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Discuss this article (27 Comments)Dubai to remain an attractive business hub - Sheikh Ahmed
by This email address is being protected from spam bots, you need Javascript enabled to view it on Thursday, 26 November 2009
BANK SHARES: European and Asian markets plunged on concern about potential exposure to debt problems in Dubai. (Getty Images)
Dubai will remain an attractive regional business hub, despite the government having to asked for a standstill agreement regarding the debts of its flagship companies Dubai World and Nakheel, a senior figure has said in a statement.
The government's intervention in the debt restructuring at Dubai World, was aimed to ensure the holding company’s "long term commercial success", said Sheikh Ahmed Bin Saeed Al Maktoum, chairman of Dubai Government's Supreme Fiscal Committee in comments published by news agency WAM.
“We want to ensure resources are deployed in the full knowledge that they are used to enhance the businesses of the Dubai World Group, build on the restructuring that has already been taking place and ensure long term commercial success," said Sheikh Ahmed, who is also chairman of Dubai Civil Aviation Corporation, chairman and chief executive of Emirates Airline and Group.
Related: Dubai’s debt move
"Our intervention in Dubai World was carefully planned and reflects its specific financial position. The government is spearheading the restructuring of this commercial operation in the full knowledge of how the markets would react. We understand the concerns of the market and the creditors in particular. However we have had to intervene because of the need to take decisive action to address its particular debt burden," he added.
"Like most global cities, Dubai has experienced its share of economic and social challenges in this global downturn. No market is immune from economic issues. This is a sensible business decision."
He said further information would be made available early next week.
Sheikh Ahmed said that the unprecedented growth, in Dubai and across the UAE, over the past decade "has helped lay the foundation for what is now a broad-based sustainable economy beyond just natural resources".
"The economic fundamentals, such as our highly developed infrastructure, strong transport and communications hub and regional financial centre will ensure Dubai remains an attractive regional market," he added.
Dubai World is one of the UAE's leading holding companies that includes port operator DP World and property developer Nakheel.
Dubai said on Wednesday that it would ask creditors of Dubai World and Nakheel to agree to delayed debt repayments as a step towards restructuring. It added that DP World was not part of the restructuring process. Dubai World has $59bn of liabilities, representing a large part of Dubai's total debt of $80bn.
READERS' COMMENTS
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HSBC
Posted by Amira Smith, Dubai, UAE on Tuesday 1 December 2009 at 07:14 UAE time
But all you are doing is endorsing my point. Among British banks, HSBC is most exposed to the debt here, and Dubai is a shareholder -hence its stock price plummeted in the wake of the news Dubai World was requesting a payment standstill. It's nothing to do with whether or not HSBC "believes" in the region, but because it is trying to reassure its shareholders and the markes - and steady its share price. Why else do you think it rushed out a statement?
(I find it bizarre how overly emotive you are over what is clearly a business decision; HSBC is here for the potential profits, not because it backs the region. All the foreign banks are. it if all went wrong tomorrow, they'd be out the door like everyone else)
Posted by Amira Smith, Dubai, UAE on Tuesday 1 December 2009 at 07:14 UAE time
But all you are doing is endorsing my point. Among British banks, HSBC is most exposed to the debt here, and Dubai is a shareholder -hence its stock price plummeted in the wake of the news Dubai World was requesting a payment standstill. It's nothing to do with whether or not HSBC "believes" in the region, but because it is trying to reassure its shareholders and the markes - and steady its share price. Why else do you think it rushed out a statement?
(I find it bizarre how overly emotive you are over what is clearly a business decision; HSBC is here for the potential profits, not because it backs the region. All the foreign banks are. it if all went wrong tomorrow, they'd be out the door like everyone else)
@ Amira Smith
Posted by M, Dubai, UAE on Monday 30 November 2009 at 14:21 UAE time
Your assumption is incorrect! HSBC and standard chart. are standing behind Dubai cuz 1) Dubai government is a major shareholder in both entities 3)They firmly believe in the future of this region - i don't mean Dubai only, but all of the GCC and other middle east markets. HSBC has always been a big player in emerging markets, so is SC. So it makes perfect sense to support Dubai at this critical stage, especially that anyone one with a little bit of intelligence will know that global markets are overreacting...big time!! The western media loves the story, but I would blame Dubai for this though, they gave them a perfect story to dramatize and the government has not released any news to clarify its position till now.
Posted by M, Dubai, UAE on Monday 30 November 2009 at 14:21 UAE time
Your assumption is incorrect! HSBC and standard chart. are standing behind Dubai cuz 1) Dubai government is a major shareholder in both entities 3)They firmly believe in the future of this region - i don't mean Dubai only, but all of the GCC and other middle east markets. HSBC has always been a big player in emerging markets, so is SC. So it makes perfect sense to support Dubai at this critical stage, especially that anyone one with a little bit of intelligence will know that global markets are overreacting...big time!! The western media loves the story, but I would blame Dubai for this though, they gave them a perfect story to dramatize and the government has not released any news to clarify its position till now.
Stop bringing up BA / Virgin Airlines into this
Posted by John Marshall, Dubai, UAE on Monday 30 November 2009 at 11:49 UAE time
Omar, I seriously used to agree on some of your arguments and reasoning on your earlier posts about the good things of Dubai. But PLEASE stop bringing up in your arguments that the biggest proof is BA or Virgin flying 5 times a day to Dubai in all of your posts. What the ???? does BA flying to Dubai got to do with Dubai debts ? BA flies to other countries too, you know. You use the same arguments in every post and it makes you look desperate and childish and it really does not help the Dubai PR machine. Others will start thinking that you are now cutting and pasting the same arguments over and over again.
For the sake of the rest of the people here who support Dubai and who are bringing up new points to counter-attack the negativity, please STOP with the flight schedules of BA, Virgin or the insights of Richard Branson, DIFC occupancy levels, Hotels occupancy levels, airport transit figures. We already know those facts from your countless previous posts. We positive people need some new arguments from you.
For the record here, I also think this Dubai debt crisis talk was overblown. But, Omar, if you look at the international financial markets now, some seems to have rebounded and others such NY did not go down as much a feared. So maybe, they are less worried as initially feared. But look at the DFM or the ADX today. The local stock markets have plunged to the maximum level (10%) allowed. So, maybe, it's not the international investors that we have to worry about but the local investors who seem to have lesser confidence in UAE than the foreigners. For example, what's with ETISALAT shares dropping close to 10% ? Omar, my friend, you've got a bigger job that before....convince the locals not to loose confidence in the UAE's ability to handle this crisis.
Posted by John Marshall, Dubai, UAE on Monday 30 November 2009 at 11:49 UAE time
Omar, I seriously used to agree on some of your arguments and reasoning on your earlier posts about the good things of Dubai. But PLEASE stop bringing up in your arguments that the biggest proof is BA or Virgin flying 5 times a day to Dubai in all of your posts. What the ???? does BA flying to Dubai got to do with Dubai debts ? BA flies to other countries too, you know. You use the same arguments in every post and it makes you look desperate and childish and it really does not help the Dubai PR machine. Others will start thinking that you are now cutting and pasting the same arguments over and over again.
For the sake of the rest of the people here who support Dubai and who are bringing up new points to counter-attack the negativity, please STOP with the flight schedules of BA, Virgin or the insights of Richard Branson, DIFC occupancy levels, Hotels occupancy levels, airport transit figures. We already know those facts from your countless previous posts. We positive people need some new arguments from you.
For the record here, I also think this Dubai debt crisis talk was overblown. But, Omar, if you look at the international financial markets now, some seems to have rebounded and others such NY did not go down as much a feared. So maybe, they are less worried as initially feared. But look at the DFM or the ADX today. The local stock markets have plunged to the maximum level (10%) allowed. So, maybe, it's not the international investors that we have to worry about but the local investors who seem to have lesser confidence in UAE than the foreigners. For example, what's with ETISALAT shares dropping close to 10% ? Omar, my friend, you've got a bigger job that before....convince the locals not to loose confidence in the UAE's ability to handle this crisis.
Omar
Posted by Amira Smith, Dubai, UAE on Monday 30 November 2009 at 10:02 UAE time
Just to correct you, HSBC is frantically trying to calm the markets because ITS share price has been hit, in light of the Dubai World announcement. Investors are panicked that - as the leading foreign lender in Dubai- it is exposed to the debt troubles here. The HSBC CEO is "standing by Dubai" in a bid to hold his share price steady.
Posted by Amira Smith, Dubai, UAE on Monday 30 November 2009 at 10:02 UAE time
Just to correct you, HSBC is frantically trying to calm the markets because ITS share price has been hit, in light of the Dubai World announcement. Investors are panicked that - as the leading foreign lender in Dubai- it is exposed to the debt troubles here. The HSBC CEO is "standing by Dubai" in a bid to hold his share price steady.
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