, boosted by an expected rally in oil prices, the central bank governor was quoted as saying on Sunday.

The UAE's economy was solid and "oil prices rising again will support expected economic growth next year", Sultan Nasser al-Suweidi told Al Ittihad newspaper.

Weaker oil prices will affect growth and lead to a contraction in the UAE economy in 2009, he added, without giving a figure.

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Global's Egypt Weekly Market Report - August 13, 2009 (PDF)

Damac faces cancellation of Dh55bn Kurdish deal

Damac Properties, the Dubai-based developer, is running into challenges with its Dh55 billion (US$14.97bn) Tarin Hills project in Iraqi Kurdistan, government officials in Iraq say.

Herish Muhamad, the chairman of the Kurdistan regional government’s board of investment, said the government was “facing some difficulties” with Damac over the project because “nothing has started on the ground”. He said the project could be cancelled.

“My team and I will discuss all possible scenarios before taking the last decisions,” he said. “However, our decision might not be pre-consulted with them.”

Tadawul defies global markets drop

Saudi Arabia’s Tadawul All Share Index ended flat Saturday, dipping 0.13 per cent despite a fall in the price of oil to below US$70 and other international markets ending down on Friday.

Analysts believe other regional markets will also decline this week when they reopen today as investors react to decreases in global exchanges, the oil price and begin to pull out of securities before Ramadan begins.

“Other GCC stock markets may see some declines at the beginning of the week due to the decline in international markets and also due to profit-taking before Ramadan,” said Udo Schaeberle, the head of Gulf clients at the German wealth management company BHF Bank.

UAE beats an ancient path to boost China trade

A recent visit to China by the Crown Prince of Abu Dhabi showed the similarities between the age-old trade partners, and a divide that needs to be conquered.

When Sheikh Mohammed bin Zayed walked this weekend into the Forbidden City, the palace of China’s ancient emperors, and crossed its sea of flagstones, he was retracing a once well-beaten path that linked the Arab world and the country known then as the Middle Kingdom.

The visit to China by Sheikh Mohammed, the Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, reinforces a journey there last year by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai.

Private equity path to India

The holy grail of the private equity fund is a small, relatively unknown and unlisted firm that has big growth potential.

Find one, buy a strategic stake at a rock-bottom price, restructure, make it grow and then sell out at a huge profit. That is the abiding fantasy that drives the private equity fund manager.

Private equity funds are private pools of capital that seek above-average returns. Not for them are the passive investment in an established company; they want managing stakes in small companies with a view to enhancing their value.

Dubai collapse sparks £3bn in legal claims

The collapse of Dubai’s once-booming construction industry has created a backlog of legal claims totalling almost £3 billion.

Disputes over unfinished contracts and outstanding payments are stacking up in the emirate’s arbitration court, according to Building magazine.

This year, more than 180 claims have been filed, mostly by international contractors. British firms are estimated to be owed at least £400m on contracts in the United Arab Emirates, many of which relate to work for state-backed investment and development firms.

Atkins, the £700m support-services giant, is among the firms to have publicly admitted being owed money in Dubai. Forensic accountants and legal experts are starting to flood in. Price Waterhouse Coopers has moved a team of 20 investigators to the emirate in recent months.END

Cooking Gas Prices in the UAE (Re-post)

Read in Gulfnews the story on people refilling cooking gas in Oman: "Residents take big risk to save a few dirhams" .... Actually, they are saving a bit more than just “a few Dirhams”. Here is how much it costs in Other GCC countries:

Bahrain: BD 1.125 (Dhs 10)
Kuwait: KD 0.750 Fils (Dhs 9.5)
Oman: Om 2.5 (Dhs 24)
Qatar: QR 15 ( Dhs 15)
Saudi Arabia: SR 20 SR 15 (Dhs 14.5)

Whereas in the UAE, cost of a medium size cylinder refill has been fluctuating between 80/- and 120/- Dirhams, but never below that range.

Now seriously GulfNews, can you blame them?END

Japan and the United Arab Emirates – A Nuclear Family? (Re-post)

Concerned about the sustainability of its oil and gas reserves, the United Arab Emirates (UAE) has been taking steps to diversify its economy and reduce its dependence on natural resource exports. The most eye-catching of these changes has been the rapid development of Dubai as a finance, services and travel hub in the last decade. A further plank in this strategy has recently been revealed: UAE plans to embark upon a nuclear power programme. Emphasising transparency and close cooperation with the International Atomic Energy Agency (IAEA), it hopes to have the first of its reactors on line by 2017.

Rather than taking the more tortuous route of developing indigenous expertise, the Emirates have been proposing joint-venture schemes with foreign contractors to construct and operate its nuclear power plants. Japan became the fourth such country to sign a bilateral nuclear cooperation agreement after France, the USA, and the UK. To secure their participation, and to maintain its image as an outward-looking, foreign investment-friendly nation, the Emirates has stressed that it will not enrich uranium itself but import nuclear fuel for its plants. These supplies will come from a foreign partner and, furthermore, the UAE will return all spent nuclear fuel rather than reprocess it. The IAEA will also have the right to conduct snap inspections and be allowed unlimited access to the nuclear sites. This stands in marked contrast to Iran, which persists with enrichment which can be used for producing weapons material despite claiming its nuclear programme is also aimed solely at generating electricity. To acquire nuclear weapons it is necessary to either pursue uranium enrichment or develop spent fuel reprocessing capabilities which can produce the necessary plutonium.

Given the furore over Iran’s nuclear programme, the UAE’s plans could potentially transform the landscape for nuclear power generation in the Middle East and beyond. Critics contend that even strictly civilian nuclear programmes could lead to nuclear proliferation in the region, especially given the risks of illicit trade and the UAE’s history of close ties with Iran. However, supporters argue that the UAE’s programme will set a good example for other potential developers of nuclear power in the Middle East, most notably Iran. At present, IAEA Director General Mohamed El-Baradei is among the many who believe that Israel is the only state in the Middle East to actually possess nuclear weapons and the means to deliver them. (Despite hiding behind a policy of so-called “nuclear opacity”, Israel is widely believed to possess between 75 and 400 nuclear warheads.) Indeed, in response to Israel’s suspected nuclear capability, many Arab states have frequently called for the Middle East and North Africa to be free of nuclear weapons. Given the lack of American pressure on Israel, Iran’s enrichment programme and the increasing number of countries exploring nuclear power in the region, this is unlikely to materialise.

Kuwait Finance House in US$450 million joint venture with US real estate firm

Kuwait Finance House is setting up a joint venture with US real estate investment company UDR, to buy high income property in the United States to tap lower asset prices.

The joint venture will seek to acquire high income residential real estate in major cities in the United States with total investments of up to US$450 million, Kuwait Finance said in a statement on Saturday.

KFH's will have a 70% stake in the joint venture while UDR will have a 30% share.

UAE's Dana Gas profit up on Iraq unit sale, eyes buys

United Arab Emirates (UAE) firm Dana Gas DANA.AD saw second-quarter profit surge after making a one-off gain from a stake sale of its Iraqi unit and said it is eyeing acquisitions in the second half of the year.

Dana said in a statement on Saturday net income in the three months to June 30 rose to 392 million dirhams ($106.7 million) from 34 million dirhams a year earlier.

In May, Dana said it was part of a UAE and European consortium planning to pump enough gas from Iraq's Kurdistan region to kick-start the estimated $10 billion Nabucco pipeline project to supply Europe.