Dubai World chairman says group does not face funding crunch

Dubai: Dubai World on Thursday said it faced no resource-crunch in its expansion plans as its chairman discounted the likelihood of a huge impact of the global financial crisis on the Gulf region.

The group, which owns companies such as real estate developer Nakheel, private equity firm Istithmar and the world's fourth-largest port operator DP World, said it continues to pursue acquisitions in many countries.

No cancellation

Dubai World chairman Sultan Ahmad Bin Sulayem said the group has not cancelled any project because of the current market troubles.

"We as a company have not cancelled any project," Bin Sulayem said at a bankers' lunch organised by Emirates NBD bank. About the local property sector, he does not see a general fall in prices and expects demand for real estate to continue outstripping supply.

"You will not see a general reduction," Bin Sulayem said.

He described the market problems in the region as more psychological than substantial, saying things are made worse by "this common feeling that there is a crisis".

Stock prices across the Gulf have fallen sharply in recent weeks and cost of borrowing has risen as banks have become more risk-averse in offering loans.

"It is fear that is making people behave irrationally," Bin Sulayem asserted.

He does not expect the credit crisis globally to last long, explaining "this is a US-caused crisis, fixing it will come from the US."

"I am not worried about the Gulf market. Our economy is strong," Bin Sulayem said, enumerating reasons such as government support for banks and injection to liquidity into the financial system by the region's central banks.

Better off

He also sees East Asian countries such as China, Malaysia, Thailand and Singapore doing well despite bad economic climate in other regions of the world.

Dubai World has dealt with all its short-term liabilities through debt refinancing, Bin Sulayem said.

Ratings agency Moody's recently raised concern about the debt levels of state-owned companies, saying they owed $47 billion, more than Dubai's gross domestic product.

Top Dubai executives told reporters the emirate's financial situation remains healthy.

"There is no such thing as Dubai running out of cash," said Sulaiman Al Mazroui, general manager of marketing communications at Emirates NBD.

Dubai International Financial Centre chief executive officer Nasser Al Sha'ali said the emirate's revenue streams are able to meet its debt obligations.

"The cash flow position of Dubai is very strong," he said.

Al Sha'ali said what is happening in the Dubai market is "a bit of balancing" as in the years before the current problems people were benefitting from "super cheap" credit. "It is back to reality," he said.