Dubai bond issue draws international interest

BOND ISSUE: Vice chairman of UAE central bank and chairman of DIFC upbeat about investor interest. (Getty Images)

A sovereign bond issue planned by Dubai this year, to raise funds to help state-linked firms, has drawn a lot of international investor interest, a member of a Dubai committee formed to tackle the fallout of the global financial crisis said on Saturday.

DIFC governor, Omar bin Sulaiman, who is also deputy chairman of the UAE central bank, told Reuters international investors and sovereign wealth funds had shown interest in the next tranche.

"We received a lot of interest from the world, which means the world still believes in Dubai," Bin Sulaiman said on the sidelines of a Young Arab Leaders conference in Beirut.

Bin Sulaiman described the level of international interest in the new issue as "very high."

The economy of the UAE, which relies heavily on oil exports, was estimated to have grown by 7.4 percent in 2008.

The IMF said in April growth was expected to fall to 3.3 percent this year, hit by lower oil prices. Dubai, on the other hand, derives only 3 percent of its gross domestic product from oil.

Commenting on Dubai's economic outlook, bin Sulaiman said: "Definitely the worst is over. It doesn't mean that all the challenges are over. We still have challenging times ahead of us." The first quarter had been difficult but "surpassed everybody's expectations", he added.

Bin Sulaiman said Dubai was well-positioned to stage a quick recovery thanks to investment in infrastructure in recent years.

"All of this, when the dust settles, will make Dubai rise again and give Dubai an even bigger advantage over everybody else," he said. (Reuters)

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