Category Archives: Summit

Cure for lending constipation needed

DUBAI/ Yes, the market for IPOs is opening up, investors are regaining confidence and the worst seems to be over, but challenges are still looming and there's a dire need for a change in regulation. Or so suggested Shuaa Capitals' chief Sameer al-Ansari.

"With the balance sheet of banks, whatever is keeping them constipated, we need to give them something to start. Banks have to be more comfortable and confident that there are no more shocks on the horizon," said Ansari at the Reuters Middle East Investment Summit in Dubai on Tuesday.

The right provisions need to be made -- and that means more acknowledgment of non-performing loans -- in turn bringing adequacy ratios down, so that banks get a boost and start
lending again, Ansari noted.

"We need to open the tap a bit, even if its a drip," the banking exec said, using hand gestures to illustrate his point. "We can't have growth in the economy if its negative."

Ansari, who'd made recommendations - simple to drastic - to decision makers in Dubai, suggesting solutions, cited the Irish example of gathering all bad debts linked to real estate and placing them in a government bank.

"It should be looked at here. If that's what's making the banks constipated, then lets do it!" he says.

Dubai, one of seven emirates that make-up the UAE federation, was hard hit by the global financial downturn and endured billions of dollars in projects cancellations, not to mention the $25 billion debt restructuring of Dubai World.

So is the worst over? Ansari opts for cautious optimism.

"We've seen the worst, been through the bottoming out process. I see growth coming back," he said. "We'll see a slow gradual recovery but the pace will be different in different places of the region."

The region still boasts strong fundamentals, underpinned by strong oil prices which drive government spending, a young growing population, a developing consumer society with regional risk ratings that are far better than any of the other regions by several notches, he said.

All of this makes one wonder why the region is undervalued compared to the rest of the world, he said.

On anti-Dubai comments, Ansari said: "When people go through a Dubai bashing exercise, you have to remember Dubai isn't sitting on the moon by itself."

While Dubai and the UAE have greater challenges than the rest of the region, Dubai's been going through a vicious circle that hit its main three economic pillars.

"If you look at Dubai, we've been through the impact of the global financial crisis, a severe regional real estate crisis and a major stock market crash," he said. "There has been phenomenal wealth erosion."

But the decline has finally been arrested and an upward trend is taking place.

"Recovery can only happen if these pillars bounce back. These three pillars are what will drive growth. I am cautiously optimistic that the vicious circle is beginning to come back up," he said.

(Writing by Tamara Walid in Dubai)

No bonds for Arabtec; not for now anyway

MIDEAST-SUMMIT/ARABTEC Just to be clear, Arabtec is not considering a convertible bond issue.

The builder has no need for funds and has adequate access to capital if needed. But nonetheless its chief financial officer Ziad Makhzoumi is watching the region's increasing capital raising activities with interest.

"I don't think we need any funding whatsoever... As a CFO I have to look at all the options all the time," he told the Reuters Middle East Investment Summit in Dubai on Monday.

Convertible bonds are an attractive way to raise funds for listed companies, he said, highlighting Emaar Properties' recent issuance plans.

Earlier this month, Emaar, the builder of the world's tallest tower in Dubai, outlined plans for a $500 million convertible bond issue.

Makhzoumi said he saw more convertible bonds coming to the market, but there was no mention at all of Arabtec.

Arabtec has expansion plans which include a push into Central Asian states like Kazakhstan and Uzbekistan, which could be funded from internal resources, he said.

"Any company needs working capital. Usually it's in the form of equity or some form of borrowing. In our case our gearing is very, very low. Any process takes time, the decision has to be made first. And I don't think we are at this stage to consider."

So Arabtec is not considering a convertible bond issue. For now at least.

(Writing by Jason Benham in Dubai)

Is investor confidence returning to the Middle East?

UNITED ARAB EMIRATES/A recovery in the Middle East and the prospects for investment are on the agenda at the Reuters Middle East and Investment Summit, taking place in Dubai, Riyadh, Cairo, Kuwait, Beirut, Bagdad, Abu Dhabi and London.

In the wake of Dubai’s debt crisis, which rocked financial markets globally and dented confidence in the region, top executives and officials will discuss whether the investment climate in the region is improving and confidence returning. 2011 will be a year of more restructurings, but the region’s capital needs will lead to a surge in debt issues and even a possible revival of the IPO market.

Reuters Middle East Investment Summit will generate exclusive stories, investable insights, online videos and blog postings. Check back here for more over the course of this week.

Infrastructure still top-of-mind in India

On Monday, we kick-off the 2010 India Investment Summit. We'll have exclusive interviews in Mumbai and Bangalore. In 2006 we held the first Reuters India Investment Summit. It was my first time in India. I've had the privilege to return every year. How time flies. Here we are four years later. Some of the key players may have changed but the big, over-arching theme is still the same: Infrastructure. It's the key to realizing the country's potential but bureaucracy, tough financing and hesitant overseas investment have slowed development in the sector, calling into question the future of India as a powerhouse.

India has had only mixed success in its efforts to accelerate construction of roads, bridges and power plants. The statistics are mind-blowing...the country is growing at 8.5% and has a population of 1.2 billion that is making a mad-dash from the countryside to sprawling cities. Call them growing India's expanding cities there is an acute need to speed project approvals, implement new financing models and attract overseas investment for much needed infrastructure. But, while the business opportunity is tremendous investors looking to India as a way to play the emerging markets are wary given the history of missed deadlines and red tape that makes getting projects completed a challenge.

Is red tape getting better or worse? Which sectors are attracting most interest? How do returns compare with similar projects globally? How do sector companies attract foreign investment in large projects? Are the challenges forcing investors and developers to look overseas instead?

These topics and more will be the key points of discussion at the Reuters India Investment Summit in Mumbai and Bangalore September 27-29.

To read our exclusive stories and analysis starting September 27 copy and paste the link below to your browser:

Lady Gaga may not be the only one singing a new tune in November

The 2010 Reuters Washington Summit included 4 days of on-the-record interviews with policymakers, congressmen and Obama Administration officials here in the DC bureau. The interviews covered a wide range of topics…from the impact of the mid-term elections to the importance of the Lady Gaga vote.

With less than six weeks to go before the mid-term elections the focus was on what a potential shift in power to a Republican-controlled Congress could mean for policy priorities in the coming year. We heard from Senators’ McCain, Dodd, Gregg and Bingaman. On the House side we spoke with the man responsible for getting Democrats elected…Rep. Chris Van Hollen, Chairman of the Democratic Congressional Campaign Committee. He called this election season a “tough and challenging environment,’ but predicted Democrats would retain control of the House.

From the Obama Administration, White House Press Secretary Robert Gibbs opened his comments by admitting that early on the administration did not have a “real understanding of the depth of what we were in.” News of Larry Summers’ departure as White House advisor came on the eve of our interview with a man who has worked with Summers, Austan Goolsbee, Chairman of the White House Council of Economic Advisors. Goolsbee said he expected that Mr. Summers’ replacement wouldn’t be part of “a dramatic change in direction.” On the economy, Goolsbee noted that he does not see a double dip on the horizon and that “pulling back on current spending programs could spook the markets.”

On the regulatory front, FDIC Chairman Sheila Bair was adamant in her remarks about “ending too big to fail” and said that “the banking system is healing…and there is continuing improvement in low quality loans.” Meanwhile, Treasury’s Special Inspector General for TARP, Neil Barofsky, the man charged with policing the government’s exit from GM and AIG, said his group would begin a probe into the GM IPO after it launches to make sure that it was in the best interest of taxpayers.

On Afghanistan, we heard from Richard Holbrooke, Special Advisor on Afghanistan and Pakistan who was measured in his response to the Obama Administration’s planned timetable for withdrawal.

And, what about the Lady Gaga vote? Senator McCain brought up the pop star and her opposition to 'Don’t Ask Don’t Tell' which was scheduled for a vote the day after McCain’s visit to our bureau, saying “I didn’t Twitter back. I only twitter with Snooki as you know. I did say, I said, look, I welcome her in the debate, I’ll welcome all of her young fans into the debate. Let’s have everybody in the the debate…it’s good to have lots of people involved.”

The summit upshot: if polls are correct and Republicans win more seats in the Senate and retake the House, all of Washington may be singing a different tune come November 3rd.

To read more stories from the 2010 Reuters Washington Summit copy the link below into your browser:

Shift in power on the horizon in Washington?

Republicans stand poised to gain substantial influence in Congress, putting at stake billions of dollars in investment as a shift among power brokers throws legislative initiatives old and new into doubt. Reuters Washington Summit will bring together an influential line-up of insiders just weeks before Americans cast their votes, promising a must-read stream of exclusive news on the outlook for Congress and President Barack Obama's agenda. Editors and correspondents from the Reuters Washington bureau are sitting down with senior lawmakers, including GOP heavyweights in line for leadership, and regulators whose implementation of Wall Street and healthcare reform could be complicated by a change in control on Capitol Hill.

The Summit will generate exclusive stories, investable insights, online videos and blog postings, which will be immediately available only to Thomson Reuters clients during the Summit. Key interviews will air live exclusively on Reuters Insider - a new multimedia platform delivering relevant news, analysis and trade ideas presented through a personalized video experience. Visit

Is Apple in Intel’s future?

Apple developed the processor for it's recently launched iPad tablet PC in-house. Intel was left waiting on the sidelines but change may be in store. Future tablets from other device makers, and maybe even Apple, could prove to be a lucrative for the world's largest chipmaker. And why not, Intel already makes the microprocessors that are used in more than three quarters of the world's PCs. Tom Kilroy, Intel senior vice president and general manager of sales and marketing, says "wait til Computex" for a big announcement. So, what's likely to come out of the industry trade show this June in Taipei? Any thoughts? Click below to hear what Kilroy had to say in San Francisco at the 2010 Reuters Global Technology Summit.

Intel on Tablet Opportunities from Reuters TV on Vimeo.

VC’s Lament: the ones that got away

Vic Gundotra, Vice President of engineering at Google (R) and Omar Hamoui, founder and CEO of AdMob converse during the "Mobile: Where's The Money Going?" panel at the Fortune Tech Brainstorm 2009 in Pasadena, California July 23, 2009. REUTERS/Fred Prouser
Whether it’s passing up on a ticket to Woodstock or not buying Apple stock at $80 a share in January 2009, everybody has regrets.

So what do VCs regret?

We asked the panel of three money-men gathered for the VC Panel at the Reuters Technology Summit for their biggest laments when it comes to the deals they let get away.

“For me the one that comes to mind is AdMob,” said Khosla Ventures partner David Weiden, referring to the mobile advertising firm that Google announced plans to acquire for $750 million in November.

“I talked to Omar (Hamoui, AdMob’s founder and CEO) when he was one employee and spent a bunch of time with him early on and then we didn’t end up doing the investment together and I absolutely regret that,” he said.

Of course, with the Google acquisition now being held up by regulators, AdMob could end up remaining independent after all.

Accel Partner’s Richard Wong did take a chance on AdMob, with Wong now sitting on the company’s board of directors. Wong’s biggest regret has to do with Siri, a maker of voice-activated smartphone software for handling personal tasks that was recently acquired by Apple for an undisclosed sum.

“I remember looking at it, you have a clean shot at it…you just have to have the conviction to do it,” said Wong, who cited worries about how the application would get customers and compete against the likes of Google as issues that gave him cold feet.

Chris Moore, a partner at Redpoint Ventures had an early look at LinkedIn, the Internet social network for professionals that now counts more than 65 million users.

“I remember thinking about how useful this app was to me at the early stages, and not being able to squint to see the business model,” said Moore, who recalls telling LinkedIn co-founder Reed Hoffman that a deal wouldn’t happen.

“In hindsight the utility of the application and the focus is just enormous,” said Moore.

Impasse over model haunts raters again

Credit rating agencies are back in the spotlight and, just like a year or two ago, for all the wrong reasons.

Last week a U.S. Senate panel said the clout of Wall Street's big banks and the thirst for profits drove ratings agencies to inflate ratings on subprime mortage-related products, helping to fuel the worst financial crisis since the Great Depression. Making things worse for Moody's, S&P and Fitch, the Senators pointed to securities backed by subprime loans that Goldman offered in 2007 -- now the subject of an SEC fraud lawsuit -- as further evidence of questionable industry practices. Goldman has rejected the accusations.

The latest dose of self-inflicted misery for the raters is unlikely to prompt any fresh regulatory action.

The basic flaw in the whole business model is still unresolved -- that the issuer being rated pays the rater and no amount of blue sky thinking over the past three years since the crisis began has come up with a better idea that works.

Have the regulators signalled defeat on this long standing problem?

Greg Tanzer, secretary general of the International Organisation of Securities Commissions told the Reuters Regulation Summit this week that its key focus is on making sure IOSCO members across the world, such as the FSA in Britain and the SEC in the United States, apply its code of conduct for rating agencies -- a code the EU sniffily dismissed as ineffective and opted for a harder version in law last year.

For Tanzer, until the boffins come up with a practical alternative to the current ratings business model, the focus has to be on making sure agencies manage conflicts of interest, disclose them and improve the quality of ratings. Regulators have been criticised in the past for failing to follow through on principles adopted so IOSCO is keen to make sure its code takes effect on the ground before considering a further review.

Tanzer doubts the conflict of interest can ever be fully resolved and would simply be shifted elsewhere in some form.

Are regulators being pragmatic or defeatist? Perhaps neither -- the broader picture is one of slapping much heavier capital, liquidity charges and other safety belts on banks so that over time, policymakers hope ratings will become far less relevant and influential in the first place to matter.

Written by Huw Jones in London