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Financial News
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The National
The
Federal Government’s consolidated budget surplus should more than triple
to Dh14 billion (US$3.81bn) this year if oil prices are sustained at existing
levels, says the Arab Monetary Fund (AMF). Nonetheless, it is still a
long way short of the Dh197bn budget surplus the country posted in 2008
when crude prices rose to record highs, a report by the Abu Dhabi-based
fund said. It said the surplus should be about 6 per cent of national GDP
this year, up from Dh4bn last year. Economists expect an improvement in
the price of oil from last year to help lift the fortunes of the economy
this year. “The main reason for the increased surplus is that the oil price
saw a big jump this year,” said Monica Malik, the chief economist at
EFG-Hermes in Dubai. EFG Hermes has forecast the surplus to reach 5.6 per
cent of GDP this year. Moody’s Investors Service expects the balance to
be about 8.4 per cent of national income compared with 0.4 per cent of
GDP last year. Oil prices have more than doubled from their lows of below
$34 a barrel in December 2008. Younis al Khouri, the Director General of
the Ministry of Finance, said last week the UAE was on course to balance its
budget after spending about half of its projected Dh43.6bn annual
appropriation in the first six months of the year.
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Emirates 24|7
Acting Director of Financial
Resources Management at the Ministry of Labour Mohamed Saqr Al Nuaimi has
been named as one of the leaders of change in Federal government. Al
Nuaimi was voted by the Ministry of Finance, the body overseeing the
application of the zero-based budget. Al Nuaimi was chosen for the role
for his direct contribution to supervising the preparation of the
zero-based budget in accordance with the Strategic Plan of the Ministry
of Labour. The zero-budgeting is a new orientation of the federal
government of UAE and conforms to the strategic direction of the Ministry
of Cabinet Affairs.
Banks can deal with fresh exposures: Suwaidi
Emirates 24|7
UAE banks can deal with fresh exposure to debt defaults
given their high liquidity and reserves they have built over the past
year, Central Bank Governor Sultan bin Nasser Al Suwaidi was quoted on
Wednesday as saying. Suwaidi said the country’s 51 banks are still
following a tight credit policy but expected them to resume normal
lending after the economic situation improves. “The UAE banking sector is
capable of facing any economic situation in the future, including
difficulties by indebted companies or individuals,” he told the
semi-official Arabic language daily Al Ittihad. “The Central Bank is
following closely all the developments in the banking sector. I think the
capital and reserves controlled by the UAE banks are large and sufficient
and the liquidity situation is good.” Suwaidi said the banks’ strong
liquidity position is underscored by a surge in their investment in the
Central Bank, with their certificates of deposits swelling by more than
Dh6.5 billion in July alone. “But banks are still cautious in expanding
their credit because of the repercussions of the global financial crisis.
I believe they will resume normal lending once economic conditions start
to improve.
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Gulf News
Abu
Dhabi: The Minister of Economy, Sultan Bin Saeed Al Mansouri, said the
UAE economy remains robust thanks to the diversification provided for by
the wise leadership's economic policies. The UAE economy is capable of
achieving a growth rate of 2.5 per cent in 2010, compared to 1.3 per cent
last year, while inflation is expected to fall to 1.1 per cent, down from
1.56 last year, according to Al Mansouri in statements during a Ramadan
gathering at Mina Salam Hotel, Dubai. The UAE economy weathered the
financial crisis thanks to certain measures and incentive reforms which
helped minimise the losses, he noted. "The UAE GDP in 2009 reached
Dh914.3 billion," Al Mansouri said. "Non-oil sectors accounted
for about 71 per cent in the country's 2009 GDP compared to 66.5 per cent
in 2008," he added. Strategy aims Industry is expected to account
for 20-25 per cent in the UAE's GDP in the years to come; up from 16.2
per cent this year, he noted, adding that the Ministry's strategy aims to
push up this contribution to 90 - 97 per cent.
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Khaleej Times
DUBAI — Gulf banks have spent more
than 20 billion dollars on provisions for bad debt and lost investments
but are showing signs of returning to high profitability, Standard and
Poor’s said Wednesday. The rating agency said
that the Gulf banks it rates have spent “more than 20 billion dollars (more
than 15 billion euros) on loan loss provisions and investment impairments
since 2008.” But it said it believed those banks appeared to show
“signs of improvement,” saying that the economies of the Gulf Cooperation
Council (GCC) were starting to recover, thanks to high oil prices and
government policies. The GCC comprises Bahrain, Kuwait, Oman,
Qatar, Saudi Arabia and the United Arab Emirates. “We believe the
asset quality of Gulf banks should improve from 2011 and that their good
margins and efficiency will provide a solid foundation for their return
to high profitability,” said Standard and Poor’s credit analyst Mohamed
Damak. But the agency added that challenges lay ahead.
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Emirates 24|7
The financial crisis has failed to dampen spirit of
expatriates in the UAE as they believe that their financial quality of
life has improved this year compared to last year. In a survey of 25
countries conducted by HSBC bank showed that the UAE’s ranking improved
by one notch in 2010 against last year, placed fourth worldwide in
financial quality of life among expatriates. Majority of respondents are
still sanguine about the UAE economy, with more than three quarters
claiming that they have not been directly hit by the economic malaise and
don’t plan to return home. The survey is based on four main factors which
are annual income in excess of US$200,000; a monthly disposable income in
excess of US$3,000; an increase in saving while living / working abroad
(in their current country of residence); and having at least two luxury
items in the country in which they live. Emirate is ranked sixth in
wealth hotspot, eighth in income and sixth in disposable income and
fourth in luxuries worldwide.
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Emirates 24|7
DIFC Investments, part of the group
which operates Dubai's tax-free business hub, said its unit will make a
periodic profit distribution on its $1.25 billion Islamic bond on time, a
statement said on Wednesday. The amount to be repaid for the three month
period from June 14 to Sept 13 by Dubai Sukuk Centre is $2.88 million, a
statement posted on Nasdaq Dubai exchange said. DIFC Investments has a
debt pile of more than $3 billion. In a note earlier in August, JP Morgan
Securities said the government of Dubai may write off its $1 billion loan
to the state-owned entity in exchange for shares and infuse additional
capital of up to $600 million to help the struggling group restructure
its debt.
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Emirates 24|7
Sheikha Lubna Al Qassimi, Minister of Foreign Trade, has
said that ministry is working on innovative strategy to make UAE trade
competitive globally. Addressing her annual Ramadan meeting with
employees of the ministry, she said the UAE is working on realistic
policies and innovative models to enhance UAE trade globally in tandem
with government vision and its developmental strategy. Sheikha Lubna said
that the ministry relies on new methodologies and sophisticated and
modern tools to deal with strategies to develop the components of the
state's foreign trade, increase national exports to foreign markets,
develop UAE's global trade position and face challenges in regional and
global markets. She urged the employees to strengthen efforts, develop
initiatives that meet strategies and objectives of the ministry, better
promote the UAE and its growing economy, strengthen the presence of UAE
products in global markets and increase foreign investment in UAE
markets, which will lead to raising the competitiveness of UAE economy
worldwide
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Emirates 24|7
Sheikh Hamdan bin Rashid Al
Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance; and Sheikh
Majid bin Mohammed bin Rashid Al Maktoum, Chairman of the Culture and
Arts Authority in Dubai, have offered their condolences to Ahmad Abdullah
Al Shaikh, Director General of Dubai Government Media Office, on the
death of his father Abdullah bin Al Shaikh Ahmad. Ahmad and his father
also accepted condolences from a number of sheikhs, ministers,
dignitaries, senior officials and representatives of the mass media
nationwide. The Speaker of Federal National Council Abdul Aziz Al Ghurair
has also offered his condolences.
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Bloomberg
Millennium Private Equity Ltd., a
Dubai government-linked investment company with about $5 billion in
capital, plans to use Islamic financing for venture capital in Europe
after buying the first corporate sukuk in the U.K. Millennium, part-owned
by Dubai Islamic Bank PJSC,
the United Arab Emirates’ largest Shariah-compliant bank, bought $10
million of four-year convertible notes in July that were sold by International
Innovative Technologies Ltd., a clean energy company in
Gateshead. “We are looking at transactions in Europe and other
areas,” Vally Khamisani, a director at Millennium said in an interview in
Dubai yesterday. “They can tap into capital which is focused on Shariah
principles. The structures can fly well here.” Persian Gulf
investors are exploring opportunities outside the region, taking
advantage of tightened lending in Europe to diversify. Middle East and
North Africa private equity funds have about $10 billion available to
invest after raising a record $5.4 billion in 2008, Gulf Venture Capital Association said
in a July 20 statement.
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Arabian Business
A
slowdown in corporate activity during the holiday period has touched the
brakes on the GCC’s largest economy despite a boost in consumer spending,
according to the latest data from Riyadh-based Jadwa Investment. The
finance house said that data for July had suggested slowing, though still
healthy economic growth, with performance distorted by the start of the
summer holiday season combining with the advent of Ramadan. Broad money
supply (M3) growth fell to its lowest level in over a decade as low
interest rates continued to encourage consumers to withdraw funds from
savings accounts. Just under $15.5bn has been wiped off the total value
of savings accounts in the past year. Elsewhere, bank lending to
the private sector rose by 0.6 percent – about average for the year to
date – while inflation hit six percent in July, its highest level since
March last year. Food prices and the rising cost of gold helped boost
inflation, while this was offset by a slowing in rental inflation.
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