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FT Alphaville » Blog Archive » Saudis come to Merseyside

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How long for business activity to recover in Dubai? (Re-post)

Dr Marc Faber established a model of the emerging market business cycle in his classic book ‘Tomorrow’s Gold’ published in 2002. It describes the phases of the business cycle from boom to bust and back again.

On my reckoning Dubai is probably in phase six of this cycle now, although possibly only just. Phase six is when the business cycle starts to bottom out, and this continues into phase zero where a new base is established for the next boom.

As Dr. Faber notes the down phases of five and six can be compressed into a year, as in the Asian Financial Crisis but can take four to six years.

GCC investor confidence remains strong, says Shuaa report

SHUAA Capital, the region’s leading financial services institution, today issued its September GCC Investor Confidence Index and Investor Sentiment Report, the only report of its kind for the Gulf markets.

Commenting on the Index findings Oliver Schutzmann, Chief Communications Officer of SHUAA Capital and Author of the Investor Sentiment Report said: “It is very encouraging to see the GCC Index on the rise once again.

Investor sentiment towards the region has been consistently improving over the past six months with only one month-on-month drop since April 2009.”

Babylon Fund (Iraq) - Fact Sheet - 31Aug09.pdf

Mexico miners join hands with UAE-based Diar Capital

UAE-based Diar Capital and Mexico-based gold miners under the banner of Durango Miners Association (DMA) plan to float a new gold mining and refining company in Mexico, a person close to the matter said.

"We are going to be a public company. We are 30 miners with total assets of $47 million (Dh172.6m). We are going to get together with the UAE's Diar Capital and float a new public company.," said Rosa de la Rocha, the Director of Public Relations with the DMA.

The company plans to raise money in tranches and the first tranche is expected to be $20m. "There will be two stakeholders in the company. It will be Diar Capital and us. The company will be listed in Mexico but we plan to raise money form across the world," she said.

'Most global estimates about size of SWFs are inaccurate'

Sovereign wealth funds (SWFs) are keeping the world guessing on the exact size of their financial resources as most of them are still resisting growing global pressure to become more transparent, according to a Saudi official.

While the IMF and numerous other sources have tried to provide rough figures about the assets of those enormous investment vehicles, their estimates have remained mostly inaccurate, said Majed Abdullah Al Muneef, an advisor at the Saudi Ministry of Petroleum and Mineral Resources.

Some of those sources could be close to reality when it comes to a handful of funds which make disclosures, but their estimates about other SWFs regarding both their present and future financial position remain highly overstated, Muneef said.

Massive project spending planned in Gulf region

Infrastructure spending by Gulf countries is expected to reach $205 billion (Dh752 billion) by 2013, according to latest estimates by Standard Chartered Bank.

Although funding has emerged a big challenge in the context of the global credit crisis, economists expect Gulf governments to support most infrastructure projects and bond issues will emerge a major source of funding.

Saudi Arabia alone accounts for more than 50 per cent of regional infrastructure spending with $105 billion in investments planned in projects such as hospitals, roads, railways and airports.

UAE banks assign 44% more for provisions

Banks in the UAE set aside 44 per cent more money for non-performing loans in August compared with a year before.

The value of bad loan provisions jumped to Dh26.3 billion from Dh18.3 billion, the Central Bank said on its website yesterday. The provisions rose every month during the year to August, data showed.

The UAE economy, the Arab world's second-biggest, is stronger than it was nine months ago, though it's expected to contract this year, Central Bank Governor Sultan Bin Nasser Al Suwaidi said in an interview on July 15. The economy grew 7.4 per cent in 2008, according to Central Bank data.

NBAD and DVB in plan for fund

The National Bank of Abu Dhabi (NBAD) and Germany’s DVB Bank plan to launch an aviation investment fund that will acquire assets valued at more than US$1 billion (Dh3.67bn) within two years.

The fund will invest principally in aircraft and engines on lease to international airlines.

NBAD and DVB will act as 50-50 joint venture partners in establishing and managing the fund and both will also invest, NBAD said yesterday. It will target investors from the UAE and GCC region.

Bloomberg sees revival in finance

Bloomberg will almost double its Dubai workforce to 90 over the next 12 months as the financial and banking sectors targeted by the provider of financial data and news regain momentum, according to its chairman.

Peter Grauer also expects to grow the number of regional terminals by at least 2 per cent this year as sales begin to pick up.

“The pipeline is healthier today. Removals are down as a result of stabilising head counts [at banks]. The prospect pipeline is starting to grow again. [Banks are] taking on a more welcoming attitude toward the future.”

Short-term leases deter institutional investors

Institutional property funds are being deterred from investing in regional office markets because of an excess of short-term leases, property consultancy Jones Lang LaSalle said yesterday.

Property developers and owners must focus on creating assets attractive to tenants and long-term property investors to ensure the regional markets recover.

“The ability of different markets to attract long-term regional and global investors will be of critical importance to their stabilisation and recovery,” the report said.

Iran Sells $7.8 Billion of State-Owned Phone Company Shares

Iran sold a majority stake in its state-owned telecommunications company to an investor group for about $7.8 billion in Tehran Stock Exchange’s largest-ever deal, the government-run Mehr news agency said.

The group, called Etemade Mobin, purchased 50 percent plus one share in Telecommunication Company of Iran, the news agency said. The value of each share in the company, which provides all the country’s landlines, was 3,400 rials (34 U.S. cents).

Iran is carrying out a plan to sell 80 percent of its major state-owned companies to boost the economy and stock values following a 2006 order by Supreme Leader Ayatollah Ali Khamenei, the country’s highest authority. At least three-quarters of the Iranian economy is controlled by the state.

Local analysts have criticized President Mahmoud Ahmadinejad, who was first elected in 2005 and started his second term in August, for failing to accelerate the privatization process. During his term, Iran has been placed under United Nations sanctions for its refusal to limit uranium enrichment activities as part of its nuclear program.END

Gulf single currency should be phased: Kuwait

Gulf states should implement a monetary union and single currency in phases, Kuwait's central bank governor said in comments published on Sunday, casting further doubt on a 2010 target date.

"Due to the limited progress achieved so far... I believe that the best way is to work out an administrative plan for the monetary union and single currency and implement it in stages," Sheikh Salem Abdulaziz al-Sabah told Awan newspaper.

The six-nation Gulf Cooperation Council (GCC) plans to launch monetary union and a single currency in 2010, although many experts believe the target date is too ambitious and unrealistic.

Saudi prince looks to buy 50 percent stake in British football club Liverpool

A Saudi prince wants to buy half of the debt-saddled football club Liverpool, in a deal worth up to $560 million that would mark the latest buy-in by Gulf investors in an English Premier League team.

Prince Faisal bin Fahd bin Abdullah al-Saud — who chairs Saudi holding company FAMA Group and the F6 sports investment firm — was quoted by the Saudi Al-Riyadh newspaper on Sunday as saying that "we are seeking, at present, to own a 50 percent stake in the club."

"The value of the transaction, which is nearing resolution, will be between 200 million pounds ($320 million) and 350 million pounds ($560 million)," al-Saud was quoted as saying.