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Thursday, 17 December 2009

Qatar needs to explore other sources of energy

Qatar needs to develop other ‘unconventional’ sources of natural gas, including shale gas, says Dr Ibrahim Al Ibrahim, Secretary General of the General Secretariat for Development Planning (GSDP).

“For us as gas producers and exporters of importance is the development of other kinds of gas called ‘unconventional’ gas, including shale gas,” he said.

Shale gas is one of a number of “unconventional” sources of natural gas that also include coalbed methane, tight sandstones, and methane hydrates. Shale gas is expected to greatly expand worldwide energy supply.

Dubai Shares Retreat on Concern Over Emirate’s Debt Obligations

Dubai shares tumbled for a second time this week, led by Emaar Properties PJSC and Emirates NBD PJSC, as investors sought information about Dubai’s ability to repay debt.

Emaar, the United Arab Emirates’ biggest developer, dropped the most in a week and Emirates NBD, the country’s largest bank by assets, declined for the first time in four days. The DFM General Index slipped 1 percent, trimming yesterday’s gain, to 1,871.57 at 12:08 p.m. in the emirate. The index has lost 11 percent since Dubai World, the state-owned holding company, said on Nov. 25 it would seek a “standstill” agreement on its debt repayments.

“A huge bomb shell is hitting the market as far as this massive uncertainty,” Tudor Allin-Khan, Dubai-based chief economist and strategist at HC Brokerage. “Investors want to know, how will Dubai’s debts be refinanced? Will Abu Dhabi come to Dubai’s aid again and provide another $10, $20, $30 billion? That’s why you have this severe volatility in the market.”

Goldman Sachs Says ‘Growth Axis’ Shifts to Abu Dhabi, Buy Aldar -

Goldman Sachs Says ‘Growth Axis’ Shifts to Abu Dhabi, Buy Aldar -

Saudi Stock Market Weekly Report - 16-December-2009

CityCenter CEO cites poker prowess in getting project done | | The Reno Gazette-Journal

CityCenter CEO cites poker prowess in getting project done | | The Reno Gazette-Journal

YEARENDER: Out of boom and bust, hope for a mature market in Dubai - Monsters and Critics

YEARENDER: Out of boom and bust, hope for a mature market in Dubai - Monsters and Critics

"Sovereign Wealth Funds" not "Sub-Prime" Marked 2007 (Re-posted just to refresh memories!)

“Sovereign Wealth Funds” should have been the words of 2007, not “sub-prime” as reported in many newspapers at the end of the year!

The above was the heading of my New Years message and prompted quite a few enquiries requesting information as to “What are Sovereign Wealth Funds (SWF)?”.

My answer has to be--they are just another source of capital available for investment globally, as was so readily exploited by the likes of UBS, CitiGroup and Merrill Lynch as the extent of their problematic exposure to “sub-prime” debts became apparent.

Damas says it must restructure, delay debt payments to survive

Damas, the region’s largest retailer of gold and jewellery, says it must secure a debt standstill and restructuring to remain in business.

The Dubai-based company will also seek to recoup almost Dh300 million (US$81.6m) from an investment unit of the Dubai Government-owned conglomerate Dubai Holding. After investing Dh294 million into the unit, Damas later discovered that its investment consisted entirely of Damas shares, which by then had a value of less than Dh75 million.

“Additional funding is required to ensure that the company can continue its operations and meet its financial obligations as they fall due,” Damas said in its results statement yesterday.

ADIA takes action over Citigroup investment

The Abu Dhabi Investment Authority (ADIA) has filed a claim against Citigroup in New York, alleging fraud over a US$7.5 billion (Dh27.54bn) investment it made in the US banking giant two years ago.

In its arbitration claim, ADIA is seeking damages of $4.4bn or an end to its obligation to convert its investment in the bank into Citigroup shares, which have fallen from about $33 at the time of the deal to $3.44 in early trading yesterday.

Citigroup called the allegations of “fraudulent misrepresentations” in connection with the investment “entirely without merit”. The bank said it would vigorously defend against ADIA’s claims.

UPDATE 2-Dubai officials in confidence-building UK, US trip | Reuters

UPDATE 2-Dubai officials in confidence-building UK, US trip
| Reuters

We Need Bankruptcy Laws in the Gulf!! « Alpha Dinar- talking GCC finance

We Need Bankruptcy Laws in the Gulf!! « Alpha Dinar- talking GCC finance

Vegas Strip redefined as mammoth complex opens

Vegas Strip redefined as mammoth complex opens

Dubai rescue ‘will not set precedent’

Abu Dhabi’s bid to save Dubai from a bond default at one of its flagship companies has raised the spectre of moral hazard as investors speculate whether the oil-rich capital of the United Arab Emirates will come to the rescue again.

Officials insisted that Abu Dhabi’s last-minute reprieve of Dubai World should not be seen as a precedent for other struggling companies owned by the emirate, popularly known as “Dubai Inc”. The bail-out of $10bn (€6.9bn, £6.1bn) allowed Nakheel, the real estate wing of Dubai World, to repay a $4.1bn bond that matured on Monday.

It is understood that Dubai’s government may also repay the outstanding 2010 and 2011 sukuk, or Islamic bonds, issued by Nakheel, and consider providing further funds to Dubai World.

Dubai crisis throws the spotlight on analysts

Abu Dhabi’s recent Dubai bail-out may have removed some of the immediate risks of default in the emirate but the saga has left a bitter taste in the mouths of many investors – and led to calls for greater transparency in the United Arab Emirates.

Dubai has admitted that it owes about $80bn, but the restructuring of the Dubai World conglomerate announced earlier this month has revealed a mass of undisclosed loans. Some analysts estimate that the emirate could owe as much as $150bn in total.

The disparity highlights the fact that the official statistics and forecasts that are available are often either lacking or misleading, say bankers. This has meant that during the past year and more, the research teams of international and regional banks have proved vital sources of information and analysis.

Bumper year for bond issues

This year has been a busy one for bond issuers in the Middle East. According to Dealogic, a data provider, sovereign, corporate and financial issuers in the region have raised more than $44bn in the year to date, compared with $14bn in 2008 and $27bn in 2007, the previous best.

Last month Qatar issued a mammoth $7bn, the largest emerging market bond on record. The offer was raised from $5bn and even then was nearly four times subscribed. The year also saw a bumper local currency offering by Saudi Electricity for nearly $1.9bn and the introduction of an electronic market for trading sukuk, or Islamic bonds, in the kingdom.

Regional issuers will be hoping that the events of the past three weeks have not sullied the reputation of the Gulf and that a pipeline can quickly be re-established. Creditors of Dubai were severely rattled last month by Dubai World’s unexpected call for a moratorium on debt repayments. By most estimates companies in Abu Dhabi, such as Mubadala and the Tourism and Development Company, and others in Qatar are looking to come back to the market to fund ambitious development projects.

Abu Dhabi sees white knight role turn dark

When US banks searched the world for rescue capital during the early stages of the financial crisis, the Abu Dhabi Investment Authority was the first sovereign wealth fund to provide assistance.

In November 2007 – after only three days of due diligence, according to people familiar with the matter – Adia agreed to invest $7.5bn in Citigroup. In return, Adia received “equity units” that currently pay an annual 11 per cent dividend and convert into shares, starting in March 2010, at a price of not less than $31.83.

The deal by Adia – then the world’s wealthiest sovereign wealth fund, with an estimated $800bn in funds, according to a New York Federal Reserve Bank official – left its Gulf peers looking on from the sidelines with envy.

Apologies for delayed publication.