Just in:  

You are here: Home»Business»Managed Funds»Dubai support fund may need up to $2.4bn: J.P. Morgan

Dubai support fund may need up to $2.4bn: J.P. Morgan

 DUBAI: A government fund set up to help debt-ridden state-linked firms will need to be "topped-up" by as much as $2.4 billion over the next two years, JP Morgan said in a note, with several looming repayment deadlines at Dubai Inc.

The US investment bank said that Dubai is likely to tap capital markets to shore up cash for the Dubai Financial Support Fund (DFSF) adding asset sales cannot be ruled out.

"A key challenge is that a substantial portion of the support required would be front end loaded (2011-12)," the note, dated Feb 25, said.

"We estimate that DFSF's cash will get exhausted later this year or early next, and will have to be topped up by $1.3 - $2.4 billion over the next two years."

The Gulf city state managed to amass a significant debt burden -- over $100 billion by some estimates -- as it overstretched itself to pay for ambitious projects such as islands in the shape of palm trees.

Among assets that Dubai could sell, JP Morgan cited non-core investments under the emirate's sovereign wealth fund, the Investment Corporation of Dubai (ICD), such as stakes in Union National Bank , Dubai Aluminium, and Borse Dubai.

State-linked companies, collectively referred to as Dubai Inc, came under the spotlight in late 2009 when one of the emirate's largest holding companies, Dubai World began to restructure about $25 billion in maturities.

The move shocked global markets and dented investor confidence in Dubai's economic model which relied heavily on developments in the real estate sector.

JP Morgan said debt at Dubai's "healthy entities", which it sees at $45 billion, will be managed without external support but said about $8.5 billion will be a challenge. It estimated total debt of $79 billion for Dubai-related entities.

Dubai tested international appetite from bond investors, and issued an oversubscribed $1.25 billion government bond in September.


Copyright Reuters, 2011 



Index Closing Chg%
Arrow DJIA 17,719.92 0.44
Arrow Nasdaq 5,108.67 0.37
Arrow S&P 2,080.41 0.46
Arrow FTSE 6,356.09 0.30
Arrow DAX 11,382.23 0.78
Arrow CAC-40 4,957.60 0.56
Arrow Nikkei 19,747.47 0.69
Arrow H.Seng 21,996.42 0.33
Arrow Sensex 26,145.67 0.07

Wholesale Camping Equipment from China at 

New 2015 adidas and Nike Soccer Cleats at Kicks Corner uk

Ad Asia 2015

Foreign Debt $62.649bn
Per Cap Income $1,512
GDP Growth 4.24%
Average CPI 8.6%
Trade Balance $-2.197 bln
Exports $1.729 bln
Imports $3.926 bln
WeeklyNovember 30, 2015
Reserves $19.828 bln