Dubai has received interest from sovereign wealth funds ‘beyond the region’ for the second tranche of the $20 billion bond it expects to launch this year, the emirate’s finance chief said on Friday.
‘Immediately after the issuance of the first tranche, we did receive interest from entities beyond the borders of the UAE. Our only issue is that… we will not issue the second tranche until it is needed,’ Nasser al-Sheikh told Reuters Financial Television on the sidelines of the World Economic Forum at the Dead Sea in Jordan.
‘We are in talks with some sovereign wealth funds and some financial institutions who have expressed their interest… We have continuous dialogue with a number of them… beyond the region.’
Earlier this month a member of Dubai’s financial crisis committee said the $20 billion bond programme will be sufficient to stimulate the Gulf emirate’s economy, hit hard by the global financial crisis.
Asked when the Dubai government would begin to invest again, Sheikh said: ‘2009 is a year of stabilisation for us — stabilising the economy, the government stepping up and supporting some of the corporates that have been playing a strategic role in the evolution of Dubai.’
Sheikh, director-general of Dubai Department of Finance, said the priority now was to ‘reactivate’ Islamic mortgage firms Amlak and Tamweel and then start a merger process.
The fate of the merger of the two firms has been under review by a federal government committee this year since the United Arab Emirates government announced in November it was merging them with two state-controlled banks.
The Islamic home financing companies developed their businesses during an economic boom in Dubai that was kicked off by the emirate’s decision in 2002 to allow foreigners to invest in properties on a freehold basis.
They ran into trouble when the global financial crisis brought the boom years to a swift end in Dubai, prompting the government to say it would merge them with two banks to form Emirates Development Bank.
‘Their intentions have changed. We were working on the merger, the merger was the priority but now looking at the importance… they realise how important Amlak and Tamweel are to the Dubai property sector,’ Sheikh said.
‘Priority today is to reactivate both companies because both companies have not been extending mortgages for the past 4-5 months,’ he said.