Thursday, January 15, 2009

UAE banks assigned negative outlook

Financial Times:
Moody’s Investors Service, the credit rating agency, has placed the United Arab Emirates banking sector on a negative outlook, amid mounting signs that the country’s real estate market is heading for a correction.
Tightening credit conditions, liquidity constraints, a collapse of regional equity markets and tumbling oil prices will also contribute to increased strains at UAE banks, Moody’s added in its report.

However, the credit rating agency added that UAE banks generally enjoy strong economic fundamentals, were sufficiently capitalised and provided for non-performing loans.
UBS, the Swiss wealth manager, said on Wednesday that Dubai’s population could contract 8 per cent this year as cancelled projects cause a mass of layoffs in the construction and real estate sectors, which account for more than half the emirate’s populace.

One wonders how much of Dubai's past growth in GDP was growth in population rather than growth in per capita GDP.

“We estimate this may result in a residential oversupply of 27 per cent of the current market by 2010, thereby incrementally pressuring home prices,” UBS said in a report.
In, um, unrelated news, traffic in Dubai is "no longer a nightmare" -- attributing it to an increase in carpooling due to the economic downturn. Or is it a fall in population?

And there's this:
He foretold the collapse of Lehman Bros., the U.S. investment bank, and anticipated the resulting plunge of the South Korea currency, the won, all the while castigating policymakers for their blunders.

But prosecutors say Minerva crossed the line.

In a Dec. 29 posting, the online commentator wrote that the South Korean government had ordered financial institutions to stop buying dollars in order to curb the won's fall against the greenback.

The posting devastated the local foreign exchange market, forcing the nation's financial authority to spend $2 billion of its reserves as the demand for dollars surged wildly, prosecutors claim.

This month, investigators arrested a 30-year-old man who they say has admitted to being Minerva. They have criminally charged him with spreading false rumors on the Internet that damaged the government's reputation in the world financial market.


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10:06 PM  

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