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Friday, January 1, 2010

Dubai's Number One Scammer: Shahram Abdullah Zadeh

source A 9 Stars Dubai Reader

In a city of soaring towers and luxury sports cars, Shahram Abdullah Zadeh wanted it all at any cost.

In roughly two years, the Dubai-born Zadeh conned his way from brokering meager real estate deals for Iranian immigrants to running an elite development firm in the fastest growing city in the world. The epitome of a con man, he is the poster boy for the thievery that descended upon Dubai during its unprecedented property boom.
Zadeh’s story, like many others, is a cautionary one that underscores the perils of rapid growth in developing economies. It is the tale of a Machiavellian businessman from an immigrant family who would stop at nothing to reach the top.

It was only a year ago, when the first paragraph in a high-profile Wall Street Journal story about Zadeh read: “Amid the movers and shakers of this glittering city, Shahram Abdullah Zadeh cut a wide swathe. He cruised around town in a white Bentley and dined with royalty as his company developed one of the emirate's premier office complexes.”

This was the portrait that Zadeh painted for the world. It was a disguise that permitted him to manipulate investors, investigators, and the media, as well as ruin reputations and steal millions of dollars.

His real biography, as shown by official documents and interviews with those who knew him from a young age, portrays a man who dreamed of a rags-to-riches transformation at any cost.

Zadeh was born in Dubai to Iranian immigrant parents in 1971. His father ran a small two-star hotel for Iranian businessmen called the Tara Hotel.

In one interview, Zadeh spoke of his parents’ vast real estate holdings and his costly education. The Wall Street Journal wrote: “Mr. Zadeh grew up in Dubai, attending school with the children of some of the city's top families.”
In fact, he attended secondary school at the Cambridge School in Rashidiya, which during the 1980s was by no means a place where top families sent their children.
Zadeh’s lies about his secondary school were only a minor detail in the fantastic, imaginary back story he concocted for himself. To many in Dubai’s elite, he described himself as Dr. Zadeh, the psychologist. This background, he said, provided him with a better understanding of those he was involved with in real estate deals. When he was hired at Al Fajer Properties to lead the company, he advertised far and wide that he had a PhD in finance, a degree that qualified him for the high-powered position.

Though Zadeh never lied about where he we went to University -- the Czech Republic -- he exaggerated his achievements. Zadeh studied general medicine at Masaryk University, graduating from the school’s Faculty of Medicine in 1999. He is not noted in the Czech Medical Chamber, which is a prerequisite for medical practice in the Czech Republic, or in Dubai. He did not study psychology or business, records at Masaryk University show.

Zadeh moved back to Dubai from the Czech Republic and in 2002 began working as a real estate agent within Dubai’s Iranian community. With his manic quest to gain recognition, he made money for those that mattered in an economy where any purchase of real estate would yield high returns in a matter of months. In 2003, Zadeh was introduced to Sheikh Hasher bin Juma'a Al Maktoum, the brother-in-law of Dubai’s ruler.

Sheikh Hasher bin Juma'a Al Maktoum, a member of the Royal family of Dubai and a man known for his old-fashioned values -- trust and commitment — was tricked by Zadeh’s tales of grandeur and hired him to run his development company, Al Fajer Properties, which is an arm of the Sheikh’s construction company.

With the real estate sector booming, there was little need to monitor Zadeh. The company appeared to be making money and towers were under construction. But in early 2008 an employee inadvertently pointed out to Sheik Hasher bin Juma'a Al Maktoum that the company’s cash situation was dire and Sheikh Hasher's son, Sheikh Maktoum bin Hasher al Maktoum, began an audit of the company, according to Forbes magazine.
His investigation soon discovered that Zadeh had funneled hundreds of millions of dollars out of Al Fajer, pocketing over $100 million for himself. The scam was simple: Zadeh would purchase real estate using Al Fajer funds and then sell it to private clients through one of his several shell companies, IBC Ltd FZCo and Diamond Steel FZCo. The method allowed him to to skim millions of dollars in profits that belonged to the company. He would then put the money he took out of the company back in as personal equity, making it look as though he were investing in the business.
Zadeh was jailed as accountants from Al Fajer put together the pieces of what was an obvious fraud committed against the company. But as government investigators were delayed as they tried to untangle Zadeh’s murky web of transactions and shell companies, they were forced to release him. His passport was confiscated and the courts ruled that he was banned from leaving the country until the investigation was finalized.

With his back against the wall, Zadeh’s churned out a plan of action. His strategy was to pressure Dubai’s legal system by spreading lies through the media and the Internet. He would then use the momentum to sue Al Fajer for $1.9 billion. Since he had never a signed an agreement with the Sheikh, which is common practice for older Arab businessmen, he could argue that the two had made an agreement favoring Zadeh. He would accuse the Sheikh of hiding it. He put together some affidavits and went to the courts. No one ever accused Zadeh of having small aspirations.

Western press outlets bought his story. Zadeh, the middle-class son of Iranian immigrants who was born and raised in Dubai, was referred to by The Wall Street Journal as an “elite expatriate.” Forbes printed quotes from Zadeh in which he alleged that he was “the sole investor in Al Fajer.” “Sheik Hasher Maktoum has not invested a single dirham into the company,” he said to Forbes.

Simple due diligence would have uncovered that Zadeh did not come from a wealthy family and that his resume was packed with fabrications and exaggerations. How could Zadeh, as The Wall Street Journal reported, have “managed his family's hotel and retail holdings and decided to go into business himself in 2000,” and then, only a few years later, obtain a job as the CEO of a major developer with such little experience? How could this same man, without personal wealth and with virtually no track record in Dubai’s business world, invest $30 million of his own money into Al Fajer (As he alleged to a Forbes reporter)?

These stories and others helped to fuel Zadeh’s devious plan. But it would not stop there.

Zadeh convinced a contact still working at Al Fajer, an assistant sales administration manager named Mohammed Salloum, to e-mail him a list of investors involved in an Al Fajer development called the Ebony and Ivory Towers. Though Salloum is now wanted by police for disseminating this list, he continues to work illegally in Dubai.

With the investor list, Zadeh orchestrated a public relations nightmare for Al Fajer. He rallied investors against Al Fajer, setting up group Web sites and enlisting overleveraged investors in Dubai real estate to be the face of his operation. These included men like Moses Oye and Imran Karim, who could no longer afford their purchases of entire floors of buildings now that the market had slowed down. A closer look at their past would have found details like Karim's felony conviction for tax evasion in the UK.

Zadeh also fed information to Ingerborg Meyer, a German woman who runs an anti-Dubai blog, called 7 Stars Dubai. He then paid her to make posts on Web forums so that his campaign against the company that he stole millions of dollars from would spread virally.
But of all of Zadeh’s posturing, the most devious move in his scheme involved a pawn named Leigh Jones, a British national and a former secretary at Al Fajer Properties.
After Zadeh was removed from Al Fajer, Jones remained in her position at the company. Unbeknownst to the new management, she and Zadeh were former lovers, and Zadeh was paying for her to live in a luxury apartment in one of Dubai’s richest neighborhoods, Downtown Burj Dubai.

Jones worked as an operative for Zadeh, deleting company files—which were later uncovered by computer forensics investigators—and making paper files disappear.
During the time that Jones schemed for Zadeh, it became obvious to the mastermind that she could serve a grander purpose. Zadeh proposed that Jones leave Dubai and provide supporting evidence for his court case against Al Fajer in the form of affidavits, which she later submitted from London. With Jones outside of Dubai, it would be impossible for investigators to interrogate her regarding the claims. Though Jones had already told investigators in Dubai that she didn’t have knowledge of the inner-workings of the company, she would later say she lied in fear of the Sheikh. As part of their deal, Zadeh would provide Jones with financial compensation.

Jones left Dubai with her boyfriend, Bernard Gabriel, a Lebanese national who had worked at Ski Dubai. The two moved to Gabriel’s hometown in the shadows of Mt. Lebanon and married. Zadeh provided them with the funds to buy a massive farm, where the two now breed German Shepherds.

Gabriel used part of the pay-off money to launch a business in which he imports cars illegally from the United States and sells them in Lebanon’s black market. Jones runs the dog farm and drives around the mountains of Lebanon in a new Hummer SUV. These two scammers, who earned meager wages in Dubai, are now managing lucrative enterprises thanks to start-up funds from Shahram Abdullah Zadeh.

But despite all of Zadeh’s scheming, his plans have begun unraveling. Leigh Jones has again changed her story, this time turning on Zadeh, and is now cooperating with investigators in Dubai. Auditors have now had ample time to review Al Fajer’s financial documents. They have gathered evidence proving that he illegally funneled money out of the company and he is now officially wanted on criminal charges in Dubai. The case has been bolstered by other victims, mostly Iranians, coming forward with allegations of fraud against Zadeh. One investor claims he was bilked of more than $400 million by Zadeh. Complaints have been filed with Interpol by numerous investors in Iran.

Now, as the walls close in on Zadeh, he roams the world looking for accessories to his scam. Though his Iranian passport was confiscated, he sneaked out of the United Arab Emirates with a Czech Republic passport, despite the fact that Czech laws prohibits wanted criminals from obtaining them. With the money he stole, he has crisscrossed the United States, meeting with lawyers and telling them his lies. He continues to try and use the West’s biases towards the Middle East to aid in his cause.

Though Zadeh remains free, it will not last forever. As evidence of his crimes mount, it will become clear to people around the world that this sociopath is not the upstanding businessman he claims to be, but rather a wicked con man out to steal money and destroy reputations at any cost. At the moment, Zadeh is working on a property deal in the Czech Republic. It is only a matter of time before the investors realize the criminal mind they are dealing with.

Hopefully, they will not face the same painful fate of others that have involved themselves with Shahram Abdullah Zadeh.

Tuesday, December 29, 2009

Chinese businesspeople in UAE upbeat about Dubai's future development

source Xinuahnet

ABU DHABI, Dec. 26 (Xinhua) -- Dubai, a member of the seven-strong federation United Arab Emirates (UAE), will overcome temporary difficulties and finally tide over the global financial crisis, Chinese businesspeople said Saturday.

"Many Chinese businesspeople living in the country are confident in the UAE government," Yaya Liu, general manager of Yaspeco, a chinaware trading company, said in an interview with Xinhua.

"They have witnessed rapid development of the UAE, especially the emirate of Dubai, in recent years," she said, adding that the Gulf nation has carried out policies that benefit investors.

Liu, who came to the UAE more than 10 years ago, said that since the global financial crisis broke out in 2008, Chinese businesspeople's trade activities in Dubai have been affected to some extent.

"Some people, who came to Dubai from China in the past two years to run small retail businesses, were hard hit by the crisis, as they don't have long-term, stable customer groups and are short of a sufficient range of products," she said.

But for larger enterprises, especially those that have manufacturing bases in China and a fixed customer group in Dubai, the impact was comparatively not so serious, Liu noted.

When asked about the recent "Dubai debt crisis," she said the incident has not caused any negative influence on her business.

"On the contrary, orders for my products increased due to the Eid al-Adha festival of Islamic nations in the Middle East," she said.

Trade activities will unavoidably be affected by financial or debt problems in the region, Liu said. But she added that after all, real estate and trade belong to two different sectors.

Sharing Liu's view, Hu Weidong, marketing manager of China Town Real Estate Trading Center, a property firm in Dubai, said quite a few Chinese businessmen in the emirate, especially those who have invested in real estate, are still optimistic about its future development.

"I believe Dubai World's debt issue will be gradually resolved through negotiations between the group and its creditor banks," he said, referring to one of Dubai's largest conglomerate, which jittered world markets and media after announcing its debt restructuring plan last month.

Hu said the debt issue was left over by the excessive growth of Dubai's real estate sector in the past years, mainly due to poor planning and easily available loans.

"In some ways, the 'debt crisis' has turned out good as the government has become more transparent by introducing and standardizing relevant laws and regulations," he said.

As for the prospects of Dubai's real estate sector in 2010, Hu said it depends on the general trading environment of the emirate and the UAE at large.

"Judging from the present situation, the country still has a freer trading environment," he said.

According to Hu, the UAE government has reduced licence fee fordoing business in the country by 15 percent.

"The UAE government still encourages investment and keeps its policy on free trade zone unchanged," he said.

Thursday, December 17, 2009

Dubai: Developer says work to resume on The World islands

source Telegraph

The World has not come to an end, after all. Work is to restart on the island archipelago off the coast of Dubai.

The Austrian developer who has bought much of Europe – the Gulf version – says construction will begin on Germany next year.

The World was the only place in Dubai for new holiday homes, the developer, Josef Kleindienst, told a local newspaper.

"Our company is specialised in European customers and they are looking for holiday homes," he said.

The emirate is currently on an international public relations drive in the wake of the damage caused by its call for a standstill on the debts of Dubai World. The state-run conglomerate counts Nakheel, master-developer of The World, on which most plans had been suspended, among its subsidiaries.

The two men who have emerged as key advisers to the ruler, Sheikh Mohammed bin Rashid al-Maktoum, have been in London and the United States this week to explain the emirate's plans.

These include paying off the most immediate of Nakheel's debts, a $4.1bn (£2.55bn) bond, using money loaned to Dubai from Abu Dhabi.

The pair will also be promising improved transparency, after repeated criticism that creditors and the media were not kept informed of government thinking.

Tens of millions of dollars were lost and gained as the Nakheel bond price fluctuated in response to government hints and statements.

Dubai also issued a new law on Thursday clarifying the government's financial relationship with its subsidiary departments. What does and does not belong to the government has been a key area of concern, a result of the emirate's opaque financial structure.

Advisers said reports that cash surpluses of government companies were to be transferred to government coffers were based on a mistaken translation.

The Nakheel bond had become the litmus test for the emirate's financial viability. The World meanwhile was the test case for its real estate model, centred on eye-popping skyscrapers and land reclamation projects.

When financial crisis struck, 30pc of The World's 254 islands remained unsold, and only one, a show-home belonging to the ruler, had been developed.

The owner of Ireland, Larionovo, went into liquidation. Nakheel have always said that the project would go ahead, however.

"Thirty-three islands have been handed over to developers in the past year and they have been working to obtain the necessary permits and design and planning approvals," a Nakheel statement said.

Mr Kleindiest owns Austria, Switzerland, Sweden, Poland and Monte Carlo, among others. He hopes to develop two five-star hotels and a shopping arcade on St Petersburg, and a beach called Amsterdam on Holland.

Wednesday, December 16, 2009

Bargain Hunters Take a Look at Dubai

source The Wall Street Journal

Real-Estate Brokers Say Dubai World's Woes Have Sparked Interest for Deals as Prices Remain Off Their 2008 Peak

DUBAI—Amid international worry over Dubai's debt load, property investors are giving this city-state a second look.

Last month, Dubai sent global markets into a swoon after announcing a standstill to debt payments for its flagship corporation, Dubai World. The group said it would seek to restructure $26 billion in debt, including that at two of its property developers, which have been caught in a real-estate crisis. This week, Abu Dhabi stepped in with a $10 billion bailout for the conglomerate, which has helped ease concerns over Dubai's debt levels.

Though a property-price rebound may be years away, real-estate brokers said the international headlines have triggered a bout of interest by bargain hunters.

The Atlantis Hotel overlooks the Palm Jumeirah, where prices for luxury villas are moving up off their lows.

After the emirate opened parts of its property market to foreign buyers in 2002, prices climbed, fueled by speculative buyers, over-the-top development and light regulation.

Today's prices are back at 2007 levels, about 50% lower on average in many cases than the market's peak in 2008. That is a buying opportunity for many.

Emirati businessman Obeid Mohammed recently bought four villas for a total of $1.7 million, just a little shy of half the $3.3 million he would have paid at the peak. He said he is looking for more deals.

"If I find a good location and a good investment, absolutely I'm going to buy," he said. "Dubai is one of the great cities in the world. It's like New York. New York is New York, even if it falls down, it's New York. Well, Dubai is Dubai."

Tom Bunker, a sales consultant at Betterhomes, one of Dubai's largest real-estate brokers, said, "There is a renewed sense of interest in Dubai."

Mr. Bunker said property on the Palm Jumeirah, the palm-tree-shaped island packed with luxury villas and unfinished hotels, is attracting the most attention. Prices are rising from their lows, he said.

A three-bedroom apartment on the Palm listed for just over $1 million at the height of the boom. It fell as low as $700,000 and is now being listed at almost $850,000.

Brokers said potential buyers are looking at the emirate as a long-term investment and a place to settle down, rather than a chance to make a quick return.

"Speculators left the market a long time ago," said Vincent Easton, sales director at the Dubai office of the Engel & Volkers property agency.

The latest quarterly Knight Frank Global House Price Index, published last week, said Dubai's was the worst performing real-estate market in the world this year. But in the months just ahead of the Dubai World announcement, prices had been showing signs of stabilization, even modestly recovering in some developments.

Property consultancy Colliers International in November said prices for residential property at developments open to foreigners climbed 7% in the third quarter, the first rise since the start of the slump.

The consultancy also said the number of market transactions rose 64% during the quarter compared with the three months to June.

Amid the downturn, activity in the emirate's rental market, where prices also have slumped close to 50%, has remained steady, brokers said. Betterhomes said its leasing transactions rose 8% from October to November.

Still, analysts and even some normally exuberant real-estate executives don't predict a quick recovery, with many saying it could take years to see 2008 prices again.

Dubai's debt woes could slow any recovery by sapping confidence and drying up local credit on default worries. Experts cite oversupply and the lack of liquidity as the biggest concerns for 2010.

In October, investment bank UBS predicted that prices could slip a further 30% over the next 18 months and may take at least 10 years to recover to peak levels. The bank said it is unlikely to change this estimate.

Despite that, some overseas buyers are trawling the Internet to see what bargains are available.

Rightmove Overseas, the international arm of British property Web site Rightmove, recorded an almost threefold rise in the number of searches for property in the emirate in the days following the Dubai World news, compared with the previous week.

"It's driven by the curious, looking to see what their money could buy," said Robin Wilson, head of overseas property for Rightmove.

Monday, November 30, 2009

Markets and Currencies Worldwide Rise As Dubai Fears Subside

According to a flurry of press accounts published late last week, you would have thought Dubai was poised to sink the world's major economies. Talk about wild speculation. Here are only a few of hundreds of stories illustrating that the fear mongering was wildly exaggerated.


source The Wall Street Journal

Westpac Bank markets strategist Imre Speizer said calming words from various officials in the United Arab Emirates, including in Abu Dhabi and the U.A.E. central bank, that they will support debt-ridden Dubai soothed markets. Dubai last week announced a standstill on servicing US$59 billion of debt chalked up by its flagship company, Dubai World.

Fear of a domino effect on Middle Eastern banks also subsided, leading to a general move toward risk-sensitive assets such as equities and the New Zealand dollar, Speizer said.

There have also been indications from China that it will be prepared to support Dubai in exchange for oil.

"All risk markets have rallied back and given back some of the panic selling. That's been the story of the Kiwi today."

The Kiwi, which traded down to US$0.7025, it's lowest level since mid-September, in New York trading Friday, bounced back to US$0.7211 in late local trading Monday and could easily march on to US$0.7300, Speizer said.

The currency also received support from strong October building permits data. Statistics New Zealand said permits rose a seasonally adjusted 11.7% from September.

Economists said the data could reinforce market expectations that the Reserve Bank of New Zealand may have to abandon its commitment not to raise its Official Cash Rate before the second half of next year.

"We see the surge in dwelling consents as adding to the likelihood that the RBNZ will start lifting the OCR prior to their previously stated second half of 2010," said UBS Senior Economist Robin Clements.

"We don't see any action on the OCR on Dec. 10, but we do expect the RBNZ to water down, if not drop, the commitment to keep the OCR at 2.5% until 2H10 and discuss the options/issues related to their 'exit strategy'."

The building data helped push swap rates up and bonds fell, although the main driver was the Australian market paring back some of last week's moves, a Wellington trader said.

He said, however, the market was thin and the main focus is on Tuesday's Reserve Bank of Australia rate decision, adding that a 25 basis point hike is almost fully priced in.


source RTT News

Better-than-expected GDP data for the second quarter and realization that Dubai's debt crisis would have only a limited impact on local companies and banks helped the Indian market bounce back sharply on Monday.

The weakening of the dollar against other major currencies and a sharp rebound across Asia also improved sentiment. The major Asian markets rose by 2-3% on Monday, led by financials.

According to government data released on Monday, the Indian economy grew at a faster-than-expected rate of 7.9% in the second quarter of this fiscal year versus 6.1% in the previous quarter and 7.7% in the corresponding quarter last year, helped by government's stimulus and a boost in manufacturing and services. For the first -half of this year, GDP growth stood at 7% versus 7.8% in the year-ago period.

The benchmark BSE Sensex opened gap-up and rose to a high of 17,027 by mid-session. Since then, the benchmark pared some intra-day gains amid apprehensions that lower agricultural growth may hit third-quarter GDP growth. A negative trend in the European markets and volatile Dow futures also led to some profit taking in late trading.

The BSE Sensex closed at 16,926, up 294 points or 1.77% and the S&P CNX Nifty rose 91 points or 1.84% to 5,033.


source Wall Street Journal

SEOUL (Dow Jones)--South Korean shares recouped some of Friday's massive loss Monday as investors took heart from the rebound in European stocks and the limited decline in U.S. stocks Friday.

The Korea Composite Stock Price Index, or Kospi, rose 31.10 points, or 2%, to end at 1555.60 after falling 4.7% Friday.

Continued efforts by governments around the world to reassure financial markets helped ease jitters, said analysts.

The United Arab Emirates central bank said over the weekend that it stands behind its banks and branches of foreign banks.

Also South Korea's finance ministry reassured investors again Monday that the impact of Dubai's debt woes on domestic financial markets will be limited. It added that the government will monitor the situation on a daily basis and take action if needed.

"But the Kospi failed to recover above the 120-day moving average (around 1560) today, indicating investors' sentiment hasn't fully recovered yet. I'd rather describe today's rise as a mere technical one," said Min Sang-il, an analyst at E*Trade Securities.

"Foreigners bought back only about half of what they sold Friday, indicating they still lack confidence about the sustainability of today's rise. Investors want to check how Middle Eastern markets will react to the Dubai problems (after last week's holidays) and how this issue will develop," added Min.

Foreigners and local retail investors were net buyers of shares worth KRW128.5 billion and KRW160.7 billion, respectively. Domestic institutions sold a net KRW294.4 billion.

Investors will also watch closely how European and U.S. stocks perform tonight.

"Investors need to confirm if European stocks can extend their gains after Friday's rebound and see how U.S. stocks react to retail sales results after Black Friday," said Lee Kyoung-min, an analyst at Woori Investment & Securities. Black Friday, the day after the Thanksgiving holiday in the U.S., is traditionally marked with big discounts by retailers.

Financial and construction stocks recovered from Friday's sharp falls on fading fears that European banks may be badly hit by their exposure to Dubai debt, and trigger the kind of global systemic financial meltdown that accompanied Lehman Brothers' collapse last year.

KB Finance Group ended 2.8% higher at KRW58,000, and Shinhan Financial Group finished up 3.2% at KRW45,550.

Woori Finance Holdings jumped 9.4% to KRW14,550 after falling 11.6% Friday.

Among builders, Samsung C&T Corp advanced 5% to KRW45,600, Hyundai Engineering & Construction climbed 3.9% to KRW66,300, and GS Engineering & Construction rose 3.3% to KRW109,000.

Car makers regained strength after they lagged other sectors since September, said Min.

Hyundai Motor added 4.7% to KRW99,000, and Kia Motors advanced 4.6% to KRW17,150.


source Wall Street Journal

SHANGHAI (Dow Jones)--The dollar's decline against major currencies because of fading concerns over the Dubai debt issue pushed the U.S. unit lower against China's yuan late Monday.

On the over-the-counter market, the dollar was at CNY6.8271 at 0930 GMT, down from Friday's close of CNY6.8284. It traded between CNY6.8270 and CNY6.8282.

The dollar-yuan central parity rate was set at 6.8272, largely unchanged from 6.8269 Friday.

Analysts said Beijing's pledge to maintain policies to support growth through 2010 shows it won't change the stable yuan policy in the short term.

The ruling Politburo of China's Communist Party met Friday to discuss economic policy for next year, and decided it will continue its proactive fiscal policy and loose monetary policy, according to a statement carried by state television.

Dealers said the dollar's fall in global markets Monday was due to the decision by the United Arab Emirates central bank to provide extra liquidity for banks in Dubai. The decision has restored confidence after Dubai World's debt restructuring plans roiled markets last week.

"The dollar is resuming its bearish trend against the euro and yen on the fading Dubai fears," said a Shanghai-based trader at a local bank.

Around 0930 GMT, the euro was at $1.5042, up from $1.4955 late Friday in New York, and the dollar was at Y86.11, down from Y86.75.

A Shenzhen-based trader at a local bank said: "The market has reached the consensus that the Dubai debt issue isn't big enough to trigger a systemic failure in global financial markets."

Demand for the U.S. unit from local importers helped limit the dollar's downside against the yuan, the trader added.

Offshore, one-year dollar-yuan nondeliverable forwards were at 6.6280/6.6320, down from 6.6330/6.6430 late Friday afternoon.


source Wall Street Journal

NEW YORK (Dow Jones)--Treasury prices slipped Monday, losing some of Friday's flight to safety run-up, as worries subsided a bit about Dubai's debt situation.

U.S. government bond prices fell, with longer maturity Treasurys hit harder. The United Arab Emirates' Central Bank stressed Sunday that it "stands behind" the country's lenders, who face potentially heavy losses from their exposure to Dubai World, which is currently struggling with about $60 billion in liabilities. Comments from a Dubai financial official indicating the government would not guarantee the Dubai World debt briefly pushed Treasury prices higher early Monday, but the rally faded as New York trading picked up.

"The general consensus seems to be that broader contagion will be limited mostly to the Gulf region," said analysts at RBC Capital Markets in New York.

Friday, the two-year yield, which moves inversely to its price, fell as low as 0.613%, a year-low. Monday the two-year Treasury was flat at 0.70%. The 10-year yield fell Friday to as low as 3.154%, a level it last hit in May. It was down 8/32 to yield 3.24% Monday. The 30-year Treasury was off 11/32 to yield 4.23% in recent trade.

Two Treasury bills maturing in January were being offered at a negative rate Monday, at around -0.01%, said Ian Lyngen, senior government bond strategist at CRT Capital Group LLC in New York. T-bill rates turned negative late this month as investors began to stock up on the safest securities heading into the end of the year at a time when bills are in shorter supply. When investors buy T-bills at negative rates they are essentially paying the government to keep their money safe.

Meantime Monday, Treasurys responded calmly to early reports of a lackluster beginning to the holiday shopping season. While U.S. shoppers were out in full force over the Thanksgiving weekend, they spent less in almost all regions of the country.

Some 195 million consumers visited stores and Web sites from Thursday through Sunday, the National Retail Federation said, compared with 172 million over the same period last year. Average spending this year though was $343.31, down from $372.57.

Overall, Treasury market participants expect demand for government debt to continue into the end of the year as investors park money made in riskier assets in the safer Treasurys market. Short-term, demand should pick up some Monday, the final day of November, amid month-end buying needs. Treasurys should benefit as investors need to buy bonds to match the monthly adjustment in benchmark indexes. Such month-end buying is more heavy in Treasury quarterly the refunding months of February, May, August and November. The Treasury index gains 0.11 years this month, strong compared to an average month, but a bit tame for November refundings, according to CRT Capital Group.

Data-wise Monday, market participants get a peek into regional manufacturing in the U.S. Data showed New York City business activity posted a fourth consecutive month of expansion in November. Still to come are reports on manufacturing in the Chicago area and in Texas, at 9:45 a.m. EST and 10:30 EST, respectively.

Wednesday, November 25, 2009

The Talented Mr. Pang... Reminds Us Of Some of Dubai's Criminals

Danny Pang sure reminds us of some of the free-wheeling Dubai mavericks that got caught up in the glitz and glory of the recent boom...

source The Wall Street Journal

From his boyhood in a Las Vegas motel to his final days in a California mansion, Danny Pang charmed and deceived. He left a trail of clues: gambling debts, a murdered wife and investors crying fraud.

With its vintage neon sign advertising "Heated Pool," the Rummel Motel in the early 1980s was the sort of place budget travelers would bunk down while they tried their luck at the slots in the nearby Las Vegas Strip. It also was home to a young Taiwanese immigrant, Danny Pang, who as a teenager lived in the motel owned by his relatives. Unlike the other immigrant teens he hung around with, Mr. Pang seemed to have a lot of money and frequently gambled at the casinos.

"He'd take you to the steakhouse, a show, pay everything," says Jeffrey Liu, whose family co-owned a neighboring motel. "Everybody wanted to be with him."

One day, Mr. Liu and another friend spotted Mr. Pang taking money from the cash register at a motel owned by the friend's family, Mr. Liu says. They confronted Mr. Pang and he denied stealing. The boys let it slide, but made Mr. Pang pay for their dinner, says Mr. Liu.

For Mr. Pang, it would become a pattern for the rest of his life—a flashy lifestyle that drew people to him, along with repeated accusations of deception that progressed from petty theft to a final, trans-Pacific heist. At the time of his death in September at age 42, Mr. Pang was battling charges by federal regulators that he ran a massive Ponzi-like scheme from his Irvine, Calif., investment firm. A court-appointed receiver accused him of using the firm as a "personal piggy bank" to help finance lavish habits that included private jets, luxury cars and gambling.

The still-unraveling scandal cost his investors, most from his native Taiwan, as much as $600 million, according to estimates from the receiver. The coroner's report is expected by early January and with it, a ruling on whether the financier committed suicide.
Timeline: The Rise and Fall of Danny Pang

View Interactive

Mr. Pang steadfastly maintained that he was innocent of the charges against him. In a statement earlier this year, he said he had "conducted himself lawfully in his business and in his personal life." A spokesman for his family said, in a statement Friday, "Danny Pang was a wonderful husband, father, son and brother and his family misses him dearly. It is unfortunate he will never have the opportunity to defend himself against the rash of sensational, and completely unproven, allegations that were trumpeted by the government with tremendous fanfare." He added, "It is time to let Danny rest in peace."

Danny Pang was born in Taipei on Dec. 15, 1966, the oldest of three children. His father, he told associates, was in the trading business, while his mother hailed from an affluent furniture-manufacturing family. He went to a prestigious private school, where he frequently got into fights, recalls a classmate at the time, Joyce Mao.

He arrived in Las Vegas as a teenager and went to high school there. After graduating in 1984, he roomed for a period with Mr. Liu at the University of Nevada, Reno. They once sat next to each other in a Nutrition class, says Mr. Liu, now an obstetrician-gynecologist in Las Vegas, who recalls Mr. Pang boasting about acing a test in the class.

While in Reno, a friend's bank ATM card went missing soon after she had withdrawn cash with Mr. Pang standing next to her. She told others that a bank security camera showed that Mr. Pang had used the card. "Danny, after he heard it, he said he found the ATM card on the floor," Mr. Liu says, adding that Mr. Pang returned the cash.

A spokeswoman for the University of Nevada, Reno, says that Mr. Pang never completed his application to the school and "we have no record of him ever attending classes."

Mr. Pang resurfaced at the University of California, Irvine, a sun-dappled campus popular with students from immigrant families. Mr. Pang drove a BMW, friends say. He also became a student leader, elected chairman of the Asian Pacific Student & Staff Association for the 1988-89 school year.

In the spring of 1989, the Tiananmen Square democracy protests in China broke out, and the 22-year-old Mr. Pang was a visible pro-democracy activist. In an article in the Los Angeles Times on the campus protests, he argued the Chinese government wouldn't dare crack down on such a high-profile protest movement, and was quoted as a "UCI senior." A fellow student leader, Paul W. Wong, says Mr. Pang was "the point person" on a petition drive and other activities around the Tiananmen protests, and was involved in numerous meetings with faculty members and the school's administration.

Danny Pang lashes out at a photographer outside a federal courthouse in Santa Ana, Calif., in April after posting a $1 million bond. He was charged with structuring large cash transactions to avoid currency-reporting rules.

University records show Mr. Pang wasn't enrolled at the time. School officials say he was never officially enrolled except for a single 1986 summer term, and never received the undergraduate and MBA degrees he later claimed.

In the years after his supposed graduation, Mr. Pang worked trying to bring deals to a small real-estate development firm in Santa Ana, Calif. R. Lang Cottrell, then a partner at the firm, says another partner brought in Mr. Pang, saying he could "sell snow to an Eskimo." Mr. Pang often spoke about how wealthy his family was and how much money he could bring to various deals. But after associates saw Mr. Pang labor for hours over a short letter, the firm checked with the university and discovered Mr. Pang had faked his resume. "It got to the point where I didn't believe anything he told me," Mr. Cottrell says.

Mr. Pang severed his ties with the office after confessing that he had gambled away $2 million sent by relatives in Taiwan that was supposed to be used to pay off the mortgage on the Rummel or another Las Vegas motel owned by his family, says another partner, Jay Meehan.

Elaine Fan first met Mr. Pang while she was in college in California, and again when she was 25 on a flight back to her native Taiwan. They dated for less than a year when he asked her to marry him, she says. He threw an engagement party at the Ritz-Carlton Laguna Niguel, a resort on a bluff overlooking the Pacific Ocean. Several dozen guests dined in the hotel's executive dining room.

Unknown to Ms. Fan, her fiancé was dating another woman, Janie Louise Beuschlein, whom he had met at a strip club, where she worked to help support two children.

Mr. Meehan asked him, "Danny, are you going to break it off with Janie?" He says Mr. Pang replied, "No problem. I can get married and still have a girlfriend.'"

Not long after the party, Ms. Fan began receiving phone calls from a woman she knew only as Janie, who said she was living with Mr. Pang and recently had his child, Danny Pang, Jr. She confronted Mr. Pang, who promised he had broken up with Janie, Ms. Fan says. But Janie kept calling. Ms. Fan broke off the engagement. "I just couldn't take it," says Ms. Fan, who still lives in the Los Angeles area.

In May 1993, Mr. Pang married Ms. Beuschlein. The marriage was tempestuous. The police were called to their home four times for domestic-disturbance complaints, including a 1993 incident in which Ms. Pang said she was afraid Mr. Pang "was going to kill her." Telling friends she wanted a divorce, Ms. Pang in May 1997 hired an investigative agency, which observed her husband holding hands with another woman in Northern California. She confronted Mr. Pang over the phone, according to a law enforcement official involved in the case.

Around noon the next day, as Ms. Pang was leaving to meet with the investigator, an elegantly dressed stranger rang the doorbell of their Orange County home, court records show. Ms. Pang came to the door with her young son by her side. The man produced a gun and started chasing her through the house. He shot her dead in a mirrored closet off the master bedroom. It was the Pangs' fourth wedding anniversary.

The trial of a suspected gunman, a onetime lawyer of Mr. Pang's, ended in a hung jury years later. Mr. Pang denied any involvement. He didn't testify at the trial, citing his Fifth Amendment rights.

The glitzy suburban sprawl of Orange County, Calif., is home to more than its share of financial scams. The anonymous glass-and-concrete office buildings of Irvine and Newport Beach are filled with the latest can't-miss ventures, some legitimate, some not. This was the milieu in which Mr. Pang operated, as he bounced from one business to another.

Mr. Pang, whom associates say could be charming and persuasive despite his choppy English, wore expensive suits even during the times he was near broke. A heavy gambler, he was repeatedly pursued for gambling debts and beat up on occasion, former colleagues say.

In the early 1990s, Mr. Pang reported to police being the victim of a convoluted extortion plot involving a few hundred thousand dollars in property. The police report isn't clear on the outcome. A few years later he became a partner at a Silicon Valley venture capital firm backed by Taiwanese money, in part because his family put up some of the fund's money, the firm's then-chief executive Michael Hsu has said. He left in 1997 under circumstances that remain in dispute. Mr. Hsu said Mr. Pang stole $3 million by forging signatures on bank accounts, which Mr. Pang denied.

Mr. Pang was sued several times. In one suit, an investor claimed he was fleeced of $80,000 in an abortive high-tech venture, and in another, his stepson accused Mr. Pang of defrauding him out of the insurance proceeds from Janie Pang's death. Both cases were settled out of court.

Mr. Pang's luck started to turn in the late 1990s, when he met an Orange County entrepreneur named Chas Radovich at a Laguna Beach nightclub, Club M. A Serbian immigrant who came to the U.S. as a child, Mr. Radovich has been involved in a series of ventures, from a now-defunct telecom firm to an allergy treatment company.

For two years starting in 2000, Mr. Radovich says he let Mr. Pang use office space and phones, free of charge, in return for a promise he'd be cut in on any deals. Instead, Mr. Pang persuaded many of Mr. Radovich's associates, including his then-chief operating officer, to join his own financial firm, says Mr. Radovich, now 50 years old. Mr. Radovich says he never saw a dime.

Mr. Radovich also says Mr. Pang once called him in a panic, saying he owed $300,000 on a stock margin call. Mr. Radovich says he loaned Mr. Pang the money from his parents' account, on the promise it would be repaid in a week. It wasn't. Last year, he says, with his parents in need of cash, he finally received a check from Mr. Pang—for $9,000. "Danny was unscrupulous, nothing more than a fast-talking con man," Mr. Radovich says.

The financial firm Mr. Pang incubated at Mr. Radovich's office turned into Private Equity Management Group Inc., or PEMGroup. Based in Irvine, the firm set out to raise money in Taiwan by promising above-market interest rates on notes. Buyers were told that the money was to be invested in assets in the U.S., including in buying up the rights to collect on life insurance policies owned by elderly people.

Although the firm had no money at the start, Mr. Pang told associates that the only way to win over investors was to project an air of success. Nasar Aboubakare, PEMGroup's No. 2 executive who was fired in 2007, says Mr. Pang on one early trip insisted on staying at the presidential suite at the Grand Formosa Regent Taipei, where he ordered up lavish banquets and spent $10,000 on a night at a local karaoke bar. Mr. Aboubakare, the only one with any money, says he was stuck with an $80,000 American Express bill from the trip.

Mr. Pang dropped names of important people he was supposedly doing business with and boasted about deals he had done or money he controlled, associates say. He falsely claimed on his resume to have been a senior Morgan Stanley executive, and told Mr. Radovich he had once worked with the famous junk bond trader Michael Milken at Drexel Burnham. PEMGroup investors also were promised that any losses would be covered by special insurance policies taken out from major international firms. But PEMGroup bought only a fraction of the insurance it promised. At one point it forged a fake insurance policy and sent it to the Taiwan unit of Standard Chartered PLC, according to court documents.

Eventually, major Taiwanese banks persuaded 16,000 individual investors to put more than $800 million into Mr. Pang's firm.

As part of Mr. Pang's pitch to some Taiwanese investors, he said PEMGroup was backed by the wealthy Irvine family, which traces its fortune to an ancestor who bought up a large part of the land in Orange County in the 19th century. Although the family has long since sold Irvine Co., which owned the land, the Irvine name still has cachet in parts of Asia.

In marketing presentations to Taiwanese banks, PEMGroup claimed a major shareholder was "Irvine Capital Holdings LLC," whose chairman was listed as Morton Irvine Smith, described as a "representative of the USA's renowned Irvine family." Mr. Pang brought Mr. Smith on a marketing trip to Taiwan, where he was introduced to local bankers.

Irvine Capital was a Nevada-registered company created by Mr. Pang and his associates, while Mr. Smith was paid a nominal salary by Mr. Pang. Mr. Smith, 44 years old, says he didn't have any real role in the company and never saw any of the marketing presentations that claimed otherwise. He also says he didn't know details of Mr. Pang's business dealings.

His mother, Joan Irvine Smith, 76 years old, says her son doesn't control any of the family's money. "We had not one red cent in this venture," she says. "I would no more put any money in a project of Morton's like that than I would go to the moon." Ms. Smith says she believes Mr. Pang used her son as an unwitting "front guy."

Mr. Aboubakare, the former PEMGroup executive, says Mr. Smith's main contribution was to greet Taiwanese bankers when they came to visit the firm's Irvine headquarters, and show them around the nearby Irvine Museum.

Mr. Pang ratcheted up his already free-spending lifestyle after the money started pouring into PEMGroup. Court records from the Securities and Exchange Commission suit against Mr. Pang show PEMGroup diverted investors' money into buying three jets, including a Gulfstream IV that Mr. Pang used for overseas jaunts and trips to Las Vegas. Mr. Pang extracted an additional $67 million from the firm in salary, fees and loans, the court-appointed receiver estimates. The receiver traced $360,000 to a girlfriend of Mr. Pang's and $1.7 million to a bookie. Mr. Pang sent $1 million to a Las Vegas casino, according to a person familiar with the matter.

As of April, Mr. Pang and his second wife together owned five vehicles, including a $189,000 Aston Martin and a $215,000 Mercedes coupe, state vehicle records show. Mr. Pang turned in a sixth vehicle, a leased Bentley, after stepping down from PEMGroup.

PEMGroup made a number of more mainstream investments, including loans to a start-up hotel venture, eSuites Hotels LLC, and a martial-arts apparel maker, Tapout LLC. Executives at both firms praised Mr. Pang as a savvy financier.

But many of PEMGroup's deals went sour, leading to what federal authorities later described as a Ponzi-like scheme in which original investors were repaid, or their investments supported, with money from new investors.

The party came to a screeching halt in April. The Wall Street Journal published a page-one article raising questions about Mr. Pang's credentials and about whether his firm might be swindling investors with a Ponzi scheme. He vehemently denied all the allegations, but stepped down the next day. The SEC obtained a court order seizing control of his firm. Mr. Pang later was charged with a criminal count of arranging cash transactions to keep them under the $10,000 federal reporting requirement designed to combat money laundering.

Amid an outcry after the scandal broke, the Taiwanese banks have agreed to cover any losses sustained by their customers in PEMGroup.

In the middle of the afternoon on Friday, Sept. 11, police say Mr. Pang's mother discovered the financier lying in bed, not breathing, at his home in a gated oceanfront community in Newport Beach, Calif. A family friend called 911. He was pronounced dead at a local hospital early the next morning.

Mr. Pang's second wife, Sheanna, is caring for a young daughter and Mr. Pang's now college-age son. The SEC and official receiver are continuing to try to reclaim what remains of the financier's wealth. Mr. Pang also died without a will, requiring a separate court action to look after his affairs.

At the time of his death, Mr. Pang was confined to his home most of the time, wearing an electronic monitoring device around his ankle. He told several associates the charges were false and he was going to be vindicated.
—Ting-I Tsai in Taipei contributed to this article.

Write to Mark Maremont at

Monday, November 23, 2009

Media Less Concerned With Dubai Real Estate

Real Estate Got Less Negative Coverage In Q3, Says New Media Intelligence Report
Signs of recovery were reflected in positive share of voice for real estate developers, with projects getting back on track.

source Mediastow

The Mediastow Q3 report on the real estate industry has revealed that negative coverage of the property sector has decreased considerably in the third quarter, compared to the same period last year.

The report, the fifth in the series, analyzed the media coverage of the UAE real estate sector, with a focus on Al Qudra Real Estate, Aldar, Emaar, Sorouh, Dubai Properties, Nakheel, Sama Dubai and Damac.

The 34-page report assessed the success of the PR campaigns of the eight real estate developers, as well as threw light on how their media coverage fluctuated and how it compared with each other.

The head of Mediastow, Mohamed Elzubeir, said: “As for coverage, Damac and Emaar had their amount of coverage peaks in July 2009, while Al Qudra Real Estate, Sama Dubai and Sorouh had their peak in August 2009. Finally, the coverage of Aldar Properties, Dubai Properties and Nakheel peaked in September.”

Emaar, followed by Sorouh and Aldar, figured in the top 3 in terms of newspaper coverage size, measured in column centimeters (cc), in July and August 2009. September saw Nakheel in the lead, followed by Emaar and Aldar.

A total of 3,962 articles from 168 publications were monitored between July and September 2009 for the report. Also, stocks movements of Emaar, Aldar Properties and Sorouh were evaluated and correlated with media coverage.

A comparison of the facets of coverage, penetrations and content analysis are featured in this report. The report also contains the real estate sector highlights to put the performance in perspective of the current market issues.

Compared to the 3rd Quarter of 2008, there was a general drop in numbers, with some experiencing a bigger drop than others. Al Qudra, Emaar and Nakheel experienced significant decreases in the 3rd Quarter of 2009 , compared to the same period in 2008, in terms of volume of coverage.

In summary, the three property developers, Emaar, Aldar Properties and Sorouh, experienced an upward trend in the third Quarter of 2009. Aldar enjoyed a decent gap in terms of share prices throughout the quarter and inched further towards the latter middle part of September 2009.

Elzubeir added: "The overall volume of coverage has dropped compared to the golden era of the early 2008, but strong signs of recovery are evident. Negative coverage is now confined to the tumbling stocks, and positive coverage is increasing with projects getting back on track.”

Thursday, November 19, 2009

Jumeirah Planning to Open First Hotels in Brazil

source Bloomberg

Nov. 19 (Bloomberg) -- Four Seasons Hotels and Resorts and Jumeirah Group plan to open their first hotels in Brazil as rising incomes in Latin America’s largest economy and the 2014 World Cup and 2016 Olympic games generate demand.

“The time is right now for us to be entering the Brazilian market,” James Erlacher, senior vice president of development for the Americas at the Dubai-based Jumeirah Group, said in an interview in New York.

Jumeirah’s priority is to operate hotels in Sao Paulo and Rio de Janeiro, Brazil’s biggest cities, and it’s also considering resorts “primarily in the northeast part of the country,” Erlacher said. The Four Seasons expects to reach agreements with developers of three projects in the next 18 months, including hotels in Sao Paulo and Rio and a beach resort, Alinio Azevedo, the chain’s director of development for South America and the Caribbean, said in an interview.

Rio’s victory over Chicago, Madrid and Tokyo to host the 2016 Olympics will help sustain Brazil’s growth by bringing $51.1 billion into the economy through 2027 and adding 120,000 jobs annually in the next seven years, according to a Sao Paulo business school study prepared for the Ministry of Sports. Six straight months of job growth, coupled with tax breaks and record low borrowing costs, is driving up consumer spending in Brazil and helping the economy rebound from a recession faster than most countries.

‘Top-Tier’ Priority

Jumeirah currently operates only one hotel in the Americas, the Essex House in New York, and is developing a polo-themed resort outside of Buenos Aires as well as resorts in Costa Rica, and Saint Thomas.

Jumeirah views Brazil as a “top-tier” priority, Erlacher said. “Brazil is a healthy robust market with good supply and demand dynamics working in its favor,” he said in the Nov. 17 interview in New York.

The number of Brazilian guests in Toronto-based Four Seasons’ hotels and resorts is rising and its reservation desks are getting calls asking about accommodations in Rio and Sao Paulo, underscoring domestic and overseas demand for its planned hotels, Azevedo said.

“The number one attraction for us is really understanding the wealth creation that has happened in Brazil in the last eight to 10 years,” Azevedo said at a New York event Nov. 17 on investment opportunities in real estate and tourism in Brazil, a country with 192 million people.

Brazil’s Real Gains

Further strengthening of the Brazilian real, which has rallied 34 percent this year against the dollar, the most of any major currency, may drive away foreign visitors before Rio hosts the 2016 Olympics, Tourism Minister Luiz Barreto said Oct. 30 in a Bloomberg Television interview.

The real’s gains have been driven in part by investors buying stocks and bonds on prospects the country is among those emerging fastest from the global financial crisis.

Brazil won an investment-grade rating from Moody’s Investors Service in September, putting it one level above high- yield or junk at all three major ratings companies. Moody’s cited Brazil’s “strong economic and financial resilience” during the worldwide slowdown.

The $1.6 trillion economy grew 1.9 percent in the second quarter from the previous three months, emerging from a recession. Economists surveyed by the central bank Nov. 13 predicted gross domestic product will expand 0.2 percent this year and 5 percent in 2010, according to the median estimate.

The Olympic Games will add 1 percent to gross domestic product in coming years, Finance Minister Guido Mantega said Oct. 4. The 2014 World Cup, which Brazil also will host, will add another 1 percent to GDP, Mantega said.

Misery Declines

Brazil’s misery index as measured by the inflation rate plus the unemployment rate, fell to 11.9 percent from 14.1 percent last year. That compares with 17.3 percent for Russia and 19 percent for India. The gross domestic product-weighted index for the eight largest economies is 7.1 percent compared with 10 percent a year earlier, data compiled by Bloomberg show.

“United States and Asia hotel chains who didn’t pay attention to Brazil before, all of them, absolutely all of them are focused on developing in the country,” Felipe Cavalcante, president of the Association for Real Estate and Tourism Development in the Northeast of Brazil, said in an interview at Bloomberg headquarters in New York on Nov. 16. He cited Hyatt Hotels Corp., Marriott International Inc., Hilton Worldwide, Six Senses Resorts and Spas, Aman Resorts and Jumeirah.

“The crisis was good to Brazil, that is the truth,” said Cavalcante.

Dubai Real Estate Market Poised To Shine

source propertyfundsworld

With the recession almost out of sight, global investors are keenly eyeing Dubai for real estate investments, given the emirate's phase of relative stability in prices and affordable housing.

In a positive upturn, the latest results from the Dubai House Price Index from Colliers indicate that real estate prices in Dubai have risen almost seven per cent in the third quarter of this year from the previous quarter.

"The results indicate a bounce in the market and are an indication of an excellent recovery," says Tej Kohli, real estate investor and founder of Ozone Real Estate.

As a long-term analyst in real estate, Kohli is of the opinion that stability in real estate prices is set to be steady from this point on. Given the fact that real estate prices are moving towards more reasonable levels, now is the time to strike the iron as the market enters a new stage that will help the transition into reformation.

The most encouraging sign in the Colliers report shows that transactions increased by 64 per cent in the third quarter. To add to the rising real estate boom will be a host of new launches and openings within the emirate.

By mid-December this year, the world's tallest tower, Rose Rayhaan, is set to have a gala opening, which will dot the skyline along Shaikh Zayed Road. Following shortly, the five-star Jebel Ali Golf Resort and Spa will re-open after a comprehensive renovation.

Kohli says: "With a host of projects slated to launch along with the opening of a spanking new airport, Dubai has plenty on its plate to silence the critics and welcome its investors."

In addition, a slew of high-end hotels, including The Conrad Hotel Dubai and a second Ritz Carlton, are also on track for an early 2010 opening. The Palazzo Versace Resort and new hotels opening on the crescent-shaped The Palm Jumeirah in 2010, including the five-star Ottoman Palace by Rixos, boasting the world's largest Turkish bath, will follow immediately. Close on its heels will be the launch of the five-star Royal Amwaj Resort & Spa.

The much-awaited Jumeirah Golf Estates will start operating in late 2009 and 2010 as Dubai's prime golf-themed real estate evolution. Moreover, a half an hour drive from Dubai International Airport, Tiger Woods' Al Ruwaya resort is also set to commence in 2010, boasting an 18-hole championship course.

"The slew of launches goes to show that Dubai is well on track; with global visitor numbers up four per cent for the first half of 2009 compared to the same period last year," adds Kohli.

Tuesday, November 17, 2009

Construction output expected to return to growth in 2011

source The National

Construction output in the Emirates will contract until the end of next year, but start to grow again at an annual rate of at least 5 per cent between 2011 and 2020, a report says.

Citing ambitious infrastructure plans and a growing economy, the Global Construction 2020 report said the hard-hit UAE construction sector would rebound, but with a smaller role in the country’s GDP.

“There has been a deterioration in the real estate market in the UAE during the last 12 to 18 months, particularly in Dubai, but demand remains strong for infrastructure,” said the report, which was compiled by Global Construction Perspectives and Oxford University’s Oxford Economics.

“The problem could be even worse in the commercial sector.”

Hundreds of construction projects around the Emirates have come to a halt this year after property prices began to fall and banks withdrew lending.

While the slowdown has hit construction of new homes, the Government hopes to offset the decline with increased infrastructure spending. Abu Dhabi alone plans to spend US$275 billion (Dh1.01 trillion) on infrastructure in the next five years.

“We therefore expect, after a temporary slowdown in 2009-2010, that construction output in the UAE will increase by 5 to 7 per cent per annum between 2011 and 2020,” the report said.

Sultan al Mansouri, the Minister of Economy, said recently that Abu Dhabi would spend $1tn on infrastructure projects over the medium term to stimulate the economy.

“This will lead to extraordinary demand for building materials and technological innovations, thus boosting the economy further,” Mr al Mansouri said.

Global construction output was expected to grow 70 per cent by 2020 as emerging economies spent increasing amounts on infrastructure and development, the report said. This comes after record drops for the sector, which has seen output decline by $650bn since 2007 in developed countries.

“The recent slump in the global economy has been exceptionally severe and construction has been hit more severely than most industries,” the report said.

The global construction market is estimated to be worth $12.7tn by 2020, with developing nations representing $7tn – double their current output.

China is likely to overtake the US as the largest construction market as early as 2018, the report said. Spending on transport infrastructure, utilities and government-related buildings in developing countries will rise by 128 per cent by 2020.

The recovery of the sector will include developed nations such as the US and Japan, which will see construction output grow by 35 per cent to $5.7tn by the end of 2020, the report said.

Monday, November 9, 2009

Dubai sets up committee to rule on real estate bounced cheques

source Business Intelligence Middle East

UAE. Dubai's Ruler Sheikh Mohammed bin Rashid al-Maktoum has issued a decree setting up a judicial committee tasked with looking into cases of bounced cheques in real estate transactions, reported the official news agency WAM.

"The committee will settle cases related to bounced cheques whether issued by the buyer to the developer or from tenants and beneficiaries of long term units under the provisions of law no 7 of 2006 regarding real estate registration in Dubai," WAM said.

The committee will be given wide ranging powers 'in order to discharge its duties properly," and its ruling will be binding, the report said.

The committee will include a chairman, to be selected by appeal court judges in Dubai Courts, and two members, the first is a Dubai primary court judge, and the second is a representative from the Dubai Land Department.

The committee’s jurisdictions include canceling a bounced cheque issued to a developer, if it was proved that the developer has no right to the amount, and obliging the issuer of the cheque to write another one to replace the disputed cheque.

It also includes referring the bounced cheque to the specialised legal authority to take legal action against the cheque issuer, if the developer has the right to the amount of the cheque. The committee may seek help from experts and specialists as necessary.

The fifth article of the decree stipulated that law enforcement authorities, including the police, should refer all cheque complaints under this decree to the committee.

The article prohibits the Public Prosecution and courts from carrying out any investigation into bounced cheques included in the decree or issuing any ruling in this regard before the case is looked into by the committee.

These bodies should also stop looking into any complaint or case related to these cheques, and must refer them to the committee

Bounced checques are treated as a criminal offence in the UAE and the issuer can land in jail.

Monday, October 26, 2009

Islamic Debt to Rally on Nakheel Recovery, GE Sukuk

Oct. 26 (Bloomberg) -- Islamic bonds are poised for record gains amid confidence that Nakheel PJSC, the developer of palm- tree shaped islands off the Dubai coast and the market’s biggest issuer, will avoid default.

“Nakheel is the flagship,” said Yannick Lopez, who helps oversee Paris-based OFI Asset Management’s $30 billion in assets. “A default by Nakheel could have wider implications” on the Islamic bond market, he said. “Our view is that the probability of default on this name is quite low.”

Almost non-existent a decade ago, the Islamic bond market has grown to $130 billion, according to Moody’s Investors Service. Prices are rebounding after three defaults in the past year because investors expect Dubai’s government to prevent state-owned developer Nakheel from failing to make payments on its obligations. The company’s bonds due Dec. 14 rose to a record 108 cents on the dollar this month, up from 93.5 on Sept. 2 and 70 percent higher than a February low.

Securities that follow Shariah laws, known as sukuk, have returned 27 percent this year, an HSBC Holdings Plc index shows. Last year, the market fell four times as much as investment- grade corporate debt that doesn’t comply with religious edicts against interest payments as oil prices tumbled and credit markets froze.

Sales to Double

The bonds are climbing almost twice as fast as global companies’ non-Islamic debt and heading for the best annual gain since the benchmark HSBC/Nasdaq Dubai Sukuk Index’s introduction in 2005. Sales of international Islamic debt will double in 2010 to $14 billion as businesses including General Electric Co. plan debut issues, HSBC says.

The Dubai government yesterday set up a $2.5 billion Islamic bond program as part of a $6.5 billion fund-raising plan, as the emirate seeks to sell international bonds for the first time in more than a year. The sale may take place as soon as next week, said two investors who didn’t want to be identified because meetings are private.

Nakheel, a unit of government-controlled Dubai World, owes more than $5 billion by 2011 in Islamic bonds and is among the biggest losers in a real-estate crash that cut home prices in half. The company is a “litmus test” for the debt of other emirate-owned enterprises, Moody’s said in June.


Dubai World has guaranteed Nakheel’s December bond, the offering prospectus says. Standard & Poor’s in June downgraded Dubai World’s companies citing “uncertainty” over the emirate’s willingness to help the firms pay their debt. Dubai World may be able to sell bonds to refinance Nakheel’s obligations, two bankers familiar with the group’s plans said last week.

“The United Arab Emirates authorities are acutely aware of the amount of profile the Nakheel 2009 sukuk instrument has in the international capital markets,” said Chavan Bhogaita, head of credit research at National Bank of Abu Dhabi PJSC, the U.A.E.’s second-largest lender by assets. “In our opinion, they fully intend to repay this bond.”

Thomas Brund, who helps manage $3.5 billion in fixed-income assets at Sydbank A/S in Aabenraa, Denmark, said the region’s bonds have become too risky after the premium paid for owning them plummeted. The gap between average yields on Middle East debt and the London interbank offered rate for loans between financial institutions has fallen by half to about 300 basis points, or 3 percentage points, in the past six months, HSBC/Nasdaq indexes show.

‘Too Far’

“The spreads have gone too far,” Brund said. He has pared Gulf debt purchases in recent months because the premiums over Libor don’t “reflect the risks if things turn around again in the global economy,” he said.

Mohieddine Kronfol, the managing director at Dubai-based Algebra Capital Ltd., said his fund has returned 25 percent so far this year after buying Islamic securities when yields were near record highs in March.

“The question remains open of what to do from here? Decisions are harder than they were in March,” Kronfol said. Franklin Templeton Investments owns 40 percent of Algebra Capital.

Islamic debt is governed by Shariah laws barring investors from profiting from the exchange of money, as happens with interest payments on other bonds. Returns from exchanging funds for assets is allowed, as long as gambling, guns and alcohol aren’t involved. Bankers structure sukuk to generate income from real estate and other permitted investments.

Created in the 1970s after almost a 20-fold jump in oil prices over 10 years, the Shariah finance industry caters to the world’s 1.57 billion Muslims.

House Prices

Investors fled the Islamic-debt market last year. Sales of international and domestic sukuk plunged almost 55 percent to $14 billion as oil and real-estate prices slumped and eroded Middle Eastern wealth, Bloomberg data show.

Oil fell 54 percent in 2008, the most since at least 1987. Dubai home prices have tumbled about 50 percent from their peak in 2008’s second quarter and may drop another 20 percent this year after a construction boom created thousands of houses just as demand began to evaporate, Deutsche Bank AG said in June.

The HSBC/Nasdaq sukuk index declined 19 percent in 2008, the most since its inception and quadruple the 4.7 percent loss of investment-grade bonds in Merrill Lynch’s Global Broad Market Corporate Index. The slide worsened as investors fled all but the safest government debt after the collapse of subprime- mortgage securities froze credit markets in 2007.


“Lack of transparency has become a hindrance in the market because the need for information and rating requirements are much higher these days,” said Harald Eggerstedt, a credit strategist in Edinburgh at bond broker and advisory firm RIA Capital Markets Ltd.

Some of the biggest Islamic debt losses were on Dubai-based companies’ bonds. DP World Ltd.’s 6.25 percent sukuk due 2017 lost 34 percent in last year’s second half and its yield spread over Treasuries reached 1,486 basis points in February, Bloomberg data show. Anything above 1,000, or 10 percentage points, is considered distressed.

Investors sold out of Dubai on concern it would struggle to repay $80 billion in debt after the credit crisis ended its four-year real-estate boom and forced the U.A.E. to work on a bailout of the emirate’s two biggest mortgage lenders. Sheikh Ahmed bin Saeed al-Maktoum, chairman of Dubai’s Supreme Fiscal Committee, said on Oct. 5 that he is confident the emirate can meet its obligations.

Aston Martin

The cost of protecting Dubai bonds from default has fallen to about 294 basis points from a peak of 977 in February, five- year credit-default swap prices show. The contracts, which get cheaper as perceptions of credit quality improve, remain the sixth costliest of 39 emerging markets, Bloomberg data show.

Several sukuk issuers have defaulted in the credit freeze’s aftermath. In May, Kuwait-based Investment Dar Co. reneged on a $100 million bond maturing in 2010, triggering concern about untested restructuring laws for such debt. The company, which owns half of luxury carmaker Aston Martin Lagonda Ltd. in Banbury, U.K., hasn’t reached a restructuring agreement with holders yet, the company said in an Oct. 12 e-mail.

Saad Group, in the Saudi Arabian oil city of Al-Khobar, also doesn’t yet have an agreement with holders of its defaulted $650 million sukuk, according to an Oct. 7 statement from bond trustee Citicorp Trustee Co. released by the Bahrain Stock Exchange.


Houston-based East Cameron Partners LP, which issued $165.7 million of sukuk, sought bankruptcy protection in October 2008. The debtor is working on a “consensual plan of reorganization,” according to a Sept. 3 filing in U.S. Bankruptcy Court in Lafayette, Louisiana. “The case is still in that same posture,” said Michael H. Piper, a Baton Rouge, Louisiana, lawyer who represents unsecured creditors, in an Oct. 22 interview.

“There are only three to four defaults in the Islamic market, not 3,000,” said Sheikh Nizam Yaquby, a board member of the Bahrain-based Accounting & Auditing Organization for Islamic Financial Institutions, in an interview. “Standards are in place” for defaulted securities, said Yaquby, who serves on the boards of about 40 firms, including New York-based Citigroup Inc., HSBC of London and Paris-based BNP Paribas.

Sukuk Sales

International sukuk sales will total at least $7 billion in 2009 and $14 billion in 2010, up from $5 billion in 2008, said Mohammed Dawood, a director of debt capital markets at HSBC, this year’s second-biggest underwriter of such bonds. Including domestic issues, total sales may hit $15 billion in 2009 and $20 billion in 2010, said Wan Murezani Mohamad, a senior analyst based in Kuala Lumpur at Malaysian Rating Corp.

International Finance Corp., a World Bank unit, said Oct. 21 that it wants to sell larger sukuk issues after it completes a $100 million sale this week. The state-owned Dubai Civil Aviation Authority may refinance $1 billion of debt due Nov. 2 with Islamic and non-Islamic bonds, two bankers familiar with the transaction said. Indonesia said it will sell its second sukuk in 2010.

This year’s 27 percent gain for the HSBC/Nasdaq sukuk index compares with a 14.7 percent increase for investment-grade corporate bonds in Merrill Lynch’s global gauge.

“We are seeing an extremely bullish and optimistic market,” Dawood said.

The recovery of global markets and investor appetite is encouraging borrowers outside the Gulf region to consider issuing sukuk for the first time.

General Electric Capital Corp., whose parent last year formed an $8 billion venture with Abu Dhabi’s investment company Mubadala Development Co., met with potential Islamic debt investors last week, said two bankers who declined to be identified because details are private.

‘New Entrants’

Asian companies and governments, which Standard & Poor’s says account for 60 percent of 2009’s Islamic bond sales, will lead the increase, said Mohd Effendi Abdullah, head of Islamic Capital Markets in Kuala Lumpur at AmInvestment Bank, the third- largest underwriter of sukuk this year.

“We have seen new entrants in Singapore and Indonesia, and potentially Korea and Japan as well,” he said.

Hong Kong’s government said in May it is changing its laws to facilitate Islamic finance. Abu Dhabi’s Tourism Development & Investment Co. offered $1 billion of sukuk Oct. 13 and ended up getting orders for $7 billion.

“The sukuk market is maturing,” said Yavar Moini, executive director of global capital markets at Morgan Stanley in Dubai. “Investors aren’t shying away.”

Saturday, October 24, 2009

Dubai likely to house AAF headquarters

source Arabian Business

The Arab League's real estate body, Arab Appraisal Foundation (AAF), will be a self-financed entity, with a high probability for the headquarters to be in Dubai, said a top Arado official.

"I expect the real estate foundation to be self-financed. The money and the budget will come from different venues such as the fees and the donation of the different members," said Refat Abdelhalim Alfaouri, Director-General, Arab Administrative Development Organisation (Arado) League of Arab States Cairo, Egypt.

"Everything is now under speculation and probably it is premature to talk about this, however, we are dealing with the real estate agencies in the Arab countries.

"There have been talks between Dubai's Real Estate Regulatory Agency (Rera ) and Arado. So far we are not getting any money from any other government or agency until we really legally establish this organisation," Alfaouri told Emirates Business on the sidelines of the 'Second Arab Real Estate and Urban Development Conference' held in Dubai.

"Real Estate has been conducted in a non-professional way in the Arab world. Once this foundation is set up, we will look at it as the establishment of an institution to take care of real estate in all the 22 countries. Services will be provided to all the Arab countries. The location of the AAF is yet to be decided," he said.

He added the UAE, especially Dubai, was the "most advanced city" among Arab nations with respect to real estate regulations.

"The board of directors will take a decision on where the headquarter will be located… and Dubai has a 'high probability' of housing the headquarter." On Monday, senior members of the Arab League approved plans by Rera to establish the AAF.

Backed by the 22 states of the Arab League, the AAF has grounds to be considered the Arab equivalent of international property bodies such as the Appraisal Foundation in the United States and the United Kingdom's Royal Institution of Chartered Surveyors.

Real estate's share in gdp down

The contribution of the real estate and construction sector to the gross domestic product (GDP) of Dubai will be less than earlier, a top government official said.

Speaking on the sidelines of the "Second Arab Real Estate and Urban Development Conference, Hamad Buamim, Director-General of Dubai Chamber of Commerce and Industry (DCCI) said: "Dubai is already seeing signs of recovery. The backbone of Dubai is trade and commerce. We believe this is what will continue to be in the future. Contribution of the construction and real estate sectors to the GDP of the economy will be less. They will continue to be a part of Dubai's growth but not a major part.

"The construction and real estate sectors have grown very fast and it will take more time for these two sectors to recover," he said

The DCCI director-general called for an increased real estate evaluation system to be established in Dubai and welcomed the initiative to launch the AAF.

"We know the issue of real estate is all about value of land and assets which has to be recognised and regulated," Buamim added.

Dubai's Emaar returns to profit in Q3

source AFP

DUBAI — Dubai property giant Emaar said on Thursday it returned to profit in the third quarter, earning 655 million dirhams (178 million dollars) after tax, following a 1.285 billion dirham (350 million dollar) loss in the three months to June.

The second-quarter loss resulted from the company writing off the full 1.727 billion dirham value of its US-based John Laing Homes unit, which filed for bankruptcy earlier this year.

However, the company posted a second-quarter profit from continuing operations of 442 million dirhams.

Meanwhile, the third-quarter net profit of 655 million dirhams compared with a year-earlier loss of 417 million, after a write-off 845 million dirhams in assets.

Revenues in the third quarter rose 12 percent to 1.948 billion dirhams from 1.747 billion a year earlier.

Dubai's real estate sector has been severely hit by the global financial crisis that brought its five-years of growth to a sudden halt.

Emaar, which is partly owned by the government and is developer of the world's tallest tower, Burj Dubai, pioneered the real estate boom in the emirate.

Emaar chairman Mohamed Alabbar said "today, there are clear signals of real estate prices gaining momentum in premium areas ... Our approach of developing integrated neighbourhoods has also succeeded in creating new growth engines that contribute to the overall growth of Dubai."

Dubai's Emaar returns to profit in Q3

source AFP

DUBAI — Dubai property giant Emaar said on Thursday it returned to profit in the third quarter, earning 655 million dirhams (178 million dollars) after tax, following a 1.285 billion dirham (350 million dollar) loss in the three months to June.

The second-quarter loss resulted from the company writing off the full 1.727 billion dirham value of its US-based John Laing Homes unit, which filed for bankruptcy earlier this year.

However, the company posted a second-quarter profit from continuing operations of 442 million dirhams.

Meanwhile, the third-quarter net profit of 655 million dirhams compared with a year-earlier loss of 417 million, after a write-off 845 million dirhams in assets.

Revenues in the third quarter rose 12 percent to 1.948 billion dirhams from 1.747 billion a year earlier.

Dubai's real estate sector has been severely hit by the global financial crisis that brought its five-years of growth to a sudden halt.

Emaar, which is partly owned by the government and is developer of the world's tallest tower, Burj Dubai, pioneered the real estate boom in the emirate.

Emaar chairman Mohamed Alabbar said "today, there are clear signals of real estate prices gaining momentum in premium areas ... Our approach of developing integrated neighbourhoods has also succeeded in creating new growth engines that contribute to the overall growth of Dubai."

Wednesday, September 30, 2009

UAE: A lucrative bet for Indian buyers

Source: The Economic Times Manoj and Sindhu — a young couple who moved to the Silicon Valley with IT jobs — had been living in the same house for over a decade. But when the Land as investment economic downturn hit, they were the lucky few whose jobs were not at stake. With property values dipping across the US, it was time to seek the new house of their choice closer to their workplace. Today they are proud owners of a two-storied house on the edge of a forest in Oakland at walking distance from Sindhu’s workplace.

This is a trend that is seen even among resident Indians in the global markets. Take the CEO of a leading IT company who was another person who did not have to fear about a job cut. With business interest already in the US, he used the surplus income to purchase a home in the Bay Area in California.

But it’s just not destinations in the US that are drawing Indians by the dozen. Singapore, the UK, Hong Kong and Dubai are some of the other places that are likely to draw interest among Indian buyers, according to Ajit Krishnan, partner, real estate practice, Ernst & Young.
“These are also markets which have seen a fair degree of correction in prices over the last 12 months. Markets such as Singapore and Hong Kong are mature and have a vibrant leasing possibility and hence tend to offer good return on investment, apart from the fact that usually they have limited stock available, owing to their limitation for expansion,” he says.

Currently, individuals are allowed to remit up to $200,000 per annum towards investments, including immovable properties. Individuals thus mostly prefer to buy towards the end of the financial year around March/April so that they can remit a larger amount and also invest in joint owned properties.

Explains Ashok Kumar, principal & managing director of CresaPartners, an international corporate real estate firm, “There are two reasons for the spurt in Indians buying property abroad. Firstly the global markets witnessed a far greater downturn that any Indian market. If our fall was about 15-20%, global markets fell by about 60-70% in value. Then the recent government norm of allowing Indians to spend up to $200,000 to purchase a property abroad helped. If the husband and wife both hold senior management positions they are able to purchase a good property for $200,000-400,000. Prime spots such as the Miami beaches in Florida and areas in Phoenix have been investment hotspots.” Kumar also finds suburban London and Manchester hotspots for Indians in the downturn.
Banks such as Citibank and Standard Chartered have been facilitating the deals. However, says Arun Goel, CEO of DHFL Venture Capital, “I don’t really see a rush for properties abroad. That was largely during the peak times in Dubai. Today the buyers are those who have business interests abroad and are seeking a buy into the markets when they are at their lowest levels. They are not speculators and intend to stay invested for a long time, say for at least 3-5 years when the markets are expected to rise again.”

Developers, however, have a different take. Rajeev Rai, vice-president, corporate, Assotech says the tremors of US sub-prime crisis were felt Land as investment across the European and Mid-East Asian realty markets, where property prices fell by 25% to 50%.

"The crash in the US, the UK, UAE, Singapore as well as Mauritius real estate markets offered affluent Indians an opportunity to own a second or subsequent home abroad. Dubai and Singapore are seen as business hubs, whereas UK and the US are favoured as education centres. Generally, only small apartments are preferred. Apartments are available in the range of $1,00,000 to $1 million in these countries, which is more or less equivalent to prices in India," says Rai.
Agrees Vijay Jindal, CMD, SVP Group who says that buying property abroad is suddenly making sense to affluent Indians.

"Countries such as Singapore, Mauritius, Thailand and Malaysia” where prices have dropped up to 30-40% in recent months” are attracting Indian investors. Prices have also crashed considerably in the US, the UK and in the Middle East, mainly in Dubai. Many Indians are seeing this as an opportunity to buy property in Dubai as buying property here attracts no government tax and even if your property is put on rent, the income is completely tax-free."

But it is best to study all aspects before you decide on buying a property in these markets. This includes studying currency fluctuations of international markets together with the home market.
Adds Krishnan of E&Y, "It is necessary to balance the risk profile of investing in immovable properties in international jurisdictions with potential foreign currency fluctuations, as the returns in rupee terms are likely to be impacted significantly, depending on how the rupee or the jurisdictional currency moves against the dollar. This becomes a greater risk given that the investment in immovable properties would usually be of long-term nature.

Therefore, if the investment is a pure play investment and has no advantages for either personal or business use, the return in the functional currency would need to be greater than the risk adjusted returns in India for such investment to make financial sense. While such opportunities may be hard to find, the last 12 months of global economic meltdown has probably resulted in such opportunities becoming more available.

Tuesday, September 22, 2009

Andrew Flintoff could become a tax exile in Dubai, says agent

• England all-rounder could move family out to emirate
• Flintoff will coach UAE team during rehabilitation

Andrew Flintoff is considering moving his home to Dubai to become a tax exile and maximise his earnings as a freelance cricketer. His agent Andrew "Chubby" Chandler, speaking for the first time about his client's ambitions, said today: "He likes life in Dubai. He likes the fact that he is not in the limelight so much, that he is not the centre of attention.

"His kids like the schools out there and, when it comes to rehabilitation, Fred gets a bit tired of running up hills in the snow, as he does in England. I've seen him do eight hours a day of rehab and it's easier in Dubai. He would also be nearer his IPL [Indian Premier League] employers and Bangladesh [where England tour in February] is closer too."

But Chandler, who was speaking as it was announced that Flintoff will coach the United Arab Emirates national team during his rehabilitation from knee surgery, did not deny that the financial benefit of living in Dubai is also an issue. He could become a tax exile if he spends no more than 90 days in the United Kingdom – meaning Flintoff would have carefully to manage his time flying in and out of the country.

Chandler said: "Anything is possible. But the 90-day rule could be cutting it a bit tight. As well as playing for England he will be playing for Lancashire and he may play the occasional four-day game for them."

Flintoff is thinking about building an academy in Dubai and Chandler admitted that the 31-year-old all-rounder is also looking to buy a home there. "Renting in Dubai is very expensive. Fred is looking at the possibility of buying a place, though he may sell it again and return to England. It is an opportunity he is looking at."

Flintoff earns an estimated £2m a year, mainly through his contract with the IPL team, the Chennai Super Kings. By rejecting an incremental contract offered to him by the England and Wales Cricket Board earlier this month he would be able to commit himself to the full six weeks of next spring's IPL tournament – England players are allowed only a three-week window.

Flintoff has been linked to playing short-term cricket in South Africa, Australia and the West Indies. But Chandler said the player would always put England first. "It is wrong, as I've read, that Fred may decide to play for other teams before England. People who say that just don't know him. He cares about playing for England."

But there are already doubts about Flintoff's fitness for the Bangladesh tour. "The powers that be – not me – are saying that Bangladesh could come a bit too soon, that it's a tall order."

Meanwhile the player's coaching role with the UAE will involve him in only five days' work over the next six months and will – according to Chandler – be unpaid. Chandler added: "A partnership has been agreed with Dubai Sports City to use their gym and facilities as a base for his rehabilitation.

"I believe he will be one of the first people to use them. In return he will be carrying out some coaching for the UAE national team over the next six months. There's been good growth in UAE cricket in the last few years and Andrew felt he wanted to give something back."

source: Guardian
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