Financial News                                                                                          Thursday February 9, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt settlement fund launched

 

Khaleej Times

 

ABU DHABI — The Ministry of Presidential Affairs on Tuesday officially launched an initiative to help settle bank debts of UAE nationals, which was announced by the President, His Highness Shaikh Khalifa bin Zayed Al Nahyan, on the 40th National Day. The Dh10 billion-fund, called ‘Citizens’ Debt Settlement Fund’, was launched at a simple ceremony at the Presidential Court in Capital. The fund signed Memorandum of Understandings (MoUs) with one international and seven local banks under which the signatory banks will waive off 50 per cent of the UAE nationals’ loans. “The fund is a non-profit making organisation and has been established to address the issues pertaining to UAE nationals’ bank debts. In the initial stage, the fund with the help of the signatory banks will help settle debts below a million dirham,” said Ahmed Jumma Al Za’abi, Minister of State for Presidential Affairs, who is also the chairman of the fund committee. Mohammed Abdullah Al Rumaithi, Undersecretary for Financial and Purchasing Affairs at the Ministry of Presidential Affairs, signed the MoUs with CEOs of National Bank of Abu Dhabi, the First Gulf Bank, Abu Dhabi Islamic Bank, Abu Dhabi Commercial Bank, RAK Bank, Union National Bank, Mashreq Bank and Standard Chartered Bank. The signing ceremony was also attended by Khalil Mohammed Sharif Fauladi, Central Bank Board Chairman, who assured the apex bank’s full support to the newly established fund.

 


 Dubai's debt decision a credit positive step

 

Gulf News

 

Dubai: The absence of Dubai government guarantees in support of the Dubai Group restructuring is credit positive for Dubai's sovereign credit worthiness, Bank of America Merrill Lynch (BofA) said in a report yesterday. "While decreasing contingent liabilities is positive for sovereign creditworthiness and CDS [credit default swaps], the immediate impact may be trumped by broader Dubai Inc restructurings and sentiment," Jean-Michel Saliba, a BofA economist wrote in a note. However, he added that the decision was broadly shrugged off by the market. The Drydocks example This announcement leaves Dubai Group to fend for itself with its creditors, who have been calling for $2 billion (Dh7.34 billion) in government support and a backstop guarantee of $1.8 billion. Dubai Group is the second firm after Dubai Drydocks to have to negotiate a restructuring deal with no government support. Dubai Group is seeking to restructure $10 billion ($6 billion in bank loans and $4 billion in inter-company loans, likely in part owed to the Dubai Financial Support Fund), though only $1.8 billion of syndicated loans appear in publicly disclosed data. Dubai Group is now reported to be offering maturity extensions of five years to secured lenders (owed $3.2 billion) and 8-10 years to partially secured and unsecured lenders (owed $2.8 billion). Interest payments are expected to be resumed once an agreement is reached with banks. Dubai Group appointed eight banks to represent creditors in two committees in 2011 to help with the restructuring. 

  


Dubai’s key sectors show strong growth in 2011

 

Khaleej Times

 

DUBAI — Key economic sectors and economic activity in Dubai remained stable and growing in 2011, with the Department of Economic Development, or DED, issuing 14,360 business licences during the year. The professional services sector, at seven per cent, accounted for the most number of licences in 2011 followed by the tourism sector at five per cent. “The strong economic performance in Dubai, as demonstrated by the high number of business licences issued, was led by the visionary policies of the government. It also shows the high level of investor confidence in Dubai, chiefly on account of its leading economic role in the region and the world. One of DED’s strategic objectives is to create a suitable environment that retains Dubai as a destination of choice for investors,” said Sami Al Qamzi, Director General of DED. “We always seek to attract investment and boost economic activity in Dubai by providing value-added services to investors and the business community,” added Al Qamzi. The top ten business activities in Dubai accounted for 12,527 — 24.8 per cent — of the 50,589 activities for which licences were issued in 2011, compared to a share of 11,733 in a total of 46,287 licensed activities in 2010. ‘General trade’ led the list of the top 10 licenced activities in the commercial category with 1,799 licences issued in 2011, compared to 1,543 licences in 2010. Dyes  and paints; carpentry and flooring  and tiling were the other business activities that showed significant growth last year.

  


 Dubai Municipality attains Dh2.1b budget surplus

 

Khaleej Times

 

DUBAI — Dubai Municipality on Wednesday said it has achieved a Dh2.1 billion surplus in 2011 budget, mainly on rationalisation of expenses in operational activities. The civic body implemented a number of programmes and initiatives in rationalisation of expenditures in its balance sheet of 2011, said Mohammed Abdul Karim Julfar, Assistant Director General of Dubai Municipality. Julfar said that the municipality has applied nine programmes for the rationalisation of expenses in operational activities, which could save Dh245 million and in projects saving Dh120 million. It also applied four programmes in the field of income developments saving Dh328 million. The overall benefits are totalling Dh693 million, which reflected on the financial performance of the civic body that achieved the surplus of Dh2.1 billion in the budget of 2011, he added. “The role of Finance Department and other sectors is very big in developing a rational budget studying the actual needs of organisational units, exploiting human and material resources in the implementation of programmes and projects without resorting to outsourcing. They could also expand partnerships with the private sector in the implementation of investment projects and sponsoring community events. In addition, it could reduce the operational cost of the stock and the revival of idle stock with a world record,” Julfar said.

 


Why you must play your cards right

 

Gulf News

 

DUBAI: UAE customers are paying the highest credit card rates in the Gulf. A survey by XPRESS found that banks charge an average annual percentage rate (APR) of between 29.88 per cent (2.49 per cent monthly) and 35.88 per cent (2.99 per cent monthly) on credit cards — among the highest in the Gulf. By comparison, Saudi banks charge a monthly rate of 1.6 to 2 per cent; Qatar and Kuwait banks charge 1.5 per cent, while Bahraini banks charge 1.74 to 1.83 per cent, according to industry reports. Concerned by the high interest rates, the UAE Central Bank last week announced that credit card rates will be capped at 18 per cent per annum, or 1.5 per cent per month, and stipulated that banks would no longer be able to raise fees after issuing a card. The move, expected to be made official soon, would give long sought after relief to card-holders in the UAE. Experts say that with the UAE's credit culture still in its infancy, marked by a unique expat-majority demography, many card- holders unwittingly edge towards a debt trap through misuse or paying just the bare minimum — five to 10 per cent of total outstanding.

 


Dubai issued 14,360 new business licences last year

 

Gulf News

 

Dubai: The Department of Economic Development (DED) issued 14,360 business licences during 2011, DED announced yesterday, arguing that the result reflects stability and growth across key economic sectors and business activities in Dubai. The professional services sector, at seven per cent, accounted for the biggest number of licences, followed by the tourism sector at five per cent. Investor confidence "Dubai's strong economic performance is demonstrated by the high number of business licences issued. It also shows the high level of investor confidence in Dubai," said Sami Al Qamzi, Director General of DED. But Abdul Hamid Radwan, a UAE-based Economist, told Gulf News yesterday that while the increase in licences was positive, all aspects should be looked at. "The big number of new licences is a positive sign of the growth of the business sectors in Dubai, [but] this number should be taken in comparison with the number of licences that weren cancelled in the same period."