Dubai targets US financial services

Dubai: Investment Corporation of Dubai, an agency which pools some of the Dubai government's biggest holdings, said it is looking to benefit from the US mortgage crisis to buy into troubled US financial services companies.

"What's happening in the States is going to create a lot of opportunities," Mohammad Shaibani, chief executive officer of the Investment Corporation, told reporters. "In financial services, we are evaluating the situation."

Shares of Merrill Lynch & Co, the US bank which wrote down $8.4 billion of assets during the third quarter because of subprime mortgage defaults, were "still expensive," Shaibani said. The shares have plunged 42 per cent since June 1.

Shaibani said the same of Citigroup, the largest US bank, which has written down at least $13 billion and whose shares have also tumbled. "We would be interested" to see the shares to fall further, Shaibani said on the sidelines of a bankers' meeting. "We'll be very selective," he said of possible acquisitions in the US.

Investment Corporation owns stakes in companies such as Emaar Properties and Dubai Financial Market, which are benefiting from record oil income to the region to make foreign acquisitions.

OMX bid

Dubai Financial Market is a part of Borse Dubai which expects to complete its $4.9 billion takeover of Nordic and Baltic bourse operator OMX by the end of February.

"We will be looking at the overall strategy and privatisation plan for Dubai," Sa'ad Abdul Razak, managing director of Investment Corporation, told Reuters earlier yesterday.

Abdul Razak, who step-ped down last month as chief executive officer of Dubai Islamic Bank, likened Investment Corporation to Singapore's state-run Temasek Holdings, which manages about $160 billion of assets.

"You need to have one consolidated investment arm," Abdul Razak said. "We are open to all markets, and we will invest in the US, Europe and Asia," he said.

Investment Corporation would look at selling stakes in state-owned entities either through initial public offerings or private placements "when the market is right", Abdul Razak said.

Emirates airline said last week its intends to sell as much as 30 per cent in an IPO to help finance more than $60 billion of aircraft purchases.