Friday 22 May 2009
UAE withdrawal from monetary union to have no rating impact
Standard & Poor's Ratings Services today said that news that the UAE has abandoned plans to join the planned Gulf Cooperation Council (GCC) monetary union raises significant doubts over the viability of the project going forward.
"Despite the UAE's decision, we believe that the economic benefits of monetary union in the GCC were likely to be minimal, given the existing customs union within the GCC and the uniform exchange rate regimes across all countries, with the exception of Kuwait," Standard & Poor's credit analyst Farouk Soussa said.
"As such, we consider that the decision per se has no bearing on the ratings on any sovereigns in the GCC region."
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"Despite the UAE's decision, we believe that the economic benefits of monetary union in the GCC were likely to be minimal, given the existing customs union within the GCC and the uniform exchange rate regimes across all countries, with the exception of Kuwait," Standard & Poor's credit analyst Farouk Soussa said.
"As such, we consider that the decision per se has no bearing on the ratings on any sovereigns in the GCC region."
Messenger shot. Dubai's ruler sacks his outspoken finance chief
The news of Mr Sheikh's removal came in a statement from the United Arab Emirates (UAE)’s national news agency that Dubai's ruler, Sheikh Mohammed bin Rashid al-Maktoum, had reassigned him to the position of assistant director of external affairs at the ruler's diwan (royal court)—effectively a major demotion. His replacement as head of the finance department is Abdul-Rahman Saleh, who previously worked as a senior executive for corporate affairs at Dubai's customs authority. No reason was given for the change.
Mr Sheikh had been promoted to head the finance department last October as part of a wider reorganisation of senior posts in Dubai. His predecessor, Omar al-Qamzi, moved across to become director-general of the Dubai Department of Economic Development, replacing Mohammed Ali Alabbar, one of the emirate's leading businessmen. Mr Sheikh's original appointment came at the moment when Dubai's real estate-driven economic boom was coming to an abrupt halt. He was closely involved in efforts to clarify the level of indebtedness of the Dubai government and its corporate affiliates and in raising funds to cover these debts. In February, Mr Sheikh's department announced the launch of a US$20bn bond programme, to which the Central Bank of the UAE subscribed to the entirety of the US$10bn first tranche. Mr Sheikh indicated that he would in due course announce details of how these funds had been allocated, but this information has not yet been forthcoming. In the meantime, contractors have been complaining with increasing anxiety about the failure of Dubai developers to pay their bills.
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Iranian Investors Returning From Dubai
One-third of Iranian investors in Dubai have returned to Iran due to the economic crisis and the housing recession in the United Arab Emirates, Germany's official news agency reported.
According to a report by Deutsche Presse Agentur (DPA), Iranian investors have a wide presence in the UAE accounting for 10 percent of the Arab country's population. Based on recent statistics nearly 400,000 Iranians live in the UAE running 10,000 small business firms.
The global financial crisis has overshadowed Iranian investors' activity in Dubai, the report added.
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According to a report by Deutsche Presse Agentur (DPA), Iranian investors have a wide presence in the UAE accounting for 10 percent of the Arab country's population. Based on recent statistics nearly 400,000 Iranians live in the UAE running 10,000 small business firms.
The global financial crisis has overshadowed Iranian investors' activity in Dubai, the report added.
Dubai's unemployed head for the beach
With sweat pouring down her face, Kate Shannon is first to cross the line.
There are cheers and hugs from her teammates, before she collapses onto the sand to catch her breath. It is only 9am but already 38 degrees celcius.
This is a warm-up with a difference. This is the Bad Times Boot Camp.
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There are cheers and hugs from her teammates, before she collapses onto the sand to catch her breath. It is only 9am but already 38 degrees celcius.
This is a warm-up with a difference. This is the Bad Times Boot Camp.
POTENTIAL IRAQ CONNECTION KEEPS NABUCCO PIPELINE PROJECT ON LIFE SUPPORT (Eurasia analysis)
Could supplies from gas fields in northern Iraq breath new life into the troubled Nabucco pipeline, a project designed to free the European Union from Russia’s virtual gas supply monopoly?
That was certainly the hope created by the May 17 announcement that a consortium of European and Middle Eastern energy companies completed a deal to develop gas resources in Northern Iraq, part of which would be used to kick start the flow of energy via the long-stalled Nabucco route.
"It’s an important and promising development for the acquisition of a huge volume of natural gas for Turkey and for Europe via Nabucco," the pipeline project’s managing director, Reinhard Mitschek, said of the $8 billion deal between Austria’s OMV AG and Hungary’s MOL, and the United Arab Emirates’ Dana Gas and Crescent Petroleum, which currently operate a gas site in northern Iraq.
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That was certainly the hope created by the May 17 announcement that a consortium of European and Middle Eastern energy companies completed a deal to develop gas resources in Northern Iraq, part of which would be used to kick start the flow of energy via the long-stalled Nabucco route.
"It’s an important and promising development for the acquisition of a huge volume of natural gas for Turkey and for Europe via Nabucco," the pipeline project’s managing director, Reinhard Mitschek, said of the $8 billion deal between Austria’s OMV AG and Hungary’s MOL, and the United Arab Emirates’ Dana Gas and Crescent Petroleum, which currently operate a gas site in northern Iraq.
CASPIAN BASIN: WHICH WAY IS UP FOR REGIONAL ENERGY DEVELOPMENT? (Eurasia analysis)
May 15 could become the official birth date of a pipeline that would help Russia maintain its virtual monopoly of natural gas exports to Europe. Whether the energy export project grows to maturity remains to be seen.
Officials from Bulgaria, Greece, Italy, Serbia and Russia convened in the Russian resort city of Sochi on May 15 to sign agreements to hasten the construction of the so-called South Stream pipeline. The pacts appear to give South Stream a commanding lead over the rival, US-backed Nabucco project in the race to deliver Caspian Basin natural gas to European markets. Many experts believe that given present energy reserve estimates and political conditions, only one of the pipelines can be viable. [For background see the Eurasia Insight archive].
A report by the official Russian news agency RIA Novosti, citing an official at the state-run conglomerate Gazprom, said that the agreements signed May 15 will mean the South Stream route can be operational by the end of 2015. "The overall investment required will be calculated on the basis of a comprehensive study," RIA Novosti quoted the unnamed Gazprom official as saying. The pipeline’s precise route should be determined by the end of 2009, the report added.
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Officials from Bulgaria, Greece, Italy, Serbia and Russia convened in the Russian resort city of Sochi on May 15 to sign agreements to hasten the construction of the so-called South Stream pipeline. The pacts appear to give South Stream a commanding lead over the rival, US-backed Nabucco project in the race to deliver Caspian Basin natural gas to European markets. Many experts believe that given present energy reserve estimates and political conditions, only one of the pipelines can be viable. [For background see the Eurasia Insight archive].
A report by the official Russian news agency RIA Novosti, citing an official at the state-run conglomerate Gazprom, said that the agreements signed May 15 will mean the South Stream route can be operational by the end of 2015. "The overall investment required will be calculated on the basis of a comprehensive study," RIA Novosti quoted the unnamed Gazprom official as saying. The pipeline’s precise route should be determined by the end of 2009, the report added.
The fastest moving banker in the Gulf
Meeting up with Hassan Heikal is like trying to hit a moving target. I thought I had him nailed down in Cairo, but he managed to elude me.
Then I had arranged to meet in Dubai, but on the morning he had to go elsewhere.
Finally, when I collared him in his office in the Dubai International Financial Centre, he said hello and disappeared around a corner. I followed. By the time I found him, the wiry, animated man was waiting for me, perched behind a table in a small room.
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Then I had arranged to meet in Dubai, but on the morning he had to go elsewhere.
Finally, when I collared him in his office in the Dubai International Financial Centre, he said hello and disappeared around a corner. I followed. By the time I found him, the wiry, animated man was waiting for me, perched behind a table in a small room.
Putting Dubai on the road to recovery
When Abdul Rahman al Saleh took over as director of the Dubai Department of Finance on Monday, he inherited a gargantuan task.
He will oversee a US$20 billion (Dh73.42bn) bond programme in which Dubai is borrowing money from the Central Bank, help resolve the problems caused by the global financial crisis and try to ensure Dubai’s key companies can perform on a series of large debt repayments due this year.
That is a huge mandate, and Mr al Saleh may at first have seemed an odd choice for the post. Before rising to take one of Dubai’s highest profile government positions, he was the senior director of corporate affairs at Dubai Customs.
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He will oversee a US$20 billion (Dh73.42bn) bond programme in which Dubai is borrowing money from the Central Bank, help resolve the problems caused by the global financial crisis and try to ensure Dubai’s key companies can perform on a series of large debt repayments due this year.
That is a huge mandate, and Mr al Saleh may at first have seemed an odd choice for the post. Before rising to take one of Dubai’s highest profile government positions, he was the senior director of corporate affairs at Dubai Customs.
Dubai hotels drop in revenue
Hotels in Dubai have recorded a first-quarter decline after being hit hard by a fall in demand and heavy discounting to boost occupancy rates, according to preliminary figures from the Department of Tourism and Commerce Marketing (DTCM).
Analysts have warned there could be an even sharper decrease over summer, predicting occupancy could fall below 50 per cent.
Dubai hotels and hotel apartments had a 14 per cent fall in revenues in the first quarter of this year compared with the same quarter last year, the DTCM figures show.
Revenues fell to Dh3.66 billion (US$997 million) in the first three months of this year from Dh4.26bn in the first quarter of last year.
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Analysts have warned there could be an even sharper decrease over summer, predicting occupancy could fall below 50 per cent.
Dubai hotels and hotel apartments had a 14 per cent fall in revenues in the first quarter of this year compared with the same quarter last year, the DTCM figures show.
Revenues fell to Dh3.66 billion (US$997 million) in the first three months of this year from Dh4.26bn in the first quarter of last year.
Aldar sells $1.25bn in bonds
The property developer Aldar has sold US$1.25 billion (Dh4.58bn) in corporate bonds, with strong appetite from international investors, its chief financial officer said yesterday.
“We had demand for orders of around $5bn,” said Shafqat Malik. “This is a good testament to Abu Dhabi. There is investor trust in the vision of Abu Dhabi as a whole and in our company.”
Aldar is Abu Dhabi’s largest publicly traded developer. Its projects include the Formula One race track on Yas Island, where Abu Dhabi will hold its first grand prix on Nov 1.
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“We had demand for orders of around $5bn,” said Shafqat Malik. “This is a good testament to Abu Dhabi. There is investor trust in the vision of Abu Dhabi as a whole and in our company.”
Aldar is Abu Dhabi’s largest publicly traded developer. Its projects include the Formula One race track on Yas Island, where Abu Dhabi will hold its first grand prix on Nov 1.
UAE quit monetary union over central bank choice
Being passed over as host country for a Gulf-wide central bank was the main reason the country withdrew from a planned GCC monetary union, the Minister of Economy said yesterday, at the same time the Foreign Minister held open the possibility that the Emirates may rejoin at a later date.
Kuwait, Qatar and Bahrain have said they continue to support the currency union project despite the withdrawal of the UAE, the second-largest economy in the region. The GCC decided to put the regional central bank in Riyadh, the capital of the largest economy in the region.
Sultan al Mansouri, the UAE’s Minister of Economy, did not rule out rejoining the monetary union project in the future, especially if the GCC were to revise its decision and agree to locate the central bank in Abu Dhabi.
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Kuwait, Qatar and Bahrain have said they continue to support the currency union project despite the withdrawal of the UAE, the second-largest economy in the region. The GCC decided to put the regional central bank in Riyadh, the capital of the largest economy in the region.
Sultan al Mansouri, the UAE’s Minister of Economy, did not rule out rejoining the monetary union project in the future, especially if the GCC were to revise its decision and agree to locate the central bank in Abu Dhabi.
Despite Torture Video, U.S. and Emirates Sign Key Pact
The United States signed an agreement with the United Arab Emirates on Thursday to help develop its civil nuclear program, despite an outcry over a video depicting the torture of an Afghan man by a member of the ruling family of Abu Dhabi, one of the emirates.
The agreement now goes to Congress, where it will face resistance from some lawmakers, who say the gruesome video, at a minimum, raises concerns about the legal system in the Emirates and its ability to prevent sensitive nuclear technology from leaking to its neighbors.
These opponents are unlikely to amass the necessary two-thirds majority to strike it down. But Representative Edward J. Markey, a Massachusetts Democrat and a longtime critic of these agreements, filed a resolution opposing it.
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The agreement now goes to Congress, where it will face resistance from some lawmakers, who say the gruesome video, at a minimum, raises concerns about the legal system in the Emirates and its ability to prevent sensitive nuclear technology from leaking to its neighbors.
These opponents are unlikely to amass the necessary two-thirds majority to strike it down. But Representative Edward J. Markey, a Massachusetts Democrat and a longtime critic of these agreements, filed a resolution opposing it.
Emirates airline profits plunge
Emirates, owned by the Dubai government, said revenues in the year to end-March rose 10 per cent to Dh44.2bn as the airline continued to expand. The airline added 20 aircraft, including four Airbus A380s, and flew to four new destinations in Asia and the west coast of the US.
“No one could have predicted the scale of the worldwide recession which is now impacting every country on earth,” Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive of Emirates Airline and Group, said on Thursday. “Emirates has worked hard to cope with this downturn.”
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Obama takes on Congress with UAE deal
Barack Obama's administration on Wednesday took on congressional critics in two disputes over nuclear proliferation in the Middle East when it decided to back a controversial deal with the United Arab Emirates and warned legislators against imposing unilateral sanctions on Iran.
The moves follow the US president's meeting this week with Benjamin Netanyahu, Israel prime minister, when the president announced he would give the US diplomatic outreach to Iran at least until the end of this year to succeed.
On Wednesday Mr Obama announced he would proceed with a civil nuclear deal with the UAE agreed in the final days of George W. Bush's administration.
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The moves follow the US president's meeting this week with Benjamin Netanyahu, Israel prime minister, when the president announced he would give the US diplomatic outreach to Iran at least until the end of this year to succeed.
On Wednesday Mr Obama announced he would proceed with a civil nuclear deal with the UAE agreed in the final days of George W. Bush's administration.
Saudi women push for business equality
“My business was growing and I had to protect myself,” said Ms Banja, whose company, 2Thepoint, develops websites and provides information technology services. “I cannot give anyone the power to sign or cancel deals without my knowledge – not when I’m the one bearing all the risk.”
Islamic law permits women to own and operate their own businesses and to maintain financial independence. However, as a result of gender segregation in the conservative kingdom, women cannot enter many government offices and face a risk of detention by the religious police, or mutawa, if they meet male customers.
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