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Wednesday, 24 March 2010

Dubai reaches metro pay dispute deal

Dubai’s Roads and Transport Authority (RTA) has reached an agreement with the Japanese-led consortium building the metro in a long-running row over unpaid bills, its chairman said on Wednesday in the first public acknowledgement of the dispute.

"The agreement is already reached, it is a matter of signing," Mattar al-Tayer told reporters on the sidelines of a press conference. "It will be signed in two to three weeks."

Work on the metro had ground to a halt in recent months amid a standoff between the RTA and the consortium over who should pay for extra costs, which have ballooned due to changes to designs and the addition of new stations and facilities.

UK heavyweight adviser at Dubai debt table - sources

A former British government minister and adviser to the G20 chair has been in Dubai for several weeks and played a key role in hammering out a debt proposal for Dubai World, sources said on Wednesday.

Shriti Vadera was quietly despatched to the Gulf Arab emirate by the British government after British banks -- who form the bulk of an informal creditor committee negotiating with Dubai World on how it will repay $26 billion in debt -- raised concerns about the process to London, one source said.

A second source confirmed her presence in Dubai as well as her participation in the drafting of the debt proposal.

Dubai World [DBWLD.UL], which counts the QE2 ocean liner among its assets, was locked in a meeting with core creditors at a Dubai hotel on Wednesday. [ID:nLDE62N161]

Dubai Shares Retreat on Concerns About Dubai World Debt Terms

Dubai shares fell for a second day this week as investors trimmed holdings as Dubai World prepared to discuss a proposal to restructure $26 billion of debt.

The Dubai Financial Market PJSC, the only Gulf Arab stock market to sell its shares to the public, and Emaar Properties PJSC dropped to the lowest in almost a week. Emaar, the builder of the world’s tallest skyscraper, declined after it said it won’t pay a dividend. The DFM General Index fell 0.4 percent to 1,769.01. The gauge has gained 11 percent this month in anticipation the Dubai World proposal will appease investors.

“It is a period of watching and taking precaution,” said Ziad Dabbas, an analyst at National Bank of Abu Dhabi. Market performance has improved “as a result of leaked information,” he said.

Gulf’s First ETF to Trade in Abu Dhabi Tomorrow

The Persian Gulf’s first exchange- traded fund will open on the Abu Dhabi Securities Exchange tomorrow as the bourse and National Bank of Abu Dhabi PJSC seek to increase investment opportunities.

The NBAD OneShare Dow Jones U.A.E. 25 ETF will combine the 25 most traded stocks on the ADX General Index, the DFM General Index and Nasdaq Dubai, the bank’s Chief Investment Officer Alan Durrant said at a press conference in Abu Dhabi today. The shares must have a daily traded value of $500,000 to be included in the ETF, Durrant said.

The ETF “will be the first in the region, albeit by just a few days” said Tom Healy, chief executive officer of ADX.

DP World Full-Year Profit Drops 31%; Beats Analyst Estimates

DP World Ltd., the world’s fourth- biggest port operator, said full-year profit declined less than analysts estimated, falling 31 percent.

Net income attributable to shareholders was $332.8 million compared with $482.2 million a year earlier, the Dubai government-controlled company said in a statement to Nasdaq Dubai today. Profit beat the $303 million mean estimate in a Bloomberg survey of 9 analysts. Adjusted profit after tax from continuing operations dropped to $333 million from $621 million, while revenue declined 11 percent to $2.92 billion.

“In the first two months of 2010 we have seen 4 percent volume growth across our portfolio from a very low base last year and an improvement in EBITDA margins from the final quarter of 2009 as cost cutting initiatives continue to be realized,” Chief Executive Officer Mohammed Sharaf said in the statement. Earnings before interest, taxes, depreciation and amortization was $1.07 billion last year compared with $1.34 billion.

Zain set to agree Africa asset sale to Bharti

Kuwait’s Zain is expected to approve the sale of most of the company’s African telecommunications assets to India’s Bharti Airtel for about $10.7bn at a board meeting on Wednesday, clearing the last big hurdle facing the deal, people familiar with the matter said.

The decision will pave the way for the creation of one of the world’s biggest international emerging market telecoms groups.

The board’s approval, expected after a similar decision by Bharti last Saturday, would come ahead of the March 25 deadline for an agreement between the two companies.

Former DIFC Official Held In AED50million Fraud Investigation

Bonds may start trading in Abu Dhabi

The Abu Dhabi Securities Exchange (ADX) is considering listing bonds for the first time in a move that could give a much-needed boost to local debt markets.

The creation of a secondary bond market in the emirate could make trading bonds easier and cheaper for investors and the show of interest comes as signs emerge that confidence is returning to the sector.

“We have built the infrastructure for [listing] bonds, and are co-ordinating with issuers,” said Rashed al Baloushi, the deputy chief executive of the ADX. “We will try to have dual listings.”

Dubai World creditors face nine-year wait for their cash

Creditors of Dubai World, which include RBS and Lloyds, could be forced to accept repayment delays of as much as nine years in a sign that the recession is putting pressure on lenders to take what they can out of troubled investments.

Dubai World, which last year stunned financial markets by asking creditors to postpone some of its debt payments, is expected to announce a $26bn (£17.3bn) debt restructuring plan within days.

The plan will be presented to a steering committee of about 10 banks, including Standard Chartered, HSBC, Lloyds and RBS, at a meeting as early as tomorrow , according to reports.

The Return of the IPOs: Is the Kuwaiti Market Ripe for Such Fruits?

The past few weeks saw a big movement in the Kuwaiti IPO market, as three companies scheduled their IPOs. Manafae Investment started trading in the Kuwaiti Stock Exchange in 16th of March, the Gulf North African Holding Company started trading on the 23rd, and Amwal Investments have planned their IPO for this week or the next.

The timing of such IPOs seems peculiar. First, market valuations are lower than average (both relative to other regional markets and historical), which will yield lower cashflow to the original investors. Second, given the liquidity constraints, investors don’t have the appetite for IPOs. Last, the recent stocks to be IPOed in Kuwait went down a lot.

This wave of three investment companies being IPOed in the timeframe of two weeks raises some questions. What signals are these companies giving to the average investor? Does the management/ owners/ underwriters of these companies believe that the market is ripe enough and has recovered enough for their companies to go public? Are current valuations appropriate since they did not wait for the market valuation to increase as the market appreciates? Are liquidity constraints going to drag the price down as some investors sell their stakes? Are some major shareholders in desperate need for cash and are pressuring the companies to go public?END

W Union Square Hotel Put Into Bankruptcy by Lender

The W New York Union Square hotel was put into bankruptcy by the junior mezzanine lender that took over ownership of the Manhattan luxury property in December from Dubai World.

Hotels Union Square Mezz 1, an entity controlled by junior lender LEM that owns the hotel, filed for bankruptcy in Delaware, saying it owes creditors as much as $100 million, according to bankruptcy papers filed in Delaware. The Chapter 11 reorganization stops a foreclosure auction that was scheduled tomorrow by the senior mezzanine lender, DekaBank Deutsche Girozentrale.

“This means the foreclosure proceeding originally scheduled for tomorrow won’t be taking place,” said David Gutstadt, a senior vice president in New York for Savills LLC, DekaBank’s adviser.