04/03/2009 11:01 PM | Staff Report
Dubai: The Dubai Department of Finance said it has appointed Rothschild to advise on the establishment of a financial support fund for which $10 billion of five-year bonds have already been issued.
The fund will be wholly owned by the Dubai Department of Finance and controlled by the Supreme Fiscal Committee of Dubai.
It will provide targeted financial support and liquidity to certain state-affiliated entities across the Dubai economy while facilitating the reforms necessary to protect stakeholder value and the long-term viability of these entities.
Further details of the principles for qualification, disbursement, monitoring and recovery of the fund will be provided in due course… SOURCE
Some background on the Rothchilds
…However, in 1882 Edmond cut back on his purchases of art and began to buy land in Palestine. He became a leading proponent of the Zionist movement, financing the first site at Rishon LeZion. In his goal for the establishment of a Jewish homeland, he promoted industrialization and economic development. In 1924, he established the Palestine Jewish Colonization Association (PICA), which acquired more than 125,000 acres (506 km²) of land and set up business ventures.
Edmond de Rothschild also played a pivotal role in Israel’s wine industry. Under the supervision of his administrators in Palestine, farm colonies and vineyards were established, and two major wineries were opened in Rishon LeZion and Zichron Yaakov.[1]
It is estimated that Edmond de Rothschild spent over $50 million dollars in supporting the settlements, and backed research in electricity by engineers and financed development of an electric generating station. In a 1934 letter to the League of Nations, Edmond de Rothschild stated that “the struggle to put an end to the Wandering Jew, could not have as its result, the creation of the Wandering Arab.”…
For his Jewish philanthropy Baron Edmond became known as “HaNadiv HaYadu’a”, (Hebrew for “The Known Benefactor” or “The Famous Benefactor”) and in his memory his son bequeathed the funds to construct the building for the Knesset.
Israel’s 1982/5742 Independence Day coin is dedicated to the memory of Edmond de Rothschild and marks the centenary of his first projects in Israel. From 1982 until 1986, the Bank of Israel used his portrait on the 500 Israeli sheqel note.[2]
Rothschild Boulevard in Tel Aviv is named after him, as well as various localities throughout Israel which he assisted in founding. Rishon LeZion, the city which he helped to found named one of the central streets Rothschild Street, and in 1996 Rothschild Mall was built…
SOURCE
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Can you say piling debt on debt?
02/24/2009 10:01 AM | By Babu Das Augustine, Deputy Business Editor
Dubai: The $20 billion bond issue announced by Dubai government on Sunday is expected to meet all 
the immediate debt obligations of Dubai government and government owned entities and ease the tight liquidity situation in the economy, according to economists and analysts.
The subscription of 50 per cent of this unsecured, $20 billion, five-year notes by the UAE Central Bank at an annual interest rate of 4 per cent, is expected to boost the confidence global financial markets in Dubai.
“The launch of the Dubai bonds is another move by the government to assure the markets that the emirates are working together. The bond issuance, with $10 billion already purchased by the central bank, gives Dubai the ability to refund all its needs for this year, which we estimate at $14 billion. We expect markets to respond positively,” said Marios Maratheftis, an economist with Standard Chartered Bank.
Global rating agency Moody’s estimate Dubai’s refinancing needs at $15 billion. Considering the global financial environment, earlier this month, the rating agency had hinted that it could downgrade the credit ratings of the key Dubai government owned entities. Responding to the bond issues, Moody’s said yesterday that this development will have a positive impact on the credit outlook of these entities.
Moody’s analysts said yesterday that the statement from the Dubai Government’s Department of Finance suggests that there will be no restrictions on how the Dubai government uses the proceeds from the bond.
“Assuming that there are no such restrictions, this news is clearly supportive for the ratings of the six Dubai Inc.,” Philipp L. Lotter Senior Vice President and Tristan Cooper Vice President – Senior Analyst and Moody’s in an emailed statement…
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Seems like everyone wants to copy Obama these days… Somehow the UAE can’t bring itself to say R-E-C-E-S-S-I-O-N:
The country could reverse an economic slump and post 0.5 per cent growth this year with an aggressive plan to boost government spending and inject Dh110 billion (US$29.9bn) into the banking system to promote lending, Standard Chartered Bank said yesterday.
“First, the Government must increase its expenditure substantially, and second, it needs to address the liquidity issue,” said Marios Maratheftis, the regional head of research at the bank.
The recommendations echo the policies that countries throughout the world are adopting to spur economic growth, ward off financial instability and spur spending during the worst global economic crisis in three decades.
But Mr Maratheftis said unlike most major industrialised countries that entered the global financial crisis with large public deficits, the UAE was sitting on large surpluses that could be used to battle the downturn. Last year alone, it had a 30 per cent budget surplus.
“We are entering this downturn from a position of relative strength,” he said. “When you run surpluses you have to save for a rainy day. So we have an umbrella that can save us from rain, but we have to open it.” Mr Maratheftis said a budget deficit would be “absolutely sustainable”.
The UAE’s Dh42.2bn budget for this year plans for no shortfall, although the Dubai Department of Finance announced that the emirate would increase spending this year, which could mean a deficit of Dh4.2bn.
Mr Maratheftis said fiscal spending should be focused on projects such as building schools, hospitals and ports. This would also allow the country to diversify its economy and create new jobs.
“Real estate should not be the main driver of our economy, but we should invest in productive capacity of the economy in education, tourism, financial services and trade,” he said. “We must return to where we started.”
He said the crisis could be a “blessing in disguise” for the region, after too much ready money had flowed into real estate.
Until the end of last year, about 75 per cent of announced projects in the region were in property. But with global liquidity all but dried up, house prices have plunged and developers have cancelled several hundred billion dirhams in construction projects.
Economists have lowered their growth forecasts for the UAE in recent months, with expectations of a sustained period of low oil prices and softening economic demand.
Last month, Standard Chartered revised its estimates for real GDP growth in the UAE from 2.7 per cent to 0.5 per cent…SOURCE
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02/05/2009 09:31 AM | By Babu Das Augustine, Banking Editor
Dubai: The Government of Abu Dhabi on Wednesday announced injection of Dh16 billion into banks based in the capital such as Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, First Gulf Bank, National Bank of Abu Dhabi and Union National Bank.
“Given current global economic conditions, the government believes that this strategic initiative is an appropriate and proactive response to ensure that the strong confidence in Abu Dhabi’s financial institutions is further enhanced,” the Department of Finance of the Government of Abu Dhabi said yesterday.
“The government views this capital injection into the banking system as an important step to allow Abu Dhabi financial institutions to remain strong and well-capitalised compared to international peers, and fulfil their role in achieving the government’s vision for the Abu Dhabi economy,” said Hamad Al Hurr Al Suwaidi, Member of Executive Council and Undersecretary of the department.
Under the initiative, the government will subscribe for Tier I capital notes issued by each of the above financial institutions. The notes will be non-voting, non-cumulative perpetual securities, and will be callable subject to certain conditions.
JPMorgan acted as structurer and arranger of the notes, with Clifford Chance providing legal advice to the government JPMorgan..
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I guess someone figured out that this was killing the real estate market.
01/11/2009 08:26 AM | By Saifur Rahman, Business Editor
Dubai: The UAE federal government is reviewing the issue of freehold property visas linked to foreigners’ ownership of properties in different emirates, a top Dubai Government official told the media on Saturday.
“The Advisory Council [of Dubai Government] has submitted a proposal to the Federal Government on the issue of property-linked visas to review,” Nasser Bin Hassan Al Shaikh, director-general of Dubai Government’s Department of Finance, said at a media briefing on the sidelines of the government’s 2009 budget announcement.
“Since a number of emirates have developed their own freehold visa arrangements, there are thoughts at the federal level to streamline the process and announce a unified guideline for all the emirates.”
Dubai Government created the Advisory Council in October last year, to assess the impact of the global financial crisis on Dubai’s economy, which has been hit due to an outflow of capital, estimated to be well above Dh200 billion.
He said there could be a new law guiding this soon, without giving any timeframe. When asked if he expects a positive resolution, he replied, “Yes, I hope so.”
The freehold visa issue has come to light in recent months when major master developers Nakheel and Emaar – who have been helping foreign buyers of freehold properties to get three-year renewable residence visas – had stopped facilitating them last year, prompting investor outcry.
Experts have welcomed the move, saying the country needed a unified regulation on this and a streamlined procedure to restore investor confidence.
“It is reassuring. It is positive news and will bring a lot of faith and confidence in the market,” Sudhir Kumar, managing director of Realtor’s International, a property consultancy.
“The matter of freehold visas has been an issue of major concern for real estate investors. This addresses the concern. With this, the government is showing its strength and resilience in the time of crisis.”…
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The Government of Dubai plans to boost public spending by 20 per cent next year to stimulate the economy and keep pace with its infrastructure development targets, Nasser Al Shaikh, Director-General of Dubai’s Department of Finance, told Khaleej Times in an exclusive interview on Saturday.
To better-position itself to face challenges posed by the global economic crisis and its impact on the domestic economy, government also plans to merge and consolidate operations of some of its departments and agencies, he said.
Al Shaikh said that the increase in 2009 public expenditure, over the budgeted public spending of Dh30 billion in 2008, would be to mostly meet the cost of construction of the Metro (the first section of the $14.3 billion mass transit project is expected to open by September 2009), the new Al Maktoum International Airport at Dubai World Central, bridges, roads and another infrastructure projects…SOURCE
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