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Saturday, 29 August 2009

Dubai's Shuaa to issue 515 mln shares to DBG

Dubai-based Shuaa Capital said on Saturday it would issue 515 million shares to Dubai Banking Group (DBG), implementing an agreement to resolve a long-running bond dispute.

Shuaa said in June it had settled the dispute after months of negotiations and the threat of a lawsuit by DBG, by allowing DBG to take a 48.4 percent stake in the investment bank.

On Saturday, Shuaa said it had asked the Dubai Financial Market to issue DBG with 515 million shares in Shuaa, more than twice the amount agreed back in 2007 and making DBG the biggest shareholder in Shuaa.

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China invests in Canary Wharf with £880m bail-out of Songbird

In a sign of the increasing influence of the East, Qatar has joined the Chinese sovereign wealth fund, China Investment Corporation, in supporting a substantial equity raising that will help Songbird pay off an £880m loan from Citigroup that is due next May and threatens the company's future.

The value of Canary Wharf, home to some of the world's largest financial services groups, has tumbled since 2007 as a result of the turmoil in the global economy. Songbird, which owns 60.8pc of Canary Wharf Group (CWG), risked breaching loan-to-value covenants in a November test on the Citi loan, its only debt.

The value of the Songbird portfolio fell almost 30pc to £4.9bn in 2008 and David Pritchard, the chairman, said the company "could have gone down the path of a liquidation or administration" if the new deal had not been struck, echoing the problems the original developer of Canary Wharf faced in the early 1990s.

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Arab bourses gain $144bn in eight months

Arab equity investors ended nearly eight months of 2009 richer by around $144 billion (Dh528bn) to partly offset a loss of more than $400bn during 2008, official figures revealed yesterday.

From $751bn at the start of 2009, the combined market capitalisation of 13 official Arab stock exchanges surged to $895.6bn on August 27, showed the figures by the joint Arab stocks data base at the Abu Dhabi-based Arab Monetary Fund (AMF).

The bulk of the increase was in the capitalisation of the bourses of Abu Dhabi, Saudi Arabia, Kuwait, Qatar and Egypt, while there was a slight decline in the capitalisation of Bahrain, Jordan and Palestine.

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Arab business has its very own global scandal

The increasingly bitter row between the Al Gosaibi family of Saudi Arabia and their erstwhile business partner, Kuwaiti-born Maan al Sanea, is setting new standards for cross-border corporate intrigue. It is difficult to recall another Arab corporate scandal that has achieved such a level of global significance.

The Al Yamama defence contract scandal resonated around the world for years; the fall-out from Dubai World’s 2006 bid to buy the P&O ports business flared briefly from Los Angeles to Shanghai. But these events had geopolitical significance, and security implications, which meant they were bound to attract the attention of the politicians, and therefore the world’s serious business media.

Al Gosaibi versus al Sanea is the first purely business event to grab the world’s attention in such a way. With some US$22 billion (Dh80.8bn) of bank funding at risk, and assets ranging from Airbuses in the Cayman Islands to Coleraine in Northern Ireland (where Mr al Sanea funds some of the activities of the local university), the recriminations between the two sides have gone truly global.

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