DealZone

Dubai World in their hands

Interest is a murky business in Muslim finance, in which religious doctrine prohibits earning money from money loaned. And while bankers are largely upbeat about the deal being offered by Dubai to bail out Dubai World and its property unit Nakheel, relieved that they are getting anything at all, perhaps they will take some solace from the interest prohibition when they say a final goodbye to any interest they were due.

Dubai World is being recapitalized and Nakheel’s bonds are to be paid off – sans interest — with $9.5 billion of aid. The funds include about $4 billion from the government of Dubai and a previous loan of $5.7 billion from oil-rich neighbor Abu Dhabi. The plan is Dubai’s attempt to restructure some $26 billion in debt held by Dubai World, owner of the QE2 liner and Cirque du Soleil assets. Nakheel is the developer that conjured the emirate’s iconic global map made of islands.

Some investors were expecting Abu Dhabi to step in with more cash, but it is apparently done funding its neighbor’s excesses. Maybe next boom, they’ll be back.

DealZone Daily

The Dubai government unveiled plans to recapitalise its indebted Dubai World flagship and repay Nakheel bonds in full, injecting what it said was $9.5 billion in new funding, but without new aid from Abu Dhabi. Read the Reuters story here.

Bharti Airtel looked set to wrap up its $9 billion deal to buy most of Kuwaiti telecom group Zain’s African assets, giving India’s top mobile operator a foothold in the frontier market after two failed attempts to buy South Africa’s MTN. Read the Reuters story here.

For more on these and the rest of the latest deal-related news from Reuters, click here.

Adelson splashes the pot in Asia

Sands China’s weak debut in Hong Kong - a first-day drop of 10 percent – was the fourth-worst launch on that market this year, but came as little shock to analysts who were betting against the Asian gambling play. Rival Wynn Macau is down 5 percent since listing in October.

Sands China’s $2.5 billion IPO wasn’t helped by the default tremors kicked off by Dubai, which has helped to expose a whole new area of risky bets in emerging markets.

“The fever for casino stocks is seen to be over now,” said Patrick Yiu, a director at CASH Asset Management. “Investors are worrying about the industry outlook, especially keen competition, when more casinos are ready for business.”

DealZone Daily

Auto maker General Motors is grappling with the future of its European units Saab and Opel after one sale collapsed and the other was pulled, targeting the bulk of its 9,000 job cuts at Opel’s German factories.

Bookseller Borders UK called in the administrators yesterday, adding its name to a growing list of failed British high street retailers. Administrator MCR is hoping to sell the business, bought by Valco (the private equity arm of turnaround specialist Hilco) in July this year, as a going concern.

Lachlan Murdoch, son of News Corp chief executive Rupert Murdoch, sold some $27.6 million of his shares in his father’s company as he bought 50 percent of Daily Mail & General Trust’s radio operations in Australia.

Nasdaq powers Iraqi stock exchange’s electronic trading

iraqiflagTalk about trying to get a piece of an emerging market.

Nasdaq OMX said on Tuesday that its trading and clearing system was used in the launch last week of electronic trading on the Iraq Stock Exchange, or ISX, as it is known.

It is not the first time U.S. exchanges have partnered with counterparts in the Middle East. Nasdaq operates Nasdaq Dubai, and last year, the New York Stock Exchange bought a 25 percent stake in Doha Securities Market. But it may well be the first time an exchange struck a deal in a war torn country, another sign that Iraq may slowly be returning to a semblance of normalcy.

With 3,800 listed stocks, Nasdaq is well positioned to help out ISX, an embryonic exchange started in 2004 that lists only 91 stocks. About half of those are finance-related companies, such as Bank of Baghdad and Babylon Bank, while others include hotels and agricultural companies. Please click here to see the list.