Thursday, Dec 15, 2011
By Nicolas Parasie
Of ZAWYA DOW JONES
BRUSSELS (Zawya Dow Jones)--Standard Chartered (STAN.LN), the U.K-based lender with an emerging markets focus, expects to post low single digit growth in the Middle East next year as the Arab Spring and global financial turbulence weighs on economic sentiment in the region, a senior executive at the bank said Thursday.
"It (2012) could be quite challenging because the Middle East is very much a part of the globalized world. We (the Middle East) are not immune to what is happening to the rest of the world," V. Shankar, who was recently appointed group executive director of the bank, told Zawya Dow Jones in an interview.
In addition, he said the outlook for the U.S. isn't rosy either, the global cost of funding is rising as banks are deleveraging and that there could be a problem in availability in dollar funding in the Middle East.
The bank expects "low single digit growth in top line and bottom line in the Middle East," Shankar said. Dubai, however, should be able to cope with its debt maturities next year, the executive added.
Moody's recently expressed concern that three Dubai government-related entities that have debt repayments worth $3.8 billion due in 2012 may face refinancing risks and suggested the emirate may need further financial support in the absence of capital-raising measures.
"Any time turmoil happens in neighbouring regions, Dubai benefits and also reinforces its position even more," Shankar said.
He expects Dubai to tackle its debt pile through a combination of asset sales, a reduction in new capex activity, "tightening the belt", refinancing existing borrowings, restructuring of existing debt, and raising new money in the debt markets.
-By Nicolas Parasie, Dow Jones Newswires; +9714 446-1681; nicolas.parasie@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
15-12-11 1240GMT
