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    Dubai down? (mart.j)

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mart.j     posted : 14/02/10   02:29 pm

Adds Dubai official comment.)

By Mirna Sleiman


DUBAI (Zawya Dow Jones)--Dubai World may offer creditors 60% of the money they're owed backed by the sheikdom's government as part of a deal to reschedule $22 billion of debt, people familiar with the matter told Zawya Dow Jones.

The offer, which pays no coupon, will come with a sovereign guarantee when eventually presented to creditors by April, the persons said, adding that the terms of the deal are still in the early stages of discussion and may change.

Under the current proposals, banks including HSBC Holding PLC (HBC), Royal Bank of Scotland Group PLC (RBS) and Standard Chartered PLC (STAN.LN), could recover 60 cents for every U.S. dollar loaned to the troubled conglomerate after seven years, the persons, who declined to be identified because of confidentiality agreements, said.

Dubai World roiled international markets in November when it unexpectedly announced that it would seek a six-month standstill on its debts. The company met in December with 90 creditors in Dubai but little detail on restructuring has emerged until now.

An alternative proposal involves creditors receiving full payment, including 40% of their Dubai World debt in the form of assets in Nakheel--the company's property unit--with no government guarantee over the same seven-year period, the persons said.


A spokesman for Dubai World declined to comment on the terms of the offer, which is still to be formally presented to creditors.

"Neither the government or the company have put forward any restructuring proposals to the lenders at this time," said a spokeswoman for the Dubai Department of Finance, which is financially supporting Dubai World. Ahmed Al Shaikh, a spokesman for Dubai government, said details of a proposal to creditors will be made public in April but declined to give details on the current terms being discussed.

Dubai shares tumbled Sunday, closing down 3.5% after Zawya Dow Jones revealed terms of the proposed Dubai World debt deal. Worries over the company's debt repayment plans sparked a selloff after initial gains in the market, said one trader at Shuaa Securities.

The cost of insuring Dubai's sovereign debt against default rose to its highest level since November Friday as concerns resurfaced over the emirate's large debt and a delay in presenting a deal to Dubai World creditors.

Dubai's five-year credit-default-swap spread--a key measure of credit risk--rocketed close to 50 basis points Friday to trade up at 632 basis points in late trading, according to CMA DataVision.


Creditors were divided Sunday on whether the Dubai World terms under discussion offer a good deal for banks.

"This obviously represents a step forward," said Abdulkadir Hussein, chief executive of Mashreq Capital, the investment unit of Mashreqbank, which has exposure to Dubai World debt. "We've started to see some clarity on the process."

Reaction to the offer from the big international lenders with exposure to Dubai World was more subdued. A spokesman from HSBC declined to comment on the matter when called.

Fahd Iqbal, Gulf strategist at EFG Hermes, the Middle East's largest investment bank, said he expects negotiations between creditors and Dubai World will now intensify.

"The market was expecting either a large haircut and a shorter repayment or a smaller haircut with a longer repayment," said Iqbal. "We expect that Dubai World will go back and forth with bankers on the offer."

U.K. business secretary Peter Mandelson speaking Sunday at a lunch in Dubai hosted for British business also pitched in by urging the emirate to settle its debts fairly and urgently to maintain its reputation with investors.

"Dubai has to be conscious of the fact that depending on how it resolves the current problems will mean a great deal for how it secures investment in the future. Dubai has to tread carefully, openly and not for too long. It has to reach an agreement that's demonstrably fair," Mandelson said.

The emirate is struggling to deal with debts estimated to exceed $80 billion that helped it build infrastructure and rise to become a global city during the boom of the last decade. In November, Dubai World shocked international investors when it asked for a six-month standstill agreement to enable it to restructure $26 billion of debt.

(Maria Abi-Habib and Stefania Bianchi in Dubai contributed to this article.)

-By Mirna Sleiman, Dow Jones Newswires; +9714 446-1698;

Copyright (c) 2010 Dow Jones & Co.

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laurent     posted : 02/03/10   08:37 pm

هذه هي رسالة اختبار
Hedge21     posted : 28/03/10   08:11 pm

ASI edges higher; Dubai index falls


Published: Mar 25, 2010 06:07 Updated: Mar 25, 2010 06:07

JEDDAH/DUBAI: Dubai's bourse fell for a second session in three on Wednesday as volumes slumped, with investors cautious ahead of Dubai World's long-awaited debt restructuring offer.

Other Middle East markets were mixed in subdued trading.

Emaar Properties lost 0.8 percent after saying it would not pay a dividend for 2009 and Dubai Financial Market lost 1.6 percent. The pair accounted for more than half of all shares traded on the index, which fell 0.4 percent to 1,769 points from Tuesday's 10-week high.

"There is only really trading on two stocks - Emaar and DFM - the rest of the market is dead," said Musa Haddad, head of MENA equity desk at National Bank of Abu Dhabi.

"From a technical point of view, I don't see the market going up much. Everyone is waiting to see what will come out of Dubai World. Dubai rallied from around 1,550 points to near 1,800, so the market has already priced in the news."

Abu Dhabi gained for a third day in four, with National Bank of Abu Dhabi rising 3.4 percent. The benchmark rose 0.4 percent to 2,872 points.

Kuwait's Zain rose 1.4 percent to a new 23-week high. After market hours, Zain's board approved its $9 billion African asset sale to India's Bharti Airtel, sources told Reuters.

Some analysts say the asset sale will spark profit-taking in Zain and other companies linked to major shareholder, the Kharafi group, but Essa Al-Hasawi, a dealer at Noor Financial Investment Co. in Kuwait, was more bullish.

"We're still positive and think the market could go up by at least 10 percent once the Zain deal is approved," said Hasawi. "There should be a cash windfall for Zain investors and this should be reinvested into other stocks because there aren't many alternative investment opportunities in Kuwait."

Saudi Telecom Co. and Etihad Etisalat (Mobily) rose 1.8 and 1 percent respectively, lifting Saudi Arabia's index to another 17-month high. "The Saudi mobile market still has growth potential despite high penetration," Al-Rajhi Capital wrote in a research note.

The Tadawul All-Share Index (TASI) edged higher by 0.27 percent to close at 6,756.98 points. The sector activity was balanced with 8 out of 15 sectors closing with positive gains ranging from 0.11 percent by the Retail sector to 1.21 percent by the Telecommunication & Information Technology sector. The losses were seen in the remaining 7 sectors ranging from 0.02 percent by the Media and Publishing to 1.20 percent by the Cement sector. The overall market breadth however remained negative with 54 advancers against 58 decliners giving it an AD ratio of 0.93, the Jeddah-based Financial Transaction House (FTH) said in its daily market commentary.

Qatar's index fell 0.6 percent to 7,372 points, its largest loss for three weeks, down from Tuesday's 23-week high as a bank-led rally waned. Doha Bank lost 2 percent.

The Omani benchmark rose 0.1 percent to 6,775 points.

The Bahraini index fell 0.04 percent to 1,532 points.
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