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Friday, 6 December 2013

Expo 2020 ‘will raise Dubai’s GDP growth, spending and debt’ | GulfNews.com

Expo 2020 ‘will raise Dubai’s GDP growth, spending and debt’ | GulfNews.com:

"Hosting the World Expo 2020 will add at least 1.5 percentage points per year to Dubai’s real gross domestic product (GDP) growth over 2014-2020, leading to annual growth of 5.5 per cent, according to Institute of International Finance (IIF) a Washington based association of 450 global banks and financial institutions.
“The official figure shows World Expo 2020-related spending of Dh88 billion ($24 billion) over 2014-2020. However, a significant portion of the spending on infrastructure projects would still have taken place as part of Dubai 2020 vision. Most of the planned spending is expected to be financed by additional borrowing, leading to further increase in the already high debt,” said Garbis Iradian, Deputy Director of Institute of International Finance.
The IIF’s projections show that Dubai’s debt will increase from $142 billion (Dh521 billion) in 2012 to $168.5 billion by 2020. The debt-to-GDP ratio, however, is expected to decline from 106 per cent of GDP in 2012 to 70 per cent by 2020, assuming annual real GDP growth of 5.5 per cent, and GDP deflator (CPI inflation) of 2 per cent."

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Beware slow-motion repeat of 2008 housing bubble | GulfNews.com

Beware slow-motion repeat of 2008 housing bubble | GulfNews.com:

"It is widely agreed that a series of collapsing housing market bubbles triggered the global financial crisis of 2008-09, along with the severe recession that followed. While the US is the best-known case, a combination of lax regulation and supervision of banks and low policy interest rates fuelled similar bubbles in the UK, Spain, Ireland, Iceland, and Dubai.
Now, five years later, signs of frothiness, if not outright bubbles, are reappearing in housing markets in Switzerland, Sweden, Norway, Finland, France, Germany, Canada, Australia, New Zealand, and, back for an encore, the UK (well, London). In emerging markets, bubbles are appearing in Hong Kong, Singapore and China, and in major urban centres in Turkey, India, Indonesia, and Brazil.
Signs that home prices are entering bubble territory in these economies include fast-rising home prices, high and rising price-to-income ratios, and high levels of mortgage debt as a share of household debt. In most advanced economies, bubbles are being inflated by very low short- and long-term interest rates."

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Live chart: Bourses

Kazakhs Need Bad Banks to Cut Loan Delinquency, Kelimbetov Says - Bloomberg

Kazakhs Need Bad Banks to Cut Loan Delinquency, Kelimbetov Says - Bloomberg:

"Kazakhstan needs bad banks to reduce the world’s worst delinquency rate in its financial industry, central bank Governor Kairat Kelimbetov said.
Kelimbetov, who took over at the helm of the Astana-based regulator in October, said in an interview in London yesterday that his main mission is to help transform the banking industry’s “architecture,” which proved vulnerable in the global financial crisis. His goal to cut the non-performing loan ratio by two thirds to 10 percent is realistic by January 2016, he said.
To complement an existing distressed-asset fund, “we have to establish bad banks to pass the bad debt to special collector agencies,” he said. “Banks should be responsible for their core business of providing loans and they also have to clean up their balance sheets. Otherwise, there will be zombie behavior by the banks, not providing loans to the economy and not writing off these bad loans.”"

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First Sukuk Fund Promising to Beat Bank Returns: Turkey Credit - Bloomberg

First Sukuk Fund Promising to Beat Bank Returns: Turkey Credit - Bloomberg:

"Turkey’s first global fund dedicated to Islamic investors will beat returns from Shariah-compliant bank deposits and will lure inflows of $1 billion during the next three years, its chief executive officer said.
AZ Global Portfoy Yonetimi, the Istanbul-based unit of Azimut Holding SpA (AZM), has attracted almost $160 million for local and international funds since opening in January, Giorgio Medda, a money manager and CEO of the Turkish operation, said in an interview yesterday. Azimut has assets under management of over $30 billion globally and has operations in 11 countries.
The company is counting on an increasing number of Turkish investors putting their money into Shariah-observant funds as global demand for sukuk is set to increase, with Ernst & Young LLP forecasting a surge to $950 billion by 2017, according to a report a year ago."

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Egypt Unexpectedly Cuts Rates to Boost Economy Hit by Unrest - Bloomberg

Egypt Unexpectedly Cuts Rates to Boost Economy Hit by Unrest - Bloomberg:

"Egypt’s central bank unexpectedly cut its benchmark interest rate, seeking to spur an economy that’s been hobbled by persistent political unrest.
The bank reduced the overnight deposit rate by half a percentage point to 8.25 percent today and the overnight lending rate by the same amount to 9.25 percent. All eight economists surveyed by Bloomberg had expected the bank to keep the deposit rate on hold.
The bank has cut rates three times by a total of 1.5 percentage points since July, when the army toppled President Mohamed Mursi. Escalating violence since then, as security forces cracked down on Mursi’s Islamist supporters, has added to the tensions that have kept investors and tourists away since the revolt against Hosni Mubarak in 2011. The government has announced more than $4 billion of new spending to help create jobs and boost output."

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