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Sunday, 24 January 2010

Dubai World assets in excess of $120 billion

Citing a recent internal report shared with creditors, Al Ittihad newspaper said the value of the company's property assets dropped around 35 percent in 2009, compared with $157 billion in 2008.

"The drop in the value of investment and strategic assets for the group did not exceed 20 percent," the paper said.

Dubai World is one of Dubai's largest conglomerates. The group came under fire last November when it said it would restructure $26 billion in debt.

Dubai is one of seven emirates comprising the United Arab Emirates.

Saudi Arabia Not Planning to Raise Interest Rates

Saudi Arabian central bank Governor Muhammad al-Jasser said he’s not planning to raise interest rates because inflation isn’t a concern and demand for loans isn’t strong enough yet to require higher borrowing costs.

“Raising -- that is only to be determined when conditions show that inflation is either getting out of hand or that demand for credit is exceeding the supply of credit in the economy,” al-Jasser said in an interview yesterday in his office in Riyadh. “I don’t see this now.”

The Saudi Arabian Monetary Agency last year cut the repurchase rate to 2 percent, the lowest since 2004, and the reverse repurchase rate to 0.25 percent as the global credit crunch led to a slump in oil prices, crimping growth in the world’s largest crude exporter. The government’s $400 billion, five-year spending program and oil prices rebounding to around $75 a barrel from less than $35 in February are likely to boost the economy this year.

Bahrain plans $1 bln conventional bond issue-source

Bahrain plans to issue a $1 billion sovereign bond with a 10-year maturity targeting mostly U.S. investors, a banking source said on Sunday, a move likely to help cover a potential 2010 budget deficit.

"Responses (from banks for the mandate) are due today," the source said, speaking on condition of anonymity.

The source said the planned bond will be a 144a transaction, which is regulated under the U.S. securities commission. The source also said the bond could be issued in March or April.

Dubai Index Leads Gulf Shares Lower on Obama Bank Plan, Oil

Dubai’s index lost the most in a month, leading Gulf markets lower, after U.S. stocks fell on a White House proposal to limit financial risk and as China moved to cool economic growth. Oil closed at a one-month low.

Shuaa Capital PSC, the United Arab Emirates’ biggest investment bank, slumped to its lowest intraday level since May. United Development Co., the Qatari developer building man-made islands off the Qatari coast, retreated to the lowest in almost two months after profit declined. The DFM General Index fell 3.9 percent, the most since Dec. 23, to 1,587.38 at 12:48 p.m. in the emirate. Qatar’s gauge lost 1.7 percent. Crude closed down 2 percent at $74.54 a barrel on Jan. 22.

“Friday’s declining oil prices and U.S. equities have had an impact, the Gulf always overreacts to U.S. equities downside,” said Mohamed Abu Ghoush, head of equity brokerage at Al-Ahli Bank in Doha, Qatar. “Markets are still waiting for the 2009 results.”

Woes could form legal guidebook

Orion Holding Overseas is only the third company to be ordered into liquidation by the Dubai International Financial Centre’s (DIFC) courts.

As one of its earliest insolvency cases, the Orion saga could set precedents and provide a guide for the judicial system as it handles an expected flood of liquidations this year.

Until last year, Forsyth Partners’ insolvency in 2007 was the only major case the courts had adjudicated.

UAE banks ask not for whom the bad loans toll

No one is happy when the knacker shows up on their doorstep. It means something has gone horribly, horribly wrong.

It’s no surprise, then, that when Bertrand Guillot came to Dubai last week to offer his services, a lot of the doors he knocked on went unanswered.

In the world of finance, Mr Guillot is the equivalent of the knacker men who collect dead and dying animals from farms and render them into useful byproducts, lard and tallow. Mr Guillot buys bad debts from banks and tries to turn them back into profitable assets.

ATIC set to buy rest of Globalfoundries

The Abu Dhabi-based Advanced Technology Investment Company (ATIC) is poised to buy outright Globalfoundries, one of the biggest customised microchip makers in the world, from its US counterpart Advanced Micro Devices (AMD), according to a company filing.

ATIC already owned 65.8 per cent of the company and now plans to buy the remaining shares.

Globalfoundries has embarked on an aggressive expansion programme since it was formed in March last year, with the purchase of Singapore’s Chartered Semiconductor for S$5.6 billion (Dh14.64bn) in September and recently signed accords with the US chip designer Qualcomm and the Korean Semiconductor Industry Association.

Orion fall linked to $20m loss on trades

The collapse of Orion Holding Overseas, the Dubai financial trading firm forced into liquidation this month, was allegedly linked to unauthorised trades in gold and other commodities contracts that led to losses of at least US$20 million (Dh73.4m), The National can reveal.

The trades were detailed in court hearings related to Orion Holding’s liquidation, which closed in the Dubai International Financial Centre courts on January 13.

Justice Sir John Chadwick ordered the company to be wound up after shareholders failed to come to an agreement to liquidate the company voluntarily.

UAE Doesn’t Expect Federal Bond Issuance for at Least 6 Months

The United Arab Emirates does not expect any federal bond issuance for at least six months, the Finance Ministry’s Younis Haji al Khouri said today in Abu Dhabi.

UAE to Create Debt-Management Unit to Work With Central Bank

The United Arab Emirates plans to create a debt-management unit within six months to a year which will work with the central bank, the Finance Ministry’s Younis Haji al Khouri said today in Abu Dhabi.

Dubai's dark side targeted by international finance police

Naresh Kumar Jain, an Indian multimillionaire suspected of being one of the world's biggest money launderers, ran from the law, but last month it became obvious that he couldn't hide.

Having skipped bail in Dubai – where much of his vast empire was based – 18 months ago, Jain was finally arrested in Delhi by India's Narcotic Controls Board for allegedly moving hundreds of millions of dollars for drug dealers. It had taken an international manhunt involving law enforcement agencies spanning three continents to catch him.

The 50-year-old is suspected by the UK's Serious Organised Crime Agency of being at the heart of a drug money-laundering network shifting up to £1.35bn a year across jurisdictions. Jain has reportedly admitted to Indian police that he has laundered cash, but denies being involved in the drugs trade.

Bahrain base for top Russian firm

A MAJOR Russian consultation company is set to open an office in Bahrain as part of an expansion into the Gulf, it has been announced.

The Agency for Financial Monitoring and Information (AFMI) chose Manama based on its position as the financial centre of the Middle East and the number of varied investment opportunities available, said officials.

It comes after Russian First Deputy Premier Viktor Zubkov met His Majesty King Hamad on Thursday to present him with a letter on bilateral relations.

Europeans, Asians held in $10 billion bank scam: report

Abu Dhabi police have arrested seven men for plotting to defraud the UAE central bank of 7.2 billion euros ($10.17 billion) using false documents, the state news agency WAM said on Saturday.

It said the suspects, three Europeans and four Asians, had presented forged documents from a commercial bank in Europe purporting that the central bank of the United Arab Emirates owed the funds representing the family investments of the gang's leader.

"The documents presented by the suspects were fake and meant for attempted fraud targeting the central bank," WAM quoted Colonel Hammad al-Hammadi, director of the police's Criminal Investigation Department, as saying.

Saudi Shares Slip Most in Six Weeks on International Outlook

Saudi Arabian shares tumbled the most in more than six weeks, led by Saudi Basic Industries Corp. and Samba Financial Group, as President Barack Obama’s plan to rein in banks sent shares tumbling across the globe.

Saudi Basic Industries Corp., the world’s largest petrochemical maker known as Sabic, declined the most in almost a month, while Samba, the kingdom’s second-biggest bank, fell the most since October. The Tadawul All Share Index slipped 1.4 percent to 6,295.92, the biggest decline since Dec. 9.

The decline is due to “the effect of the global markets,” Raj Sinha, head of equity research at HSBC Saudi Arabia, said in an e-mail. “Earnings season was fine, but there wasn’t a case of overall positive or overall negative, so global markets are a key driver today.”