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Sunday, 25 July 2010

Is a muscular indepedent judiciary coming to a self-legislating financial free zone near you? Inshallah.

In my last post I suggested that Bisher Barazi get out of town because the DIFCI counter-claim reads more like a vendetta than a defence against his lawsuit to recover his severance pay. It looks like he agrees and according to The National, a respected paper in Abu Dhabi, he has sent his family home to Syria and has himself asked the judge to lift the travel ban on him so that he can defend himself from the comfort and relative safety of Damascus. The judge said no dice. This is a little interesting to me because the judge in this case seems to be adjudicating remotely as well as he conducted the hearing from London by video link. This is of particular interest because the DIFC is qualified to hear commercial disputes only. It can only fine and censure its members, it has no criminal authority and therefore cannot imprison Bisher. It can however refer criminal cases to the Dubai courts for adjudication and enforcement. We may be seeing a preview of coming attractions in the DIFC court’s refusal to allow him to leave, which is of course all the more reason for him to do so.

Additionally he has been asked to detail all his assets and sources of income in the UAE. Still more interesting he is required to demonstrate that he actually owned the villa he just sold. This seems a little odd because presumably the buyer would have also checked that he was buying the villa from the actual owner before handing over the cash no? I think I know what the judge is after in this case. When I was in Dubai I heard a lot of rumors about expat civil servants being paid under the table by the various organizations that employed them with certain high value gifts like villas, cars, and everyone’s favourite: off plan real estate. I imagine that in Dubai proper this is not a big deal but given how much emphasis is being placed on “unlawful compensation” on the former management of the DIFC I think this policy, if indeed it took place, is going to get a lot of scrutiny. If Bisher did receive extra undocumented compensation from the DIFC he is almost certainly not the only person to have done so. It will be a cliff-hanger for everyone else living in gift homes as well. My guess is that more than a few people will be watching the Barazi-DIFC litigation with their real estate agent on hold and their travel agent on speed dial.

Most importantly of all, they will get to watch it. The DIFC Court ruled against a request from both parties to close the hearing to the public. Having had my hopes for the DIFC dashed repeatedly I am wary of reading too much into this but I think it might be significant. Firstly, as a point of journalistic honor I have to concede that as with the ESCA ruling on Aabar, I have perhaps taken too dim a view of the DIFC courts and described them as a tool of Sheikh Mohammed in his quest to punish Dr. O and Bisher. But now the DIFC courts have denied two requests from the government: 1.) that the trial be conducted in secret, and 2.) that they cripple Bisher’s capacity to fund his defence by demanding a 500,000 AED deposit. It may not be a first but having a court in the GCC deny a request of an agent of The Ruler is pretty unusual. Is it possible that we are seeing the creation of a independent judiciary in the DIFC? This will indeed be an interesting court case to watch.

Inshallah the Abdullah Brothers will get their day in court as well if the DFSA ever musters the thrasos to take them on.

Dubai stock index in biggest monthly decline

"Dubai's main stock index posted its biggest decline in almost a month on Sunday after disappointing earnings from two of its most valuable companies, Emaar Properties and Dubai Financial Market.

The index fell 1.4 per cent to 1,507 points in its largest single-day decline since June 29. Emaar and DFM shares fell 3.6 per cent and 3.3 per cent respectively.

Emaar Properties, the Arab world's largest developer, missed analysts' forecasts with a second-quarter net profit of Dh802 million�which it reported on Thursday after the market close."

Middle East Losing Interest � Alpha Dinar- talking GCC finance

The Middle East was considered one of the hottest markets globally and it was attracting a vast amount of foreign investments in the past decade. However, due to the tightening of credit and the deterioration in the global economy, Middle East’s foreign direct investments (FDI) were pulled back by nearly a quarter.

A recent report by the United Nations Conference on Trade and Development (UNCTAD) stated that inflows of FDI to the region dropped by 24 percent reaching USD68 billion in 2009 after six years of growth.

On a country to country basis some countries had different fate from the others; for example, in 2009 Qatar had an increase of FDI inflows of 112 percent and Lebanon had an increase of 11 percent, while the UAE was hit the most and the FDI inflows decreased by 71 percent. Saudi Arabia remained the largest receiver of foreign investments, with inflows reaching USD36 billion, 52 percent of the middle east’s total FDI inflows.

Although the FDI inflows were hit hard in 2009, the FDI outflows were hit harder- they decreased by 36 percent, reaching USD23 billion. This decrease was mainly attributed to the UAE as their FDI outflows fell from USD16 billion to USD3 billion. Saudi Arabia FDI outflows increased the most, from USD1.5 billion to USD 6.5 billion. Kuwait was the largest investor, with USD9 billion in outflows.

Doha Bank Plans to Sell Dollar, Riyal Bonds by Year-End, Seetharaman Says - Bloomberg

Doha Bank QSC, Qatar’s third-biggest bank by revenue, aims to sell bonds by the end of this year in both dollars and the local riyal currency, the lender’s chief executive officer said.

The bond offering “will definitely happen, as I see it,” Raghavan Seetharaman said in an interview in the Qatari capital Doha today. “I expressed my intention to” sell the bonds in dollars and riyals to the central bank, which must approve the transaction, he said.

Qatar, the world’s biggest exporter of liquefied natural gas, is trying to develop a domestic debt market. The government sold 12 billion riyals ($3.3 billion) of bonds and Islamic debt this year. The Qatar Exchange, the country’s equity market, may start bond trading before September, the exchange’s Chief Executive Officer Andre Went said in February.

Turkey to promote closer trade ties with Iran

Turkey could emerge as a new safety net for Iranian business as the government insists that it will abide by United Nations sanctions, but not the more sweeping restrictions imposed on Tehran by the US and the European Union.

Mehmet Simsek, the finance minister, told the Financial Times that Turkey would not shy away from promoting closer trade links with Iran.

“We will fully implement UN resolutions, but when it comes to individual countries’ demands for extra sanctions we do not have to,” said Mr Simsek.

Egypt, Israel Shares Advance on Global Recovery; Dubai Drops on Earnings - Bloomberg

Egypt’s benchmark rose to the highest in almost one month, leading Middle East markets higher, as concern about the global economic recovery eased and earnings in the U.S. boosted investor confidence. Dubai shares declined.

Orascom Telecom Holding SAE of Egypt, the Middle East’s biggest mobile telephone company by subscribers, advanced to the highest level in more than a week. Delek Real Estate Ltd., Israeli billionaire Isaac Tshuva’s real estate company, jumped the most in three weeks. Egypt’s EGX30 Index gained 1.6 percent to 6,127.79 as of 11:55 a.m. in Cairo, the highest intraday level since June 29. Israel’s TA-25 Index rose 0.7 percent to 1,126.59, the highest in more than a month.

“We’re continuing to catch up with the positive movements in the U.S. and European markets,” said Cairo-based Amr Elfeky, head of technical analysis at Cairo Capital Securities.

Oaktree Capital Said to Revise Almatis Debt Plan After Dubai Proposal - Bloomberg

"Oaktree Capital Management LLC, an asset manager battling Dubai International Capital LLC for control of Almatis, plans to revise its debt-restructuring plan for the German alumina-products maker, a person familiar with the situation said.

Oaktree plans to offer junior lenders of Frankfurt-based Almatis some immediate recovery of their debt, compared with its existing proposal where recovery can only be achieved if Almatis is sold for more than $325 million, said the person, who declined to be identified because the information is private.

Oaktree, the largest senior lender to Almatis, plans to file the revised plan to the U.S. bankruptcy court next week, the person said."

Bahrain plans to privatise Gulf Air soon, Bahrain Aviation, Transportation - Maktoob Business

Bahrain plans to privatise national carrier Gulf Air as soon as possible encouraged by positive results in its restructuring, a senior government official said in remarks published on Sunday.

The loss-making carrier could return to profit within a year, paving the way for privatisation, the head of Bahrain's Economic Development Board, Sheikh Mohammed bin Essa al-Khalifa, told newspaper Akhbar al-Khaleej.

Gulf Air was established as a regional airline but has undergone years of restructuring after shareholders Oman, Abu Dhabi and Qatar gave up their stakes, partly to establish national carriers.

Emaar denies pullout from Indonesian project - Emirates24|7

Emaar Properties has strong financial fundamentals and will undertake all strategic projects across its key markets, a company spokesperson
told Emirates 24|7.

The Dubai developer said it has “responded on time and with total commitment to the proposals of the Bali Tourism Development Corporation (BTDC) for the Lombok project".

“Emaar also provided recommendations on how it intends to proceed with the development of the project,” the spokesperson added without
confirming the status of the project.

RAK digs in on Borneo coal project - The National Newspaper

Ras al Khaimah remains committed to a huge coal project in an isolated corner of Indonesia, with plans to “add value” to the development without having to invest more capital, top officials say.

The emirate is still studying how the project would directly tie in to its economy, said Sheikh Saud bin Saqr, Crown Prince and Deputy Ruler of Ras al Khaimah. But under the current plans, RAK entities may not have to put any substantial equity into the project.

“They have a fantastic coal mine and I think we could add value to it,” Sheikh Saud said last Monday. “It’s huge for us.”

RAK targets home for investment push - The National Newspaper

Ras al Khaimah is looking inwards for opportunities to attract foreign investment as it pulls back from overseas projects.

The northern emirate, which has some of the UAE’s most striking natural scenery, is now counting heavily on globe-trotting tourists to raise its profile on the world stage. Last week it unveiled a joint venture with an Indian group to develop a huge theme park complex called WOW RAK.

“We wanted to bring something extraordinary to Ras al Khaimah,” said Balwant Singh, the managing director of the developer Polo RAK Amusements.

Vodafone Qatar Says It May Take Legal Steps Over Virgin Mobile's Entry - Bloomberg

Vodafone Qatar said it may take further legal steps after the country’s telecommunications regulator ruled on its dispute with Qatar Telecom QSC over Virgin Mobile’s entry into the market.

Vodafone Qatar is reviewing the decision “to determine if they may take further legal action with courts to rectify the impact” of the matter, the company said today in an e-mailed statement.

The regulator, ictQATAR, issued a decision that was sent to the parties involved though it wasn’t posted on ictQATAR’s website. A spokesman for the agency didn’t immediately respond to a phone call or e-mail request for comment.

Tehran Stock Exchange Starts Futures Trading to Attract Foreign Investors - Bloomberg

The Tehran Stock Exchange, home of the world’s second-best performing equity index, today begins offering derivatives based on Iranian banks to diversify its market and attract foreign investors.

The exchange is introducing six futures contracts on two banks, Managing Director Hassan Ghalibaf-Asl said July 23 in a telephone interview. The contracts, based on Parsian Bank and Karafarin Bank, will expire in two, four and six months. The exchange said it hopes to increase the number of companies covered by futures contracts to at least 10 by March.

“This new product will attract the foreign investors to Iran’s capital market, which isn’t very well known to them,” Ali Karamad, owner of Tehran-based asset management company Karamad Group, said by telephone July 23. “It gives them security, knowing that Iran’s market is introducing instruments similar to those in international markets.”