Goodbye Dubai
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NO surprises in this news. This was expected despite all the smoke-screening.
I always said that everything would have to change in Dubai (mainly) if all that housing was to be occupied. This meant giving rights to people to feel attracted to buy in Dubai and make it as their own home or than expand exponentially in order to recruit thousands (perhaps 3 to 4 millions) to fill in all those homes.
Now that the debt is here, it'll be interesting to see how Abu Dhabi will flex its muscle in all accounts after bailing Dubai out, including the big businesses which portray Dubai worldwide.
I always said that everything would have to change in Dubai (mainly) if all that housing was to be occupied. This meant giving rights to people to feel attracted to buy in Dubai and make it as their own home or than expand exponentially in order to recruit thousands (perhaps 3 to 4 millions) to fill in all those homes.
Now that the debt is here, it'll be interesting to see how Abu Dhabi will flex its muscle in all accounts after bailing Dubai out, including the big businesses which portray Dubai worldwide.
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Turn Dubai into Vegas with a beach and it may survive
AQ and Taliban would be here next then, its a absolute no no on the land of Arabia.
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Yes it did and still does. Its not only money EK makes huge money
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World stocks dive on Dubai default fears
By Roland Jackson (AFP) – 5 hours ago
LONDON — Global stock markets fell sharply Thursday on mounting fears of a debt default by Dubai and tighter lending conditions in China, analysts said.
London shed 1.95 percent to 5,260.05 points in mid-afternoon deals. The market was earlier forced to suspend trading for three and a half hours due to a technical hitch.
Elsewhere, Frankfurt sank 1.91 percent to 5,692.06 points and Paris plunged 2.04 percent to 3,730.77 points.
In Asia, Beijing nosedived 3.62 percent, Tokyo fell 0.62 percent and Hong Kong closed 1.78 percent lower.
Chinese shares were also hit by the prospect of tighter banking rules and worries about monetary policy next year.
New York markets were closed Thursday for the Thanksgiving Day holiday in the United States.
"We have two major factors weighing on equities and other risk markets: Dubai's call for a moratorium on its debt repayment to May and more stringent capital adequacy requirements for Chinese banks -- but Dubai is bigger," David Morrison, an analyst at financial betting firm GFT, told AFP.
The government of Dubai shocked financial markets on Wednesday when it said it would ask creditors of its Dubai World conglomerate for a debt moratorium of at least six months.
The Dubai government announced that it would revamp the Dubai World group and wanted its lenders to extend its maturing debt until at least May 2010.
Dubai added that it had raised five billion dollars in a new bonds issue aimed at helping meet other debt obligations.
"Dollar weakness ... sent Asian markets plunging, which then took European exchanges with them," said Xavier de Villepion, an analyst with Global Equities in Paris.
In addition, the debt delay request by Dubai "fed a climate of insecurity and crisis of confidence at a time when fears are mounting about excessive public debt."
As equities sank heavily, investors sought safety in the bond market and gold, which struck yet another record high point.
"It's causing a mini flight-to-quality as US, European debt gets bought as a relative safe haven," noted Morrison.
He added: "If (Dubai) had given the debt markets more warning, then there would be less of a panic now."
Meanwhile, ratings agency Standard & Poor's said the development could be considered a default and downgraded a raft of Dubai government entities including Dubai World.
"The rating actions are the result of the announcement on November 25 of the restructuring of the debt obligations of Dubai World and its subsidiary, (property developer) Nakheel," S & P said in a statement.
"In our view, such a restructuring may be considered a default under our default criteria, and represents the failure of the Dubai government to provide timely financial support to a core government-related entity."
Barclays Capital analyst Paul Robinson warned that the issue of Dubai could contribute towards a "serious" pullback in global stock markets.
Others warned that it could take more than a decade for investor enthusiasm for the Gulf emirate to return as a result of this week's development.
"Dubai could not undermine either itself, or global perception any further as a place not to do business in at the moment," MF Global analyst Manus Cranny told AFP.
"Quite literally, this geographic region is now looking as a mirage in stability terms.
"It is the much longer term implications on funding, confidence and capital raising that will take a decade or more to re-establish.
"This last-minute moratorium on debt repayments at Dubai World is unacceptable has all the smacking of an Ireland -- nay worse, an Iceland -- in the making.
"The two regions may be polemic in climate but mirror images in terms of credit and ability to meet their bills."
Elsewhere on Thursday, gold soared to a record high of 1,195.13 dollars an ounce after a purchase of IMF gold by Sri Lanka's central bank, traders said.
The precious metal has also won support in recent weeks from inflationary fears, the weak US currency and increasing moves by central banks to diversify assets into gold.
Copyright © 2009 AFP. All rights reserved. More »
By Roland Jackson (AFP) – 5 hours ago
LONDON — Global stock markets fell sharply Thursday on mounting fears of a debt default by Dubai and tighter lending conditions in China, analysts said.
London shed 1.95 percent to 5,260.05 points in mid-afternoon deals. The market was earlier forced to suspend trading for three and a half hours due to a technical hitch.
Elsewhere, Frankfurt sank 1.91 percent to 5,692.06 points and Paris plunged 2.04 percent to 3,730.77 points.
In Asia, Beijing nosedived 3.62 percent, Tokyo fell 0.62 percent and Hong Kong closed 1.78 percent lower.
Chinese shares were also hit by the prospect of tighter banking rules and worries about monetary policy next year.
New York markets were closed Thursday for the Thanksgiving Day holiday in the United States.
"We have two major factors weighing on equities and other risk markets: Dubai's call for a moratorium on its debt repayment to May and more stringent capital adequacy requirements for Chinese banks -- but Dubai is bigger," David Morrison, an analyst at financial betting firm GFT, told AFP.
The government of Dubai shocked financial markets on Wednesday when it said it would ask creditors of its Dubai World conglomerate for a debt moratorium of at least six months.
The Dubai government announced that it would revamp the Dubai World group and wanted its lenders to extend its maturing debt until at least May 2010.
Dubai added that it had raised five billion dollars in a new bonds issue aimed at helping meet other debt obligations.
"Dollar weakness ... sent Asian markets plunging, which then took European exchanges with them," said Xavier de Villepion, an analyst with Global Equities in Paris.
In addition, the debt delay request by Dubai "fed a climate of insecurity and crisis of confidence at a time when fears are mounting about excessive public debt."
As equities sank heavily, investors sought safety in the bond market and gold, which struck yet another record high point.
"It's causing a mini flight-to-quality as US, European debt gets bought as a relative safe haven," noted Morrison.
He added: "If (Dubai) had given the debt markets more warning, then there would be less of a panic now."
Meanwhile, ratings agency Standard & Poor's said the development could be considered a default and downgraded a raft of Dubai government entities including Dubai World.
"The rating actions are the result of the announcement on November 25 of the restructuring of the debt obligations of Dubai World and its subsidiary, (property developer) Nakheel," S & P said in a statement.
"In our view, such a restructuring may be considered a default under our default criteria, and represents the failure of the Dubai government to provide timely financial support to a core government-related entity."
Barclays Capital analyst Paul Robinson warned that the issue of Dubai could contribute towards a "serious" pullback in global stock markets.
Others warned that it could take more than a decade for investor enthusiasm for the Gulf emirate to return as a result of this week's development.
"Dubai could not undermine either itself, or global perception any further as a place not to do business in at the moment," MF Global analyst Manus Cranny told AFP.
"Quite literally, this geographic region is now looking as a mirage in stability terms.
"It is the much longer term implications on funding, confidence and capital raising that will take a decade or more to re-establish.
"This last-minute moratorium on debt repayments at Dubai World is unacceptable has all the smacking of an Ireland -- nay worse, an Iceland -- in the making.
"The two regions may be polemic in climate but mirror images in terms of credit and ability to meet their bills."
Elsewhere on Thursday, gold soared to a record high of 1,195.13 dollars an ounce after a purchase of IMF gold by Sri Lanka's central bank, traders said.
The precious metal has also won support in recent weeks from inflationary fears, the weak US currency and increasing moves by central banks to diversify assets into gold.
Copyright © 2009 AFP. All rights reserved. More »
short flights long nights
nearly all european markets are down due to the "Dubai effect" Many FOREX markets are also lower..this is big,,its going to be a hell of a ride
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Wonder why Abu Dhabi didn't step in with a helping hand?
Sounds equally alarming to me...
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Watch out girls; this is a game changer. Never, never scare the heavy money guys who you rely upon to fund your "VISION".
IMHO this is a GAME CHANGER FOR DUBAI. I have years in the markets and I see an inferno in the making.
This is not the end.....the business model in it's most basic form "works" without a doubt; it is just the idiot running that model that screwed the pooch.
Stocks Tumble, Bonds Rally on Dubai; Credit-Default Swaps Soar Share Business Exchange*******Facebook| Email | Print | A A A
By David Merritt
Nov. 26 (Bloomberg) -- European stocks fell the most in three weeks and bonds jumped after Dubai’s attempt to reschedule its debt rattled investors seeking higher returns in emerging markets. The dollar dropped to a 14-year low against the yen.
Europe’s Dow Jones Stoxx 600 Index retreated 1.9 percent at 12:02 p.m. in London. The Shanghai Composite Index slumped 3.6 percent, its biggest drop since August. Credit-default swaps tied to debt sold by Dubai rose as much as 131 basis points to 571 according to CMA DataVision. U.S. markets are closed today for the Thanksgiving holiday.
Dubai World, the government investment company burdened by $59 billion of liabilities, roiled markets around the world yesterday by seeking to delay repayment on much of its debt. The dollar’s slump to a 14-year low against the yen prompted Finance Minister Hirohisa Fuji to say Japan’s government is watching currencies “very closely,” while traders said the Swiss central bank sold the franc after it climbed to the highest value against the euro since June 24.
“Dubai isn’t doing risk appetite any favors at all and the markets remain in a vulnerable state of mind,” said Russell Jones, head of fixed-income and currency research in London at RBC Capital Markets. “We’re still in an environment where we’re vulnerable to financial shocks of any sort and this is one of those.”
Sovereign Debt
The Dubai announcement drove up the cost of protecting emerging-market sovereign debt against default. Contracts linked to Saudi Arabia climbed 18 to 108, while Bahrain rose 30.5 to 225, CMA prices show. Debt swaps linked to Abu Dhabi government bonds increased 18.5 to 155, Vietnam rose 39 to 252, Indonesia climbed 27 to 229 and Russia added 13 to 205. Credit- default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements.
Vietnam’s dong, the world’s worst-performing currency, declined 3.3 percent against the dollar to a record low after the central bank devalued the currency to curb inflation. South Africa’s rand weakened 1.1 percent against the dollar as gold declined. The Turkish lira slumped 1 percent versus the greenback, and Hungary’s forint lost 1.1 percent per euro.
Russia’s Micex Index fell 2 percent as commodities retreated. The MSCI Emerging Markets Index of 22 developing nations fell 1.1 percent.
Property Slump
Dubai, which borrowed $80 billion in a four-year construction boom to transform its economy into a regional tourism and financial hub, suffered the world’s steepest property slump in the global recession. Home prices fell 50 percent from their 2008 peak, according to Deutsche Bank AG. Banks around the world have written off more than $1.7 trillion as the credit crisis trashed the value of their assets.
European bonds rose as investors fled to the relative safety of government debt. The yield on the 10-year U.K. gilt dropped 5 basis points 3.58 percent after falling to the lowest level in more than a month. The 10-year German bund yield declined 7 basis points to 3.20 percent, the lowest level in more than three weeks.
Stocks fell from Shanghai to Tokyo and London. The MSCI Asia Pacific Index retreated 0.5 percent as Chinese banks dropped on concern they need to sell more shares to fund demand for loans. Bank of China Ltd., which said this week it’s studying options to replenish funds, declined 2.9 percent.
China Minsheng
China Minsheng Banking Corp. became the first Chinese lender in four years to fall in its Hong Kong trading debut. The nation’s first privately owned lender slipped 3.1 percent after raising HK$30.1 billion ($3.9 billion) this month in the territory’s biggest public share sale since April 2007.
Japan’s Nikkei 225 Stock Average fell to a four-month low as the dollar’s decline against the yen dimmed the earnings outlook for makers of electronics and cars. Canon Inc., the world’s largest maker of cameras, fell 2.1 percent in Tokyo. The company gets 28 percent of sales from the Americas. Toyota Motor Corp., the world’s biggest carmaker, slid 1.2 percent.
European Aeronautic, Defence & Space Co., which is part- owned by Dubai, fell 2.9 percent in Paris. Porsche SE, which is merging with Volkswagen AG, tumbled 6.3 percent and VW fell 2.3 percent in Frankfurt. Qatar owns 10 percent of the voting rights of Porsche and will hold 17 percent of the combined carmaker.
Banks Fall
Dubai World’s lenders include Credit Suisse Group AG, HSBC Holdings Plc, Barclays Plc, Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc, according to a person familiar with the situation. Credit Suisse fell 3.5 percent in Zurich, HSBC slid 4.3 percent, Lloyds sank 3.9 percent and RBS retreated 4.2 percent in London, where a trading glitch halted trading in many stocks.
Marfin Investment Group SA, the investment fund backed by Dubai Financial LLC, plummeted 8.4 percent in Athens.
Futures on the Standard & Poor’s 500 Index retreated 1.1 percent. The U.S. stock market will be open for a half day of trading tomorrow.
The yen climbed as high as 86.30 per dollar, the strongest since July 1995, before trading at 87.77. The U.S. currency strengthened against all but the yen among its 16 most-traded counterparts, appreciating 1.6 percent to 72.06 cents versus the New Zealand dollar and advancing 1.2 percent to 7.4160 South African rand.
The Swiss franc weakened to as low as 1.5133 per euro, falling from the highest level since June, on speculation the Swiss National Bank sold the currency to curb its gains. The franc dropped 0.4 percent to 99.98 centimes against the dollar after yesterday reaching parity for the first time in 19 months. The SNB declined to comment.
Crude oil for January delivery fell 92 cents, or 1.2 percent, to $77.04 a barrel in electronic trading on the New York Mercantile Exchange after a government report yesterday showed rising inventories. Gold for immediate delivery declined 0.4 percent to $1,186.53 an ounce in London trading, after touching an all-time high earlier today.
To contact the reporter on this story: David Merritt in London at [email protected].
Last Updated: November 26, 2009 07:28 EST
IMHO this is a GAME CHANGER FOR DUBAI. I have years in the markets and I see an inferno in the making.
This is not the end.....the business model in it's most basic form "works" without a doubt; it is just the idiot running that model that screwed the pooch.
Stocks Tumble, Bonds Rally on Dubai; Credit-Default Swaps Soar Share Business Exchange*******Facebook| Email | Print | A A A
By David Merritt
Nov. 26 (Bloomberg) -- European stocks fell the most in three weeks and bonds jumped after Dubai’s attempt to reschedule its debt rattled investors seeking higher returns in emerging markets. The dollar dropped to a 14-year low against the yen.
Europe’s Dow Jones Stoxx 600 Index retreated 1.9 percent at 12:02 p.m. in London. The Shanghai Composite Index slumped 3.6 percent, its biggest drop since August. Credit-default swaps tied to debt sold by Dubai rose as much as 131 basis points to 571 according to CMA DataVision. U.S. markets are closed today for the Thanksgiving holiday.
Dubai World, the government investment company burdened by $59 billion of liabilities, roiled markets around the world yesterday by seeking to delay repayment on much of its debt. The dollar’s slump to a 14-year low against the yen prompted Finance Minister Hirohisa Fuji to say Japan’s government is watching currencies “very closely,” while traders said the Swiss central bank sold the franc after it climbed to the highest value against the euro since June 24.
“Dubai isn’t doing risk appetite any favors at all and the markets remain in a vulnerable state of mind,” said Russell Jones, head of fixed-income and currency research in London at RBC Capital Markets. “We’re still in an environment where we’re vulnerable to financial shocks of any sort and this is one of those.”
Sovereign Debt
The Dubai announcement drove up the cost of protecting emerging-market sovereign debt against default. Contracts linked to Saudi Arabia climbed 18 to 108, while Bahrain rose 30.5 to 225, CMA prices show. Debt swaps linked to Abu Dhabi government bonds increased 18.5 to 155, Vietnam rose 39 to 252, Indonesia climbed 27 to 229 and Russia added 13 to 205. Credit- default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements.
Vietnam’s dong, the world’s worst-performing currency, declined 3.3 percent against the dollar to a record low after the central bank devalued the currency to curb inflation. South Africa’s rand weakened 1.1 percent against the dollar as gold declined. The Turkish lira slumped 1 percent versus the greenback, and Hungary’s forint lost 1.1 percent per euro.
Russia’s Micex Index fell 2 percent as commodities retreated. The MSCI Emerging Markets Index of 22 developing nations fell 1.1 percent.
Property Slump
Dubai, which borrowed $80 billion in a four-year construction boom to transform its economy into a regional tourism and financial hub, suffered the world’s steepest property slump in the global recession. Home prices fell 50 percent from their 2008 peak, according to Deutsche Bank AG. Banks around the world have written off more than $1.7 trillion as the credit crisis trashed the value of their assets.
European bonds rose as investors fled to the relative safety of government debt. The yield on the 10-year U.K. gilt dropped 5 basis points 3.58 percent after falling to the lowest level in more than a month. The 10-year German bund yield declined 7 basis points to 3.20 percent, the lowest level in more than three weeks.
Stocks fell from Shanghai to Tokyo and London. The MSCI Asia Pacific Index retreated 0.5 percent as Chinese banks dropped on concern they need to sell more shares to fund demand for loans. Bank of China Ltd., which said this week it’s studying options to replenish funds, declined 2.9 percent.
China Minsheng
China Minsheng Banking Corp. became the first Chinese lender in four years to fall in its Hong Kong trading debut. The nation’s first privately owned lender slipped 3.1 percent after raising HK$30.1 billion ($3.9 billion) this month in the territory’s biggest public share sale since April 2007.
Japan’s Nikkei 225 Stock Average fell to a four-month low as the dollar’s decline against the yen dimmed the earnings outlook for makers of electronics and cars. Canon Inc., the world’s largest maker of cameras, fell 2.1 percent in Tokyo. The company gets 28 percent of sales from the Americas. Toyota Motor Corp., the world’s biggest carmaker, slid 1.2 percent.
European Aeronautic, Defence & Space Co., which is part- owned by Dubai, fell 2.9 percent in Paris. Porsche SE, which is merging with Volkswagen AG, tumbled 6.3 percent and VW fell 2.3 percent in Frankfurt. Qatar owns 10 percent of the voting rights of Porsche and will hold 17 percent of the combined carmaker.
Banks Fall
Dubai World’s lenders include Credit Suisse Group AG, HSBC Holdings Plc, Barclays Plc, Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc, according to a person familiar with the situation. Credit Suisse fell 3.5 percent in Zurich, HSBC slid 4.3 percent, Lloyds sank 3.9 percent and RBS retreated 4.2 percent in London, where a trading glitch halted trading in many stocks.
Marfin Investment Group SA, the investment fund backed by Dubai Financial LLC, plummeted 8.4 percent in Athens.
Futures on the Standard & Poor’s 500 Index retreated 1.1 percent. The U.S. stock market will be open for a half day of trading tomorrow.
The yen climbed as high as 86.30 per dollar, the strongest since July 1995, before trading at 87.77. The U.S. currency strengthened against all but the yen among its 16 most-traded counterparts, appreciating 1.6 percent to 72.06 cents versus the New Zealand dollar and advancing 1.2 percent to 7.4160 South African rand.
The Swiss franc weakened to as low as 1.5133 per euro, falling from the highest level since June, on speculation the Swiss National Bank sold the currency to curb its gains. The franc dropped 0.4 percent to 99.98 centimes against the dollar after yesterday reaching parity for the first time in 19 months. The SNB declined to comment.
Crude oil for January delivery fell 92 cents, or 1.2 percent, to $77.04 a barrel in electronic trading on the New York Mercantile Exchange after a government report yesterday showed rising inventories. Gold for immediate delivery declined 0.4 percent to $1,186.53 an ounce in London trading, after touching an all-time high earlier today.
To contact the reporter on this story: David Merritt in London at [email protected].
Last Updated: November 26, 2009 07:28 EST
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It's a window-dressing or smoke-screening exercise to avoid hurting Dubai's public image and pride, while at the same time Abu Dhabi holds up its breath waiting for Dubai to (kneel) beg for former's much needed help. In doing so, Abu Dhabi will be quietly taking all Dubai's real value assets in a much formal shape and form and portray as being the saviours (Arab botherhood).
Last edited by LLuke; 26th Nov 2009 at 17:16. Reason: Typo
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[IMG]
[/IMG]
For those that don't know, that is $534,000 cost of insurance on $10,000,000 bond position........."Guido" mafia loanshark terms.
What a steller bunch Dubai has associatied itself with..... Dubai is pushing Latvia for #5! LOL. Hope Sheik Mo enjoys his weekend in London while his economy collapses.
[/IMG]For those that don't know, that is $534,000 cost of insurance on $10,000,000 bond position........."Guido" mafia loanshark terms.
What a steller bunch Dubai has associatied itself with..... Dubai is pushing Latvia for #5! LOL. Hope Sheik Mo enjoys his weekend in London while his economy collapses.
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Dubai Debt Delay Rattles Confidence in Gulf Borrowers (Update3)
Share Business Exchange*******Facebook| Email | Print | A A A
By Laura Cochrane and Tal Barak Harif
Nov. 26 (Bloomberg) -- Dubai shook investor confidence across the Persian Gulf after its proposal to delay debt payments risked triggering the biggest sovereign default since Argentina in 2001.
The cost of protecting government notes from Abu Dhabi to Bahrain rose, extending the steepest increase since February as Dubai World, with $59 billion of liabilities, sought a “standstill” agreement from creditors. Its debt includes $3.52 billion of bonds due Dec. 14 from property unit Nakheel PJSC. Dubai credit-default swaps climbed 90 basis points to 530 after yesterday increasing the most since they began trading in January, CMA Datavision prices showed.
“There is nothing investors dislike more than this kind of event,” said Norval Loftus, the head of convertible bonds and Islamic debt at Matrix Group Ltd. in London, which manages $2.5 billion of assets including Dubai credits. “The worst-case scenario will of course be involuntary restructuring on the Nakheel security that brings into question the entire nature of the sovereign support for various borrowers in the region.”
Dubai World’s assets range from stakes in Las Vegas casino company MGM Mirage to London-traded bank Standard Chartered Plc and luxury retailer Barneys New York through asset-management firm Istithmar PJSC. The Dubai government’s attempt to reschedule debt triggered declines in stocks worldwide that had been rebounding from the worst financial crisis since the Great Depression.
Worldwide Slump
The MSCI Emerging Markets Index of stocks headed for the biggest decline in four weeks, falling 2 percent, led by Russia and China. Europe’s Dow Jones Stoxx 600 Index lost 2.5 percent, the biggest decline since July 2, at 2:46 p.m. in London. South Africa’s rand and the Turkish lira weakened 2.1 percent against the dollar. Hungary’s forint lost 1.7 percent per euro. Credit- default swaps on Russia increased to 205 basis points from 192.
The MSCI World Index of 23 developed markets has risen 26 percent this year after banks worldwide recorded more than $1.7 trillion in writedowns and losses and governments committed about $12 trillion to shore up economies.
“The announcement was a shock,” said Beat Siegenthaler, chief emerging-market strategist at TD Securities Ltd. in London. “It is strongly affecting European markets.”
Dubai, ruled by Sheikh Mohammed Bin Rashid Al Maktoum, borrowed $80 billion in a four-year construction boom to transform the economy into a regional tourism and financial hub. The emirate suffered the world’s steepest property slump in the global recession with home prices dropping 50 percent from their 2008 peak, according to Deutsche Bank AG.
Downgrades
Moody’s Investors Service and Standard & Poor’s cut the ratings on Dubai state companies yesterday, saying they may consider Dubai World’s plan to delay debt payments a default.
Gulf region default swaps jumped, with contracts linked to Bahrain adding 29 basis points today to 223.5, the biggest increase since Feb. 18. Contracts linked to Abu Dhabi added the most since February yesterday, climbing 36 basis points to 136.5 and were another 23 basis points higher at 159.5 today, according to London-based CMA. Qatar default swaps rose 13 basis points to 117, adding to yesterday’s 11 basis-point increase.
“Dubai is the most indicative of the huge global liquidity boom and now in the aftermath there will be further defaults to come in emerging markets and globally,” said Nick Chamie, head of emerging-market research at Toronto-based RBC Capital Markets.
Saudi Debts
Saudi Arabia default swaps climbed the most since February, adding 18 basis points to 108. The British Bankers’ Association asked the U.K. government to intervene with Saudi authorities over debts of at least $20 billion owed to as many as 100 banks by Saad Group and Ahmad Hamad Algosaibi & Brothers Co., two family holding companies based in the oil city of Al-Khobar, according to a letter dated Nov. 20.
Default swaps on Dubai World unit DP World Ltd., the Middle East’s biggest port operator, jumped by a record 181 basis points to 540.5 yesterday and were priced another 72 basis points higher today at 612, according to CMA data.
Dubai World had $59.3 billion in liabilities and $99.6 billion in total assets at the end of 2008, subsidiary Nakheel Development Ltd. said in an August statement. Dubai owes $4.3 billion next month and $4.9 billion in the first quarter of 2010 through government and corporate debt, Deutsche Bank AG data show.
“DP World and its debt are not included in the restructuring process for Dubai World,” the government said in a statement to Nasdaq Dubai today.
‘Brink of Failure’
The price of Nakheel’s bonds fell to 70.5 cents on the dollar from 84 yesterday and 110.5 a week ago, according to Citigroup Inc. prices on Bloomberg.
“Nakheel is now standing on the brink of failure given the astonishing amount of cash Dubai would have to inject on it in order to see the enterprise survive,” said Luis Costa, emerging-market debt strategist at Commerzbank AG in London. “Events like this are a perfect storm.”
Dubai credit-default swaps now rank as the fifth most expensive worldwide, exceeding Iceland’s and Latvia’s.
The contracts, which increase as perceptions of credit quality deteriorate, pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements. A basis point is 0.01 percentage point and is equivalent to $1,000 a year on a contract protecting $10 million of debt.
Abu Dhabi Aid
UBS AG, Switzerland’s largest bank, said it expects the U.A.E. will prevent a default by Nakheel. Owners of bonds sold by Nakheel scheduled a conference call today, said an investor and a trader who received the details.
Dubai is one of seven sheikhdoms in the U.A.E. that includes Abu Dhabi, which holds 8 percent of the world’s oil reserves and bought $5 billion of bonds sold by Dubai yesterday through state-controlled banks.
Sheikh Mohammed turned to Abu Dhabi’s central bank on Feb. 23 to raise $10 billion by selling debt. The emirate’s credit default swaps dropped 178 basis points that day, after trading for a record 976 basis points.
Unlike Argentina, which stopped payments on $95 billion of debt eight years ago after yields on benchmark bonds more than doubled in four months to more than 40 percent, Dubai’s announcement yesterday “was a surprise,” said Alia Moubayed, a London-based economist at Barclays Plc.
Standstill Agreement
The government raised $1.93 billion last month in its first sale of Islamic bonds, attracting more than $6.3 billion of orders. The dollar-denominated securities due 2014, which are governed by Shariah laws barring investors from profiting from the exchange of money, dropped to 5.5 percent today to 92 cents, lifting the yield to 8.4 percent from 6.2 percent on Nov. 24, according to ING Groep NV prices on Bloomberg.
Gulf International Bank BSC, a Bahrain-based lender owned by the governments of six Gulf Arab states, postponed a planned sale of bonds in a $4 billion debt program, citing the “unexpected announcement” from Dubai, according to an e-mailed statement today.
Dubai World will ask creditors for a “standstill” agreement as it negotiates to extend maturities, including $3.52 billion of Islamic bonds due Dec. 14 from Nakheel, Dubai’s Department of Finance said in an e-mailed statement yesterday.
‘Brink of Failure’
Dubai World’s more than 70 creditors face the prospect of writedowns on as much as $60 billion of debt if they haven’t unloaded their holdings and the state-owned company fails to win additional support from Abu Dhabi.
The biggest creditors are Abu Dhabi Commercial Bank and Emirate NBD PJSC. Other lenders include Credit Suisse Group AG, HSBC Holdings Plc, Barclays, Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc, according to a person familiar with the situation. Barclays slumped as much as 6.9 percent, the biggest intraday loss in a month, while RBS sank as much as 8.3 percent. Lloyds and Credit Suisse dropped more than 3 percent.
“Our exposure is immaterial,” said Credit Suisse spokesman Marc Dosch. HSBC, Lloyds and RBS declined to comment when contacted by Bloomberg. Spokespeople at Barclays were not immediately available to comment.
Emaar Properties PJSC, the U.A.E.’s biggest developer, was cut by four levels by Moody’s to Ba2, two steps below investment grade. Jebel Ali Free Zone, an operator of business parks, and DIFC Investments were also lowered to speculative-grade by Moody’s yesterday. DP World and Dubai Electricity & Water Authority were downgraded two levels to Baa2, the second rank above junk. Moody’s and S&P said they may cut ratings further.
The debt “restructuring may be considered a default under our default criteria,” S&P said in a statement.
‘Shut Up’
Borrowing from Abu Dhabi state banks accounted for half the $10 billion Dubai ruler Sheikh Mohammed said he planned to raise by yearend. He said Nov. 9 the program will be “well received,” and those who doubt the unity of Dubai and Abu Dhabi should “shut up.”
Sheikh Mohammed removed the chairman of Dubai World from the board of Dubai’s main holding company, the Investment Corporation of Dubai, last week.
Contracts on Abu Dhabi National Energy Co., the state- controlled energy producer known as Taqa, jumped 70 basis points to 250, the highest since August. Swaps linked to Mubadala Development Co., a government-backed investor that announced an $8 billion joint venture with General Electric Co. last year, rose 111 basis points to 247, according to CMA. Mashreqbank PSC, the United Arab Emirates-based lender owned by billionaire Abdul Aziz al-Ghurair, jumped by a record 254 basis points to 639.
“It’s very important to resolve this in a way that will minimize contagion across the region,” Matrix Group’s Loftus said.
To contact the reporter on this story: Laura Cochrane in London at [email protected]
Last Updated: November 26, 2009 10:53 EST
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By Laura Cochrane and Tal Barak Harif
Nov. 26 (Bloomberg) -- Dubai shook investor confidence across the Persian Gulf after its proposal to delay debt payments risked triggering the biggest sovereign default since Argentina in 2001.
The cost of protecting government notes from Abu Dhabi to Bahrain rose, extending the steepest increase since February as Dubai World, with $59 billion of liabilities, sought a “standstill” agreement from creditors. Its debt includes $3.52 billion of bonds due Dec. 14 from property unit Nakheel PJSC. Dubai credit-default swaps climbed 90 basis points to 530 after yesterday increasing the most since they began trading in January, CMA Datavision prices showed.
“There is nothing investors dislike more than this kind of event,” said Norval Loftus, the head of convertible bonds and Islamic debt at Matrix Group Ltd. in London, which manages $2.5 billion of assets including Dubai credits. “The worst-case scenario will of course be involuntary restructuring on the Nakheel security that brings into question the entire nature of the sovereign support for various borrowers in the region.”
Dubai World’s assets range from stakes in Las Vegas casino company MGM Mirage to London-traded bank Standard Chartered Plc and luxury retailer Barneys New York through asset-management firm Istithmar PJSC. The Dubai government’s attempt to reschedule debt triggered declines in stocks worldwide that had been rebounding from the worst financial crisis since the Great Depression.
Worldwide Slump
The MSCI Emerging Markets Index of stocks headed for the biggest decline in four weeks, falling 2 percent, led by Russia and China. Europe’s Dow Jones Stoxx 600 Index lost 2.5 percent, the biggest decline since July 2, at 2:46 p.m. in London. South Africa’s rand and the Turkish lira weakened 2.1 percent against the dollar. Hungary’s forint lost 1.7 percent per euro. Credit- default swaps on Russia increased to 205 basis points from 192.
The MSCI World Index of 23 developed markets has risen 26 percent this year after banks worldwide recorded more than $1.7 trillion in writedowns and losses and governments committed about $12 trillion to shore up economies.
“The announcement was a shock,” said Beat Siegenthaler, chief emerging-market strategist at TD Securities Ltd. in London. “It is strongly affecting European markets.”
Dubai, ruled by Sheikh Mohammed Bin Rashid Al Maktoum, borrowed $80 billion in a four-year construction boom to transform the economy into a regional tourism and financial hub. The emirate suffered the world’s steepest property slump in the global recession with home prices dropping 50 percent from their 2008 peak, according to Deutsche Bank AG.
Downgrades
Moody’s Investors Service and Standard & Poor’s cut the ratings on Dubai state companies yesterday, saying they may consider Dubai World’s plan to delay debt payments a default.
Gulf region default swaps jumped, with contracts linked to Bahrain adding 29 basis points today to 223.5, the biggest increase since Feb. 18. Contracts linked to Abu Dhabi added the most since February yesterday, climbing 36 basis points to 136.5 and were another 23 basis points higher at 159.5 today, according to London-based CMA. Qatar default swaps rose 13 basis points to 117, adding to yesterday’s 11 basis-point increase.
“Dubai is the most indicative of the huge global liquidity boom and now in the aftermath there will be further defaults to come in emerging markets and globally,” said Nick Chamie, head of emerging-market research at Toronto-based RBC Capital Markets.
Saudi Debts
Saudi Arabia default swaps climbed the most since February, adding 18 basis points to 108. The British Bankers’ Association asked the U.K. government to intervene with Saudi authorities over debts of at least $20 billion owed to as many as 100 banks by Saad Group and Ahmad Hamad Algosaibi & Brothers Co., two family holding companies based in the oil city of Al-Khobar, according to a letter dated Nov. 20.
Default swaps on Dubai World unit DP World Ltd., the Middle East’s biggest port operator, jumped by a record 181 basis points to 540.5 yesterday and were priced another 72 basis points higher today at 612, according to CMA data.
Dubai World had $59.3 billion in liabilities and $99.6 billion in total assets at the end of 2008, subsidiary Nakheel Development Ltd. said in an August statement. Dubai owes $4.3 billion next month and $4.9 billion in the first quarter of 2010 through government and corporate debt, Deutsche Bank AG data show.
“DP World and its debt are not included in the restructuring process for Dubai World,” the government said in a statement to Nasdaq Dubai today.
‘Brink of Failure’
The price of Nakheel’s bonds fell to 70.5 cents on the dollar from 84 yesterday and 110.5 a week ago, according to Citigroup Inc. prices on Bloomberg.
“Nakheel is now standing on the brink of failure given the astonishing amount of cash Dubai would have to inject on it in order to see the enterprise survive,” said Luis Costa, emerging-market debt strategist at Commerzbank AG in London. “Events like this are a perfect storm.”
Dubai credit-default swaps now rank as the fifth most expensive worldwide, exceeding Iceland’s and Latvia’s.
The contracts, which increase as perceptions of credit quality deteriorate, pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements. A basis point is 0.01 percentage point and is equivalent to $1,000 a year on a contract protecting $10 million of debt.
Abu Dhabi Aid
UBS AG, Switzerland’s largest bank, said it expects the U.A.E. will prevent a default by Nakheel. Owners of bonds sold by Nakheel scheduled a conference call today, said an investor and a trader who received the details.
Dubai is one of seven sheikhdoms in the U.A.E. that includes Abu Dhabi, which holds 8 percent of the world’s oil reserves and bought $5 billion of bonds sold by Dubai yesterday through state-controlled banks.
Sheikh Mohammed turned to Abu Dhabi’s central bank on Feb. 23 to raise $10 billion by selling debt. The emirate’s credit default swaps dropped 178 basis points that day, after trading for a record 976 basis points.
Unlike Argentina, which stopped payments on $95 billion of debt eight years ago after yields on benchmark bonds more than doubled in four months to more than 40 percent, Dubai’s announcement yesterday “was a surprise,” said Alia Moubayed, a London-based economist at Barclays Plc.
Standstill Agreement
The government raised $1.93 billion last month in its first sale of Islamic bonds, attracting more than $6.3 billion of orders. The dollar-denominated securities due 2014, which are governed by Shariah laws barring investors from profiting from the exchange of money, dropped to 5.5 percent today to 92 cents, lifting the yield to 8.4 percent from 6.2 percent on Nov. 24, according to ING Groep NV prices on Bloomberg.
Gulf International Bank BSC, a Bahrain-based lender owned by the governments of six Gulf Arab states, postponed a planned sale of bonds in a $4 billion debt program, citing the “unexpected announcement” from Dubai, according to an e-mailed statement today.
Dubai World will ask creditors for a “standstill” agreement as it negotiates to extend maturities, including $3.52 billion of Islamic bonds due Dec. 14 from Nakheel, Dubai’s Department of Finance said in an e-mailed statement yesterday.
‘Brink of Failure’
Dubai World’s more than 70 creditors face the prospect of writedowns on as much as $60 billion of debt if they haven’t unloaded their holdings and the state-owned company fails to win additional support from Abu Dhabi.
The biggest creditors are Abu Dhabi Commercial Bank and Emirate NBD PJSC. Other lenders include Credit Suisse Group AG, HSBC Holdings Plc, Barclays, Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc, according to a person familiar with the situation. Barclays slumped as much as 6.9 percent, the biggest intraday loss in a month, while RBS sank as much as 8.3 percent. Lloyds and Credit Suisse dropped more than 3 percent.
“Our exposure is immaterial,” said Credit Suisse spokesman Marc Dosch. HSBC, Lloyds and RBS declined to comment when contacted by Bloomberg. Spokespeople at Barclays were not immediately available to comment.
Emaar Properties PJSC, the U.A.E.’s biggest developer, was cut by four levels by Moody’s to Ba2, two steps below investment grade. Jebel Ali Free Zone, an operator of business parks, and DIFC Investments were also lowered to speculative-grade by Moody’s yesterday. DP World and Dubai Electricity & Water Authority were downgraded two levels to Baa2, the second rank above junk. Moody’s and S&P said they may cut ratings further.
The debt “restructuring may be considered a default under our default criteria,” S&P said in a statement.
‘Shut Up’
Borrowing from Abu Dhabi state banks accounted for half the $10 billion Dubai ruler Sheikh Mohammed said he planned to raise by yearend. He said Nov. 9 the program will be “well received,” and those who doubt the unity of Dubai and Abu Dhabi should “shut up.”
Sheikh Mohammed removed the chairman of Dubai World from the board of Dubai’s main holding company, the Investment Corporation of Dubai, last week.
Contracts on Abu Dhabi National Energy Co., the state- controlled energy producer known as Taqa, jumped 70 basis points to 250, the highest since August. Swaps linked to Mubadala Development Co., a government-backed investor that announced an $8 billion joint venture with General Electric Co. last year, rose 111 basis points to 247, according to CMA. Mashreqbank PSC, the United Arab Emirates-based lender owned by billionaire Abdul Aziz al-Ghurair, jumped by a record 254 basis points to 639.
“It’s very important to resolve this in a way that will minimize contagion across the region,” Matrix Group’s Loftus said.
To contact the reporter on this story: Laura Cochrane in London at [email protected]
Last Updated: November 26, 2009 10:53 EST
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What's next????
Type in 'Argentina financial collapse' in google. Will give you a realistic idea what's next for Dubai...
This is going to get very very nasty. Not sure about our jobs btw.... I wouldn't be surprised to see a massive drop in bookings due to the uncertainty with Dubai the coming weeks...
Time for another $25M splash over the Palm.
This is going to get very very nasty. Not sure about our jobs btw.... I wouldn't be surprised to see a massive drop in bookings due to the uncertainty with Dubai the coming weeks...
Time for another $25M splash over the Palm.
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Spot on 5star - if the forward bookings collapse, then it will be big trouble for EK.
Personally I can't see a collapse in bookings, just a temporary decline for a few months.
Personally I can't see a collapse in bookings, just a temporary decline for a few months.
I Have Control
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Dubai finance
Here comes financial winter----Serves them right..arrogant people. (By that comment, I mean all associated, not just the local royals.)
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Isn't the Gulf News wonderful
Ok - I feel better now - the Gulf News says everything is OK !! This is their midnight update for 27 November - I know it has been a holiday but they might want to catch up on the global impact - I love the line that says there has been some concern among investors !
"Investors show trust in Dubai
Al Hilal Bank releases first installment of $500m to Dubai with rest to follow
The Dubai Government successfully raised a further $5 billion from two Abu Dhabi banks on Wednesday as part of its $20 billion long-term bond programme launched at the beginning of 2009.
Mohammad J. Berro, Chief Executive of Al Hilal Bank, said $500 million was released to the Dubai government by Al Hilal Bank on Wednesday. "The remainder will follow," he added.
The $5 billion tranche was fully subscribed equally by National Bank of Abu Dhabi and Al Hilal Bank.
"We have subscribed to sukuk worth $2.5 billion because Dubai has come strongly out of the financial crisis," Berro told Gulf News. "The tenure is five years and the coupon rate is four per cent, which is a good return," Berro added.
Concern
However, there is some concern among investors after Dubai's Department of Finance asked for a ‘standstill' until May 30 on all financing to Dubai World and its property unit Nakheel, which is due to pay back $4 billion on an Islamic bond on Dec-ember 14.
"The market expects Dubai to raise another $5 billion soon which will take care of some of Dubai's debt and lift the confidence of the investors," said Tariq Qaqish, fund manager with Al Mal Capital. In February, Dubai raised $10 billion through the first tranche of the bond, which was entirely subscribed by the UAE Central Bank.
DP World unaffected
International port operator DP World and its debt are not included in the restructuring of Dubai World, the Dubai Government said yesterday, after announcing it will seek a debt delay for its two flagship firms.
On Wednesday, the government said it will ask creditors of Dubai World and property group Nakheel to agree to a debt ‘standstill' as it restructures the Dubai World group.
"The Government of Dubai has confirmed that DP World and its debt are not included in the restructuring process for Dubai World," a statement said.
Analysts said excluding DP World may be an attempt to shelter the profit-making company and ease shareholder fears it will could be used to sustain less healthy companies.
DP World in October reported a six per cent fall in third-quarter container volumes and said its 2009 results would be in line with market expectations
Dubai World is one of the emirate's three big holding firms, along with Dubai Holding and Investment Corporation of Dubai.
In addition to Nakheel, its affiliates include DP World and Istithmar, an investment company with a portfolio of over 50 firms in the financial services, consumer, industrial and property sectors...."
"Investors show trust in Dubai
Al Hilal Bank releases first installment of $500m to Dubai with rest to follow
The Dubai Government successfully raised a further $5 billion from two Abu Dhabi banks on Wednesday as part of its $20 billion long-term bond programme launched at the beginning of 2009.
Mohammad J. Berro, Chief Executive of Al Hilal Bank, said $500 million was released to the Dubai government by Al Hilal Bank on Wednesday. "The remainder will follow," he added.
The $5 billion tranche was fully subscribed equally by National Bank of Abu Dhabi and Al Hilal Bank.
"We have subscribed to sukuk worth $2.5 billion because Dubai has come strongly out of the financial crisis," Berro told Gulf News. "The tenure is five years and the coupon rate is four per cent, which is a good return," Berro added.
Concern
However, there is some concern among investors after Dubai's Department of Finance asked for a ‘standstill' until May 30 on all financing to Dubai World and its property unit Nakheel, which is due to pay back $4 billion on an Islamic bond on Dec-ember 14.
"The market expects Dubai to raise another $5 billion soon which will take care of some of Dubai's debt and lift the confidence of the investors," said Tariq Qaqish, fund manager with Al Mal Capital. In February, Dubai raised $10 billion through the first tranche of the bond, which was entirely subscribed by the UAE Central Bank.
DP World unaffected
International port operator DP World and its debt are not included in the restructuring of Dubai World, the Dubai Government said yesterday, after announcing it will seek a debt delay for its two flagship firms.
On Wednesday, the government said it will ask creditors of Dubai World and property group Nakheel to agree to a debt ‘standstill' as it restructures the Dubai World group.
"The Government of Dubai has confirmed that DP World and its debt are not included in the restructuring process for Dubai World," a statement said.
Analysts said excluding DP World may be an attempt to shelter the profit-making company and ease shareholder fears it will could be used to sustain less healthy companies.
DP World in October reported a six per cent fall in third-quarter container volumes and said its 2009 results would be in line with market expectations
Dubai World is one of the emirate's three big holding firms, along with Dubai Holding and Investment Corporation of Dubai.
In addition to Nakheel, its affiliates include DP World and Istithmar, an investment company with a portfolio of over 50 firms in the financial services, consumer, industrial and property sectors...."
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Just how really informed are you guys? Copy/paste news reports just shows how you can read things. Read and not grasp.
What's wrong with debt restructuring talks? Are those the only talks in the world going on right now? What do you call Obama's Asian tour? Buy our debt please so we can spend our selves out of debt?
Who are the rating agencies again? The rating agencies who gave us the AAA ratings that preceded the recent financial meltdown.
The ratings that preceded Enron, Worldcom and the dot com.
How much?59-billion....... a drop in the ocean compared to the trillions borrowed, yes borrowed by the US. The UK could not borrow so they came up with a money printing solution instead. Ingenious.But restructuring debt is now called a default. And who's got the right credibility to make that call?
But as always, informed journalism will prevail.
No mention that no one is buying US debt anymore, unemployment topping 10%, Obama begging Asian support for US debt. But that is not getting enough attention as it should. It is no news that the US can't borrow itself out of debt, but Bloomberg will really shed true light on that reality. Even Sri Lanka is buying gold instead of the worthless greenback. The sovereign fund behind Dubai, what is their capitalisation again, and wouldn't the US love some of it? Just get Bloomberg on the story to scare scare everyone and in the process halve ones assets.
If Bloomberg were truly independent they can focus on what really matters, reporting on just how bad the US economy really is and its ramifications that still lie ahead.Argentina had rocks not a sovereign wealth fund behind them.
What's wrong with debt restructuring talks? Are those the only talks in the world going on right now? What do you call Obama's Asian tour? Buy our debt please so we can spend our selves out of debt?
Who are the rating agencies again? The rating agencies who gave us the AAA ratings that preceded the recent financial meltdown.
The ratings that preceded Enron, Worldcom and the dot com.
How much?59-billion....... a drop in the ocean compared to the trillions borrowed, yes borrowed by the US. The UK could not borrow so they came up with a money printing solution instead. Ingenious.But restructuring debt is now called a default. And who's got the right credibility to make that call?
But as always, informed journalism will prevail.
No mention that no one is buying US debt anymore, unemployment topping 10%, Obama begging Asian support for US debt. But that is not getting enough attention as it should. It is no news that the US can't borrow itself out of debt, but Bloomberg will really shed true light on that reality. Even Sri Lanka is buying gold instead of the worthless greenback. The sovereign fund behind Dubai, what is their capitalisation again, and wouldn't the US love some of it? Just get Bloomberg on the story to scare scare everyone and in the process halve ones assets.
If Bloomberg were truly independent they can focus on what really matters, reporting on just how bad the US economy really is and its ramifications that still lie ahead.Argentina had rocks not a sovereign wealth fund behind them.
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Time to bring in the casinos.
However, on the day the (old) sheikh was to sign the papers making it so, one of his sons was killed in a motorcycle accident, and he saw that as a sign from You-Know-Who that he should not go ahead with the casino.
(I'm standing by to be told that I'm totally wrong by Sir Donald or one of the other company 'plants'.)
Dubai is / was a snowball system, an economy based on property investment with the hope, that when you invest you will find another guy to pay you even more in the future.
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Transparency
The easy answer to that Sir Donald is transparency.
Everyone knows that the US is neck deep in debt - and that China holds most of it. But they hold that as government debt. The trouble with Dubai's debt is that it is held by global banks - and they are in enough of a mess already.
What happened yesterday caught everyone in the markets by surprise. And it was done after markets close before an extended holiday - and with very little clarification. One look at the market reaction globally is a pretty fair indication of the level of concern.
The only positive is that there is a (belated) recognition of the problem - even though the local newspapers appear to be in denial.
What happens next is a mystery - but Dubai Inc presumably will need to raise cash - selling foreign assets may be preferable to selling domestic assets (eg EK). It might hasten a listing of EK - pure speculation.
Bests.
Everyone knows that the US is neck deep in debt - and that China holds most of it. But they hold that as government debt. The trouble with Dubai's debt is that it is held by global banks - and they are in enough of a mess already.
What happened yesterday caught everyone in the markets by surprise. And it was done after markets close before an extended holiday - and with very little clarification. One look at the market reaction globally is a pretty fair indication of the level of concern.
The only positive is that there is a (belated) recognition of the problem - even though the local newspapers appear to be in denial.
What happens next is a mystery - but Dubai Inc presumably will need to raise cash - selling foreign assets may be preferable to selling domestic assets (eg EK). It might hasten a listing of EK - pure speculation.
Bests.
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Gulf Casino's
Quote:
Time to bring in the casinos.
I understand that's why the Burj was built 300 metres offshore - so it could operate as a casino, but technically, not be in the Holy Land where such things are forbidden.
However, on the day the (old) sheikh was to sign the papers making it so, one of his sons was killed in a motorcycle accident, and he saw that as a sign from You-Know-Who that he should not go ahead with the casino.
Back in the early '70's, RAK had a Casino in an Abela run hotel - though I seem to recall one the RAK hierachy closed it down by throwing a couple of 'Thermite' grenades into it - the rumour was that he owed the 'House' a few million riyals (as the dirham was then)
PZU - Out of Africa (Retired)
Time to bring in the casinos.
I understand that's why the Burj was built 300 metres offshore - so it could operate as a casino, but technically, not be in the Holy Land where such things are forbidden.
However, on the day the (old) sheikh was to sign the papers making it so, one of his sons was killed in a motorcycle accident, and he saw that as a sign from You-Know-Who that he should not go ahead with the casino.
Back in the early '70's, RAK had a Casino in an Abela run hotel - though I seem to recall one the RAK hierachy closed it down by throwing a couple of 'Thermite' grenades into it - the rumour was that he owed the 'House' a few million riyals (as the dirham was then)
PZU - Out of Africa (Retired)