Soverign Wealth Funds

Dubai Debt Fears Jolt World Financial Markets

In the U.S., Dubai World owns at least eight office buildings and hotels: Mandarin Oriental and W Union Square hotels in New York , Fontainebleau in Miami Beach, City Center in Las Vegas and a percentage of the NASDAQ. Are these deals Shariah based? Is money being siphoned off and sent to Shariah Charities which might be funding terror? After all, the UAE is the #1 trading partner in the world with Iran, and UAE wired most of the money to Al-Qaeda that financed the Sept 11th attacks. Is the US TSY regulating purchases of Sovereign Wealth Funds? No.
November 27, 2009
New York, NY

Dubai's debt crisis rattled world financial markets Friday, raising concerns that some banks could further tighten lending and stall the global economic recovery.

The possible spillover effects centered on fears that international banks could suffer big losses if Dubai's investment arm defaulted on its $60 billion debt. Stock and commodity markets tumbled in New York, London and Asia as investors flocked to the U.S. dollar as a safe haven.

But earlier concerns that the crisis might trigger another financial meltdown seemed to ease after some analysts downplayed the risks for U.S. banks, which are thought to have little exposure to the Middle Eastern city-state.


CRS Report on Soverign Wealth Funds

The following dowload is the January 2009 Congressional Research Report on the risks of Soverign Wealth Funds. Congress does identify the risks that SWF investments are based on politics rather than economics, which creates national security concerns. Congress also identified the UAE and Qatar SWF funds as being of particular concern.  However, Congress had not made the connection between Islamic Finance and these SWF's as key funders and investors.

Soverign Wealth Funds: Background and Policy Issues for Congress



UAE, Germany, China are Iran's main trade partners

UAE is the #1 trading partner with Iran . UAE banks wired most of the funding for the Sept 11th attacks on America . Sanctioning IRAN is does little without sanctioning UAE.

January 3, 2009
Tehran, Iran

The Islamic Republic of Iran Customs Administration (IRICA) released a report in which the UAE was cited as Iran's major trade partner in the first nine months of the current Iranian calendar year (began March 20, 2008).

Iran's exports to the UAE in the nine-month period amounts to 25.10% of Iran's total trade, and imports from this major trade partner in the Persian Gulf totals 12.82% of its trade, up 6.10% and 40.94% respectively from last year's corresponding period.


GE, Abu Dhabi firm in $8 bln joint venture

General Electric and an Abu Dhabi Investment agency, known as Mubadala Development Co. and created with Sovereign Wealth, have agreed to a $8 Billion joint venture. This Sovereign Wealth funded company plans to become one of GE's 10 largest shareholders over time.

July 22, 2008
Boston, Massachusetts

Conglomerate General Electric Co (GE.N) and Abu Dhabi investment agency Mubadala Development Co said on Tuesday they have entered into an $8 billion joint venture that will initially focus on providing commercial finance in the Middle East and Africa.

The two companies said they also plan on working together in the clean energy and water, aviation, and oil and gas sectors.

The action reflects GE's strategy of shifting its financial operations away from volatile segments such as those influenced by U.S. consumer spending toward areas of higher growth.

Shares of the second-largest U.S. company by market capitalization have been battered this year because of concerns about its consumer and commercial finance units.


Shariah Capital, Inc - JV with DMCC

Dubai is creating numerous financial holding companies and funds using its Sovereign Wealth with the requirement that investments and financing be Shariah Compliant. Shariah Compliant joint ventures are being created with U.S. companies enticed by Dubai sovereign wealth.

March 18, 2008
Dubai, United Arab Emirates

DMCC to Develop and Seed Commodity-linked Investment Products

  • Launch DMCC-owned asset management company
  • Establish joint venture initiative with Shariah Capital
  • Take 4.99% equity stake and board seat in Shariah Capital

The Dubai Multi Commodities Centre (DMCC) announced today that it has applied for a license to set up a UAE investment company - DMCC Asset Management Company (DCAM) - that will develop and seed commodity-linked investment products for distribution in the UAE and other markets. DCAM will be registered as a DMCC Free Zone Company and established with an initial capital of AED 25 million. It will be 100 per cent owned and managed by the DMCC.

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