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Fri 20 Nov 2009 03:07 PM

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Dubai may see growth of 5% in 2009 - Alabbar

UPDATE 1: Alabbar withdraws remarks that bonds were in final preparation stages.

Dubai, hit hard by a property downturn in the wake of the financial crisis, may see growth of 5 percent in 2009, a ruling council member said on Friday.

Mohamed Alabbar also said Dubai's second $10bn bond tranche, part of a $20 billion sovereign bond programme aimed at supporting state-linked firms hit by the credit crunch, was in its "final stages" and would be brought to market soon.

"A reasonable chunk of it will be in the market," Alabbar, who is also chairman of Emaar Properties, told reporters after a speech at the World Economic Forum in Dubai.

The UAE central bank bought the first $10 billion tranche earlier this year.

"A lot of it will be taken by regional institutions, but there will be some government bodies who will take it as well," he later said, in a yet-to-be aired interview with Bloomberg TV.

Hours later, however, Alabbar withdrew his remarks that the bonds were in the final stages of preparation, and said in a statement that he "had no links to government bonds which were beyond his competence". Earlier this month, the ruler of Dubai said the second tranche "will receive subscribers", suggesting it would not be purchased entirely by the UAE central bank.

The emirate - one of seven members of the UAE federation - and its state-linked firms have outstanding debt of about $80 billion, much of it incurred during a drive that saw Dubai expand activities in logistics, financial services, property and luxury retail and tourism.

The downturn hit Dubai's property sector particularly hard, leading to real estate project cancellations or delays and substantial job cuts.

Alabbar said in his speech that the emirate had seen some 400,000 people move to Dubai over the past 12 months.

Dubai, which jumped into the global spotlight with vast infrastructure projects such as the world's tallest building, successfully tapped global debt markets in October, in its first fixed income foray in more than a year. (Reuters)

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