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’Dubai: It’s a ‘frontier market’ for a reason
Kudos to Zawya Dow Jones for keeping an eye on an evolving legal dispute between Dubai Islamic Bank (DIB) and four businessmen.
Proponents and practitioners of Sharia-compliant finance are fond of trumpeting the safety,
‘Internal Dubai government resources’ to the rescue
Breaking — Dubai’s palm-shaped islands would appear to be safe once more.
The emirate’s government said on Thursday it would stump up cash for the firm’s debt restructuring — including the liabilities of property developer Nakheel — to the tune of $9.5bn.
Dubai World: the restructuring that keeps on giving
The debt shenanigans at Dubai World are keeping analysts, investors and the financial media quite busy.
In the latest issue of Moody’s Weekly Credit Outlook, the rating agency estimates that Dubai World’s UAE-based creditor banks “would incur losses amounting to only around 9 per cent of their capitalization as of year-end 2009″
Sovereign debt crises 2010, an RBS sapling
What is the `Tree of Truth’?
According to RBS, it is a Binary Recursive Tree Approach aimed at selecting explanatory variables and critical threshold levels that best discriminate between sovereign debt crisis and non-sovereign debt crisis states.
Nakheel bondholders are having a ‘temper tantrum’
The UAE’s English language newspaper The National put out a snippy editorial on Wednesday, lecturing about the perils of moral hazard and the like.
In short, it told Nakheel bondholders to get over themselves,
Camel finance
No, that’s not an outrageous slur. It’s a reference to this — the Souk al-Manakh.
This was former camel trading venue was home to the 1982 stock market crash in Kuwait, which wiped out many billions in regional wealth at the time. Older investors in the Gulf will see it as a history lesson for Dubai in how one localised problem can suddenly become much wider and deeper.
UAE post-holiday hit
As expected, the Abu Dhabi and Dubai stock exchanges have been hit with a wave of selling on their first day open since the Dubai debacle broke.
But with brokers having predicted the indices to be suspended limit down,
UAE vs NewsCorp
The leaders of the United Arab Emirates don’t take too kindly to criticism, according to a report by Zawya Dow Jones:
The Sunday London Times newspaper was removed by authorities from shelves in the United Arab Emirates on Sunday amid intensive reporting of Dubai’s debt problems,
UAE: ‘the best banking model to weather the financial crisis’
Statement from the UAE central bank:
Central Bank of the UAE announced today that it stands behind UAE banks and branches of foreign banks operating in the UAE .
Central Bank has issued a Notice to UAE banks and branches of foreign banks operating in the UAE,
This is a sensible business decision
But one that’s sparked a big sell off around the world.
Thursday’s (late) statement from H.H. Sheikh Ahmed bin Saeed Al-Maktoum, Chairman of the Supreme Fiscal Committee:
Our intervention in Dubai World was carefully planned and reflects its specific financial position.
Caveat emptor: Risk factors from the Nakheel prospectus
A quick perusal of the risk factors section in the Nakheel ’09 bond prospectus shows investors were warned about many things.
Firstly, Dubai World, the parent company of Nakheel, “is not required to,
Latvian house prices fall 59.7% in Q3 (y/y)
The Global Property Guide’s quarterly house price report was published on Wednesday offering some sobering statistics on global real-estate prices in the third quarter.
To wit, the fact that “price falls in several countries have been much larger than house price rises anywhere and include unprecedentedly severe falls in Latvia (-59.7% year to date),
Do buy Dubai (and Saudi too), Merrill says
FT Alphaville has featured a series of bearish articles on the Emirates of late (see related links for examples), so here’s a bullish counterpoint: Merrill Lynch believes the region is “a compelling trading buy for investors looking for laggards.”
Major blow to Gulf common currency plans
Progress on the formation of the Gulf Cooperation Council (GCC), a project that aims to create a Gulf Arab monetary union, had been going swimmingly of late.
Most importantly, earlier this month, the GCC got over what was assumed to be one of its most thorny issues – the choosing of a headquarters.
At least one central bank in the Q1 happy bank club
The Swiss National Bank (SNB), being a listed institution, reports every quarter just like any other publicly traded bank. On Friday the SNB reassuringly announced that it — like most other banks in the quarter — was also back in the black;
Political fat tails
Probability distributions didn’t do a great job predicting financial meltdown, and we’re not sure they’ll be much better at predicting general events. But, since it’s not far-fetched to think that political extremes can follow economic ones,
One emirate for all, none for one
Fears over Dubai’s ability to service its debts led Abu Dhabi finally to stage a marked response at the weekend. In a ‘lender of last resort’-type move the emirate bought $10bn of Dubai bonds to help its neighbour raise funds.
UAE to lend Dubai up to $10bn
The UAE is to lend Dubai $10bn to ease the emirate’s debt repayment schedule in an effort to rescue the struggling economy. The UAE central bank subscribed to half a $20bn five-year bond programme launched by the Dubai government,
‘Banks are hereby required not to be in a hurry to publish their audited annual accounts’
Yes, that’s right.
If you happen to be a bank in the United Arab Emirates you have most likely received the above request from the central bank, according to reports from the Zawya Dow Jones newswire.
Atlantis, we have a problem
It might have been obvious, but it appears not all is well in the United Arab Emirates. Who would have thought a region so dependent on a building boom could be exposed to a slowdown during a global credit squeeze?
The latest bad news is focused on Dubai.