UAE Banking Sector by

It has been a dramatic final quarter of the year for the UAE, and particularly for the banking sector. The Nakheel debt problem has thrown into sharp relief the indebtedness of the entire emirate, and this has spread contagion to the general business environment. Even with the bond paid, there still remains a further USD22 billion on the table for rescheduling or restructuring. It is of course a strong positive that Abu Dhabi has been willing to fund a further USD10 billion worth of debt. However, with Dubai having to face an estimated USD120-150 billion debt mountain, the picture has changed for the banks.

Dubai Chamber of Commerce and Industry - Analysis report 2009-2010

Dubai Chamber of Commerce and Industry released its analysis report for the year of 2009 which was quite challenging for the business community and focuses on the promising prospects of the coming year 2010.

Easing in liquidity conditions, lower interbank lending and fiscal stimulus packages certainly bode well for a robust UAE economic recovery in 2010, indicates a Dubai Chamber analysis.

Dubai is well positioned to withstand global economic crisis in 2010, despite Dubai own local turmoils (USD 60 billion debt, 50% slump in Real Estate prices, lower interest rates, defaulting companies and high banking provisions).

The main reason for this strength are:

1- UAE investor and consumer confidence is improving

2- UAE banking sector showing signs of recovery

3- Trade data from Dubai showing remarkable resilience

4- Falling realty prices have increased personal disposable incomes and business competitiveness

5- UAE government support will remain strong in 2010

6- Loosening monetary policy has yielded positive impact on economic growth

7- Stronger crude oil prices will boost the UAE’s current account position in 2010

To download the full report: Dubai Chamber of Commerce - analysis report 2009-2010

Egypt: Better to deal with inflation than stimulating growth

HC: As Egypt was trying to recover from the latter financial crisis through different stimulus packages, the Central Bank is now focusing on dealing with inflation, as the money supply increased lately and prices of commodities are continuously rising. The unwinding of the carry trade between the EGP and the USD on the back of the US economy is posing further pressures on inflation in the country.

To download the report, HC Brokerage - Egypt - 23 Dec 09