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Thursday, 18 February 2010

Dubai Shares Fall on Concern About Details of Debt Restructure

 Dubai shares declined for a third time this week on concern about the details of Dubai World’s restructuring of $22 billion of debt when it releases a proposal to creditors next month.
Emaar Properties PJSC, the builder of the world’s tallest skyscraper in Dubai, fell the most since Feb. 14. Dubai Financial Market, the only Gulf Arab stock market to sell shares to the public, declined for a second day. The DFM General Index lost 0.2 percent, bringing its decline for the week to 3 percent. The ADX General Index increased 0.3 percent and Oman’s MSM30 Indexclimbed 0.8 percent to 6,795.17, the highest since November 2008.
“U.S. equities rallied the last couple of days and had a positive impact on the Gulf Cooperation Council overall, but Dubai seems to be quiet today as it awaits more news about Dubai World,” said Mohamed Abu Ghoush, head of equity brokerage at Al-Ahli Bank in Doha, Qatar. “The longer the repayment schedule will be, the more pressure on the Dubai index. How long it will take is the question.”

AFP: Moody's raises Oman ratings with stable outlook

AFP: Moody's raises Oman ratings with stable outlook

Moody's Investors Service on Thursday raised the sovereign ratings of the Gulf state of Oman on the back of the strength of its public finances.

Oman's local and foreign currency government bond ratings and the country ceiling for foreign currency bank deposits were both raised to A1 from A2, and the country ceiling for foreign currency bonds was raised to Aa2 from Aa3.

The ratings outlook is stable, Moody's said in a statement.

Qatar to Grow 18.5%, Risks Overheating, Says IMF (Update1) -

Qatar to Grow 18.5%, Risks Overheating, Says IMF (Update1) -

Qatar’s gross domestic product will grow by 18.5 percent this year as gas exports increase, leaving the economy at risk of overheating in the medium term, the International Monetary Fund said.

The Persian Gulf country should have “positive” economic prospects in the medium term, with continuing strong growth, moderate inflation and a fiscal and current account surplus in 2010, the Washington-based lender said in a e-mailed report late yesterday. Inflation is forecast at 1 percent this year.

Rapid growth has ‘the potential of overheating the economy unless the government continues to prioritize and sequence its spending toward infrastructure spending,” the Fund said. Infrastructure projects should be phased in to avoid supply bottlenecks that could drive up inflation, it said.

Standstill? We don't need no stinking standstill

As dozens of accountants sift through Dubai World's financial records in a race to determine how best to restructure as much as $22bn in debts, the company appears to be pursuing a new strategy to ensure it can win a deal from creditors before facing any major repayment demands, according to sources close to the company and its banks.

It now hopes to convince creditors to agree on how to restructure its debts before an April 30 deadline without necessarily first getting them to sign a standstill agreement on debt. "A standstill is nice to have, but it's not essential," a source close to Dubai World, speaking on the condition of anonymity, told me.

Getting a standstill agreement from creditors has been a key condition of Dubai World's restructuring efforts since Nov. 25, when Dubai 's Government appointed an outside accountant to run the process. A standstill would essentially prevent creditors from declaring Dubai World if it missed a payment while it was still negotiating a restructuring of its debts with creditors.

Bahrain eyes slice of global exhibitions market

The winter months are known as camping season in Bahrain, a period when many Arab families stake out a plot near Sakhir in the island’s southern desert. By night, between the months of October and March, a shabby tent city appears and is transformed into a lively carnival of campfires and impromptu musical concerts. Burger vans and makeshift drinks stores ply their trade nearby.
Yet in recent years this stretch of wilderness has played host to a more lucrative form of tourism. Since 2004, Sakhir has been home to the Bahrain International Circuit, currently preparing to host the first leg of the annual Formula One motor racing championship in March. Last month, the desert skies were split by the roar of jet fighters and unmanned drones as the kingdom hosted its first industry air show.
 More foreign visitors are expected in Sakhir in 2012, when the first attractions open at @Bahrain, a $3.5bn mixed-use business, technology and entertainment park being built on a 180-hectare site next to the motor circuit. The development is part of a concerted push by the Bahraini government to boost its income from “business tourism”.

Joint FATF-MENAFARF Plenary meeting opens in UAE

The joint meeting of the Financial Action Task Force (FATF) and Middle East ''&'' North Africa Financial Action Task Force (MENAFATF) opened today in Abu Dhabi with the participation of delegates representing 60 countries.

The plenary meeting was inaugurated by HE Sultan Bin Nasser Al Suwaidi, Governor of the UAE Central bank and Chairman of the national Anti-Money Laundering Committee of UAE on behalf of Central Bank of the UAE, the National Anti-Money Laundering Committee (NAMLC), and the Anti-Money Laundering and Suspicious Cases Unit (AMLSCU) of the UAE.

Al Suwaidi expressed his hope that the joint meeting will be a milestone in terms of cooperation and coordination among the member countries and their FIUs aimed at encountering, Money Laundering, Terrorist Financing and related activities.

Provisions hit Saudi banks

While the global financial crisis unfolded, Saudi Arabia maintained its conservative monetary policy had in effect shielded local banks from the effects of toxic foreign debt instruments.
Then defaults by the Saad Group and Ahmad Hamad Algosaibi & Brothers , two large family-owned Saudi conglomerates, revealed debts of $20bn were owed to international and local lenders. Saudi banks were estimated to have an exposure of $5bn-$7bn.
Officials again played down the importance of this, but fourth-quarter performance suggests the full magnitude of troubled debts, not just those of the two families, is beginning to be felt. Collective profits of 11 listed banks declined 8.6 per cent to SR22.22bn ($6bn) in 2009, with many citing credit provisioning and sluggish lending, according to National Commercial Bank. Analysts estimate non-performing loans at about 3 per cent in 2009.

Dubai World Debt Plan On Schedule; No Fire Sales

Dubai World is on schedule to present formal debt-restructuring proposals to lenders by March or April, and won't consider selling assets at distressed prices, according to people familiar with the situation.

While asset-shedding is likely to be part of any restructuring plan, "it won't be a fire sale," according to one government official.

The government official and another person familiar with the talks said Wednesday that despite a fresh bout of investor worry over Dubai debt, negotiations among the company, the government, advisors and lenders are moving ahead according to a timeline set out by Dubai at the beginning of the restructuring process, which began late last year.

Gulf begins tentative earnings recovery

After a grim last three months of 2008, when some feared the world was set for a rerun of the Great Depression, year-on-year Gulf corporate earnings figures for the fourth quarter of 2009 look relatively rosy.

However, the quarter-on-quarter figures look a lot less attractive.

With slightly more than half of Gulf companies having reported their earnings, Markaz, the Kuwaiti investment bank, estimates that profits slumped 44 per cent in the last three months of 2009 compared with the third quarter.

Takaful firms search for long-term assets

The Islamic insurance industry, or takaful, is struggling to find suitable long-term investment opportunities, executives at the Reuters Islamic Banking and Finance Summit said.

The takaful -- or sharia-compliant -- insurance industry has grown at double- or three-digit growth rates so far as the Gulf Arab region is underpenetrated with insurance products in general, and has also attracted business from conventional peers.

But issues like the absence of long-term sukuk, or Islamic bonds, to compliment some of the products are hampering the process of asset deployment.

IMF urges more effort from emirate

The International Monetary Fund yesterday urged Dubai to improve its handling of the debt restructuring of a major conglomerate and advised the emirate to reorganise the rest of its state-linked companies.

Dubai World, a troubled state-owned holding company, is restructuring $22bn of loans and bonds to local and international banks. But it has been criticised by bankers and investors for its lack of communication and transparency.

In a so-called Public Information Notice, the IMF "stressed the importance of a speedy, orderly, co-operative and predictable approach to debt restructuring . . . The process should seek to enhance transparency and information disclosure and ensure comparability of treatment among creditors."