Road to Recovery, Part I
Come on – it wasn’t all bad. The crash of 2009 put the Gulf economies on a more solid footing, reports Trends magazine. Part I.
November 18, 2009 3:42 by Scott MacMillan
Not a crane, truck or bulldozer was to be found on the vast expanse of reclaimed land, and even the on-site offices had been cleared of everything but the furniture. Dubai Promenade’s Web site still promises “a sophisticated waterfront community” with “breathtaking vistas from every direction” as though the Dubai property boom was still in full swing.
In previous years, words such as those lured lenders like flies to honey, but during the first half of 2009, holders of Nakheel sukuk certificates began to get skittish about how the company would pay off its $3.52 billion in obligations due in December, sending the price plummeting.
Sentiment began rebounding over the summer, with investors becoming more bullish on Nakheel, on Dubai as a whole, and on the Gulf in general. By August, Nakheel’s sukuk price had risen 46 percent from its February low of63.5 cents on the dollar, a movement Abu Dhabi daily The National called “one of the clearest indications yet that Dubai is getting the upper hand on the financial crisis.”
Markets had watched the issue as an indicator of how the Dubai government would handle the emirate’s $80 billion-plus debt load, and it was gradually becoming clear that the government would not allow Nakheel to default, aided as it was by the UAE central bank, which came to the rescue earlier this year by buying at least $10 billion of Dubai’s $20 billion bond issue.
Whatever Nakheel’s woes, there’s still plenty of money to go around.