Dubai swept out the board of indebted property firm Nakheel and replaced its high profile chairman on Tuesday, in the wake of parent company Dubai World's $9.5 billion rescue plan. Nakheel, builder of man-made islands in the shape of palms and a map of the world, will get a new board and chairman as the developer pushes ahead with projects. Ali Rashid Ahmed Lootah was appointed chairman, replacing Sultan Ahmed bin Sulayem who is also chairman of Dubai World and a major name in Dubai's corporate landscape. Lootah is listed as a vice-chairman of Dubai's Mashreq Bank on the lender's website. The changes come less than a week after Dubai launched plans to restructure $26 billion in Dubai World debt.

Nakheel claims to be the largest property firm in the Middle East and was the unit within Dubai's dense constellation of government-related entities that threatened to scupper over six years of rapid expansion that thrust Dubai on the world stage. The Dubai government said in a statement the new board would help prioritise property projects, many of which have been put on hold since Dubai's boom turned to bust.

Money management

Dubai Financial Support Fund (DFSF) has been entrusted by the Government of Dubai to head the restructure of Dubai World immediately. The process has begun with the appointment at the direction of the DFSF of a Chief Restructuring Officer (CRO), Aidan Birkett, Managing Partner, Corporate Finance at Deloitte LLP, to Dubai World. The CRO will work with Dubai World’s executive management team to oversee the restructuring process and ensure the continuity of Dubai World’s operations. Dubai World has a portfolio of strategically important businesses and the restructuring will be designed to address financial obligations and improve business efficiency for the future. The DFSF, working with the CRO, will start to assess and evaluate the extent of the restructuring required. As a first step, Dubai World intends to ask all providers of financing to Dubai World and Nakheel to “standstill” and extend maturities until at least 30 May 2010.

The $5 billion bond announced earlier today by the Dubai Department of Finance and managed by the DFSF is not linked to the restructuring of Dubai World and is meant for the general purposes of the DFSF. Dubai World has a portfolio of strategically important businesses and the restructuring plans to address financial obligations and improve business efficiency.

Restructuring begins for Dubai World

Dubai and Abu Dhabi stock markets on Thursday rallied to their highest levels since November and January, after the Dubai Government announced its decision to back the debt of Dubai World and its property-development subsidiary Nakheel. Benchmark indices for the Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX) advanced by 4.3 per cent and 1.2 per cent respectively, led by the real estate and financial services sectors.

In Dubai, investors flocked to Emaar and Arabtec shares, pushing the Emaar up by 8.8 per cent and Arabtec up by 6.9 per cent. Shares of the listed DFM security climbed by 7.8 per cent. In Abu Dhabi, Aldar gained 5.8 per cent and Sorouh added 6.7 per cent. Abu Dhabi Commercial Bank, RAKbank and Union National Bank all gained more than 5 per cent. The debt restructuring proposal, still awaiting the approval of the creditors committee, will see Dubai pump $8 billion (Dh29.4 billion) into Nakheel and $1.5 billion into Dubai World using $5.7 billion remaining from the Abu Dhabi fiscal support package in addition to “internal Dubai Government resources,” according to a statement released yesterday. More significantly, Dubai will convert the $8.9 billion it is owed by Dubai World and the $1.2 billion owed by Nakheel into equity. Since the government is already a full owner of both, this means the debt will be written-off.

Dubai money investment

In just two days, as the world tunes in to watch its most valued hoofs tear down the new turf for a $10 million (Dh36.7m) purse, Dubai will unveil another landmark achievement – Meydan. With two tracks and facilities that scream luxury, it has set the benchmark too high for any other country to follow. Proud residents have long waited this moment and while milliners' cash registers ring and designer store owners sing in glee of March's timely windfall. A 1,750m all-weather 'tapeta' track and a 2,400m turf track will then take a hammering for the next couple of hours until all the $26.25 million set aside for the day have been handed to jockeys, trainers and horse owners.

With cultural delights such as traditional folkloric entertainment, shisha, belly dancers, henna and an Arabian souk to a falcon display, horse and camel shows and rides, Arabic bands, and Dabka dancers, this literally is Arab world on a platter. At Dh1,000 a pop for those parading as adults and Dh250 for children, it obviously attracts the deep pockets. All 6,000 of them. When you make your way to your seat you may not realise that you're strutting through the comfort of a 1.6 kilometre long Grandstand, but when you eventually reach trackside, you are guaranteed to stand and marvel. You'll be one of 60,000 guests curiously observing what the world's first five-star track side hotel looks like. Pan right and you'll see the Sky Bubble lounge under an iconic crescent roof with an unbelievable 360 degree view, turn left towards the track and those that didn't attend the Sting concert will catch their first glimpse of a 107m LED screen. Yes, it is this planet's largest.

Appartments In Dubai

A conglomerate will look into Dubai World’s plan to restructure its $26 billion debt pile to creditors this week. The firm has been in talks with its creditors about how to repay its commitments with an informal bank panel, which represents 97 creditors to the state-owned conglomerate in Dubai. The debt is linked mainly to Dubai World's property units, Nakheel and Limitless World. The company ring fenced other key assets, such as ports operator DP World, from the restructuring. Talks have tested the tolerance and positions of both sides with early reports floated about a loss, as large as 40 percent, while bankers have countered with demands for nothing less than full repayment.

A final proposal on the debt could involve tranches with different repayment profiles, one with a repayment over three to five years with the principal discounted, and another with repayment over seven to nine years with no discount. The eventual proposal will centre on the extension of maturities with low or zero interest, and the option of an early exit at a discount or eventual repayment over a longer period of time. The quality of the offer rests with Abu Dhabi, Dubai's wealthier and larger neighbour, which bailed the emirate out late last year.

Dubai World to restructure $26 billion debt pile

UAE is steering the way to generate travel and tourism employment between 2010 and 2020. Plans are that UAE will generate 5.7 per cent annualised growth rate in travel and tourism economy employment making it the fastest in the world. UAE stands fifth among the countries expected to grow their travel and tourism economy GDP during the 10-year period.

The contribution of the T&T economy to employment is expected to surge from 429,000 jobs in 2010 (13.8 per cent of total employment or one in every 7.2 jobs) to 745,000 jobs (18 per cent of total employment or one in every 5.5 jobs) by 2020, WTTC data show. The UAE is followed by Cape Verde, Fiji and Solomon Islands (all 5.4 per cent), Botswana (5 per cent), Nicaragua and Mali (4.9 per cent each), and Comoros (4.8 per cent). With a 4.7 per cent growth rate during the same period, GCC peer Qatar features at No9 on that list, followed by Guatemala (4.5 per cent). The contribution of travel and tourism to UAE's GDP is expected to grow from 16.6 per cent (Dh156.3 billion or $42.56bn) in 2010 to 21.7 per cent (Dh513.9bn or $139.93bn) by 2020.

A Dubai World debt deal will help lift investor concerns about the regions' financial stability but local firms trying to raise money will still pay a higher price and face more scrutiny. Dubai World, which said in November it would delay repayment on $26 billion in debt as it restructured, is in the final stages of preparing a debt restructuring proposal to present to its creditors. Analysts expect any proposal that sets less attractive terms for creditors will set a precedent that will make it harder for companies in Dubai World's wake to borrow money or raise funds. Analysts are expecting the plan to have less attractive terms for the creditors, setting a precedent that will make it harder for companies coming in Dubai World's wake to borrow money or raise funds.

Dubai-based companies have already been hard hit, with a near-50 percent fall in property prices and most construction projects in the area have come to a halt as well as a curb in lending by provisions-hit regional banks. Before the financial crisis hit global markets, foreign banks were lending extensively to the region, aiming to cash in on the oil-rich emirate's growth prospects. However, foreign investor confidence was deeply shaken by Dubai World's announcement on its debt and, subsequently, international capital markets have become less accessible to most Gulf companies. At the same time, companies that need to raise fresh capital to rebuild balance sheets or to fund expansion have found debt markets in the region are clogged and the appetite for initial public offerings is remarkably low.

Money Investments

Dubai International Airport was the 15th busiest in the world last year for passenger numbers while it ranked fifth for cargo traffic. A total of 40.9m passengers used Dubai's airport in 2009, a growth of 9.2 percent on the previous year. The figures showed that Dubai was one of only four of the world 20 busiest airports to add new growth in 2009, alongside Beijing (ranked third), Bangkok (16th) and San Francisco (20th). Atlanta in the US was the world's busiest airport with almost 88 million passengers, well ahead of London Heathrow (66m) in second place.
For cargo, Dubai also saw growth in 2009 of 5.6 percent, making it one of only three airports to see growth. Memphis and Beijing were the only others, with Memphis topping the world list. Globally, airports saw passenger numbers decline by 2.7 percent last year while cargo volumes retracted by 8.2 percent.

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Dubai is rapidly metamorphosing into a world-class city owing to the progressive and smart strategies initiated by the powers-that-be. Some of the road projects in Dubai are on the verge of completion. Dubai completed 11 key road works last year with the Roads and Transport Authority (RTA) spending Dh3.8 billion (US$1.03bn) on the projects, which include phase one of the busy Ittihad Road, Dubai Bypass Road, the upper deck of the Financial Centre Road, Al Nahda-Beirut Interchange, Mirdif Bridge, Jumeirah Lakes Interchange, Al Barsha road projects and several other roads in the city.
Bridge works Dubai also witnessed some of the most innovative and unique bridges. The first one to change the outlook of traveling in Dubai is the Sixth Crossing at Dubai Creek. It is a landmark bridge over the creek linking new residential and commercial property developments in the city. Other project to grace Dubai's surface is the Murdiff Bridge Upgrade Project. Cost of the project came to about Dh236 million.

Dubai Investments

Dubai World will present a proposal which will consider the long-term interests of banks, contractors and Dubai. The "fair" plan will restructure about $26 billion (Dh95.4bn) of debt as it needs creditors and contractors for the long term, chairman of the Dubai Supreme Fiscal Committee said. The restructuring proposal will be announced "very soon" and will be drawn up considering the long-term interests of the banks, contractors and Dubai.

Sheikh Ahmed bin Saeed Al Maktoum added, "At the end of the day, we need everybody, they need us also; we have projects that will be started in the near future for the long term. My focus today is to do what Dubai knows.” The emirate had given too much attention to its real estate market as prices accelerated, becoming too high over the past five years, he said adding real estate prices are now "right" for Dubai and will help attract new residents and businesses to the emirate, Sheikh Ahmed said. A new offshore oil discovery is "a plus" for Dubai, he said.

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The Finance Ministry released a statement saying that Banks in the UAE are strong enough to absorb any shock, including the impact of Dubai World's debt restructuring. UAE banks have enough capital to absorb any shock that might come. The UAE will also not see a federal bond issue in 2010. The government did not see the need for a capital injection for banks at this time. The ministerial committee is meeting every month and reviewing the end results of local banks. So far they have not seen a need for further injection. The country has Dh20 billion left out of a Dh70bn facility set up in 2008 to inject liquidity into the UAE banking system. Achieving a balanced budget in the 2011 to 2013 period would be government’s top priority.

Prices in steel in UAE showed a positive trend in cost reaching at AED 2,150 per tone and this overall monthly increase from December 2009 to march this year will supposedly influence the regional market as far as implications on the capacity of mills to operate at full capacity. Furthermore scrap prices will continue to firm up, costs of raw materials steadily increased, and billet availability is constrained. In the coming months, more hikes in price are predicted prompting local steel suppliers to strongly reinforce their presence in the regional market. However the rise in price is not in with the steep levels by which global steel prices are rising, which is a reflection that the steel market in the region is becoming indifferent to global market forces and thus continues to have a significant lag behind price surges in other parts of the world.
The price of steel in the UAE started its recent climb from a rate of AED 1,780 per tonne in November-December 2009, to AED 1,850 in January 2010, to AED 1,950 in February, and to its present rate of AED 2,150 per tonne. Comparatively, global steel (mill) prices have gone from USD 490 (December 2009) to USD 520 (January 2010) to USD 535 (February 2010) to USD 570 (March 2010), and latest estimates reveal that a price of USD 600 is imminent. The region’s indifference to the rate of increase seen in global prices is partly due to weak demand, as a result of some major projects in the Middle East being delayed or put on hold. Furthermore, liquidity in payment remains tough, with most contractors and developers unable to commit to immediate payments for suppliers in the region.

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Hospitality sector is looking up and investors, both foreign and domestic, who have preferred to stay away since October 2008, are now exploring private equity deals in the region. However investors are not rushing in to the deals. They are taking their time for analysis as far as mergers and acquisitions are concerned. Investors who have started to explore deals are making initiative towards Dubai and Middle East. Deals will start to flow in once the financing problem is sorted out. Analysts view this as a positive move towards recovery. By the end of 2008 deals have frozen but the situation is looking upbeat in January 2010.

Faced with an oversupply and a decline in revenues, the hospitality industry is hunting for new alternatives to save costs. One of the top four global consultants, Deloitte, yesterday entered an agreement with Roya International whereby it would provide hotel management oversight services in the Middle East. Some of the HMO functions include monitoring ongoing financial performance, evaluating the sales and marketing process and reviewing the budgeting process. Investors are waiting for right valuations and they are unsure if that has hit a nadir or will go down further. But the interesting thing is that investors who were not even considering deals in this region have now at least started to explore.

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In 2009, gold prices broke the record-high level of US$1,200 per ounce before averaging to US$973 per ounce. More than 130 countries served as gold import partners into Dubai in 2009. The total gold trade through Dubai stood at US$29 billion in 2009, matching the value of gold traded in 2008. For the 12 months ending December 31, 2009, a total of 576 tonnes of gold was imported into Dubai, compared to 674 tonnes in the previous year. Although imports in tonnage terms saw a 15 per cent decline compared to the record set in 2008, it was 16 per cent higher than the average import of 498 tonnes since 2001. In 2009, gold exports from Dubai reached 403 tonnes, an increase of nine per cent compared to 371 tonnes in 2008.
The value of the gold trade in the emirate has increased by over six times since 2001; the same for 2009 is more than double the average trade in the past nine years. These figures demonstrate the emirate’s increasingly important role as a centre for regional and global gold trade. With growing stability in global economic conditions, Dubai will continue to perform well in 2010 and further strengthen its status as a global hub for gold trade.

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World renowned accountancy and finance profession, the Institute of Chartered Accountants in England and Wales (ICAEW) is moving into its office in Dubai International Financial Center in a move to strengthening its position in the Middle East Region. ICAEW is a professional body headquartered in the UK with more than 132,000 members in over 160 countries. Setting up a office in DIFC is a part of its campaign to set up regional offices around the world to work more closely with key stakeholders globally and to offer better support to its members and students around the world. The move also will facilitate the institution in attracting more member firms.

The ICAEW Middle East office which is based at the DIFC will cover the following countries including, the UAE, Bahrain, Saudi Arabia, Qatar, Kuwait, Oman, Egypt, Iran, Lebanon, Iraq and Jordan.

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UAE has suffered huge losses due to the impact of sudden shower, resulting in business being hit badly. At least tens of millions of dirhams losses has been incurred, pushing the economy of the country down by approximately Dh2.5bn. IMF reckoned that UAE's GDP would reach Dh909.6 billion this year but in the current scenario, it has taken a downward trend. Parts of roads in Dubai and across most of the UAE have been inundated with water over the past two days, making certain parts of the emirates inaccessible. More than 18 million gallons of water had been pumped out from different locations in Dubai and the Sharjah-bound Emirates Road was the most impacted route due to the large amount of rainwater accumulated on Emirates Road.

The partial shutdown in business over three days had made a difference in certain businesses monthly profits, and bearing the plight at this moment are single-outlet restaurant, retailers in malls, flights, schools, offices, places of tourist attractions, etc.

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AED1.55 billion Cedre Villas development will soon be on the display at Qatar International Investment and Real Estate Exhibition (Q-REX 2010). The fifth edition of Q-REX is scheduled to take place from 3- 6 March at the Qatar International Exhibition Centre in Doha. Dubai Silicon Oasis Authority (DSOA) which made the announcement had launched sale and lease of 400 of the 1,047 units from its Cedre Villas project at Cityscape Dubai in October 2009.

Cedre Villas project consists of executive and twin villas, townhouses, with high-quality finishing, stylish designs, and first-class amenities to suit every customers’ preferences. The units are built in three distinct architectural models – Modern, Traditional, and Arabic. The Urban Community features an exclusive club house, a shopping complex, health and leisure facilities, swimming pools, schools and academies, hospitals, play areas and other necessities. It has been modeled as a city within a city, allowing the residents there to live, work and play.

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