GCC News Roundup – May 21, 2009
News & Views General
· The withdrawal of United Arab Emirates from the proposed Gulf monetary union has thrown into question the viability and influence of any union that does emerge eventually. The UAE — the second of six members of the Gulf Cooperation Council (GCC) to pull out of Gulf monetary union after smaller Oman — linked its decision to a choice to base a joint central bank in Saudi Arabia, by far the region’s largest economy.
· National Bank of Abu Dhabi received approval from Hong Kong Monetary Authority to set up a full fledged branch in Hong Kong.
· Dubai based Aramex approved a proposal permitting foreigners outside the Gulf region to own 49% of the company’s shares.
· Abu Dhabi Commercial Bank announced to lend $79.5 Mn to Finance House through medium term loans, overdraft and guarantee facilities. Finance House will utilize these funds to finance its operations in the retail as well as small and medium enterprise sector.
· Orascom Telecom initiated a lawsuit against France Telecom as the latter has offered to acquire minority rights in Mobinil.
· Dubai Islamic Bank announced to buy back $50.6 Mn worth of sukuk, which is maturing in 2012. The buy-back price is set at 88% of the bond’s face value and the settlement date is May 21, 2009.
· Commercial Bank of Kuwait received approval from Central Bank of Kuwait to buy about 10% of its issued shares.
· Dubai is likely to borrow additional $10 Bn from the Central Bank of UAE, by the end of 2009, to help state owned companies in raising cash.
· Gulf region’s borrowers are likely to restructure their Islamic bonds as global recession cuts funding to repay the debt – Law firm, Clifford Chance LLP. Investment Dar Co. had missed a payment on $100 million of debt last month, becoming the first Persian Gulf company to default on Islamic bonds, also known a sukuk. The market for such bonds has grown to $90 billion as surging energy prices spurred borrowing in the Persian Gulf and Asia.
· Saudi Arabia hasn’t canceled rail, port and roadwork projects because of the global financial crisis as the government spends cash reserves to diversify its economy and create jobs – Transport Minister Jubara al-Suraisry.
Real Estate and Private Equity
§ Aldar Properties announced to issue a dollar-denominated bond through a special purpose vehicle named Atlantic Finance Ltd.
§ Danube Building Materials FZCO established two retail complexes worth AED11 Mn in Dubai and Abu Dhabi.
