UAE banks need to raise deposit levels to reduce interbank lending rates and put them more in line with London Interbank Offered Rates (Libor), the central bank governor was quoted as saying on Thursday.
UAE interbank rates (EBOR) AEIBOR= have stayed high over past months, sparking criticism from the central bank, although debt restructuring and a flood of dollar liquidity on global markets have helped to ease some of the pressure. [ID:nRISKAE]
'The gap between the two prices (of EBOR and LIBOR) must be bridged,' Sultan Nasser al-Suweidi told local daily al-Ittihad."
Thursday 25 November 2010
American Chronicle | HBG investment fund set to boost trade between UK and UAE
HBG Holdings (HBG), a leading UK private equity investor and fund management business specialized in the Middle East, has today announced plans to invest $500m in small and medium sized enterprises in the United Kingdom. HBG will specifically target companies with potential to expand operations in the United Arab Emirates and the GCC states.
About HBG Holdings (HBG):
HBG is a leading UK private equity investor and fund management business specialized in facilitating the flow of investment capital from the GCC into high growth small and medium sized companies."
About HBG Holdings (HBG):
HBG is a leading UK private equity investor and fund management business specialized in facilitating the flow of investment capital from the GCC into high growth small and medium sized companies."
Banks need to boost deposits by Dh40bn: Al Suwaidi - Emirates24|7
UAE banks need to attract nearly Dh40 billion in new deposits to expand their financial resources to cut rates and bridge a gap between loans and deposits, the Central Bank Governor was quoted on Thursday as saying.
Sultan bin Nasser Al Suwaidi said new provisioning regulations issued by the Central Bank for the country’s 23 national banks and 28 foreign units last week would not curb their lending potential, adding that a floor of 1.5 per cent on provisioning to total loans would have limited effects on the banks on the grounds the new rules gave banks a deadline of four years.
Quoted by the semi-official Arabic language daily Alittihad, Suwaidi said he believes UAE banks would be able to expand credit if they increase client deposits, excluding inter-bank deposits which account for about seven per cent."
Sultan bin Nasser Al Suwaidi said new provisioning regulations issued by the Central Bank for the country’s 23 national banks and 28 foreign units last week would not curb their lending potential, adding that a floor of 1.5 per cent on provisioning to total loans would have limited effects on the banks on the grounds the new rules gave banks a deadline of four years.
Quoted by the semi-official Arabic language daily Alittihad, Suwaidi said he believes UAE banks would be able to expand credit if they increase client deposits, excluding inter-bank deposits which account for about seven per cent."
Dubai Shares Rise, Pare Weekly Loss, on U.S. Jobs; Oil Above $83 - Bloomberg
Dubai shares rose for the first time in three days after reports showed U.S. employment and consumer sentiment improved, boosting investors confidence in the global economic recovery. Oil traded above $83 a barrel.
Emaar Properties PJSC, builder of the world’s tallest skyscraper in Dubai, climbed for the third time this week and Emirates NBD PJSC, the United Arab Emirates’ biggest bank by assets, advanced 1.6 percent. The DFM General Index increased 0.5 percent to 1,682.23, at the 2 p.m. close in in Dubai, trimming its loss this week to 0.3 percent. Emerging-markets shares climbed, with the MSCI EM Index increasing as much as 0.4 percent.
“Local investors are tracking the performance of markets around the world; we are part of the global economy,” said Humam Al-Shamaa, economic adviser at Al-Fajer Securities in Abu Dhabi. “The gain is not sustainable as there are pending concerns surrounding the debt situation in Europe, particularly in Ireland. Trading volumes are very low.”
Emaar Properties PJSC, builder of the world’s tallest skyscraper in Dubai, climbed for the third time this week and Emirates NBD PJSC, the United Arab Emirates’ biggest bank by assets, advanced 1.6 percent. The DFM General Index increased 0.5 percent to 1,682.23, at the 2 p.m. close in in Dubai, trimming its loss this week to 0.3 percent. Emerging-markets shares climbed, with the MSCI EM Index increasing as much as 0.4 percent.
“Local investors are tracking the performance of markets around the world; we are part of the global economy,” said Humam Al-Shamaa, economic adviser at Al-Fajer Securities in Abu Dhabi. “The gain is not sustainable as there are pending concerns surrounding the debt situation in Europe, particularly in Ireland. Trading volumes are very low.”
Dubai Still Faces Challenges With Debt a Year After Dubai World's Workout - Bloomberg
A year after Dubai’s corporate flagship stunned markets with plans to freeze payments on $25 billion in loans, the emirate is still struggling to reduce a total debt load more than four times that amount.
The immediate crisis triggered by Dubai World’s announcement last Nov. 25 has passed. Lenders to the government- owned group have agreed to accept a delay in repayments of $14.4 billion, and access to credit in the Middle East’s once- flourishing financial services hub is starting to ease after the worst recession since the 1930s.
Dubai and its state-controlled companies are grappling now to service debt that Barclays Capital estimated in a September report to total about $112 billion -- equal to more than 140 percent of its gross domestic product. They amassed the loans during years of frenetic growth in the property and tourism industries. One of seven sheikhdoms comprising the United Arab Emirates, Dubai lacks the energy wealth of neighboring Abu Dhabi and must boost revenue from trade and other traditional businesses and by selling assets, analysts say.
The immediate crisis triggered by Dubai World’s announcement last Nov. 25 has passed. Lenders to the government- owned group have agreed to accept a delay in repayments of $14.4 billion, and access to credit in the Middle East’s once- flourishing financial services hub is starting to ease after the worst recession since the 1930s.
Dubai and its state-controlled companies are grappling now to service debt that Barclays Capital estimated in a September report to total about $112 billion -- equal to more than 140 percent of its gross domestic product. They amassed the loans during years of frenetic growth in the property and tourism industries. One of seven sheikhdoms comprising the United Arab Emirates, Dubai lacks the energy wealth of neighboring Abu Dhabi and must boost revenue from trade and other traditional businesses and by selling assets, analysts say.
AFP: Debt-laden Dubai leans on key sectors for recovery
A year after scaring global markets over its debt crisis, Dubai still has a huge legacy of debt to deal with over the medium term, and is leaning on its core economic sectors for recovery.
The focus in the city-state has shifted to the traditionally strong sectors of trade, logistics and tourism in order to recover slowly from a crisis caused primarily by a boom-to-bust real estate frenzy.
Financial markets woke up in the red last November 26 after Dubai signalled its need for a standstill on debt payments by its largest conglomerate, Dubai World.
The focus in the city-state has shifted to the traditionally strong sectors of trade, logistics and tourism in order to recover slowly from a crisis caused primarily by a boom-to-bust real estate frenzy.
Financial markets woke up in the red last November 26 after Dubai signalled its need for a standstill on debt payments by its largest conglomerate, Dubai World.
Turkey Stocks Priciest Since 2003 as Worst Profits Imperil `Crowded Trade' - Bloomberg
The highest Turkish stock valuations in seven years and slowest profit growth in the emerging markets are signs the nation’s longest stretch of equity outperformance since 1997 is ending.
The MSCI Turkey Index trades for 2.2 times net assets, the highest since February 2003 relative to the MSCI Emerging Markets Index, data compiled by Bloomberg and MSCI Inc. show. Earnings in the 20-company Turkey gauge will rise 7.7 percent next year, the smallest gain of 19 major developing nations, according to analysts’ estimates.
Turkey’s fastest economic expansion since 2005 and record- low interest rates spurred mutual fund managers to make Turkey their largest “overweight” holding and sent price-to-book ratios to a 10 percent premium over emerging markets, from a 45 percent discount two years ago. Citigroup Inc. and Morgan Stanley say stock pickers are too optimistic and slower profit growth will limit gains after the MSCI Turkey index outperformed the emerging markets benchmark for six straight quarters.
The MSCI Turkey Index trades for 2.2 times net assets, the highest since February 2003 relative to the MSCI Emerging Markets Index, data compiled by Bloomberg and MSCI Inc. show. Earnings in the 20-company Turkey gauge will rise 7.7 percent next year, the smallest gain of 19 major developing nations, according to analysts’ estimates.
Turkey’s fastest economic expansion since 2005 and record- low interest rates spurred mutual fund managers to make Turkey their largest “overweight” holding and sent price-to-book ratios to a 10 percent premium over emerging markets, from a 45 percent discount two years ago. Citigroup Inc. and Morgan Stanley say stock pickers are too optimistic and slower profit growth will limit gains after the MSCI Turkey index outperformed the emerging markets benchmark for six straight quarters.
Abu Dhabi Commercial Bank Sues Credit Suisse, S&P Over Farmington Sales - Bloomberg
Abu Dhabi Commercial Bank PJSC, the United Arab Emirates’ third-biggest bank by assets, sued Credit Suisse Group AG, Standard & Poor’s and others for allegedly providing misleading information on an investment product.
The lawsuit filed in New York alleged that Credit Suisse “failed to disclose conflicts of interest and other material information, and provided misleading information, when structuring, marketing and selling an investment, known as Farmington, to ADCB in 2007,” the bank said in an e-mailed statement today. The lender also alleged that Standard & Poor’s “provided inaccurate, investment-grade ratings to assets associated with the Farmington structure.”
Abu Dhabi Commercial made a 560 million-dirham ($153 million) provision in 2007 for losses from investments in the U.S. subprime mortgage market. The bank also sued Morgan Stanley & Co., Bank of New York Mellon Corp. and three securities ratings services for allegedly rating too highly a structured investment vehicle that collapsed in 2007.
The lawsuit filed in New York alleged that Credit Suisse “failed to disclose conflicts of interest and other material information, and provided misleading information, when structuring, marketing and selling an investment, known as Farmington, to ADCB in 2007,” the bank said in an e-mailed statement today. The lender also alleged that Standard & Poor’s “provided inaccurate, investment-grade ratings to assets associated with the Farmington structure.”
Abu Dhabi Commercial made a 560 million-dirham ($153 million) provision in 2007 for losses from investments in the U.S. subprime mortgage market. The bank also sued Morgan Stanley & Co., Bank of New York Mellon Corp. and three securities ratings services for allegedly rating too highly a structured investment vehicle that collapsed in 2007.
Dubai Pearl mulls $6 bln assets sale, UAE Industries - Maktoob News
Dubai Pearl FZ LLC, which earlier this year revived its $4 billion Pearl project, is looking to sell $6 billion of its hospitality assets to raise financing for the mixed-use project, it chairman said on Wednesday.
'We do not want to sell as desperate asset sales but only to strategic buyers,' Abdul Majeed al-Fahim told reporters on the sidelines of an industry event in Dubai.
The company's project includes hotels from brands such as Bellagio, MGM Grand and Skylofts."
'We do not want to sell as desperate asset sales but only to strategic buyers,' Abdul Majeed al-Fahim told reporters on the sidelines of an industry event in Dubai.
The company's project includes hotels from brands such as Bellagio, MGM Grand and Skylofts."
FT.com / Comment - Middle East: Fear of the fast lane
Tyres screeched; high-powered engines roared. Off the track, tycoons and celebrities flitted between corporate boxes and champagne bars.
When the world Formula One carnival pulled into Abu Dhabi this month – bringing with it names such as entrepreneur Sir Richard Branson, actor Hugh Grant and footballer Patrick Vieira – the wealthy capital of the United Arab Emirates seized the opportunity to dazzle visitors with its showcase infrastructure. Latest additions include a Ferrari theme park boasting the world’s fastest rollercoaster and the futuristic Yas hotel, which loops over the grand prix track.
Beyond the glitz, however, the mood in Abu Dhabi is more sober. The buzzwords these days are “discipline” and “priorities” as the city-state tries to heed the lessons of the debt crisis encountered by Dubai, the sister emirate an hour and a half’s drive away. As one long-time observer says only half-jokingly, “Abu Dhabi is feeling poor.”
Dubai prepares for next debt challenge
A year after the trauma of Dubai World's announcement that it was to restructure US$24.9 billion (Dh91.45bn) of liabilities, the emirate can look back with some satisfaction that its most serious financial threat has been neutralised.
But it must also be aware there are still difficulties to overcome in other parts of the complex corporate infrastructure of Dubai Inc.
'Progress made but challenges remain', was how the situation was summed up by the US investment bank JP Morgan in a recent study of Dubai's debt situation."
But it must also be aware there are still difficulties to overcome in other parts of the complex corporate infrastructure of Dubai Inc.
'Progress made but challenges remain', was how the situation was summed up by the US investment bank JP Morgan in a recent study of Dubai's debt situation."
Oil pipeline bypassing Hormuz is completed
Construction of a pipeline from Abu Dhabi's largest oilfields to Fujairah, allowing crude to bypass the Strait of Hormuz, has been completed.
The pipeline to the Arabian Sea promises greater security in the event that the narrow waterway is closed, and promises to help cut the costs of exporting oil from the UAE.
About 40 per cent of the world's international oil trade, including all of Abu Dhabi's exports of about 2 million barrels daily, passes through the strait."
The pipeline to the Arabian Sea promises greater security in the event that the narrow waterway is closed, and promises to help cut the costs of exporting oil from the UAE.
About 40 per cent of the world's international oil trade, including all of Abu Dhabi's exports of about 2 million barrels daily, passes through the strait."
Muslim Nations Plan Stock Index Next Year to Spur Trade: Islamic Finance - Bloomberg
The organization representing the world’s biggest grouping of Muslim-majority nations is seeking to attract more overseas investment by offering the first Shariah-compliant stock index from its 57 members.
The Organization of the Islamic Conference based in Jeddah hired Standard & Poor’s to start an index of about 50 of the most-traded stocks in the first quarter of 2011, Huseyin Erkan, the Istanbul Stock Exchange’s chief executive officer and coordinator of the initiative, said on Nov. 8. The index, which will track listed equities that comply with Islam’s ban on alcohol, gaming and tobacco, aims to target exchange-traded funds, he said.
“Governments of Islamic countries want us to cooperate in capital markets to facilitate cross-border trading,” Erkan said in an interview in Abu Dhabi. “One of the easiest and most efficient ways to improve trading is to build indexes and exchanged-traded funds.”
The Organization of the Islamic Conference based in Jeddah hired Standard & Poor’s to start an index of about 50 of the most-traded stocks in the first quarter of 2011, Huseyin Erkan, the Istanbul Stock Exchange’s chief executive officer and coordinator of the initiative, said on Nov. 8. The index, which will track listed equities that comply with Islam’s ban on alcohol, gaming and tobacco, aims to target exchange-traded funds, he said.
“Governments of Islamic countries want us to cooperate in capital markets to facilitate cross-border trading,” Erkan said in an interview in Abu Dhabi. “One of the easiest and most efficient ways to improve trading is to build indexes and exchanged-traded funds.”
FT.com - Opportunities in the region
Dubai is a thriving hub for the Middle East and its most glitzy attraction for would-be expatriates. It has also experienced swifter rises and falls in activity than other parts of the region.
But there are signs that hiring activity is reviving across the Gulf Co-operation Council area. GCC member countries include Saudi Arabia, Kuwait, Bahrain, Qatar, Oman, Yemen, and United Arab Emirates (Dubai, Abu Dhabi and Sharjah are the best known of the seven emirates, or states).
“We have had two very difficult years,” says Tariq Sadiq, markets, accounts and business development leader for Middle East and north Africa (Mena) for the professional services firm Ernst & Young. “Our profession follows our clients. And optimism has been creeping into the market.”
But there are signs that hiring activity is reviving across the Gulf Co-operation Council area. GCC member countries include Saudi Arabia, Kuwait, Bahrain, Qatar, Oman, Yemen, and United Arab Emirates (Dubai, Abu Dhabi and Sharjah are the best known of the seven emirates, or states).
“We have had two very difficult years,” says Tariq Sadiq, markets, accounts and business development leader for Middle East and north Africa (Mena) for the professional services firm Ernst & Young. “Our profession follows our clients. And optimism has been creeping into the market.”
U.A.E. Bankruptcy Filing Worries Home Investors - NYTimes.com
Property buyers scrambling to get money back from stalled real estate projects across the United Arab Emirates fear a ripple effect after a bankruptcy filing by a developer in Umm al-Quwain, the smallest of the seven emirates.
The developer, Al Murjan Real Estate, which has a $3 billion development project, White Bay, filed for liquidation in Sharjah, a neighboring emirate, according to court documents.
According to lawyers, it is the first bankruptcy filing of a property developer to have taken place in the U.A.E. since the onset of the financial crisis in 2008, a move that may prompt other developers to do the same.
The developer, Al Murjan Real Estate, which has a $3 billion development project, White Bay, filed for liquidation in Sharjah, a neighboring emirate, according to court documents.
According to lawyers, it is the first bankruptcy filing of a property developer to have taken place in the U.A.E. since the onset of the financial crisis in 2008, a move that may prompt other developers to do the same.
FT.com / Middle East - UK on the trail of more Gulf trade
As the Queen and Duke of Edinburgh arrive for their visits to the United Arab Emirates and Oman, British businesses are hoping that trade will receive a significant boost.
Ministers in the Conservative-led coalition have made it clear that they regard exports to the region as having been neglected under the previous Labour government.
In July, William Hague, UK foreign minister, said: “The real economic action in the world has been taking place in Brazil and India and China and the Gulf states, and that is where . . . we now have to connect ourselves much more strongly.”
Ministers in the Conservative-led coalition have made it clear that they regard exports to the region as having been neglected under the previous Labour government.
In July, William Hague, UK foreign minister, said: “The real economic action in the world has been taking place in Brazil and India and China and the Gulf states, and that is where . . . we now have to connect ourselves much more strongly.”
FT.com - Comment: Business links that must be aired
A widely held belief in the Arab world holds that some elements in the west secretly oppose democracy in the region because free and fair elections would produce anti-western governments. However, one overlooked aspect is the role that leading businesses in Arab countries play in stifling democracy.
The most glaring example of businesses in bed with authoritarian regimes became evident when anonymous posters appeared last summer in Cairo’s streets. They urged Gamal Mubarak, the influential son of Egypt’s president, to run for next year’s presidential elections to succeed his father.
Mustapha Kamal, a political science professor at Cairo University, commented that the “campaign began at the proposal of some businessmen who fear a deterioration in President Mubarak’s health and believe that it is better to quicken Gamal’s succession while his father is around”.
The most glaring example of businesses in bed with authoritarian regimes became evident when anonymous posters appeared last summer in Cairo’s streets. They urged Gamal Mubarak, the influential son of Egypt’s president, to run for next year’s presidential elections to succeed his father.
Mustapha Kamal, a political science professor at Cairo University, commented that the “campaign began at the proposal of some businessmen who fear a deterioration in President Mubarak’s health and believe that it is better to quicken Gamal’s succession while his father is around”.