By naming Ahmed Humaid al-Tayer as the new head of the Dubai International Financial Centre, Dubai has put on a new face that it hopes will convey a new-found caution and dispel its image of recklessness.
The appointment of Tayer, 59, who has served in government for more than 30 years and is a prominent local businessman, is a message to investors at home and abroad that, following the financial crisis, Dubai has learnt from its mistakes and is turning over a new leaf.
"Tayer's appointment indicates that the city is intent to deal with the aftermath of the financial crisis in a different way," said politics professor Abdulkhaleq Abdulla.
Sunday, 22 November 2009
Dubai court again clears ex-minister of fraud
A former United Arab Emirates minister, Khalifa Bakhit al-Falasi, was cleared on Sunday of corruption charges on appeal for a second time, his lawyer said.
Dubai's "Court of Appeals acquitted my client Khalifa Bakhit al-Falasi" along with two co-defendants, an American and an Indian who were earlier convicted along with Falasi, Hussein al-Jaziri told AFP.
Falasi, 51, was sentenced to two years in prison on February 24 for fraudulently taking control of a company after the death of his Lebanese business partner.
Dubai's "Court of Appeals acquitted my client Khalifa Bakhit al-Falasi" along with two co-defendants, an American and an Indian who were earlier convicted along with Falasi, Hussein al-Jaziri told AFP.
Falasi, 51, was sentenced to two years in prison on February 24 for fraudulently taking control of a company after the death of his Lebanese business partner.
Emirates NBD faces $350 mln Saudi exposure -CEO
Emirates NBD ENBD.DU, the Gulf region's biggest lender, has exposure of up to $350 million to two Saudi conglomerates now restructuring their debt, Emirates NBD Chief Executive Rick Pudner said.
Pudner said the bank's balance sheet and results in the fourth quarter would not be affected by the exposure, which the bank has declined to detail up to now.
At least 13 United Arab Emirates (UAE) banks and seven foreign banks have exposure to Saudi family firms Saad Group [SAADG.UL] and Ahmad Hamad Algosaibi and Bros Co (AHAB), the UAE central bank said last week.
Pudner said the bank's balance sheet and results in the fourth quarter would not be affected by the exposure, which the bank has declined to detail up to now.
At least 13 United Arab Emirates (UAE) banks and seven foreign banks have exposure to Saudi family firms Saad Group [SAADG.UL] and Ahmad Hamad Algosaibi and Bros Co (AHAB), the UAE central bank said last week.
U.A.E. Shares Tumble to 2-Month Low on Drop in Volumes, Shakeup
United Arab Emirates shares tumbled to their lowest close in more than two months as volumes fell ahead of the Islamic holiday and Dubai’s ruler demoted some of the emirate’s most prominent executives.
Emaar Properties PJSC, the U.A.E.’s largest property developer, dropped to its lowest in more than two weeks and First Gulf Bank PJSC fell the most since Nov. 1. The Dubai Financial Market General Index lost 2.6 percent to 2,073.66, the lowest level since Sept. 15. Abu Dhabi’s index slid 2 percent to 2,865.25, the lowest since Sept. 2. About 188 million shares traded in Dubai’s index today, or 45 percent of the three-month daily average, according to data compiled by Bloomberg.
“We saw volumes fall much lower today because of the holidays coming up,” said Vyas Jayabhanu, head of Al Dhafra Financial Brokerage LLC in Abu Dhabi. “We saw investors exercise caution today because they are not sure why the decision to shuffle the executives came now.”
Emaar Properties PJSC, the U.A.E.’s largest property developer, dropped to its lowest in more than two weeks and First Gulf Bank PJSC fell the most since Nov. 1. The Dubai Financial Market General Index lost 2.6 percent to 2,073.66, the lowest level since Sept. 15. Abu Dhabi’s index slid 2 percent to 2,865.25, the lowest since Sept. 2. About 188 million shares traded in Dubai’s index today, or 45 percent of the three-month daily average, according to data compiled by Bloomberg.
“We saw volumes fall much lower today because of the holidays coming up,” said Vyas Jayabhanu, head of Al Dhafra Financial Brokerage LLC in Abu Dhabi. “We saw investors exercise caution today because they are not sure why the decision to shuffle the executives came now.”
Dubai Shares to Slump 11% in Next Two Weeks: Technical Analysis
Dubai’s benchmark index may fall as much as 11 percent in the next two weeks after the lack of positive catalysts pushed the gauge below a technical support level, Rasmala Investment Holdings said.
After the measure dropped below 2,130, the Dubai Financial Market General Index “will go down further to the 1,850 level where the market will find strong support,” Nabil Al Rantisi, senior vice president of brokerage at Rasmala, said today. The index could reach that level by the end of the holiday period next week, he said. His estimate is based on a weekly trend-line support and the 200-day moving average.
The stock market will close four days in the next two weeks in celebration of the Islamic Eid Al-Adha holiday on Nov. 26 and 29 and the United Arab Emirates National Day on Dec. 2 and 3.
After the measure dropped below 2,130, the Dubai Financial Market General Index “will go down further to the 1,850 level where the market will find strong support,” Nabil Al Rantisi, senior vice president of brokerage at Rasmala, said today. The index could reach that level by the end of the holiday period next week, he said. His estimate is based on a weekly trend-line support and the 200-day moving average.
The stock market will close four days in the next two weeks in celebration of the Islamic Eid Al-Adha holiday on Nov. 26 and 29 and the United Arab Emirates National Day on Dec. 2 and 3.
Is UBS right about a 30% additional house price fall in Dubai? (Re-post)
Swiss bank UBS published a controversial report late last week which predicts an additional 30 per cent fall in Dubai house prices over the next 18 months, down to 70 per cent of peak price levels, and for the market to take at least a decade to get back to the peak prices of summer 2008.
Deutsche Bank used to be almost as pessimistic but is now talking of prices bottoming out and a recovery early next year.
The problem with the Deutsche Bank argument is that this is not how markets usually behave. Markets might rebound for a while from a big fall, but they then generally continue on down to find a bottom, unless the fall was some kind of accident.
Global financial crisis
Nobody could really see the global financial crisis of last year as a passing accident, or if they do then a nasty reality still awaits them. In Dubai the global crisis came on top of a cyclical property market boom that was close to bursting whatever happened.
That meant a painful double whammy, something like Hong Kong in 1997 where a local property boom went bust at the time of the Asian Financial Crisis. From 1997-2003 Hong Kong house prices fell by 70 per cent.
In Hong Kong in 1997 the government’s response to the crisis was to keep on building. That resulted in a significant oversupply of property at the very moment that the market was weakening. Does this not sound like Dubai?
UBS estimates that the Dubai population will drop by a net eight per cent this year and two per cent next. This population exodus will leave 30,000 units empty says its report.
Then there are some 40,000 units to be completed over the next 18 months, and 20,000 units already lying empty. That leaves overcapacity at 90,000 units by 2011.
Greater supply and falling demand is a recipe for lower prices, whatever the government propaganda machine cares to insist. UBS says average house prices are presently 50 per cent of their peak at $254 per square foot and may drop as low as $164.
What could happen to derail this unwinding process and help support prices? A stronger than expected recovery in the global economy and higher oil prices would be good news for the UAE. Low cost finance for home owners would also be helpful, although if this also meant cheap finance for developers the additional property supply would counter the beneficial effect on house prices.
Big oversupply
Consolidation and mergers among the developers would eliminate some of the upcoming supply, although not all, and the 50,000 empty units would still remain by 2011.
But if UBS is right about the future how do you explain the market recovery this autumn? Villa prices are up, for example. Quite simply supply is still limited in completed planned communities and these expensive units had been overly discounted in the crash.
Hence overall the UBS argument makes sense. However, a surge in general inflation levels around the world courtesy of the massive government stimulus packages makes a return to nominal peak values within a much shorter timeframe than a decade very likely.
Those who choose to buy in 18 months time when the property market will be as popular as the H1N1 virus may not have to wait very long to make a good profit, and those holding on now could be pleasantly surprised within three to five years.
Deutsche Bank used to be almost as pessimistic but is now talking of prices bottoming out and a recovery early next year.
The problem with the Deutsche Bank argument is that this is not how markets usually behave. Markets might rebound for a while from a big fall, but they then generally continue on down to find a bottom, unless the fall was some kind of accident.
Global financial crisis
Nobody could really see the global financial crisis of last year as a passing accident, or if they do then a nasty reality still awaits them. In Dubai the global crisis came on top of a cyclical property market boom that was close to bursting whatever happened.
That meant a painful double whammy, something like Hong Kong in 1997 where a local property boom went bust at the time of the Asian Financial Crisis. From 1997-2003 Hong Kong house prices fell by 70 per cent.
In Hong Kong in 1997 the government’s response to the crisis was to keep on building. That resulted in a significant oversupply of property at the very moment that the market was weakening. Does this not sound like Dubai?
UBS estimates that the Dubai population will drop by a net eight per cent this year and two per cent next. This population exodus will leave 30,000 units empty says its report.
Then there are some 40,000 units to be completed over the next 18 months, and 20,000 units already lying empty. That leaves overcapacity at 90,000 units by 2011.
Greater supply and falling demand is a recipe for lower prices, whatever the government propaganda machine cares to insist. UBS says average house prices are presently 50 per cent of their peak at $254 per square foot and may drop as low as $164.
What could happen to derail this unwinding process and help support prices? A stronger than expected recovery in the global economy and higher oil prices would be good news for the UAE. Low cost finance for home owners would also be helpful, although if this also meant cheap finance for developers the additional property supply would counter the beneficial effect on house prices.
Big oversupply
Consolidation and mergers among the developers would eliminate some of the upcoming supply, although not all, and the 50,000 empty units would still remain by 2011.
But if UBS is right about the future how do you explain the market recovery this autumn? Villa prices are up, for example. Quite simply supply is still limited in completed planned communities and these expensive units had been overly discounted in the crash.
Hence overall the UBS argument makes sense. However, a surge in general inflation levels around the world courtesy of the massive government stimulus packages makes a return to nominal peak values within a much shorter timeframe than a decade very likely.
Those who choose to buy in 18 months time when the property market will be as popular as the H1N1 virus may not have to wait very long to make a good profit, and those holding on now could be pleasantly surprised within three to five years.
Profits of Kuwaiti listed firms slide 73%
Total net profits of firms listed on the Kuwait Stock Exchange slumped by about 73 percent in the first nine months of the year due to the global financial crisis, an economic report said on Sunday.
The 187 firms that declared results so far posted a total net income of 800.3 million dinars (2.8 billion dollars) compared to 2.93 billion dinars (10.3 billion dollars) in the same period last year, Al-Shall Economic Consultants said.
The 15 companies that did not declare results include five that have a different fiscal year and 10 that have been suspended from trading.
The 187 firms that declared results so far posted a total net income of 800.3 million dinars (2.8 billion dollars) compared to 2.93 billion dinars (10.3 billion dollars) in the same period last year, Al-Shall Economic Consultants said.
The 15 companies that did not declare results include five that have a different fiscal year and 10 that have been suspended from trading.
Dubai Ruler Tightens Control, Downgrades Key Aides (Update1) [Possibly final piece of analysis]
Dubai ruler Sheikh Mohammed Bin Rashid Al Maktoum has consolidated his hold on the debt-laden emirate, downgrading powerful figures behind the city-state’s boom that turned to a bust.
Sheikh Mohammed on Nov. 20 sacked the governor of the Dubai International Financial Centre, Omar Bin Sulaiman, who had led efforts to transform Dubai into a Middle East finance hub. A day earlier, he dropped Mohammad al-Gergawi, Sultan Ahmed Bin Sulayem and Mohammed Ali Alabbar from the board of Dubai’s main holding company, the Investment Corporation of Dubai. The three were at the forefront of a construction drive that began in 2002 and collapsed last year after the global financial turmoil engulfed Dubai.
The announcement, which follows the replacement in May of Nasser al-Sheikh, former director of the emirate’s Department of Finance, heralds greater consolidation of so-called Dubai Inc., the web of competing, state-owned companies that Sheikh Mohammed used to accelerate the diversification of Dubai. Dubai is struggling under $80 billion of debt amassed in the process.
Sheikh Mohammed on Nov. 20 sacked the governor of the Dubai International Financial Centre, Omar Bin Sulaiman, who had led efforts to transform Dubai into a Middle East finance hub. A day earlier, he dropped Mohammad al-Gergawi, Sultan Ahmed Bin Sulayem and Mohammed Ali Alabbar from the board of Dubai’s main holding company, the Investment Corporation of Dubai. The three were at the forefront of a construction drive that began in 2002 and collapsed last year after the global financial turmoil engulfed Dubai.
The announcement, which follows the replacement in May of Nasser al-Sheikh, former director of the emirate’s Department of Finance, heralds greater consolidation of so-called Dubai Inc., the web of competing, state-owned companies that Sheikh Mohammed used to accelerate the diversification of Dubai. Dubai is struggling under $80 billion of debt amassed in the process.
Court withdraws from Tamweel case
The Dubai Criminal Court of First Instance decided to withdraw on Thursday from a case of bribery and embezzlement related to mortgage financier Tamweel.
Presiding Judge Hamad Abdul Latif referred the case file to Ahmed Ibrahim Saif, Chief Justice of Dubai Criminal Court, asking it to be transferred to another court. Though no reason for the decision was announced, sources said UAE courts have the right to withdraw from a case if any court member feels "embarrassment".
The five defendants involved in the case are AS (Emirati, former Tamweel CEO), WA (Pakistani), MA (Pakistani), RR (Ukrainian) and AH (Emirati, ex-Tamweel commercial manager).
Presiding Judge Hamad Abdul Latif referred the case file to Ahmed Ibrahim Saif, Chief Justice of Dubai Criminal Court, asking it to be transferred to another court. Though no reason for the decision was announced, sources said UAE courts have the right to withdraw from a case if any court member feels "embarrassment".
The five defendants involved in the case are AS (Emirati, former Tamweel CEO), WA (Pakistani), MA (Pakistani), RR (Ukrainian) and AH (Emirati, ex-Tamweel commercial manager).
Tesla may go public on 'green' car surge
US electric sports car maker Tesla Motors plans to go public soon, two sources familiar with the matter said, amid growing interest in green technology and battery-powered vehicles.
An IPO filing from the six-year-old start-up, best known for its $109,000 (Dh400,030) all-electric Roadster, is expected any day, said one of the sources. The person did not give a specific time frame, although IPOs typically take several months.
Tesla spokesman Ricardo Reyes declined to comment on what he called "rumour or speculation".
An IPO filing from the six-year-old start-up, best known for its $109,000 (Dh400,030) all-electric Roadster, is expected any day, said one of the sources. The person did not give a specific time frame, although IPOs typically take several months.
Tesla spokesman Ricardo Reyes declined to comment on what he called "rumour or speculation".
Bahraini banker calls for industry consolidation
The Chairman of Bahrain's Ithmaar Bank, Khalid Abdulla-Janahi, is here in Dubai for the World Economic Forum's Summit on the Global Agenda and so I had a chance to catch up with him briefly and hear his views.
Mr Abdulla-Janahi has appeared in this blog before, in particular his views on the schadenfreude over Dubai in the Gulf, and on the responsibility of sovereign wealth funds to invest in their home turf.
Mr Abdulla-Janahi is here in his capacity as Vice-Chairman of the Global Agenda Council on the Future of the Middle East. One of his recommendations so far is for a consolidation of regional banks. "Financial institutions should get together in order to survive," he told me. "This is a must." Regulators have been taking it easy on the banks, he believes. If they enforced their own rules on lending limits and capital adequacy, he said, "a lot of banks would have failed by now."
Mr Abdulla-Janahi has appeared in this blog before, in particular his views on the schadenfreude over Dubai in the Gulf, and on the responsibility of sovereign wealth funds to invest in their home turf.
Mr Abdulla-Janahi is here in his capacity as Vice-Chairman of the Global Agenda Council on the Future of the Middle East. One of his recommendations so far is for a consolidation of regional banks. "Financial institutions should get together in order to survive," he told me. "This is a must." Regulators have been taking it easy on the banks, he believes. If they enforced their own rules on lending limits and capital adequacy, he said, "a lot of banks would have failed by now."
Judge reverses ‘insider’ case payout settlement
A judge in the US has reversed a US$875,000 (Dh3.2 million) settlement in an alleged insider trading case brought in July against an Al Ain resident.
The US Securities and Exchange Commission (SEC) initially said on Thursday that it reached a deal to settle the case against Khaled Mohammed Sharif al Sayed al Hashemi of Al Ain, levying a penalty of $406,620, plus $458,760 in profits and $9,620 in interest charges.
Under the deal, Mr al Hashemi did not admit or deny the SEC’s allegation that he profited illegally by trading in the shares of a Canadian petrochemicals firm ahead of its acquisition by the International Petroleum Investment Company (IPIC) of Abu Dhabi.
The US Securities and Exchange Commission (SEC) initially said on Thursday that it reached a deal to settle the case against Khaled Mohammed Sharif al Sayed al Hashemi of Al Ain, levying a penalty of $406,620, plus $458,760 in profits and $9,620 in interest charges.
Under the deal, Mr al Hashemi did not admit or deny the SEC’s allegation that he profited illegally by trading in the shares of a Canadian petrochemicals firm ahead of its acquisition by the International Petroleum Investment Company (IPIC) of Abu Dhabi.
Emirates NBD puts off bond sale
Emirates NBD, the biggest UAE bank by assets, will delay a planned bond sale until the first quarter of next year to wait for pricing to improve as investors return to regional debt markets.
The bank tested investor appetite for new debt two weeks ago in a roadshow spanning Asia, the Middle East and Europe. But despite strong interest, the bank decided not to hold the sale immediately.
“The appetite was there, but it was not quite at the price we were expecting,” said Rick Pudner, the chief executive of Emirates NBD. “We don’t need to repay and raise money that urgently.”
The bank tested investor appetite for new debt two weeks ago in a roadshow spanning Asia, the Middle East and Europe. But despite strong interest, the bank decided not to hold the sale immediately.
“The appetite was there, but it was not quite at the price we were expecting,” said Rick Pudner, the chief executive of Emirates NBD. “We don’t need to repay and raise money that urgently.”
Al Tayer takes helm at DIFC
The newly appointed governor of the Dubai International Financial Centre (DIFC) has pledged to build on its success in promoting Dubai as a vital hub for capital and investment.
Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, on Saturday issued a decree naming Ahmed Humaid al Tayer to replace Omar bin Sulaiman, who had led the DIFC since its creation in late 2004.
“We are here to establish an international financial centre for the UAE, to serve the region and to co-operate with other centres from Hong Kong to Frankfurt and London,” said Mr al Tayer, who is also the chairman of Emirates NBD, the largest UAE bank by assets.
Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, on Saturday issued a decree naming Ahmed Humaid al Tayer to replace Omar bin Sulaiman, who had led the DIFC since its creation in late 2004.
“We are here to establish an international financial centre for the UAE, to serve the region and to co-operate with other centres from Hong Kong to Frankfurt and London,” said Mr al Tayer, who is also the chairman of Emirates NBD, the largest UAE bank by assets.
“It everything, stupid.” (Re-post)
I know I misquoted Clinton’s famous election phrase, “It’s the economy, stupid.” For the US in 1992, it was the economy. In Kuwait, people wonder what is our problem. Some say it is political, others say social, and the financially savvy like to point to the economic side as the culprit. The best answer to that question is, “It’s everything, stupid.” Everything: we are dysfunctional from a political, social, and economic perspective.
Political:
The country is daily riding a roller-coaster of politics orchestrated by a cynical populist parliament and a fragile inefficient government. The political roller-coaster is circulating in a never-ending fashion from impeachment to dissolution. When is it going to end? I don’t want to elaborate on the political side. For more, refer to my previous post titled, “Parliamentary plays derail reform.”
Social:
Why it it that everyone in Kuwait regardless of their wealth live the most lavish lifestyle? The answer is simple: why not? Charge it on a credit card and expect the government to forgive loans. It is sad that a graduating senior from a Kuwaiti high-school’s dream is not to get into Harvard, but to drive a Maserati and upgrade to a Ferrari after college graduation. I remember a time when I was a kid and I used to enjoy going to my family’s weekly gathering to go to the supermarket and buy candy. You know what is a Kuwaiti kid’s dream nowadays? A Blackberry phone and an Abercrombie & Fitch t-shirt. This consumer mentality has to come to an end. More importantly, the parenthood relationship between the government and its citizens has to be abolished. There is severe moral hazard in our nation and its a vicious downward spiral cycle. Our government acts as a free collection agency for businesses. Our parliament sponsors morally hazardous acts such as sending families for tourism in the name of sickness and proposals such as debt forgiveness and “attractive” laid-off employee benefits. Our citizens enlist in unheard of universities in the likes of Zimbabwe and the Philippines to get a high-paying government job doing, well, nothing.
Economic:
We were the first to establish a stock market in the GCC, but today we are the only country without a governing Capital Markets Authority. It hurts, so I don’t want to talk about where we were, coulda, shoulda, and woulda. I wish I could say it in a different way, but what is happening in Kuwait’s stock market is a disaster. The domino effect is unstoppable without government intervention, regulation, and a complete overhaul of the economic system. We desperately need to instill confidence in our stock market. We want to send a message to everyone that what happened during Souq Al-Manakh crisis was a one-time event that isn’t currently in the making.
The government has to take the initiative and push for a new era of economic transparency and development. We need a Capital Markets Authority that acts as a watchdog that punishes all malpractices in the industry. Isn’t it humiliating to see the United States question manipulations by Kuwaiti individuals and companies while no one in Kuwait addresses these issues? Isn’t it ironic that market leaders are currently on the verge of bankruptcy? With added transparency, investors would have enhanced clarity and can potentially make an informed decision as opposed to gamble or leverage on an insider tip. Rest assured that the wounds of burnt foreign investors will take time to heal and it will be challenging to win them back. The establishment of a Capital Markets Authority is pivotal to the critical process of confidence restoration in our financial system. What we lack in Kuwait is priorities. Why don’t we organize and push for passing the Capital Markets Authority in the parliament? Let us prioritize our problems and address them in a one-by-one basis instead of being overwhelmed by their magnitude.
After the Agility controversy last week, people are left wondering what could stop the free-fall of our stock market? As with any solution, there is a short-term and long-term approach that need to be addressed in tandem. Establishing a Capital Markets Authority helps in the long-term, but shorter-term we have to focus on addressing the issue at hand. The reality is that our stock market is made-up of a few Chaebols*. These few Chaebols have numerous companies attached to them. These numerous companies ultimately depend on the success of the few and the few are all in trouble. The biggest four companies by market capitalization in the Kuwait Stock Exchange are Zain, NBK, KFH, and Agility. There used to be Dar and Global, but there are gone. Zain is operationally challenged and its owners want to bail-out (but seemingly can’t), NBK will be hit hard if Zain owners can’t sell their stake, KFH depends heavily on real-estate and with the wealth destruction in Kuwait there is no hope there, and Agility’s sheer existence is being challenged by a complex fraud case.
I believe government intervention should be through recapitalizing banks. The government should simply buy a 5-10% stake through new share issuance by all banks. This will provide banks with much needed cushion for taking write-downs. Instead of the never-ending provisions drama, let us mark down these assets, take the hit, and move on. The US is a perfect example of such successful approach. Establishing a portfolio that buys into stocks and tries to lift the market is a very limited solution. The government is only addressing a symptom when it does that and should do that simultaneously with other solutions proposed.
*Chaebols: large, conglomerate family-controlled firms of South Korea characterized by strong ties with government agencies.
No money-laundering in Kuwait
Kuwait is free of money-laundering operations, according to Minister of Commerce Ahmad Al-Haroun, who revealed that a conference is to be held on this subject on Dec 5, which aims to raise awareness of the great damage that this activity can cause to the national economy. He explained that the conference forms part of the commerce ministry's efforts to counter these illegal practices, reported Al-Watan.
Meanwhile, finance minister Mustafa Al-Shamali revealed that the cabinet has made four amendments to the controversial insolvency fund, as follows: Borrowers who took out loans before Dec 31, 2008 will be able to benefit from the fund, Beneficiaries will be able to borrow from the fund more than once, The fund's capital is to be increased, The fund is to remain open to applicants for four more months than was originally planned. Al-Shamali indicated that the new amendments will be submitted to parliament to enable MPs to rule on them.END
Meanwhile, finance minister Mustafa Al-Shamali revealed that the cabinet has made four amendments to the controversial insolvency fund, as follows: Borrowers who took out loans before Dec 31, 2008 will be able to benefit from the fund, Beneficiaries will be able to borrow from the fund more than once, The fund's capital is to be increased, The fund is to remain open to applicants for four more months than was originally planned. Al-Shamali indicated that the new amendments will be submitted to parliament to enable MPs to rule on them.END
Dubai Ruler Tightens Control of Emirate, Downgrades Key Aides
Dubai ruler Sheikh Mohammed Bin Rashid Al Maktoum has consolidated his hold on the debt-laden emirate, downgrading powerful figures behind the city-state’s boom that turned to a bust.
Sheikh Mohammed on Nov. 20 sacked the governor of the Dubai International Financial Centre, Omar Bin Sulaiman, who had led efforts to transform Dubai into a Middle East finance hub. A day earlier, he dropped Mohammad al-Gergawi, Sultan Ahmed Bin Sulayem and Mohammed Ali Alabbar from the board of Dubai’s main holding company, the Investment Corporation of Dubai. The three were at the forefront of a construction drive that began in 2002 and collapsed last year after the global financial turmoil engulfed Dubai.
The moves herald greater consolidation of so-called Dubai Inc., the web of competing, state-owned companies that Sheikh Mohammed used to accelerate diversification of the second- largest member of the United Arab Emirates away from oil. Dubai is struggling under $80 billion of debt amassed in the process.
Sheikh Mohammed on Nov. 20 sacked the governor of the Dubai International Financial Centre, Omar Bin Sulaiman, who had led efforts to transform Dubai into a Middle East finance hub. A day earlier, he dropped Mohammad al-Gergawi, Sultan Ahmed Bin Sulayem and Mohammed Ali Alabbar from the board of Dubai’s main holding company, the Investment Corporation of Dubai. The three were at the forefront of a construction drive that began in 2002 and collapsed last year after the global financial turmoil engulfed Dubai.
The moves herald greater consolidation of so-called Dubai Inc., the web of competing, state-owned companies that Sheikh Mohammed used to accelerate diversification of the second- largest member of the United Arab Emirates away from oil. Dubai is struggling under $80 billion of debt amassed in the process.