Financial News                                                                                     Thursday September 8,  2011
















Arab economic integration must for growth: Hamdan


Khaleej Times


ABU DHABI — Shaikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance, said the economic integration between Arab nations is a must to boost the inter-Arab economic activity and achieving a sustainable economic growth.  Opening the extraordinary meeting of Arab Finance Ministers in Abu Dhabi on Wednesday, Shaikh Hamdan reiterated the importance of the entry of all Arab countries into the Global Forum on Transparency and Exchange of Information for Tax Purposes, which will boost investments and competitiveness.  At present only Saudi Arabia, the UAE, Qatar and Bahrain are signatory to the forum, while remaining 18-Arab economies have not yet started the process of complying to its conditions. Shaikh Hamdan  also explained the importance of finalising and implementing the decisions of the Economic and Social Development Summit held in Kuwait in 2009 with regards to trade and services and the establishment of the Arab Customs Union in 2015 in order to better deal with economic development challenges in the region.  “In this context, we need to enhance our capability of establishing a solid presence in global markets and to affirm our role in the global financial and economic system by establishing a new Arab development model,” he said. He asked to reduce business risks, decrease costs, build new institutions, enhance governance, more initiatives to organise and develop Arab financial markets, increase opportunities of financing trade and improve the investment climate to attract foreign direct investment.


UAE to spend Dh110m more on 2011 budget


Gulf News


Dubai: The UAE plans to spend an additional Dh110 million on top of its 2011 budget, and to pass a new bankruptcy and public debt law before year's end, Minister of State for Financial Affairs Obaid Humaid Al Tayer told Dow Jones. "We expect to spend an additional total of Dh110 million on enhancing the health sector," Al Tayer said. In July, the federal government announced an increase of Dh540 million to the 2011 budget, including Dh100 million for the health sector. "Since July we have added the additional Dh110 million in spending on the health sector, bringing the upped public spending to Dh650 million," he said. Article continues belowHe added that he expects the UAE's bankruptcy law to be issued "before the end of 2011, as the draft is ready". Sovereign bonds Asked about the public debt law, Al Tayer said he expects it to be passed soon, adding, "We can start issuing sovereign bonds 18 months after the law is passed." His comments came after a meeting of 22 Arab nations in Abu Dhabi, where finance ministers shrugged off the threat to their economies from political upheaval and a global slowdown, saying ample cash reserves and mutual support would help them withstand new shocks. The meeting of the 22 ministers follows the fall of Tripoli to forces opposing the rule of Muammar Gaddafi. Tunisia and Egypt's rulers were ousted earlier in the year and there is ongoing unrest in Yemen, Bahrain and Syria.


 UAE banks resilient, liquidity levels comfortable


Khaleej Times


ABU DHABI — The liquidity levels of the UAE banks are comfortable and the nation’s financial sector is “quite resilient” to the economic shocks, Obaid Humaid Al Tayer, State Minister for Financial Affairs said.  The minister told reporters in Abu Dhabi, on Wednesday that the government took a number of bold measures in September 2008, soon after the financial crisis. Al Tayer termed as “ahead of time” the measures that gave strength to the financial sector, making it quite resilient to the effects of the financial crisis. “We feel quite comfortable and confident of the resilience of our banking sector,” he said.  However, “We remain always vigilant,” by monitoring the economic situation. With regard to liquidity in the financial system, he said,“ we have no concerns.” Speaking to reporters after the extraordinary meeting of the finance ministers from the Arab world, the state minister said that the UAE presented a five-point Abu Dhabi Initiative to address the present weaknesses in the Arab economies in the wake of recent political upheavals. In its plan, the UAE suggested measures to strengthen the economic and financial systems; improving business climate by introducing structural economic reforms.  Al Tayer said that the initiative also suggested a mechanism to tackle the rise in food prices, which has posed a serious threat to economically vulnerable nations apart from funding the inter-Arab trade, which has not picked up despite some of the best efforts by the member states.


Stronger inter-Arab ties sought


Gulf News


Abu Dhabi: The UAE's approach to economic policy is based on five main pillars that support the financial and economic stability of the Arab world, Obaid Humaid Al Tayer, UAE Minister of State for Financial Affairs, said yesterday. Addressing a press conference after the meeting of Arab finance ministers, Al Tayer said: "These pillars include financial and economic stability in the Arab world, creating job openings, stability of prices of goods, Arab food security, trade financing and Arab electronic clearance, which will help boost inter- and intra-regional trade." Regional financial status Al Tayer said that the ministers did not discuss financing any Arab country, but "the IMF report about the global and regional financial status". Article continues below "We also discussed the report by the OECD [Organisation of Economic Cooperation and Development] with regard to transparency and tax regulations," added Al Tayer, saying the ministers listened to UAE proposals on upgrading Arab financial policies. Following the Abu Dhabi meeting, the Arab Monetary Fund plans to send a letter to the IMF and the World Bank on the views of the Arab finance ministers. Although the US debt issue and the EU's fiscal woes have no direct impact on the region, if oil prices drop, this will negatively affect the performance of Arab economies, said Al Tayer. He said that the ministers had also discussed how Arabs would benefit from their competitive advantages in some sectors.


UAE business growth slows


Khaleej Times


DUBAI — The UAE non-oil private sector grew at the slowest pace in 15 months in August, a survey conducted by HSBC Bank and Markit Economics revealed on Wednesday.  The purchasing managers index (PMI) for the non-oil private sector dropped to 50.9 in August from 53.3 in July. A PMI reading above 50 indicates expansion in the sector, while one below suggest decline. The latest reading was the lowest in 15 months. “Underlying the weaker headline figure were slower rises in both new business and employment, a stagnation of output and a fall in input stocks,” the bank said. “New business growth continued to slow during the latest survey period, reaching a one-year low. The rate of increase in new work has cooled sharply over the past two months from the series record rates recorded in the second quarter. However, data suggested that the latest moderation was largely centred on the domestic market as new export orders rose at a sharper pace, boosted by a weaker dirham. Where higher takings were reported, firms commented on good demand, competitive pricing and successful promotional activities,” HSBC said. Production, meanwhile, remained unchanged in August, ending one-and-a-half years of expansion. Employment in the non-oil private sector expanded at a moderate rate during the month, reflecting the softer order growth. Input price pressures remained at elevated levels. Despite that, companies reduced their selling prices in August, though moderately, in order to remain competitive and attract more customers.


 Nakheel delays AED1bn sukuk on inaccurate bank details


Arabian Business


State-backed Dubai developer Nakheel has delayed the issuance of AED1bn ($272m) of Islamic bonds to its trade contractors after bank account details of some of its creditors were found to be inaccurate, it was reported on Tuesday. The developer, which last month issued the first tranche of an AED4.8bn ($1.31bn) Islamic bond as part of a complex debt restructuring process, has asked the 30 trade creditors to resubmit their account details to proceed with the second AED1bn tranche, according to a report by the Alkhaleej newspaper. Nakheel declined to comment further on the report when contacted by Arabian Business. The developer behind the Palm Jumeirah and The World islands, was at the heart of Dubai’s crippling debt crisis in 2008 after a property bust bought the company to its knees. The firm Aug 24 announced details of its five-year debt restructuring programme, which included the issuance of an AED4.8bn Islamic bond in part payment to trade creditors. Nakheel offered creditors repayment of 40 percent cash and the remaining 60 percent in the form of an Islamic bond, or sukuk, at a profit rate of 10 percent. Nakheel said Aug 24 it was restructuring some AED59bn of liabilities, including AED32bn to Dubai government, AED19bn to trade creditors and AED8bn to banks. The company said it had settled about 60 percent of liabilities linked to buyers in its stalled real estate projects, representing about AED10bn ($2.72bn), by offering investors homes in completed Nakheel projects or a credit switch to another investor or project.



UAE ranked as innovation-driven economy


Khaleej Times


DUBAI — The Global Competitiveness Report 2011/2012, issued by the World Economic Forum, ranked the UAE 27th globally for competitiveness.  The report classified the UAE as an innovation-driven economy. This is the highest stage of economic development that a country can achieve. This classification is based on factors that promote innovation in economic development.  The UAE was the only Arab country to be classified in this category for three years consecutively. Other countries in this stage of economic development include Germany, Japan, Sweden, Australia, Canada, the United States, Switzerland, the United Kingdom and Singapore. According to the report, the UAE has ranked among the top ten countries in more than 20 global competitiveness indicators, and has scored advanced positions among the 142 countries that the report has covered: The UAE ranked third globally in business costs of crime and violence; fourth globally in quality of air infrastructure; fifth globally in wastefulness of government spending; fifth globally in government procurement of advanced tech products; fifth globally in flexibility of wage determination; sixth globally in quality of port infrastructure; seventh globally in quality of roads infrastructure; seventh globally in the burden of customs procedures.


New DFSA chairman appointed


Khaleej Times


DUBAI — Shaikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, in his capacity as President of the Dubai International Financial Centre (DIFC), has appointed Saeb Eigner as the new chairman of the Dubai Financial Services Authority (DFSA). He also appointed the existing DFSA board members for a further three-year term.  Eigner said: “The DFSA has strengthened its reputation as a world-class regulator under the leadership of the former chairman Abdullah Saleh, who takes on his new responsibility as governor of the DIFC.  “I look forward to continuing to work with my colleagues and to leading the DFSA in its vital role as the regulator of the DIFC. In doing so I am fortunate to have a highly respected and experienced international board of directors and an excellent executive team.” “The DFSA looks forward to continuing to fulfill the vision of His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, to position the DIFC as a global financial centre with strong and independent regulation.” Eigner said that one of his key priorities is the DFSA’s continued engagement with international standard-setting bodies and regulators, as well as the implementation of international regulatory standards.