Tuesday, 30 November 2010
In Abu Dhabi Aldar Properties rose 1.4 per cent to Dh2.21 and Sorouh Real Estate gained 1.2 per cent to Dh1.63 on the day the company's chief operating officer said the developer had started an aggressive 'default avoidance' programme after seeing up to eight per cent of buyers on its Reem Islands project pull out of contracts. RAK Properties, which rose 2.2 per cent during intraday trading, closed flat at Dh0.45. However the Abu Dhabi Securities General Index closed marginally down at 0.05 per cent to 2,729.87 points.
The Dubai Financial Market (DFM) General Index dropped 0.3 per cent to 1,668.82 points as Emaar Properties slipped 0.8 per cent to Dh3.62, after rising 1.4 per cent earlier in the week as its chairman said the property sector will pick up.
“We are picking up gas exploration,” Ahmad Al-Sa’adi, vice president of gas operations at Saudi Aramco, said today at a conference in Doha, Qatar. “Any liquid fuel we are burning comes at the expense of our exports.”
Middle East oil producers like Saudi Arabia, Kuwait and the United Arab Emirates are largely dependent on gas found together with crude oil. Output of the fuel is crimped because the Organization of Petroleum Exporting Countries limits the amount of gas that can be extracted.
Damas’ six-months net profits stand at Dh4.25m compared with a net loss of Dh714.87m during the same period of 2009.
The company’s profits are largely on the basis of a reversal of impairment losses on equity accounted investments (based on settlement agreement entered with a related party), which boosted its bottom line by over Dh12m, compared with a net impairment provision of over Dh138m last year.
The deal is being touted as the first time a heavyweight Gulf-based investor has taken the leap to invest in Russia.
Verno was founded by Dimitri Kryukov and a senior team who all previously worked at Kazimir Partners. Before establishing Verno about a year ago, Kryukov and his Kazimir colleagues delivered annualized returns to investors of 30% from inception in 2002 to 2008.
“Shell is not an equity investor in the project” and serves instead as a project and technical adviser, Barry said at a conference in Dubai today. “Shell is also involved in sourcing the LNG.”
Dubai began discharging the LNG at 1:00 am today, he said.
The loan, priced at a margin of 1.75 per cent above the applicable reference rates, was fully subscribed by JP Morgan.
"This successful transaction is a testament to the market's confidence in Emirates NBD as a premier financial institution in the Middle East, with an established track record, solid fundamentals and excellent future prospects," Emirates NBD chief executive Rick Pudner said in a the statement.
"The issue of dealing with that will be important, as will other issues like the outlook for energy prices [and] global growth," said John Lipsky, the first deputy managing director of the IMF.
Mr Lipsky was speaking on the sidelines of the World Economic Forum Summit on the Global Agenda in Dubai yesterday.
The two UAE carriers are among 10 international airlines that have formed a group called Aviation Alliance, the primary goal of which is to end the "Home Country" rule, which was agreed to through the Organisation for Economic Co-operation and Development (OECD).
That rule prevents airlines based in the countries that produce Airbus and Boeing planes from receiving government-backed loans at attractive rates.
Qatar is only prepared to take part in the capital hike if it can invest in Areva's mining activities, Les Echos newspaper said. The Financial Times has also reported that Qatar is seeking guarantees over the value of Areva, for example by having an option to take shares in its uranium mining division.
Areva, which is almost 90 percent owned by the French state, is planning a capital increase which it hopes will raise up to 3 billion euros ($3.94 billion) to finance future development projects."
Dubai World, a debt-ridden offshoot of the emirate, is a 50-percent partner with MGM in CityCenter, as well as a major holder of MGM stock.
Last year, much to the embarrassment of Dubai leader Sheik Mohammed bin Rashid Al Maktoum (a major player in the U.S. thoroughbred racing industry), Dubai needed a $10 billion bailout from its oil-rich neighbor, Abu Dhabi. That triggered reports that Dubai World would be forced to sell some of its holdings to address its major debt problems.
"I believe that all the main sectors have registered varying proportions of growth (in 2010), except property and construction which saw a five percent drop," Sami al-Qamzi, director general of the Dubai department of economic development, told AFP.
Growth in the construction sector is based on supply and demand, thus "its recovery will take a longer time," added Qamzi, who was speaking on the sidelines of the Global Agenda Summit in Dubai.
Average yields on sukuk climbed 19 basis points, or 0.19 percentage point, in November to 5.04 percent, the highest level since September, according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index. Yields had dropped 194 basis points from May 31 until the end of October. The extra yield investors demand to hold non-Islamic emerging market debt instead of U.S. Treasuries rose 16 basis points in the month to 261 yesterday, according to JPMorgan Chase & Co.’s EMBI+ Index.
“The sukuk market doesn’t work in isolation,” Scott Lim, chief executive officer at Kuala Lumpur-based MIDF Amanah Asset Management Bhd., who oversees the equivalent of $670 million of assets, said in an interview Nov. 26. “Europe is having too many structural problems and this is only the beginning. It is going to be challenging for the bond market.”
When it was announced that Dubai’s top three government officials were to provide an “economic update” at the weekend, it was telling that rumours quickly began to swirl. Investors braced for another big announcement from the emirate.
Some judged that the only reason for these officials to speak would be a statement on the emirate’s debts, estimated at $110bn by the International Monetary Fund.
The event harked back to a year ago on November 25, when the government asked to freeze debt payments on up to $25bn owed by Dubai World, a troubled conglomerate brought low by real estate speculation and leveraged foreign purchases.Some judged that the only reason for these officials to speak would be a statement on the emirate’s debts, estimated at $110bn by the International Monetary Fund.
Monday, 29 November 2010
The following stocks gained or fell in the Gulf. Symbols are in parentheses.
Emaar Properties PJSC (EMAAR UH) advanced the most in more than a week, gaining 1.4 percent to 3.65 dirhams. Dubai’s property market, which fell more than 50 percent from its peak, has reached bottom and is moving toward recovery, according to Mohamed Alabbar, the chairman of the shiekhdom’s biggest developer.
Saudi Basic Industries Corp. (SABIC AB) climbed the most in more than three weeks, increasing 1 percent to 100.5 riyals. The world’s biggest petrochemical maker won’t be affected by India’s anti-dumping duty on Saudi polypropylene, Al-Watan said, citing Chief Executive Officer Mohamed al-Mady.
The loan continues to pay the same interest as earlier and the extension will help Dubai International’s 26 creditor banks agree on new terms for $2.6 billion of debt that the company is seeking to alter, the people said, declining to be identified because the information is private. The loan, which was due to mature in June, was extended to Sept. 30 and then to Nov. 30.
A company spokeswoman could not immediately comment when contacted by Bloomberg News today.
The loan will be extended until Dec. 31 and then rolled over into a new medium-term facility, the terms for which are still under discussion, said the people, who declined to be identified because the talks are private. An official for Dubai Holding LLC, the company’s parent, declined to comment.
Dubai Holding Commercial received a two-month extension on the loan in July at “commercial terms,” the company said at the time, and then got the maturity lengthened again to Nov. 30. Citigroup Inc., Royal Bank of Scotland Group Plc and Standard Chartered Plc provided the loan.
Mohammed Alabbar also told a conference in Dubai there were no plans to reduce the Dubai government's 31.2 percent stake.
"We have just finished our bonds. We have no intention of doing that again," Alabbar told reporters on the sidelines of the conference.
The government hired CIMB Investment Bank Bhd., a Kuala Lumpur-based unit of CIMB Group Holdings Bhd., the world’s top sukuk arranger this year, as a lead manager to sell between $1 billion and $1.5 billion of the securities, a person with knowledge of the plan said Nov. 24. Malaysian Prime Minister Najib Razak said Oct. 26 the Dubai Department of Finance is proposing a multi-currency sukuk program.
“I doubt they can get it done in any sort of size without a rating,” Abdul Kadir Hussain, who manages $2 billion of mainly Persian Gulf assets as chief executive officer of Mashreq Capital in Dubai, said in a response to e-mailed questions Nov. 25. “Normally Malaysian investors are relatively conservative and invest in very high grade type issuers.”
Obtained exclusively by Gulf News, the authors of the report titled Global Competitiveness Landscape of Islamic Finance, showed that while profitability of all banks declined, the fall has been steeper for Islamic banks, largely due to higher provisions and lower investment income.
Higher investment losses are partly due to banks' greater exposure to risky assets such as real estate.
The restructuring of the debt of Dubai World is complete and the conglomerate is now on a "sound financial footing" said Shaikh Ahmad Bin Saeed Al Maktoum, Chairman of the Supreme Fiscal Committee and Chairman and Chief Executive of Emirates Airline and Group.
Dubai's sovereign debt is $30 billion, according to Mohammad Al Shaibani, Director-General of the Ruler's Court. This is a small amount relative to earlier speculation and can easily be managed by the emirate. The operating debts of government entities should not be too much of a concern as most are known to have strong operations which generate revenue, such as the Dubai Electricity and Water Authority.
Officials plan to repeat the exercise every three months, increasing transparency after complaints from analysts and other observers that the Government was not sufficiently forthcoming about debt restructurings and the state of the local economy. 'We continue to work towards improving the level of disclosure and transparency,' Sheikh Ahmed said. 'We are holding open dialogue forums like this one.'
Dubai International Capital (DIC) had previously sought and received two extensions on the loan to buy time for restructuring talks to progress. The second, which delayed repayment until the end of this month, was agreed on in September. DIC is looking to restructure repayment on total debts of $2.6bn.
Those talks are part of a broader shake-up at Dubai Holding, which has total debts of more than $9bn and numerous divisions that are looking at repayment extensions."
The sheikh, who is also chairman of the Dubai Supreme Fiscal Committee which in charge of financial affairs, added that the emirate needed to 'regroup, review and reconsider some of our investments and re-challenge our competitive edge'.
The comments, made on the anniversary of Dubai's first admission of its debt crisis, caused shares in the state-controlled companies to drop."
TID said it had accepted the resignation of the creditors’ coordinating committee after refusing to accept a proposal that would have seen creditors exchange KD475m ($1.7bn) of debt for a 90 per cent stake in the company, but leaving them still retaining a further KD600m of debt.
TID said the proposals were unfavourable. The company has “conservatively” valued its assets at about KD1.8bn.
The emirate is “working on opening the capital of some of our leading companies to the public,” Sheikh Ahmed bin Saeed Al Maktoum, chairman of Emirates Airlines and a three-man committee charged with plotting the emirate’s economic recovery, told reporters.
Mohammed al-Shaibani, director general of the ruler’s court and another member of the committee, said Dubai is currently working on proposals to sell off stakes in strategic domestic companies.
Sunday, 28 November 2010
Dubai shocked markets around the world last November when one of its biggest companies asked for a 6-month standstill on its debt repayments.
One year on, and Dubai World has agreed a restructuring deal with its creditors. But its property arm Nakheel, the developer of Dubai's Palm Island, is yet to agree on its restructuring arrangements.
It has recently restarted some of its short-term projects but longer-term developments, which include two other Palm Island projects as well as the multi-island development The World, are still on hold.
So how is Dubai moving on from the events of the past year? Katy Watson's been finding out.
"The possibility of offering a stake in Emirates Airlines to the public is always there and is being studied and considered," Mohammed Ibrahim Al Shaibani told a Dubai press conference in an update on the emirate's economic situation. "But it is well known that offering stakes to the public in solid commercial companies like Emirates is not always useful."
Emirates Airline is widely considered one of Dubai's most precious and profitable assets. The Middle East's largest carrier last month said first-half net profit rose fourfold to 3.4 billion U.A.E. dirhams ($925.8 million), from 752 million dirhams a year earlier.
The United Arab Emirates government said in November 2008 it aimed to merge Amlak AMLK.DU with rival lender Tamweel TAML.DU but the plan was effectively scrapped after Dubai Islamic Bank DISB.DU raised its stake in Tamweel in September. [ID:nLDE6310AG]
'We are in intense negotiations with all creditors and shareholders of Amlak. I would like to see a solution for Amlak by Q1 2011,' said Mohammed Al Shaibani, deputy chairman of Dubai's supreme fiscal committee.
Emaar Properties PJSC, builder of the world’s tallest skyscraper, closed at the lowest in almost three months. Aramex PJSC, the United Arab Emirates-based courier company, decreased 4.3 percent. The DFM General Index fell 1.4 percent to 1,659.5, the lowest level since Sept. 16, at the 2 p.m. close in Dubai. The Bloomberg GCC 200 Index of Gulf stocks lost 0.2 percent at 1:11 p.m. in Riyadh. Egypt’s gauge declined.
Dubai plans to sell shares of some of the emirate’s large companies, Sheikh Ahmed Bin Saeed al Maktoum, chairman of the Dubai Supreme Fiscal Committee, said at a conference today. The emirate racked up $109.3 billion of debt to transform into a tourism, trade and financial-services hub, according to the International Monetary Fund. Last year Dubai World sought to alter terms on $24.9 billion of debt.
“We are working on opening up the capital of leading companies to our public,” Sheikh Ahmed bin Saeed Al Maktoum told a conference in Dubai today. The emirate may now need to “regroup, review and reconsider some of our investments and re- challenge our competitive edge,” he said. The committee is the top body responsible for Dubai’s fiscal policy.
Dubai and its state-controlled companies are struggling to service debt that Barclays Capital estimated in September at about $112 billion. The second-largest sheikhdom in the United Arab Emirates accumulated the loans during years of rapid growth in its property industry and other businesses.
Investment Dar, the Islamic firm which owns half of British luxury carmaker Aston Martin, said in a statement that the plan was not acceptable to the firm and it will now go to court to resolve the dispute.
Dar has been trying to restructure about KD1 billion ($3.55 billion) in debt since last year after the investment firm was hard hit by financial crisis. It applied in March for support under a government facility set up for troubled companies as part of a debt restructuring.
"Dubai will seek to diversify its funding sources though both debt and equity capital," Shaikh Ahmad Bin Saeed Al Maktoum, Chairman of Supreme Fiscal Committee and Chairman of Dubai Civil Aviation Authority and Chairman and Chief Executive of Emirates Airline and Group told a news gathering on Sunday.
Dubai Government also announced the successful restructuring of Dubai World - its largest conglomerate that sought a standstill to restructure part of its then $59 billion debt.
“For 2011 we expect between 3 and 4 percent and for this year I can say almost zero” growth, Sheikh Salem said in an interview in Beirut, Lebanon today. Inflation will be 4 percent by the end of this year and “slightly lower” in 2011, he said.
Sheikh Salem said in March that the economy of Kuwait, which produces about 2.3 million barrels of oil a day, may expand by as much as 5 percent this year as it recovers from a contraction caused by the global financial crisis.
The UAE has been growing between three to 3.5 percent in 2010 after the 1.3 percent in 2009, the UAE minister said, noting "in 2008, we established a government committee to tackle the impact of the global financial crisis. Our measure to pump 33 billion U.S. dollars into the domestic banking was a key measure to stabilize the national economy."
During the third quarter of 2010, combined UAE bank profits jumped 46 percent year-on-year.
"The official announcement of converting Alba into a joint stock company has embarked the company into the new direction aimed at strengthening the economic growth in the Kingdom of Bahrain," the company said in a statement.
The Minister of Industry and Commerce Hassan Fakhro presented a certificate announcing Alba’s new status as a public joint stock company to Alba’s Chairman Mahmood Hashim Al-Kooheji and Alba’s Chief Executive Laurent Schmitt. The company’s new official title will now be Aluminium Bahrain.
The table below shows the market outlook based on each study.
Visit the links above to view the full analysis reports for all GCC markets.
Saturday, 27 November 2010
The Tadawul All Share Index advanced 0.1 percent, the most since Nov. 9, to 6,298.89 at the 3:30 p.m. close in Riyadh. Leading the advance were Banque Saudi Fransi, the fourth-largest publicly traded lender in the kingdom, Etihad Etisalat Co., the second-biggest mobile-phone operator and Samba Financial Group, the No. 2 Saudi bank. Tadawul has gained 9.4 percent from this year’s low in May.
“Upbeat news on improving consumer sentiment and declining initial jobless claims out of the U.S. are lifting the Saudi market,” said Asim Bukhtiar, an equity analyst at Riyad Capital. “Employment numbers beat market expectations and point to encouraging ‘Black Friday’ sales, which should lift retail stocks.”
The five-year facility replaces a credit line from 2006, the Dhahran, Saudi Arabia-based company said in a statement on its website today. The facility includes a $2.5 billion tranche, of which $1 billion is a 364-day facility, and a $1.5 billion equivalent in riyals, according to the statement.
Saudi Aramco and Saudi Basic Industries Corp., the world’s largest petrochemical maker, are seeking financing as they expand their refining capacity and petrochemical production to diversify their economies away from exports of raw crude and to manufacture higher-margin products. Riyadh-based Saudi Basic sold $1 billion of five-year bonds last month.
Although there are federal laws covering bankruptcy, they have almost never been tested, legal experts say.
“A lot of it is cultural,” said James Farn, head of banking and finance in the Abu Dhabi office of UAE law firm Hadef & Partners. “There is a perceived stigma.”"
But while buying into structured investment vehicles (SIVs) such as Cheyne Finance and Stanfield Victoria gave ADCB a portal into some of the most high-flying and hard-to-understand investments in the world, fallout from the credit crunch and sub-prime mortgage crisis in the US has turned the bank from one of the Gulf's most sophisticated investors into one of its most aggrieved.
In addition to SIVs, ADCB was exposed to the US mortgage crisis through collateralised debt obligations (CDOs), which packaged home loans and sold them to investors as securities. It also has one of the largest exposures among local banks to Dubai World, the Government conglomerate that recently reached a pact to restructure US$24.9 billion (Dh91.45bn) of debt.
Friday, 26 November 2010
The valuation is below the French government’s estimate of 12 billion euros to 14 billion euros and may jeopardize Areva’s planned capital increase, the magazine said.
Separately, it said Mitsubishi Heavy Industries Ltd. and the Kuwait sovereign fund would limit their offers to 300 million euros for a 3 percent stake and 500 million euros for a 5 percent holding respectively.
The airlines, which include Korean Air Lines Co. and Abu Dhabi-based Etihad Airways, said in a statement there must be no increase in fees, no limit on the amount of credit extended to any one airline and no reduction in the proportion of the cost of an aircraft that can be financed.
Airlines from Airbus SAS’s home countries of France, Germany, Britain and Spain and from the U.S., where Boeing Co. is based, are currently excluded from receiving export credit to help fund plane purchases. Paris-based Air France-KLM Group Plc is among barred companies that say the distinction gives an unfair advantage to carriers including Dubai-based Emirates.
"Dubai Properties Group (DPG) is not restructuring. DPG honours all of its commitments. We continue to maintain a good relationship with all our partners, including Arabtec," the company said in a statement sent to Reuters. Its comment came after remarks by Tom Barry, chief executive of Dubai-based builder Arabtec , who said on Wednesday Dubai Properties may enter restructuring.
Barry clarified on Thursday his remarks "were with particular regard to payments which are, or about to become, due to Arabtec".
Total’s plans have existed since 2006, said one of the people, who declined to be named because the matter is confidential. The company is in talks to build a mixed-feed petrochemical cracker that will probably be located in the energy center of Ras Laffan, the other person said.
Qatar is using its natural gas reserves, the world’s third largest, to run petrochemical, aluminum and fertilizer plants as it diversifies its economy away from liquefied natural gas and oil exports. The country aims to raise its annual production of petrochemicals to 28 million metric tons by 2014, Energy Minister Abdullah bin Hamad al-Attiyah said in May.
The push for the larger amount comes after the emirate reached a deal with creditors in October for about $25 billion of outstanding debt owed by the government's other flagship conglomerate, Dubai World. Dubai World shocked investors a year ago Thursday when it announced that it would delay debt payments.
The Dubai World deal buoyed sentiment in the city-state, one of seven semi-autonomous emirates that make up the United Arab Emirates. Dubai's oil-rich neighbor, Abu Dhabi, the capital of the U.A.E., has provided billions of dollars of aid to Dubai after its property-market bubble burst, reinforcing among investors a sense of underlying government support for Dubai and its corporate entities.
Dubai World, one of the government's flagship conglomerates, shocked the financial community a year ago when it announced it would ask creditors to delay repayments on its $23.8 billion debt pile, leading investor confidence in the emirate to plummet.
The conglomerate, like other Dubai government-owned groups, built up debts during years of frenzied spending that included some of the world's most extravagant real-estate projects developed by its Nakheel unit—seen to be at the center of Dubai's financial problems—and on the purchase of international properties by investment arm Istithmar World as prices peaked.
Dubai, until then known for its outsized ambition and mammoth construction projects such as artificial islands and sky-high hotels, started evoking other, less kind epithets.
Today, the market focus has shifted to the euro zone’s debt woes, even as Dubai continues to face serious challenges. Read related story on fears that Portugal or Spain will follow Ireland’s path toward bailout.
Thursday, 25 November 2010
UAE interbank rates (EBOR) AEIBOR= have stayed high over past months, sparking criticism from the central bank, although debt restructuring and a flood of dollar liquidity on global markets have helped to ease some of the pressure. [ID:nRISKAE]
'The gap between the two prices (of EBOR and LIBOR) must be bridged,' Sultan Nasser al-Suweidi told local daily al-Ittihad."
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Sultan bin Nasser Al Suwaidi said new provisioning regulations issued by the Central Bank for the country’s 23 national banks and 28 foreign units last week would not curb their lending potential, adding that a floor of 1.5 per cent on provisioning to total loans would have limited effects on the banks on the grounds the new rules gave banks a deadline of four years.
Quoted by the semi-official Arabic language daily Alittihad, Suwaidi said he believes UAE banks would be able to expand credit if they increase client deposits, excluding inter-bank deposits which account for about seven per cent."
Emaar Properties PJSC, builder of the world’s tallest skyscraper in Dubai, climbed for the third time this week and Emirates NBD PJSC, the United Arab Emirates’ biggest bank by assets, advanced 1.6 percent. The DFM General Index increased 0.5 percent to 1,682.23, at the 2 p.m. close in in Dubai, trimming its loss this week to 0.3 percent. Emerging-markets shares climbed, with the MSCI EM Index increasing as much as 0.4 percent.
“Local investors are tracking the performance of markets around the world; we are part of the global economy,” said Humam Al-Shamaa, economic adviser at Al-Fajer Securities in Abu Dhabi. “The gain is not sustainable as there are pending concerns surrounding the debt situation in Europe, particularly in Ireland. Trading volumes are very low.”
The immediate crisis triggered by Dubai World’s announcement last Nov. 25 has passed. Lenders to the government- owned group have agreed to accept a delay in repayments of $14.4 billion, and access to credit in the Middle East’s once- flourishing financial services hub is starting to ease after the worst recession since the 1930s.
Dubai and its state-controlled companies are grappling now to service debt that Barclays Capital estimated in a September report to total about $112 billion -- equal to more than 140 percent of its gross domestic product. They amassed the loans during years of frenetic growth in the property and tourism industries. One of seven sheikhdoms comprising the United Arab Emirates, Dubai lacks the energy wealth of neighboring Abu Dhabi and must boost revenue from trade and other traditional businesses and by selling assets, analysts say.
The focus in the city-state has shifted to the traditionally strong sectors of trade, logistics and tourism in order to recover slowly from a crisis caused primarily by a boom-to-bust real estate frenzy.
Financial markets woke up in the red last November 26 after Dubai signalled its need for a standstill on debt payments by its largest conglomerate, Dubai World.
The MSCI Turkey Index trades for 2.2 times net assets, the highest since February 2003 relative to the MSCI Emerging Markets Index, data compiled by Bloomberg and MSCI Inc. show. Earnings in the 20-company Turkey gauge will rise 7.7 percent next year, the smallest gain of 19 major developing nations, according to analysts’ estimates.
Turkey’s fastest economic expansion since 2005 and record- low interest rates spurred mutual fund managers to make Turkey their largest “overweight” holding and sent price-to-book ratios to a 10 percent premium over emerging markets, from a 45 percent discount two years ago. Citigroup Inc. and Morgan Stanley say stock pickers are too optimistic and slower profit growth will limit gains after the MSCI Turkey index outperformed the emerging markets benchmark for six straight quarters.
The lawsuit filed in New York alleged that Credit Suisse “failed to disclose conflicts of interest and other material information, and provided misleading information, when structuring, marketing and selling an investment, known as Farmington, to ADCB in 2007,” the bank said in an e-mailed statement today. The lender also alleged that Standard & Poor’s “provided inaccurate, investment-grade ratings to assets associated with the Farmington structure.”
Abu Dhabi Commercial made a 560 million-dirham ($153 million) provision in 2007 for losses from investments in the U.S. subprime mortgage market. The bank also sued Morgan Stanley & Co., Bank of New York Mellon Corp. and three securities ratings services for allegedly rating too highly a structured investment vehicle that collapsed in 2007.
'We do not want to sell as desperate asset sales but only to strategic buyers,' Abdul Majeed al-Fahim told reporters on the sidelines of an industry event in Dubai.
The company's project includes hotels from brands such as Bellagio, MGM Grand and Skylofts."
Tyres screeched; high-powered engines roared. Off the track, tycoons and celebrities flitted between corporate boxes and champagne bars.
When the world Formula One carnival pulled into Abu Dhabi this month – bringing with it names such as entrepreneur Sir Richard Branson, actor Hugh Grant and footballer Patrick Vieira – the wealthy capital of the United Arab Emirates seized the opportunity to dazzle visitors with its showcase infrastructure. Latest additions include a Ferrari theme park boasting the world’s fastest rollercoaster and the futuristic Yas hotel, which loops over the grand prix track.
Beyond the glitz, however, the mood in Abu Dhabi is more sober. The buzzwords these days are “discipline” and “priorities” as the city-state tries to heed the lessons of the debt crisis encountered by Dubai, the sister emirate an hour and a half’s drive away. As one long-time observer says only half-jokingly, “Abu Dhabi is feeling poor.”
But it must also be aware there are still difficulties to overcome in other parts of the complex corporate infrastructure of Dubai Inc.
'Progress made but challenges remain', was how the situation was summed up by the US investment bank JP Morgan in a recent study of Dubai's debt situation."
The pipeline to the Arabian Sea promises greater security in the event that the narrow waterway is closed, and promises to help cut the costs of exporting oil from the UAE.
About 40 per cent of the world's international oil trade, including all of Abu Dhabi's exports of about 2 million barrels daily, passes through the strait."
The Organization of the Islamic Conference based in Jeddah hired Standard & Poor’s to start an index of about 50 of the most-traded stocks in the first quarter of 2011, Huseyin Erkan, the Istanbul Stock Exchange’s chief executive officer and coordinator of the initiative, said on Nov. 8. The index, which will track listed equities that comply with Islam’s ban on alcohol, gaming and tobacco, aims to target exchange-traded funds, he said.
“Governments of Islamic countries want us to cooperate in capital markets to facilitate cross-border trading,” Erkan said in an interview in Abu Dhabi. “One of the easiest and most efficient ways to improve trading is to build indexes and exchanged-traded funds.”
But there are signs that hiring activity is reviving across the Gulf Co-operation Council area. GCC member countries include Saudi Arabia, Kuwait, Bahrain, Qatar, Oman, Yemen, and United Arab Emirates (Dubai, Abu Dhabi and Sharjah are the best known of the seven emirates, or states).
“We have had two very difficult years,” says Tariq Sadiq, markets, accounts and business development leader for Middle East and north Africa (Mena) for the professional services firm Ernst & Young. “Our profession follows our clients. And optimism has been creeping into the market.”
The developer, Al Murjan Real Estate, which has a $3 billion development project, White Bay, filed for liquidation in Sharjah, a neighboring emirate, according to court documents.
According to lawyers, it is the first bankruptcy filing of a property developer to have taken place in the U.A.E. since the onset of the financial crisis in 2008, a move that may prompt other developers to do the same.
Ministers in the Conservative-led coalition have made it clear that they regard exports to the region as having been neglected under the previous Labour government.
In July, William Hague, UK foreign minister, said: “The real economic action in the world has been taking place in Brazil and India and China and the Gulf states, and that is where . . . we now have to connect ourselves much more strongly.”
The most glaring example of businesses in bed with authoritarian regimes became evident when anonymous posters appeared last summer in Cairo’s streets. They urged Gamal Mubarak, the influential son of Egypt’s president, to run for next year’s presidential elections to succeed his father.
Mustapha Kamal, a political science professor at Cairo University, commented that the “campaign began at the proposal of some businessmen who fear a deterioration in President Mubarak’s health and believe that it is better to quicken Gamal’s succession while his father is around”.
Wednesday, 24 November 2010
Asked how he knew a restructuring was likely, Arabtec CEO Tom Barry said he was in discussion with the developer over the payment for four completed projects.
But Arabtec, the builder of the world's tallest tower in Dubai and Emirates' largest builder by market value, still expects to get paid. "I believe funds will be available to them because I trust in Dubai," Barry told reporters on the sidelines of an industry event in Dubai on Wednesday.
The company faced “financing difficulties” as it was building the 20.6 billion-riyal ($5.5 billion) facility, said outgoing Chief Executive Officer Abdullah al-Dabbagh in remarks to Al Arabiya television.
The delay will not incur additional costs and commercial production will start in the third quarter, the Riyadh-based miner said in a statement to the Saudi bourse today.
The Meister letter provides specific examples of judicial misconduct. One involves a judge conferring openly with a bank lawyer on cases in which the lawyer had no involvement.
I urge you read this letter in its entirety.
“I’m personally a big fan of these Islamic funds because I think the idea of equity is very important. I think that the equity side is where we are going to see big growth going forward.
‘‘The potential is very, very great. We believe that the potential assets that are available to the Islamic asset management industry goes over $480 billion.
Before harnessing up to film stunts for the next "Mission: Impossible" on the face of the world's tallest tower, Tom Cruise bounded onto stage in the skyscraper's plush new Armani Hotel to promote shooting in Dubai. With cameras rolling, he thanked the emirate's ruling sheik and praised the city as "very cinematic," deeming it "beautiful" four times in under a minute.
Publicity stunt it may have been. But the filmmakers' decision to set a large part of the movie here also reflects the headway Dubai has made on its own tough mission: to again charm investors and repair its reputation a year on from its market-rattling financial crisis. It's a task that could take years to complete.
The pint-sized Persian Gulf emirate sent tremors through the world economy a year ago this week when it effectively acknowledged it couldn't repay billions of dollars as promised. Lenders who had relied on government backing for conglomerate Dubai World and a web of other state-linked companies found no such guarantees, leaving them scrambling for details from a city-state as famously tightlipped as it was opaque about the health of its globe-trotting businesses.
Work on the $1.5 billion multi-currency programme was "more than 50 percent" under way but the plan was not final given the volatility in financial markets due to Ireland's debt troubles and tensions on the Korean peninsula, said one source not authorised to speak to the media.
"This will be the first foreign sovereign to issue ringgit (sukuk) in Malaysia," said the source who asked not to be identified as the plan has not been announced.
Under a debt restructuring proposed by senior lenders, creditors including Lloyds TSB Bank Plc, Commerzbank AG and Prudential Plc’s M&G unit would seize the company in exchange for writing its debt down to 250 million pounds ($395 million) from 555 million pounds, said the people, who declined to be identified because the plan is private.
Dubai International may retain some shares in the company, the people said. Junior lenders, owed 140 million pounds, may also be allotted some shares rather than recouping their initial investment. Senior creditors may initiate legal proceedings at the U.K.’s High Court if the plan is opposed by junior lenders and Dubai International’s management, the people said.
TIBC, a provider of commercial loans winding down in Bahraini courts, is in Chapter 15 bankruptcy in the U.S., which foreign companies use to protect U.S. assets while they are liquidated or reorganized in a foreign court.
U.S. Bankruptcy Judge Stuart Bernstein, who is overseeing TIBC’s Chapter 15 case, today denied a motion by an administrator to the foreign bankruptcy to vacate attachment orders obtained by Deutsche Bank and Mashreqbank, saying a Bahraini court should decide the issue.
The bankruptcy filing is likely to set a precedent for hundreds of stalled real estate projects across the Emirates as this type of proceeding may take years and delay the processes allowing the many thousands of individual investors to get their money back.
Omani mobile-phone operator Nawras and Aluminium Bahrain BSC, the operator of an 850,000-metric-ton-a-year smelter, sold shares this month at the bottom of the range used to canvas investor interest in the stocks. The six-member Gulf Cooperation Council region generated $1.91 billion of initial public offerings this year, compared with $2.27 billion in the same period a year earlier, data compiled by Bloomberg show.
The region’s benchmark Bloomberg GCC 200 Index has gained 9.1 percent this year, compared with a 9.9 percent increase for the MSCI Emerging Markets Index. The average number of shares traded daily in Dubai has dropped 65 percent from the year- earlier period. By contrast, the pace of IPOs in Asia has climbed to a record since the crisis.
And he does not embark on any venture until he has completed thorough research and is convinced the business will succeed. Today, the Al Majid Group comprises more than 40 companies in engineering, retail, automotive and investment — to name but a few — across the world.
Al Majid says it's the sea that taught him to be patient. When he was eight, he used to accompany his father, who owned two boats, on pearl-diving trips. During the summer, he would serve refreshments on the boats for a few rupees.
Until December 6, Mazaya will offer additional shares to existing shareholders to increase its capital by 30 per cent to 64.9 million Kuwaiti dinars. It has begun by offering equity to shareholders of First Dubai Real Estate and Waterfront Real Estate Development, two groups in which it currently holds majority stakes.
Mazaya said it would offer the new shares at a price of 127 fils each."
The volumes of traded shares on the Dubai Financial Market are scraping past 80 million, compared with highs that touched 900 million before the Dubai World crisis took hold. On the Abu Dhabi Securities Exchange, volumes have settled at about 50 million.
'What we want is long-term investors who recognise long-term opportunities here and are willing to back this market for the next five years,' Alan Durrant, the chief investment officer of National Bank of Abu Dhabi (NBAD) said yesterday. 'If people are largely trading between each other, that's a zero-sum game.'"
Emirates REIT, a joint venture between DIB and French property firm Eiffel Management, looks to attract sharia-compliant property such as office buildings, warehouses, schools and car parks and convert the rental income into dividends for investors, said Adnan Chilwan, chief of retail banking at DIB.
80 percent of the REIT's annual profit will be distributed to shareholders as a dividend."
The three-day event has been convened under the patronage of His Royal Highness Prime Minister Prince Khalifa bin Salman Al Khalifa and held under the auspices of the Central Bank of Bahrain.
Under the theme 'Building a new growth paradigm - Islamic banking and the new global financial landscape', the event has featured a series of pragmatically-focused workshops and executive briefing sessions led by experienced and respected industry experts.
Lawyers say the move is the UAE’s first court-mandated bankruptcy of a distressed property project since the financial crisis struck.
The filing will raise fears among the thousands of investors in stalled real estate developments across the UAE, especially Dubai, where many projects have floundered since the crisis sent the market into decline.
Tuesday, 23 November 2010
In a reverse of yesterday's positive gains, the Dubai Financial Market (DFM) fell 1.16 per cent to 1,691.48 points.
Meanwhile, the Abu Dhabi Securities Exchange Index gained 0.07 per cent to 2,755.81 points."
The prince said on Tuesday that his investment vehicle, Kingdom Holding, took a $500 million piece of the car maker’s initial public offering, representing a 1 percent stake of the company. He was one of several big investors G.M. and its advisers courted during the months-long I.P.O. process.
“We are confident that the current management of G.M. is able to deliver growth and profits over the coming years,” Ahmed Reda Halawani, Kingdom Holding’s executive director of private equity, said in a statement. “We will be able to achieve the expected return on this investment.”
The program will be rolled out in two phases with the sovereign funds of Qatar and Kuwait making the first investment and industrial players participating in a second round.
'We are in negotiations ...we are sticking to the timeline set out by the nuclear policy board, to have the deal tied up by the end of the year,' said Alexandre de Jugniac, chief of staff to French finance minister Christine Lagardere."
The following stocks gained or fell in the Gulf. Symbols are in parentheses.
Industries Qatar (IQCD QD) dropped the most since May 25, tumbling 3.3 percent to 126.7 riyals. Crude for January delivery retreated as much as 1.7 percent to $80.35 a barrel on the New York Mercantile Exchange. Industries Qatar is the second-biggest petrochemicals maker in the Middle East. Saudi Basic Industries Corp. (SABIC AB), the region’s biggest petrochemicals maker, declined 2 percent to 98.75 riyals, the lowest level since Nov. 3.
The company is also asking its 26 creditor banks to extend loan maturities to five to six years to allow asset prices to recover, said the people, who declined to be identified as the discussions are private. Lenders are in turn seeking a guarantee from the government to make up any losses if money raised from the sale of Dubai International’s assets isn’t sufficient to repay the loan principal, the people said. An official at Dubai International Capital declined to comment.
Dubai International parent Dubai Holding LLC’s 4.75 percent bond due 2014 yields 11.9 percent today, according to data compiled by Bloomberg. Dubai International’s assets include stakes in budget hotel chain Travelodge Hotels Ltd., U.K.-based medical imaging company Alliance Medical Ltd. and Mauser AG, a German industrial packaging company.
Mohammed al-Shaibani, director of the court of Dubai’s ruler, Sheikh Mohammed bin Rashid al-Maktoum, speaks to the Financial Times. The interview was conducted by FT Editor Lionel Barber with Roula Khalaf, Middle East editor, and Simeon Kerr, the FT’s Dubai correspondent. Following and headline link above are exerpts from the interview.
Financial Times: Let’s start with what you think you’ve done a year on since the announcement that the government was requesting a standstill on debt repayment at Dubai World and what you think there’s still to do.
MS: We have to realise, we have to accept there are a lot of challenges in the whole process and there are still a lot of challenges on the way. So definitely, this is not a so called a cakewalk. The whole world is going through a lot of crisis. Each time we say things are, it’s over something comes up whether it’s government issues or company related issues. But looking back almost a year now we are more than, how can I say, confident that it was the right decision to call for a standstill and look at the situation of that company and come up with a more comprehensive specific plan that can meet all the requirements and also analyse all the complexities of that company.
Axiom is hoping that all this can power its own initial public offering next month - the first new listing in the United Arab Emirates for two years. The company can point to a lucrative deal with BlackBerry-maker RIM. But even in the BlackBerry-loving Gulf, the margins are very tight.
Axiom Telecom will list 35 per cent of its shares on the Nasdaq Dubai in December. According to the prospectus, the group - owned by two family companies and troubled conglomerate Dubai Holding - has an agreement with RIM UK to source BlackBerry handsets direct from the manufacturer. The companies hopes that will double margins on smartphone sales, which are forecast to grow across the region by 41 per cent through 2014.