Dubai

[kennynah]

how true W...well said...

i recall watching the documentary about the buidling of the Palm island too.... the croonies were all singing praises of their sheik-in-charge.

[millionairemind]

Dubai rejects debt guarantee

By Simeon Kerr in Dubai, Andrew England in Abu Dhabi, and Frances Williams in Geneva

Published: November 30 2009 06:50 | Last updated: November 30 2009 23:44

Dubai’s government will not guarantee the debts of Dubai World, the state-owned holding company struggling under the weight of $59bn (£36bn) in liabilities, arguing that lenders were mistaken to think that there was sovereign backing.

Abdulrahman al-Saleh, department of finance chief, said that creditors were responsible for their own lending decisions and should differentiate between companies and the state.

“Creditors need to take part of the responsibility for their decision to lend to the companies. They think Dubai World is part of the government, which is not correct,” Mr Saleh said.

Dubai World said last night it had began “constructive” talks with banks to restructure $26bn of debt, including liabilities owed by its property companies Nakheel and Limitless. Nakheel has asked for all three of its sukuk, worth $5.25bn, to be suspended from trade.

In its first statement since the crisis began, Dubai World said other companies such as DP World, Jebel Ali Free Zone and Istithmar would not be included in the restructuring because they were financially stable.

Mr Saleh’s comments underscored the government’s intention to cut Dubai World adrift and raised questions over whether it would distance itself from other parts of the emirate’s commercial empire.

In a note to clients, RBC Capital Markets said that Dubai World bondholders had “almost no legal legs to stand on” to recover the value of their investments from the government in the event of a default.

“We now have to look at each Dubai entity on its own merits and cash flows,” said one other banker. “The mood is really crummy, and it’s not just Dubai government risk. We have to be worried about healthy corporates with exposure to companies like Nakheel too.”

Dubai’s move came amid the first signs of regional contagion as the Egyptian stock exchange fell almost 8 per cent, replicating a battering taken by the United Arab Emirates’ bourses.

The Dubai market closed down 7.3 per cent, its biggest drop in a year, but shares in DP World, Dubai World’s most valued asset, fell 15 per cent on the Nasdaq Dubai bourse. Abu Dhabi’s bourse fell more than 8 per cent in heavy trading.

Five-year credit default swaps for Dubai widened after Mr Saleh’s comments, after tightening on UAE central bank intervention announced on Sunday. The UAE markets are closed from tomorrow until Sunday.

Mr Saleh said creditors of Dubai World would be affected in the short term but claimed there would be long-term benefits as the government restructured the business.

Officials in Dubai were eager either to justify the decision or blame the crisis on other issues.

[millionairemind]

Dubai World heavily invested in US hotels

By ALEX VEIGA

Dubai World borrowed billions of dollars to acquire some of the most high-profile commercial developments in the United States in recent years, and it could be forced to sell them at a loss if the Persian Gulf conglomerate can't restructure its debts.

Dubai World said last week it would seek a six-month delay in paying creditors on nearly $60 billion it owes. The desert emirate racked up the debt during its own real estate bubble that popped with the global recession.

Among Dubai World's U.S. assets are several luxury hotels -- a sector that has been one of the hardest hit by the fallout from rising unemployment and plunging real estate values this year.
http://www.businessweek.com/ap/financia ... A58KG0.htm

[kennynah]

well, apparently, the world is seemingly unconcerned about this "small" problem, as SP500 futures continue to gain some 8 points this afternoon...

[cif5000]

1. The government will not stop you from uncontrolled speculation.
2. If you are willing to pay millions for a small plot of sand, they are happy to sell that to you, even if the sand is not there.
3. If there is enough hype, the banks want to be part of it.
4. What is the qualifying mark now for "too big to fail"? Dubai World is testing the water.

[helios]

yo, i just came back from jogging, and was reading this ... the story is well-written; this is an independent source ...

The dark side of Dubai

Dubai was meant to be a Middle-Eastern Shangri-La, a glittering monument to Arab enterprise and western capitalism. But as hard times arrive in the city state that rose from the desert sands, an uglier story is emerging.

Her story comes out in stutters, over four hours. At times, her old voice – witty and warm – breaks through. Karen came here from Canada when her husband was offered a job in the senior division of a famous multinational. "When he said Dubai, I said – if you want me to wear black and quit booze, baby, you've got the wrong girl. But he asked me to give it a chance. And I loved him."

All her worries melted when she touched down in Dubai in 2005. "It was an adult Disneyland, where Sheikh Mohammed is the mouse," she says. "Life was fantastic. You had these amazing big apartments, you had a whole army of your own staff, you pay no taxes at all. It seemed like everyone was a CEO. We were partying the whole time."

Her husband, Daniel, bought two properties. "We were drunk on Dubai," she says. But for the first time in his life, he was beginning to mismanage their finances. "We're not talking huge sums, but he was getting confused. It was so unlike Daniel, I was surprised. We got into a little bit of debt." After a year, she found out why: Daniel was diagnosed with a brain tumour.

One doctor told him he had a year to live; another said it was benign and he'd be okay. But the debts were growing.

Source: http://www.independent.co.uk/opinion/co ... 64368.html

[helios]

excerpt is from the same source which dictates different chapters of life in Dubai ... ...

My arguments have clearly disturbed him; he says in a softer, conciliatory tone, almost pleading: "Listen. My mother used to go to the well and get a bucket of water every morning. On her wedding day, she was given an orange as a gift because she had never eaten one. Two of my brothers died when they were babies because the healthcare system hadn't developed yet. Don't judge us." He says it again, his eyes filled with intensity: "Don't judge us."

[winston]

Markets there are open on Sunday. Looks like a non-event now ..

======================================

UAE stock markets recover but Dubai remains volatile

Emirati traders follow the prices of stocks and shares at Dubia's Financial Market.

• Saudi banks not in danger over Dubai debt
• Asian banks have little exposure to Dubai: Moody's
• Gulf stocks take breather from Dubai debt crisis
• Dubai ruler says "roll up your sleeves" to support economy

DUBAI: Abu Dhabi and Dubai stock markets opened stronger on Sunday after heavy losses last week over Dubai's debt woes, but the Dubai bourse remained volatile and had slipped back into the red by mid-morning.

The Abu Dhabi Securities Exchange, which shed 11.6 per cent of its capitalisation last week, opened up 3.9 per cent and gained further ground in early trade to hit 2,686.47 points, up 4.4 per cent, by mid-morning.

Dubai's DFM index, which dropped 12.5 per cent in two days of trading last week, opened up 0.5 per cent, hit a peak of 1,873.36 points – up 2.4 per cent – half an hour after trading resumed following a three day break, and then lost ground to be down 0.5 percent at 10:50 am (0650 GMT).

The shares of Dubai's giant property developer, Emaar, which led the losers last week dropping by almost the maximum-allowed percentage of 10 per cent, increased 3.5 per cent, while Dubai Islamic Bank recovered over 6.0 per cent.

Emaar later went into red, dropping by just over one per cent. All Dubai's indices for traded sectors were in the green at opening, except for banking which was down by over 1.4 per cent. Real estate later went into red by 1.78 per cent.

Abu Dhabi's indices were up in all sectors. The Kuwait Stock Exchange also traded up following a weekend break, increasing by 0.46 per cent to 6,729.2 points.

Source: AFP/so

http://www.channelnewsasia.com/stories/ ... 19/1/.html

[millionairemind]

Dec 10, 2009
Dubai stocks plunge again
DUBAI - Dubai's stock market which opened slightly up on Thursday after leading Emaar cancelled a merger with government entities, plunged again within less than half hour of trading by over four per cent.

At 0630 GMT, the Dubai Financial Market index was trading down 4.03 per cent, or 61.8 per cent, at 1,471.54 points, after it had slightly recovered by 0.4 per cent at open. The market recovered losses later to 2.17 per cent, or 33.26 points down, to 1,500.10 points.

Emaar shares had bounced back by some 7.0 per cent in early trading before plummeting again by over 6.0 per cent. The company's shares fluctuated since the opening.

Emaar said late Wednesday that it has decided to cancel merger plans with the property arm of government-owned Dubai Holding, as the largest Middle East property developer by market capitalisation appeared to distance itself from the heavily-indebted government entities.

In Abu Dhabi, the market was trading down by 1.33 per cent at 2,434.24 points, with the construction and real estate sectors leading the drop by 3.06 per cent and 2.94 per cent respectively.

The markets continue to reel under the impact of Dubai's debt woes, triggered late November by the government's request to freeze debt repayments of its largest and most-indebted Dubai World group - liable for US$59 billion (S$82 billion). By Wednesday, Dubai's DFM index had shed over 26 per cent of its value since the debt standstill was announced, wiping out all gains made this year. -- AFP

[mojo_]

Long article. Touches on the 'dark side' of Dubai

http://www.independent.co.uk/opinion/co ... 64368.html

Correction: it's a very very long article... But it's a nice read. As usual, I guess the truth is somewhere in-between, but it's pretty revealing stuff. Don't think the author will be invited back anytime soon.

A family member visited Dubai recently with daughter who was on business trip. They had a driver assigned to them who is from Pakistan. He works very very long hours and not only has to drive but also serve food and sell souvenirs, etc. all with the same employer. He and fellow workers only get to drink substandard desert water. Hardly a happy soul.