January 2009 1

January 20092

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Vol. VI. No. 40 MARCH 2009

K raveendran

editor’s note

Reality checkAny crisis demands responses and attitudes that

are in accordance with the situation on hand. As such, the shifts that are taking place in the

marketplace provide some insight to the gravity of the current crisis. The implications are not restricted to just demand-supply or profit and loss: there is apparently nothing that is outside of its purview, inter-personal relationships, family bonds, social values all included.

Dubai real estate has been swept full steam into the trail of devastation left by the financial tsunami. So, the response has been equally drastic. The unprepared and the weak-founded have taken a very heavy toll and those who are left behind now have to come up with appropriate action so that they can hold out on the long haul. Thankfully, the process has already started. Dubai’s real estate players have realized that they have to pull together and change their ways to get out of the mess that they find themselves in today, part of which is created by the global crisis, but an equally important part is of their own making.

It is time for a reality check for the banks as well. The pickings of the past few years were too good to last and the banks seem to be quite ill-prepared. They have simply gone into a shell, with their response to the emerging situation bordering on panic. But for them to survive meaningfully it is imperative that they come out of hiding.

It is gratifying that there are at least some positive signals, which is good for themselves as much as it is for the others.

Tel : +971 6 746 3335 , Fax : +971 6 746 3392 P.O.Box 6959 Ajman U.A.E. www.escapeajman.com

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March 20094

COVER STORY

24

24

CONTENTS

HOSPITALITYEnter the economy travelerSurvey shows executives will travel less in the next 12 months

COVER STORY

Shake-up, shape upbanks rethink strategies to stay aloft during distress times

REAL ESTATEon a strict dieting courseDubai’s property sector is becoming leaner and fitter

n a strict dieting courseDubai’s property sector is becoming leaner and fitter

March 2009 5

24 COMMODITIESFewer tourists to buy goldDubai jewellery trade braces for lower sales as financial crisis hits tourist flow

24 FOCUScaught napping againS&P chief says ratings are about ‘default’ and not market value

24 COPING UPcash is kingCompanies tighten the belt as meltdown begins to bite

24 WELATHno excitement yetSovereign wealth funds think it’s too early for bargain hunting

24 MARKETSripe for long-term value seekersMarkets continue to be weighed down by adverse conditions

24 INTERNATIONALPractical to be tacticalIt’s highly rewarding to remember trees don’t grow to the sky

March 20096

ROUNDUP

Dubai as hub for pearl industry

The pearl industry believes that Dubai can complement its sta-tus as the gold and jewellery

hub by serving as a base for the global pearl industry as well. Industry leaders cite Industry leaders cite Dubai’s posi-tioning as the ideal location and the presence of Dubai Pearl Exchange as the ideal platform to coordinate such an initiative given its neutral position-ing and ability to drive fundamental projects.

In fact, the Dubai Pearl Exchange (DPE) is committed to establishing a working committee by inviting the participation of industry leaders from key producing regions to develop a strategic plan that will promote the interests of the global pearl industry among the various stakeholders.

Assurances in this regard came during the two-day World Pearl Fo-rum, organised by the Dubai Pearl Ex-change, a subsidiary of the Dubai Multi Commodities Centre (DMCC) in Du-bai recently. The industry has called for Dubai to take a leadership role in driving the future collective growth of the global pearl trade. According to the organizers, the event proved successful in achieving the objective of uniting leading pearl industry professionals for the first time.

Stressing the need for greater co-ordination among the diverse types of pearls represented by the global pearl industry, participants from across the world called for action from industry leaders to ensure effective positioning of pearls as a division amongst the jew-ellery sector.

According to Ahmed Bin Sulayem, Executive Chairman, DMCC said the first World Pearl Forum has injected a positive note through a commitment to collaboration on the part of the world’s major producers and industry decision-makers. Dubai’s geographic positioning and DMCC’s commitment to the pearl trade are factors in our de-

cision to spearhead and proactively establish the new international work-ing committee for pearl promotion, he said.

Tawfique Abdullah, Chairman, Dubai Gold and Jewellery Group, said the time is right for all pearl pro-ducers to work together and with traders towards a single coherent strategy for pearls. At the centre of the future consuming economies, Du-bai is ideally located to co-ordinate and drive such a strategy, he said.

Echoing the suggestion for creat-ing a universal support group, Akshay Kumar Sharma, CEO, Lucky Star Jew-ellery Expots Ltd, Rosy Blue Group of Companies, said there was a strong case for the pearling industry to unite so that it can overcome the troubles of these times. The gold and diamond industry comprises many well-estab-lished, long-standing bodies and fo-rums that unite traders and producers but there is an absence of a global fo-rum for members of the pearling trade. The forming of a working committee is needed to provide direction and lead-ership to the pearl industry, he said.

Also recognised during the forum discussions and presentations was the need to establish a universal language and set of definitions that would fa-cilitate in educating both retailers and consumers about all types of pearls available.

Sonny Sethi, President, Cultured Pearl Association of America (CPAA) explained: “Neither the retailer nor the consumer completely understand pearls and it is important that produc-ers work together with the trade to ed-ucate consumers on the different types of pearls to create a stronger demand. Trust and reliability are important aspects of any customer relationship, especially for jewellers, and forming a committee who will work on and in-

troduce a universal grading system by providing expert certification for pearl strands will lead to a new layer of confi-dence in their quality.”

Gaiti Rabbani, Executive Director, Coloured Stones and Pearls, DMCC, invited leading pearl producers of South Sea, Tahitian, Golden, Freshwater and Akoya pearls to be part of the first-ever global focus group for pearls.

“Given Dubai’s neutral position in the pearl industry, DPE is pleased to take on the responsibility of initiating a cohesive working group dedicated to promoting the interests of the glo-bal pearl industry,” she said. “Moving ahead, we look forward to garnering the expertise from the leading pearl produc-ers of the world to create this working committee. Their combined knowledge and long-term experience will go a long way towards directing future growth strategies. With the support of interna-tional pearling companies and indus-try experts, the Dubai Pearl Exchange hopes to coordinate this working com-mittee in the coming months.”

The World Pearl Forum witnessed interesting debates and presentations from over 25 international speakers in front of a global audience of over 200 participants.

7March 2009

LG Electronics is expending in-creasing R&D budgets as part of its strategy to weather the cur-

rent economic storm, along with a fo-cus on green technologies, the group’s global CEO Yong Nam indicated in Dubai.

Yong Nam, who was on a visit to Dubai, said his company was seeking to turn the ‘crisis into opportunity’ by maintaining product leadership and to grow market competitiveness the company would intensify marketing, branding and design efforts.

“Every company –- not just LG -- has been affected negatively by the economic downturn,” said CEO Nam, who was behind the successful turna-round of LG Telecom during the Asian Financial Crisis of 1997. “The poor performance of many global compa-nies in the last quarter of 2008 was a wake-up call that we needed to take drastic actions, not just safe ones.”

LG has intensified its efforts to in-crease market share despite the vola-tile economic situation. To achieve this, the CEO said the company will boost its focus on investing in future growth engines such as solar power, commercial air conditioners and busi-ness (B2B) solutions.

LG has also reorganized its busi-ness portfolio to focus on areas with longer-term growth potential, profit-ability and partnerships will continue to be a key element of the company’s marketing activities to elevate its brand position.

LG has established a Crisis War Room (CWR) to bring together the group’s five business units, eight re-gional headquarters and executives to implement and manage the company’s aggressive business plan.

In just three months the CWR, with the collaboration of each of the com-pany’s business units and company divisions such as supply chain man-agement, marketing, procurement, hu-

curement system, which includes everything from raw materials to in-vestment in facilities, financial serv-ices and recruitment. The efforts to improve its cash flow have already re-sulted in reduced inventory, increased liquidity, optimized supply chain management and a more consolidated, efficient purchasing process overall, he pointed out.

To cement its position as a global company, LG will continue to direct significant resources toward improv-ing standards to global organisational levels. Efforts currently underway include improving its HR system, re-organizing business portfolios, focus-ing on customer-centric processes, recruiting and retaining global talent, eliminating unnecessary costs and continuing to foster technology and design innovations. LG now has non-Korean executives occupying five of

been instructed to establish task force teams to take responsibility for man-aging the cost-saving initiatives.

LG is targeting a reduction in ex-penses of more than $2 billion in 2009. This company-wide initiative, which includes headquarters and all 82 sub-sidiaries around the world, also applies to manufacturing and indirect costs.

Nam said globally LG has been working to further improve its pro-

its seven highest positions and has re-cruited approximately 200 other pro-fessionals around the world to oversee marketing, supply chain and procure-ment, Nam said.

“These initiatives will enable LG to improve both growth and profitability over the long-term, regardless of the economic climate,” he remarked. “Be-coming a stronger global brand will be a natural outcome of this effort.”

man resources and finance, has identi-fied and developed 11 key action items, according to Nam. Business units have

Yong Nam global CEO , LG

LG seeks to ‘turn crisis into opportunity’

Like their conventional peers, IFIs stand to post weak-er financial performance and asset quality indicators in the coming quarters, the report said.

S&P feels that rated IFIs’ financial performance will deteriorate because they are expected to book some market-related provisions covering their exposure to the dropping values of stock markets and to Shariah-compliant investment products (mainly sukuk notes and funds). The anticipated slowdown in loan growth, the in-flated cost of funding because of tight liquidity, and the increased cost of risk in the Gulf region also stand to test IFIs’ performance and constrain their growth.

Liquidity management is challenging for IFIs due to the lack of liquid Shariah-compliant asset classes. “We understand that IFIs’ instruments for managing liquidity are scarce compared with those of conventional counter-parts.

“In our view, IFIs could take advantage of the current challenging times to innovate and broaden the offering of acceptable instruments for liquidity management,” said Damak.

Following the liquidity crunch, total sukuk issuance worldwide reportedly declined to $14.9 billion in 2008, compared with more than $34.3 billion a year earlier. Still, S&P continues to foresee long-term positive pros-pects for the sukuk market, with sustainable growth poised to come from the increasing popularity of Sha-riah-compliant financial instruments, governments’ in-creasing openness to Islamic finance around the world, substantial investment and financing needs in the Gulf, and issuers’ desire to tap investors from the Middle East and Muslim Asia.

Islamic banks resilient, but face risk: S&PGulf Islamic financial institutions and takaful

companies are feeling the repercussions of the current global financial market disruption less

than most of their conventional counterparts because Shariah law prohibits interest-based financial products, according to a new report by Standard & Poor’s Ratings Services.

“IFIs didn’t invest in the structured products that have hampered many conventional banks’ financial profiles and performance,” said Standard & Poor’s credit analyst Mohamed Damak in the report, titled Rated Gulf Islamic Financial Institutions And Takaful Companies Have Shown Resilience To Global Market Dislocation, But They Are Not Risk Immune. “And most IFIs should be equipped to weather the financial downturn and keep the effects on their financial profiles at manageable levels.”

S&P said it expects takaful and retakaful insurers to continue to resist the toughening market environment. The agency attributes their resilience to sufficient liquid-ity flows--in part due to reportedly higher new business--to service normal claims levels, and to capital adequacy, which, despite being affected in the current climate, re-mains supportive of the ratings across the sector.

Still, Standard & Poor’s notes the squeeze that market conditions are putting on many Islamic banks and taka-ful insurance companies.

“We see the liquidity dry-up, mounting pressure on the real estate sector in the Gulf Cooperation Council countries, the sharp correction in regional stock mar-kets, and certain investments made by IFIs--mainly in-vestment banks--in European or U.S companies and real estate as the main sources of stress,” said. Damak.

8 March 2009

9March 2009

Trading Technologies Inter-national, provider of trading software for the derivatives

trade, announced the launch of a new version of its market-leading X_Trader adding new features that enhance functionality, usability, deployment and user administra-tion.

Trading Technologies, which is the technology partner to Du-bai Mercantile Exchange, provides trading software and services fa-cilitating direct access to the major international derivatives exchanges in Chicago, New Jersey, London, Frankfurt, Singapore and Tokyo, besides Dubai. The company sup-plies it solutions to investment banks, proprietary traders, brokers, Futures Commission Merchants (FCMs), hedge funds and other trading institutions.

Headquartered in Chicago, Trading Technologies maintains a worldwide presence with offices in New York, Stamford, Houston, London, Geneva, Frankfurt, Singa-pore, Hong Kong, Tokyo and Syd-ney. The regional expansion plans include the move to set up an office in Dubai, the company’s marketing executives told BBR.

“In this tough economy, trad-ers are demanding more and more from their trading platforms. We have to stay ahead of the curve and innovate every day. This new ver-sion of X_Trader incorporates a number of cutting-edge enhance-ments and should give our custom-ers an advantage,” according to Harris Brumfield, CEO of TT.

X_Trader 7.6 significantly im-proves performance across all ma-

DME technology partner launches upgraded software

jor functional areas, including price updates, order handling, contract loading and workspace opening, the company said. The new version ben-efits from TT’s upcoming PFX price protocol architecture, which maxi-mizes the speed of price delivery, minimizes the size of price messages, reduces client interactions with the price server and achieves faster price recovery in network outage scenar-ios. The breakthroughs in PFX de-sign and architecture have produced greater than a 10-fold increase in data throughput capacity while fur-ther optimizing machine resources, a company statement said.

It said X_Trader 7.6 also provides traders with additional market in-sight and decision support by adding new ways to filter and manipulate the display of market data, price move-ments and specific trading activity at the most detailed level. Any X_Trad-er user could potentially benefit from these enhancements, which include:

The ability to highlight large •trades and apply different filters to multiple products in the Time & Sales window.“Live Only”, which when enabled •will display only those contracts with an active bid, ask or last traded price in the Market Grid window. This feature is especially useful for options and energy traders.Usability enhancements that •make it easier to add, subtract, highlight and manage data in the Market Grid window.Advanced search capabilities to •more easily locate spreads, strat-egies and options in the Market Explorer window.

Leading Indian bank expands operations

State Bank of India (SBI), which has set up office in DIFC with a category 1 licence, is launching

operations of SBI Mutual Fund and SBI Life from the centre, according to bank officials..

While SBI Mutaul Fund is in the fi-nal stages of obtaining a licence from the UAE Central Bank for opening a representative office, SBI Life is in the process of securing such approvals, A J Vidyasagar, chief executive officer of SBI’s operations at DIFC, said.

He said SBI’s commercial operations from the DIFC had got into a full swing with the bank beginning to accept non-dirham deposits. Under the Category 1 licence, a DIFC-based entity can ac-cept only non-dirham deposits from non-UAE corporates and professional clients.

He said SBI group, which has a network of 17,000 branches across the globe, would be opening its Jeddah branch soon. In the Gulf, SBI also op-erates two branches in Bahrain, one branch in Oman, representative offices in Teheran and Cairo.

The bank has tied up with various exchange companies including Emir-ates India International Exchange, Al Rostamani Exchange, Wall Street Exchange, Al Ansari Exchange, Al Fardan Exchange, Al Ahalia Exchange, Citi Exchange and UAE Exchange en-able customers to remit funds to their accounts with SBI in India.

Vidyasagar said customer confi-dence in SBI rose when the bank came out with excellent results for the quarter ended December 2008 amid the global financial crisis. The profit of the group, comprising several subsidiary banks and other financial operations, surged 52 per cent to Rs36.08 billion while non-per performing assets declined from 1.44 per cent to 1.36 per cent.

10 March 2009

The UAE Ministry of the Interior has announced that the federal government will be looking to roll out uniform residency visas for property owners

across the country. The visas will be issued on a renew-able six month basis.

According to Brigadier Nasser Al Menhali, the acting Director-General of the federal Naturalisation and Resi-dency Department, the Ministry of the Interior was look-ing at finalising the new visa laws within the next month, with the roll out expected this year. The scheme will grant residency to owners of freehold properties, regardless of the size or value of the property.

The government is also looking at proposals to extend the visa scheme to include the families of property own-ers, although this is in the very early stages, he indicated.

‘We are looking to unify the procedure for the issu-ance of residency visas for expatriates who purchase properties,’ said Al Menhali.

Analysts and industry insiders have welcomed the proposal as an incentive to increase interest in the prop-erty market, although the short-term nature of the visas is still viewed as a downside.

The announcement addresses a core issue behind in-vestor confidence. Although not as widespread a practice as in the Dubai property sector, some developers in Abu Dhabi had attracted prospective buyers by claiming that the units were accompanied by residency status for the investor.

Similarly, Abu Dhabi developers are also beginning to offer their own incentives to attract investor interest. Arady, a property market-focused private equity and in-vestment firm, announced that it would pass on the ben-efit of the fall in construction costs to buyers of its Reem Island project. The group said that it would lower prices on units at the, as yet untendered, Helix Towers project by 20 per cent.

Bloom properties, the company behind the Bloom Gardens development, a community project in the centre of Abu Dhabi targeting Emirati investors, also announced that it would be lowering its prices - an offer which also covers retroactive purchases.

Average prices in Abu Dhabi have fallen approxi-mately 18 per cent since October as the emirate feels the effects of the global slowdown. Despite this , analysts re-main cautiously optimistic about the property market’s future, citing the continuing supply-demand imbalance and pointing to the fact that rental prices continue to hold steady, despite previous warnings that leasing prices are set to fall.

Residency visas for Abu Dhabi property owners too Dubai Gold Securities, an initiative of World Gold Council

(WGC) and the Dubai Multi Commodities Centre (DMCC), has begun trading on NASDAQ Dubai. Dubai Gold Securi-

ties represent the first Exchange Traded Commodity (ETC) to list on NASDAQ Dubai and the first Shariah-compliant gold ETC in the region.

Dubai Gold Securities offer investors simple, secure and Shariah-compliant access to gold bullion investment without the additional costs normally associated with insuring, storing and transacting in physical gold. Each security is 100 per cent backed by physical al-located gold held in safekeeping by an independent custodian. One share represents an initial interest of one-tenth of a fine troy ounce of allocated gold bullion.

Gold is widely-accepted by the investment community as an im-portant portfolio diversifier and preserver of wealth. It is a proven hedge against inflation and the dollar.

Dubai Gold Securities will be marketed in the UAE by Dubai Commodity Asset Management, a wholly-owned subsidiary of the DMCC that is licensed by the UAE Central Bank, and which devel-ops and distributes commodity-linked investment products.

HSBC Bank will act as the primary market maker for Dubai Gold Securities. Investors can trade in Dubai Gold Securities through registered NASDAQ Dubai brokers.

Dubai Gold Securities comply with Shariah law and practice. A Shariah Supervisory Board has been constituted to supervise the is-suance of Dubai Gold Securities and will conduct regular physical inspections of the gold held on behalf of investors.

Integral to Dubai Gold Securities’ compliance with Shariah law is the fact that each security is fully backed by an identifiable amount of allocated gold held by the Custodian, HSBC Bank USA, N.A., at its London vault premises. The gold will be held in an allocated ac-count on behalf of securities holders. The Custodian also plans to appoint a sub-custodian with vaults in Dubai.

According to Aram Shishmanian, Chief Executive Officer of World Gold Council, the initiative is part of the council’s efforts to remove the barriers to investing in gold across the globe. “As finan-cial turmoil continues all over the world, investors are wondering where their money will be safe. Gold has represented an important currency for thousands of years and it is a major store of value for governments, institutions and individuals alike. As a physical asset, gold is no one’s liability and is not exposed to financial market or corporate failures. Having an allocation to gold is like an insurance policy, gold’s value as an asset becomes most obvious when it is most needed. With future inflation looming, gold’s ability to preserve wealth will become key.”

The listing on Nasdaq Dubai follows the successful listing of similar bullion securities products on a number of stock exchanges around the world, including the NYSE Arca and London Stock Ex-change. The value of gold held by products in World Gold Council-backed gold ETFs, as of 23 February, 2009, stood in excess of $38 billion, equivalent to 1202 tonnes of gold.

Gold-backed investment product

March 2009 11

HOSPITALITY

Visitor flow is considered to be a major factor in deter-mining how soon Dubai would be able to overturn

the current downtrend in its economy as a tourism boom has also got a lot to do with the revival of the real estate market.

When more people come to the city, there is demand for more servic-es, which in turn require more people to perform those duties. The growth in the services sector implies higher immigration levels, particularly for employment, and this in its wake im-pacts the whole spectrum of business, including the real estate sector. More visitors also means an increase in the

Survey shows executives will travel less on business in the next 12 months

footfall for the shopping malls, which have taken a severe hit in the after-math of the credit squeeze and the uncertainties that it has created in the marketplace.

In this context, the results of a survey by the Economist Intelligence Unit on corporate travel during the current financial meltdown have sig-nificant implications for Dubai, as the boom in the city has corresponded to the consolidation of its status as a glo-bal financial and business hub.

Perhaps, Richard Branson’s de-scription of the ostentatious opening of Atlantis towards the end of last year as ‘probably the last party of the decade’ is proving ominous. The sur-

vey found that the downturn is leading to corporate travel budgets coming un-der greater scrutiny. Pressure is coming not only from CFOs looking to cut cost from their bottom lines, but also from shareholders keen to address criticisms that corporate culture had become ex-cessive before the downturn.

Executives believe that they will travel less on business in the next 12 months—many significantly less—with executives based in Asia-Pacific and North America likely to see the biggest cutbacks in their travel plans. In con-trast, over one-half of those based in Europe believe that the number of their trips will be unchanged. But this will not be the only hardship with which

ENTER the economy travellerthe economy traveller

12 March 2009

the hotel sector will have to deal. Alongside fewer trips, business travel will also get shorter in duration and, in many cases, companies will expect executives to downgrade from busi-ness-class cabins and five-star hotels, EIU said in a report on the survey’s findings.

The EIU, jointly with Amadeus, surveyed 354 executives worldwide in November and December 2008 to obtain their views on how the global economic downturn will feed into cor-porate travel plans, with particular fo-cus on the impact on the hotel sector. All of the executives surveyed travel at least once a quarter for business, with 37 per cent travelling more than once a month and 7 per cent travelling weekly. Geographically, respondents were split as: North America, Europe and Asia-Pacific 29 per cent each and the Rest of the World 13 per cent.

Close to one-half (47 per cent) of the executives in the survey said that they planned to take fewer trips over the next 12 months because of the eco-nomic downturn. Of particular con-cern for hotels is that a sizeable pro-portion of these (16 per cent) believe that economic woe will mean a drop of over 30 per cent in the number of trips undertaken.

Travel budgets are under pressure worldwide, and companies are pur-suing various strategies to keep them under control. The most popular has been to cut out travel for internal meetings—an approach that has been adopted by 46 per cent of respondents’ companies. But it is not just a drop in the frequency of trips that will concern hotels. Even where trips are undertak-en, business travellers are being asked to economise, economy for the earlier business class and three star for what was earlier five star. Over one-quarter (28 per cent) of executives surveyed expect their company to downgrade them from five- and four-star estab-lishments.

Keenest of all to cut out the luxury will be Asian business travellers—33 per cent of executives from that region expect to be downgraded. In the case of airlines, 36 per cent of executives expect to travel by economy class over

Richard Branson’s description of the ostentatious opening of Atlantis as ‘probably the last party of the decade’ is proving ominous

the next 12 months.According to the survey, another

strategy that companies may look to follow is convening larger, centralised meetings in regional hubs, rather than sending out individuals into provincial offices. This is considered good news for hotels in cities such as London, New York and Hong Kong, where sup-ply already struggles to keep pace with demand, but bad news for everyone else, EIU said.

Other popular measures to curb travel expenditure will include requir-ing trips to be signed off by a more senior manager, cited by 37 per cent of respondents; cutting back on travel for junior staff (33 per cent); and only al-lowing travel that is linked to new busi-ness generation (24 per cent). If there is a silver lining for the hotel sector, it is that very few businesses indeed are looking to implement a blanket ban on international travel, EIU pointed out.

As if having to contend with fewer,

more parsimonious travellers were not pain enough for hotels, the executives surveyed also predict that business trips will become slightly shorter. Over the past 12 months, the average length of stay for 11 per cent of executives was one night. Over the next 12 months, this figure is expected to rise to 16 per cent.

Unsurprisingly, companies see pressure within their organisation to reduce costs as the primary reason to cut back on hotel spending. But this will not be the only impact on hotels. Expensive business trips are increas-ingly being shunned as companies use collaborative technologies, such as video-conferencing, cited by 41 per cent of executives as a factor that would encourage them to curtail travel over the next year.

But the research is clear that in or-der for hotels to continue to attract business travellers, price will be of the essence. Forty-five percent of the ex-

13March 2009

ecutives agree that room rates would be ‘absolutely decisive’ to their choice of hotel in the coming year, with a further 36 per cent ranking it an im-portant consideration. Furthermore, companies won’t be shy in pushing home an advantage as hotels fight for fewer customers. Most respondents say that their company would use the economic downturn to extract the best possible rates from hotels.

According to the EIU, the effect that this belt-tightening will have on the type of hotel that executives will choose is the most interesting aspect. With less money to spend on exclusive hotels, most business travelers will re-vert to the tried and trusted. A major-ity (61 per cent) of executives cite a de-pendable brand, with uniform levels of service across locations, as something that will be important to them over the coming year. Brand is particularly important to executives in the Asia-Pacific region and in North America, but West Europeans (53 per cent) are relatively less likely to stick with what they know.

But the survey showed that ex-ecutives are realistic about what this

means in terms of service. They are willing to accept less luxury for few-er dollars. The research suggests that hotels that bolster their high-end, an-cillary products in order to gain an advantage, or install fancy business centres or meeting facilities, will be wasting their money—at least when it comes to attracting business travelers. Instead, executives will be focusing on whether hotel chains do the simple things well.

The best indicators of good service are supposed to include efficient check-in (68 per cent), flexibility to change requirements, such as a last-minute cancellation (64 per cent), and a quick resolution to problems (59 per cent).

In comparison, anything with a whiff of luxury—such as concierge services—is considered far less of an indicator. Even brand loyalty pro-grammes fall way down the list. But there are slight regional variations. West European executives, for exam-ple, are more likely to be impressed by a flexible check-in, while Asians are keener than others to have their loy-alty rewarded.

As if to underline the all-pervading sense of austerity, well over one-half (54 per cent) of respondents say they value convenience over comfort. Only 19 per cent like to travel on business trips with their families and less than one-half (43 per cent) consider extend-ing their business breaks to include some leisure time. Again, there are subtle differences across the regions, with North Americans the most likely to travel with their families, and North Americans most likely to take in a holi-day at the end of the trip.

The survey showed that budget establishments are particularly well-placed to treat the downturn as an op-portunity. Indeed, 44 per cent of the

survey panel agreed that putting up ex-ecutives in budget hotels is a smart move in the current climate. In comparison, 29 per cent feel it is important for the prestige of their company to stay at the best hotels. However, top-end hotels in London, Milan or Paris might want to take heed: the number who equate the prestige of the company to the prestige of the hotel they are staying in drops alarmingly in Western Europe—to just 14 per cent.

But, even in the downturn, for budget hotels to be successful they will need to compete on more than just price. While executives are actively seeking cheaper alternatives, they are clear about the minimum level of service that they ex-pect from a low-cost alternative. Most important of all is Internet connectivity. Good transport links, a quiet room and a central location are also considered es-sentials.

What is not apparently considered as important—in either budget or full-service hotels—is the quality of the business facilities. Only 24 per cent of respondents say that the lack of such facilities as a dedicated business centre would stop them from staying at a budg-et hotel. At higher-end hotels the figure was, interestingly, even smaller, at 13 per cent, although a further 37 per cent cited them as somewhat important..

EIU feels that the relatively cost-effective ways for hotels to continue to appeal to business travelers in the lean times should be of some comfort to the sector. “But, in an age of increasing time pressures, security fears and greater bu-reaucracy—when the conventional wis-dom sometimes seems to be that busi-ness travel has become something of a chore—perhaps the most heartening finding of the research is that executives still enjoy and see the benefit of travel-ling for work”.

Of particular concern for hotels is that a sizeable proportion believes that economic woe will mean a drop of over 30 per cent in the number of trips undertaken

14 March 2009

COVER STORY

A customer of a leading in-ternational bank operating in the UAE was recently of-fered a top-up on an exist-

ing loan. The offer was obviously due to the fact that he has been ‘regular with repayment’ and his salary fell in the ‘safe bracket’. But the customer laughed off the offer and asked the bank wheth-er they could give him a waiver on the existing loan instead.

The incident is typical of the pre-vailing scenario where banks across the board are cherry picking. Credit card holders with credible repayment history are being bombarded with all kinds of offers. The banks seem to be desperate in their bid to lure customers with a ‘good track record’ with loans and top-ups. But those who are genu-inely in need are deliberately avoided if they are from the vulnerable sectors, such as real estate and construction. Also, the entire lower spectrum of the income chart is out of the lending game, although a couple of years ago this was among the most sought after segments. The new selectivity has meant that loans have become out of bounds for thousands, who don’t qualify because minimum salary requirements have

SHAKE-UP SHAPE-UP SHAPE-UPBanks rethink strategies to stay afloat in distress timesBy Ambily Vijaykumar

been doubled or raised three fold in many cases.

The stricter lending rules have also meant several other things. There is a lot less that people who don’t have liquid money can do. The effect of the credit squeeze on the real-estate and construction sector is all too well-known. The automobile industry is also struggling as banks refuse to fi-nance purchase of vehicles.

The reason for the new found cau-tiousness is that banks now want to be seen as ‘responsible lenders’ who have ‘the best interest of their depositors and share holders in mind’.

“If you overburden the customer with a loan and he is unable to give back, we are not being fair to our cus-

tomers,” says Sanjoy Sen, the business manager of Citibank’s consumer bank-ing in the UAE.

It is precisely to get the banks to lend again and invigorate the economy that governments across the globe, in-cluding the UAE, have pumped in vast amounts into the banking system. The UAE Central Bank has already made Dh120 billion available to financial in-stitutions to help stabilize the market.

15March 2009

SHAKE-UP SHAPE-UP

Considering that the situation contin-ues to be delicate, we could expect big-ger stimulus packages.

The banks, which have been at the epicentre of the financial earthquake that hit the world last year, have suffered tremendous damage both in terms of fi-nances and investor confidence. Many in the West have shut shop, several oth-ers have been nationalized and many are merging to stay afloat.

To stop the crisis from deepening, banks are revisiting their underwriting criteria for lending money. While sev-eral banks have been forced to do that in the aftermath of the economic crisis, others say they ‘proactively changed’ their lending terms much before the crisis struck and hence have not been forced to take any ‘knee-jerk’ reac-tions.

“This market does not have any credit bureaus. But we have over a pe-riod of time set up our own set of un-derwriting criterion based on which we judge how much loan to give. Income is one of the criteria; others include back-ground and whether a customer has taken other loans or credit cards from us,” explains Sanjoy Sen.

HSBC has excluded new custom-ers-- non-relationship customers as they are called—from the auto loan business. Moreover, they have doubled the minimum salary requirements for vehicle finance. As against the earlier Dh10,000, the threshold now stands at 20,000 for eligibility.

“In line with current market condi-tions, HSBC has further tightened its lending criteria in order to ensure that customers who do receive loans can af-ford to repay them at a time of consid-erable uncertainty around the world,” says Abdulfattah Sharaf, CEO of Per-sonal Finances Services in the region.

This tightening has happened in the wake of increasing cases of loan de-faults across the country. The defaults have particularly hit the auto loan seg-ment. Reports of people returning their car keys in envelops to banks are testi-mony to the piling bad loans for banks on this account.

In the backdrop of such develop-ments lenders across the board have hit the panic button. With the real estate

sector being the worst-affected, lay-offs have become the order of the day. And predictions of further large-scale redundancies have made the prospect of more defaults and slimming bank deposits real.

Ironically those who have been the drivers of the economy in the last few years are being driven away. Massive layoffs have prompted several banks to suspend lending to expatriate employ-ees working in leading real estate com-panies. Many have increased minimum salary limits for expatriates by almost

determine whether they are eligible for a loan. Banks now demand that a cer-tain minimum amount be transferred to the account every month to avail of a loan. This is one of the methods being used to determine whether you have a consistent source of income.

The new stance taken by the banks is in complete contrast to what was hap-pening early last year when, riding high on the real-estate boom, banks were not only generously giving loans, they were also engaging in aggressive cross-sell-ing. All that resulted in a massive dis-

The new selectivity has meant that loans have become out of bounds for thousands, as salary requirements have been doubled or raised three-fold in many cases

200 per cent, while others have settled for a more realistic 60 per cent hike in salary limits for personal and auto loans for all customers.

Moreover banks are doing a thor-ough credit analysis of its customers to

parity in the banks’ loan to deposit ratios. Much of that has now cooled down or as banks would want to say they have ‘paced the cross-sell’.

“Generally banks first start by giving a credit card, a few months down the line, they give a personal loan and again top up

16 March 2009

Liquidity challenges have forced HSBC Middle East to tighten lending norms. But the bank has reposed

faith in the ‘robust’ steps taken by the government to combat the crisis.

One of the immediate steps by the bank to stem defaults has been to raise the minimum salary bar for eligibility for loans. The minimum salary requirement for auto loans has been doubled. From the previous limit of Dh10,000, this has now

been increased to 20,000. According to the bank, these steps come at a ‘time of considerable uncertainty around the world’.

The tightening is also attributed to fact that the bank takes its role as a ‘responsible lender’ very seriously and also ‘for the sake of our customers and long-term sustainability of business,’ says Abdulfattah Sharaf, CEO of Personal Financial Services, HSBC Middle East.

With reports of vehicles being abandoned, indicating a crisis in the auto loan segment, the bank has gone to the extent of rejecting applications from ‘non-relationship customers’. In short, HSBC does not

want to lend to a customer it does not know. Layoffs, especially in the real-estate sector, have meant that the possibility of default has increased. So raising the salary bar would automatically leave out a large number of people from the borrowing cycle.

Even personal loans are hard to come by. There have been numerous instances where people have used personal loans for investment purposes and defaulted as the investments have gone bad. HSBC has hence increased the minimum salary limit to Dh20,000. The bank defends the new criteria saying it is to ensure that ‘customers who take loans can afford to repay them.’

Affordability has also become the buzzword when it comes to home loans, with the loan to value ratio having been brought down to the range of 50-60 per cent, depending upon whether the property is under construction or ready. Also, the finance is available only for the list of

Strict adherence to new criteriaTroubled times demand appropriate policies, says HSBC

Abdulfattah Sharaf, CEO of Personal Financial Services, HSBC Middle East

properties approved by the bank. An interesting aspect that the bank

stresses is the ‘sustainability’ factor. There was a time in 2008 where banks were offering loan to value of up to 90 per cent. This was clearly a recipe for disaster. During a crisis of such proportions, when people are losing jobs and there is very little surety about things, being strict with regards to products and services is the key, says HSBC.

‘The group’s financial strength is built on maintaining a strong capital base, ensuring strong liquidity, a conservative appetite for risk and well-diversified earnings both by geography and business type,’ says Abdulfattah Sharaf.

And this, the bank says, is the very reason why it is ‘well-placed’ to navigate the tough times. Unlike early last year when the bank achieved ‘excellent results’ largely because of the sheer quantity of loans, HSBC plans to ‘curtail lending’ until the deposit base is built up sufficiently. The steps have been taken to ‘protect’ the bank in its forward march in today’s economically excruciating times.

The bank, however, is offering more diverse products. Insurance, for instance, is one product the bank thinks will be in demand. ‘We need to look to changing our product offering. I am sure there will be a huge increase in appetite for guaranteed products,’ says Abdulfattah Sharaf.

In times of economic uncertainty, ‘customers re-assess their insurance needs’, a trend that HSBC is keen to tab into. ‘As a bank we need to offer products tailored to our clients’ needs coupled with a brand guarantee that we will only sell products from the solid providers still out there,’ adds Sharaf.

So with a 100 million customer base worldwide and being the largest international bank in the Middle East, HSBC says it ‘continues to operate normally’ and ‘invest in its operations in the region’. The bank says that despite the upheaval in the banking sector, it is ‘well-placed to capture the growing business opportunities’ in the region.

Ambily Vijaykumar

17March 2009

Strict adherence to new criteriaTroubled times demand appropriate policies, says HSBC

that loan. In the past if we would have given a loan after four months of hav-ing given a credit card, now we would give it after six months,” says Citibank’s Sanjoy Sen.

The bank has also worked out dif-ferent sets of underwriting criteria, giving preference to their ‘target mar-ket customer’. So while others have to fulfill a minimum salary requirement of Dh10,000 for loans, the ‘target mar-ket customer’ gets the benefit of half the salary limit.

But fulfilling the loan criteria is no guarantee that the customer will be consistent with repayments. Hence to minimize risk, banks are employing new methods of vetting customers; a process that rates existing customers on the basis of their performance with repayments. So a credit card customer repaying on a timely basis is more likely to get a loan from the banks than the one who is irregular with payments.

The underlying theme of all lending now is ‘be prudent’. But the aftereffect of this has been little money flow in the system. With finances drying up, the construction industry, one of the engines of the UAE economy, has vir-tually ground to a halt and banks are wary of lending to them. Several big projects announced by big developers have been shelved, many are now being ‘completed in phases’ and contractors are packing bags. Reports say over 50 per cent of all construction projects in the country have been suspended.

As for those who dreamt of buying a house, only those who have saved consistently can realize them now. Most banks have decreased their loan to value ratio. Which means that ear-lier when banks were happy to finance anywhere between 90 per cent and 95 per cent of the value of the property, now they’ve come down to an average range of 60-70 per cent. The buyer now has to shell out huge amounts as initial payment to be able to buy a house. With lenders having already burnt their fin-gers due to their large-scale exposure to the real-estate market, many banks are now offering home loans only to ready projects and not to the ones that are under-construction.

Most people are hand-tied as far as

new purchases are concerned. Another interesting fact that has emerged out of the crisis is that apart from the banks not lending, people are also skepti-cal about keeping their money in the banks. Banks are admitting that they have faced such instances in these trou-bled times.

For customers, removing money from a bank they think is ‘not reliable’ to another that they believe will safe-guard their money is a reflection of the loss of faith several major financial in-stitutions have suffered. A coffee-table conversation this reporter was part of revolved around an instance when a couple who had huge savings in a bank was offered a higher interest rate as an incentive not to withdraw the amount from their accounts.

The lack of faith in banks is not re-stricted to customers alone. Banks are unwilling to lend to each other. With many big names in the banking sector across the world going under, competi-tors feared the worst and stopped offer-ing a helping hand. But with the UAE government guaranteeing banks their deposits, the sector now feels that the situation will improve.

An overall squeeze of money from the system has also hit the retail sector. In uncertain times when manufactur-ers, suppliers and consumers cut down on expenses, the vicious cycle of less lending and less spending is further slowing down the economy. But consid-ering that no one can escape the crisis, banks are also adopting an empathetic approach to customers who are facing difficulties in repaying large amounts of loans. For example, banks are willing to talk to such customers and decrease their monthly payments and lengthen their repayment tenure. However, if it is not a question of ‘capacity’ but of ‘in-tention’ then most banks are “treating it differently”.

Individually banks are taking meas-ures to ensure that their loans do not go bad. But given the fact that custom-ers tend to misuse the luxury of having multiple credit cards and multiple loans from several banks, predicting a default has become very difficult. But lenders are taking solace from the fact that the UAE Central Bank is working towards

setting up credit bureaus that will not only ensure there is data available about individuals, but in case of defaults, oth-er banks are alerted and they don’t end up giving loan to the same individual.

The Central Bank has already pre-dicted ‘a two-year slump’ for the UAE economy and now intends to implement a slew of measures including ‘ring-fenc-ing’ the banking system according to the Central Bank governor. With the emphasis for the coming years being ‘reasonable but low rate of credit expan-sion and restricted banking expansion’, lenders across the board are becoming ‘extremely vigilant’and getting ready for ‘restricted growth’.

Amidst all this, banks are also look-ing to change their product offerings. Many are concentrating on the insur-ance market, which is considered to have a huge growth potential in times like these. The demand for Islamic products too has increased with many already being launched. But not many banks are willing to concede that once the dust settles lenders will opt for ‘con-servative’ methods of functioning. The last few months, banks say, have been ‘very challenging’ and they don’t be-lieve that the crisis has hit a plateau yet. Banks are in fact bracing for a tougher 2009, signs of which have already begun to show with a local bank axing four per cent of its work force.

Massive layoffs have prompted several banks to suspend lending to expatriate employees working in leading real estate companies

March 200918

The news of Citigroup selling Smith Barney brokerage to Morgan Stanley in the US has

done little to shake the faith of its executives in the Middle East, who do not have any ‘immediate concerns’. But their optimism does have a tinge of caution.

“We are not taken aback by the turn of events and have not been forced to take any knee-jerk reactions, since we have been fine-tuning our credit criteria all along over the last year and a half,” says Sanjoy Sen, the business manager of Citibank’s consumer banking in the UAE.

He says the bank pre-empted a market correction and hence ‘starting probably a year back proactively changed’ its credit criteria. Operating without credit bureaus in the market is a challenge and Citibank therefore came up with its own set of underwriting criteria based on which it judged how much loan to give. The bank takes into account factors like income, background, multiple loans, credit cards etc, and decides whether the customer has the capacity to repay the loan. Sen says the bank’s ‘strong analytics unit’ has helped it keep credit defaults ‘largely as per plan’ for 2008.

“If we see certain segments of our portfolio not performing, we tweak our criteria to get back what we want. That is why I feel risk management and credit skills are very important differentiators in the industry and as we go forward it will become all the more important. That will differentiate between leading banks and other banks that rampantly give out loans,” Sen points out.

Banks in general were doling out loans rampantly for the better part of 2008 and are now suffering the consequences. The auto loan sector has seen large-scale skips.

“We used to be one of the largest

Timely moves pre-empted troubleCitibank’s Sanjoy Sen says underwriting criteria helped restrict problem lending

auto finance players in the region. But more than a year back we decided to exit the business and stop doing incremental auto business, because we saw that it was getting quite indiscriminate. Where the interest rates were coming down, there were lots of defaults, lots of cars were getting repossessed, the residual value of the cars was not justifying enough and all banks were facing huge default; so we decided to quit that business and we are very happy with that decision, because that would have cost the bank a lot financially,” says Sen.

Several banks in the country are facing this scenario, with large number of people losing jobs and defaulting on their vehicle loans. Citibank feels that the current situation gives lenders sufficient reasons to tighten the lending criteria. With many banks already doing that, Citibank feels it will only get stricter.

“There has been a situation in the market where customers have a higher amount of loans to service than their income, which is wrong. For example, someone who has Dh20,000 as salary is servicing Dh40,000 of loans between mortgages and personal loans. This is

clearly unsustainable,” says Sen. The very reason why banks are finding a huge disparity in their loan to deposit ratios.

The financial meltdown has been an eye-opener for the bank, which admits it was aggressive with cross-selling till some time back. A new credit card customer with the bank would be offered a personal loan within few months of association with the bank. The current situation, Citibank feels, has left scope only for ‘paced-out’ cross-sell.

But managing loans is a job that begins the moment the lender chooses its customer. Inaccurate documentation has resulted in several fraudulent loans in the market. So Citibank has come up with a system to grade its customers. It has generated a scoring model that helps determine a customer’s performance with regard to repayment.

“It is an automated model which defines the score for every individual based on certain application criteria. It builds up a behaviour score based on certain parameters. So if you have a credit card customer who has been using his card in a certain manner and has been paying on a timely basis, then we build a score around him so if that person comes for a personal loan, he will get a higher loan or have a greater propensity to get a loan than a person who has been defaulting or paying up late for the last three months,’ explains Sen.

But do in-house checks rule out the possibility of defaults? Not entirely. Because there are several lenders in the market and the customer has been spoilt for choice, with competing banks also vying for their attention.

The same person can take six credit cards and use up all the credit lines and not pay up at all or take multiple personal loans based on the same income. So even if a bank checks on the customer’s income to loan ratio, it does

Sanjoy Sen, Business Manager, Citibank Consumer Banking

19March 2009

not make any sense since the loans have been sourced from different banks. The need of the hour then is ‘for banks to get together and have credit bureaus, which is how it works in all developed markets,’ says Sen.

However, the bank is willing to be considerate to customers with repayments. It is open to reducing monthly repayments and increasing the tenure for customers and believes in ‘curing on a case-by-case basis.’ But as a larger part of the risk management methods, the bank is assessing whether it is the customer’s capacity that is an

as compared to other customers. For them the minimum salary limit is Dh5,000 while for the rest it is 10,000. New customer are not a taboo but ‘how much loan to give and when to give will vary depending on types of customers.’

A tighter lending norm is, however, is not an indicator that the bank has slowed down on its loans business. “We continue to grow our loans business everyday even in the last five months. We have tightened our credit norms, but our business strategies remain the same, since we started realigning our strategies much before the crisis hit,”

clients for ready property only. This prudence kept it safe and sound.

With the bank ‘never going for an 80 per cent growth or indulging in market share games, its liquidity ratio has been sound’ and it has not stopped it was doing. That is applicable to credit lines for businesses too. The lending is based on ‘security’ and ‘debt capacity of the customer’. That only resonates to an old saying that one must not swallow more than one can chew.

But that is what many lenders and buyers were doing. According to Citibank, once the impact of the economic crisis begins to recede, the rules of the game would be changed forever.

“The industry will get redefined as we go along, not only in the Middle East, but across the world. The entire banking industry will get redefined,’ says Sanjoy Sen. “Regulators will change their rules, you will have to do what is right for the business and what is best for your customers and profitable for you.

“There is also a need to ensure that there is matched growth in demand and supply and there is growth that the market can take, because one of the things that we can learn from this crisis is that top-line growth is not necessarily an indication of good health and bottom-line profit,”says Sen.

Citibank says its business in the UAE is ‘the most profitable’; yet considering that there are job losses happening, the bank will be ‘extremely vigilant’ and ‘extremely credit conscious’ from now on.

“The impact of the recession is not going to go away in a hurry. So there will be a slower growth. In fact, there will be a deflation in the market. Rentals, consumer goods, real estate prices will come down. Deflation is finally good for the consumers. The retail outlets, however, will have less profit,’ says Sen.

But Citibank believes that the UAE has every reason to stay positive. Thanks largely to its ‘proactive rules and regulations and change in strategies’, the bank says the country ‘would emerge on top of the world market’ once the world gets out of the crisis.

Ambily Vijaykumar

issue or his intent. If capacity is the issue, then the bank is talking to its customer and working out a repayment model that addresses his concerns, however if it is the intent that is the trouble, then the bank is ‘treating it differently’.

Citibank in the UAE has raised its minimum income criteria across the board. However, the bank’s ‘target market customer’ stands to benefit

says Sen. And the crisis in the UAE has hit the

real-estate sector the hardest. Citibank says it has been ‘really far sighted’ about its home-loans portfolio and ‘there has been no exposure at all to the real estate recession, which all other banks have faced in the market.’ After noticing an unsustainable market trend of offering 90 per cent loan to value ratios, the bank restricted the lending to selective

The same person can take six credit cards and use up all the credit lines and not pay up at all or take multiple personal loans based on the same income

20 March 2009

REAL ESTATE

It is not only the demand and prices that have gone down in the Dubai real estate sector. The slowdown has already seen con-

siderable trimming of the sector, with a process of weeding out going on re-lentlessly and those with a chance of survival coming together to cut down on operational costs.

The situation is so drastic that near-

On a strict dieting courseDubai’s property sector is becoming leaner and fitter

On a strict On a strict

ly half of the total number of 800 devel-opers licensed by the Real Estate Regu-latory Agency (RERA) have folded up operations. According to Marwan Bin Ghalita, CEO of RERA, some 300 de-velopers have approached the agency on the ground that they are not in a position to go ahead with their projects and therefore want their licences can-celled.

RERA views the situation as having many positive effects as only players with a long-term view can survive the tough conditions and that will rid the market of most of the unprofessional players, who probably entered the fray to make a fast buck, although they did not have the wherewithal to conduct the business properly.

“Some development companies

21March 2009

were registered but have now decided they don’t want to develop because of liquidity, which is a good thing. Others were forced to cancel their registration because we were sure that their devel-opments would never be real,” Marwan Bin Ghalita pointed out.

With buyers defaulting their pay-ments on a large scale on the back of credit tightening by the banks and financial institutions, there is a seri-ous cash flow issue for the developers, many of whom were depending on the proceedings of their off-plan sales to fi-nance the construction. In most cases, these monies are stuck in the escrow accounts opened with the banks, which can release the funds only on the basis of construction milestones. Since there has been a general slowdown, and in many cases a virtual stoppage of work, cash flow on this account has been sig-nificantly impaired. Some of the more established players with the financial muscle have sought to re-schedule pay-ments through more flexible payment options, but the majority of developers are in a desperate situation.

A real estate analyst with the Swiss bank UBS has estimated that the Du-

bai developers will face a liability of $20 billion in the next two years. “Our assessment of leverage in Dubai’s resi-dential property market is based on the cost to developers to finish properties should investors default on the upcom-ing supply of 140,000 units,” analyst Saud Masud said. “We estimate this li-ability to be roughly $20-25 billion over the next two years.”

Developers, including the top ones, have resorted to significant staff reduc-tion as activity in the sector has slowed down, whether it is marketing and sales or other supporting services, not to speak of construction work itself. Staff redundancies have occurred across the board, right from the highly skilled to the lowest level of employment.

Nakheel laid off 500 employees at the end of last year as the master developer indicated delaying work on a number of leading projects. The affected projects are said to include the Trump Interna-tional Tower and Hotel on Palm Jumei-rah, Waterfront, Palm Jebel Ali, The Universe and the Tower and Harbour Project, which is supposed to include the world’s tallest tower, surpassing Burj Dubai’s record.

The leading developer has followed up this by merging three business units as part of the ongoing restructuring programme in view of the crisis in the market. The move involves merging of Palm Deira, Mina Rashid and The

World businesses into Nakheel North-ern Coastal Projects, in addition to the merger of Nakheel Asset Management and the company’s design and develop-ment department.

“Nakheel continues to readjust its current business objectives to match supply and demand in the most effec-tive way. Last month, Nakheel merged a number of its business units,” a spokes-person said.

The consolidation phase has got into right earnest and at one point of time it was strongly rumoured that Nakheel may be merged with Emaar, but this was promptly denied by Mohammed

RERA views the situation as having many positive effects as only players with a long-term view can survive the tough conditions and that will rid the market of most of the unprofessional players

22 March 2009

Alabbar, Chairman of Emaar Proper-ties. The denial came in government announcement, which clarified that the merger between the two master de-velopers was not on the agenda.

Speaking at a conference in Dubai,

pened along with some major changes in the management of Dubai Holding, under which Soud Ba’alawy, Executive Chairman of Dubai Group, and Sameer Al Ansari, Executive Chairman of Du-bai International Capital, take on the roles of Chairmen of Dubai Holding Investment Group. Dubai Holding In-vestment Group is an existing wholly-owned subsidiary of Dubai Holding that holds Dubai Holding’s stake in Dubai International Capital and Dubai Group. In addition to his current role as CEO of Dubai Group, Tom Volpe has become the CEO of Dubai Holding Investment Group and Acting CEO of Dubai International Capital.

While the ownership and core ac-tivities of Dubai International Capi-tal and Dubai Group will not change, both companies are to forge a closer working relationship to realize efficien-cies through the consolidation of their back-office operations, the group said in a statement.

The process of cutting flap is also visible in the mortgage finance sector, with Amlak and Tamweel deciding to combine under the Abu Dhabi-based Real Estate Bank to form the largest property finance firm in the country.

The new entity will provide a strong growth platform for real estate financ-ing and will serve as the cornerstone of the mortgage market, Amlak said in a statement. The statement said that the Real Estate Bank, a unit of the Ministry of Finance, has more than 7,000 cus-tomers and the combination of Amlak and Tamweel with the Real Estate Bank will ensure a fair process for the current shareholders and customers.

Amlak’s Chairman Nasser bin Has-san Al Shaikh pointed out that by lever-aging the combined expertise of Amlak Finance and Tamweel, the Real Estate Bank will enhance the value proposi-tion for customers with broader prod-uct capabilities, and meaningful op-erational and financial synergies. The move for Amlak-Tamweel merger is the most important consolidation de-velopment in the UAE financial sector since the merger one year ago of Emir-ates Bank and NBD, creating Emirates NBD, which is now the biggest Gulf lender in terms of assets.

A real estate analyst with the Swiss bank UBS has estimated that the Dubai developers will face a liability of $20 billion in the next two years

Alabbar had said he would welcome a merger with Nakheel if the opportuni-ty arose. “Nakheel and Emaar are two separate entities, but we welcome col-laboration. If there is a chance, I will welcome it,” Alabbar said when asked about a possible merger of the compa-nies, according to news reports. But he clarified later that there were no cur-rent plans to merge the companies.

Alabbar also said small develop-ers in Dubai could have to consolidate to weather the global financial cri-sis. “You will see more consolidation among third-party developers, who are facing lending difficulties,” he was quoted as saying.

Developments that followed proved him rights. Within days, Dubai Hold-ing announced that it will merge the back-office operations of three of its real estate entities, Dubai Proper-ties Group, Sama Dubai and Mizin, a member of Tatweer, under one con-solidated operation.

While the ownership and core ac-tivities of the three companies will not change, this will lead to closer work-

ing relationships, by realizing efficien-cies through the consolidation of their back-office operations, the group said in a statement. The company said the arrangement will not impact the legal relationship that the companies have with their current partners including their suppliers, contractors and their investors.

The new work alignment has hap-

23March 2009

“Prestigious projects are being consigned to history with the UAE real estate sector facing

unheralded challenges. Solid pipelines are quickly becoming pipedreams with construction order books contracting sharply and development delays now commonplace,” global financial com-pany Nomura said in a report marking the Japanese company’s coverage of the local property market.

Speculators fuelled the market with ‘easy’ liquidity that has evaporated, just as developers commence deliveries that cannot be financed. Nomura said the sector shakeout is likely to continue with direct markets possibly falling another 15 per cent, but it saw the key theme for 2009 as sector consolidation, though initially in the private, rather than the public, arena. “The sector is maturing at break-neck speed and we expect casualties.”

Nomura has initiated coverage of the UAE real estate sector with a fun-damentally cautious view. Real estate is capital consumptive and the market is currently capital constrained, it said. Bridge finance is not an option if there are no end-users to take inventory or banks to fund it.

The report said development delays are likely to dampen earnings. This

‘From pipelines to pipe dreams’Bridge finance is not an option if there are no end-users to take inventory or banks to fund it, says Nomura

and creating investment portfolios are likely to weaken revenue accounts. Dividends are at risk – if not this year, then next, as cash constraints bite. The decline of occupancy rates and rents as affecting the carrying values of invest-ment properties, just as companies are forced to take unsold stock into their portfolios.

According to Nomura, asset prices are set to suffer average peak to trough falls of 40 per cent across the direct real estate sectors, against 25 per cent aver-age falls so far, but equities are pricing in more.

Although the company has a fun-damentally bearish view on the direct property market, it believes that there are pockets of value in the listed sector. “We regard the relatively ‘underdevel-oped’ Abu Dhabi as having better pros-pects than the ‘overdeveloped’ Dubai, but there appears to be a wider, possibly unwarranted, disconnect from equity market valuations that are starting to appear oversold to us. Our clear prefer-ence is towards early cycle developers with committed sales and unencum-bered balance sheets – or at least access to committed facilities – and low or no gearing”.

It said most of the companies in its coverage universe tick most of the box-es, but this is more a call on sentiment

than fundamental equity valuations. The company feels there has not been enough of a sector shake-out yet to sort the ‘men from the boys’ and sector con-solidation appears inevitable.

Real estate stock prices have fallen on average 80 per cent over both the last 12 months and the last six months. “So while we are not positive on a macro level, we can see absolute value uplift of c30 per cent at current price levels. The implied market risk is probably too high if we assume these entities were to continue to operate as independent go-ing concerns”.

The company analysts believe that the market is near the floor in equity pricing, but stock prices will not im-prove until liquidity (or some form of direct government intervention) is force-fed into the system. They see the issue as a lack of obvious catalysts to at-tract capital back into the sector.

“At 0.3x spot book, Emaar is a proven developer, diversified into in-ternational markets with strong demo-graphic fundamentals and is the Dubai Government’s flagship developer, so there are enough positives to outweigh the negatives, in our view. Sorouh is our preferred Abu Dhabi based real es-tate company with what we perceive to be higher growth prospects, but at 1.0x spot book we regard it as still expensive

24 March 2009

relative to the sec-tor.”

The report views the sector as a ho-mogenous basket. The market has re-lied too heavily on the (previously) eas-ily ‘funded off plan’ sales market where speculators provided the working capital. But this passed the refinanc-ing risk with each speculative ‘flip’, which has unwound sharply. Regionally, developers now face the situation where speculators can’t sell or can’t meet the final installments as developments complete. The end user market is being crimped by onerous (or no) bank lending terms, with banks trying to conserve already limited li-quidity pools and reduce their sector exposure, the report pointed out.

It said the UAE mortgage market has historically been thin, but banks leveraged their lending exposure with a classic triple exposure (bridge financ-ing the development start up, financing

are being forced to evolve rapidly. The warehousing of unsold inventory for delivery into the rental market has in-creased, but this is now unavoidable, it said. The occupier market is rapidly weakening and capital markets may take years to recover (after all Singa-pore and Hong Kong are still below 1996 levels). Lower rents and occupan-cy, coupled with higher financing costs, will weaken revenue accounts, with the

as pipedreams – they may come back to the market, but this is less likely,” the report said.

Nomura cited reports that over 45 per cent of UAE developments, or around $580 billion in monetary terms have either been halted or cancelled. Contractor order books are falling sharply and margins are settling at around 5 per cent, having peaked at 20 per cent. Building material prices are reversing rapidly in the global com-modity sell-off, so some schemes may come back on stream, but only the most sensible designs will now pass muster and ‘prestige projects’ are probably con-signed to history.

The report points out that liquidity, beyond monetary measures, is mostly about confidence. “The whole world appears to be in recession and capital-rich countries have also discovered that their accumulated wealth is not enough to keep them unaffected. The collapse of housing bubbles is now a global event and the UAE has had one of the big-gest bubbles. Therefore, it is a question of normalisation after a long period of excesses”.

On the government plans to increase domestic spending and roll out fiscal stimulation packages, the report feels it will probably not be enough to resurrect property prices. “We estimate another 15 per cent of average price declines, adding to the 25 per cent that the mar-ket has probably already fallen in 4Q08. This implies a peak to trough market decline of 40 per cent.”

Speculators fuelled the market with ‘easy’ liquidity that has evaporated, just as developers commence deliveries that cannot be financed

the contractor’s bond, and financing the end user), clipping the ticket at each pass of the finance chain. The ‘halcyon’ days are over and the banking system has choked the desperately needed li-quidity with developers now forced to provide incentives to gap bridge finance loans to clear inventory backlogs. The public sector has the tacit support of federal governments and also the abil-ity to tap equity capital markets if need be – the private sector does not and are expected distressed asset sales and de-faults to dominate news flow through at least the first half of 2009, the analysts pointed out.

The report observes that companies

payback in rental significantly longer than the payback in sales.

In terms of business evolution, Nomura believes the next logical step would be to carve property assets into funds, but this assumes demand. This would recycle equity to the group and ultimately the shareholders, but until this happens, capital is locked into low-er returning investment portfolios.

“Current market conditions have in-troduced a dose of fiscal reality and fi-nancial discipline to the market. Catch-cry calls of ‘the biggest’, ‘the best’, “the tallest” etc that typified summer devel-opment launches are now gone. Eco-nomically unviable buildings now rank

March 200926

COMMODITIES

The decline in the number of tourists visiting Dubai due to the global financial crisis is af-

fecting the city’s jewellery trade and this, along with some other factors, has led to jewellery demand struggling to sustain any surge in momentum, ac-cording to World Gold Council sourc-es.

Movements in the price of gold were also a key factor in quashing demand. Although the gold price dipped sharp-ly in October, it soon recovered lost ground and this higher price level, to-gether with a rise in volatility, discour-

Fewer tourists to buy goldDubai jewellery trade braces for lower sales as financial crisis hits tourist flow

aged purchases in many of the more price-sensitive markets.

Beginning with October’s Diwali festival, the gold trade had witnessed strong demand, thanks to a lower, and more stable gold price during that time. Notably, demand for gold coins also in-creased during the festival. The rise in off-take was sufficient to result in stock shortages, and low production-cost 22 carat gold jewellery such as bangles and chains absorbed the benefits of the excess demand.

According to sources, these short-ages were also apparent during the Du-

bai’s shopping festival, but at the same time jewellery demand has struggled to sustain any surges in momentum. The significant slowing in the global econo-my has resulted in fewer tourists, which contribute strongly to Dubai’s jewellery trade.

Total gold demand in the Middle East in the last quarter was up 1 per cent on the levels of the same period in the previous year. Around 90 per cent of total consumer off-take in the region is in the form of jewellery, and a 7 per cent fall in demand in this sector had largely offset extremely strong growth

27March 2009

in net retail investment, which actually registered a growth of 139 per cent.

The surge in investment demand was reasonably widespread across the region – three times more than the same period in Saudi Arabia, 38 per cent in the UAE and 2 per cent in the Other Gulf countries. In contrast, Saudi Arabia, the UAE and the Other Gulf countries each recorded declines in jewellery demand of over 10 per cent relative to year-earlier levels, although Egypt showed continued resilience with a 4 per cent rise.

India, the largest market for gold jewellery, experienced a strong resur-gence during the fourth quarter, with

demand more than double year-earlier levels as a sharp drop in the gold price coincided with the key gold-buying Di-wali festival. However, the comparison is distorted somewhat by the fact that demand in the fourth quarter of 2007, a time when prices were rocketing, was particularly weak. For the year as a whole, demand declined by 15 per cent, largely on the back of the relatively high and volatile gold price, although in lo-cal currency terms the value of annual demand was 12 per cent higher than 2007.

The biggest source of growth in de-mand for gold, both last quarter and during the year as a whole, was invest-ment. Identifiable investment demand globally reached 399 tonnes in the fourth quarter, up from 141.4 tonnes in the same period in 2007, a rise of 182 per cent. Demand in 2008 was 64 per cent higher than in 2007, equiva-lent to an additional inflow of $15.2 billion. Taking into account implied investment, which includes the more speculative side of the gold market, to-tal investment was $10.1 billion higher than in 2007, according to World Gold Council.

On the investment side, the main driver of flows was net retail invest-ment, which rose 396 per cent from 61.4 tonnes in the fourth quarter to 304.2 tonnes in the comparable period of 2008. Over the year as a whole, the growth rate was 87 per cent. Bar and coin shortages were reported across many parts of the globe, although the most dramatic surge was in Europe, where bar and coin demand increased from just 9 tonnes in the fourth quarter of 2007 to 113.7 tonnes in the last three months of 2008.

Gold jewellery demand declined during the fourth quarter as the global economic crisis began to bite and prices

continued to fluctuate around relatively high levels. Total tonnage off-take, at 538.9 tonnes, was down 6 per cent on Q4 2007, while the year-on-year decline was a more marked 11 per cent. The dol-lar -value measure of demand reveals that the fourth quarter demand of $13.8 billion was 4 per cent below year-earlier levels, with the result that 2008 annual demand – at $59.7 billion – was 11 per cent higher than 2007 levels.

The main factor affecting jewellery demand was the difficult economic en-vironment that has taken hold in most countries. Consumers are facing issues such as rising unemployment and fall-ing house prices and stock markets and are focusing their spending decisions on necessities. Once again however, the value measure of jewellery demand confirms that spending on gold jewel-lery remains relatively robust.

Although the severity of the eco-nomic climate took its toll in the fourth quarter, for calendar 2008 the primary value of gold jewellery demand in-creased by $6.1 billion. Some markets, including Middle East, mainland China and Russia, benefited from elevated lev-els of investment-related demand for gold jewellery, as the intrinsic value of gold lent a stronger investment perspec-tive to jewellery purchases, although the rise in jewellery off-take in these markets was insufficient to fully offset the weakness seen in, most notably, the USA, Europe and Turkey.

An interesting development in the gold market is the spread of the metal’s store value awareness to the western world. Gold has remained in the head-lines of both consumer and financial media, which served to reinforce both the enduring intrinsic value of gold and its historic role as a store of value. Even the US consumer now recognizes the investment appeal of gold and this

The demand for gold coins and low production cost 22 carat jewellery such as bangles and chains even created a stock shortage during the Diwali festival, but overall demand now has struggled to maintain momentum

28 March 2009

is evident in the very different picture of investment off-take, according to World Gold Council.

In the US, for instance, both the fourth quarter and calendar 2008 comparisons of demand for gold bars and coins show a rise of around 370 per cent on year-earlier levels. Fourth quarter demand of 34.8 tonnes result-ed in an annual demand figure of 77.8 tonnes, the highest annual total since 1999 when investment demand was boosted by the threat of the so-called ‘millennium bug’. At a time of crisis in the global banking sector and fall-ing values of stock markets and other investments, investors appear to want the certainty of owning gold.

But a further deterioration in eco-nomic conditions spelled mixed for-tunes for gold demand in the US mar-ket as plunging jewellery consumption more than offset soaring investment demand. Total volume of gold off-take in 2008 fell by 6 per cent year-on-year, although in value terms annual de-mand of $7.2 billion represented a rise of 17 per cent over 2007. Rising unem-ployment, falling values of stock and property markets and plummeting consumer confidence produced a very weak quarter for jewellery demand. The fourth quarter jewellery demand

was 35 per cent below the year-earlier quarter, while the 2008 annual total represented a 31 per cent decline year-on-year, and, at 179.1 tonnes, is the lowest figure on record. That 2008 was a very difficult year for gold jewellery demand is clear from the fact that in the first 11 months of 2008, 1069 jew-ellery-related businesses either ceased operations or were declared bankrupt.

Amid the continuing financial crisis and economic downturn, the outlook is for a continued divergence in the two elements of consumer demand for gold, with jewellery suffering as con-sumers reduce their spending and fo-cus on essential needs, while investors continue to respond to the safe-haven motive for holding gold. According to World Gold Council, the extreme uncertainty that currently surrounds the global economy is unlikely to abate and should continue to underpin net investment demand, particularly de-mand for bars and coins. However, the council expects this to be partly offset by ongoing weakness in both indus-trial and jewellery demand.

The extent of the weakness in jew-ellery demand partly depends on the gold price. While western markets are expected to continue to struggle, dips in the gold price could trigger bouts of

buying in some non-western markets, similar to what was seen in the second part of last year. This buying is likely to be centred in those countries where the investment element of the jewellery sec-tor is strongest.

It is pointed out that the constraints surrounding mine output are unlikely to ease, and in fact, have the potential to worsen as credit conditions continue to cause problems for some miners and explorers. Furthermore, net selling by the central bank sector should remain at relatively low levels. However, much will depend on the direction of the gold price and the scrap response. Contin-ued high levels of the gold price could see scrap levels increase further.

A growth of 139 per cent in net retail investment was not enough to offset a 7 per cent fall in jewellery demand as 90 per cent of total consumer off-take in the region is in the form of jewellery

March 2009 29

COPING UP

Middle East firms have sig-nificantly scaled back on allocations for non–core and support functions as

they brace up to meet the effects of the global downturn and they have started to relook at things critically, according to Fouad Alaeddin, Managing Partner, Ernst & Young EMEIA.

“Like their international counterparts, it’s crucial that Middle Eastern compa-nies proactively look at models that don’t just sustain or tide over during crises but can also be flexible enough to capital-ize during adjustments in the economy. Clearly the best prepared were those that practised judicious financial discipline

Cash is kingCompanies tighten the belt as they brace up to meet the effects of meltdown

during buoyant phases. The windfall along with the checks and balances in their systems would help them cushion the effect in the short to medium term,” he says while interpreting the results of a global survey by Ernst & Young titled ‘Opportunities in Diversity’, seeking to look at how companies are adapt-ing their business strategies to a deep international recession and how their key priorities are evolving for the next 12 months.

According to Alaeddin, current de-velopments point to a firming up of ex-pected growth levels in the Middle East. With most governments and economic blocs elsewhere in the world working

on bail out mechanisms for troubled in-stitutions, GCC governments have sig-nalled significant expenditure plans for 2009, especially on infrastructure and enhancing capacities in the energy sec-tors. This is expected to provide steady stimulus to the economy and play a prominent role in kick starting the en-gines of growth in the region.

The starting point for any business is cash and many corporates have already drastically tightened their belts. Nearly 40 per cent of the companies surveyed felt there had been a significant dete-rioration in the business environment in their individual sectors, with over a third noting competitors withdrawing

30 March 2009

and a rise in bankruptcies. More than two thirds have already implemented increased frequency of reporting risk to their boards.

The drive to cut costs has already im-pacted internal business strategy. Over 80 per cent of respondents have already undertaken a major costs saving analy-sis, nearly two thirds had instigated a headcount reduction programme and over half had rationalized their IT spend. European companies were more likely than their US counterparts to look to cut costs on Real Estate and IT rather than cutting direct or indirect employee costs.

The credit crunch has forced compa-nies to seek alternative ways of improv-ing liquidity. Nearly half of all compa-nies had disposed of or shut down parts of their business and 43 per cent were looking at alternate short term finance facilities whilst 23 per cent were con-sidering options to renegotiate their debt covenants as well as proactively communicating with lenders, analysts and rating agencies and considering renegotiating debt covenants. Barely a quarter said the availability of cash was not an issue.

According to Mark Otty, Area Man-aging Partner of Ernst & Young EMEIA, this is an important snapshot of global corporates already facing up to a credit crunch and thinking how to prepare for a recession. “But the business world has experienced serious downturns be-fore and there are opportunities to learn from past crises. There will inevitably be losers over the next 12 months but there will undoubtedly be a significant minority of clear winners.”

The companies surveyed have al-ready been keeping a close eye on both their customers and their supply chain. And with good reason, as over half had seen a deterioration in creditworthiness of customers (nearly 60 per cent in Eu-rope) whilst over half said that some key customers are in distress, and that there was an increase in the time lag between customer order and cash collection.

Companies around the world have adapted their strategies to fit with this new environment, with nearly three quarters showing an increased focus on key accounts and over 40 per cent devel-

oping new products. A third said that fears about existing customers meant they had broadened their customer ba-sis and a third said they had terminated contracts with customers they perceived as high risk.

In terms of suppliers, respondents were split equally between two very dif-ferent strategies. Half the companies surveyed have narrowed their supplier base to obtain more favourable prices or terms whilst the other half have broad-ened the supplier base to reduce the im-pact of the failure of a key supplier. The majority of companies are already com-municating more proactively with sup-pliers, half were negotiating payment terms with suppliers more frequently and over a quarter of companies said key suppliers were experiencing finan-cial distress.

On the question of where companies will be looking to save cash in the fu-ture, the survey found some fairly con-sistent messages. Most companies said they expected significant or reasonable savings in their supply chain operations (58 per cent), their sales and marketing (42 per cent), Operations (56 pre cent) and IT functions (43 per cent).

In strategic terms 40 per cent of global companies and 53 per cent of European ones said they were actively considering selling non-core or non-performing business, an increased use of shared services centre (27 per cent), increased use of outsourcing (31 per cent), making strategic alliances (30 per cent) and moving operations to lower cost locations (31 per cent). Companies particularly saw an increased role for outsourcing for their IT, Logistics and Human Resources.

This would potentially imply a posi-tion of advantage for markets like India and the region which offer significant differentials in the costs associated with the above. However, a reasonable pro-portion of corporates saw the recession as an opportunity to expand with 34 per cent globally and 38 per cent in Europe thinking of making strategic acquisi-tions.

Whilst most developed markets were either perceived as stagnant or in de-cline companies still saw major oppor-tunities in emerging markets. Some

18% of companies expect significant growth still in emerging markets in the near future; the majority (57 per cent) expects growth to continue but a slower pace than over the last two years and 25 per cent growth to slow significantly.

Real estate and leisure, which were key components that fuelled the region’s growth trajectory, are currently experi-encing a slow down. Most analysts seem to agree that the current trough is a short to medium term phenomenon while the long term outlook remains positive. The pace may have scaled down compared to the same time last year but is expected to slowly move up in the coming months ahead.

Additionally, relatively lenient regu-lation and tax regimes will now be seen as a major draw as European and US business environments tighten under the pressure of the recession.

“Companies are completely right to still believe in the opportunities of the emerging markets. To put into context, a recent Ernst & Young sponsored report highlighted that Brazil Russia, India and China will contribute 40 per cent of glo-bal economic growth between 2009 and 2020,” Mark Otty said.

Nearly 40 per cent of the companies surveyed felt there had been a significant deterioration in the business environment in their individual sectors, with over a third noting competitors withdrawing and a rise in bankruptcies

March 2009 31

FOCUS

Credit rating agencies has always taken the flak for failing to warn about an impending crisis. Once

the crisis actually sets in, they go to town proclaiming everything is bad and starts downgrading companies and realigning their positions with the prevailing the situation. This was the case with the Asian financial cri-sis and so is it with the current global meltdown. In both cases, the rating agencies were caught off-guard.

This has often led to people criti-cizing the rating agencies, more for what they are not doing rather than what they are doing. It has also been observed that the rating agencies and their analysts often tend to reflect what their colleagues in the business say, each one endorsing the other, thus creating the impression that there is a consensus. But significantly, such ‘consensus’ invariably comes after the damage has already been done and the crisis stares starkly at everyone. When it comes to predicting something, the rating agencies appear to be as clueless as anybody else.

This has been the case with the cri-sis in the regional property sector as well. When things were on a roll and the unprecedented boom showed no sign whatsoever of abating, the rat-ing agencies were going gaga about the sector and related businesses and companies that were riding the wave. The talk about trouble started only after visible signs of a slowdown were already present. To make things dif-ficult, the slowdown deteriorated too fast for anyone’s comfort, including that of the rating agencies.

Caught napping againS&P chief says ratings are about ‘default’ and not market value

In this context, it is interesting to see what the rating agencies have to say. In fact, Standard & Poor’s Managing Director Barry Hancock has answered some of these questions. In response to questions raised by gtnews.com, Barry clarifies that the role of the rating agen-cies is limited to default and not neces-sarily about market value, volatility in price or suitability of a product or asset as investment.

“An S&P rating has an important

but limited role - it is an opinion about creditworthiness and the relative like-lihood of a security defaulting, not about its market value, the volatility of its price or its suitability as an invest-ment. While the performance of many of our ratings of recent US residential mortgage-backed security (RMBS) and collateralised debt obligations (CDOs) is worse than has been the case histori-cally, much of the difficulty being expe-rienced in the markets - such as the sig-

March 200932

nificant mark-to-market write-downs taken by financial institutions - is due to declines in market value, not defaults”.

He asserts that even considering that the widespread volatility in the market value of many structured securities and evaporation of their market liquidity, defaults, which is what ratings specifi-cally address, have been limited to only 3 of the $3 trillion of US housing-relat-ed securities rated by S&P since January 2005.

“That said, we recognise that a number of the assumptions we used in our analysis of many US RMBS and CDO ratings did not hold up. Put sim-ply, we did not fully anticipate the extent of recent, unprecedented declines in the housing and mortgage markets. We have reflected on this, are committed to doing our part to enhance transparency and confidence in our ratings and the markets, and are making several chang-es in our business,” the S&P managing director acknowledged.

When asked why should anyone be-lieve what a credit rating agency says, he said that the acid test of S&P’s credibil-ity was its track record. “The acid test of our credibility is our track record over time. S&P has been in this business for over 100 years and studies on ratings trends and performance have repeated-ly confirmed that our ratings - both of corporate debt and structured securities - have been highly effective in inform-ing the markets about deterioration and improvement in credit quality. Between 1978 and 2008, the average five-year default rate for investment grade struc-tured securities is around 1 per cent; for speculative grade securities it is around 15 per cent. That is broadly compara-ble with the equivalent default rates for corporate bonds. Ratings have been,

“While the performance of many of our ratings of recent US residential mortgage-backed security (RMBS) and collateralised debt obligations (CDOs) is worse than has been the case historically, much of the difficulty being experienced in the markets - such as the significant mark-to-market write-downs taken by financial institutions - is due to declines in market value, not defaults”

and we believe will continue to be, an important tool for investors and others looking for a common and transparent language for evaluating and comparing creditworthiness, across sectors and geographies”.

He said S&P constantly learns from experience and has listened carefully to the many views that have been ex-pressed about what it does. “We are focusing on two key efforts: first, we are making adjustments to our assump-tions and analysis so that our current ratings reflect our best opinion of credit risk based on all information learned to date; second, we are taking concerted steps to improve our processes, enhance our transparency and restore market confidence in our rating opinions”.

Barry also spoke his mind about the need for more stringent regulation of credit rating agencies. “We believe that sound, internationally consistent regu-lation of CRAs can benefit the market by helping support confidence in credit ratings. Sound regulation should fo-cus on overseeing agencies’ policies and procedures that address the integ-rity and transparency of the analytical process.

“At the same time, it should preserve the independence of ratings opinions and methodologies. Because of the global nature of ratings and the capi-tal markets, any regulatory framework needs to be globally consistent and built on a set of standards commonly accepted by the market and regulators internationally, as the G20 govern-ments proposed late last year. Such a consistent regime would help underpin investors’ confidence in the compara-bility, and hence usefulness, of ratings around the world. The global markets need the certainty of a coordinated,

consistent approach,” he said.gtnews asked Barry why was it that

the credit rating agencies did not down-grade the US AAA rating. His response was that according to S&P’s expecta-tions, the fiscal deterioration in the US will be temporary and the country’s other credit strengths will withstand current pressures.

“The ratings on the US primarily reflect our opinion of the sovereign’s high-income, highly diversified, and exceptionally flexible economy. The rat-ings also reflect our view of its strong track record in terms of growth-en-hancing policies, as well as the unique advantages coming from the US dollar’s role as the key international currency. In our opinion, these strengths contin-ue to outweigh the US’s weakening cur-rent-year fiscal performance, growing risks in its financial sector, longer-term challenges associated with its entitle-ment programs, and the nation’s weak external position,” he said.

On the issue of due diligence in terms of new instruments such as asset-backed securities and collateralized debt, both of which have turned bad, Barry pointed out the S&P has certain information requirements in order to rate a transaction and it relies on issuers and originators providing this informa-tion in good faith. “It is not, and never has been, our role to audit this informa-tion. Among the steps we have taken in recent months to further strengthen our ratings, we are seeking more in-formation about the processes used by issuers and originators to assess the ac-curacy and integrity of their data and their fraud detection measures, so we can better understand their data qual-ity capabilities. We will take this into account in our analysis,” he said.

March 2009 33

The credit crunch and its im-pact on the regional econo-mies have led to a sharp fall in the issuance of sukuks.

In 2008, the amount raised through sukuk issuance has fallen sharply by 54.5 per cent to S$15.1 billion, as com-pared to $33.1 billion in 2007.

The credit crunch forced investors to step aside from the money markets, hence exhausting resources for suku-

ks as well, according to a report of the Global Investment House.

Similarly, the US dollar dominance over sukuk market has weakened. The total amount of dollar dominated su-kuk issued in 2008 was $1.5 billion, or 10.1 per cent of the total sukuk is-suance, as compared to total dollar dominated sukuk of $13.9 billion in 2007 (41.2 per cent). Moreover, the number of dollar dominated issues

was 27 in 2007, as compared to 2008 where only five issues saw the light.

Islamic financial industry has been gaining popularity in recent years. Around 300 financial institutions are working according to Islamic prin-ciples and they are scattered over 75 countries. Currently, GCC and Malay-sia are the main centers for the Islamic industry.

Excluding 2008, the Islamic financ-

Sukuk issues lose shinePoor money market conditions exhaust resources

ISLAMIC BONDS

34 March 2009

ing industry had been growing at a double digit over the last ten years. It is estimated that the Islamic financ-ing assets are worth up to $700 bil-lion. Part of this massive expansion of this market is due to the boom of the GCC economies. In addition, the industry had been witnessing a wide spread acceptance among Muslims, and non-Muslims alike. Nevertheless, the industry is still in its infancy, when compared to the total global financial sector.

According to the report, with the recent crisis in the financial indus-try, voices calling to rely more on the Islamic principles are rising. Islamic financial institutions were impacted less than conventional institutions. The lesser impact was due to the re-strictions that Islamic laws place on financial transactions. The toxic assets, which include mortgage backed secu-rities (MBS) and credit default swap (CDS), are impressible in shariah.

The year 2008 witnessed a decline in the amount of sukuk issuance, after years of massive growth. The amount raised from issuance decreased by 54.5 per cent in 2008 to $15.1 billion as com-pared to $33.1 billion in 2007. Despite that, the number of global sukuk issues increased from 129 in 2007 to reach 165 in 2008.

As evident of the credit crunch ef-fect on sukuks, issuances in the fourth quarter of 2008 were weak when com-pared with other quarters in the same year. In the first three quarters of last year, the number of sukuk issuances was 139 raising $14.3 billion, averaging $4.8 billion per quarter. On the other hand, the number of sukuk issuance in the fourth quarter of 2008 was 26, rais-ing $0.8 billion.

The Islamic bond market is still concentrated in the GCC region and Malaysia, in terms of dollar amount. GCC countries accounted for 55.5 per cent of the dollar amount issued, while Malaysia accounted for 36.3 per cent. Meanwhile, the number of sukuk is-sued by corporates slightly decreased from 97 in 2007 to reach 92, while the number of sovereign sukuks increased by more than double to reach 73 in 2008 from 32 in 2007.

The number of sovereign issuanc-es was driven primarily by Gambia, which is a low-income African coun-try populated mostly by Muslims. Gambia had no sukuk issues in 2007, but started issuing Al Salaam sukuks, ending 2008 with 40 issues. The dol-lar amount raised from these issues was small when compared to the total sukuk market, but the high number of Gambian sukuks shows that there is an overwhelming demand for financial instruments that are in compliance with Shari’a, especially in the Muslim world.

Out of 165 sukuk issued in 2008, 92 (55.8 per cent) were corporate issues, as compared to 97 out of 129 (75.2 per vcent corporate issues in 2007. Despite the decrease, corporate constituted a large piece of total amount issued. Cor-porate sukuk issues amounted to $13.3 billion, or 88.5 per cent of the total dol-lar amount, while sovereign sukuks were worth $1.7 billion, or 11.5 per cent in the same period.

Some countries had no corporate sukuk issues, such as, Brunei which had 4 sovereign sukuk issues worth more than $95 million. On the other

In the backdrop of the financial crisis, voices calling to rely more on the Islamic principles are rising as Islamic financial institutions are impacted less than conventional institutions

hand, corporate issues were dominat-ing in some countries like Malaysia which had 54 corporate issues. Out of 73 sovereign sukuk issues, 24 sukuks were sold by the government of Bah-rain which included the $350 million international, dollar dominated sukuk by the Central Bank of Bahrain.

In the year 2008, ten countries had sukuk issuance, of which half were from the GCC countries. The com-position of issuing countries was the same in 2007, except for Gambia which replaced Sudan. All countries experi-enced a fall in sukuk issuance in terms of dollar amount in 2008 except for Qa-

tar and Indonesia. The largest drop in sukuk issuance

was recorded by Kuwait that witnessed a decline by 77.2 per cent from $835 million, followed by Saudi Arabia with a fall of 67.2 per cent from $5.7 billion in 2007. The only country to experience a major increase in sukuk issuance was Indonesia with more than a six folds in-crease over 2007 ($92.8 million), while Qatar maintained almost the same level.

In 2008, Malaysia was the largest market for sukuk raising $5.5billion-from 54 issues; average issue raised $101.3 million. UAE was the second largest market raising $5.3 billion from 10 issues; average issue size was $530 million. Saudi Arabia was the only country to join the billion dollar sukuk club, along with UAE and Ma-laysia, raising $1.9 billion from 4 issues and averaging $468.3 million per issue. Other countries include Bahrain ($700 million), Indonesia ($663 million), Pa-kistan ($476 million), Qatar ($300.9 million), Kuwait ($190 million), and Brunei ($95 million).

Sukuk structure comes in a variety of flavours. Most importantly, all these

structures must conform to the Islamic principles, and the degree of popular-ity of any structure depends on its us-ability, and credibility. Many struc-tures could be similar, but practitioners avoid the complex one. In addition, is-suers always seek the less controversial structure, in order to attract as many investors as possible. The credibility of a structure plays a vital role because vast majority of prospective buyers of sukuk are interested in its compliance with shariah.

Dollar DominanceThe domestic market witnessed an in-

35March 2009

crease in demand for sukuk as a tool for raising funds. Therefore, the dol-lar dominated sukuk declined relative to the total sukuk issuance in 2008 in terms of value and number of issues. The total amount of dollar dominated sukuk issued in 2008 was $1.5 billion, or 10.1 per cent of the total sukuk issu-ance, as compared to total dollar dom-inated sukuk of $13.9 billion in 2007 (41.2 per cent). Moreover, the number of dollar dominated issues was 27 in 2007, as compared to 2008 issues of only five, of which four were in the GCC countries. Only one government issued sovereign dollar dominated su-kuk, and it was worth $350 million.

The financial products created must be compliant with the Islamic teachings, and religious scholars are the ones who decide on the compli-ance of these financial products. In fact, every financial institution has its own board of Fatwa, which might hold different interpretations of the Islamic teachings. This difference could create variation in opinions –sometimes con-flicting- on the permissibility of some financial transactions. In other words, Is-lamic finan-c i a l

institutions depend on different scholars, who might embrace different interpretation of the Islamic financial laws. This variation among Islamic companies leads to a distraction in delivering the Islamic industry brand to consumers and investors alike, es-pecially to the non Muslim world.

The standardization of sukuk regu-lations will not only improve the brand image, but it will yield other benefits, the report said. The standardization would reduce cost and times faced by Islamic firms, and eliminate inconsist-ency. Efforts to lay out the foundation for standardized rules for the Islamic financing industry have been put in place. A major organization that is focused on improving and standard-izing the industry is the Accounting and Auditing Organization for Islam-ic Financial Institutions (AAOIFI). Compliance with AAOIFI standards is optional, but they are required in some countries, such as, Bahrain and UAE. AAOIFI recognizes 14 sukuk structures that are in compliance with shariah.

There are also other organizations that attempt to promote

Islamic financing. However, the Is-

lamic financing in-dustry still lacks harmony among its players, as the disparities among Islamic financial institutions are

still present. Thus, more work is still

needed to attain the desired standardized

marketplace, in order to eliminate confusion,

enhance credibility, and improve efficiency.

Because of its immaturity, the sukuk market still lacks the central information body, in which all the data can be pub-licly accessed. This includes the availability of indices that could represent the performance of the

Islamic fixed income industry. A few indices were created a while

back, but none of them was extensive

enough to cover the whole market. Key obstacles need to be resolved

when deciding on creating an index to the sukuk market. Choosing what type of structure to be included is mind puzzling. Not all structures are agreed upon by scholars to be in compliance with Shariah. Thus, any index includ-ing these structures will be controver-sial. Nevertheless, the goal of the index is to provide a benchmark for investors when investing in sukuks.

The report points out that sukuks are under the same macroeconomic environment as the conventional bonds. Despite being complaint with Islamic shariah Sukuks are still part of the global financial industry. Sukuk market is always linked with conven-tional bonds market. The pattern of widening spread in the conventional is also present in the sukuk world. Thus, yields of many sukuks have sky-rocketed in this crisis. The increase in yields can be attributed to two main factors: credit premium, and liquidity premium.

First of all, investors are concerned about the issuer’s ability to meet its fi-nancial obligations, since confidence has been lost due to the collapse of the major financial institutions that used to be credit trustworthy. This has re-sulted in higher credit risk premium in order to entice investors into purchas-ing risky assets.

Issuers always seek the less controversial structure, in order to attract as many investors as possible as credibility of a structure plays a vital role because vast majority of prospective buyers of sukuk are interested in its compliance with shariah

March 200936

WEALTH

No excitement yetSovereign wealth funds think it’s too early for bargain hunting

Abu Dhabi accounts for the largest sovereign wealth funds in operation, with estimated assets worth $800 billion last year, but the value of the holdings has come down substantially in the aftermath of the continuing global financial crisis

Sovereign wealth funds are adopting a very cautious approach to the current market, expecting better value to materialize later during the year, a survey of senior executives from some of the world’s leading SWFs has revealed.

The funds covered in the survey had total assets of over $5 trillion, ac-counted for over 50 per cent of the collective global funds currently held by the SWF asset class. The research, conducted by Financial Dynamics International (FD), a member of FTI Consulting Inc, focused on current SWF attitudes towards valua-tions, investment strategies and where they see regional investment opportunities.

The funds indicated they are still waiting to see the bottom of the market before committing to further substantial investments.

Abu Dhabi accounts for the largest sovereign wealth funds in operation, with estimated assets worth $800 billion last year, but the value of the holdings has come down substantially in the aftermath of the continuing global financial crisis. Cur-rent estimates of their assets vary, but most reasonable assessments now put the value at around $500 billion.

The survey showed that SWFs are primarily interested in acquiring minority equity stakes in listed companies, with no desire to take management control, have board representation or act as ‘activist’ investors. They are particularly cautious with regard to supporting further bail-outs of distressed companies.

37March 2009

0

5

10

15

20

25

AsPacWestern EuropeNorth AmericaCentral & South America -50

-40

-30

-20

-10

0

AsPacWestern EuropeNort AmericaCentral & South America

The executives who were inter-viewed as part of the survey said they considered Brazil, China and areas of Central America as the most attrac-tive regions for investment. Western European markets are also seen as of-fering the most compelling value with PE ratios of publicly listed companies down more than 40 per cent from their peak, and markets trading at the lowest absolute price earnings ratios of under 10.0x.

The survey showed SWF invest-ment decisions on average are made on a minimum of a five year invest-ment perspective, with dividend yield being as critical an investment crite-rion as capital growth. In the short term some SWFs are seeing their cash in-flows diverted from their glo-bal portfolios to invest in their home countries/regions to add stability and economic stimulus to local markets.

“Our research confirms that whilst

High Current

Extent of fall in forward PE from Five-year high

Current 12 months forward PE versus five years

Sovereign Wealth Funds are currently adopting a very cautious investment approach to world markets, they are clearly poised to re-enter the global eq-uity markets in the not too distant fu-ture with compelling valuation propo-sitions beginning to present themselves across North American and Western European equity markets. Our research has also determined that contrary to widespread perceptions, Sovereign Wealth Funds are primarily genuine long term passive investors who have no agenda to exercise management control or behave in an activist way,” Charles Watson, FD’s Group CEO, said.

Whilst a number of key SWF invest-ments have been made over the last 18 months and SWFs are still interested in broadening their portfolios, the find-ings showed that this particular class of investor is keeping a watchful eye on global markets, waiting for the right time to make deep value investments.

Yes 10%

No 70%

Undecided/No comment 30%

Yes 10%

No 70%

Undecided/No comment 30%

Are you currently actively investing in the equity market ?Do you anticipate increasing significantly your investment in equity markets in the second half of the year ?

38 March 2009

“The bottom has yet to come,” said one SWF executive. “Obama’s first 100 days may see bear markets rally but the entire financial system and capital market has been stressed to the point of collapse and now needs time to ad-just. We are behaving in a very cautious manner at present. We are convinced there will better value in markets later this year.”

“We are ready to re-enter the mar-ket in a major way – but not for several months given that we are sure prices are only heading down. Valuations of the assets we are targeting are certainly more attractive but we still feel they have further to go during 2009. Our view is that valuations may bottom out towards the end of this year,” the ex-ecutives said.

The interviews indicated that SWFs are conservative with regards to partic-ipating in further bail-outs of compa-nies in financial difficulties given that a number of such funds are currently sit-ting on major capital losses from pre-vious investments. “Having supported some of the earlier capital raising of distressed banks, we are not planning to make any follow-on investments of a similar nature. We see the real oppor-tunities as being investing in well man-aged sound companies whose shares are trading at all time lows, rather than

putting good money into failed com-panies,” one of them pointed out.

Some funds are actually reducing their exposure to the listed market. At least one adopted this strategy as early as 18 months ago, having noticed early warning signs in market excesses. An-other executive commented that cor-porate governance and management quality were also very important issues in the current market conditions:

“Investors will now turn to value a company using a holistic valuation method, including corporate govern-ance and measures of a reliable man-agement team with good checks and balances, for example.”

It was also noted by several inter-viewees that when determining ‘value’ within prospective investments, the sustainability of and growth prospects of dividend streams was as critical as capital growth prospects. “Yield is as critical to us as growth. Sustainabil-ity of dividend payments is therefore a critical area we focus our analysis on.”

The SWFs stated without exception that their preferred option for invest-ing was through minority participa-tion via capital injection, with no SWF stating a desire or intention to control or manage investee companies, indi-cating their passive investment style. The majority also iterated that they had

no desire to have board representation within their investments.

“If we don’t like an investment, it is not our intention to then intervene with management and try and change things. Rather, we will exit the invest-ment. It is a serious misconception that we are active or strategic investors. Our sole objective is to invest across a very broad range of assets and geographies to create long term value.”

Those who are investing in the cur-rent market are all clear on one thing – they are not looking to take operational control of their investments. Full 100 per cent acquisitions and majority stakes are not on the agenda, and have not his-torically been of particular interest to SWFs regardless.

“We definitely are not interested in seeking board representation. We have no interest in controlling assets,” said one of the funds surveyed. “We do not want seats on the board. We are tradi-tional long term investors”.

It was also noted that in the cur-rent market conditions, debt for equity swaps are increasingly being seen as an opportunity to enter investments in an efficient manner. “We are increasingly interested in seeing how it might be possible to secure a cheap entry into an investment by either buying the debt or structuring some form of convertible in-

39March 2009

strument – but our intentions in doing so is purely to create value, not to seek any form of control.”

SWFs see themselves as passive and therefore fundamentally very different from hedge funds or private equity in-vestors. “It is very unfortunate that we get tarred with the same brush as “alter-native assets” such as hedge funds and private equity. In complete contrast to these asset classes, we are passive inves-tors. Our normal form of investment is buying minority shareholdings in trad-able liquid assets … We do not seek to engage in confrontational situations or exert influence … If we don’t like management’s strategy, or the strategy changes, we sell.”

The majority of SWFs interviewed confirmed that Asia and South America are the two regions SWFs deem to be the most attractive for a combination of qualitative and quantitative reasons. Regarding the latter region, Mexico and Brazil were cited as the two most attractive countries.

It was also stated by several of the survey’s participants that North Amer-ica and Western Europe clearly present the most compelling value proposi-tion.

A quantitative financial analysis of the top 800 companies in major mar-kets across the world (Central & South America; North America; Western Eu-rope; and Asia Pacific) indicates deep-est value in North America and West-ern Europe.

By measuring the current Price/Earnings ratios of the major companies in these geographies and comparing current P/E valuations to market highs, FD found:

The greatest discounts compared to •recent market highs currently exist in North America and Asia-Pacific Asia-Pacific companies have fallen •from considerable highs (25.1x to 13.2x) but the market is still com-paratively ‘expensive’, due to con-tinuing belief in the more positive fundamentals of the region Indus-try categories including ‘Media & Entertainment’, ‘Mining’ and ‘Steel & Other Metals’ are consistently showing the largest top to bottom falls across all geographies

However, these industries aside, the opportunities in each geography are very diverse

According to FD, the survey was car-ried out to identify which markets still held the best value for investors. The findings showed that actually despite market conditions, Western Europe and North America were identified as the best investment regions in financial terms. Although the data revealed Asia

to have one of the two deepest discount areas alongside North America, its ac-tual PE is the highest and therefore it is on a total basis, the most expensive option currently for investors.

The majority of the SWFs inter-viewed in the survey confirmed that it was only a matter of time before they started to commit significant funds again to the North American and Western European markets. “There are clearly some phenomenal value oppor-tunities in Europe and the US. There are many high quality companies trading

at unprecedented valuations. We really feel we are starting to see some genuine value in the more mature markets.”

However, the speed with which SWFs will re-enter this market will be moderated by two things: firstly a genu-ine sense of caution prevails with regard to fears that continuing negative senti-ment will drive equity markets lower – and secondly, some SWFs are seeing cash sources diverted by the need to

support local financial stimulus pack-ages in their own regions/countries. “A proportion of our free cash hold-ings have been diverted to supporting local investments – meaning that our international investment activities have been temporarily put on hold. Although the objectives of our fund are solely in-ternational, we are slowing down our overseas activities whilst we firstly wait for market conditions around the world to stabilize – and secondly we have seen funds diverted to support a variety of local stimulus packages”, it was stated.

Findings of the survey showed wealth funds are keeping a watchful eye on global markets, waiting for the right time to make deep value investments

March 200940

MARKETS

With no encouraging news on the econom-ic front and further deepening of global fi-

nancial crisis, GCC market continued their downward journey in the first month of 2009. According to Global Investment House, that UAE markets are ripe for the long term value-seekers, at the same time confidence building exercise by the government authorities are in the right direction to boost in-vestor’s morale.

January was no different than what was seen in the last quarter of 2008. The markets continue to be weighed down by adverse economic develop-ments. Though governments in the re-

Ripe for long-term value seekersMarkets continue to be weighed by adverse economic conditions

gion have been taking steps in the right direction to support the economy and market; these have proved to be insuf-ficient to improve the market senti-ments. For the fourth quarter of 2008, the profitability of the companies has declined; however the decline has been less than what was expected by the market. But, it is very early to draw any conclusion as most of the companies are yet to declare their results, accord-ing to the investment bank.

Among its GCC peers, UAE markets declined the least during the month of January 2009. Reflecting the trend, the market barometer NBAD general In-dex ended the month with a loss of 4.2 per cent on a month to month basis to

close the month at 5,703.79 points. According to the investment bank’s

GCC market review, the only market which managed to end the month in green was Saudi Arabia with a marginal month to month gain of 0.1 per cent. Qatar market declined the most in Jan-uary-2009 with Global DSM Index end-ing the month at 396.02 points, showing a decline of 23.2 per cent. Among other markets, Kuwait market was down 12.8 per cent for the month. In fact the decline in Kuwait market was much steeper during the month; however the market recovered to some extent during the last week of the month on the news about bailout package proposed by Ku-wait government.

41March 2009

The review referred to the Dh50 bil-lion liquidity injection plan of the UAE Central Bank to maintain economic growth in the country as a positive de-velopment. Local banks are committed to finance vital public sector projects in the UAE as well as the local companies that enjoy strong balance sheets and that were old clients for these banks.

During the month, the Central Bank cut its benchmark repurchase, or lending rate, by 50 basis points to 1 per cent in an effort to boost liquidity in the country.

The review feels that this 50 basis points cut should further reduce the cost of the liquidity supporting facili-ties implemented by the Central Bank to support banks. Also lower cost of funds will ultimately reduce customer loans, interest rates, and would further enhance sustained development pros-pects.

The month of January witnessed an erosion of $7.9 billion or a decline of 6 per cent in market capitalization on a month to month basis, with the over-all capitalization reaching $124.1 bil-lion. The market breadth continued to remain negative as collective figures of both the markets show that there were 49 decliners and 34 advancers while in case of 47 stocks the prices remained unchanged. Out of the total market volume of 5.7 billion shares, about 77 per cent of the volume was accounted by the decliners.

Among the volume movers, the stock of Dubai Financial Market (DFM) accounted for the highest volume (15 per cent of the total market volume) whereas the stock of Emaar Properties accounted for the highest value traded (19.5 per cent of the total market value) for the month. The stock of DFM ended the month with a loss of 30.4 per cent to reach Dh0.87per share while Emaar Properties declined by 13.3 per cent to Dh1.96 per share. Trading activity in terms of value as well as volume trad-ed increased by 34.5 per cent and 58.4 per cent respectively. About 5.7 billion shares worth $2.4 billion exchanged hands, on both the exchanges, as com-pared to 3.6 billion shares worth $1.8 billion which traded in the preceding month.

Though on the back of very low vol-ume of 495 shares, the stock of Kuwait-based Grand Real Estate Projects defied the market trend and posted a gain of 88 per cent for the month. Among the other prominent gainers for the month were Abu Dhabi Aviation (38.7 per cent), Ras Al Khaimah Cement (35.8 per cent), Methaq Takaful Insurance (28.8 per cent and Commercial Bank International (26.1 per cent). Among the major decliners for the month were Global Investment House (-51.8 per cent, Ekttitab Holding (-49.6 per cent), Arabtec Holding (-48. Per cent), Na-tional Bank of Ras Al Khaimah (-47.4 per cent), and Bank of Sharjah (-46.6 per cent).

The first round of results for the year 2008 were encouraging, with Abu Dhabi Aviation’s net profit rising by 53.2 per cent to Dh116.3 million, Abu Dhabi Ship Building witnessing a four-fold jump in its net profit to reach Dh103.2 million and Dana Gas reporting a profit growth of 8.1 per cent to Dh120 million. Gulf Navigation Holding’s profit grew by 27.7 per cent to Dh148.2 million, Al Dar Properties reported a profit growth of 77.5 per cent to Dh3.4 billion while Etisalat’s profit grew by 18.7 per cent to Dh8.7b billion. First Gulf Bank’s profit rose by 50 per cent to Dh3 billion while Gulf Medical Projects registered a profit growth of 4.8 per cent to Dh73.6 million.

The only market which managed to end the month in green was Saudi Arabia with a marginal month to month gain of 0.1 per cent

42 March 2009

INTERNATIONAL

For much of the period be-tween 1982 and 2000, ‘buy and hold’ investors enjoyed the benefits of a secular

bull market characterized by strong economic growth and rising profits. Many investors took advantage of emerging trends, such as the ‘gray-ing of America’ and the technology boom, believing that the growth tra-jectory of pharmaceutical companies and semiconductor manufacturers would continue into the future with no end in sight. Indeed, the equities of such companies were known as ‘ruler stocks’, popular with investors for their predictable, straight-line growth.

But trees don’t grow to the sky. In

Practical to be tactical

It is highly rewarding to remember that trees don’t grow to the skyBy Marshall Kaplan and William Mann

the late 1990s, expiring patents, com-petition from generic drugs and a pau-city in the new-product pipelines came together to drag down the pharmaceu-tical stocks. Technology stocks soared atop the ubiquity of the personal com-puter, the emergence of the World Wide Web and the transformation of telecommunications via the cell phone. Then they started a long period of un-derperformance with the bursting of the tech bubble in March 2000, which came as a result of excess capacity and faulty assumptions about the potential returns on technology investments. IS THIS TIME DIFFERENT? With the technology and pharma stocks, in-vestors were at least able to ride an iden-tifiable long-term trend. In 2009, such

trends are hard to find as severe capital constraints, a weak housing sector and forecasts for declines in real GDP make earnings visibility impossible. What is clear to us is that investors are discount-ing a wide range of potential outcomes. Some wonder if the economy will slip into a deeper recession, while others question whether the government bail-out of financial firms will ultimately lead to a new round of inflation. In ei-ther case, it doesn’t appear that inves-tors’ conviction levels are very high. In fact, a look at the VIX, which measures volatility and fear in the marketplace, reveals that the index is still well above its 10-year average. Moreover, last year, the S&P 500 rose or declined by 5 per cent or more on 13 days. Before 2008,

March 2009 43

the last time investors witnessed a 5 per cent one-day move was in 2002. BE READY TO ACT: Even if there are no identifiable long-term strategies, in-vestors should be prepared to act on tac-tical opportunities that arise as a result of the gap between fundamentals and perceptions, as well as due to changing economic conditions. For example, as oil prices decline, earnings estimates for oil service and equipment companies could be vulnerable, warranting poten-tial action within the energy portion of portfolios. Still, in a two-month period, there were three double-digit rallies in the sector. Further, sentiment shifts on infrastructure companies, based on the ultimate composition of the fiscal stimulus package, could create oppor-tunities in these stocks. While a great deal of deleveraging has already taken place, hedge funds may still engage in forced selling from time to time, driv-ing prices of individual stocks to unu-sually attractive levels. Often, these inefficiencies are quickly corrected, so anyone who hopes to benefit from them must act swiftly.

Our stock market forecast calls for modest gains in the S&P 500 this year, recognizing that head fakes may be in store in either direction as the economy attempts to regain its footing. After all, when the NASDAQ declined to 1,114.11 from 5,048.62 between March 2000 and October 2002, there were four rallies in excess of 20 per cent—two of them greater than 40 per cent—presenting some very profitable tactical opportu-nities for the most nimble investors. While the days of ruler stocks may have passed, the ability to capitalize on the missteps of others—combined with a strategy focused on identifying compa-nies with strong balance sheets and at-tractive fundamentals—could prove to be a rewarding strategy in 2009.

The ability to be nimble is also likely to be necessary in global investing this year. Opportunities will arise in indi-vidual markets and in playing off the variations in various regional markets. While we are not increasing our risk ex-posures at this time, we believe that the returns from global markets will be less homogeneous in 2009 than in 2008.CHINA’S NEAR-TERM OPPOR-

the last time investors witnessed a 5 per

Even if there are no identifiable long-term strategies, in-vestors should be prepared to act on tac-tical opportunities that arise as a result of the gap between fundamentals and perceptions, as well as due to changing economic conditions. For example, as oil prices decline, earnings estimates for oil service and equipment companies could be vulnerable, warranting poten-tial action within the energy portion of portfolios. Still, in a two-month period, there were three double-digit rallies in the sector. Further, sentiment shifts on infrastructure companies, based on

TUNITY: In our view, the near-term prospects for China appear quite good. We believe that a first-quarter rally, supported by significant fiscal and monetary stimulus packages, is likely to offer investors the potential for solid returns. However, on a slightly longer-term basis, the tug-of-war between the stimulus and the local impact of a pronounced global economic down-turn is likely to act as a headwind to performance. Until this is resolved and until signs of a weaker dollar emerge, the China call remains tactical rather than strategic. Across the longer term, we would prefer to wait for signs of a more defined economic recovery before investing in China.LOOKING SOUTH: Our Latin Amer-ican strategist Geoff Dennis says that the region offers multiple opportuni-ties. True, he expects a first-quarter pullback driven by poor fourth-quarter

MIXED SIGNALS IN THEUK. Trad-ing at just 8.5 times I/B/E/S consensus earnings estimates for 2009, the equity market appears attractive, relative both to other regions and to its history. In addition, with a corporate sector that derives 70 per cent of earnings over-seas, sterling’s nearly 30 per cent slide versus the dollar and 20 per cent down-side against the euro during the last six months could stand it in good stead.

With that said, the market contin-ues to concentrate on further disloca-tions in the banking sector, the UK’s high level of consumer and government indebtedness and the likely severe eco-nomic downturn. In addition, while the pound’s slide may benefit companies that derive revenues overseas, for non-sterling investors the currency is a drag on performance. At the first signs that these issues are receding, we believe there will be good prospects for eq-

Some wonder if the economy will slip into a deeper recession, while others question whether the government bailout of financial firms will ultimately lead to a new round of inflation

profits and weak global macroeco-nomic data. But Dennis expects a rally later on, anticipating an upturn in the US and global economies. He favors the prospects for Brazil, which he expects to be supported by an improving do-mestic economy, a slow, steady rebound in commodity prices and a strengthen-ing currency.

uity market gains. Strategist Jonathan Stubbs’ year-end target of 4600 for the FTSE 100 index implies a double-digit upside from the current level.

The writers are Equity Strategists with Smith Barney Private Client Investment Strategy

N

S

E

W

44 March 2009

ISLAMIC FINANCE

“Weiji” is the Chi-nese word for crisis, which literally means

“risky chance”. From the Chinese point of view, every crisis contains a chance for reconstruction and renew-al. So where are the potentials nowa-days, during a globalized and severe recession?

According to Dr. Nasser H. Saidi, chief economist, Dubai International Financial Centre Authority (DIFCA), the high currency reserves of Arabian Gulf states are a chance to support global liquidity and boost Islamic Fi-nance as a genuine banking alterna-tive for the future.

“The GCC states have amassed re-serves of $3.3 trillion during the oil price rally in recent years”, he said on the occasion of the tenth anniver-sary of the Dow Jones Islamic Market (DJIM) Indexes in Dubai. “But the debt market is still in its infant stage in this part of the world.”

Dr Saidi also said that the decline in the issuance of interest-free bonds in line with Islamic law (Shari’ah) does not signal a major setback for the industry. He points out that ap-prehension and pessimism are rife in every corner of the financial markets, and not just the Islamic world.

“With the investors’ risk aversion still on the rise, they shy away from all sorts of financing, whether conven-tional or Islamic,” said Dr Saidi.

The DJ Citigroup Sukuk Index de-clined by 3.65 per cent in February.

By Gérard Al-Fil

Potential number 1: Islamic Finan-cial Institutions

But transforming liquidity into supportive cushions is exactly what happens in the Gulf. The government of Dubai announced a US$20 billion bond program in order to refinance outstanding debt. Investors hailed this initiative by sending the Dow Jones DFM Titans 10 Index, which measures the 10 biggest capitalized firms listed on the Dubai Financial

Unlocking potentials

Market, up 4.47 per cent in February (based on the close of trading on Feb-ruary 24). The Dow Jones DFM Titans 10 Index was topped only by the Dow Jones JS Pakistan Islamic Index (7.40 per cent higher), followed by the DJIM Taiwan Index (gaining 3.43 per cent, outperforming its conventional coun-terpart by 2.23 per cent). The UAE and Pakistan are important centers in Is-lamic finance, which is at this time a $1 trillion market worldwide.

Transforming liquidity into supportive cushions is exactly what happens in the Gulf. The government of Dubai announced a $20 billion bond programme in order to refinance outstanding debt

March 2009 45

indexes of the DJIM Index family were based in non-industrialized nations or regions. For the month, the DJIM U.S. Titans 50 Index (off 4.65 per cent), the DJIM Europe Titans 25 Index (down 7.48 per cent) and the DJIM Japan In-dex (12.95 per cent lower) posted above average losses. This came despite a market rally on February 24 triggered by US president Obama and Fed-Chief Bernanke remarking that an econom-ic recovery might occur at the end of 2009. But what all markets have in common is that they have not yet un-locked the full potential of sustainable investments.

“This unique crisis offers unique chances for courageous investors to re-allocate capital to ‘green’ real estate companies, and to selected innovative producers of renewable energy, espe-cially in Asia”, says Burkhard Varn-holt, Chief Investment Officer of Swiss private bank Sarasin.

Dow Jones Indexes offers the DJIM Sustainability Index (off 7.00 per cent in February), a benchmark which combines Islamic and sustainable in-vestment principles. Among the sector indexes, the DJIM Consumer Services Index lost the least amount (down 2.45 per cent), while the DJIM Utilities In-dex plummeted the most (down 10.32 per cent).

In order to unlock their true invest-ment potential, fund managers should (and will) rethink their traditional asset allocation, according to Varn-holt, which he calls a probable painful process. We see this happening even now around the globe. Former Gen-eral Electric-CEO Jack Welch seems to agree, and he expresses the “Weiji” of 2009 even clearer:

“The biggest danger in the post-financial crisis era is to miss the next rebound of the global economy.”

Gérard Al-Fil is a financial journalist in Dubai. He works as a Middle Eastern correspondent for the Swiss financial website moneycab.com, for Dubai-based portal AME Info, for the Swiss banking magazine ‘Schweizer Bank’ and for the German weekly ‘Euro am Sonntag’.

“Islamic Financial Institutions (IFIs), by nature do not bear toxic as-sets, act conservatively and continue to unlock financial potential by giving corporations and the middle class in poor countries tools of faith-based in-vestment,” Dr Saidi explains. However, many IFIs postponed their expansion plans to Europe and East Asia. They have instead put their regional focus on the Middle East.

“Operations abroad are delayed, but not cancelled”, confirms Al Af-shar, Senior Vice President and Head of Institutional and Investment Bank-ing Division at Al Hilal Bank in Abu Dhabi, another important Islamic fi-nance center.

Potential number 2: Sustainable In-vestment

Dr Saidi also stresses that 40 per cent of world economic production now comes from emerging markets. In February 2009, the 10 best performing

This unique crisis offers unique chances for courageous investors to re allocate capital to ‘green’ real estate companies, and to selected innovative producers of renewable energy, especially in Asia

March 200946

TECHNOLOGY

Although the global down-turn has raised questions about vendors’ financial health and India’s under-

lying economic conditions, as also the anti-offshoring rhetoric from the United States during the presidential campaign, offshoring remains as viable a cost-reduction option as ever for glo-

Offshoring India advantage intactDespite financial crisis, US anti-offshoring rhetoric and Satyam fiasco, outsourcing to India remains a compelling proposition

bal companies, and the environment for outsourcing in India continues to be favourable, according to a report by management consultants AT Kearney.

The report, authored by Arjun Sethi, partner in the New York office of AT Kearnery; Ken Lee, partner in the Cambridge office; Uday Singh, a principal in the New York office and

Randy Burt, consultant in the Chi-cago office, says that despite currency fluctuations, declining growth in the Indian economy, changing Indian la-bour rates and the recent accounting scandal at Satyam, the environment for outsourcing in India is actually quite favourable.

“The Satyam accounting scandal is

47March 2009

clearly a grave situation, especially con-sidering that company’s scope in the in-dustry, but we do not believe it is symp-tomatic of the outsourcing industry in general. It does, however, underline the need for buyers to increase the rigour of their due diligence when it comes to their potential suppliers’ financial sta-bility and viability,” they say.

The report points out how the cur-rent financial crisis finally put the brakes on years-long growth in the Indian outsourcing industry. This was spurred in large part by troubles in the financial services industry, which makes up approximately 30 per cent of Indian information technology out-sourcing (ITO) and business process outsourcing (BPO) and is the catalyst

for past outsourcing industry growth. Consolidation in financial services (such as Bank of America’s acquisition of Merrill Lynch and Wells Fargo’s pur-chase of Wachovia) will place new pres-sures on vendor margins, as the newly merged companies aim to eliminate redundancies and lower costs for both new and existing outsourcing con-tracts, the authors feel.

At the same time, they argue that for US companies, this changing envi-ronment offers increased buying power in creating new and revising existing outsourcing contracts. Companies that carefully choose solid vendors and ne-gotiate the right deals can find the sig-nificant savings their shareholders are looking for.

According to the report, two major macroeconomic changes are occur-ring in India, leaving a major impact on the offshoring industry. First, the robust growth of the Indian economy has slowed down. Asian Development Bank has estimated that India’s econo-my grew 9 per cent in 2007, but growth is expected to drop to 7 per cent in 2008 and 6.5 per cent in 2009. This has af-fected the labour markets, as fewer workers are leaving their existing jobs. Vendors are reporting that BPO attri-tion rates have dropped from highs of 60 per cent to roughly 20 per cent. As a result of these lower-than-normal at-trition rates, several Indian providers have announced wage freezes for 2009, underscoring the push by vendors to reduce costs, the report notes.

The second major change has been the rise of the dollar and the Japanese yen against every major currency, in-cluding the euro, the British pound and the Indian rupee. While on one hand this has meant cheaper labour costs in India in comparison with the dollar, it has also meant reduced revenues for BPO and ITO organizations that do business with Europe. While low inter-est rates could weaken the dollar again in 2009 and create another see-saw year for currency values, US compa-nies should be in a position of strength when it comes to negotiation, the au-thors argue.

The report notes that in the context of slowing demand and the chang-

ing US political environment, ven-dors are facing higher risk and more intense competition. To manage their risk, many vendors are diversifying. Full-service vendors are trying to limit overexposure to problems in major industries by pursuing new business in secondary areas of focus. Domain specialists are placing less focus on ex-panding existing accounts and more on attracting new clients in different areas. Industry consolidation is likely to ac-celerate in 2009 as vendors try to im-prove economies of scale and ITO and BPO organizations that are critical to winning larger deals.

“We have also seen many vendors acting more aggressively when it comes to structuring deals. Suppliers are be-coming increasingly flexible about con-tractual and financial terms, accepting lower margins on deals in an effort to secure new business and explor-ing creative ways to restructure exist-ing contracts. Beyond price, suppliers are showing more willingness to share both the capital costs and the risks as-sociated with project startup and tran-sition; these are compelling incentives for companies given current capital constraints,” the report says.

With virtually all companies facing budget constraints, outsourcing and offshoring are obvious options for sav-ings. Taking into account the changing economic environment in India and the risks involved, there are several im-

“The Satyam accounting scandal is clearly a grave situation, especially considering that company’s scope in the industry, but we do not believe it is symptomatic of the outsourcing industry in general”

48 March 2009

portant actions for companies as they consider offshoring opportunities, the authors say.

Due to weakened demand and the currency effects, vendors are becom-ing more flexible about pricing. Buyers should capitalize on this, both when it comes to pricing on existing contracts and new business, they advise.

They feel that the constrained capi-tal environment and increased vendor flexibility should allow companies to structure offshore arrangements in new ways, thus limiting the significant up-front investments of traditional agreements.

Larger, established vendors with diversified customer bases will be the more attractive options in this envi-ronment. Companies exploring op-portunities to expand their existing offshore relationships can also take advantage of vendors’ recent capacity improvements.

“We have seen vendors either waive portions of the start-up costs or agree to amortize such costs over the life of the contract Limiting capital costs can make off-shoring a more attractive op-tion. Leading companies are analyzing their current footprint to limit risk of overconcentration (with one coun-try or vendor) and are re-examining

their disaster recovery capabilities and contract obligations after the Mumbai attacks of November. Most clients we work with insist they will only consider tier 1 vendors as potential suppliers, and many operating officers have even begun the search for alternative con-tractors outside of India,” they said.

According to the report, in terms of operating models, the major change being seen among companies that are planning to out-source is an accelerated movement away from captive organiza-tions. Given capital constraints and the relatively strong balance sheets of tier 1 suppliers, companies are generally more reluctant to set up new captive organizations and many are moving to sell existing captives. Citigroup sold off its Citigroup Global Services unit to Tata Consultancy Services in October 2008, and WNS purchased insurance group Aviva’s offshore captive organi-zation in July 2008, the report points out in this context.

“Outsourcing is at a crossroads—its growth is slowing but its importance is still strong. Economic conditions are certainly making the environment risk-ier, and IT and business process manag-ers are paying increased attention to the stability and safety of their offshoring interests. At the same time, considering

the economic conditions and the matu-ration of the outsourcing industry in general, offshoring will be an even more critical arena for cost-conscious compa-nies trying to save their imperiled profit margins. Despite the risks, the chances for savings through outsourcing in India are as great as ever,” the authors say.

The report refers to the renewed ‘America First’ push in the US adminis-tration and says offshoring could be the target of widespread criticism, particu-larly in the face of rising US unemploy-ment. According to the authors, while President Barack Obama was an outspo-ken critic of moving jobs offshore dur-ing his campaign, much of the rhetoric focused on manufacturing, Some have speculated that the new administration may enforce labour and environmental regulations in existing agreements more aggressively, but that should affect man-ufacturing more than the ITO or BPO industries.

But they point out that senior advi-sors have assured the business commu-nity that Obama is a free trader who understands the interdependencies of the global economy, although they do stress that the Obama administration’s proposed tax incentives to create new jobs at home could have an impact on offshoring. Alternatives to India, such as home sourcing or moving low-cost tier 2 suppliers to US locations, may deserve closer study in this environment.

The report stresses that as the United States continues to spend the $700 bil-lion from the Troubled Assets Relief Pro-gram (TARP) for the banking industry, it seems possible that conditions placed upon TARP recipients could diminish the overall attractiveness of offshoring. However, this should not keep compa-nies from pursuing options to operate more efficiently. TARP recipients such as Citigroup, JP Morgan, AIG and Bank of America have already begun pursu-ing staff reductions in the United States or moving work offshore—for example, Citigroup expects to triple its workforce in the Philippines. The important point is that potential regulatory changes in the financial services industry and be-yond have not kept companies from taking advantage of offshoring, the au-thors say.

March 2009 49

ABN AMRO Bank

Head Office: The Netherlands Dubai Branch, Regional Hub for UAE and Middle East Tel: 04 3512200 P.O.Box: 2567, Khalid bin Waleed Street, Dubai, UAE. Fax: 04 3511555 Non-stop banking service: 04 3080000 (Toll free)

Dubai Branch:Colin Macdonald Country Executive 04 5062601Burhan Khan Head of Consumer Banking 04 5062801 Hassan EI Nahas Head of Private Clients 04 5062301Vishnu Deuskar Head of Global Market 04 5062551Padmanabh Mishra Head Commercial Client Coverage 04 5062701

Abu Dhabi Tel: 02 6963000Corner of Hamdan and Salam Streets Fax: 02 6963001P.O. Box: 2720, Abu Dhabi, United Arab Emirates

Sharjah Tel: 06 5594900Abdul Aziz Al Majid Building, King Faisal Street Fax: 06 5591009P.O. Box: 1971, Sharjah, United Arab Emirates

Abu Dhabi Commercial Bank

Head Office: Abu Dhabi Mall P.O. Box 939, Abu Dhabi Tel: 02 6962144 Fax: 02 6450384

Branches Al SalamOmar S. Al Tamimi Manager 02 6962486, 02 6666311Khalidiya 02 6669910Al BayahKhaled Al Mannaei Manager 02 8721300Al DhafraYaqoob Al Dosari (Edgar Ruaya / GM in charge) 02 5851030Al MuroorRamzi Al Rimawi Manager 02 4444216Al ShahamaHazim Al Suwadi Manager 02 5633424GHQEssam Husain Al Habshi Manager 02 4415626Tourist Club AreaHadia Dalloul Manager 02 6725178HamdanAbdalla Al Jaberi Manager 02 6335820Sh. Rashed RoadMohamed Al Dosari Manager 02 6213237

CornicheGhassan Kandalaft Manager 02 6275111 MussafahFiras Al Eid Manager 02 5544272Baniyas Town Manager Hamad Salem Rashid Al Junaibi Manager 02 5821550Ruwais Mohammad Ismail Manager 02 8775015Zayed TownDhababa Rashed Obaid Al Mansouri Manager 02 8846180GayathiHaraba Al Mazroui Manager 02 8742155Al BayaOttakath C Mohamed Kutty Manager 02 8721300Al Ghuaifat Pay OfficeOttakath C Mohamed Kutty Manager 02 8723499Al Ain Main BranchMohd. Al Darmaki Manager 03 7543413Al Ain Khalifa StreetSalim Al Darmaki 03 7511322Sinaeyah (Indust. Area)Salem Ahmed Manager 03 7210064Al WaganNayla Al Ameri Manager 03 7352100Al YaharKhamis Sulum Abdun Khamis Manager 03 7815600Al HayerKhalid Omar Eissa Manager 03 7322557RiggahMudhi Al Haj Manager 04 2956969KaramaOmran Abbas Taimour Manager 04 4055135MinaHosam Al Refay Manager 04 3984444Naif Ms. Seema Mohd. Malk Manager 04 6024110Al EttihadSalem Ali Khammas Jammahi Manager 04 3615151 ext. (202)Al QusaisFahd. M. Baroudi Manager Manager 04 2634244Sharjah MainMs. Wissam Moaded Manager 06 5737737Farah Al Ulama Manager 06 5566169Abdulla Al Shamsi Manager 06 5433300Abdullah Fayez Al Shamsi Manager 06 5432006Ajman

March 200950

Yasmeen Alabid Manager 06 7442111RAKAisha Ahmed Ghareib Manager 07 2335500FujairahMohdAli Hassan Mohd Al Bloushi Manager 09 2224324 DibbaRania Yousef Manager 09-2446700Contact CentreAhmed Abdo Manager 800-2030

Eissa Al Suwaidi Chairman Eirvin Knox CEO Ala’a Eraiqat Deputy Chief Executive OfficerThirry Bardury Head Operations & ITDeepak Khullar Chief Financial OfficerSeumas Gallacher Head - Investment BankingZaki Hamadani Head - legal & Special AssetsSultan Al Mahmoud Head - Human ResourcesAbdirizak Ali Head - Internal AuditAlok Kakar Head - Corporate Finance DivisionRobert Price Head - CreditWalter Pompliano Head - Financial Institution & Intl. DivisionHoward Gaunt Head - Business BankingJasim Al Darmaki Head - Government RelationsArup Mukhopadhyay Head - Retail BankingAhmed Barakat Head - Wealth ManagementYaser Mansour Head - Corporate Communications, Director of Chairman’s Executive Office & Senior Vice PresidentSimon Copleston General Counsel & Board Secretary

Abu Dhabi Islamic Bank

Head Office: Abu Dhabi Najda Street, P.O. Box 313, Abu Dhabi UAE Tel 02 6343000Email: customerservice@adib.ae Fax 02 6342222Website : www.e-adib.com

Established on 20th May 1997 as a Public Joint Stock Company through the Amiri Decree No. 9 of 1997. The bank commenced commercial operations on 11th November 1998, and was formally inaugurated by His Highness Sheikh Abdulla Bin Zayed Ak Nahyan, UAE Minister of Information and Culture on 18th April 1999. All contracts, operations and transactions are carried out in accordance with Islamic Shari’a principles. Branches

Abu Dhabi Main 02 6168118Aref Ismail Al Khouri Manager Mushref 02 4455177Ezzeldin Nagdy Manager Madinat Zayed 02 6100821 Mohamed Yousef ManagerKhalidiya Ladies Abu Baker Omar Manager Sheikha Al Suwaidi Manager Khalifa Street 02 6100590Omar Aqel Manager

Al AinSinaiya 03 7211777Omar M. Basheer ManagerClock Tower Branch 03 7076444Ali Abdullah Al Manager Dhaheri Al Jimi Mall Branch 03 7633500Ahmed Abdullah Manager Al Boloshi

DubaiAl Twar 04 2611116Ibrahim Alqasser ManagerOpposite Deira City Center 04 3973333Hashim Al Zarooni Manager Shk. Zayed Rd. Mohamed Hussein Zainal Manager 04 4033400

FujairahFujairah 09 2222711Fahad Al Shaer Manager Dibba 02 6100920Ali Mohammed Manager Ras Al Khaimah 07 2284448Saif Hamdan Alkeem ManagerSharjah 06 5075100Ali Essa Alshaqoosh Manager

Al Ahli Bank of Kuwait - Dubai

Head Office: KuwaitRegional Head Office: Dubai Tel 04 2681118Opposite Hamarain Centre, Deira Fax 04 2684445P.O.Box 1719, Dubai, E-mail: infodubai@ahlibank.aeWebsite: www.ahlibank.ae Management & Senior Personnel:Vikram Pradhan General Manager, UAE Vijay Shah Head of Trade Finance & Operations Hiranand Motwani Manager Treasury Krishna Kumar Manager Retail Operations

American Express Bank Ltd

Representative Office, Suite 509 Tel: 04 3975000; Fax: 04 3976986The Business Centre, Khalid Bin Al Waleed Street, Bur DubaiP.O. Box 3304, Dubai.Prabir A. Biswas Director & Chief RepresentativeSumit.K.Roy Director-financial institution groupJohn A. Smetanka Head-wealth management-subcontinent and global NRI

Arab African International Bank

Head Office: Cairo, Egypt.Regional Head Office Dubai Tel: 04 3937773ART Tower, Al Mina Street, Opp. Ports & Customs Bldg., Bur DubaiP.O. Box 1049, Dubai Fax: 04 3937774Swift ARAIAEAD, E-mail: aaibdxb@emirates.net.aeWeb: www.aaib.comHistory: Established 1964 as the first Arab joint venture bankHemant Jethwani General Manager UAE Dubai Branch: Key ExecutiveAlaa Sobhy Head of syndication and assert tradeAbu Dhabi Tel: 02 6323400; Fax: 02-6216009Arab Monetary Fund Bldg, Corniche Street, P.O. Box 928, Abu DhabiKey ExecutiveHani Hassan Branch Manager

Arab Bank

Head Office Jordan – Amman Tel: 04 2950845; Fax: 04 2024369P.O.Box 950544, 950545Amman 11195 Website: www.arabbank.aeHistory: The Arab Bank Group is one of the principal financial institutions in the Arab world and ranks among the leading international banks in terms of equity, earnings and assets. Established in 1930 in Jerusalem. The Arab Bank Group is

March 2009 51

owned by about 4,000 shareholders from all over the world, mainly Arab countires. The Group has a diversified network of over 350 branches worldwide. Abdul Majeed Shoman ChairmanAbdel Hamid Shoman Deputy Chairman & Chief Executive OfficerU.A.E Area Management Mohammad A . Azab Senior Vice President - DubaiSaed Jarallah Senior Vice President – Abu DhabiAladin Al-Khatib Treasury HeadHatem Kurdieh Corporate Banking HeadTareq HajHasan Retail Banking HeadMohammad Mattar Central Operations Unit ManagerHani Hirzallah Regional Manager Human Resources /Gulf RegionTareq Ibrahim Head of Human ResourcesAmmar Al Khayyat Financial ControllarGhassan Nimer IT Center Regional ManagerJihad Ghoury Legal CounselSanjay Malhotra Global Head of Marketing & Product DeveleopmentNasser Maghtheh Senior AuditorAnan Al Khatib Premises & Pruchasing Officer (Engineer)Suleiman Malhas U.A.E Branches Audit Centre Manager

Dubai Al Ittihad Street 04 2950845

Mohammed Azab Branch Manager

Deira 04 2221231Mohammed Elayyan Branch Manager

Abu Dhabi Al Naser Street 02 6392225 Nasser Serries Branch Manager

Al Ain 03 7641328Colock Tower roundabout, Al Ain StreetMaen Jarrar Branch Manager Sharjah Al Arooba Street 06 5618999Maher Al Debis Branch Manager

Ajman 06 7422431Rashid Bin Humaid Street Modhar Kherfan Branch Manager

Ras Al Khaimah 07 2288437Oman Street, Al Nakheel Ali Zatar Branch Manager

Fujairah Sheik Zayed Street 09 2222050Abdel Hamid Qamhieyah Branch Manager Call Centre Within UAE 800 40 43Outside UAE 009714 2953889

Arab Bank for Investment and Foreign Trade

Abu Dhabi Tel 02 6721900Regional Head Office, Sh. Hamdan Street, Tourist Club Area Fax 02 6785271P.O. Box 46733, Abu Dhabi Telex 22455 ARBIFT EMEmail: arbiftho@emirates.net.aeWebsite: www.arbift.comHistory: Established in 1976 in Abu Dhabi Registered as a Puvlic Joint Stock CompanyManagement & PersonnelIbrahim N. R. Lootah General Manager 02 6952286Hassan S. Kishko Head of Finance 02 6721299M.A. Majid Siddiqui Head of HR & Admin 02 6728785Khalid Mohammed Bin Amir Head of Operations 02 6776109Najib Taleb Nasser Head of Commercial Banking Ahmed Majid Lootah Head of Retail Banking 02 6743801M. Santosh Babu Senior Manager IT 02 6722975Izzeldin Al Siddiq Salem Mgr - Inspection & Internal Audit 02 6780592Osman Hamid Suliman Mgr - Banking Relations Dept 02 6787380

Mir Asif Ali Mgr - Treasury Dept 02 6721600Saidi Zoubir Head of Business Dev. Dept. 02 6723763Tareq S’adi Al Darras Mgr - Credit Risk Management 02 6720886Issam Abugisseisa Legal Advisor 02-6791642Abu Dhabi Main, Sh. Hamdan Street 02 6721900Noora Ebrahim Manager -Sales & Services 02 6780423Souk Branch 02 6269500Al Masaood Building - Khalifa Street, Abu DhabiNasser Rashed Al Ali Manager 02 6275087

Al Ain 03 7655133Mohd. Sultan Al-Darmaki Bldg., 1st Floor, Old Passport Office Road.Hussain Marzouqul Manager 03 7656482

Dubai 04 2220151Arbift Tower, Baniyas Street, DeiraAdel Mohd. Khalfan Manager 04 2282071Al Bagh

Sharjah King Faisal Street 06 5744888Fatima Al Muani Manager 06 5747766

Arab Banking Corporation

Abu Dhabi Office 02 6447666Office, 10th Floor, Abu Dhabi Trade Centre, Abu Dhabi MallP.O.Box 6689, Abu Dhabi Fax 02 6444429Mohamed El Calamawy Chief Representative

Arab Emirates Investment Bank PJSC

Head Office: Cairo Egypt Tel: 04 3937773Regional Office: Dubai Fax: 04 3937774ART Tower, Al Mina Road, Opposite Maritime City, Bur DubaiP.O Box 1049 DubaiSWIFT: ARAIAEADE-mail: aaibdxb@eim.aeWeb: www.aaib.com

Management-UAEHemant Jethwani General ManagerAlaa Sobhy Head of Syndication and Asset TradeMahendran Raman Head of Operations and LiabilitiesAbu Dhabi Branch Tel: 02 6323400 Fax: 02 6216009Arab Monetary Fund Bldg., CornicheP.O Box 928, Abu Dhabi

BLOM Bank France SA

Dubai Tel 04 2284655Al Maktoum Street, Deira Dubai, P.O. Box 4370 Fax 04 2236260email: info@blomfrance.aewww: www.blombank.aeBassem Ariss Regional Manager 04 2222355Samir Hobeika Branch Manager 04 2214648Michel Germanof Manager Corporate Credit UAE 04 2242067 Mohammad M Ansari Treasurer 04 2224812

Sharjah

PO Box 5803, Al Buheira Tower, Al Buheira Corniche Tel 06 5736100 Fax 06 5736080 Mokhtar Kassem Branch Manager

March 200952

Bank Muscat

Dubai Representative Office Dubai Creek Tower, Baniyas Road, Deira Tel 04 2222267P.O. Box 29969, Dubai Fax 04 2210115Lawrence P. Monteiro Chief Representative

BBK BSC

Dubai-Representative Office 04 2210560Dubai Creek Tower Office 18A, Baniyas Road, DeiraPO Box 31115 Tel 04 2210560 / 70 Fax 04 2210260 Website www.bbkonline.comHistory: Established on 16th March, 1971

Murad Ali Murad ChairmanKarim Bucheery CEO & GMSh. Rashed Al Khalifa Deputy General Manager

Dubai ReP-Office: CK Jaidev Head of Representative Office Rajiv Kapoor Relationship Manager & Loan Syndications Wafa Al-Alwan Relationship Manager & Loan Syndications

Bank of Baroda

Dubai Zonal Office: Sheikh Rashid Bldg.Ali Bin Abu Talib Street, Bur Dubai,P.O.Box 3162, Dubai Tel: 04 3531628E-mail: cc.gcc@bankofbaroda-uae.ae Fax: 04 3530839UAE Website: www.bankofbarodauae.aeHistory: Established in 1908, July 20Nationalized on July 19, 1969

Senior Management & Personnel – Baroda Corporate Centre, Mumbai, India.Dr. A.K. Khandelwal Chairman & Managing Director Mr. V. Santhanavanam Executive DirectorMr. S.C. Gupta Executive Director

Zonal Office, Dubai:Ashok K. Gupta Chief Executive, (GCC operations) 04 3538093L.J. Asthana Senior Manager (Credit) 04 3531628J.K.Jais Senior Manager (Inspection) 04 3531628P.M. Bondarde Senior Manager (Credit) 04 3531628Sujeet Bhale Senior Manager (Syndication) 04 3531628Rajesh Jain Senior Manager (Internal Auditor) 04 3531517

Abu Dhabi:Al Halami Centre, Sheikh Hamdan Street 02 6330244/ 6322000K. Venkateshwarlu Chief Manager 02 6344302K.Shridhar Senior Manager (Credit) R.G. Shanker Senior Manager (Operations)

Al Ain: Clock Tower, Round about, Planning Street 03 7519880Sarabjeet Singh Senior Branch Manager 03 7659554Vijay Kumar Goel Senior Manager (Operations)

Dubai:

Sheikh Rashid Bldg.Ali Bin Abu Talib Street, Bur Dubai, 04 3531955Vinod Malhotra Asst. General Manager 04 3534516Shekhar Tripathi Senior Manager (Operations) 04 3530166M.K. Patel Senior Manager (Credit) 04 3534080Beena Desai Manager (India Desk) 04 3537586Retail banking Shoppe, DubaiMr. Saravana kumar 04 3534390Mr Ketan Dave 04 3540041Mr Vinay Rathi 04 3540340

Deira Kuwaiti Bldg., Al Rigga, Baniyas Street, Deira 042287949Rajiv K. Garg Chief Manager 04 2286516Yuvraj Singh Senior Manager (Operations) 04 2286216P.K. Gambhir Senior Manager (Credit) 04 2292181R.K. Madaan Manager 04 2292181

Ras Al Khaimah:Al Qasimi Bldg, Oman Street, Al Nakheel 07 2229293P.K.Bhargav Senior Branch Manager 07 2229293

SharjahAl Mina Road 06 5684231/ 5686232M.S. Chouhan Asst. General Manager 06 5683273D. Pathania Senior Manager (Credit) 06 5684231D. Guha Senior Manager (Operations) 06 5686232

Bank of New YorkRepresentative office Tel 02 6263008Suite 402, The Blue Tower, Sh. Khalifa Bin Zayed Street Fax 02 6263308P.O.Box 727, Abu DhabiHani Kablawi Managing Director

Bank of Sharjah

Sharjah Head Office – Al Hosn Avenue Tel 06 5694411 P.O. Box 1394, Sharjah Fax 06 5694422E-mail: bankshj@emirates.net.aeHistory: Established on 22nd December 1973 with Banque Paribas, Paris

Ahmed Abdulla Al Noman ChairmanVarouj Nerguizian General ManagerMario Tohme Deputy General ManagerFadi Ghosn Deputy General ManagerAli Burheimah Commercial ManagerMohammed Asghar Senior Operations ManagerFares Saade Senior ManagerMichel Germanos Risk ManagerJayakumar Menon Finance ManagerBerj Tossounian Credit Manager - SharjahWahide Assaad IT ManagerJihad Aoun Investment ManagerSamer Hamed Audit & Control Manager Abu Dhabi Tel 02 6795555Al Mina Street, P.O.Box 27391 Fax 02 6795843Ramzi Saba Senior ManagerMazen El Attar Operations Manager- Abu DhabAnni Barsoum Credit Manager - Abu DhabiDubai Tel 04 2827278Al Gharoud Street, PO Box 27141 Fax 04 2827270Nadim Melki Senior ManagerToufic Youakim Credit Manager - DubaiFadi Haddad Operations Manager - DubaiAl Ain 03 7517171Khalifa Street, PO Box 84287 Fax 03 75170770George Dib Branch Manager

March 2009 53

Rida Higazi Deputy Branch Manager

Bank Saderat Iran

Dubai Tel 04-6035555Regional Office, Al Maktoum Street, P.O. Box 4182 Fax 04 2229951

Dr.Hamid Borhani Regional ManagerAbdul Reza Shabahangi Assistant Regional ManagerMohammad Yousefi Peyhani Assistant Regional ManagerMajid Tavasoli H.R. & Organization Dept. ManagerGholamreza Joulaie Credit Facility Dept. ManagerRahim Erfan Moghaddam Account Dept. ManagerMehran Arzhang Letter of Credit Dept. Manager Majid Mirnasiri Recovery Dept. ManagerHamdi Reza Khalajzadeh Dealing Dept. ManagerHojatollah Malek Mohammadi IT Dept. ManagerMansoor Sedaghat Motlagh Service Dept. Manager Mohsen Hossein Hosseinpour Manager of Al Maktoum BranchGholamreza Ebadi Fard Manager of Murshid Bazar Branch Saeed Mirzaian Tafti Manager of Sheikh Zayed Rd. Branch Ferdos Zolfagharian Manager of Bur Dubai Branch Seifollah Farzan Mehr Manager of Sharjah Branch Jalil Vosooghi Manager of Ajman Branch Ali Abasteh Manager of Abu Dhabi Branch Peyman Sabri Manager of Al Ain Branch

Banque Du Caire

Abu Dhabi Regional Head Office (02) 6225880P.O. Box 533, Abu Dhabi Telefax 02-6225881History: Established on 8th May, 1952 On July 1, 1960 the Amman Branch became independent under the title of Cairo Amman Bank. In July, 1961 the Bank was na-tionalized. On November 2, 1962 the Lebanese branches were absorbed by Banque Misr-Liban S.A.L On October 1, 1979 fo3rmer branches in Saudi Arabia have been saudized and a new bank was formed under the name of Saudi Cairo Bank.

Mohamed kamal Al Deen Barakat Chairman Ahmad Sherif Rehab Regional Manager Abu Dhabi - UAE PO Box 533 Tel: 02-6272525Abu Dhabi Branch Mohamad Kamal Farid (Acting Manager) Tel: 02-6273000Dubai Branch Labib Abdul Ghaffar Tel: 04-2715175Sharjah Branch Tareq Hafez Tel: 06-5739379Ras Al Khaima Mohamad Abdul Ghani (Acting Manager) Tel: 07-2332245Al Ain Abdul Hamid Saeed Tel: 03-7511104

Barclays Bank PLC

Dubai Tel: 04 3626888Emaar Business Park, Building No. 4, Sheikh Zayed Road Fax: 04 3663133P.O. Box: 1891, DubaiWebsite www.barclays.com

Saleem Sheikh Regional Managing Director, Middle East & North AfricaMark Petchell Group Country Managing DirectorAmin Habib Director - Corporate BankingFaizen Mitha Regional TreasurerFarrukh Zain Head of Trade SalesFlorence Goodman Head of Corporate Afffairs & Public RelationsDavid Inglesfield Location Manager - International & Premier Bank-ing Callum Watts-Reham Director, Market Manager, Gulf - Barclays Private Clients

Barclays CapitalDubai International Financial Centre, Level 9, West Wing, The Gate Building, Sheikh Zayed Road, Dubai Nicholas Hegarthy Managing Director, Head of Middle East & North Africa

BLC Bank (France) S.A.

Head Office17-19 Avenue Montaigne Tel 33 1 56 52 11 0075008 Paris, France Fax 33 1 56 52 11 11Mr. Andre Tyan General Manager

Regional Office Dubai Al Maidan Tower, Al Maktoum St. Tel 04 2222291P.O. Box 4207, Dubai Fax 04 2283935E-mail: blcdxbrm@emirates.net.ae Melhem Dagher Administration & Operations Manager

DubaiAl Maidan Tower, Al Maktoum St. Tel 04 2222291P.O. Box 4207, Dubai Fax 04 2279861 Hamze Abdul Sater Branch Manager

Abu DhabiMohd. Joan Al Badi Bldg., Hamdan St. Tel 02 6220055P.O. Box 3771 Fax 02 6222055Ghassan Haddad Acting Regional ManagerSamir Rached Acting Branch Manager

Sharjah Al Salam Bldg., Al Mina St. Tel 06 5724561P.O. Box 854 Fax 06 5727843Victor Khoriaty Branch Manager

Ras-Al-KhaimahSheikh Ahmad Bin Saker Al Quasimi Bldg., Al Montaser St. Tel 07 2286222P.O. Box 771 Fax 07 2275067Abd El Hajj Branch Manager

BNP Paribas

Abd Ahmad Al Hajj Branch ManagerAbu Dhabi Tel 02 6130400Khalifa Street, P.O. Box, 2742, Abu Dhabi Fax 02 6268638Marc Checri General Manager

Central Bank of the U.A.E

Abu Dhabi Tel 02 6652220/6915555Head Office, Al Bateen Area, Bainoona Street Fax 02 6668483/6668621P.O.Box: 854, Abu Dhabi, www.cbuae.gov.aeE-mail: sultan_rashid@cbuae.gov.aeSwift: CBAU AE AAReuters dealing code: CBEMHistory Established in 1980 as a central bank of the United Arab Emirates by a federal decree. Central bank took over the activity of the United Arab Emirates currency board which was established in 1973.Management & PersonnelH.E. Sultan Bin Nasser Al-Suwaidi Governor H.E. Mohd. Ali Bin Zayed Al Falasi Deputy Governor

Board of DirectorsH.E. Mohd. Eid M. Jasim Al-Meraikhi ChairmanH.E. Jumaa Al-Majid Vice ChairmanH.E. Sultan Bin Nasser Al-Suwaidi Governor

March 200954

MembersAli Al-Sayed Abdulla, Jamal Nasser Lootah, Khalifa Nasser Bin Huwaileel, Saeed Rashid Al Yateem Al Muhairy

Executive DirectorsSaeed Abdulla Al Hamiz Executive Director-Banking Supervision & Exami-nation Dept.Rashid Mohamed Al Fandi Executive Director - Banking Operations Dept.Saif Hadef Al Shamesi Executive Director - Treasury DepartmentSalem Ahmed Al-Hammadi Executive Director - Research & Statistics DepartmentAbdulla Hamad Al-Zaabi Executive Director - Internal Audit DepartmentJamal Ebrahim Al Mutawaa Executive Director - Administration Department

Economic AdvisorsAbed Alla Osama Malki, Mohammed Zeitouni Bechri

Portfolio ManagersMohammed Abdulla Mohammed, Brian Gardner

Anti-Money Laundering & Suspicious Cases UnitAbdul Rahim Mohamed Al Awadi Asst. Executive Director

General Secretariat & Legal Affairs DivisionSalem Said Al Kubaisi Senior Manager

Financial Control DepartmentHassan Ibrahim Al Hamar Senior Manager

Personnel DivisionAli Ghurair Al Romaithi Senior Manager

Correspondent Banking DivisionSultan Rashed Al-Sakeb Senior Manager

Public Relations DivisionAbdul Raheem Abdullah Manager

Information Technology Division/ UAE Switch DivisionKhalifa Al Dhaheri Senior Manager

Dubai Tel: 04 3939777P.O. Box 448 Fax: 04 3937802Omar Al Qaizi Manager-in-Charge

Sharjah Tel: 06 5592592Old Airport Road, Opp. Immigration Bldg., P.O. Box 645, Sharjah Fax: 06 5593977Zakaria Abdul Aziz Al Suwaidi Senior Manager

Ras Al Khaimah Tel: 07 2284444Al Nakheel, Oman Street, P.O. Box 5000 Fax: 07 2284646Salem Jasem Al Baker Asst. Executive Director

Fujairah Tel: 09 2224040P.O. Box 768, Fujairah Fax: 09 2226805Ali Mubarak Saeed Abbad Senior Manager

Al Ain Tel: 03 656656Ali Ibn Abee Taleb Street, Oud Al Touba Fax: 03 664777P.O. Box 1414Ajlan Ahmed Al Qubaisi Asst. Executive Director

Citibank N.A (UAE Branches)

Date of Establishment 1964Nationality USALegal Status Commercial Banking Services (F)Regional Head Office Oud Metha Towers

P.O Box 749, Dubai – UAETel: 04- 3245000Telex: 023 6738736Cable: CITIBAEMSwift: CITIAEADReuters: N/AEmail: karim.seifeddine@citi.comWebsite: www.citibank.aeAuditors: KPMGDomestic Branches: Al Wasl Road Branch (Main Branch) Tel: 04 3245000Oud Metha Road, P.O Box 749 Dubai Branch (Next to Burjuman) Tel: Abu Dhabi Branch Tel: 02 6982206Al Salam Street, Next to Lulu Center Fax: 02 6726381P.O Box 999, Abu DhabiSharjah Branch Tel: 06 5072101Beside Sharjah Emigration, Fax: 06 5723378Opposite Civil Court. Sharjah Al Ain Branch Tel: 03 7641090Sh. Zayed Street Fax: 03 7663887Broad of Directors: N/AGeneral Management: Mohammed E. Al- Shroogi, MD for the Middle East and Chief Executive Officer, UAE Sanjoy Sen, Country Business Manager Global Consumer Group - U.A.EMohammed Azab, Chief Officer, UAE Offices, Citi Private Bank

Clearstream Banking

Dubai Tel 04 3310644City Tower 2, Sheikh Zayed Road Fax 04 3316973Website: www.clearstream.comRobert Tabet Vice President Middle East & North Africa

Commercial Bank International

Dubai Tel 04 2275265Head OfficeDubai Al Riqqa Street Deira , P.O Box 4449 Tel : 04 2275265 Website : www.cbiuae.com Fax : 04 2279038 Hamad Al Mutawaa Chairman H.E. Humaid Al Qatami Deputy Chairman Abdulla Rashid Omran Managing Director and Board Member 04 2242104

Mohammed Saadeh Head of GBG 04 2126500 Abdulla Amer Jasem Head of HR & Admin 04 2126466 Hesham Abdulla Head of Branches & Services 04 6020615 Ahmed Mustafa Tahoun Head of Internal Audit & compliance Division 04 2126603 Ramanthan Murgappan Senior Manpower planning & Recruitment Manager 04 2126444 Zainab Nour Aldin Employee Relations Manager 04 2126 442 Yousef Haddad Planning & Development Manager 04 2126190 Bashir Haji Mohd Chief Dealer 04 2126214 A.D.Abooty Head Of Operations & Finance 04 2126291 K.E Mammoo Accounts Manager 04 2126215 Faris Saddi Chief information Officer 04 2060700 Yousef Al Marshoudi Dubai Branch Manager 04-2275265 Tariq Selaij Bur Dubai Manager 04-3559577 Ameena Bin Kaali Sheikh Zayed Branch Manager 04 3405555 Ahmed Al Junaibi Abu Dhabi Branch Manager 02-6913111 Abdulla Ali Almadhani Al Ain Branch Manager 03 7669994 Mohammed Ishaq RAK Branch Manager (AL Manar Mall) 07 2274777 Ahmed Darwish RAK Branch Manager (Nakhel Branch) 07 2227555 Alyia Al Mulla Sharjah Branch Manager 06 512100 Ahmed Bin Masood

March 2009 55

Fujairah Branch Manager 09 2011777

Dubai Main Branch (Al Riqqa Street)Yousef Al Marshaudi Branch manager 04 2126101Bur DubaiTariq Sulaij Branch manager 04 3555511Sheikh Zayed RoadAmeena Mhd. Bin Kaadi Branch manager 04 3405555Abu Dhabi Ahmed Sulaim Al Junaibi Branch Manager 02 6264400AL AINAbdulla Ali Branch manager 03 7669994Ras Al KhaimahKhaled Al Mannai Branch Manager (Manar Mall) 07 2274777Ahmed Yousef A. Darwish Branch Manager (Nakeel Branch) 07 2227555SharjahAliya Al Mulla Branch manager 06 5687666

Commercial Bank of Dubai

Main Branch , Al Ittihad Street, Port Saeed, DubaiIbrahim Salama Branch Manager 04 212 1000Dubai Branch, Mankhool Street, DubaiAmer Al Shamali Branch Manager 04 352 3355AL Maktoum Branch, Abu Baker Al Siddique StreetAhmed Al Aboodi Branch Manager 04 268 3555Deira Branch, Baniyas Street Mohammad Al-Sayed Al-Hashemi Branch Manager 04 225 3222Baniyas Square Branch, Al Maktoum Hospital StreetMohd. Al Lawati Branch Manager 04 228 9000Jebel Ali Branch, Jebel Ali Free ZoneMohammed Abdulla Mardood Branch Manager 04 881 8882Jumeirah Branch, Jumeirah Beach RoadAreffa Al Hashimi Branch Manager 04 344 1438Sheikh Zayed Road Branch, Ghaya Towers, Sheikh Zayed RoadMaher Marzouqi Branch Manager 04 334 777Al Garhoud Branch, Al Haj Saleh Bin Lahej Building,Al Garhoud Street-DeiraAli Salman Branch Manager 04 282 6444Al Qusais Branch ,Al Nahda StreetAbdullah Lootah Branch Manager 04 261 5000Souq Al Wasl Branch, Souq Al Wasl StreetTaher Mohammed Branch Manager 04 227 6111Al Aweer Branch, Central Fruit and Vegetable Market, Al AweerIbrahim Al Ramsi Branch Manager 04 320 1222Naturalization and Residence , Administration – Dubai BranchAdel Abdul Aziz Branch Manager 04 398 5000Mr. Jamal Saleh Assistant General Manager, Head of Risk ManagementAbu Dhabi Branch, Corniche Street Wael Ahmed Mahfouz Branch Manager 02 626 8400Musaffah Branch , Al Firdoos Building, Mussaffah Area M/3Zahir M. Suaiman Branch Manager 02 555 5510Khalidiya Branch, Khalidiya streetSultan Ali Al Assiry Branch Manager 02 667 9929 AL Ain Branch, Al Takhtit Street, Clock TowerKhalid Abdel Hadi Branch Manager 03 766 7800Sharjah Branch, Immigration RoadAbdul Aziz AL Ansari Branch Manager 06 574 0666Ajman Branch, Shk.Humaid Abdul Aziz StreetMarwan Ebrahim Mohammed Branch Manager 06 745 6668 Ras Al Khaimah Branch, Al Nakheel Area, Oman StreetEbrahim Ahmed Al Zaabi Branch Manager 07 228 6266Fujairah Branch , Al Gurfa Road, Near Al Mibkhar RoundaboutAbdullah Al Suwaidi Branch Manager 09 222 5111H.E. Ahmed Humaid Al Tayer ChairmanH.E. Saeed Ahmed Ghobash Deputy ChairmanH.E. Saeed Mohd Al Ghandi Deputy ChairmanMr. Abdul Wahed Al Rostamani Director

Mr. Abdul Rehman Saif Al Ghurair DirectorMr. Saeed Mohd Al Mulla DirectorMr. Khaled Juma Al Majid DirectorMr. Omar Abdulla Al Futtaim DirectorMr. Peter Baltussen Chief ExecutiveMr. Yaqoob Yousuf Hassan Deputy Chief ExecutiveMr. Ibrahim Abdulla General Manager, Administration & FinanceMr. Mahmoud Hadi General Manager, Central OperationsMr. Faisal Galadari General Manager, Business groupMr. Ahmed Shaheen General Manager, Credit GroupMr. Abdul Rahim Al Nimer General Manager, Financial ServicesMr. Stephen Davies Deputy General Manager, Corporate Banking Mr. Moukarram Att asi Deputy General Manager, Asset ManagementMr. Thomas Smith Deputy General Manager, Head of RetailMr. John Tuke Deputy General Manager, Treasury & ALMMr. V.P Bhatia Assistant General Manager, TreasuryMr. Masood Azhar Assistant General Manager, SPDMr. Amir Afzal Assistant General Manager, ITMr. Adel Al Sammak Assistant General Manager, Corporate Banking Mr. Kanan Iyer Assistant General Manager – Internal AuditMr. Clive Harrison Assistant General Manager – HRMr. Alan Kerr Assistant General Manager, Corporate BankingMr. Alan Hill Assistant General Manager, Treasury & Investment

Coutts & Co.

Representative Office - Dubai Tel 04 2217007Twin Towers, Baniyas Street, Deira Fax 04 2217006P.O. Box 42220Sarah Deaves CEOSandra Shaw General Manager Martin Bond Private Banker

Calyon Corporate & Investment Bank (Previously Crédit Agricole Indosuez & Crédit Lyonnais) DubaiWorld Trade Centre, Level 32 Tel: 04 3314211P.O.Box: 9256 Fax: 04 3313201Website: www.calyon.comAmr Alkabbani Regional Manager – Gulf 04 3317316Ludovic Bernard-Maissa Regional COO Eric Fromaget Head of Private Banking 04 3321300Sebastian Van der List Head of Corporate Banking – UAE 04 3315836Naeem Khan Trade Finance 04 3291055Albert Mondjian Head of Investment Banking – MEA 04 4284803 Abu DhabiAl Muhairy Centre, Level 5 Tel: 02 6351100Block C, Sheikh Zayed the First Street Fax: 02 6344995P.O.Box: 4725Ghazi Abdul Fattah Branch Manager 02 6351991

Credit Suisse

Abu Dhabi Dhabi Tower, 4th floor, Sheikh Hamdan Street Tel 02 6275048P.O.Box 47060 Fax 02 6274109Jean-Marc Suter Director

Dubai P.O. Box 33660 04 3620000The Gate bldg, 9th Floor Fax 04 3620001Dubai International Finance Centre ( DIFC), Dubai

March 200956

Head of Regional Office Beat Naegell

Deutsche Bank A G

Abu Dhabi Tel 02 6333122P.O.Box 52333 Fax 02 6322044E-mail: jens.moeller@db.comJens Moeller Representative

Dubai P.O. Box: 50490Emirates Towers, Level 27b Fax 04 3199560Karl French Director Tel : 04 3199514 Private Wealth Management - AsiaNadeem Masud Director Tel : 04 3199524 Global MarketsHarris Irfan Vice President Tel : 04 3199520 Global Equities & DerivativesRohit Johri Vice President Tel : 04 3199522 Private Wealth Management - Asia

Dresdner Bank AG

Dubai Representative OfficeBurjuman Business Towers, 10th Floor, Office 1011 Bur Dubai, P.O. Box: 25654 Tel 04 3596444 Fax 04 3596116E-mail: RepDubai@Dresdner-Bank.com

Bashar A. Barakat Chief Representative Regional Head GCC & Yemen

Dubai Bank

Main Office Sheikh Zayed Road, Near Dubai World Trade Centre Tel 04 3328989P.O. Box 65555, Dubai Fax 04 3290071E-mail: info@dubaibank.ae Website: www.dubaibank.ae

History: Established in September 2002

Ziad Makkawi Chief Executive Officer

Dubai Islamic Bank

Head OfficeAl Maktoum Street, Dubai Tel 04 2953000 P.O. Box 1080, Dubai Fax 04 2954111Website: www.alislami.co.aeHistory: Established March 12, 1975Dr. Mohammed Khalfan Bin- Kharbash Chairman Butti Khalifah Bin DarishAl- Falasi CEOSaad Mohammed Abdul Razzaq Deputy CEOMohd. Saeed Al Sharif Executive Vice President-FinanceArif Ahmed Al Koheji Executive Vice President-Investment BankingAbdullah Ali Al Hamli Executive Vice President - Business ServicesAhmed Mohammed Fadel Legal Consultant and Board Secretary

BranchesDeira Main Branch 04 2959999Al Souk 04 2233300

Sheikh Zayed Rd 04-3437777Nad Al Shiba 04 3907777Bur Dubai 04 3971717Jumeirah Ladies Branch 04 3429955Al Barsha 04 3406000Ajman 06 7466555Sharjah 06 5726444Wasit Road 06 5584455Al Dhaid 06 8826682Khorfakan 09 2370080Abu Dhabi 02 6346600Khalidiah Ladies Branch 02 6677119Al Salam 02 6450555Bani Yas 02 5825511Al Ain 03 7644111Al Ain Mall 03 7515155Ras Al Kheimah 07 2284888Fujairah 09 2221550

El Nilein Bank

Abu Dhabi P.O.Box 46013 Tel 02 6269995 Fax 02 6275551Abdulla Mahmoud Awad Manager Tel 02 6720934Mohamed Osman Salih Deputy Manager 02 6761916Murlidhar G. Ramchandani Chief Accountant & Dealer 02-6729300Ahmed Hillali Ahmed Head Investment Dept. & Credit 02-6729300

Emirates Bank International

DubaiMain Branch, Baniyas Road, Deira Tel 04 2256900P.O. Box 2923, Dubai Fax 04 2267718

BranchesAbu Dhabi 02 6455151Hameed Sheikh ManagerAl Ain 03 7510055/77Ghanim Al Hajeri Manager Al Maktoum Ali Malallah ManagerAl Quoz Mohd. Abdulla Manager Baniyas Square Sherif Al Ulama ManagerBander Talib Fareed Aquilli ManagerDubai Main Branch Amal Al Qamzi ManagerFujairah 09 2222114/110 Yousif Al Marshoudi ManagerInternet City 04 3910840/1 Balakrishnan Nair ManagerGalleria Farida Al Balooshi Manager IBN Gardens 04 8844689Hamdan Mohd. Abdulla Manager Jebel Ali Free Zone 04 8815551Abdul Rahman Ibrahim Manager Karama Muna Al Falahi ManagerKarama Shopping Complex Nawal Al Khader Manager

March 2009 57

Mankhool Abdul Rahim Abdulla ManagerQiyadah Fatima Al Midfa ManagerGhusais Fatima Al Midfa ManagerRamoul Ibrahim Hassan ManagerRas Al Khaimah 07 2272333 Khalifa Bin Kalban ManagerSatwaMohamed Bilal ManagerSharjah Industrial Area 06 5345577Mohamed Al Shouq ManagerSharjah 06 5733300Mahmoud Saif Manager Souk Samia Al Aqady ManagerUmm Suqueim Nazia Kalban ManagerTower Saif Al Mansoori ManagerWorld Trade Centre Abdulla Sulaij Al Falasi ManagerNajdah 02 6771919 Butti Al Assiri Manager

Emirates Industrial Bank

Abu Dhabi - Head Office Tel 02 6339700P.O. Box 2722, Abu Dhabi Fax 02 6319191/6326397E-mail: indbank@emirates.net.aeDubai Tel 04 2211300Arbift Tower, Deira P.O. Box 5454, Dubai Fax 04 2232320E-mail: eibdubai@emirates.net.aeWebsite: www.emiratesindustrialbank.netSenior Management Personnel/Branch ManagerMohamed Abdulbaki Mohamed General ManagerAhmed Mohamed Bakhit Khalfan Deputy General ManagerAbdullah Rashed Omran Dubai Branch ManagerKhalifa Al Falasi Acting Projects Division ManagerAli Ahmed Al Essa Development Services Division ManagerNasser Haji Malek Administration ManagerEssa A. Bu Al Rougha Internal Audit ManagerMohamed Moneir Makled Finance ManagerSalem Abu Baker Salem Acting Loans Division Manager

Emirates Islamic Bank

P.O. Box: 6564, 2nd & 3rd Floor, Al Gurg Tower 1 Tel: 04 3160330Plot 372 - Riggat Al Buteen, Deira, Dubai. Fax: 04 2272172www.emiratesislamicbank.aeEbrahim Fayez Al Shamsi CEO 04 3160330Abdulla Showaiter (General manager – corporate and investment banking) Faisal Aqil General manager – retail banking Ahmed Fayez Alshamsi chief financial officer Syed Imran Bashir Head of marketing and product development Samih Mohd Qadri Awadalla head of branches Nasir Ahmed Khan head of consumer finance Zahir Mulla head of operations

IMB (Main Branch) P.O. Box: 6564, Al Gurg Tower 2, Riggat Al Buteen, Dubai.BUD (Bur Dubai) P.O. Box: 6564, Khalid Bin Walid Road, Dubai.

DFR (Diyafa) P.O. Box: 6564, Diyafa Road, Dubai.RIQ (Riqqa) P.O. Box: 6564, Omar Bin Al Khattab Street, Dubai.ADC (Abu Dhabi) P.O. Box: 46077, Sheikh Rashid Bin Saeed Al Maktoum Street, Abu Dbahi.ROS (Ras Al-Khaima) P.O. Box: 5198, 191 Oman Street, Al Nakeel, Ras Al Khaima.Fuj (Fujairah) P.O. Box: 1472, Sheikh Hamad Bin Abdulla Street, Fujairah.AJS (Al Ain) P.O. Box: 15095, Jawazat Street, Al Ain.QFS (Umm Al-Qaiwain) P.O. Box: 315, King Faisal Road, Umm Al Qaiwain.SBA (Sharjah) P.O. Box: 5169, Al Arooba Bank Street, Sharjah.

Finance House P.J.S.C.

Mr. Mohammed Abdullah Jumaa Al Qubaisi Chairman

Mr. Abdul Hamid Umer Taylor General Manager 02 6194998Mr. T.K. Raman Chief Operating Officer 02 6194889Mr. Mohammed Wassim Khayata Executive VP – Strategic Planning 02 6194445Mr. Ramesh S. Mahalingam Chief Investments & Financial Officer 02 6194601Mrs. Shagufta Farid Khan Head of Internal Audit 02 6194223Ms. Lina Abdul Hamid I. El Araj Manager – General Services 02 6194702Mr. Tarek Soubra Vice President – Central Operations 02 6194362

Ms. Maha Al Jamal Senior Manager – Marketing 02 6194893

First Gulf Bank

Abu Dhabi Tel 02 6816666 Head Office, Sh. Zayed Second Street, Khalidiya P.O. Box 6316, Abu DhabiWebsite: www.fbg.aeHistory: Established in 1979Shareholder Equity of over AED 10 billionSenior ManagementAbdulhamid Mohammed Saeed Managing Director 02 6920502Andre’ Sayegh Chief Executive Officer 02 6920506Amit Wanchoo Head of Retail Banking GroupArif Shaikh Chief Credit & Risk OfficerGeorge Abraham Head of Corporate BankingGopi Krishna Madhavan Head of Human ResourcesHana Al Rostamani Strategic Planning HeadKarim Karoui Head of Business Planning & Financial ControlNadeem A. Siddiqui Head of International BusinessShafiqur Rehman Adhami SR. VP, CB FI\SYN\MNC\OIL & Energy SectorZafar Habib Khan Chief Investment OfficerZulfiquar Ali Sulaiman Business Support Director

Habib Bank A.G. Zurich

Head Office: Zurich, SwitzerlandZonal Office: Dubai Tel 04 2214535Baniyas Square Deira, P.O. Box 3306 Fax 04 2284211E-mail: hbzcad@habibbank.comWebsite: www.habibbank.comHistory: Established in 1967Reza S. Habib Joint President Arif Lakhani Chief Executive Vice President 04 2229985Asad Habib Senior EVPAfzal Memon Senior EVP Shariq Ali Senior EVPDeira Mains 04 2214535Najibullah Khan Branch Manager Farrukh Iqbal Deputy Branch Manager Corporate 04 3513777 Awais Hasan Branch ManagerSharjeel Vijdani Deputy Branch Manager Al Fahidi Street 04 3534545Zain Ghazali Branch ManagerAbdul Basheer Deputy Branch Manager

March 200958

Jebel Ali 04 8812828Nisar Chowdhary Branch Manager Ifthikhar Memon Deputy Branch ManagerSh.Zayed Branch 04 3313999Zia Abbas Mirza Branch ManagerKashif Aijaz Dodhy Deputy Branch Manager

Abu Dhabi Sh. Hamdan 02 6346888Imamat Naqvi Area Manager Farhan Bakhshy Branch Manager Al Falah 02 6422600Syed Akhtar Hussain Branch Manager Raid Saleem Ansari Deputy Branch Manager Sharjah 06 5730004Al Boorj Avenue Younus Warsi Area Manager Kausarullah Khan Branch Manager

Habib Bank limited

Abu Dhabi Tel 02 6224688Main Branch, Corniche Road, P.O.Box 897, Abu Dhabi Fax 02 6225620E-mail: hbl2003m@emirates.net.aeHistory: Established on August 25, 1941Nationalised on January 1, 1974 On June 1974 absorbed Habib Bank Ltd. On June 30, 1975 absorbed Standard Bank Ltd., KarachiAman Aziz Siddiqi EVP/RGM 04 3597753Mohammad Tanvir HR. Manager 04 3592292Fouad Farrukh GRM 04 3592214Sh. Abdul Basit AVP/CAD Manager 04 3592539M. Amin Usman AVP/Treasury 04 3591893Ahmed Faraz Faruqi VP/Head ICU 04 3592517Nadeem Zia VP/Head FINCON 04 3592292Syed Ali Gohar VP/IT/Head 04 3592820Abdul Shahid Khan VP/Head Cops 04 3591874Abu DhabiSh. Zayed Road, 2nd Street Mushtaq H. Shah Service Manager 02 6344557Abu DhabiMain Branch M. Saadat Cheema VP/Chief Manager 02 6224655Al Ain 03 7642555Abdul Jalil Al Fahim Bldg.Adbul Hameed Khan AVP/Senior Manager 03 7642555Dubai Regional Office Sahibzada M. Taimur SVP/Corporate Manager 04 3596922Sameera Mohammad Service Manager 04 3592016Sheikh Zayed Road, Kalantar Tower Khalid Bin Shaheen SVP/Director 04 3431421Mahdi Hassan Business Development Manager 04 3438081Isar-Ul-Haq Service Manager 04 3438081Deira Branch, Creek Road Zulfiqar Ahmad Bhatti Service Manager 04 2253292Sharjah 06 5682552 / 5683473Al Boorj AvenueAssad Ali Shaikh AVP/Branch Manager 06 5695122Dhaid & Dibba 06 8822249Near Al Dhaid Police Station 06 8822249Abdul Sattar Badi Service Manager 06 8822249

HDFC Bank

Representative Office: Dubai Tel 04 3966991

Juma Al Majid Bldg., Opp Bur Juman Centre Fax 04 3967010P O Box 64546, Email: hdfcbank@emirates.net.aeFaisal Saeed Cheif Representative Tel 04 3966991

HSBC Bank Middle East Ltd

Head Office: Jersey, Channel IslandMiddle East Management Office, Dubai Internet City Tel: 04 3904722 Fax: 04 3906607HSBC Bldg., Dubai Internet City, P.O. Box: 66, Dubai, UAE Web: www.hsbc.aeUAE Web: www.uae.hsbc.com

Youssef Nasr ChairmanDavid Hodgkinson DirectorKen Matheson Regional Chief Operating OfficerAbu Dhabi 02 6332200/6152215Al Ain 03 7641812Dubai 04 3535000Deira 04 2227161Fujeirah 09 2222221Jebel Ali 04 8846133Ras Al Khaimah 07 2333544Sharjah 06 5537222

IndusInd Bank

Dubai Representative Office Tel 04 3978803203, Safa Commercial Bldg. Fax 04 3978805Opp. Bur Juman Centre, P.O. Box: 111873, Dubai.E-mail: ibldubai@indusind.aePradeep Gupta Vice President & Chief Representative 04 3978804

ING Asia Private Bank Ltd

Dubai Representative Office Tel 04 4277100602, Level 6, Building 4 Fax 04 4257801Burj Dubai SquareSheikh Zayed RoadP.O Box 4296, Dubai – UAE Suresh Nanda Managing Director & HeadEric Lorentz Managing DirectorVarun Bukshi Executive DirectorMelwyn Dias Executive Director

B.R. Subramanian DirectorP.G. Bhaskar DirectorRanjit Paul DirectorPiyush Bhandari DirectorNitin Bhatnagar DirectorRishi Chauhan DirectorAsad Dadarkar DirectorAshraf Al Yamani Director

InvestBank

Sharjah Tel 06 5694440Al Boorj Avenue, P.O. Box 1885 Fax 06-5694442E-mail: sharjah@invest-bank.comWebsite: www.invest-bank.comHistory: Established on 2nd February 1975 as Investment Bank for Trade & Finance On July 1, 1995 name changed to Investbank.Sami Farhat General Manager

March 2009 59

Qasim Kazmi AGM. Operations & Treasury Taleb Zaarour Senior Manager-ADM & LegalAthar Anis Manager, Credit Risk Bassam Hollmerus Chief DealerSajjad H. Holimerus Trade FinanceMadhu Pilakazhi Financial Controller Ghassan Accari Personnel Manager Vinay Gupta IT ManagerDubai 04 3213131Sheikh Zayed RoadDubai 04 2285551Al Maktoum StreetAl Ain 03 7644446Al Ghaba StreetAbu Dhabi 02 6794594Sh. Khalifa streetAbu Dhabi 02 5555336Mussaffa Area Sharjah 06 5420333Industrial Area

Janata Bank Abu DhabiObied Sayah Al-Mansuri Building Tel No 02-6331400Electra Road, Post Box No. 2630 Fax : 02-6348749Email jbadas@emirates.net.aeMr. Md. Masuduzzaman Chief Executive 02-6344543Mr. Md. Chaynul Haque IT Manager/SPO 02-6340881Mr. Md. Ramjan Bahar System Administrator/PO 02-6340881 Abu DhabiMr. Mohamudul Hoque Manager 0 2-6344542DubaiMr. Md. Abdul Awal Manager Mohammad Saleh Al-Gurg Building 0 4-2281442Al-Borj Street, P.O. Box 3342Mr. Md. Mizanur Rahman ManagerSharjah Saqer Bin Rashid Al Quassim BuildingAl Suwaiheen Street, P.O. Box- 5303 0 6-5687032Mr. Md. Mizanur Rahman ManagerAl Ain Branch Mr. Md Shahadat Hossain ManagerSk. Khalifa Bin Mohd. Al-Nahyan Building, Main Market Centre, Main Street,P.O. Box- 1107 0 3-7513425

Lloyds TSB Bank plc

Dubai Main BranchAl Wasl Road, Opp. Safa Park Tel 04 3422000P.O. Box: 3766, Dubai, UAE Fax 04 3422660E-mail: information@lloydstsb.ae Website: www.lloydstsb.aeVivek Vohra Head of Corporate OriginationGiles Cunningham Regional Manager, UAE & Gulf States 04 3023267Bert de Ruiter Managing Director 04 3023267Steve Williams Consumer Banking Director 04 3023267 Jon Mortell Head of Corporate Banking 04 3023266Suresh Jadhwani Treasury Manager 04 3023256Tim Goddard Head of Operations and IT 04 3023250Derek Vaz Head of Finance and Planning 04 3023330Caroline Ridley HR Manager 04 3023270Steve Snowdon Head of Middle OfficeAlex de Melo Head of Treasury Trading Edson Suppo Head of Treasury Strategy & Risk Claire Thomas Head of Human Resources

Dubai Customer Service CentresCommunity Centre at Arabian Ranches, Dubai Tel 04 3023318 Fax 04 3618035Dubai Healthcare City (Behind Wafi City) Tel 04 3023349 Fax 04 3624805

Man Investments Middle East Limited

Representative Office Dubai Tel 04 3604999Level 5, West Wing, The Gate, Dubai Internaional Financial Centre Fax 04 3604900P.O. Box: 73221, DubaiWebsite: www.maninvestments.comE-mail: ManDubai@maninvestments.comPatrik Merville Chief Executive OfficerKamlesh Bhatia Deputy Chief Executive Officer

Mashreqbank

Dubai Tel 04 2223333Head Office, Omar Bin Al Khatab Street, Deira Fax 04 2226061P.O. Box 1250, Dubai History: Established on 1st May, 1967 as Bank of Oman Limited. On October 1st 1993 name was changed to MashreqBank PSC.bdullah Al Ghurair President and ChairmanAbdul Aziz Al Ghurair CEOAli Raza Khan Head of Corporate AffairsDouglas Beckett Head of Retail BankingOmar Bouhadiba Head of Investment and Corporate BankingNabeel Waheed Head of Treasury and Capital MarketsNigel Morgan Head of Audit Review & ComplianceMajid Husain Head of Financial InstitutionsSomnath Menon Head of Operations & TechnologyKantic DasGupta Head of Risk ManagementAlexander Sinclair Head of Technology Mubashar Khokhar CEO of Badr Al IslamiEbrahim Kazi Head of Marketing and Corporate CommunicationsSaad Hakim Events and Public Relations ManagerAl Khaleej Street, Deira 04 2717771Souq Al Kabir Branch 04 2264176Hor Al Anz, Deira 04 2623100Jumeirah Branch 04 3441600Jebel Ali 04 8815355Khor Branch 04 3534000Bur Juman Centre 04 3527103Al Riqa, Deira 04 2229131Al Aweer 04 3333727Abu Dhabi 02 6274300Main Branch, Khalifa StreetMusaffa 02 5555051Zayed the 2nd Street 02 6334021Al Salam Street 02 6786500Al Mushrif 02 4432424Baniyas 02 5821100Muroor 02 4481858Khalidiya 02 6665757Al Ain 03 7667700Al Ain Main Street Ali Ibn Abi Tailb St. 03 7669968 Ajman 06 7422440Shk Humaid Bin Abdul Aziz Street, Near Ajman MuseumFujairah 09 2221100 Sh. Hamad StreetRas Al Khaimah 07 2361644King Faisal Street.

March 200960

Al Nakheel RAK 07 2281695Sharjah Main 06 5684366Bank Street, RollaKing Abdul Aziz Street 06 5730883Dhaid 06 8822899Main Street, Sh. Arsan Hameed Bldg., DhaidDibba 09 2444230Kalba 09 2777430Kalba CityKhorfakkan 09 2385295Umm Al Quwain 06 7666948 King Faisal Street, Next to New Souk

Merill Lynch International & Co.C.V

Representative Office Dubai (04) 3975555Business Center Building, Khalid Bin Walid StreetP.O. Box 3911, DubaiTelefax 04-3975252Executive Director Mones Bazzy

NATIXIS

Dubai Branch Tel 04 7026777DIFC Gate Village Fax 04 7026820Building No. 8, 5th FloorP.O Box 33770Email: natixis@emirates.net.aeWebsite: www.natixis.frPhilippe Petitgas CEO

National Bank of Abu Dhabi

Head Office: Abu Dhabi 02 - 6111111One NBAD Tower, Khalifa St., P.O. Box 4, Abu DhabiTelex 22266/7 MASRIP EMHistory: Established in 1968H.E. KHALIFA MOHAMED AL KINDI ChairmanH.E. DR. JAUAN SALEM AL DHAHIRI Deputy ChairmanMICHAEL H. TOMALIN Chief ExecutiveABDULLA MOHAMMED SALEH ABDULRAHEEM GM & Chief Operating OfficerSAIF ALI MOHAMED MUNAKHAS AL SHEHHI GM Domestic Banking DivisionQAMBER ALI AL MULLA GM International Banking DivisionABHIJIT CHOUDHURY GM & Chief Risk OfficerJOHN GARRETT GM & Chief Audit & Compliance Officer

Abu DhabiMain Branch 02 - 6111111Khalidiya 02 - 6666800Dept. of Social Services & Commercial Buildings 02 - 6346673ADCO 02 - 6672642ADMA 02 - 6263225ADNOC 02 - 6669143Abu Dhabi Municipality 02 - 6744749NPCC 02 - 5549282 ZADCO 02 - 6768821HILTON 02 - 6812280Abu Dhabi International Airport 02 - 5757303Sheikh Rashed Bin Saeed Al Maktoum Road 02 - 6419800Abu Dhabi Mall 02 - 6452200Arabian Gulf Road 02 - 4478878Baniyas 02 - 5831625Bateen 02 - 6658332Between The Two Bridges Area 02 - 5589446Corniche 02 - 6220300

Dalma Island 02 - 8781240TAMM 02 - 8945528Das Island 02 - 8731099Liwa 02 - 8822388Madinat Zayed 02 - 8846146Government Complex 02 - 8945428Al Mirfaa 02 - 8836506Al Ruwais 02 - 8776343Al Muroor 02 - 4481918Mussafah 02 - 5553357Dept. of Social Services & Commercial Buildings (Mussafah) 02 - 5520681Mussafah Municipality 02 - 5540300Industrial City of Abu Dhabi 02 - 5501125Al Salam St. 02 - 6442900Al Shahama 02 - 5632411New Al Shahama 02 - 5635695Abu Dhabi Municipality-Shahama 02 - 5631385Sweihan 03 - 7347919Marina Mall 02 - 6816002Al Etihad 02 - 6111111Emirates Palace 02 - 6908900National Exhibition Centre 02 - 4494996Mina Road 02 - 6767665

Al AlinAl Ain Clock Tower 03 - 7642400Al Ain 03 - 7516900Al Ain Cement Factory 03 - 7828060Al Ain International Airport 03 - 7855511Al Ain Defence 03 - 7688824Al Sanaiya 03 - 7213222Al Hayer 02 - 7322400Al Ain Mall 03 - 7519900

AjmanAjman 06 - 7422996

DubaiDeira 04 - 2226141Dubai Side 04 - 3599111Jebel Ali 04 - 8815655Sh. Zayed Road 04 - 3433311 Al Qusais 04 - 2674176Jumeirah 04 - 3499001Mall of the Emirates 04 - 3413888

FujairahFujairah 09 - 2222458Dibba 09 - 2444223

Ras Al KhaimahAl Nakheel 07 - 2281753 Ras Al Khaimah 07 - 2334333

SharjahAl Bourj Avenue 06 - 5695500Sharjah 06 - 5721111Al Falah Camp Office 06 - 5385969Al Dhaid 06 - 8822929Khorfakkan 09 - 2385250Kalba 09 - 2772112

Umm Al QuwainUmm Al Quwain 06 - 7660033

March 2009 61

National Bank of Bahrain

Abu Dhabi Tel 02 6335288Khalaf Bin Ahmed Al Otaiba Building, Sh. Hamdan Street Fax 02 6333783P.O.Box 46080Email: nbbbr96@emirates.net.aeWebsite: www.nbbonline.com

Farouk Khalaf UAE Country Manager 02 6335299Ingersoll Ramalingam Manager Credit 02 6311248

National Bank of Dubai

Dubai Tel 04 2222111Head Office Baniyas Street, Deira Fax 04 2283000P.O. Box 777 Email: contactus@nbd.co.aeWebsite: www.nbd.comHistory: Established in1963 as National Bank of Dubai Limited. In 1994 name was changed to National Bank of Dubai.

R. Douglas Dowie CEOJoyshil Mitter CFOAlex Richardson COOLeslic Rice CROAbdul Shakoor Tahlak CM - Intl.Ghanim Bin Zaal CM - Business DevelopmentAli Al Najjar CM - LiabilitySuvo Sarkar Head of RetailRajesh Thaper Head Of CorporateFaranak Foroughi Head of TPOHusam Al Sayad Head of HRG. Krishnamoorthy TreasurerSue Evans Head of IS&TAlan M. Smith Head of Group AuditA. Chandran Head of BPQMWalid El Masri Head of Corp CommRashmi Malik Head of StrategyAbdul Fattah Sharaf GM NFSMohamed Al Neaimi GM AqaratAli Kaitoob Head of Dist. RetailP.S. Sastry SM CEO’s OfficeHesham Qassimi Divisional Manager Corporate Banking

Abu Dhabi P.O. Box: 386 Tel : 02 6394555 Fax : 02 6346767Ajman P.O. Box: 712 Tel : 06 7456555 Fax : 06 7456060Ajman Archives Tel : 06 7444606 Fax : 06 7425883Al Mizhar Tel : 04 2641221 Fax : 04 2640569Al Ain P.O. Box: 16122 Tel : 03 7644345 Fax : 03 7668515Burjuman Centre Tel : 04 3555222 Fax : 04 3554455Bullion Tel : 04 2284757 Fax : 04 2289090Convention Centre Branch Tel : 04 3320808 Fax : 04 3320908Dubai Central Fruit & Vgtbl. Mkt Branch Al Awir Tel : 04 3333880 Fax : 04 3333870Dubai International Airport Tel : 04 2200404 Fax : 04 2244614Dubai International Airport Pay Office Tel : 04 2164946 Fax : 04 2244614Dubai Internation Airport Tel : 04 2162450 Fax : 04 2244614Dubai Internation Airport Tel : 04 2166995 Fax : 04 2244614Dubai Internation Airport Tel : 04 2162452 Fax : 04 2244614Dubai Internation Airport Tel : 04 2162434 Fax : 04 2244614Dubai Internation Airport Tel : 04 2162740 Fax : 04 2244614Dubai Media City Pay Office Tel : 04 3902007 Fax : 04 3908855Deira City Centre Tel : 04 2951555 Fax : 04 2951525Dubai Airline Centre Tel : 04 2952555 Fax : 04 2955655

Dubai Airport Free Zone Tel : 04 2995550 Fax : 04 2995557Dubai Courts Tel : 04 3366702 Fax : 04 3353906Dubai Media City Pay Office Tel : 04 3030400 Fax : 04 3908855Emirates Tower Tel : 04 3300133 Fax : 04 3300155Fahidi Tel : 04 3535575 Fax : 04 3535575 Emirates Tower Tel : 04 3530308 Fax : 04 3534601Emirates Tower Tel : 04 2823400 Fax : 04 2823640Fahidi Direct Banking Tel : 04 3532840 Fax : 04 3531443Fujairah Branch P.O. Box: 1744 Tel : 09 2233335 Fax : 09 2233336Hamriya Tel : 04 2663189 Fax : 04 2690103Hatta Tel : 04 8523183 Fax : 04 8521051Ibn Battuta Mall Branch Tel : 04 3685499 Fax : 04 3685501Ittihad Road Tel : 04 2955600 Fax : 04 2955611Jumeirah Branch Tel : 04 3420202 Fax : 04 3421112Jebel Ali Tel : 04 8816087 Fax : 04 8816961Main Office Tel : 04 2222111 Fax : 04 2283000Maktoom Branch Tel : 04 2281141 Fax : 04 2235456Malleq Emirates Branch Tel : 04 3410777 Fax : 04 3410707Muhaissnah Branch Tel : 04 2544545 Fax : 04 2544646Nadd Al Shiba Tel : 04 3363939 Fax : 04 3363788Oud Metha Branch (Ex-Gulf Tower Branch) Tel : 04 3370222 Fax : 04 3366145Ras Al Kaimah P.O. Box : 1932 Tel : 07 2279888 Fax : 07 2279889Rashidiya Tel : 04 2859523 Fax : 04 2854847Souk Madinat Jumeirah Branch Tel : 04 3686130 Fax : 04 3686195Sh. Zayed Road (Saeed Tower) Tel : 04 3313183 Fax : 04 3310629Sharjah P.O. Box : 21850 Tel : 06 5738888 Fax : 06 5733000Umm Al Quwain P.O. Box : 22 Tel : 06 7656154 Fax : 06 7655151Emirates Tower Tel : 06 7656152 Fax : 04 3300155Umm Suqeim Tel : 04 3485222 Fax : 04 3482535

National Bank of Oman

Abu Dhabi Bin Sagar Towers, Najda Street Tel 02 6348111 / 6323456P.O. Box 3822 Fax 02 6325027Ravi S. Khot Country Manager 02 6393028Salim Al Khanjri Manager - Operations 02 6392535Minhajuddin Niazi Manager - Consumer Banking & Business Development 02 6326560K.K. Gambhir Manager - Corporate Banking 02 6394922

National Bank of Umm Al Qaiwain

History: Established in 198224/7 Call Centre Number: 600 56 56 56 E-mail: nbuq@nbq.ae Website: www.nbq.aeSh. Nasser Bin Rashid Al-Moalla Managing Director Mohamed Abdel Rahim Al Mulla General Manager

Umm Al Qaiwain Branch Tel: 06 7066666NBQ Building, King Faisal Street Fax: 06 706 6677P.O.Box 800, Umm Al QaiwainFalaj Al Mualla Branch Tel: 06 8824447NBQ Building, Shaikh Zayed Street Fax: 06 8824445P.O.Box 11074 Falaj Al MuallaDubai Branches Tel: 04 3976655NBQ Building, Khalid Bin Al Waleed Street Fax: 04 3975382P.O. Box 9715 Dubai Deira Branch Tel: 04 2651222Opposite Dubai Police Head Quaiter Fax: 04 2651333Al Ittihad Street, P.O. Box 8898 Deira, Abu Dhabi BranchHamdan Bin Mohammed Street (# 5) Tel: 02 6775100P.O. Box 3915 Abu Dhabi Fax: 02 6779644Mussafah Branch Tel: 02 5555088P.O. Box 9770 Abu Dhabi Fax: 02 5553559

March 200962

Al Ain Branch Tel: 03 3751300Oud Al Touba Street Fax: 03 7513500Al Mandoos RoundaboutP.O. Box 17888 Al AinSharjah Branch Tel: 06 5742000King Faisal Street, Fax: 06 5742200P.O.Box 23000 SharjahNBQ Kiosk Fax: 06 5742200Sharjah Mega MallP.O.Box 23000 SharjahAjman BranchesCity Center Branch Tel: 06 7436000Ajman City Center Fax: 06 7436060P.O.Box 4133 AjmanMasfout Branch Tel: 04 8523377 NBQ Building Fax: 04 8523093Main Street P.O.Box 12550 Masfout, AjmanFujairah Branch Tel: 09 2232100Fujairah Insurance Co. Building Fax: 09 2232220Hamad Bin Abdulla RoadP.O.Box 1444 FujairahRas Al Khaimah Branch Tel: 07 2366444Corniche Al Qawasim Road Fax: 07 2364470P.O.Box 32253Ras Al Khaimah

Philippine National Bank

Dubai Representative Office Room 108, Al Nakheel Bldg., Zabeel Road, Karama Tel 04 3365940P.O. Box 52357, Dubai, UAE Fax 04 3374474E-mail: pnbdxb@emirates.net.aeAmroussi Tillah Rasul First Vice President & Regional Representative

Rafidain BankAbu Dhabi Tel 02 6335882 / 3 Al Nasser Street, Glass Bldg. Fax 6326996P.O.Box 2727, Abu Dhabi Salah Mahid Branch Manager

Royal Bank of Canada

Dubai Representative Office Tel 04 3313196API World Tower, Suite 1002, Shk. Zayed Road, P.O. Box: 3614. Telefax 04 3313960Umaima Zaman senior managerAshwani.k.Dewitt senior managerGlobal Private BankingAshish Anand Chief Representative

RAK Bank

Ras Al Khaimah Head Office, Oman Street, Al Nakheel Tel 07 2281127P.O. Box 5300 Fax 07 2283238E-mail: nbrakho@emirates.net.ae; www.rakbank.aeHistory: Established in 1976 as The National Bank of Ras Al Khaimah. In 2003, name was changed to RAKBANK

H.E. Sheikh Omar Bin Saqr Al Qasimi ChairmanH.E. Sheikh Salim Bin Sultan-Al-Qasimi DirectorMr. Hamad Abdulaziz Al Sagar DirectorMr. Essa Ahmed Abu Shuraija Al Neaimi DirectorMr. Majid Saif Al Ghurair Director

Mr. Ali Samir Al Shihabi DirectorMr. Yousuf Obaid Essa DirectorMr. Graham Honeybill General ManagerMr. Ian Hodges Head of Personal BankingMr. Anil Sukhia Head of Corporate BankingMr. Steve O Hanlon Chief Operating OfficerMr. Geoff Harman Head of Internal ControlsMr. Jose Braganza Head of CreditMr. Malcolm D’Souza Head of TreasuryMr. Nigel Summersall Chief Internal AuditorMrs. Susan Gardner Head of Human ResourcesMr. Venkat Raghavan Head of FinanceDubaiDeira Maktoum Branch Tel : 04-2248000Deira Souk Branch Tel : 04-2248000Umm Hurair Branch (Bur Dubai) Tel : 04-2248000Sultan Business Center ( Dubai Main Branch) Tel : 04-2248000Sheikh Zayed Road Branch Tel : 04-2248000Emaar Business Park Branch Tel : 04-2248000Marina Diamond Branch Tel : 04-2248000Al Quoz Branch Tel : 04-2248000Al Qusais Branch Tel : 04-7058444Ibn Battuta Mall Branch Tel : 04-3685890SharjahSharjah Main Branch Tel : 06-5746888Sharjah Industrial Area Tel : 06-5132666Kalba Branch Tel : 09-2778707Khorafakkan Branch Tel : 09-2371900Al AinAl Ain Branch Tel : 03-7644222Abu DhabiAbu Dhabi-Tourist Club Branch Tel : 02-6448227Khalidiya Branch Tel : 02-6666658Ras Al KhaimahRAK Town Branch Tel : 07-2333744Sha’am Branch Tel : 07-2666833 Badr Branch Tel : 07-2448822Al Mannei Branch Tel : 04-8525999Al Rams Branch Tel : 07-2662434Al Dhait Branch Tel : 07-2351147Al Nakheel Branch Tel : 07-2281127

Sharjah Islamic Bank

Mohammed Abdalla Chief Executive Officer 06-5115116Ahmed Saad ibrahim Chief Operating Officer 06-5115118Mohammed Rizwan Chief Risk Officer 06-5115172Saeed M Ahmed Al Amiri Head, Investment Group 06-5115000Ossama Salah El Din Head, Retail Banking 06-5115339G . Ramkirshinan Head of Coroprate Banking Group 06-5115111Hussam A. Abu Aisheh SVP-Chief Internal Audit 06-5115153Mohammed Ishaq Chief Dealer 06-5115151Mohamed Azmeer Head of Credit Division 06-5115319Eman Jasim Sajwani Head of Human Resources Group 06-5115170Myron Britto Head, nformation Technology Div.-CIO 06-5115444Sufyan Maysara Head of Shariaa Supervision Divison 06-5115213BranchesMain Branch - Al Brooj Avenue Mohammed Yousif 06-5115121King Faisal Street Branch Abdul Salam Al Ali 06-5746805Ladies Branch Laila Ali Salem 06-5746807American Unversity Branch Mohd Mousa Ali 06-5585789Al Dhaid Branch Khalid M. Ajmani 06-8829414Industrial Area Branch Waleed Abdul Qadir 06-5397623Sharjah Expo Branch Jassim Al Awadi 06-5992502Sharjah Buhaira Branch Osama Ahmed AlSalman N/AKhorfakhan Branch Yousif M. Abdullah 09-2387490Dibba Branch Ali Al-Abdouli 09-2442601

March 2009 63

Kalba Branch Abdullah Bin Hikal 09-2774204Fujairah Branch Nawal Mohamed AlMaghribi 09-2244339Dubai Branch Mohamed Ibrahim Alghufili 04-2698322Sheikh Zayed Branch Maisoon Zainudin 04-3217543Al Twar Branch Maha AlBanna 04-2638335Abu Dhabi Branch Thomas P.Y. 02-6224166Al Ain Branch Majid Sha’abaan 03-7513200

Shuaa Capital PSC

Head Office Tel: 04 3303600/ 04 3199778Emirates Towers Hotel, Level 7 Fax: 04 3303550P.O. Box: 31045, Dubai, UAE.Website: www.shuaacapital.com Iyad Duwaji CEOAbeer Ayash Marketing and PR coordinator

Societe Generale

Dubai DIFC Gate Village, Bldg. 6, 4th Floor Tel.: 04 4257500Sheikh Zayed Road, Dubai Fax: 04 3653170 Website: www.socgen.com Alain L. Tave Chief Regional Representative

Standard Bank Plc - Dubai Branch (DIFC)

Dubai Emirates Tower, Office-16 B Tel 04 3300011P.O. Box 504904 Fax 04 3300169Website: www.standardbank.comJeffrey Rhodes General Manager 04 3300164Kate Lunjevich Head of Compliance & Operations

Standard Chartered Bank

Head Office: United KingdomDubai Main Branch Tel 04 3520455 Head Office: Al Fardan Building, Fax 04 3526679 Mankhool Road, Bur Dubai P.O. Box: 999, Dubai - United Arab Emirates www.standardchartered.com/ae/Phone Banking: +9714 3138888 (24 hours)Dubai Branch P. O. Box 999, Al Mankool Road, Dubai , UAE 04-3599550Deira Branch P. O. Box 1125, Al Nasr Square, Dubai, 04-5085300Gold Souq BranchP. O. Box 64555, Gold Souq, Dubai , UAE 04-2262699Jebel Ali BranchP. O. Box 16920 , Jebel Ali, Dubai , UAE 04-5085200Sharjah BranchP. O. Box 5, Al Boorj Avenue, Sharjah , UAE 06-5916100Hamdhan BranchP. O. Box 240,Al Fardan Tower ,Abu Dhabi, UAE 02-6165600Istiqlal BranchP. O. Box 241, Istiqlal Street, Abu Dhabi UAE 02-6165400Al Ain BranchP. O. Box 1240, Near Clock Tower, Al Ain, UAE 03-7056800Dragon Mart BranchP. O. Box 4166, Dragon Mart mall, Dubai, UAE 04-5085260Emaar Business Park BranchP. O. Box 103669,Building 3 ,Dubai , UAE 04-5085255Wealth Management CenterP.O Box 999, Jumeira Beach Road, Dubai UAE 04-5085706

The Housing Bank for Trade & Finance

Abu Dhabi P.O. Box 44768 Tel 02 6268855/6270280 Fax 02 6271771Muhanad Habashneh Representative

Union de Banques Arabes et Francaises UBAF

Dubai Creek Tower, Baniyas Road, Deira Tel 04 2284080P.O. Box 29885 Fax 04 2284070Hamed Hassouna Chief Representative GCC & Yemen

UBS AG

Abu Dhabi ADNIC Bldg., 5th Floor, Sh. Khalifa Street Tel 02 6275024P.O.Box 3744 Fax 02 6272752Website: www.ubs.comRoger Leitner Senior Representative

DubaiCreek Tower, Office 17A, Baniyas Road, Deira 04 2240044Peter Schaer Senior Representative 04 2220006

DIFC Gate Village, Bldg. No. 6, 5th Floor Tel.: 04 3657150Sheikh Zayed Road Fax: 04 3657191P.O Box 506542Per Larsson Senior Representative

Union National Bank

Abu Dhabi Tel 02 6741600Head Office, Salam Street, P.O.Box 3865, Abu Dhabi Fax 02 6786080Website: www.unb.aeHistory: Established as a Public Joint Stock Company in 1982Nahyan Bin Mubarak Al Nahyan ChairmanMohammad Nasr Abdeen Chief Executive OfficerAbu Dhabi Corniche 02 632 1600City Centre 02 627 3471Najda 02 632 4981Hazzaa 02 641 2288Khalidiya 02 635 2511Adgas Booth 02 627 0611Musaffah 02 555 9111Shahama 02 563 4600Baneyas 02 582 1886Al Dhafra/Madinat Zayed 08 884 8484Al Muroor 02 444 8384Al AinSh. Khalifa Street 03 7644551Al Jimi 03 7626240DubaiMain Branch, Deira 04 2211188 Al Maktoum Street 04 2232266Khalid Bin Al Waleed Road 04 3516444Al Bustan 04 2636388Jebel Ali 04 8810999Sheikh Zayed Road/Jumeira 04 3329911Rashidiya 04 2857686

March 200964

Ajman Central - Emirates Post 06 7425552Fujairah 09 2222747Ras Al Khaimah 07 2286600Sharjah 06 5686141King Abdul Aziz 06 5746161

United Arab Bank

General Management & H.O. Tel 06 5733900Sh. Abdulla Bin Salim Al Qassimi Building, Al Qasimia St., Sharjah Fax 06 5733906E-Mail Address uarbae@emirates.net.aeWebsite www.uab.aeHistory: Established 1975

Bertrand Giraud General Manager 06 5733900Awni Alami Dy. General Manager 06 5733900Gibert Hie Asst. GM-Corporate & Retail 06 5733900Arif Premdjee Asst. GM-Admin. & Finance 06 5733900

United Bank Limited

Dubai Gargosh Bldg, Khalid Bin Waleed Street Tel 04 3552020

P.O. Box 1367, Dubai Fax 04 3514525Email: ublgmuae@emirates.net.aeWebsite: www.ubl.com.pkWajahat Husain Head of Middle EastMaruf Ahmed General Manager UAE

Wachovia Bank National Assoc.

Representative Office Dubai The Atrium Centre, Khalid Bin Waleed Street, Bur Dubai 04 3556244P.O. Box 53089 Fax 3557117Head Office: USAJ.Kennedy Thompson Chairman & Chief Executive Officer Michael P. Heavener International DivisionDubai Branch:Chafic Haddad Vice President & Regional Manager Carol Hampson Customer Services Representative

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Portfolio UAE Banking FP DSF.ai 1/12/09 11:38:39 AMPortfolio UAE Banking FP DSF.ai 1/12/09 11:38:39 AM