AlQabas carries an account of an interview by Shaykh Ahmad Bin Saeed Al Maktoum, Head of the Supreme Committee for Fiscal Policy of the Emirate of Dubai with CNN Middle East Markets.
He's quoted as saying that the process has reached the final stages and he expects that the restructuring will be signed in a couple of weeks.
What's perhaps more important are his comments that Dubai learned from the financial crisis the necessity of focusing/concentrating on the sectors which constitute the core/backbone of its economy. The article states that he did not mention the real estate sector. He reportedly called on workers to revisit their plans confirming that the previous real estate boom will not return just at the revival in real estate will not begin again before some years.
On the rescheduling he said the proposal ( قُب.ل Not sure what this means. Cable? Anyone out there with an idea please post.) is in its initial forms and we are putting the finishing touches on it. today We're optimistic in getting all signatures with the hope this will be completed in the next two weeks.
About the complaints of local creditors about the interest rate they will get is unfair to them compared to what the Western creditors are getting, an unnamed Emirati official is quoted as saying: "The offer of Dubai World is generous for all. And we have made it clear that we do not want to harm any of our creditors. The creditors in turn understand what we are doing. And it's incumbent on them to thing about their long term presence (in Dubai)."
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2 comments:
Ye olde arrogance raises its head again...The message it screams out between the lines is "Take it or leave it" and if you leave it your business is finished in Dubai.
Btw...There is a large and very popluar villa compound in Dubai, owned by Sheikh Ahmed. About two/three years ago all 160 tenants or so got eviction notices. The plan was to redevelop this prime piece of real estate with double the density. Then, after some to-ing and fro-ing everything stopped. The tenants are happily ensconced in their villas to this day, and rents -shock horror- have even been reduced!
Similar to what stockpickers do who watch which directors buy or sell shares in their own companies, it's always useful to see what the top guys here are doing with their own money...
Pretty typical stuff for a restructuring. At some point you tell the banks to "stuff it".
Perhaps my translation was a bit inartful. One might read his comments as "We've done all that's possible. It's the best we can do".
The local banks never funded their US$ loans at the same rate as HSBC - though no doubt in happier days, they at least had a positive spread.
Now they don't. If everyone is applying IFRS consistently and had been carrying the loans at historic cost (held to maturity or originated loans), the immediate impairment should be the same - with the negative interest margin buried in the income statement year by year. It will still hurt but won't be as obvious.
Interesting about Shaykh Ahmad's compound. Appears he may have first hand knowledge of the lesson of the real estate sector.
To be fair of course, it's not only in the UAE that folks get carried away with bubbles. I can think of one "highly developed" Western nation which seems to have been on a path of serial bubbles. At least I hope the past tense is right in that connection.
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