By Eliana Benador, Special to Gulf News
Published: October 16, 2008, 23:47

New York:  Despite faltering international confidence in financial institutions, Abdul Aziz Al Ghurair, chief executive of Mashreq and Speaker of the UAE’s Federal National Council, believes the UAE’s banking sector will prove “pretty resilient” in the face of the current crisis.

Al Ghurair was honoured this week by the Arab Bankers Association of North America (ABANA) in New York during its 25th anniversary, and received the 2008 ABANA Achievement award.

He spoke to Gulf News about the challenges facing the UAE banking sector, the importance of the ABANA prize, and the role of the FNC.

Gulf News: How has the current economic crisis affected the UAE and your own business activities?

Al Ghurair: We are an open economy and what happens in the world does impact us sometimes, but I think we have been immune from this huge crisis. Yes, there was some maybe slowdown in the stock market, some liquidity issues. But in the last four days we have seen the economy and the stock market bouncing back and the banking system is getting very stable particularly after the support put in by the government.

The UAE announced that it’s guaranteeing all deposits in its banks; it is one of a few countries to have been able to make such an announcement. How do you think businesses will react around the world?

What’s important for us is to manage our economy, our own destiny. I think there is a strong trust in the banking system by the government; therefore they did not hesitate in guaranteeing the deposits for the inter-bank, so it was easy for them, because they have the trust in our banking system.

What’s your reaction to the government’s decision to transfer extra funds to support banks? Also, what are your views of the market response to the government action?

I think that as we are a growing economy, the supply of money is critical and important and this kind of injection into the banking system will allow the economy to grow at the original growth rate. So it is a welcome sign and we will have to adjust to this kind of relationship between the banks and the government.

Could you explain the challenges facing the UAE banking sector, and how resilient it is to external shocks?

I think it’s pretty resilient. We have seen in the first half of the year the banks’ results and within the next week we will have their third quarter results, and we will see they are quite resilient. Now, whether we’ll be able to continue growing at the same pace as the last two years, we have to bear in mind that the growth of the last two years has been phenomenal; the banking system has been growing at a rate of 50 per cent every year. This is unheard of. And, I think we have to accept that a 30 per cent or a 20 cent growth is a great growth in this climate.

Your carefully-planned strategy has allowed Mashreq to become one of the leading banking institutions in the UAE, what did it take to get there and what will be your next project?

I think vision and determination to succeed and setting higher goals for yourself and for your organisation, if you do that, you achieve [success]. So people just don’t think high enough, they are always scared what if it does not happen. And I think every CEO and leader should set up very high ambitions and goals.

How far has the National Federal Council helped strengthen democracy in the UAE? What is the coming phase in widening its powers?

The UAE has a programme of introducing some changes, and already we have seen 50 per cent of our parliament members come by election. Eventually and slowly we will have a wider body with more electoral colleges and it will continue to improve until there is a 100 per cent direct election. More and more powers will be given to the National Federal Council, and we think it will be done on our own time schedule. We think democracy should be tailor-made with each direction, and it should not be used as a cookie-cutter, one formula fits all. We are a federation of states and we are unique even within the GCC countries.

What are your major priorities on the coming session? What are the highlights of your agenda?

There are always new issues that we discuss of concern to our people … and there are always new by-laws which we review. And, giving our parliament members more support in doing their work. So we want to set a higher standard for our parliament members to perform within a session, or what happens after a session. We provide support in all the issues which concern the UAE nationals.

How do you view women’s presentation in the National Federal Council?

I think they are a great asset, they are contributing as much as the male members, and it’s great to have [them]. We have women who have come through the election system, and some have come through the appointment system. So the UAE people accept women quite easily and do not differentiate between male and female members.

And finally, what does the Abana prize mean to you? What are your connections to Abana and would you envisage any potential exchange with the organisation and its members on a regular basis.

The award is really a recognition that an Arab institution has the quality comparable to any other international bank, and this is an encouragement for Arab CEO Leaders to excel at what they do. Some day they will get recognised for their outstanding performance.

The writer is a public relations strategist based in New York and Zurich, Goodwill Ambassador of Children of Peace and Special Advisor to the Washington Cosmos Group.

http://www.gulfnews.com/business/Markets/10252488.html

By Nadia Saleem, Staff Reporter
Published: September 22, 2008, 00:04

The Central Bank governors of five Gulf States are still deliberating on the timeline after a meeting in Jeddah on Tuesday but Fabio Scacciavillani, economist at DIFC believes that they will meet the Monetary Union January 2010 deadline.

“In the last two to three months, the mood has switched dramatically to a state of readiness and they are on track to meet the deadline,” Scacciavillani said, adding that over the past few days, “there has been a determined effort to get this project to full completion in the shortest possible time.”

De-pegging

The International Monetary Fund (IMF) has encouraged the de-pegging of the greenback from Gulf Cooperation Council (GCC) currencies and the adjustment exchange rates. The say the move would help bring down inflation.

Speculation is that the GCC’s European Union-type single currency would be pegged to a basket of currencies instead, according to Nasser Saidi, chief economist, DIFC Authority and one of the authors of the report. Economists are saying that the GCC single currency would be one of the major global currencies and could be a reserve currency.

A report titled The Institutional Framework of the Gulf Central Bank, issued by DIFC says, with the establishment of the new GCC common currency, international investors and central banks around the world would be “keenly interested in holding assets denominated in the new currency, as a safe haven and a hedge against oil shocks and inflation, thereby boosting its international role.”

The writers of the reports say that it is clear the new currency would be among the top five worldwide. “This would also boost the sophistication of local GCC financial markets, extend their depth and strengthen their governance.”

“We believe that a Gulf currency will be major world currency alongside the dollar, the euro and the Japanese yen and it can be one of the international reserves for other countries,” Saidi said earlier.

Structure

The report by DIFC economists proposes the setting up of a body that would preside over the union and details its institutional and governance framework.

The body, Gulf Central Bank, would be a “supranational institution”, with permanent staff, an appointed president and an executive board, which together with the national governors would form a monetary policy council responsible for the setting of monetary policy instruments and taking decisions in all the main areas of monetary policy, the report suggests.

The creation of a new bank with its own staff and executive board, “would strengthen the authority and sustainability of the institutional arrangement and create an organisation that is an effective counterpart of the other major international central banks and financial markets.

For the union to take place, economists suggest the criteria for convergence of the Gulf currencies. While inflation in the Gulf states is converging to the double-digit rate, econ-omists say that it should not exceed two per cent for the common currency.

Many experts are saying that inflation could be the biggest challenge for the move towards the union.

Additionally, the report says that short-term interest rates should not exceed by more than two per cent of the lowest three rates, foreign exchange reserves should cover goods imports for at least four months, annual fiscal deficit should not exceed three per cent of the gross domestic product (GDP), the public debt ratio should not exceed 70 per cent of GDP for the central government.

Another criterion for the currency union is the peg to the US dollar, econ-omists say.

The report also touches upon the voting system for council. It suggests that each member of the council could be given equal voting rights, or a voting power “weighted according to the economic and financial size of each country, with some corrective counterweight mechanism such as a specific voting weight for the President and/or the Executive Board to provide checks and balances.”

Stressing the importance of an authority over the union, the report says that “the intermediate phase in the run up to the launch of the single currency should not be left to a temporary institution, like a monetary institute with weak powers.

“The bank must be created as soon as possible with a strong mandate to clear the obstacles while testing and fine-tuning the decision-making mechanisms in all areas.”

Coordination

Urging the speedy establishment of the single currency, economists say that the increasing international economic and financial openness of the GCC countries requires “policy coordination and concerted action within a well-conceived economic policy framework, to avoid the risk of being swept away by developments that individual countries do not have the power to resist or control.”

Economists say that prior to the launch of the euro, the European Central Bank was preceded by the European Monetary Institution (EMI) which was responsible for the technical details to ensure the smooth functioning of the EMU and the functions of the EMI were agreed upon many years before the euro came into being.

Economists say that an institute similar to the EMI is not in place yet in the case of the Gulf union.

“With such a short time left before the deadline, it would be a waste of energy and political capital to set up some sort of monetary institute that in a few months would cede powers to the bank.”

The report thus urges the quick establishment of a bank, with sufficient capital, human resources and transfer of foreign reserves necessary to conduct interventions in the market if the need arises.

“In a nutshell, the plan for the Gulf monetary union can be interpreted as moving the GCC countries from a monetary union in which they did not enjoy any monetary autonomy to an arrangement in which monetary policy can be more readily tuned to countering inflation, addressing economic fluctuations, adapting to business cycle developments and reacting to changing global economic conditions,” the report says.

http://www.gulfnews.com/business/Economy/10246743.html

Posted in 1 ]]> http://farayandnews.wordpress.com/2009/02/03/plans-for-gulf-monetary-union-on-track/feed/ 0 farayandnews http://farayandnews.wordpress.com/2009/02/03/uae-banks-face-dh500b-fund-shortage/ http://farayandnews.wordpress.com/2009/02/03/uae-banks-face-dh500b-fund-shortage/#comments Tue, 03 Feb 2009 12:31:37 +0000 farayandnews http://farayandnews.wordpress.com/?p=117 ]]>

By Ahmed A. Elewa, Senior Reporter
Published: October 11, 2008, 23:29

Abu Dhabi: The failure of the UAE banking system would jeopardise all the ambitious economic development projects planned by the country, including the Dh660 billion in projects announced at the real estate exhibition Cityscape Dubai last week.

“If the credit contracts along with the banking system there will be no other means to finance the ambitious development projects announced in Dubai and Abu Dhabi,” a senior banker told Gulf News.

“Banks need the necessary capital to provide financing, and with funds flowing out of the country, the only option for the government is to step in,” he added. Most banks refrain from being transparent in relation to the issue, and many claim that no liquidity crisis exists whatsoever, including the major banks.

“Transparency in such circumstances is crucial towards the government and the Central Bank,” the official said.

By the end of 2007, total bank assets exceeded Dh1 trillion, and they stood at Dh1.4 trillion at the end of last June, according to the Central Bank, a figure that will fall by Dh500 billion as a result of the withdrawal of foreign funds.

To many observers, the levels to which share prices have plunged in reaction to the international financial collapse are very attractive indeed, as many companies are being traded at prices below their book value.

“This means that these companies will generate better value if liquidated, and it only reflects that the panic selling that is taking place is beyond any logic,” said Mohammad Ali Yasin, managing director of Shuaa Securities.

Panic

“The panic prevailing as a result of the crisis is not helping anyone, and what is certain is that smart money is cautiously building positions to benefit from this drop.

“The government can also benefit from the situation as the interference will not only restore confidence, but generate generous profits as well,” he added.

Meanwhile, UAE banks are on the verge of a serious crisis due to a Dh500 billion funding shortage, senior bankers revealed yesterday.

With foreigners accounting for about 40 per cent of UAE bank deposits and an increasing gap in the spread between total loans and advances and total deposits of more than Dh56 billion at the end of June, banks can only hope for strong government intervention to salvage the system.

“Foreign deposits that are being withdrawn from the system in addition to the increasing liabilities compared to assets are forcing the UAE banks into a corner,” a top official at a leading bank told Gulf News on condition of anonymity.

“The Central Bank did not actually pump Dh50 billion into the system, as these facilities are for banks to borrow. Instead, what is needed is strong government intervention by placing deposits with the bank to compensate for the outflow of foreign funds,” he said.

Many bankers agree that only a minimal amount of the Dh50 billion of facilities offered by the Central Bank has been utilised.

Total foreign deposits along with European Commercial Paper issues and Medium Term Notes stands at about 35 per cent of total assets, according to a statement by the Central Bank on Saturday.

Meanwhile, total bank deposits fell short of total loans and advances by more than Dh56 billion in June compared to a Dh19 billion surplus in June 2007, according to official statistics fromy the Central Bank.

“These foreign funds were actually hot money that flooded into the country during the increasing speculation about the de-pegging of the UAE dirham from the US dollar, especially after Kuwait departed from the peg,” a senior executive at the National Bank of Abu Dhabi said.

“Now the trend has reversed, and accordingly we find more than Dh200 billion is being withdrawn from the system,” he added.

The end of speculation in the currency market accompanied by the mounting international financial turmoil forced foreigners to abandon their positions in the UAE to cover the losses.

The impact on the stock markets was obvious, where more than Dh293.76 billion was lost in market capitalisation since the beginning of the year, of which Dh130.5 billion, or 44 per cent was recorded last week alone.

“For the government to interfere, is up to the concerned authorities, but as a market we cannot interfere, not even by diminishing the maximum limit down, a practice that proved a failure in Saudi Arabia,” a top official at the Dubai Financial Market told Gulf News.

http://www.gulfnews.com/BUSINESS/Banking_and_Finance/10251418.html

Reuters
Published: October 14, 2008, 23:50

Abu Dhabi: The Gulf Arab region could see a new wave of capital repatriation from the US and Europe following the global crisis, the speaker of the UAE council that advises the government said.

“The current turmoil and apparent failure of regulators, markets and institutions in the West may cause investors from the region, whether public or private, to rethink their strategies and question how reliable they are,” Abdul Aziz Al Ghurair, speaker of the Federal National Council (FNC) said yesterday.

“Just as they did after 2001, regional investors may again shift more of their assets back into regional markets,” Al Ghurair, who is also the chairman of Mashreq, Dubai’s largest bank by market value, told a conference.

Repatriation of billions of dollars of private wealth back to the Gulf Arab region following the September 11, 2001 attacks in the United States and subsequent stringent banking legislation helped boost regional capital markets in the early part of this decade.

http://archive.gulfnews.com/indepth/markets/more_stories/10252013.html

Reporters
Published: January 11, 2009, 23:41

Dubai: The Dubai government’s 2009 budget which boosted the fiscal outlay by 42 per cent to Dh37.7 billion was widely welcomed by Dubai’s business community on Sunday.

A cross-section of businessmen, bankers, economists and senior bureaucrats hailed the budget as growth oriented and said the government’s emphasis on infrastructure spending will go a long way in resisting the impact of the global slowdown on Dubai’s economy.

The budget estimates a 26 per cent increase in government revenue from Dh26.5 billion last year to Dh33.5 billion this year has avoided any new taxes or fees.

The business community in general believes that the Dubai government’s fiscal strategy will be successful in preparing local businesses to meet short-term challenges from the current global economic environment.

Strong step to restoring confidence
If we look at the budget for 2008, we see it was well-managed and showed an increase in government revenues of 30 per cent and most revenues came from government investments in the emirate and abroad.

The majority of this budget (2009) will go to the liquidity of the market, services and for infrastructure. There will be a decline in growth but the government is taking action to inject money into the market to keep the confidence there.

The budget is significant not only for Dubai but for the UAE because the economy of Dubai is a huge part of the whole country.
Abdullah Al Saleh
Director General, Ministry of Foreign Trade

Investment in infrastructure must go on
I think the deficit is insignificant in comparison to the GDP itself. During recessionary times, governments resort to deficit spending on infrastructure projects. I think it’s the right thing to do.

I think investment in infrastructure has increased over 30 per cent and this is a real boost to the economy. My opinion is that there should be more investment in infrastructure and the investment must go ahead without pause.
Abed Junaid
Executive Director, ETA Star Property Developers

Reflection of forward thinking
Our view is that it is a reflection of the forward-thinking of our Ruler and the Executive Council of Dubai. We’ve said all along that it is a crisis of sentiment, not a financial or economic one.

The governments’s commitment to focus on building the infrastructure projects is going to be a very positive boost and shows, to whoever is concerned about the future of Dubai, that Dubai continues its vision of becoming one of the best cities in the world.
Mohammad Bin Braik
Group CEO, Dubai Properties

Strong message for private investors
The decision by Dubai Government to increase public sector spending by 42 per cent to Dh37.7 billion in 2009 underlines Dubai’s chosen path to sustain economic development. The government’s determination also indicates its commitment to ensuring adequate infrastructure is ready when major projects are completed.

The growth in government spending is also a clear message to all the investors in the private sector to demonstrate confidence in the economic fundamentals of the emirate of Dubai.
Hesham Al Qasim
CEO of Dubai Real Estate Corporation (DREC) and Wasl, the asset management group owned by DREC

Announcements will curb speculation
The Dubai budget of 2009 comes at a time when the entire world is reeling from a recessionary phase. It is indeed very positive to note that infrastructure spending has received a further boost.

This year’s budget announcement seems to mark the beginning of an era of better transparency with the budget announcements being more detailed this year.

Transparency in government spending and revenues is highly important for the economic maturity of the country. Transparency is also very critical to ensure that speculation activity is under manageable levels in the economy.
Raju Menon
Managing Partner, Morison Menon Chartered Accountants

Future full of opportunities
It shows Dubai’s commitment to the great vision of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.

The future is full of opportunities and the infrastructure projects will keep the momentum going and through the good management of resources and the good governance system, we will achieve the best .
Marwan Bin Galita
CEO, Rera

Providing fiscal stimulus to the economy
This increase provides a fiscal stimulus at a time when the outlook for the global economy is less than positive with global growth forecast less than two per cent in 2009.

Having budgeted for this, the Dubai government is again demonstrating its ability to be pre-emptive. Whilst this is the first time ever that the government has run a budget deficit, it is less than 10 per cent of GDP.

This is a very healthy ratio in absolute terms and relative to other countries across the globe. The deficit is an investment by the government in enhancing the productive capacity of Dubai.
Sami Al Qamzi
Director General, Department of Economic Development

Shining example of transparency
The most important thing coming out of this announcement is the transparency of the Dubai Government. We are talking very openly about what we plan to do and how much we plan to spend.

Dubai is sending a very strong signal to the market. There might be some deficit in the overall budget but this is the reality of the market.

The commitment of Dubai Government is very clear. Even revenues will witness growth, which is a positive signal that though the market is being affected by what is going on around the world, we still expect local growth to continue.
Hamad Bu Amim
Director-General of Dubai Chamber of Commerce

Evidence of visionary leadership
This is yet another evidence of the vision of leadership. At different times, we viewed this region to be able to manage in good times. Now, in difficult times, the true colours of leadership show.

With this decision, there are indications that leadership here, represented by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, is taking the measures which will induce investor confidence, consumer confidence and shown that these are just temporary times and things will pick up.
Nawfal Al Jourani
Chief Marketing Officer, Dubai Maritime City

Dubai set to meet global challenges
A look at Dubai Budget 2009 shows that Dubai is all set and ready to face the global challenges. It reaffirms the strong commitment, trust, strength and resilience of the Dubai Government and the economy.

This is the first time that the budget is announced in a press conference, the rent cap awaiting approval, the unified freehold visa, part-time work system, ICD and Dubai World representations, restructuring of government departments, postponing VAT to 2012 will all help Dubai survive the current challenges.
Sudhir Kumar
Partner & Head-Corporate Communications and
Public Relations, Morison Menon Chartered
Accountants

Indicator of financial stability
Dubai’s annual budget for 2009 indicates the emirate’s financial stability and sends out a strong message to investors and businesses operating in the region.

The increase in spending also reflects the government’s transparency and confidence in the changed global environment.

Damac believes in the long-term vision of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of UAE and Ruler of Dubai. The budget will provide the needed boost and support to the businesses in the region to weather the challenges posed by the global economic meltdown.
Hussain Sajwani

http://www.gulfnews.com/business/Economy/10274477.html
Chairman of Damac Holding

Posted in 1 ]]> http://farayandnews.wordpress.com/2009/02/03/bankers-and-business-leaders-hail-government-support-2/feed/ 0 farayandnews http://farayandnews.wordpress.com/2009/02/03/uae-banking-remains-resilient/ http://farayandnews.wordpress.com/2009/02/03/uae-banking-remains-resilient/#comments Tue, 03 Feb 2009 12:20:04 +0000 farayandnews http://farayandnews.wordpress.com/?p=109 ]]>  New York: Crude oil futures fell below $70 a barrel on Thursday after a US government report showed a bigger-than-forecast increase in inventories.

supplies rose 5.6 million barrels to 308.2 million barrels in the week ended on October 10, the Energy Department said Wednesday in a weekly report. Inventories were forecast to rise 2.6 million barrels,
according to the median of analyst estimates.
Crude oil for November delivery fell $4.50, or 6 percent, to $70.04 a barrel at 11:14am on the New York Mercantile Exchange. Oil fell as low as $69.15 a barrel after release of the supply report.
 Oil also fell on doubts that the rescue plan for banks will be enough to bolster global economic growth and fuel use. Industrial production in the US fell in September by the most in almost 34 years as hurricanes and an aircraft strike combined with the credit crunch to weaken manufacturing.
Lower forecast

Credit Suisse Group and Sanford C. Bernstein & Co. slashed their oil-price forecasts for next year as tightening credit conditions and slowing economic growth eroded fuel demand.
Bernstein lowered its forecast to $70 a barrel from $90 in 2009 and cut the 2010 estimate to $80 from $95 a barrel, according to a report Wednesday. Zurich-based Credit Suisse reduced its next-year estimate by 32 per cent to $75.
The “ideal” price for crude oil is between $70 and $90 a barrel, Organisation of Petroleum Exporting Countries (Opec) President Chakib Khelil said on Thursday.
Opec hasn’t decided the size of an output cut it may opt for at a meeting in Vienna. “No one can say how much,” said Khelil, who is also Algeria’s oil minister.
Opec said on Wednesday it had brought forward an emergency meeting to discuss the impact of global recession on oil markets to next Friday.
Pressure has been mounting within the group to reduce supplies as oil prices have fallen by around 50 per cent from an all-time high of $147.27 hit in July.

http://archive.gulfnews.com/articles/print_friendly_version.jsp?global_name=/channe… 2009-01-26

Dubai: Dubai will meet its all debt obligations as it puts a comprehensive economic plan together to ride out the current financial crisis, a top government official said on Monday.

Dubai’s total debt obligation of Dh256 billion is much lower compared to its assets, which are valued at Dh1.3 trillion.

“Currently, the Dubai Government’s sovereign debt obligations stand at $10 billion (Dh37 billion). At the same time, the total debt obligations of affiliated companies stand at $70 billion (Dh256 billion), compared with assets valued at $260 billion (Dh950 billion),” Mohammad Al Abbar said on Monday.

Al Abbar, chairman of the Advisory Council – the newly created crisis body of of the Dubai Government – and chairman of Emaar Properties, made the comments at a conference at the Dubai International Financial Centre (DIFC).

“While our key sovereign assets are currently being evaluated, I can give you a rough estimation of their value, being over $90 billion (Dh330 billion). And this does not include our airports, bridges and the Metro. The total value of the assets of the government and affiliate companies in Dubai is well over Dh1.3 trillion.”

Dubai last month created the council to assess the impact of the global financial crisis on its economy, amid a massive capital outflow estimated at Dh500 billion between July and October this year, which resulted in a stock market crash and a correction in the real estate sector.

Dubai shares continued to drop sharply yesterday as investor sentiments were affected by a lack of clarity on the Amlak-Tamweel merger and the news that the three big real estate companies of Dubai are in talks about pulling back property supply.

The Dubai Financial Market General Index fell 5.33 per cent to 1,814.90 led by real estate and banking stocks. Emaar Properties fell close to 10 per cent to end at Dh2.47.

Admitting the challenges, Al Abbar said, Dubai will overcome the crisis. “We accept the challenges that face us and the world … Our feet are firmly planted on the ground and our eyes remain fixed on new horizons, on a future that remains bright. We have risen to great challenges before, and we will rise to them again,” he said.

Emaar-Nakheel merger plan denied

Dubai’s Advisory Council on Monday denied any merger talks between Emaar Properties and Nakheel. “Emaar Properties and Nakheel are not considering any merger plans,” a spokesperson said in an e-mailed statement.

With more than 20,000 completed homes, Emaar has the distinction of delivering the largest number of residential units in the UAE, while with Dh367 billion worth of projects in the pipeline, Nakheel is one of the largest UAE developers.

Together, the combined value of projects under planning and development by both entities is estimated at Dh900 billion stretching from the Far East to Morocco. A merger between Nakheel and Emaar Properties could create one of the world’s biggest property developers.

Do you expect the speech to reassure investors of the viability of the market in Dubai? Will Alabbar’s statements help revitalise the Dubai Financial Market? How do you see it affecting the level of transparency in the business sector?

http://www.gulfnews.com/Business/Economy/10262270.html

By Babu Das Augustine, Banking Editor
Published: December 14, 2008, 23:17

Dubai: Citigroup Incorporated has arranged more than $8 billion (Dh29.3 billion) finance for various Dubai government entities in recent months, the global banking group said.

“This is in line with our commitment to the UAE market in general, and reflects our positive outlook on Dubai in particular,” said Citi’s chairman, Sir Win Bischoff in a statement.

Officials familiar with Citi’s recent deals with Dubai entities said the amount is an aggregate of about half a dozen deals Citi did with Dubai’s public sector entities during the past few months.

“We continue to place the Gulf region among our globally most significant markets, and we certainly see opportunities across all of the UAE’s financial sectors. In the last 2 years, we’ve participated in most major financing transactions across the region including the UAE,” Bischoff said.

Citi’s renewed commitment comes amidst speculation on Dubai’s sovereign debt obligations.

Late last month Mohammad Al Abbar, chairman of the Advisory Council of Dubai’s government and chairman of Emaar Properties, stressed that the government was capable of meeting all its obligations.

According to the council’s estimates, the government’s sovereign debt stood at $10 billion, while its assets, excluding key infrastructure installations were more than $90 billion.

The total debt of government-affiliated companies is estimated at $70 billion, while assets are valued at $260 billion.

While the government has clarified its ability to meet all its debt obligations, analysts view the renewed support by international financial houses as a strong vote of confidence in Dubai’s financial strength despite the global financial turmoil.

“We are quite positive about the UAE’s prospects and Dubai in particular as one of the world’s fastest growing international financial centres.

“This is evident in our decision to move our headquarters for the region to Dubai, and to strengthen our regional coverage teams through key appointments based at the DIFC,” said Mohammad Al Shroogi, Citi’s UAE chief executive and managing director for the Middle East.

http://www.gulfnews.com/business/Banking_and_Finance/10267253.html

US RATE AT LOWEST LEVEL SINCE JULY 1954

Washington (Reuters) The US Federal Reserve yesterday aggressively cut its target for

overnight interest rates to a record lowzero to 0.25 per cent, and said it would employ “all available

tools” to dispel a year-long recession.

The surprise move to lower its target for the benchmark federal funds rate by 0.75 percentage

points to up to a full point from its prior one per cent put the Fed in unprecedented policy territory.

Financial markets had expected the Fed to lower rates by no more than three-quarters of a

point.

The Federal Reserve will employ all available tools to promote the resumption of sustainable

economic growth and to preserve price stability,” the Fed said.

The cut in the federal funds rate pushes it to its lowest level on records dating to July 1954, and

the central bank said it would likely keep it at “exceptionally low levels for some time.”

In addition to the rate cut, the Fed said it was prepared to expand already announced large

purchases of debt issued by government-sponsored mortgage agencies to support the battered

housing market.

Prices for US stocks and government debt shot higher, while the dollar slipped, on the Fed’s

announcement.

It’s a highly unorthodox and creative step,” said Michael Woolfolk, senior currency strategist, at

http://gulfnews.newspaperdirect.com/epaper/showarticle.aspx?article=885bbe32-1acf… 2009-01-04