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Friday, 6 March 2009
Optimism is a good thing, in moderation
“You’ve got to accentuate the positive, eliminate the negative, latch on to the affirmative, don’t mess with Mister In-between.” So sang Bing Crosby in late 1944 as the Second World War raged and Allied troops were liberating Greece from the Germans. The war had turned, but it would take seven more months and Europe’s deadliest battle before Germany’s surrender. Japan’s capitulation came only after 10 more months and two atom bombs.
Optimism is a powerful weapon in troubled times. But optimism did not win that war and optimism alone cannot prevent the current economic crisis from taking an inexorable toll in lost livelihoods and shattered aspirations.
There remains a strong body of opinion in the Gulf that regards the impact of the crisis in this part of the world as an attitude problem, one that could be corrected with a little positive thinking. That view was on display this week at the Abu Dhabi Economic Forum. Some blamed the media for exaggerating the scale of the problems, creating a vicious circle of negative sentiment that is driving prices down and making matters worse.
Optimism is a powerful weapon in troubled times. But optimism did not win that war and optimism alone cannot prevent the current economic crisis from taking an inexorable toll in lost livelihoods and shattered aspirations.
There remains a strong body of opinion in the Gulf that regards the impact of the crisis in this part of the world as an attitude problem, one that could be corrected with a little positive thinking. That view was on display this week at the Abu Dhabi Economic Forum. Some blamed the media for exaggerating the scale of the problems, creating a vicious circle of negative sentiment that is driving prices down and making matters worse.
Shuaa Capital slashes jobs
DUBAI: Dubai-based investment bank Shuaa Capital has cut about a dozen staff in a move to cut costs, a spokesman for the bank said yesterday. The cuts come on top of the 21 employees who left the bank in December.
"We've released about a dozen internal staff members and we've released some people who worked with us on a project basis in the back office," Shuaa spokesman Oliver Schutzmann said. "We're sensible and prudent in managing our cost base." Shuaa posted a loss of 577.4 million UAE dirhams ($157m) in the final quarter last year and said the current year was unlikely to be easy, in a sign of how the crisis has hit the Gulf financial sector with writedowns, impairments and falling revenue.
"We've released about a dozen internal staff members and we've released some people who worked with us on a project basis in the back office," Shuaa spokesman Oliver Schutzmann said. "We're sensible and prudent in managing our cost base." Shuaa posted a loss of 577.4 million UAE dirhams ($157m) in the final quarter last year and said the current year was unlikely to be easy, in a sign of how the crisis has hit the Gulf financial sector with writedowns, impairments and falling revenue.
Emirates NBD eyes Dh6.3bn capital boost
Emirates NBD seeks to raise Dh6.3 billion (US$1.72bn) to bolster its capital base during the financial crisis by converting emergency federal deposits, its chief financial officer said, sending shares higher.
The option to convert the deposits, which will bolster regulatory capital held as a cushion to absorb surprise shocks, is likely to be exercised by a number of banks in the UAE, CFO Sanjay Uppal said in an interview.
“This is not really a bailout,” Mr Uppal said. “I see this as systemic support.
The option to convert the deposits, which will bolster regulatory capital held as a cushion to absorb surprise shocks, is likely to be exercised by a number of banks in the UAE, CFO Sanjay Uppal said in an interview.
“This is not really a bailout,” Mr Uppal said. “I see this as systemic support.
Emirates NBD eyes Dh6.3bn capital boost
Emirates NBD seeks to raise Dh6.3 billion (US$1.72bn) to bolster its capital base during the financial crisis by converting emergency federal deposits, its chief financial officer said, sending shares higher.
The option to convert the deposits, which will bolster regulatory capital held as a cushion to absorb surprise shocks, is likely to be exercised by a number of banks in the UAE, CFO Sanjay Uppal said in an interview.
“This is not really a bailout,” Mr Uppal said. “I see this as systemic support.
The option to convert the deposits, which will bolster regulatory capital held as a cushion to absorb surprise shocks, is likely to be exercised by a number of banks in the UAE, CFO Sanjay Uppal said in an interview.
“This is not really a bailout,” Mr Uppal said. “I see this as systemic support.
Security fears shut dhow harbour
The historic dhow harbour, one of Dubai’s most popular tourist attractions, is to be closed to long-haul dhows because of growing concerns about the difficulty of maintaining security in the heart of the city.
For the past 100 years, the dhow wharves on the east bank of Dubai Creek have played a key part in the expansion of the city and the development of trade with East Africa and the Indian subcontinent.
Tourists flock to the Creek for the colourful and often chaotic spectacle of hundreds of workers loading and unloading goods from the traditional wooden dhows that ply their trade on age-old routes to destinations throughout the Gulf, the Arabian Sea and the Indian Ocean.
For the past 100 years, the dhow wharves on the east bank of Dubai Creek have played a key part in the expansion of the city and the development of trade with East Africa and the Indian subcontinent.
Tourists flock to the Creek for the colourful and often chaotic spectacle of hundreds of workers loading and unloading goods from the traditional wooden dhows that ply their trade on age-old routes to destinations throughout the Gulf, the Arabian Sea and the Indian Ocean.
MGM Mirage
Will the last person to leave the Strip please turn out the lights? MGM Mirage’s difficulties are another blow for Las Vegas, which saw Strip gaming revenues slump 23 per cent in December.
Worse, spending away from the tables now accounts for three-fifths of Strip turnover, up from two-fifths in 1990, say Citigroup. And visitors have lost the urge to splurge.
This means MGM’s debt burden is rising – estimated at about $14.5bn against its lowly equity value of $550m – as earnings head in the other direction. It could this quarter breach a covenant on its maxed-out senior credit facility. Negotiations with Deutsche Bank to fund the remaining $1.2bn of its vast CityCenter project – a condominium-based scheme conceived at the property bubble’s apex – have reportedly collapsed. Meanwhile, the development consumes about $100m each month.
Worse, spending away from the tables now accounts for three-fifths of Strip turnover, up from two-fifths in 1990, say Citigroup. And visitors have lost the urge to splurge.
This means MGM’s debt burden is rising – estimated at about $14.5bn against its lowly equity value of $550m – as earnings head in the other direction. It could this quarter breach a covenant on its maxed-out senior credit facility. Negotiations with Deutsche Bank to fund the remaining $1.2bn of its vast CityCenter project – a condominium-based scheme conceived at the property bubble’s apex – have reportedly collapsed. Meanwhile, the development consumes about $100m each month.
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