ID :
41124
Sat, 01/17/2009 - 13:38
Auther :
Shortlink :
http://m.oananews.org//node/41124
The shortlink copeid
Dubai's refinancing needs to touch US$15b
Dubai's corporate refinancing requirements in 2009 are expected to touch US$15 billion (Dh55 billion), according to credit rating agency Moody's in its latest report according to "Gulf News."
This is nearly half of the total refinancing requirements of the Gulf Cooperation Council (GCC), estimated at US$33 billion (Dh121 billion). The UAE's total refinancing requirements are put at approximately US$19 billion (Dh70 billion).
Dubai companies in which the government has a stake, such as Dubai Holding, are included in Moody's estimate of the figures, and the report states that “addressing these maturities will be a significant challenge, although we do expect liquidity to return to the markets as 2009 progresses”.
Moody's affirms that governments in the Gulf are well placed to respond to these challenges.
Although the end of “cheap money” has reached the Middle East, and markets in the region are jittery on the back of low oil prices and vulnerabilities, regional governments remain financially strong, with the capabilities to intervene more assertively in the economy.
Some measures are already forthcoming - the UAE Federal Government has shown an inclination to shore up the country's banking and financial sector, and extra federal-level spending as well as Dubai Government spending has been set aside in 2009 budgets.
Moody's expects such “tangible evidence of support” from government to increase in the short term, echoing other sources.
Nonetheless, the overall assessment for the Middle East is predictably gloomy.
Moody's predicts a difficult year ahead, stating, “We believe that most companies in the sectors rated by Moody's - most notably real estate, infrastructure and energy - are more likely to scale back their investment plans than raise substantial new debt.”
The onset of the global downturn across the Europe, Middle East and Africa (EMEA) region and across industries has led to a weakened economy and a much more challenging environment for companies to find and access loans.
According to the report, 2009 will be a year of “painful convalescence”, with downgrades “to continue to significantly exceed” upgrades.
Michael West, group managing director of Moody's EMEA Corporate Finance Group, notes: “The deterioration in the credit environments in 2008, which culminated in the near-closure of capital markets after the default of Lehman Brothers in September, weakened consumer and corporate demand and exerted severe negative pressure on corporate ratings.
"As a result, Moody's implemented four times as many downgrades as upgrades in the EMEA corporate sector in 2008.”
This is nearly half of the total refinancing requirements of the Gulf Cooperation Council (GCC), estimated at US$33 billion (Dh121 billion). The UAE's total refinancing requirements are put at approximately US$19 billion (Dh70 billion).
Dubai companies in which the government has a stake, such as Dubai Holding, are included in Moody's estimate of the figures, and the report states that “addressing these maturities will be a significant challenge, although we do expect liquidity to return to the markets as 2009 progresses”.
Moody's affirms that governments in the Gulf are well placed to respond to these challenges.
Although the end of “cheap money” has reached the Middle East, and markets in the region are jittery on the back of low oil prices and vulnerabilities, regional governments remain financially strong, with the capabilities to intervene more assertively in the economy.
Some measures are already forthcoming - the UAE Federal Government has shown an inclination to shore up the country's banking and financial sector, and extra federal-level spending as well as Dubai Government spending has been set aside in 2009 budgets.
Moody's expects such “tangible evidence of support” from government to increase in the short term, echoing other sources.
Nonetheless, the overall assessment for the Middle East is predictably gloomy.
Moody's predicts a difficult year ahead, stating, “We believe that most companies in the sectors rated by Moody's - most notably real estate, infrastructure and energy - are more likely to scale back their investment plans than raise substantial new debt.”
The onset of the global downturn across the Europe, Middle East and Africa (EMEA) region and across industries has led to a weakened economy and a much more challenging environment for companies to find and access loans.
According to the report, 2009 will be a year of “painful convalescence”, with downgrades “to continue to significantly exceed” upgrades.
Michael West, group managing director of Moody's EMEA Corporate Finance Group, notes: “The deterioration in the credit environments in 2008, which culminated in the near-closure of capital markets after the default of Lehman Brothers in September, weakened consumer and corporate demand and exerted severe negative pressure on corporate ratings.
"As a result, Moody's implemented four times as many downgrades as upgrades in the EMEA corporate sector in 2008.”
