Dubai returns to the fixed-income sphere for the first time in more than a year after raising about $2 billion from dirham and dollar-denominated Islamic bonds.

Confidence in the emirate had run aground earlier this year as investors bet on Dubai’s state-linked entities not being able refinance debt. So far, this year it has met all its obligations and with the fresh issue booking about $6.5 billion from regional and international investors, Dubai’s doomsday scenario appears to be vanishing. 

With much of the United Arab Emirates’ oil coming from the largest of the emirates Abu Dhabi, investors have flocked to the capital this year as appetite for good emerging market debt revives. The spread between Abui Dhabi and Dubai widened at its peak to over 500 basis points in February, but Dubai government efforts to restore confidence — kickstarted by the UAE central bank buying $10 billion of its bonds — has helped spreads narrow to about 200 basis points.

Dubai still has a long way go. The next test will be property developer Nakheel resolving its $3.5 billion Islamic bond maturing on Dec. 14 and then a raft of debts in 2010…..but as Harold Wilson once said, ”A week’s long time in politics.”  

The headline in the Gulf News English language daily reads 'UAE tops world on per capita carbon footprint'.

For a place so reliably bathed in sunlight, the Dubai property explosion seems to have generated enough construction noise to drown out the environmental debate raging elsewhere in the world.

For the first-time visitor, the scale of the global construction superlatives - The Palm, made from reclaimed land jutting out defiantly into the Gulf, the skyscrapers built in a region where there is no shortage of space - is staggering.

The amount of environmentally 'sinfull' concrete poured over the last decade is ncalculable. Billboards lauding the benefits of solar power look like a bit of an after thought.

Climate change was just beginning to take hold as an issue for property developers when the economic downturn struck and put paid to nascent environmental ambitions.  "Green is not cheap," says Markus Giebel, chief executive of Dubai property group Deyaar Development. "Dubai was on the right track, but there's no money now. People are thinking about survival."

Dubai has sufficient superlatives – record-setting landmarks unique in their size, cost or concept -- to last it for the next decade – so enough already, says Deyaar CEO Markus Giebel.

“I endorse having the tallest building in the world, the first seven-star hotel in the world, the palm,” he says. “What I don’t endorse are attempts to now outdo these superlatives…they are going to last us the next 10 to 15 years.”

Dubai is home -- amongst other attractions -- to the world's largest indoor ski slope, the world's tallest tower, and the world's first, albeit self-rated, seven-star hotel that also sports its own Rolls Royce fleet and helicopter landing platform. The global financial crisis brought a real estate boom in the emirate to a screeching halt, leading to a raft of new, hugely ambitious projects  -- including a 1-km high tower and the world's largest mall -- to be shelved or delayed.

Socially responsible investing, which takes into account social, environmental and governance risks, is arguably still in its infancy in the Gulf, where the enormous wealth created by hydrocarbons sometimes flows into extravagant projects like an indoor ski resort.

But Mustafa Abdel-Wadood, managing director of Abraaj Capital – the Middle East’s biggest private equity firm — sees SRI as enlightened self interest and the firm puts its own money where its mouth is.

Fred Sicre, executive director of Abraaj, told us the firm — which signs up to United Nations Principles for Responsible Investing (UNPRI) — has a 5+5+5 plan, where it encourages employees to donate 5% of bonuses to a charitable pool, 5 days for community/charitable work and the firm itself gives 5% of net revenues to a charity. Sicre himself taught at the first class yesterday on entrepreneureship.

“When we invest for pure business reasons into an education business or a hospital group, in a certain sense, we are looking at this also from a sustainable investment (point of view) for this region because the competitiveness of a country is directly linked to the health of the population,” Sicre says.

“We feel we have great opportunities and responsibilities to bring portfolio companies to adhere to sustainble investment practices, whether its security or health standards… It’s just about being good human beings and doing good practical businesses.”

Watch a clip below for Sicre talking about this 5+5+5 plan.

Starting Monday, Reuters is inviting  business leaders from various sectors in Dubai, Riyadh and Cairo to discuss key challenges facing them in the aftermath of the global financial crisis and the lessons they have learnt.

Is the downturn over or are we set for a double-dip? Will buyers flock back to Dubai's property bonanza or will they stay away for the foreseeable future? Will the oil-reliant economies of the Gulf manage to diversify as they had hoped at the start of the boom in 2002 or will they continue to rest on their barrels of crude? Read this for a preview.

Department of Homeland Security Secretary Janet Napolitano defended the Obama administration’s plans to bring terrorism suspects held at Guantanamo Bay, Cuba, to the United States — countering critics who questioned whether it would create security risks.

“There’s no question in my mind that those detainees who would be moved to the United States would be held in such a fashion that they would not be any threat to public safety, and I say that as a former prosecutor,” Napolitano said in an interview during the Reuters Washington Summit. She served as a U.S. attorney in Arizona during the Clinton administration.

President Barack Obama has pledged to close the controversial prison by Jan. 22, 2010, including bringing some of the terrorism suspects to U.S. soil for trial in military commissions or U.S. criminal courts. There have been questions and doubts about whether his goal can be achieved because of political, legal and logistical complications.

Napolitano held out hope that the administration could meet the fast-approaching deadline: “I would hope so.” She declined to comment on the likely location of where the detainees could be held in the United States.

But Republicans have criticized the idea of bringing the terrorism suspects to U.S. soil, arguing that they are not entitled access to the criminal court system and could pose threats to the communities where they may be imprisoned.

Her remarks came as former U.S. Attorney General Michael Mukasey issued a stinging condemnation of the Obama administration plan, writing in a Wall Street Journal opinion piece that civilian courts were not the right place to try the terrorism suspects and could make communities, jurors and courts targets.

“Based on my experience trying such cases, and what I saw as attorney general, they aren’t. That is not to say that civilian courts cannot ever handle terrorist prosecutions, but rather that their role in a war on terror—to use an unfashionably harsh phrase—should be, as the term ‘war’ would suggest, a supporting and not a principal role,” he wrote in the Wall Street Journal.

Mukasey served as a federal prosecutor in the 1970s and then as a federal judge in New York from 1988 to 2006, presiding over terrorism cases that included the trial of those who plotted to blow up the World Trade Center in 1993. He was attorney general under former President George W. Bush.

While Mukasey also argued in his op-ed that imprisoning terrorism suspects in the United States could expose others in the prison to their beliefs, many of the individuals convicted like Zacarias Moussaoui are kept in maximum security facilities isolated from the general population.

He also warned that U.S. criminal court procedures would risk revealing too much sensitive information and that the cases against Guantanamo detainees were not built for civilian court proceedings. Many of the hearings in U.S. District Court for petitions by prisoners seeking their release from Guantanamo have been held in closed session to protect classified information.

So do you believe U.S. criminal courts can handle the terrorism cases and would communities become targets or should terrorism suspects from Guantanamo only be tried in military commissions?

For more news from the Reuters Washington Summit, click here.

- Photo credit: Reuters/Jonathan Ernst (Napolitano speaks to the Reuters Washington Summit)

A war of words over U.S. policy on Afghanistan is heating up between Democrats and Republicans on Capitol Hill as they await President Barack Obama’s new strategy.

“This kind of partisanship in the middle of a war I find to be really out of place,” Senate Armed Services Committee Chairman Carl Levin, a Democrat, said.

He was responding to House of Representatives Republican leader John Boehner’s statement that “the current political uncertainty should not be used as a pretext for the White House to back away from the counter-insurgency strategy the president announced in March.”

Levin, at the Reuters Washington Summit, said former Republican President George W. Bush took three months to decide on the troop surge in Iraq — “Nobody was saying that President Bush is jeopardizing anything by taking three months to deliberate on a new strategy.”

Levin said he agrees with much of what General Stanley McChrystal, the top U.S. commander in Afghanistan, says.

“One of the things he (McChrystal) says is the deliberative process is useful and healthy. So, I wish Boehner would listen to McChrystal,” Levin said.

For more news from the Reuters Washington Summit, click here.

Photo credit: Reuters/Jonathan Ernst (Senator Carl Levin at Reuters Washington Summit)

It’s hard to imagine that a banker who represents multimillionaires would be anything but professional - but a top executive at a leading global bank thinks that’s precisely the wealth management industry’s problem.

“There is so much mediocrity in the industry we have to raise the bar here,” said Gerard Aquilina, vice chairman of Barclays Wealth, at the Reuters Global Wealth Management Summit in Geneva.

    To Aquilina’s way of thinking, private bankers need the same “institutional rigor” as investment bankers in the way they operate. To this end the bank is looking to pursue only top-quality hires.

“Our strategy is not to be the hoover that comes and hires willy-nilly, we want to be much more selective,” said Aquilina — perhaps an ironic view given Barclays acquired thousands of investment bankers from the ashes of the fallen Lehman Brothers last year.

    But he and his colleagues are so sure of their position that he said they are working on developing MBA-level courses with some unnamed top universities on private banking, especially as they see fewer and fewer interns turning up their noses at the prospect of a three-month rotation in the private banking shop.

    They’re not alone, either. Alexander Classen, head of EMEA wealth management for Morgan Stanley, said his firm too was seeing more and more people turn up to recruiting presentations on college campuses, whereas at one time they would have summarily shunned the private bankers for the investment banking sessions.

Things may have changed since then, but private banks may still have their work cut out if they want to attract talent early. After all, as Aquilina himself admitted, ”There are not many people at eighteen who say, ‘Hey Dad, I want to be a private banker’. Most people just fall into it.”

  By Neil Chatterjee
    The U.S. has promised it will hunt down tax evaders.
    And it seems tax evaders are on the run.
    DBS bank, based in the growing offshore financial centre of
Singapore, told Reuters it had been approached by U.S. citizens
asking for its private banking services. But when told they would
have to sign U.S. tax declaration forms, the potential clients
disappeared.  
    Swiss banks also approached DBS on the hope they could
offload troublesome U.S. clients to a location that so far has
not been reached by the strong arms of Washington or Brussels.
    DBS said no thanks. In fact many private banks and boutique
advisors now seem to be avoiding U.S. clients.
    Will this spread to other nationalities, as governments
invest in tax spies and tax havens invest in white paint?
    Is this the end of offshore private private banking?