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“Because of the settlement agreement, sentiment is slowly coming back to the market,” Hassan Jarrar, managing director of Standard Chartered’s UAE unit, said in an interview in Shanghai today. “We see a lot of funds coming from different parts of the world into Dubai, trying to capitalize on emerging opportunities, especially in real estate.”
Dubai World, one of the sheikhdom’s three main state-owned business groups, roiled global markets late last year when it said it would seek to delay repaying loans. The company said May 20 it reached an accord with its main creditor group to restructure $23.5bn of liabilities.
More than 90 banks are owed money by Dubai World, and Royal Bank of Scotland Group, HSBC Holdings and Standard Chartered are among its seven biggest creditors.
Access to credit in Dubai is easing in areas including mortgages, auto loans and corporate debt, according to Jarrar.
“Dubai is right now having some short-term pains, but you cannot erase the importance of that place,” he said.
Real estate prices in Dubai, the second-largest emirate in the UAE, have plummeted about 50 percent from their peak in late 2008. Dubai’s economy will shrink about 0.5 percent this year, according to the International Monetary Fund, marking the second year of contraction for the debt-laden emirate.
London-based Standard Chartered, which derives most of its profit from emerging markets, is “hoping” to be granted a license in Libya, and sees opportunities in countries including Saudi Arabia, Iraq, Egypt and Algeria, Jarrar said.
The lender, which generated 16 percent of pretax profit from Africa and the Middle East in 2009, wants to take advantage of rising trade and mergers and acquisitions between the oil-rich regions and other emerging markets. (Bloomberg)
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