Summit Notebook
Exclusive outtakes from industry leaders
Dubai returns to fixed income sphere
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.”
AUDIO – Gazprom: “We are mutually dependent”
A quarter of the gas that heats European homes and powers European industry is piped in thousands of kilometres from the Russian tundra. By 2015, Russia’s share of European gas supplies will rise to at least one third. That powerful lever of influence over Europe’s economy raises the stakes in its confrontation with Russia over its invasion of Georgia.
But Alexander Medvedev, deputy chief executive of Russia’s state gas export monopoly Gazprom, opened the Reuters Russia Investment Summit on Monday with a reminder that even the mighty Gazprom is not invulnerable to Europe and the West, relying as it does on foreign revenue and capital.
Is a triple-A a triple-A a triple-A?
Credit ratings agencies have been under fire from investors for giving the highest ratings for what turned out to be risky assets.
But Standard & Poor’s President Deven Sharma told the Reuters Investment Outlook Summit investors just didn’t really understand what a triple-A rating meant.
“It’s a question a lot of people ask: Is a triple-A a triple-A a triple-A?” Sharma said. “We reflected on it and recognised one of the things we didn’t explain to investors as much as we should have done is what comparability of ratings really means.”
To listen to what he had to say, please click here
