Dubai under scrutiny after debt payment delay

Enderby said:
you have proof that they were amercan hookers or none is needed in this particular case
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you should work on your reading and writing skills, on top of your mannerism you make it incredibly easy for folks to ignore your posts..

Other than that if genuinely interested, you may google the guest list for the hotel on fire in the pic above.. I won't post any more links to have them removed..

large vacancy between the ears? don't know how to compensate? google shall be your vindicator!

all the best of course!
 
cat eyes said:
;D they are muslims for pity sake they don't feel any shame?? ive been to u.k many times as i have loads of family there and at least they are bloody private and decent enough to not flash there cash and there fancy clothes and they drink in there homes away from the public to see
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I don't know where your friend is getting information from? Personally, I've not seem them drinking on the places I go, which is lot places here. Parks, shopping malls, streets, etc... and I've been living here for 9 years. Airport is duty free, and I've seen Europeans by lot of beer since it is cheaper. But they are not allowed to get drunk or there is a big fine and may be jail. Same with drunken on street, thats probably the reason I've seen drunk driving or somebody drunk on the street. People are allowed to drink in designated areas like night clubs, but I don't go there so I don't know how much they drink there.
 
What pictures, american hookers who? You mean american celebrities?
 
Sampharo said:
It's called indignant reaction to misinformation.
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What misinformation I've given? You are the one talking hearsay and saying these things:
Sampharo said:
Big Brother Abu Dhabi decided to cut them off... Nobody cares if they come up with the money later on because the default is already made... no one will extend any further much needed credit in the future, so there is no possibility of growth under the current ownership/management, and their greatest commodity (potential property profits based on Dubai's reputation) is already busted...
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.....................................................................

Sampharo said:
It's called indignant reaction to misinformation. Something those of virtue and honesty naturally do not accept, not to mention that it is of legal consequence that implausible share recommendations are made. If you presented a plausible yet disagreeable opinion it would have been normal and respected by any of us. But instead you were insisting on a strange non-argument that seems to be fundamentally faulty, yet you were backing it up with claims of being an expert and a financial consultant.

This would be a plausible yet disagreeable proposal. If that is how you decide to invest in companies, that is fine. If that is what you presented earlier it would have been a different discussion.

Earlier however you were not on that. However, I'll go along for a second with the proposal with a neutral mindset about Dubai World and you, please elaborate though:

You're saying that a company with $100 billion in assets and $59 billion in liabilities would be a good investment:
a- based on what income levels? How much does it earn annually?
b- what was the last share dividend payout?
c- What are the future projections of profit that you made to account for the company's growth over the next ten years?
d- Have you analyzed the management team in place to account for expected performance?
e- Most importantly: What is the share price above which people should no longer buy DW shares and sukuks now that the restructure is announced?
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You are mixing two different things. I just asked you if their debt-to-equity ratio is good or bad. 0.59 ratio is considered good and doom-gloom sentiments are out of proportion. I don't know why you mixed it with my other comment, perhaps because that gives you better chance to dodge my question.

And one another thing, restructuring debt is meant to improve a,c, and d.
 
Chuck said:
What misinformation I've given? You are the one talking hearsay and saying these things:
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That's called financial news and fundamental analysis, and it is based on best practices of the industry. Not even beginners consider such things as hearsay, because even a false rumor produces real market decisions.

Chuck said:
You are mixing two different things. I just asked you if their debt-to-equity ratio is good or bad. 0.59 ratio is considered good and doom-gloom sentiments are out of proportion. I don't know why you mixed it with my other comment, perhaps because that gives you better chance to dodge my question.

And one another thing, restructuring debt is meant to improve a,c, and d.
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Chuck, I asked you these questions because you said you were a consultant to financial institutions and are right now buying DW stocks and bonds. It is not possible that you do that without connecting all the lines together and having already calculated AND combined these fundamental numbers together. Sorry but I believe then what you said was only said to support your opinion and is simply not true.

Saying that debt-to-equity is what matters, is like saying a car will win because it has good power-to-weight ratio, regardless of the fact that it has a broken chassis and shot suspension and the has less fuel than the race requires. No consultant worth his salt will ever be tolerated with such a statement. If you don't know how much is it making now and what is the share buying cutoff price, it is impossible and unacceptable to make a share and bond buying decision. If funds were managed that way it would have been lost in a flash and the person managing would have been held negligent.

The reason for the market reaction is the problem that this company has right now is a disease with its liquidity. Liquidity is fuel and lack of liquidity that is so severe a major company announces one whole month in advance that they are unable to make a payment this small in comparison to its size, it means the market will experience a domino effect of failures to pay, and everybody knows this is detrimental for a highly leveraged market. Additionally the prices were all trading on such levels because there was a sentiment of liquidity being back and abundunt in the market, with that gone they HAVE To recalculate and therefore exit before the prices crash to reflect reality. The market is running fine and financial institutions know what they were doing, it's obvious however you're missing the point.

As for your general opinion that DW is doing good, that is your opinion then and it's yours to keep, however to answer your question a debt-to-ASSETS (not equity !?!) ratio of 0.59 is less than 0.75, therefore it is healthy, but is considered good investment and sustainable ONLY if the management team is strong and is generating steady good income. Failure to pay also means the management team is unable to steer the company and manage its finances properly, which means the company's income is a lot less than expected or at least not possible to be collected properly. Since they decided to sell Assets and companies to fund the debt, it means in the future they will get even less income while the same less than competent management is staying in control and the company suffers even lower credit limits, which means forget growth potential.
 
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Sampharo said:
That's called financial news and fundamental analysis, and it is based on best practices of the industry. Not even beginners consider such things as hearsay, because even a false rumor produces real market decisions.
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Lets see:
Sampharo said:
Big Brother Abu Dhabi decided to cut them off... Nobody cares if they come up with the money later on because the default is already made... no one will extend any further much needed credit in the future, so there is no possibility of growth under the current ownership/management, and their greatest commodity (potential property profits based on Dubai's reputation) is already busted...
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Above is financial news, fundamental analysis based on best practices of the industry? I rest my case.

Btw, Abu Dhabi gave them $15 billion. That is cutting them off? :hmm:

Your info is hearsay, which is basically based on western media.
Sampharo said:
ratio of 0.59 is less than 0.75, therefore it is healthy
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Thank you!
 
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Chuck said:
Lets see:

Above is financial news, fundamental analysis based on best practices of the industry? I rest my case.
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Actually:

The statement did not rattle Wall Street Monday night. The Dow Jones Industrial Average was down 0.3 per cent in early trade, partly on expectations that Abu Dhabi will still bail out Dubai. [The Straits Times/Asia News Network]
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I rest mine, unless you think wall-street traders are a group of idiots who trade on hearsay, which is non-consequential because it will STILL affect the price. I am completely convinced now that this is not your area at ALL.


"ratio of 0.59 is less than 0.75, therefore it is healthy"

Thank you!
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Seriously?!?!? Are we going to play the "And don't come near prayers..." lecturing tricks without adding the "while you are intoxicated"? I said:

"ratio of 0.59 is less than 0.75, therefore it is healthy, but is considered good investment and sustainable ONLY if the management team is strong and is generating steady good income."

Which DW is NOT. Clearly you are trying hard to save a point which is not even there.

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As for DW future, still looks murky, especially after THIS:

"Dubai govt walks away from Dubai World debacle

The Dubai government effectively washed its hands of crisis-hit Dubai World Monday (November 30) when it announced that it does not guarantee the conglomerate's debts.

A senior finance department official said that while the government was the firm's owner, its many activities and interests meant it had to stand alone.

"The decision was, from the day of its establishment, that the company would not be guaranteed by the government," said Abdulrahman al-Saleh, head of Dubai's Finance Department in an interview with state-owned Dubai Television, AFP reported.
"

We'll still have wait and see if the companies are not merged and thousands are not laid off to boost the profits as they usually do, which otherwise along with the stricken small sub-contractors not getting paid, means again more exodus without settling credit cards and car loans in the local market. If not merged, still no point in re-entering until the assets are sold off and the new balance sheet can give an indication of what the company is worth (by at that time the share prices would have continued dropping to a seriously low level), where it can become a decent buy.

Impact on the global market should be close to non-existent now that the illiquidity was digested and reflected.
 
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Sampharo said:
I rest mine, unless you think wall-street traders are a group of idiots who trade on hearsay, which is non-consequential because it will STILL affect the price. I am completely convinced now that this is not your area at ALL.
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All most all of the stocks that were going down, were not even exposed to Dubai debts. Traders were panic selling, and did not base their judgement on fundamentals. This is not an example of financial news and fundamental analysis based on best practices of the industry.

Markets doesn't always move with fundamentals, anybody with experience of financial markets would know that.

With all the doom and gloom about Dubai and its debts in the media, traders started panic selling. There was a big gap down the day market opened after news, which any smart trader would have seen the sign of panic selling and buying opportunity along with studying the real fundamentals.

It gave me opportunity to buy Nakheel bonds at 40 and some other nice stocks at a good price. Whoever sold it at 40 must be feeling stupid now since price has gone back up to 50-65 range.

Your Abu Dhabi comments was pure hearsay and rubbish, which you conveniently avoided to respond. But the fact is Abu Dhabi gave Dubai $15 billion in last 6 months. As a muslim brother, I expect you to be more truthful, and not just base your opinion on what the western media says.

"ratio of 0.59 is less than 0.75, therefore it is healthy [emphasis mine], but is considered good investment and sustainable ONLY if the management team is strong and is generating steady good income."
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Now you are again changing the goal post. It is not gloom and doom some people here are making it out to be. As for the future, we'll see what happens with DW.

Sampharo said:
"Dubai govt walks away from Dubai World debacle

The Dubai government effectively washed its hands of crisis-hit Dubai World Monday (November 30) when it announced that it does not guarantee the conglomerate's debts.
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And your point is? As I said before Dubai govt is not liable of for debts of DW. DW is commercial company, and Dubai govt is just a shareholder of the company. And DW is limited liability company. Contractually, they are not liable for the debts of DW in anyway, and they are just making that clear.
 
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cat eyes said:
:sl:my friend spent a week in dubai before flying off to pakistan for a month... This girl is a revert and she said that they drink more alcohol and sell more alcohol then the west! She never seen anything like it.....They were even selling alcohol in the airport and drinking it during the day. Europeans are not as bad as that and her family lives in the biggest holiday destination in Europe
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:wa:
Although your point is out of the economical topic discussed here, I have to comment that when you say a fact, say it COMPLETELY please. I’m Emirati, and I don’t see these things in Dubai because simply I communicate with the locals there. So, you must say (if your point is valid) that those drinkers are NOT locals, most of them are western. So the bad attitudes which you are talking about have been brought by foreign people. People who drink in their countries, are the same ones who your friend saw!

You might know this point, sis.. and it might be trivial for many people who know Dubai, but if a person hasn’t been here and doesn’t know that there is a mixture of nationalities residing in Dubai, s/he might understand from your post that Emirati people in Dubai drink alcohol! So, you have to clarify that you mean the non-locals in your post!


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Longing for the Paradise (Al-Jannah) where the endless happiness…
 
If Dubai didn't deal in riba and actually adhered to true shari'ah finance principles without playing a usury shell game this wouldn't have happened (of course, the city would never have been built in the manner it was if it refused to resort to debt financing).

It's stuff like this that actually inspires me to continue in finance and help develop true, shari'ah compliant financial products that both operate within the strict confines of Islamic law and Islamic ethics.

I encourage everyone to go read the article Uthman just posted in the "Islamic Finance News" thread, which details how modern "Islamic" banks are really not too much different from their conventional riba-based counterparts. Very interesting stuff.

EDIT: I'll just post it here for easy reference: http://news.bbc.co.uk/2/hi/business/8388644.stm
 
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rpwelton said:
If Dubai didn't deal in riba and actually adhered to true shari'ah finance principles without playing a usury shell game this wouldn't have happened (of course, the city would never have been built in the manner it was if it refused to resort to debt financing).

It's stuff like this that actually inspires me to continue in finance and help develop true, shari'ah compliant financial products that both operate within the strict confines of Islamic law and Islamic ethics.

I encourage everyone to go read the article Uthman just posted in the "Islamic Finance News" thread, which details how modern "Islamic" banks are really not too much different from their conventional riba-based counterparts. Very interesting stuff.

EDIT: I'll just post it here for easy reference: http://news.bbc.co.uk/2/hi/business/8388644.stm
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Nakheel bonds are Islamic bonds. And they are not over leveraged as all are below the value of DW assets.
 
Chuck said:
Nakheel bonds are Islamic bonds. And they are not over leveraged as all are below the value of DW assets.
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I have a hard time believing bonds can even be Islamic. The very nature of shari'ah denotes that one cannot finance with debt, but rather dealings should be structured like an equity partnership. Thus, using equity, there is nobody to repay should things go sour (ie, both parties share in the gain as well as the loss).
 
rpwelton said:
I have a hard time believing bonds can even be Islamic. The very nature of shari'ah denotes that one cannot finance with debt, but rather dealings should be structured like an equity partnership. Thus, using equity, there is nobody to repay should things go sour (ie, both parties share in the gain as well as the loss).
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Sukuks are Islamic bonds, you can read in detail about it here: http://en.wikipedia.org/wiki/Sukuk
 
Chuck said:
Sukuks are Islamic bonds, you can read in detail about it here: http://en.wikipedia.org/wiki/Sukuk
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The trouble with sukuks is: how Islamic are they?

The problem is with debt financing. If we stick to the shari'ah, then we can deduce that only equity partnerships are viable Islamic solutions. Both parties share in the gain and both share in the loss. There is also no such thing as a fixed rate of return in Islam, and many sukuks often fix a rate of return for investors.
 
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rpwelton said:
I know full well what sukuks are; the trouble is: how Islamic are they?

The problem is with debt financing. If we stick to the shari'ah, then we can deduce that only equity partnerships are viable Islamic solutions. Both parties share in the gain and both share in the loss. There is also no such thing as a fixed rate of return in Islam, and many sukuks often fix a rate of return for investors.

These types of "Islamic" instruments seek to circumvent the laws of shari'ah and do nothing to reduce the type of havoc riba causes in society. Western banks are all too eager to buy into these instruments because they know they can make the same profits as with conventional products and the risks are not much different.
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Risk sharing is not proportional in all Islamic financial instruments. Nakheel sukuks were based on ijara structure which is lease-to-own model. Difference with conventional bond is that it is backed by asset. It is not like what happened on wall street in which debt was repacked again and again in the form of derivatives and you end up with 1 trillion of sales with only assets of $100 billion. Islamic finance principles will not do away with economic cycles of expansion and recession, neither they are meant to do away these cycles. However, they do give good practice to better coup with them. DW is not in the same situation as what happened to the companies in US and UK -- it is not over-leveraged and it has assets more than its debts.
 
What I'm wondering is: is the debt of this company tied to the market value of its assets? If a creditor owns a portion of the company, that ownership stake should be tied to the market value of what they own, so this way there can never be a "negative-equity" position (like so many homebuyers in the US are facing right now). I understand that the company has more assets than liabilities, but this doesn't mean the liabilities can't become more than the assets should the market drop significantly lower.
 
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Chuck said:
Traders were panic selling, and did not base their judgement on fundamentals. This is not an example of financial news and fundamental analysis based on best practices of the industry.
.............

Nakheel bonds are Islamic bonds. And they are not over leveraged as all are below the value of DW assets.
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Brother Chuck, it is getting tiring the way you are disrespecting people's professional knowledge and underestimating your ignorance on the matter. You are NOT a financial expert by any standard, you're just blabbing laymen deductions, and it is getting annoying when you start claiming buying at 40. I am no longer willing to discuss finance with you considering you couldn't even address the most basics correctly or answer the questions set that ANY floor sweeper in a financial institution could have answered specifically.

But if you're going to claim that sukuk are proper Islamic then you are seriously blabbing out of place. Sukuk are fundamentally unislamic and all they did was avoid direct outright set interest-rate, did not avoid the forbiddence of "loan that brought benefits is still usury", nor the fact that guaranteed capital is not Islamically compliant. If you're going to count on wikipedia then you might as well subscribe to whatever nonsense is being written there.

Additionally, DW financial department approached us a couple of years ago asking if we can arrange a money market account for them, which is a strictly interest-based market for banks to utilize excess corporate cash to increase their account size in front of the central banks on certain dates and times, allowing them to leverage more loans. DW gets paid daily interest for the money utilized. We told them we don't have such accounts and they went shopping for it elsewhere.
 

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