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Dubai 'not worried' about maturing debt, says ruler
Source: BI-ME and Bloomberg , Author: Bi-ME staff
Posted: Wed September 9, 2009 4:50 pm
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UAE. Dubai ruler Sheikh Mohammed Bin Rashid Al Maktoum said he is 'not worried' about the emirate's ability to repay at least US$4.52 billion of debt this year, boosting property developer Nakheel's bonds to a year-high.

“I assure you we are alright, the UAE is alright, and we are not worried,” Sheikh Mohammed told reporters late yesterday at his Zabeel palace in Dubai, when asked whether the emirate would be able to repay the loans. Sheikh Mohammed is also the prime minister of the United Arab Emirates, a union of seven states of which Dubai is the second-biggest after Abu Dhabi.

The Dubai government must repay a US$1 billion Islamic bond maturing in November, while state-owned real-estate developer Nakheel  has a US$3.52 billion Islamic bond falling due in December. The emirate borrowed US$80 billion to finance its transformation into an international logistics, tourism and finance hub, and the seizure of global credit markets sparked concern about its ability to repay the loans.

Nakheel’s 3.1725% bond surged 9.3% to 102.5% on a dollar at 12.34pm in Dubai after the comments, according to prices provided by National Bank of Abu Dhabi to Bloomberg.

The bond, which slumped to 63.5 cents on a dollar in February, is headed for its highest close since September 2008.

“We’ll be more careful now,” he said. “The crisis came for everyone, not just Dubai. People had to fight.”
 
“The strategy is nearly the same,” Sheikh Mohammed said. “The UAE is strong, it is like a plane facing headwinds. Now the headwinds are slowing down, so the plane will reach its destination more quickly.”

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

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UAE. Given the recent developments in Saudi Arabia and India, there is now a greater level of hope that the TRA and RIM will reach an agreement about the manner in which BB Messenger services are provided.
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UAE. GCC Telecom markets are on the verge of saturation, while prices decline due to increasing competition, resulting in telcos profits being under very high pressure.