UAE slowdown, downgrade

1. Agencies downgrade Gulf institutions (Financial Times)

Rating agencies have downgraded either the credit ratings or the outlooks for more than two dozen Gulf banks and companies, including a number of Dubai government-related entities, in a further sign of the region being impacted by the global financial crisis.

Fitch Ratings downgraded the individual ratings of Dubai Holding Commercial Operations Group, the real estate, leisure and telecommunications wing of a conglomerate owned by Dubai’s ruler, and Dubai Electricity and Water Authority (DEWA) from AA- to A+. The move was due “to the worsened economic outlook for Dubai and the likely pressure this will put on Dubai’s public finances,” the agency said.
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Standard and Poor’s, meanwhile, revised its outlook on seven of Dubai’s government linked entities from stable to negative, including Emaar Properties, one of the emirate’s main developers, DP World Ltd, DIFC Investments, the investment arm of Dubai’s international financial centre, and Dubai Holding Commercials Operations Group.

S&P, however, reaffirmed the companies’ credit ratings.

2. Abu Dhabi braces for slowdown (Financial Times)

If oil prices average about $55 a barrel next year – some analysts predict a lower level – the United Arab Emirates’ crude oil revenues are expected to fall from between $90bn and $100bn estimated for this year to $48.8bn in 2009, according to research by National Bank of Abu Dhabi. That compares with $71.2bn in 2007, and with Abu Dhabi controlling some 95 per cent of the UAE’s oil reserves its main revenue stream looks set to be hit hard.

The upshot, bankers and businessmen say, is likely to be a slowdown and delay for some projects, and the government will have to consider intervening to help finance developments. At the same time, pressure is likely to build on the private sector, particularly real estate and construction-related companies, which will be affected by the slowdown and could also be crowded out as state-backed projects and entities suck up what credit is available.

3. Job losses in real estate continue in Dubai (Gulf News)

4. Oil falls below $40 despite Opec output cut (The National)