Island-raffler’s debt sparks Dubai concern | Business , Regional | THE DAILY STAR:
"Islamic bonds from Damac Real Estate Development Ltd. have become the region’s worst performers this year just three months after they were issued, amid concern Dubai’s property boom is running out of steam.
The developer, which once raffled a Caribbean island in a bid to sell more luxury apartments, was last month caught up in a selloff led by property securities that sent the local equity gauge into a bear market. The yield on Damac’s 2019 sukuk jumped 69 basis points to 5.87 percent in June, according to data compiled by Bloomberg, compared with the 10 basis-point increase to 4.17 percent for Middle East Islamic bonds on a JPMorgan Chase & Co. index. The securities have traded below their selling price since they were sold in April.
“The market is assigning an added risk to Damac because its business model is based on pure property sales without any rental income, which is very risky,” Taher Safieddine, an analyst at Shuaa Capital PSC, said by telephone. “Now they are doing brilliantly because they have a lot of handover, but once that is done, earnings may take a beating because there is no other source of income.”"
'via Blog this'
No comments:
Post a Comment