In the last month, even as markets have sold off on worsening macro news, many SWF watchers in the press remain agog over the recent flurry of purchases by the Qatar Investment Authority across the commodities space, particularly the energy sector, as well as some other extensive purchases. It seems a good time (if a […]
The year 2012 will be a crucial year for Dubai Inc. as a number of significant debt matures in the year. Analysts expect the emirate to service these maturities, but they expect external support. Here’s a look at Dubai’s options. 2012 is going to be a major year for the emirate of Dubai as it […]
The recent debt restructuring of Dubai World and the last minute rescue of property subsidiary Nakheel, which issued one of the largest Islamic bonds three years ago, has shaken the confidence in Islamic finance owing to growing controversy about the interaction of shari’ah compliance and principles of investor protection in times of distress. As creditors are about to sign their settlement agreements in late April 2010 there remains general concern about whether shari’ah compliance might hamper an orderly dispute resolution under conventional law and about the legal enforceability of asset claims under the current Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) recommendations on sukuk structures. With the clear benefit of hindsight, this brief note speculates on possible outcomes of legal proceedings if the Nakheel sukuk had defaulted and discusses some potential implications for the wider sukuk market. The note also briefly touches upon the recent UK ruling in the Investment Dar case.
In the links yesterday, I pointed to an FT article detailing the Austrian government’s nationalization of the insolvent bank Hypo Group Alpe Adria (HGAA). The financial institution, which has 40 billion Euros in assets, is the country’s sixth largest bank. But, in relative terms, this is a very large bankruptcy – using GDP at purchasing power parity, an American HGAA would have assets of $2.5 trillion, larger than any of the American banks. So, this is a very big deal and it points to renewed risks in banking and the possibility of contagion.
The ongoing dollar carry trade has recently come to the forefront of the international policy debate (Roubini, 2009). Capital inflows to emerging market countries have put pressures on some currencies, and authorities have responded by slowing the pace of appreciation, in some cases by capital controls. This short article uses a GARCH framework to examine […]
This week we turn our attention to the fallout from the debts of Dubai Inc that roiled global markets last week. Today’s note is excerpted from two pieces of analysis available in full to RGE clients: “Dubious Dubai: Castles in the Air, Heads in the Sand?” and “Rerisking after Dubai: The End of ‘Quasi-Sovereigns?’” Last […]
Back in the heady days of 2006 some 30,000 cranes, roughly a quarter of total global capacity, were busy whirring away in Dubai. Today most of these devices have either left to find service in other parts of the globe, or lie silent, unused and unloved. In what is only the latest sign of the […]
By now you have heard that Dubai World, the investment company, has asked its creditors for a six-month delay in repaying its debt (see articles in links). This is what is commonly referred to as default. Now many are wondering if Dubai the country is on the verge of default and asking who is most […]
Presumably the rulers of Dubai and Abu Dhabi are currently locked in negotiations regarding the exact terms that will be attached to a “bailout” for Dubai World. We’ll never know the details but if, as seems likely, the final deal involves creditors taking some sort of hit (perhaps getting 75 cents in the dollar, at […]