Dubai creates $10bn Islamic investment firm

Dubai Holding, a group of companies owned by the ruler of the wealthy Arab emirate, said on Tuesday it will consolidate two units to create a sharia compliant investment firm, tapping into the fast-growing market.

The company plans to combine Dubai Islamic Investment Group and Dubai Bank in a new entity called Dubai Banking Group, which would invest across the Middle East, Africa and South East Asia.

" [It] will... aggressively target significant direct investments and acquisitions in a wide range of sectors across the world's biggest Islamic markets," Soud Ba'alawy, chairman of Dubai Group, the financial services arm of Dubai Holding which will manage Dubai Banking Group, said in a statement.

A nearly six-fold rise in oil prices since 2002 has flooded the Gulf with cash that bankers are scrabbling to invest. At the same time, demand from the world's 1.3 billion Muslims for investments that comply with their beliefs has soared.

Islam bans interest, and demands that risk and reward be shared between all participants in a business venture. It also prohibits investments in some business sectors, such as alcohol and pornography.

In January, Dubai's Noor Islamic Bank started operations. The lender is 25% owned by the government of Dubai and 25% by Dubai ruler Mohammed bin Rashid Al-Maktoum, also vice president and prime minister of the UAE.

Dubai Banking Group will be competing with firms including Bahrain-based Islamic investment banks Gulf Finance House and Arcapita.

Gulf Finance House said earlier this week it would build a cement company worth up to $2 billion to take advantage of a construction boom while Arcapita said Tuesday it bought Pinnacle Real Eastate, a European warehouse firm, for an undisclosed sum.

Read More......

A1 rating for Dubai Holding Commercial Operations Group

Moody’s Investors Service has issued its updated Credit Analysis Report on Dubai Holding Commercial Operations Group (DHCOG).

According to the report, the company’s A1 ratings remain firmly supported by its close association with the government of Dubai and its role as one of the Emirate’s most strategic corporate enterprises. The outlook remains stable.

“Since assignment of Dubai Holding’s first ratings in January last year, the company has executed on many of its near-term strategic priorities and has started to produce additional revenues from the hand-over of large real estate projects, including Jumeirah Beach Residence”, says Philipp Lotter, lead analyst for Dubai Holding and Senior Credit Officer at Moody’s Middle East Limited in Dubai (DIFC). “Whilst its balance sheet is strong and carries fairly limited leverage today, ratings are constrained by our expectation of diversification, which may require larger external funding over time,” Lotter adds.

The company’s ratings remain supported by the group’s intrinsic financial strength and the credit enhancement that can be derived from the financial strength of the Emirate and the group’s ultimate majority owner, His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. Completion and hand-over of some large-scale infrastructure projects in 2007 and only moderate increases in leverage are likely to further support debt protection ratios in line with Moody’s assumptions. Ratings also benefit from the group’s buoyant free zone operations and hospitality business under the strong Jumeirah brand.

Ratings remain constrained by the group’s significant and ambitious development portfolio, which is dependent on the sustained growth and

stability of the region in general, and Dubai as a desirable tourist destination in particular, and therefore carries both execution and commercial risk. Ratings also reflect high concentration to a single economy, although Moody’s expects the group to further diversify internationally over time.

“The ratings are well positioned at the current level, and the stable outlook indicates that a change in either direction is unlikely over the

medium term, if the company continues to perform in line with our expectations, keeps leverage in moderation and remains as closely aligned

to the government as it presently is”, says Philipp Lotter. Source

Read More......

Dubai Holding obtains $1.26bn financing from Morgan Stanley

Dubai Holding today announced it has obtained financing of $1.26bn from Morgan Stanley, one of the world's leading investment banks, on a fully underwritten basis.
The facility has been provided, in the form of a short-term bridge loan, to the Dubai Holding Investments Group, the investment arm of Dubai Holding.
It is anticipated that the proceeds of the loan will be used in part, to fund its 100 per cent owned subsidiary Dubai International Capital's (DIC) acquisition of a 9.9 per cent stake in US alternative asset management firm, Och Ziff, upon completion of its initial public offering.
In addition to its role as finance provider for the bridge facility, Morgan Stanley acted as financial advisor to Dubai Holding. Source

Read More......

Future Leaders Programme launched by Dubai Holding

A new initiative for future leaders, seeking to develop individuals with high potential was officially launched Sunday by Dubai Holding, Dubai Holding said.
Benchmarked against similar programmes in global organizations such as General Electric and Toyota, the future leaders programme Leadon is in line with the conglomerate's Leadership Model which is built around four development categories - Strategic Thinking, Inspirational Leadership, Operational Excellence and Personal Growth.
According to Dubai Holding, Leadon will seek to establish a common standard of leadership development across all Dubai Holding entities. Linked to its guiding principles, individual entity's needs and global best practices, the programme will also position Dubai Holding internationally, as a champion of excellence in leadership development.

The development of the future leadership pipeline, across all Dubai Holding entities, is a strategic priority. The Leadon programme is based on a leadership model developed specifically for Dubai Holding. It lays the foundation for all future talent and succession management initiatives across the company. The programme will play a critical role in supporting the successful implementation of future growth strategies across the group", said Mohammad Al Gergawi, UAE Minister of State for Cabinet Affairs and Dubai Holding's Executive Chairman.
The values of the leadership definitely rely on management skills. But it is also equally important to possess qualities such as innovation, creation, pioneering and confidence for an effective leadership role", he added. Source

Read More......

Emaar and Dubai Holding to explore joint venture opportunities

Emaar Properties PJSC, the region's largest real estate developer, and Dubai Holding, the largest business conglomerate in the Middle East, jointly announced today that the two companies are currently exploring joint venture arrangements to develop land in prime locations in Dubai. The announcement of specific joint venture projects is expected to be made during September, 2007.
The decision to pursue such arrangements follows the recent management assessment that any land-equity swap agreement would not be in the best interest of Emaar shareholders.
Mohammad Al Gergawi, Executive Chairman, Dubai Holding said: "Emaar and Dubai Holding continue to believe that both companies would benefit from working together on real estate projects in Dubai.
On this basis, the two firms are currently in advanced discussions to enter into a joint venture to develop world-class projects in prime locations in the emirate.
"The Dubai economy is robust and continues to provide confidence to both local and international investors on its long-term potential.
The fundamentals of the companies are strong and potential growth holds great promise for investors. Nothing should hold back Emaar and Dubai Holding to collaborate and synergise their respective strengths to further fuel that promise," Mr. Gergawi added.
Emaar Properties Chairman Mohammed Alabbar said: "A joint venture between Emaar and Dubai Holding will be beneficial to both companies.
Dubai Holding has a large land bank in prime locations in the Emirate, and Emaar with the right track record and experience in developing real estate projects, will have access to that attractive land bank." "Through the joint venture route, both Dubai Holding and Emaar can tap these remarkable prospects and play a significant role in the emirate's incredible growth story," Mr. Alabbar concluded. Source

Read More......

Emaar S&P rating rests on govt deal

Standard & Poor's would look again at Emaar Properties credit rating if the developer's plans to swap land for shares with the Dubai government fall through, an analyst at the ratings agency said on Wednesday.
S&P assigned the real estate developer an "A-" rating in July.
Emaar said on March 19 it would give 2.364 billion new shares to Dubai Holding, owned by the emirate's ruler, in exchange for land. It has yet to give details of the agreement including the extent, location and value of land.
The deal could be concluded next month, Amit Jain, chief financial officer of Emaar Dubai, said on Tuesday, holding out the possibility that talks could collapse if the terms were not good for shareholders.
"In case the deal would not close, we would look at the reason why and see if that also would impact our view on the implicit support from the government factored into the ratings," S&P credit analyst Alf Stenqvist said.
"We have an ongoing surveillance of the rating and if the deal doesn't go through we would look at it again."Source

Read More......

Record Dubai Debt Programme

Clifford Chance (CC) and Linklaters have advised on a $5bn (£2.55bn) debt issuance programme in Dubai – the largest such programme in the Middle East and the first to be listed exclusively on the Dubai International Financial Exchange (DIFX).

CC advised Dubai Holding Commercial Operations Group on the establishment of the $5bn programme, fielding a team led by Dubai capital markets partner Debashis Dey.

Notes were issued in US dollars, euros and sterling by Cayman Islands-incorporated special purpose vehicle (SPV) Dubai Holding Commercial Operations.

Linklaters advised JP Morgan and HSBC as arranger and book-runner on the deal respectively. The magic circle firm fielded a team led by London capital markets partner Jane Brown, with consultant Luma Saqqaf advising from Dubai.

The Dubai office of offshore leader Maples & Calder acted for the SPV.
The programme marks the first occasion an issuer from the Gulf region has made a debut issue of notes in three currencies simultaneously.

Dey commented: “For Clifford Chance, acting for Dubai Holding was a significant instruction since the company has been integral to the economic development and success of Dubai, particularly in the real estate and hospitality and leisure sectors. The fact that this was an offering structured [for] European and Gulf investors while being listed on the DIFX… instead of a European exchange was also a novel feature of the transaction.”

Brown added: “This is the largest corporate listing to date on the DIFX, which was set up in 2005. The DIFX has already listed several Sukuk [Islamic-compliant] bonds but the listing of this issue shows that it is also an excellent platform for listing conventional internationaldebt. Source

Read More......

The New Strategic Plan seek Credit Raiting

Dubai's government plans to seek a credit rating, a first step to selling bonds, as its draws up a financial strategy with advice from JP Morgan and Swiss bank UBS (UBSN.VX: Quote, Profile, Research), a senior official of the Gulf emirate said.
Anticipation of a debut bond from Dubai, commercial hub of the world's biggest oil exporting region, has been growing since a unit of a company owned by the emirate's ruler raised $2.5 billion in a bond sale last month.
"The Government of Dubai is assessing its medium-term financing strategy and is evaluating different available alternatives," said Sami al-Qamzi, director general of Dubai's Finance Department. "The timetable for the ratings process as well as the specifics of Dubai's financing strategy are yet to be finalized".
Dubai is part of the United Arab Emirates, an oil exporting federation that has never sold a sovereign bond.
Dubai Holding Commercial Group's $2.5 billion of sale bonds in dollars, euros, and pounds was seen as a precursor to the emirate's debut in the bond market which would create a benchmark Dubai-based corporate issuers.
Dubai's government planned to issue $4 billion worth of dollar-denominated bonds in the international market to fund infrastructure projects, a Dubai official said last year.
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. Source , Source

Read More......