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from Breakingviews:

Builder’s shaky foundations dent UAE’s credibility

By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

The shaky foundations of the most prominent builder in the United Arab Emirates have dented the country’s credibility. Shares in Dubai-based Arabtec, which helped erect the world’s tallest tower in the emirate, have more than halved since May 15, wiping almost $4.9 billion off its market value. The debacle is a warning to investors attracted by the UAE’s new emerging market status.

Graphic: Arabtec's rise and fall

Arabtec’s slide began last month amid rumours of a rift between its two largest shareholders. Chief executive Hasan Ismaik mysteriously trebled his stake in the contractor to 28.9 percent this year before resigning as chief executive on June 18. Fears that he will sell out have left a massive overhang on the stock. The slide accelerated earlier this month when Aabar, an investment fund of the Abu Dhabi government, cut its stake from 21.6 percent to 18.9 percent.

Arabtec has not provided any serious explanation for what is happening. The company has said that it’s implementing a “limited restructuring” but it hasn’t quantified that in any way. A cadre of senior executives has also left the company raising questions marks over the expansionist strategy Arabtec has pursued in the past two years, taking it into new sectors such as heavy industry and oil and gas.

from Hugo Dixon:

Six solutions for the UK housing crisis

By Hugo Dixon

Hugo Dixon is Editor-at-Large, Reuters News. The opinions expressed are his own.

Britain’s main economic problem is that the supply of homes isn’t rising nearly as fast as demand. This doesn’t just create the risk of a new housing bubble; young people are finding it increasingly hard to find places to live, especially in crowded London and southeast England. So I make no apologies for returning to the topic after only three weeks.

from Hugo Dixon:

Do national champions merit protection?

By Hugo Dixon

Hugo Dixon is Editor-at-Large, Reuters News. The opinions expressed are his own.

The French always protect their national champions, while the British have a laissez-faire approach to foreign takeovers of their top companies, right? That is certainly the caricature. Witness how France deterred PepsiCo from bidding for Danone in 2005 on the grounds that yoghurt was a strategic industry, while the UK allowed U.S.-based Kraft to move ahead with its hostile bid for Cadbury, the confectioner, in 2010.

from Breakingviews:

ICBC takes slow-burn approach to global expansion

By John Foley

The author is a Reuters Breakingviews columnist.  The opinions expressed are his own.

ICBC’s purchase of Standard Bank’s UK trading division has moved at a glacial pace, and gives rivals little to fear. That’s the best sign that China’s largest lender knows what it’s doing.

from Breakingviews:

Predictions 2014: Reversals and Revivals

By Breakingviews columnists

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Breakingviews’ annual compendium of financial foresight sets the agenda for the next 12 months. From Wall Street to the Great Wall, who has most potential to surprise, where are markets heading, and which are the companies to watch? Plus, we predict the winner of soccer’s World Cup.

from Breakingviews:

China is moving closer to its “Dubai moment”

By Peter Thal Larsen

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

China’s reform drive is getting closer to its “Dubai moment”. The emirate’s 2009 refusal to bail out its flagship holding company shocked lenders who had assumed all debt carried an implicit state guarantee. As China introduces market forces to its financial system, it will also have to draw a clearer line between public and private lending.

from Breakingviews:

Banks’ taper rehearsal gives emerging markets hope

By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The banking industry’s dress rehearsal for tapering by the Federal Reserve has given emerging markets hope.

from Breakingviews:

Benefits of being “G-SIFI” seem to outweigh costs

By Peter Thal Larsen

The author is a Reuters Breakingviews columnist.  The opinions expressed are his own.

The benefits of being labeled “too big to fail” may just outweigh the costs. Since regulators first published their list of global systemically important financial institutions, or G-SIFIs, the banks concerned have boosted capital and tamped down balance sheets. But smaller lenders, particularly in Europe, have done the same without joining the club. And shareholders seem not to notice much of a difference.

from Breakingviews:

“Secular stagnation” lament revives wealth paradox

By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Larry Summers reckons rich countries are suffering from long-term stagnation. If accurate, the former U.S. treasury secretary’s view is chilling. It has also revived an old, unresolved puzzle: Why doesn’t the world’s capital willingly go where it’s most needed?

from Breakingviews:

Iran deal offers the world a ray of hope

By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Iran’s nuclear deal offers the world a ray of hope. It won’t be easy to turn the agreement to curb Tehran’s nuclear activities from a six-month accord into a lasting solution that assures the world the country’s nuclear programme is peaceful. But the resulting diplomatic goodwill should make it harder to go backwards.

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