Fundi Mchundo
Platinum Member
- Nov 9, 2007
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Mafuta Yanalipa Mwana Usipime...na Ukishakuwa Mjanja Na Rasilimali Imemilikiwa Na Wafalme....lazima Kieleweke..atii Here Comes Wa Tz Na Maliasili Zetu...mrahaba 4% Mpo??twajengewe Vyoo Na Primary 3 Kwa Mwaka Kwenye Wilaya Zinazozunguka Mgodi Kweishaa Habari.........
DUBAI, United Arab Emirates - Fitch is cutting its ratings on two companies tied to the Dubai government.
The credit rating firm says it made the downgrades Wednesday because of what it called the emirate's worsened economic outlook and the likely pressure this will put on the Gulf city-state's finances.
The downgrades affect Dubai Holding Commercial Operations Group, a holding company owned by Dubai's ruler, and state-owned utility Dubai Electricity and Water Authority.
Fitch cited poor transparency in cutting the ratings, though it acknowledges the benefit of continued government support for the companies.
Concerns have grown about Dubai's debt level in light of the world financial crisis.
Habib Mostofi is one of thousands of Iranians who believed buying property in Dubai would be safer than Iran, isolated by the West over its disputed nuclear plans. But that was before the emirate's property bubble burst.
"I invested all my family savings in property in Dubai. I thought it was near Iran, politically safe and business- friendly," the 43-year-old businessman told Reuters. "How can I tell my family I was so wrong and lost the money?"
The economy of the United Arab Emirates, the world's fifth-largest oil exporter, has surged 50 percent in real terms since 2004, but the tide has turned as slumping oil prices and a global financial meltdown put an end to Dubai's property boom.
In recent years Iranians -- as well as others from Iraq, Pakistan, Somalia, Sudan and Lebanon -- have flocked to Dubai, the Gulf trading hub where construction cranes litter the skyline. For Iranians it was a haven from sanctions over the nuclear work the West says is to make bombs. Tehran denies this.
Many Western banks and export credit agencies have quit Iran and Iranian executives face increasing difficulty opening letters of credit, vital for trade, with an Iranian address.
Some opened Dubai offices to avoid that problem, while others just saw Dubai's property boom as a surefire earner.
At the height of the real estate bonanza, mortgages were easy and property could be sold for profit even before construction was finished -- a practice known as "flipping."
Reza Dabir-Alai, a businessman, 39, bought several apartments that together measured 1,541 square metersin Dubai.
"Substantial profits could be earned in a matter of days, sometimes even hours immediately after buying a property," Dabir-Alai said, adding after signing a deal for one apartment he was offered 2 percent more as he left the real estate agent.
PROJECTS ON HOLD
Then the financial crisis began lapping on the beaches of Dubai's many manmade islands. Rows of apartment blocks and exclusive villas have lost their value, as banks have reined in lending, casting a pall over corporate finance and construction.
"I cannot sell these apartments ... and I cannot cancel the contracts," said Dabir-Alai.
Shahnaz Mirsoufi, an Iranian real estate agent based in Dubai, said prices of villas and apartments in Dubai, on average, doubled since early January in 2007 but now some premier property prices have dropped as much as 50 percent.
"Even in the first quarter of the year, the price of villas and flats, many not yet built, rose by 43 percent," she said.
Analysts in a Reuters survey this month said Dubai property prices would fall 28 percent from a peak earlier this year.
Hamid Sardari, an Iranian businessman, said he was "penniless" and feared for his shipping company.
"My money that I need to run my business is stuck in Dubai property," he said. "I will be bankrupted soon."
Now some developers have put projects on hold after Dubai's real estate regulator urged developers to slow down, saying worsening financial conditions were driving up defaults.
FINANCIAL RUIN
Many foreigners were also attracted by a former promise that owning a property would secure them long-term Dubai residency rights. But Dubai's property regulator this year scrapped such a guarantee.
That spelt financial ruin for computer engineer Mohammad Reza Nouri: no visa, no job in Dubai and not enough salary from his Tehran work to pay off his UAE loan.
"My aim was to get a residence permit in Dubai. Now I cannot get the permit and I cannot pay the apartment's monthly installments," he said after investing $50,000 of his savings.
Concern about the speculation even prompted a public warning from Iran's ambassador to the United Arab Emirates in November.
"I call on Iranians to avoid buying properties in Dubai. For those who want to make profit or get a residence permit, none of those is possible," Hamid Reza Asefi told state radio.
Selling up is not always an option.
Mina Vakili, a divorcee, said she could not sell an 80 square meter apartment she bought off plan.
"I wanted to profit from my Dubai apartment to buy one in Tehran," she said. "But now, it is not clear when the project will even be finished."
i take it the DXB bubble has b....
hiyo ya abudhabui kjutaka 51% ya EK kiboko...nasikia hata ile project ya DUBAIWORLD imesimamishwa
i take it the DXB bubble has b....
hiyo ya abudhabui kjutaka 51% ya EK kiboko...nasikia hata ile project ya DUBAIWORLD imesimamishwa
ABU DHABI has demanded control of Emirates, Dubais flagship airline, as the price of a multi-billion pound cash injection for the Gulf kingdom.
The fast-growing airline, long the envy of neighbouring Arab states, has emerged in recent days as the centrepiece of negotiations over a financial bail-out for cash-strapped Dubai.
The emirate, which is ruled by the Al Maktoum family, has been hit hard by the credit crunch. Its property market, in which many of the big players are state-owned or backed, has enjoyed explosive growth over the last decade but prices are now tumbling, leaving heavily indebted developers badly exposed.
Government sources in Dubai confirmed last week that talks had begun with Abu Dhabi, which has huge oil and gas reserves, about funding. Rather than ploughing cash into the Dubai state, Abu Dhabi has offered to invest in its neighbours strategic assets.
The Sunday Times has learnt that Abu Dhabi is eyeing a stake in Emirates, along with investments in other industries, such as the state water company.
The airline alone is estimated to be worth about £10 billion and selling a stake in it could generate enough cash to prop up much of Dubais economy.
The proposal is controversial, however, as the airline is regarded as the embodiment of Dubais rapid rise to international prominence and an important symbol of the emirates identity. It is owned by the Dubai government, which is reluctant to relinquish control.
Although other Gulf states are thought to be monitoring the situation, Abu Dhabi is believed to be keen to offer Dubai a deal that keeps the airline within the United Arab Emirates.
Transport bankers say Abu Dhabi may plan to pursue Emirates nascent plans for a float on the Dubai Stock Exchange. The airlines management, and Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive of Emirates Group, recently hinted the government would consider a listing, with 25%-30% of the airlines equity sold. Last year the group had net profits of £690m.
Airlines have long been a contentious issue in the United Arab Emirates, a confederation of Gulf states that includes Abu Dhabi and Dubai. In the 1970s the two states, along with Oman and Bahrain, took strategic stakes in Gulf Air, intending to turn it into a national carrier for the region.
By 1985, however, Dubai had decided to set up a rival and created Emirates, backing a largely expatriate management led by Briton Maurice Flanagan.
Emirates has been a success story of international aviation, turning Dubai into one of the largest hubs, and in the process helping the government fulfil its ambition of growing tourism and financial services. Abu Dhabi followed Dubais example, setting up its own national carrier, Etihad, in July 2003.
Thanks for the posting GT.
Icadon,
unakumbuka ile posting yako kuhusu mafuta?..This is
what its adding up to.Jamaa walijisahau during the petroleum
boom na sasa mambo yamebadilika and these projects
have to be put on hold.
Waarabu wameumbuka!
GT,
soko kubwa la hawa mabwana ni marekani and with the trend
of things sidhani kama wamarekani watawa-sustain any longer.
Now that Obama and his new team are looking towards a "green
econmoy" and fuel alternatives, I don't see how these projects
are intending to be revamped....what becomes their next option?