DIC believes crisis still to hit bottom

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ON-GOING RECESSION: Dubai International Capital says it has no liquidity problems but has halted is aggressive spending spree.

Dubai International Capital (DIC), an investment firm owned by the ruler of Dubai, said on Friday the global crisis had not hit bottom, but there were still opportunities for investing in firms with potential.

"I don't think we are in a deep depression but we are in a serious recession that will take a few years to take through," Chief Executive Sameer Al Ansari said.

DIC, which is owned by the ruler of Dubai and controls around $13bn in assets, is one of the group of Gulf Arab funds and investment vehicles that have lost billions in the financial crisis through stakes in top Wall Street firms.

Speaking on the sidelines of the annual meeting of the World Economic Forum, Al Ansari said DIC did not face any financial liquidity problems to meet any of its investment commitments from its massive buying spree.

"We don't have a shortage of capital, we have plenty of cash on our balance sheet. We have funding available to us. There are several facilities we are currently renegotiating," he said.

Losses made by Gulf Arab funds and investment vehicles have made them more reluctant to spend on cheaper assets until the market hits the bottom.

Although DIC was now putting the brakes on an aggressive buying spree, there were still opportunities within its broad diversified portfolio in certain firms and sectors such as healthcare and infrastructure that are becoming more cost effective, Al Ansari said.

"If one was to take a two-to five-year view, there are great opportunities out there. Our view today is that we are in no hurry to invest and we have to do more homework to understand what the new world is going to look like in a year or two - who are the winners, who are the losers and where we want to be," Ansari said.

"The focus would remain on building up our broad portfolio ... We have not stopped investing in companies that will emerge stronger," he added, without giving more details.

But despite the impact of the global crisis on the slowdown in the Middle East, the region remained one of the least affected areas in the world, Ansari said.

"The region is not immune to the crisis, the region has a lot of things to cope with, not least the phenomenal oil price drop - add to that the real estate shock or stock markets or the liquidity crunch," he said.

"The governments of the region have done everything possible to mitigate ... the slowdown of the private sector," he said.

"I am still optimistic that the region is one of the few bright spots." (Reuters)

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