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Wednesday, 7 April 2010

Abu Dhabi Names Al Kindi Managing Director of AD Investment

United Arab Emirates President Khalifa Bin Zayed appointed Khalifa Mohammed Al Kindi as managing director of the Abu Dhabi Investment Council, state-run WAM news agency reported.END

Exclusive: Dubai can fund rescue plan, sees "small issues"

Dubai has the money to pay its share of Dubai World's rescue plan and can help other state-linked firms that may be facing "small issues," the vice chairman of the emirate's top fiscal body said in an interview.

Dubai unveiled a $9.5 billion rescue plan for Dubai World last month, as part of its offer to repay creditors of the state-owned conglomerate.

The plan relies on Dubai stumping up $3.8 billion from "internal government resources." The remainder comes from a previous loan from wealthy neighboring emirate Abu Dhabi.

Dubai Shares Drop Most in Week on Concern Rally May Be Overdone

Dubai’s benchmark index dropped the most in more than a week on speculation gains since the beginning of March may have outpaced prospects for profit growth.

Emaar Properties PJSC, the developer of the world’s tallest tower in Dubai, declined 3 percent. Dubai Islamic Bank PJSC, the United Arab Emirates’ biggest Islamic lender, dropped the most in almost two months. Dubai Financial Market, the only Gulf Arab stock market to sell shares to the public, also retreated. The DFM General Index fell 2.1 percent, the most since March 29, to close at 1,800.12.

Dubai’s measure has surged 13 percent since the beginning of March after state-owned holding company Dubai World announced its debt restructuring plan. The gauge climbed 4.3 percent on March 25 after the government said it will support the company with as much as $9.5 billion. Abu Dhabi’s benchmark index has gained 5.2 percent since the end of February. Dubai companies will start releasing first-quarter earnings later this month.

DP World readies for expansion

DP World is drawing closer to reviving its global investment plans after increasing its cash pile to almost US$3 billion (Dh11.01bn).

After pushing down costs judiciously during the downturn, including trimming its global workforce by 5 per cent, the world’s fourth-largest ports operator is in a prime position to invest in new terminals where it sees the greatest untapped demand.

“We have the ability to time it once we see the markets come back,” says Yuvraj Narayan, the chief financial officer of DP World. “Our plan was to complete most of these by 2013. I think what you will see is two years market respite.”

DIFC reviews strategy and costs

The Dubai International Financial Centre (DIFC) is conducting a wide-ranging review of strategies and costs in a bid to help it emerge from the global downturn, the centre’s chief executive said today.

Abdulla al Awar said the review, expected to be completed within months, would help chart a new direction for the centre.

“We are taking it a step at a time and now we are trying to develop high-level goals,” Mr al Awar said. “That will cascade down.”

Islamic Finance Assets May Rise to $5 Trillion, Moody’s Says

Assets held by Islamic financial institutions may rise five-fold to more than $5 trillion as demand increases for products that comply with Muslim principles, according to Moody’s Investors Service.

The Islamic finance industry’s assets under management reached $950 billion last year, Moody’s said in a report today, without providing a timeframe for the projected growth. The global market for Islamic bonds, or sukuk, is worth $110 billion, the rating agency said.

“Despite the recent gloomy economic environment globally, the industry’s total assets scaled new heights,” the report said. “Islamic financial institutions are continuing to deliver Shariah-compliant returns whilst, at the same time, focusing on efficiently mitigating the associated risks through a new risk management approach, including the use of derivatives.”

Oman fund manager ‘selective’ on Gulf banks

Oman's First Mazoon Fund is "selective" on banks in the Gulf Arab region as a recovery in credit growth is expected only in the second half of the year, its manager said on Tuesday.

"When it comes to the banking sector, we are selective in the region. We do not expect credit growth in the first half of the year," said Sankar Kailasam, the fund's manager and senior vice president for asset management at Gulf Baader Capital Markets in Muscat.

Banks in the region have had to take large provisions against their exposure to indebted conglomerates and certain family-owned groups in the wake of the global financial crisis, curtailing their ability to lend more.

DEWA starts to test appetite for Dubai debt

Dubai Electricity and Water Authority (DEWA) has started a series of meetings with investors ahead of a potential new bond issue that is expected to be a litmus test of investor appetite for Dubai debt.

Last November, conglomerate Dubai World shocked global markets with plans for a debt restructuring.

The state-owned utility would be the first company in Dubai to sell bonds since then. The company met investors in Dubai and Abu Dhabi on Tuesday and is set for further meetings in the US and Asia later this week and early next week to test appetite for a possible new issue, according to people with knowledge of the transaction.

Qatar strong arm

It took a little more than a year for Anthony Armstrong , Credit Suisse's Middle East head of M&A, to decamp to Qatar Holding.

As its new head of mergers and acquisitions, it is a powerful role: Qatar Holding has stakes in J Sainsbury, the London Stock Exchange, Barclays - and Credit Suisse.

Mr Armstrong was posted to Dubai in January 2009 in a newly created role of regional head of M&A, from Los Angeles. There he advised Dubai World on a $5.4bn MGM Mirage joint venture in 2007, and deals on behalf of Egyptian billionaire Naguib Sawiris.

Venezuela: still the world’s riskiest sovereign (and other stories)

CMA DataVision released its quarterly global sovereign credit risk report on Tuesday, featuring 17 pages replete with charts and data on the ever-so-topical question: who’s the riskiest of them all?
If five-year credit default swaps are a reasonable indicator of default risk, Venezuela continues its run as the riskiest sovereign, with a 48.5 per cent cumulative probability of default (CPD) within the next five years and a CDS spread quoted in points upfront.
Greece ranks 9th by CMA’s metrics, with a 25.4 per cent 5-year CPD.
The chart below includes the top 10 riskiest sovereigns, as measured by CMA (click to enlarge):
CMA chart of the world's riskiest sovereign debt
CMA chart of the world's riskiest sovereign debt