Dubai calms investor worries

Dubai: Dubai will meet its all debt obligations as it puts a comprehensive economic plan together to ride out the current financial crisis, a top government official said on Monday.

Dubai's total debt obligation of Dh256 billion is much lower compared to its assets, which are valued at Dh1.3 trillion.

"Currently, the Dubai Government's sovereign debt obligations stand at $10 billion (Dh37 billion). At the same time, the total debt obligations of affiliated companies stand at $70 billion (Dh256 billion), compared with assets valued at $260 billion (Dh950 billion)," Mohammad Al Abbar said on Monday.

Al Abbar, chairman of the Advisory Council - the newly created crisis body of of the Dubai Government - and chairman of Emaar Properties, made the comments at a conference at the Dubai International Financial Centre (DIFC).

"While our key sovereign assets are currently being evaluated, I can give you a rough estimation of their value, being over $90 billion (Dh330 billion). And this does not include our airports, bridges and the Metro. The total value of the assets of the government and affiliate companies in Dubai is well over Dh1.3 trillion."

Dubai last month created the council to assess the impact of the global financial crisis on its economy, amid a massive capital outflow estimated at Dh500 billion between July and October this year, which resulted in a stock market crash and a correction in the real estate sector.

Dubai shares continued to drop sharply yesterday as investor sentiments were affected by a lack of clarity on the Amlak-Tamweel merger and the news that the three big real estate companies of Dubai are in talks about pulling back property supply.

The Dubai Financial Market General Index fell 5.33 per cent to 1,814.90 led by real estate and banking stocks. Emaar Properties fell close to 10 per cent to end at Dh2.47.

Admitting the challenges, Al Abbar said, Dubai will overcome the crisis. "We accept the challenges that face us and the world ... Our feet are firmly planted on the ground and our eyes remain fixed on new horizons, on a future that remains bright. We have risen to great challenges before, and we will rise to them again," he said.

Emaar-Nakheel merger plan denied

Dubai's Advisory Council on Monday denied any merger talks between Emaar Properties and Nakheel. "Emaar Properties and Nakheel are not considering any merger plans," a spokesperson said in an e-mailed statement.

With more than 20,000 completed homes, Emaar has the distinction of delivering the largest number of residential units in the UAE, while with Dh367 billion worth of projects in the pipeline, Nakheel is one of the largest UAE developers.

Together, the combined value of projects under planning and development by both entities is estimated at Dh900 billion stretching from the Far East to Morocco. A merger between Nakheel and Emaar Properties could create one of the world's biggest property developers.

Do you expect the speech to reassure investors of the viability of the market in Dubai? Will Alabbar's statements help revitalise the Dubai Financial Market? How do you see it affecting the level of transparency in the business sector?