Global business leaders Emirates Business spoke to yesterday reacted positively to the government's support to Dubai World. Following are some of the reactions:
Salah Al Shamsi,
President of both the Abu Dhabi Chamber of Commerce and Industry and the UAE Federation of Chambers of Commerce and Industry
The support given by the Abu Dhabi Government to Dubai is the best evidence of the coherence of UAE leadership. This support will enable Dubai to repay the debts of its companies, deal strongly with the crisis and contain it. This support underlines the extent of co-operation and co-ordination between Abu Dhabi and Dubai.
Simon Cooper,
Deputy Chairman and CEO of HSBC Middle East
The news that the UAE authorities are going to support Dubai World in its financial obligations will be welcomed by international financial markets. This support confirms that the UAE is one country and demonstrates the strong support provided by the Government of the UAE to the country's corporate sector. HSBC has always, and will remain, the strongest supporter of Dubai, Abu Dhabi, and the whole of the UAE.
Abdul Majeed Ismail
Al Fahim, Chairman of Pearl Dubai
The announcement by Dubai Government reaffirms the strong ties between the emirates of Abu Dhabi and Dubai as part of the UAE federation. The two strong pillars that have significantly contributed to the development of the UAE now remain committed to support each other.
The decision sends a clear message to the global investment community on the strong fundamentals of the UAE economy, while encouraging investors to continue with their projects in the country. Abu Dhabi and Dubai have demonstrated a unique example of transparency and wise leadership.
Shayne Nelson,
Regional CEO Middle East and North Africa, Standard Chartered Bank
All markets around the world have been impacted in different ways by the global financial crisis. The UAE has, of course, also been affected but Monday's statement from the government is extremely positive and it will provide Dubai with a strong platform for future growth and investment. Dubai's announcement of a comprehensive reorganisation law that sets out internationally accepted standards for transparency and creditor protection is also welcome.
Khalid Esbaitah,
CEO and Managing Director of Al Mazaya Holding
The [announcement] has come at the best possible time, and similar initiative is required from all countries in the region that have special ties with Dubai, as the emergence of the emirate of Dubai as a leading economic, tourism, trading and financial hub is what captured the world's attention and focused it on the entire GCC.
We as developers have not lost our confidence in Dubai, as this market has been built on a solid foundation, with focus on the long-term outcome. We believe that Dubai has been working according to a visionary plan that has made the emirate the region's business hub.
Omar Al Barguthi,
Director-General of Arra
We are pleased and optimistic about the initiative. We certainly hope the pressure has been defused and released once for all. This has shown the quality of the leadership in the UAE.
This move reinstates that the country in united and will re-boost the investor interest across the UAE.
Venu Rajamony,
Consul-General of India, Dubai
It is a very welcome step. It shows the strength and unity of the UAE as a country and it will dispel all fears and speculations with regard to the soundness of the UAE economy.
This measure in particular the repayment in full of the Nakheel's sukuk will provide a big boost to the stock markets and assure investors that their future is secure in the UAE.
I strongly urge the Indian community especially the Indian businessmen to do everything possible to infuse confidence in Dubai economy and to support measures being taken by the UAE and Dubai Governments. As far as India is concerned, UAE is a close economic partner and we see both the UAE and the Indian economies going from strength to strength.
Ali E Alshaqoosh Al Mueen,
Acting CEO, Ajman Bank
In taking this step Abu Dhabi clearly sees what we at Ajman Bank have continued to believe throughout the past months that Dubai and the UAE more widely, remain strong economies, especially when compared to other global markets. This latest sukuk-based deal is proof of Abu Dhabi's commitment to Dubai and its belief in Dubai's future. In fact we would like to congratulate the Government of Abu Dhabi for taking this decision. With our Dubai and Abu Dhabi branches on the horizon, 2010 is set to be year of promise."
Ziad Makhzoumi,
CFO at Arabtec Holding
Any news that the liquidity will come back and revive the economy is good news for Dubai. The world was waiting for some good news, which was very decisive. It is a step in the positive direction. The market reacted positively to the news. The foreign investment limit was reached very quickly within minutes of the news and the opening of the markets although reactions from some of the analysts who do not live in Dubai was not positive because they always look at the negative side of things.
The whole world's economy is restructuring and what is needed is an occasional boost to get the economy kick-started.
Jeffrey Rhodes,
CEO of INTL Commodities DMCC
The news that Abu Dhabi has injected $10 billion (Dh36.7bn) into Dubai is extremely positive. It shows that solidarity between the emirates remains strong and that they are united in facing challenges. The developments in UAE will initiate a sustained economic recovery in GCC and Mena.
Philipp L Lotter,
Senior Vice-President of Corporate Finance Group at Moody's Middle East Limited
After weeks of uncertainty, the decision to repay the Nakheel sukuk, and more importantly the orderly restructuring of Dubai World will provide much needed stability to the market.
While it seems that Dubai World will continue to be restructured and the debt standstill remains in place, we are comforted by the fact that creditors will continue to be serviced in the interim period.
Dr Nasser Saidi,
Chief Economist at DIFC
This should be very much welcomed by the international markets that have been under uncertainty over the past few weeks, concerning some of Dubai World obligations through Nakheel. That uncertainty has now been resolved and the markets have responded very positively to that.
The resolution of the debt issue is a confirmation of the underlying strength of Dubai and the GCC economies.
Farouk Soussa,
Sovereign Credit Analyst, Standard & Poor's
S&P considers this announcement as a step towards rebuilding confidence in Dubai's policy-making environment. The intention to strengthen the laws governing the Dubai World restructuring is an opportunity for the Dubai Government to demonstrate the workings of its legal system in dealing with such events, and the intervention of Abu Dhabi as an indication that it stands ready to safeguard the stability of the UAE economy.
Stephen de Stadler,
Managing Director, Head of Business Development (Middle East), Fitch Ratings
The decision by the Governments of Abu Dhabi and Dubai to act together to provide liquidity facilities to Dubai World, thereby ensuring the timely repayment of the Nakheel bond, is positive for the UAE as a whole.
While the short term effects of this action are evident, greater transparency as to the financial affairs of the Dubai Government and the various government related entities would lead to increased confidence over the longer term as well.
Tristan Cooper,
Head Analyst for Middle East Sovereigns, Moody's Middle East Limited
This announcement is clearly positive for Nakheel bondholders, but the wider restructuring of Dubai World remains in place. The apparent see-sawing of policy on this issue has undermined market confidence and that will take time to rebuild. Policy transparency will be the key to an enduring restoration of investor sentiment.
John Sfakianakis,
Chief Economist of Banque Saudi Fransi-Credit Agricole
It is an important first step. The market was looking for such guarantees and took to above and beyond what is expected. What has to be seen is what happens to the remaining debt, the restructuring and the debt that is pending for 2010.
Mathew Wakeman,
Managing Director for Cash and Equity-linked Trading, EFG-Hermes
The market was pricing in Monday's news from last Thursday as the retail rumour mill was in full swing. The Monday's announcement shows that the success of Dubai and its ability to be able to go back to global markets in the future to raise cash is of key strategic importance for the UAE as a whole.
What this gives is time for Dubai World to restructure the existing debt and gives investors confidence that the government appreciates the systemic shockwaves that a default would have caused here and overseas.
Costs of borrowing may well be different in the future but the door is still open and that's the main thing. The bounce in the stock markets is due to a re-pricing of market risk and earnings potential. It's likely that both markets will see similar strength today given the residual buying unexecuted yesterday.
Imad Al Jamal,
Vice-President of the UA Contractors Association
I welcome this decision. It reinforces the opinion that UAE is a unified country and the development will definitely boost the market. We saw the results – the stock markets went up yesterday. Everybody was expecting that Dubai will default on the sukuk. It is also mentioned in the statement that part of the payment will go to us contractors as there is a lot of delayed payments.
Now this should be a boost to the liquidity situation and will help enhance the confidence in the market. Yes, we do have hiccups and we have problems but these are short-term issues. People have to be patient. The problem was not created by us but by the West. We are trying to get out of the situation.
The money will be distributed to all major contractors who have been working with the government and are expecting payments.
Nicholas Maclean,
Managing Director, CB Richard Ellis
From our perspective the announcement has been important for three reasons. First the expression of unity between Abu Dhabi and Dubai is very important for investors looking to place capital into the UAE.
Secondly, there is acknowledgement that there needs to be a legislative change to ensure a greater level of transparency and protection for future investors be they creditors, direct investors, or property developers.
Further, the interests of contractors and advisors are openly recognised as being vital to the future success of the country.
Abid Junaid,
Executive Director of ETA Star Properties
The $4.1bn repayment of the sukuk is a very welcome news. Certainly, this will bring a lot of confidence back into the investors' mind and will stop all the rumour-mongers from talking ill of the Dubai economy.
This news reinstates the strength of the larger players of the real estate industry and that strength will surely trickle down to the rest of the small to medium real estate players.
Mohammed Nimer,
CEO MAG Property Development
The cornerstone of this economy has been based on the trust and stability of this economy. A large number of people have invested in this economy's real estate sector based on the trust and confidence they have in the government and the city of Dubai. Any signs of this trust being weak will hurt everybody. This news will certainly reconfirm that trust.
Bill Hubard,
Chief Economist at MIG Investments, Switzerland
The commodities' markets will stabilise following this announcement. The behaviour of markets proves that they had overreacted when Dubai World had previously announced the restructuring of its debts.
Suresh Vasan,
Director of Energy Financial Services at General Electric
It will be positive. I'm not sure it will change the basic fundamental issue of government support for government related entities that's a broader framework that needs to be established. The market should hear more about it.
Bill O'Neill,
Portfolio Strategist, Merrill Lynch Wealth Management, Europe, MiddleEast and Africa
The effects of what has happening in the UAE in the past month or so will be damaging. The game and the environment have changed. I think there will be a significant risk aversion coming into this economy, which was the case before the Nakheel standstill. That said things are much better now that they were a week ago.
A week ago you were facing a very serious situation in terms of the ability to convince offshore investments to come in here. That has improved. This is a good first on what is going to be a lengthy work.
Ali Asif Khan,
Managing Director and Head of Brokerage, Arqaam Capital
The price action in the bond markets and the equity markets demonstrates how important this news was. The buying has been broad-based. There has been a positive impact on regional markets as well, and this news is a catalyst for that.
I think this gives Dubai World, and Dubai generally, breathing space to continue discussions surrounding their restructuring or their standstill request to creditors without being distracted.
Saleh Muradweij,
Executive Director, Gulf Technical Construction Company
This is excellent news that portrays the dedication of the Government of Dubai on taking the necessary measures to deal with the issues that have risen due to the global financial crisis.
This shows the UAE's commitment to tackle the existing problems and providing support where needed.
We have become accustomed to seeing strong determination from the Government of Dubai to work in the best interest of its stakeholders, residents and the overall economy.
Mohammed Yassin,
CEO of Shuaa Securities
I believe the agreement was a perfect reply to all the speculation in the past two weeks. The leadership of the UAE has addressed all the concerns and proved that the UAE as a whole and Dubai in particular will be able to meet its financial obligations in a timely manner.
With this decision, Dubai will be able to achieve its goals that it set on November 25 to sign the standstill agreements with the creditors and to be able to restructure the Dubai World subsidiaries. The payment does not just address the bondholders but also address all contracting and supplying companies with dues on Dubai World subsidiaries.
Dr Mahdi Mattar,
Chief Economist and Head of Research, Shuaa Capital
We view this as a positive to the markets, mainly since the announcement of the repayment as well as the support from the Abu Dhabi Government is part of a more comprehensive plan to address the challenges that lie ahead.
One could argue that the Dubai World 'default' story and its effect on Dubai, the UAE and the region, has been bigger than initially expected. We believe the negative effect of the Dubai World 'standstill' announcement speeded up the latest decision by Abu Dhabi to provide support.
Ziad Dabbas,
Financial Advisor, National Bank of Abu Dhabi
It was a very strong and important move by Abu Dhabi. The Dubai debt issue was scheduled to be discussed by the GCC summit in Kuwait and Abu Dhabi's timely decision to extend support to Dubai reflected the strong relations between the two emirates and showed that it will continue in its support.
The move was timely as it coincided with Monday's maturity of Dubai's sukuk payment. The whole world has been watching and the move came as a very good surprise to all of them. This support will certainly reassure investors to re-enter the UAE market.
Bishoy Azmi,
CEO of Al Shafar General Contracting
As a company, we are not directly exposed to Dubai World and Nakheel. But generally speaking as a market sentiment, it has had very positive effects on the DFM and all shares of real estate and construction firms have shot up to the maximum.
The move gives a good positive boost to the morale of the industry. The UAE is united and that the federal government and the Government of Dubai are trying their best to support firms.
Jitendra Gianchandani,
Chairman of Jitendra Group
Clouds of uncertainty have cleared. We as residents of the UAE were confident and had faith in the unity of the UAE. But now as it is evident that Dubai has the support of Abu Dhabi.
This will close the doors for those outside the UAE who were deliberately tarnishing the image of the UAE and Dubai. The Western media reacted prematurely as it acted upon the half-baked information.
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