NEWS FROM THE UAE
SOURCE : THE NATIONAL/ARBIAN BUSINESS
Bank officials among five held in card fraud
UAE - NOV 13: Five South Asian men, including two senior bank officials, were accused of using fraudulently obtained credit cards to withdraw more than Dh2 million (US$545,000) from a local branch of a foreign bank, police said yesterday.
Police received a tip about the fraud last month. In less than a week, they had the five men in custody and recovered nearly 100 credit cards and more than Dh60,000 in cash. Police said the scheme had lasted six months.
Detectives were told on Oct 30 that a Pakistani man had used false documents to obtain credit cards from the bank branch. The investigation led to SH, who was allegedly carrying four credit cards and Dh21,540 in cash when he was arrested.
A search of his home discovered 95 credit cards, five chequebooks, nine mobile phones, a fake South African passport and identity card, some forged labour cards, nine commercial stamps and Dh39,000 in cash, police said.
SH implicated two men identified by police as MA from Pakistan and MI from India, who he said also had obtained credit cards by using forged documents.
According to the CID, MA used a computer to forge salary certificates and other documents required by banks for issuing credit cards. He and the other two suspects then allegedly went to officers at a local branch of a foreign bank, identified as VL and JS, who approved the credit card applications knowing that they were fraudulent.
Upon receiving the cards, SH, MA and MI allegedly withdrew the maximum cash advance permitted for each card and paid the bankers 15 per cent for approving the applications.
Dubai CID also learnt that one of the bankers, VL, allegedly stole Dh225,000 from the gang and left the country, and that one of the suspects was wanted in six police districts and by the immigration and passports department for absconding from his employer.
All members of the gang were arrested by Nov 4, including VL, who was detained when he returned to the UAE from abroad.
THE NATIONAL
Prices drop for first time on record
ABU DHABI - NOV 13: Property sale prices have softened month-on-month for the first time on record, falling by 4 per cent in Dubai and 5 per cent in Abu Dhabi, while rental yields have grown, according to an HSBC survey.
“Despite market tightness, Abu Dhabi prices appear to be down due to its heavy off-plan weighting,” analysts said in the bank’s monthly secondary-market survey of the UAE. “Nonetheless, the only development that is ready, Raha Gardens, was down 2 per cent month-on-month.”
In Dubai, the villas and flats markets saw different trends. According to the report, advertised villa prices fell by 19 per cent from September after several banks reduced mortgage loan-to-value ratios in August and September. But average apartment asking prices in Dubai were flat, which analysts attributed to an increase in sales at high-end projects.
The HSBC survey also found that for the first time since the first quarter of last year, rental yields expanded last month due to lower asset prices and seemingly tight supply. “Month-on-month implied gross yields increased from 4.7 per cent to 6.3 per cent. However, rental demand is likely to remain robust as we sense potential buyers are deferring their plans until there is better visibility in the credit markets,” the survey said.
THE NATIONAL
Shakira plans capital date
ABU DHABI - NOV 13: Shakira, the Colombian pop singer with Lebanese roots, will star in the biggest New Year’s Eve show to be staged in Abu Dhabi — a Latino-themed extravaganza at the Emirates Palace hotel.
Ticket sales for the show have been capped at 10,000 to ensure a “more intimate occasion”, the organiser, Flash, said yesterday. Previously, 20,000 fans were expected. “Shakira’s a huge name and absolutely perfect for the event,” said John Lickrish, the managing director of Flash. “She is just the kind of artist we wanted to encapsulate the Latin feel. With Shakira being half Lebanese, she’s the perfect artist to bring here, reaching out to her fans in the region and adding the Latin twist to the evening.” It will be the second performance in the UAE by the Colombian-born Shakira, whose New York-born father is of Lebanon descent. She sang at the Dubai Autodrome last year to an audience of 25,000.
Other New Year’s Eve events in the capital will include an outdoor party at Al Bateen Marina with international DJs Saeed Murad and Artful Dodger.
THE NATIONAL
Economic storms dampen plans
U.A.E. - NOV. 13: Authorities are grappling with an unprecedented twin decline in equity and property markets as the global economic crisis buffets the region in ways few imagined just months ago.
The Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM) fell for a fifth straight trading session yesterday, leading GCC bourses deeper into a market rout that has become the worst in the history of the region.
The DFM has fallen 63 per cent this year. That surpasses the 52 per cent decline the market experienced from late 2005 to the middle of 2006. The ADX, which fell 47 per cent peak-to-trough in the 2005-2006 rout, is down 38 per cent so far this year. Markets in other GCC countries have experienced similar declines.
They are being hit by the second wave of the global crisis. It began with a financial system meltdown but is now rippling out into a global recession some predict could become the worst downturn in decades, perhaps even since the 1930s. Unlike the last sustained market downturn, which the region’s equity investors recovered from fairly quickly as the global economy grew, this time the woes are linked closely with stresses in the underlying economies of the region.
“There’s a question not only for Dubai, but for all the region regarding the assumptions on which their expansion plans have been based,” said Richard Fox, the head of sovereign ratings at Fitch in London. “They’re going to probably revise them all down a bit.”
Credit, which just months ago flowed freely, has become scarce as regional banks have been cut off from gyrating international markets and curtailed lending at home. That has transformed property markets from free-wheeling bazaars where prices seemed to go nowhere but higher – especially in the secondary, off-plan market, where speculation reigned – into dens of sellers. Some are dumping properties to generate cash to meet margin calls from stockbrokers, or to fill holes in their portfolios created by the declines in their equities.
In the most recent gauge of the property market, the global bank HSBC Holdings issued a report yesterday saying property prices fell four per cent in Dubai and five per cent in Abu Dhabi last month. Some kinds of properties fell much more than that, the bank said, citing a 19 per cent decline in the prices of villas in Dubai during the month. It was the first time monthly prices had fallen, the bank said.
Meanwhile, oil prices have fallen to below US$60 per barrel from more than $147 just four months ago. Revenues for GCC producers remain well above spending levels, but the sharp decline has added to the atmosphere of constricting cash flows and scaled back investor expectations for the region’s economic growth.
Federal authorities and leaders in Dubai and Abu Dhabi have responded with a flurry of moves in recent weeks, starting with Dh120 billion (US$32.6bn) worth of funds that the Central Bank and Ministry of Finance have made available to banks. Some Dh50bn of that money has been placed as deposits in banks, which saw a steady outflow of funds in the past half year as foreign investors fled regional markets amid the global financial turmoil.
Those funds are aimed at assuring that banks continue lending for important infrastructure and building projects that are crucial to the country’s economy – from power plants to marque property developments.
The Central Bank has set up a task force to monitor markets, while Dubai’s leadership has assembled a committee to examine major projects in the emirate and determine where financing should be focused.
Many observers say that while the global crisis will clearly hit the country’s economy, the Government is in a strong position to manage the fallout. Mohieddine Kronfol, the managing director at Algebra Capital, figures the Government has sufficient resources to assure that current projects continue to receive funds and banks have the backing to deal with any fallout from a correction in the property market. He estimates that Dubai and companies the emirate controls must repay about $21bn in debt by the end of next year. With the resources of the Federal Government and, if necessary, even those of Abu Dhabi available in some cases, he said that should be possible, as well as provide help for any banks that might need it.
“You have essentially a $25bn to 30bn problem. Addressing it is now manageable with the resources that they have at their disposal.”
Emaar Properties, the Dubai-based developer, announced yesterday that it will ease the payment restrictions on property purchases to make it easier for buyers to afford properties.
Buying homes has become significantly more difficult in recent months as the country’s banks have tightened the requirements for obtaining loans. That, in turn, has contributed to the decline in property prices.
Also yesterday, the Dubai Government announced rules that would make it harder for buyers to back out of purchases during the period they are making payments.
Emaar in some ways encapsulates the vicious cycle that has emerged between the equity and property markets. The company is one of the biggest builders and started the year as the largest capitalisation stock on the DFM. The company’s shares have fallen 77 per cent so far this year, contributing more than 10 per cent to the overall decline in the market.
That has pinched the portfolios of many investors, some of whom have then had to raise cash by selling properties, helping push real estate prices lower. Falling real estate prices, in turn, are now contributing to concerns about Emaar’s corporate performance as it moves to extend more credit and loosen restrictions on sales to try to encourage buyers.
But Emaar is far from the only property company seeing declines. Sorouh Real Estate, an Abu Dhabi-based developer, saw its shares fall 9.5 per cent yesterday. Its shares have fallen 35 per cent in the past five trading sessions.
THE NATIONAL
OPEC eyes new output cut as oil hits 22-month low
UAE - NOV 13: OPEC ACTION: The oil cartel could act before the end of November to arrest the slide in oil prices. (Getty Images)Oil slid for a third straight day to hit a 22-month low of $55 a barrel on Thursday, after a 5 percent overnight loss, as mounting pessimism about the global economy outweighed OPEC's comments that it could cut output again as early as end-November.
OPEC officials, concerned about oil's steep drop from record highs over $147 a barrel per day (bpd) in July, said the cartel could possibly decide by the end of the month to cut production again to raise prices.
But comments from the producer group failed to lift oil prices, as investors focused on near-term demand woes after the US Energy Information Administration (EIA) slashed America's 2008 oil demand outlook and the International Energy Agency (IEA) flagged further reduction in its oil forecast.
Oil has lost about $91, or 62 percent, from its mid-July high, on growing evidence that recent high energy prices and the financial crisis have dented energy demand in the United States and other industrialised nations.
US light crude for December delivery fell 40 cents to $55.76 a barrel by 6.19am Dubai time, after having fallen earlier to $55.03 - the lowest since Jan. 29, 2007. The contract fell $3.17 to settle at $56.16 a barrel on Wednesday.
London Brent crude fell 41 cents to $51.96.
OPEC President Chakib Khelil said on Wednesday that OPEC may cut oil supplies again, possibly by the end of this month if prices keep falling and the world economy weakens.
"If the prices continue their decline, most probably OPEC will have to take a further decision on a cut in supply," Khelil, who is also Algeria's energy and mines minister, told Reuters in an interview in Algiers.
A further decision to lower output could happen as early as a Nov. 29 meeting of the Organisation of the Arab Petroleum Exporting Countries in Cairo, Khelil said.
"Oil prices continue to be pressured by fears that weaker international economic growth will depress oil consumption," said David Moore, a commodities strategist at the Commonwealth Bank of Australia.
Oil's overnight fall came after the US government shifted its position on how it planned to use its $700 billion bailout fund, which added uncertainty to financial markets and renewed fears of a protracted global recession.
Expectations that US government data would show a further build-up of its crude and gasoline stocks also weighed on prices, analysts said.
Analysts polled by Reuters ahead of US weekly inventory data forecast crude oil stocks rose 1.2 million barrels last week, while distillate inventories were seen rising by 800,000 barrels.
Analysts also forecast a 300,000 barrel rise in gasoline stocks. The data will be released on Thursday, a day later than usual due to the US Veterans' Day holiday on Tuesday.
Demand in the United States, the world's biggest consumer of oil, was expected to fall by more than 1 million barrels per day (bpd) for the first time since 1980 this year, the EIA said.
The EIA also forecast world oil demand to rise by only just 100,000 bpd in 2008 and will be virtually flat in 2009, as it cut its 2009 oil price forecast to average around $63.50 a barrel.
Analysts said a move by IEA to further cut its oil demand growth forecast later on Thursday could heighten fears among investors that the ferocity of the recession sweeping through many of the world's biggest economies has not yet been fully factored into projections for oil demand.
The group includes top OPEC producer Saudi Arabia, Kuwait and the UAE. (Reuters)
ARABIAN BUSINESS