Dubai Poised to Sustain 11pc GDP Growth

Dubai's real gross domestic product (GDP), which surged to a record Dh198 billion in 2007, is predicted to sustain an average growth rate of 11 per cent for the next eight years. The main driver of this remarkable growth - outpacing the average growth rate forecast for the GCC - will be the non-oil sector, growing at a spectacular pace.

According to Hisham Abdullah Al Shirawi, Second Vice-Chairman, Dubai Chamber of Commerce and Industry, the key sectors fuelling the growth include tourism, retail, infrastructure, knowledge industry, transportation, logistics, manufacturing, professional and government services. He said Dubai's GDP growth was higher than other Gulf countries and major global economies even in 2005. After growing at an average of around 8.5 per cent in 2003, 5.9 per cent in 2004, 6.8 per cent in 2005, and 6 per cent in 2006, GCC's GDP growth averaged at 5.0 per cent in 2007. In 2020, the nominal GDP of GCC is projected to soar three-fold from $773 billion to roughly $2.3 trillion in 2020 at an average oil price of $70 per barrel, according to McKinsey & Company Middle East.

In contrast, the overall real GDP of the UAE is poised to record a slower growth rate of 6.4 per cent in 2008 and 6.1 per cent in 2009 compared to an eight per cent surge in 2007, economists said. However, nominal GDP -measured on the basis of current prices - will record almost the same growth trend as in 2007 at 15.7 per cent. Economists forecast that UAE's nominal GDP will hit Dh805 billion and Dh960 billion in 2008- respectively up 6.4 per cent and 6.1 per cent in real terms and 15.7 per cent and 19.1 per cent in nominal terms.

Al Shirawi said Dubai's non-oil foreign trade that surged 33 per cent to $185 billion in 2007 from $139 billion in 2006, also was poised for a sustained growth. In a presentation about Dubai's remarkable growth at a two-day business convention yesterday, he highlighted Dubai's ambitious economic targets under the strategic plan 2015.

He said the hospitality industry is expecting a real boom with its target of 100,000 rooms for 15 million visitors by the year 2015. Currently, there are 324 hotels, 33,731 rooms with occupancy rate of more than 85pc throughout the year as a total of seven million people used Dubai hotels in 2007 compared to 1.9m in 1996. Geared up for the air traffic boom is Dubai International Airport, which handled an average of 725 flights per day compared to 650 flights in 2006, reflecting a 10 per cent growth during 2007. Connected to 205 destinations through a network of 120

international airlines, the airport serviced 34 million passengers in 2007 thus recording a 19 per cent rise and is expecting 40 million passengers this year.

In 2007, Dubai's non-oil exports surged a record 43 per cent in 2007 to Dh167.9 billion from Dh117.4 billion on the back of a remarkable increase in trade with Iran, Saudi Arabia and Qatar.

The jump in total exports, including re-exports, underscored the buoyant economic growth of the emirate. Dubai's exports have been growing by an average of more than 28 per cent annually during the past five years. In 2006, Dubai's non-oil foreign trade grew 9.15 per cent to Dh523.5 billion compared with Dh479.6 billion in 2005 - the highest non-oil trade in the Arabian Gulf. Dubai's non-oil foreign trade represents about 80 per cent of the UAE's total trade. Dubai's imports have also increased by 15.5 per cent, from Dh190.4 billion in 2005 to Dh219.8 billion in 2006. (via Khaleej Times)

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Nasdaq and Borse Dubai may Join Hands in OMX bid

US exchange company Nasdaq may sell its stake in the London Stock Exchange to Borse Dubai and make a joint bid with the Gulf exchange for Nordic exchange owner OMX, The Daily Telegraph said on Monday.

Nasdaq Stock Market, eager to expand its presence in overseas markets, is now locked in a $4 billion bidding war with Borse Dubai for OMX, which owns exchanges in Sweden, Denmark, Finland, Iceland and the Baltic states.

On August 20, Nasdaq said it may sell its 31 percent LSE stake, worth around 800 million pounds ($1.6 billion), to bolster its chances of buying OMX and that it was already in touch with interested parties. It said then it would not sell the stake to a single buyer.

"I think Dubai have a very strong hand to take some terms or at least be included in the council," the paper quoted a source as saying.

Nasdaq's agreed $3.7 billion deal with OMX has been trumped by a $4 billion cash proposal by Borse Dubai. Nasdaq chief executive Bob Greifeld, wary of losing the battle for OMX or paying too much, is expected to come back with another bid close to $4 billion, the paper said.

Nasdaq wants to use the proceeds from the sale of its LSE stake to pay down debt and buy back shares, which would effectively raise the value of its cash-and-share bid for OMX.

Nasdaq and Borse Dubai could not be immediately reached for comment. - Reuters

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Dubai Mercantile Exchange says IPO an option

The Dubai Mercantile Exchange is considering an initial public offering as one of its options for future growth, the DME chairman said.

The DME, backed by the New York Mercantile Exchange, launched on June 1 with its debut futures contract in Oman sour crude.

The Dubai exchange is competing for the sour crude futures market with the Atlanta-based IntercontinentalExchange, Nymex's principal competitor.

'An IPO of the DME may be an option for the future,' DME chairman Ahmad Sharaf said.

'However, it is still early days for the exchange and we are focusing on growing the business. At this point, no decision has been made on possible timelines for any potential IPO or, indeed, whether an IPO will actually take place.'

The DME is working to build trading volumes in its Oman futures, as it looks to avoid the fate of several previous failed attempts on other exchanges to launch high-sulphur, or sour crude contracts.

The Oman contract is the latest attempt to provide a futures link to crude supply from the Middle East. The region provides more than 30 per cent of the world's 85 million barrels per day (bpd) crude oil and much of it goes to Asia.

But the contract has yet to attract much volume from Asian refiners, and sees most activity during New York trading hours.

DME chief executive Gary King said he expected volume to pick up next month once traders are more familiar with the exchange's settlement procedure.

The exchange was also working on a jet fuel futures contract for launch before the end of the year and has previously said it is looking at futures contracts outside of the energy sector.

Dubai's Tatweer and the Nymex each own a 32.5 per cent stake in the DME. The Oman government has 30 per cent and the remaining five per cent stake is held by DME floor members.Reuters

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Dubai Properties Unveils Leadership Programme

Dubai Properties recently launched the High Potential Leadership Development Programme, incorporating 14 of its future leaders. The programme is part of the company's strategy to invest in its people, in line with the overall objective of Dubai Holding.

The first session was held at Burj Al Arab and was inaugurated by Mohamed Binbrek, CEO of Dubai Properties; Yaqoob Al Zarooni, Chief Officer Human Capital; and Francois Viljoen, HR Development Director from Dubai Holding. It was facilitated by Hassan Khalifa, Director - Human Resources, Dubai Properties.

The programme is being conducted in collaboration with Novations, a US-based talent development centre, which helps companies develop employee strengths, capacity and performance using a broad range of proprietary tools. Participation is conditional on candidates' potential to rise to senior positions within the organisation in the future.

end post-(via Khaleej Times)

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'Booming' Dubai set to borrow $10bn+

Dubai Government seeks to borrow at least $10bn by 2009, as the emirate’s ambitious expansion plans begin to outpace revenues from its oil, which is expected to run dry within 20 years.

Such borrowing would be used to fund the road, rail, power and water desalination infrastructure necessary to achieve Dubai's ambitious plans for economic growth, which the emirate's ruler forecasts will hit 11% per year until 2015.

This will require borrowing that will “go into double-digit billions” by 2009, according to Nasser Akil Abbas, treasury director at Dubai government’s finance department, quoted by Bloomberg.

“There will be both syndicated loans and bonds of 7, 10 and 15-year [maturities]”, he added.

Dubai is seeking a credit rating in order to achieve this, and its Department of Finance is drawing up a strategy with advice from JP Morgan and Swiss bank UBS, according to a senior official.

"The Government of Dubai is assessing its medium-term financing strategy and is evaluating different available alternatives," Mr. Al Qamzi, Director General of the Department of Finance, said in a statement made to the state news agency.

"The timetable for the ratings process as well as the specifics of Dubai's financing strategy are yet to be finalised and will be communicated in due course."

Talks with UBS are likely to be further strengthened by news that the bank today celebrates its official opening at the Dubai International Finance Centre. Huw Jenkins, CEO and Chairman for UBS Investment Bank, and Peter Burnett, Chairman for UBS in the Middle East, will be in attendance.

Anticipation of a debut bond from Dubai has been growing since Dubai Holding Commercial Group's $2.5 billion bond sale last month. The company is owned by the emirate's ruler, and the move was seen as a precursor to the government’s debut in the bond market.

Dubai Holding Commercial Group's sale, rated A+ by Standard & Poor's, AA- by Fitch and A1 by Moody's, received orders of about $12.5 billion last month.

It was previously reported that Dubai's government planned to issue $4 billion worth of dollar-denominated bonds in the international market to fund infrastructure projects, according to a Dubai official last year. via arabianbusiness.com

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Dubai 2015: New strategy Unveiled

A Dubai Strategic Plan (DSP) oulining the economic and social goals for the emirate until 2015 was presented by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Prime Minister and Vice President of the UAE and Ruler of Dubai, yesterday. Sheikh Mohammed said that based on the exceptional economic performance of the past years and on expected future global trends, the economic objectives for Dubai for 2015 were to sustain economic growth at a rate of 11 per cent per annum; reach a gross domestic product (GDP) of $108 billion by 2015; and increase GDP per capita to $44,000.

He said to achieve these goals, the focus will be on sectors that the emirate had strong competitive advantage in and those expected to experience future global growth. The sectors of strength, Sheikh Mohammed said, were tourism, transport, trade, construction and financial services; in addition, new sectors with a sustainable competitive edge would also be created.

He also noted the restructuring the economy had undergone in recent years. “The non-oil sectors played a more prominent role in 2006 contributing 97 per cent to GDP, as compared to 90 per cent in 2000, and approximately 46 per cent in 1975. The services sector was the driving force behind economic growth, with a GDP contribution of 74 per cent, mirroring economies of the developed world,” he said. “Our success in diversifying sources of income has compensated for low oil reserves. Our economic development is now supported by an infrastructure that is not directly affected by oil.”

The economic goals, however, are only one component of the DSP, which also outlined the need for social development, better infrastructure, land and environment management, security, justice and safety and pulic sector excellence.
“Under the DSP, initiatives will be launched to ensure nationals are the preferred employees in strategic sectors. These initiatives will be aimed at improving education and skills development. “All nationals will have access to quality education that will include the upgrading of teachers’ qualifications and the curricula to international standards,” said Sheikh Mohammed. (via 7days)

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Credit Ratings for Private Companies in Dubai

Dubai is likely to make credit rating mandatory for the private sector companies if the current plan materialises, a government official said.

About 75 per cent of Dubai's 80,000 private sector establishments have been brought under a credit rating mechanism by the Dubai Chamber of Commerce and Industry (DCCI) and French credit insurer, Coface.

"We are working on a set of proposals to submit to the board that might make credit rating mandatory to all companies registered in Dubai," Mariam M. Al Serkal, Credit Rating Unit team leader at the DCCI, told Gulf News yesterday.

"This proposal might be submitted later this year, although, we are currently working on expanding the network.

"More than 5,000 companies within Dubai's free zones have been brought under the scheme while we are moving ahead towards bringing others into the mechanism."

Private companies in the UAE are not required to declare financials, assets and liabilities, making it difficult for others to measure risks.(via Gulf News)

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Businesswomen in Dubai join 3iC

3iC Group, an international investment firm, is set to launch Dubai Growth Fund Enmaa', a Dh367 million ($100 million) Sharia-compliant open-ended public fund, a statement said yesterday.

The minimum investment amount per customer is $1,000. 3iC Group is licensed by the Financial Services Commission of the British Virgin Islands with operations in Malaysia and the US, is the sponsor and manager of Enmaa'.

Dubai Businesswomen Council, a division of Dubai Chamber of Commerce and Industry (DCCI) is teaming up with 3iC Group, to launch Enmaa' Class A shares.

The fund will primarily invest in high growth equities and pre-IPO opportunities in the Middle East and selected international markets following the Dow Jones Islamic Indexes criteria.

Emirates Islamic Bank has agreed to become the receiving bank while HSBC Bank Middle East Ltd is custodian and administrator of the fund.

The National Investor (TNI), a leading UAE asset manager based in Abu Dhabi, has been retained to become the portfolio manager.

Raja Eisa Al Gurg, president of Dubai Business Women's Council and co-sponsor of Enmaa', said yesterday, "Finally, there is a Sharia-compliant public fund that really caters to the average investor and we see it as a great tool to empower women investors".

Akram Yosri, managing partner 3iC Group and sponsor of Enmaa' added: "We are honoured to have the Dubai Business Women's Council as co-sponsor of Enmaa' and we hope that this will be the beginning of a serious programme to empower women investors not only in the UAE but throughout the region as well."

Subscriptions to shares of Enmaa' will open today at all Emirates Islamic Bank branches nationwide.

UAE women nationals and residents should contact the Dubai Business Women's Council to receive a letter, which should be presented to the bank to obtain the 2.5 per cent discount.(via Gulf News)

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