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Monday, 5 October 2009

UAE's Waha eyes acquisitions of up to $1 bln

Abu Dhabi-based Waha Capital WAHA.AD is looking at acquisitions of up to $1 billion in the maritime, financial and leasing services sectors, Chief Executive Salem al-Noaimi said on Monday.

"From the maritime side, we are interested in a regional player, financial services would be regional and leasing would be global." Noaimi told Reuters in an interview at the Cityscape property exhibition in Dubai.

He declined to say when acquisitions might take place. Waha is also working on two structured finance deals for the United Arab Emirates' armed forces, Noaimi said, declining to give further details.

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UAE's TAQA on track to invest $1 bln in fourth-quarter

Abu Dhabi National Energy Company or TAQA TAQA.AD is in talks with three companies in the mid and downstream sector as it seeks to meet its $1 billion spend target for the fourth-quarter, its chief executive said on Monday.

"We are working on a number of transactions and that will get me to meet the target. We are working on three targets," the CEO, Peter Barker-Homek told reporters without naming the companies.

TAQA has already invested $1.5 billion and plans to continue its buying spree and could spend $1 billion before end-2009, Barker-Homek said earlier.

"We are emphasising on downstream, gas and transmission business," he said.

Currently, TAQA's investments are heavily weighted towards the upstream and the company is aiming for balanced growth with 40 percent in upstream, 40 percent in downstream and 20 percent in the midstream, he said.END

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Dubai ‘Confident’ of Repaying Debt, Sheikh Ahmed Says

Dubai, the Persian Gulf emirate whose state-related companies must repay at least $4.52 billion of loans this quarter, is “confident” of repaying its debt, Sheikh Ahmed bin Saeed al-Maktoum, chairman of Dubai’s Supreme Fiscal Committee, told reporters today.

Dubai, the second-biggest of seven sheikhdoms that make up the United Arab Emirates, and its state-related companies ran up debt of $80 billion over the past few years to fund its transformation into a tourist and financial services hub. State- owned developer Nakheel PJSC, which is building palm-shaped islands off the emirate’s coast, needs to repay an Islamic bond of $3.52 billion in December, while Dubai Global Sukuk, a Department of Civil Aviation-backed entity, has to repay a $1 billion bond.

The emirate borrowed $10 billion from the U.A.E. central bank in February to help state-related companies facing problems raising cash amid the global credit crunch. Dubai’s Department of Finance is seeking to raise another $10 billion.

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CMA Releases Sovereign Risk Report for Q3 2009 (PDF)

Oct Thu 01 2009 at 9.00 am

CMA, the credit information specialist, today announced the release of its quarterly Global Sovereign Credit Risk Report.

The report covers activity in the sovereign CDS market between July and September 2009.

Download a PDF copy of the report (721 KB)

Kuwaiti Gov’t: A FREE Collection Agency (Re-post)

Collection Agency? I’m not sure this term rings a bell in Kuwait for a simple reason: the government is doing an exceptional job collecting money for companies. Consequently, this deems the existence of collection agencies unnecessary! The good news: For once our government is actually doing something remarkable. The bad news: It is not supposed to do it!

The arabic headline above is from the front page of Kuwaiti Al-Qabas daily newspaper. It reads, “136 thousand individuals prohibited from traveling- the largest statistic in Kuwait’s history.” So why are these folks banned from traveling outside Kuwait? Don’t rush- we don’t have that much murderers in Kuwait! These individuals simply have some debt outstanding: a phone bill, a credit card balance, a car payment installment- you name it. Yes, this stuff happens in Kuwait. So what’s wrong with the government becoming a forceful and FREE collection agency? A WHOLE LOT.

Doing business entails various risks. One of these is credit risk. The presence of credit risk inherently limits the amount of risk companies take when they extend credit to individuals. Without it, companies will give credit to virtually anyone regardless of their credit history/financial abilities. Companies operating in Kuwait don’t need to worry about the ability of a client to pay their bills because if they don’t, they can’t travel and you know how much Kuwaitis relish traveling! Not only that, but they can even go to jail.

By doing this, our government is endorsing companies to overwhelm Kuwaitis with credit. A car dealership will sell a Porsche to an underprivileged young man, banks will provide a low-income earner with a KD 2000 credit card, and mobile phone companies will allow customer bills to reach high levels. Companies are doing all this and more because the collection of their money is taken for GRANTED courtesy of the Kuwaiti government!

And then of course you have Parliament members ask our one and only spoiling government for debt forgiveness. Rather than focus on the end-result, Kuwait’s parliament members should tackle the causes of Kuwaiti indebtedness which I believe partially stem from our government’s role as a free collection agency.

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Monthly Investment Report - October 2009

Reality check ‘is good for Dubai’

As Dubai restructures during a global economic crisis that has hit its vital property, finance and tourism markets, some people say the downturn has been good news for the emirate.

Nabil Alyousuf is one of them. A former director general of the Executive Office of Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, he worked closely with many prominent business leaders during the boom years.

Today, he is one of a growing number of people looking to rebuild the Dubai economy on entrepreneurial, rather than speculative, foundations.

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Assets already owned by Istithmar

Dubai World has retracted a statement last month that it moved hotel and property assets to its investment arm Istithmar World from elsewhere within the conglomerate, saying that Istithmar already owned the assets in question.

Dubai World, which has an estimated US$5.5 billion (Dh20.2bn) in debt and another $53.5bn in consolidated liabilities at its various subsidiaries, announced in mid-September that as part of its ongoing restructuring “selected hotel and real estate assets and the management teams related to these assets, primarily in international markets, have been transferred to Istithmar World”. The release went on to name four executives from Nakheel, the property developer it controls, who were being transferred to Istithmar World. Among them were Nakheel’s chief investment officer and chief financial officer.

In a clarification last week to NASDAQ Dubai citing “conflicting media reports”, Dubai World said “the ownership of these assets was and continues to be with IW”. The company did not issue a clarification to the media accompanying that statement. John Hobday, an official at Financial Dynamics, a public relations firm representing Dubai World, confirmed the assets in question were already owned by Istithmar World, but had been managed by Nakheel. “That’s normal in the hotel industry,” he said, of the split between management and ownership.

New law sets UAE’s nuclear age in motion

The federal Government yesterday issued a law that will form the legal cornerstone of the country’s civilian nuclear programme. Significantly, the law affirms the UAE’s place as the first nation to ban uranium enrichment, the process by which the metal can be made not only into nuclear fuel but also into an atom bomb.

Instead, officials said the UAE will import its nuclear fuel.

The law, approved by Sheikh Khalifa bin Zayed, President of the UAE and Ruler of Abu Dhabi, also puts strict controls on the handling of nuclear material and sanctions the creation of a nuclear safety regulator with what is unprecedented independence for the UAE from industry influence.

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Abu Dhabi Index Falls Most in Four Days; Dubai Shares Retreat

United Arab Emirates shares dropped, with Abu Dhabi’s index falling the most in four days, as U.S. unemployment climbed to a 26-year high and investors awaited the third-quarter earnings season.

Sorouh Real Estate PJSC, the second-biggest developer in Abu Dhabi, declined for the first time this month. National Central Cooling Co., the refrigeration company known a Tabreed, fell as much as 2.9 percent. Abu Dhabi’s benchmark index closed 0.3 percent lower at 3,127.59, while Dubai’s measure slipped 0.1 percent.

“Investors are on the fence heading into the third-quarter earning season,” Ali Khan, head of cash-equity trading at Dubai-based Arqaam Capital Ltd., wrote in an e-mail. “The market should continue to drift and remain range-bound as a consequence.”

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Dubai's ruler downsizes ambitions amid crisis

Sheikh Mohammed bin Rashid Al Maktoum, Prime M...Image via Wikipedia

There was a time when Dubai's annual property fair was a gilded stage for the ruling sheik to unveil his latest, anything-goes dreams: the world's tallest towers, canals in the desert and artificial islands in the sea. As this year's fair begins Monday, the global recession has sharply downsized those visions and taken much of the boomtown bravado from the city-state's CEO-style ruler.

The Cityscape expo is expected to be far more subdued than in years past. The shift reflects Sheik Mohammed bin Rashid Al Maktoum's passage from big-ticket visionary to more cautious steward of the Gulf emirate's sand-to-skyscraper transformation.

"Nobody is talking about grand projects or being No. 1 anymore," said Abdul-Khaleq Abdullah, a political science lecturer and Dubai native. "There's a sense from top to bottom that we need to tone it down."

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