Takeover of Dubai Bank

The Dubai government stepped in to take control of Dubai Bank yesterday - a move it said was designed to protect the bank’s depositors.

The authorities, acting under the directions of UAE vice president and Dubai ruler HH Sheikh Mohammed bin Rashid Al Maktoum, said it would make an immediate cash injection into the Sharia-compliant bank, taking full control.

“The intervention is designed to ensure that Dubai Bank’s business continues uninterrupted while options for the bank’s future, whether to be run on a stand-alone basis or be potentially merged with another bank in which the government has ownership, are being assessed,” the Dubai government said, adding the management would not be affected by the takeover.

“The injection will effectively dilute the complete holding of Dubai Bank’s current shareholders, and consequently allow the 100 per cent takeover of the bank by the Government of Dubai,” it said.

Dubai Bank had previously been 70 per cent owned by Dubai Holding, with Emaar Properties holding the remaining 30 per cent.

In March, ratings agency Fitch Ratings announced that it had downgraded its rating from ‘D’ to ‘D/E’, referring to what it called the bank’s “weakened financial flexibility”.

While yesterday’s takeover came as a surprise to some, Mohammed Ali Yassin, chief investment officer at CAPM Investment, told 7DAYS the UAE banking sector had expected the decision.

“Dubai government has found the best response by taking control of liabilities of the bank. It is very important to show their commitment as part of the whole restructuring of all Dubai entities,” he said, adding that the move would be met positively by the market.

Yassin said there had been doubts about whether the bank had “enough provisions or reserve power” as it faced up to imminent liabilities.

“Any kind of unclear strategy would have affected the sector badly so therefore I think it is a move that had to be taken,” he said.

Nasdaq pulls out of bid

Nasdaq and Intercontinental-Exchange (ICE) are withdrawing a Dubai-backed $11 billion offer for the parent of the New York Stock Exchange after recognising they would not receive regulatory approval for the transaction.

The decision leaves the path open for NYSE Euronext to proceed with its previous $10 billion deal to combine with the German exchange operator Deutsche Boerse.

Nasdaq OMX Group and ICE said yesterday that they held unsuccessful talks with the antitrust division of the Justice Department about their joint bid for NYSE Euronext.

The announcement comes one week after the firms reached out directly to NYSE Euronext shareholders, issuing a letter saying that the NYSE board was rushing a vote without exploring better alternatives, after the board rejected their initial bid.

Manny’s videogame debut

Manny ‘Pacman’ Pacquiao has made a name for himself by knocking out opponents in the boxing ring. Soon he will make his video game debut as a martial arts hero battling an underground world of heinous villains, mercernaries and thugs.

‘Pound for Pound’ Volume 1 - developed for PC, mobile, iPad, iPhone and facebook by Abu Dhabi-based Karkadann Games - is a new action adventure online game starring the famous Filipino champ.

The game’s storyline centres around an evil kingpin who hires mercenaries and thugs to assault Manny’s village and kidnap his life-long friend after the fighter refuses to take part in an underground ‘fight to the death’ cage fight. Players will be able to wield Manny’s now-legendary combination of pummeling punches, as well as a full arsenal of kicks and martial arts weaponry in a bid to save his mate, while also being able to customise and develop the fighter into the ultimate martial arts combatant, ready to fend off his enemies.

“Our game captures Manny as a true action hero – with the will power, determination and resilience unique to Manny,” says David Ortiz, general manager of Karkadann Games.

“We wanted to celebrate a great athlete and complete fighter and provide an entertaining game experience for his millions of fans,” he says, adding that the game will be launched this summer, but a date is still to be confirmed.

Karkadann Games, which was launched in January 2011, has begun to position itself as a major online game developer, with a particular focus on titles that focus on sports.

‘Pound for Pound’ comes hot on the heels of  ‘Cricket Power’, their official game for the 2011 Cricket World Cup.

“We are proud of the premium titles we have already produced and are confident that Karkadann Games will be a key driver in the future of the gaming industry,” says Ortiz.

Until now, games developers in the UAE and wider Middle East have produced little to write home about.

It’s clear that Karkadann is attempting punch above its weight by pinning down a slice of the the lucrative casual gaming market. How successful the firm is remains to been seen, and will hinge on how global gamers will respond to the Manny-based title.

Perhaps they are right to be upbeat - after all the last game featuring a character called Pacman did quite well...

Emaar sales fell

Emaar Properties, the UAE’s largest developer by market value, yesterday revealed its revenues from apartment sales fell by 81 per cent in the first quarter of this year - a sign that the Dubai property market is still struggling.

The Burj Khalifa builder said income from apartment sales dropped to Dhs375 million ($102 million) from a little over Dhs2 billion in the same period in 2010.

Revenues from the sale of villas were also sharply down, falling 50 per cent from Dhs119 million to Dhs60 million over the same period.

The figures were revealed in a filing to the Dubai Financial Market yesterday, providing more details on the company’s current state after it last month announced that first-quarter profits were down 44 per cent on figures for the first three months of 2010.

The property giant reiterated its plan to diversify its activities beyond the UAE market, explaining that it is “currently developing a number of international business opportunities outside the United Arab Emirates that will have a significant impact in future periods”. It wasn’t all bad news for Emaar – the newly released figures showed that revenues from its hospitality business were up 41 per cent to Dhs 338.8 million. Rental income from leased properties – which include shopping malls – grew 8.5 per cent to Dhs507.5 million. The firm has previously shared plans that would see hospitality and retail make up a larger share of its income, and analysts have speculated Emaar will look to focus on hotels in emerging markets such as China, Africa and Brazil.

When the firm unveiled its first-quarter results last month, it revealed that its flagship retail property The Dubai Mall, above, had welcomed 13.5 million shoppers in the first three months of this year – the highest quarterly total since it opened in November 2008. The firm also said ts Address Hotels in Dubai enjoyed an occupancy rate of 87 per cent in the first quarter.

However, Emaar’s share price slid 1.55 per cent following yesterday’s additional information, finishing at Dhs3.17.

DIFC going global

Dubai International Financial Centre (DIFC), the emirate’s high-profile business hub, says it is confident recent visits to the US, Brazil, and India will pay off and deliver new firms to the city as it ontinues a global drive to attract new tenants.

A DIFC delegation recently visited the US in a bid to add to the more than 100 American companies, which currently operate in the centre, and another mission to Brazil saw meetings with major executives in fields ranging from agriculture to oil and gas, as well as the senior management of the country’s major stock exchange.

“We have prioritised an extensive list of global companies from around the world with whom we intend to forge closer ties,” said DIFC deputy chief executive Marwan Ahmad Lutfi.

The next stage of DIFC’s global initiative will involve meeting existing and prospective clients in China, South Korea, Malaysia and Brunei later this month.

DFM dual listing talks with Egypt

Dubai’s main stock market is working with the Egyptian Exchange to make it easier for companies to list their shares on both trading boards.

The Dubai Financial Market and the Cairo exchange yesterday agreed to set up a framework to encourage dual listings, particularly for companies with operations in both Egypt and the UAE.

Executives say closer cooperation will boost liquidity and offer investors more diversity.

Egypt’s stock market has yet to recover from a steep plunge following uprisings that pushed longtime President Hosni Mubarak from office.  

Dubai is competing with other regional bourses to win the favour of international investors.