The total debt of cash-strapped Dubai could be as much as $170 billion, much higher than earlier reported, according to a report by EFG-Hermes.
"The total debt held by Dubai Inc could well be in the range of 130-170 billion dollars," the bank said in its 2010 UAE Yearbook, a copy of which was received by media on Tuesday.
Dubai Inc is a term used to refer to the Dubai government and its government-related entities.
Tuesday 19 January 2010
OPEC members continue to break their own quotas
The Organization of Petroleum Exporting Countries' compliance with production targets dropped to the lowest in a year last month as output rose.
Production from the 11 members bound by quotas rose to 26.681 million barrels a day in December, from 26.613 million a day the previous month, the group's Vienna-based secretariat said in a monthly report today. Their compliance rate with targets slipped to 56 percent, from 58 percent in November. The organization kept its 2010 forecasts for demand and non-OPEC supply mostly unchanged.
OPEC, responsible for about 40 percent of global crude supply, announced a record production curb in December 2008 in response to the sharpest demand drop since the 1980s. The group's adherence to output targets has since waned as consumption revives and prices gain.
Dubai Index Drops to One-Month Low on Earnings Concern, Oil
Dubai shares declined to their lowest level in more than a month led by Emaar Properties PJSC and Emirates NBD PJSC as investors awaited fourth-quarter earnings and oil fell for a sixth day.
Emaar, the United Arab Emirates’ biggest developer, fell to the lowest in more than five weeks. Emirates NBD dropped as much as 3.8 percent to the lowest since December 2008. Dubai’s benchmark index retreated 1.4 percent to 1,664.28 at 1:12 p.m. in the emirate, the third-worst performer among global markets tracked by Bloomberg. Crude slipped 0.3 percent to $77.75 a barrel, bringing its six-day loss to 6 percent.
“Investors are not willing to pick up shares now before company earnings come out,” said Vyas Jayabhanu, head of Al Dhafra Financial Brokerage LLC. “We do not expect the market to maintain momentum and oil is down, so there’s no positive input to prompt investors to really buy any shares.”
RLPC-Borse Dubai gets loan extended to Feb 2011-bankers (A very speedy turn around from story below this!)
State-run Borse Dubai will extend its $2.5 billion syndicated loan for one year to February 2011, taking some of the pressure off the emirate's immediate debt repayment concerns, banking sources close to the deal said.
FINANCIALS
Borse Dubai raised the financing in February 2009 with a one-year maturity, but the deal included a one-year extension option at the borrower's behest, the bankers said.
"The extension is at the borrower's option so it's a two-year deal," one of the bankers said.
Dubai rocked global markets on Nov. 25 when it said it would ask creditors to agree a standstill on $26 billion in debt, linked to its main property units
Kurdish minister pushes for Iraqi oil deal
Shares in DNO, the Norwegian oil company, rose more than 16 per cent on Monday after authorities in Iraqi Kurdistan said they were ready to resolve a dispute with Iraq’s central government over distribution of oil revenues and payment of foreign operators.
But the statement appeared to be a political overture, not a binding plan capable of breaking the deadlock that has prevented full-scale exploitation of Iraqi Kurdistan’s estimated 40bn barrels of oil.
Ashti Hawrami, oil minister for the autonomous Kurdistan regional government (KRG) of Iraq, said in the statement that the KRG was prepared to resume international oil exports after holding a “serious dialogue” with Baghdad over how to pay operators such as DNO and Turkey’s Genel Energy.
Dubai Group May Sell Stake in Bank Islam Malaysia, Reserve Says
Dubai Group LLC, an investment company owned by the Dubai ruler, may sell its stake in Bank Islam Malaysia Bhd. for 1 billion ringgit, Malaysian Reserve reported, citing unidentified people familiar with the plan.
The sale is expected to be completed by June, according to the newspaper. Officials at Bank Islam and its parent BIMB Holdings Bhd. couldn’t be reached for comment, according to the report.
Borse Dubai Faces $2.5B Bank Loan Maturing By Feb 19-Sources
Government-owned Borse Dubai has to pay back, or refinance a $2.5 billion loan due next month, marking the next major test of the emirate's ability to pay its debts, according to people familiar with the matter.
"Dubai still needs to cough up cash for these loans and the market is increasingly getting nervous as the repayment date draws near and the government maintains its usual silence," a banker familiar with the loan, who declined to be identified, told Zawya Dow Jones.
Borse Dubai executives couldn't be reached for a comment. Spokespersons for Nasdaq Dubai and The Dubai Financial Market couldn't comment immediately on the matter.
The company, which encompasses the government's shares in Nasdaq Dubai and the Dubai Financial Market Co. (DFM.DFM), on Feb. 19 last year said it raised a $2.5 billion one-year multi-currency syndicated facility.
The facility, which carries a one-year extension option at the discretion of Borse Dubai, has a conventional and Islamic tranche, and pays 325 basis points per year over the London interbank offered rate.
The company said that at the time of syndication participating banks included India's Bank of Baroda (532134.BY), Dubai Islamic Bank PJSC (DIB.DFM), Emirates Bank International PJSC, HSBC Holding PLC (HBC), National Bank of Abu Dhabi PJSC (NBAD.AD), Skandinaviska Enskilda Banken AB, The Bank of Tokyo-Mitsubishi UFJ Ltd. and Union National Bank.
Turkey touts proposed gas pipeline from Qatar
Recep Tayyip Erdogan, the prime minister of Turkey, used his appearance in Abu Dhabi yesterday at the World Future Energy Summit to promote the ambitious project, which could supply gas to Europe through a Turkish hook-up with the proposed Nabucco pipeline.
Mr Erdogan said the Qatar-Turkey pipeline project was “important” for his country, and “will provide remarkable opportunities for Gulf countries”.
He also described last year’s signing of an inter-governmental agreement on the Nabucco pipeline as the year’s “most significant development” for Turkey’s energy strategy.
Bank says UAE markets could rise by 25% this year
Stock markets in the Emirates could gain 25 per cent this year, helped by attractive valuations and faster earnings growth, a report from the UAE’s biggest investment bank says.
A successful resolution to Dubai World’s planned debt restructuring would also benefit local markets, Shuaa Capital said yesterday.
The bank said investors might have given too much weight to negative news related to the Dubai Government-owned conglomerate.
NK Project Helped KEPCO Win UAE Nuclear Bid
A controversial inter-Korean nuclear development project, which wrapped up years ago, played a key role in helping the Korea Electric Power Corp. (KEPCO) win its first bid to build nuclear power plants overseas, a senior KEPCO official said.
"Some still might say the Korean Peninsula Energy Development Organization project was a failure, but it offered us priceless experience that helped us win the United Arab Emirates (UAE) bid," Byun Jun-yeon, KEPCO's executive vice president, told The Korea Times.
The KEDO project, launched in 1995, was aimed at constructing a light-water nuclear power plant in North Korea. However, no concrete results were apparent as the project broke down due to Pyongyang's intransigence and disputes among participants.
Gulf buries its head in the sand over water
Standing in one of the many farms that line Bahrain’s northern coast, it is easy to forget that this is technically a desert island. Between the ranks of date palms and pomegranate trees stretch fields of spinach, herbs and potatoes – a view more appropriate to a Caribbean island than the arid Gulf.
Yet this bounty has come at a high price. Poor management, population growth and the promotion of energy and water-intensive lifestyles have pushed the Gulf states into a crisis, says a new report by NCB Capital, a regional investment bank. Ground-water reserves have been severely depleted and many cities, such as Jeddah, routinely suffer water shortages in the summer months.
“You are beginning to see in the Gulf the emergence of political constraints to long-term growth and a number of patterns that are unsustainable, from intensive energy use to the waste of water resources and the promotion of agriculture,” says Jarmo Kotilaine, chief economist and author of the report. “Governments are beginning to wake up to these problems, but the concern is that too little is being done and too late.”
Abraaj confronts Pakistan power challenge
Almost three months after taking charge of Karachi’s main electricity provider, Tabish Gauhar promises that Abraaj, the Dubai-based private equity company that manages the utility, will complete its promised investment of $360m by 2012.
It is a make-or-break commitment for the Karachi Electricity Supply Company if it is to extricate itself from years of losses. Last year the company, which is the monopoly supplier to the city’s 18m people, lost Rs1bn ($12m) every month.
Concerns have mounted over the future of Abraaj’s investments in KESC after Dubai’s financial woes posed questions over its ability to raise funds from investors and add $168m to the $193m already invested.
Abu Dhabi offers half cash promised for Dubai rescue
A $10bn rescue package for Dubai pledged by Abu Dhabi was only half that amount because the headline figure included $5bn of loans already granted by two banks, Dubai's government said yesterday.
The disclosure indicates that the emirate has less cash on hand than previously supposed to meet the claims of creditors, and reinforces its reputation for poor communications.
In late November, Dubai said it had received $5bn (€3.5bn, £3.1bn) in credit lines from two Abu Dhabi-controlled lenders: Al Hilal Bank and National Bank of Abu Dhabi. Just hours later it shocked financial markets by announcing it was seeking a debt standstill at its troubled Dubai World conglomerate, raising the spectre of an unprecedented default.
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