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Credit Crisis coming to the Qatar
Financial experts warned banks in Qatar and the GCC about the impact of the US financial crises and the possibility of it hitting the GCC specially with expected slow down in real estate investments
Do you think this will have a big impact on Qatar's economy?
janeyjaney said
I'm waiting for Tig's say on ...I'm waiting for Tig's say on this.
MagicDragon said
I think the falling oil ...I think the falling oil price will become an issue for the Gulf States.
britexpat said
MD.. ...Saudi budget is based on the oil price being around US$ 30 a barrel. So, they've made enough money in the last three years to last a few lifetimes.
clearbluesky said
and financial market is not as developed as the west and the ...dependency on it is relatively low, so the impact would be relatively less too
Something is better than nothing but nothing is better than nonesense :p
exiledsaint said
Look at Dubai ...Dubai will have the real issues not here. They have so many units coming on stream there will be a knock on on prices unless the government intervenes to prop up the market and prices. (Which is likely)
In Qatar the govt can underwrite the whole economy by throwing petrodollars around. It could do that for at least two years without any ill effect. Lack of supply in housing will still keep prices where they are now, but I have noticed a flattening out especially in the higher end market.
MagicDragon said
I read about this lately, ...I read about this lately, brit. The ability to import what is needed in Saudi is good for 8 months. With a falling oil price it will be reduced to six months. Some Gulf countries are able to import for the next 8 weeks (if the oil price declines). It's not really how much money they have gathered in the meantime, because the money doesn't go where it should go. There is a judgment on how long a country can afford to import the goods it needs.
logicsays said
Deos this mean possible recession hitting the GCC? ...Deos this mean possible recession hitting the GCC? Will inflation continue?
"The best way to predict the future is to create it".
Vegas said
freaking 15 eggs cost 42 QR yesterday??? WTF??? ...You can't teach experience...
charanmafiriyals said
Vegas - Better buy a Hen and ...Vegas - Better buy a Hen and make her lay eggs for you :)
Ban Spoon Feeding not Me
britexpat said
MD.. ...The Gulf countries, with Bahrain probabaly being the exception should be able to heavily subsidise essential goods/foodstuffs and ride out the crunch.
MagicDragon said
Yes, brit, they already do ...Yes, brit, they already do that. For fuel, for example. I think it was a Gulf Times article in the "business" sector which gave the figures I'm referring to.
King Edshel said
Vegas ... which shop ...are you going to man? Forget about Megamart and got to FFC, they got the 30 eggs of Al-Wataniya eggs [Emirates] fro 18 Q.R and their chicken + eggs taste the best ...
Do not dwell in the past, do not dream of the future, concentrate the mind on the present moment. (Gautama Buddha)
666 said
Vegas is probably on Omega 3 ...Vegas is probably on Omega 3 eggs for nourishing of his .................
aviduser said
Not posted in Ages ...Not posted on here in ages as I prefer to live in my happy place.
Anyway economics is a subject I know.
The credit crunch will affect the economies in this region with varying degrees. It does seem counter intuitive to think that with so much Oil and Gas that these countries could be effected but they will.
For one thing, these Countries sit on a load of Oil and Gas, but it can't be pumped all at once, so countries like Qatar issue bonds against the value of the Gas in the the ground, these bonds were traded on the World markets and as we have all seen credit has dried up meaning there are no takers for the bonds.
In Dubai the cost of insuring Govt Debt doubled this month, this means that Dubai will have trouble selling their bonds on the market as they are now seen as too risky.
You will find that many of the spectacular projects announced will quietly disappear as the money or bonds to finance them will evaporate.
Back in Qatar I saw the first sign of a tightness in the housing market, the recently released Imperial towers on the Pearl are now being offered with a 5% deposit and a fixed 3.99% interest rate for 3 years. This is the first time an offer such as this has been made in this market and indicates that they are having trouble shifting the units. Now Qatar is tiny in comparison to Dubai but it's clear that Qatar is losing the battle to attract companies and inward investment. This means that many of the flats being built will remain empty at current prices. All of a sudden a 300,000 pound flat in the desert doesn't seem like such a sound investment.
Dubai is in an even more precarious position, much of their property has been brought by speculators, hoping to see a rise in prices and many have been rewarded with huge returns. The problem now is that people are realising that the ones who end up with the property are the one to lose out.
Often the standard of the property is low (as we all see here) service charges are sky high and maintenance is poor. This information is filtering through the market, there are already signs that many owners are in difficulty.
There is also the spectre of the collapsing dollar, this will happen, the bailout this wk has fatally weakened the dollar, the peg will have to go, BUT, expect the it to go AFTER a lot of damage has been done, the GCC will not just pull the plug they will procrastinate as inflation spirals. Mark my words. And all the while that happens the real value of the Oil will fall. Saudi is in trouble here as dropping the peg will only exasperate the fall of the dollar, a downward spiral.
So with less money floating about the GCC will suffer, obviously petro dollars will of course help and the rich will continue to be rich, the problems though of poor governance and lack of any of transparency will mean that the GCC will be woefully unable to deal with the problems, witness the presently high inflation and the total inability of the Country to deal with it.
AbuAmerican said
DUDE you still ...DUDE you still live???
Informative post man seems like you have a good grasp on the situation.
Any advice to the common schmo here?
______________________________________________
Brazilian Jujitsu in Qatar
http://iloveqatar.ne...
exiledsaint said
Agree with Aviduser ...lots of people in the gulf holding properties will now be very worried especially in the UAE. Its like a game of pass the parcel except the one holding the parcel is the one who loses.
Advise for the common schmo? Sit tight, hold onto your cash and try and pick when its time to invest again. When that is though who knows but if you get it right or nearly right you could make some good returns over the next 5 years.
britexpat said
AbuAmerican.. ...Now is the time to put your savings in these bonds then :)
clearbluesky said
Brit do u mean it? is it a good time to invest in UAE ...bonds? but will it have enough liquidity in the market?
Something is better than nothing but nothing is better than nonesense :p
britexpat said
Clearbluesky.. ...I am a novice at these things.. I think Aviduser can perhaps shed some light..
AbuAmerican said
avid hates my guts, that's ...avid hates my guts, that's why he hasn't answered me :(
______________________________________________
Brazilian Jujitsu in Qatar
http://iloveqatar.ne...
AbuAmerican said
someone else ask him and ...someone else ask him and maybe he will respond
______________________________________________
Brazilian Jujitsu in Qatar
http://iloveqatar.ne...
britexpat said
Aviduser.. ...Thanks for the clarification and info..Given the current finacial climate, what is the best investment option for a careful and risk averse investor ?
clearbluesky said
Avid could u answer for us pls? :) ...Something is better than nothing but nothing is better than nonesense :p
qatartico said
no place to hide... i'm ...no place to hide... i'm afraid it doesn't take an economist to see that this one will punch a big hole in everyone's budget..
and yes, i would not want to be one of those investors who've just bought real estate in Dubai..
**Sic dixit Zarathustra**
Andrews said
My advice is to wait for few ...My advice is to wait for few months..let the market to reach the rock bottom then enter
amnesia said
I don't think Oil will ...I don't think Oil will affect Qatar seeing as
1) The price of oil where it is just gives Qatar bonus profits, it can succeed if oil is at a much lower price.
2) Qatar is a Gas based economy.
Qatar will feel the pinch, and it'll be to the high inflation and slow down of investment in the region. Simple as that.
/-a-t-/avid, is that promotion direct from engel?
Mr. Q's Blog - A Qatari's view on Qatar.
__________________________
AbuAmerican said
Off topic, Amnesia.. Is your ...Off topic, Amnesia.. Is your RSS feed working? I don't get updates anymore :(
______________________________________________
Brazilian Jujitsu in Qatar
http://iloveqatar.ne...
jan007us said
hi how r u there alll ...hi how r u there alll
amnesia said
/-a-t-/abu, did you refresh .../-a-t-/abu, did you refresh your cache? (press CTRL + F5)
It's odd that it's not working... keep me updated and I'll look into it
Mr. Q's Blog - A Qatari's view on Qatar.
__________________________
amnesia said
/-a-t-/avid, I discovered .../-a-t-/avid, I discovered thats a QIB offer not an Imperial Towers offer.
That means it's not the project thats doing it, it's the bank. And the bank with that promotion ends up making more than with a normal promotion lol.
Mr. Q's Blog - A Qatari's view on Qatar.
__________________________
aviduser said
Ha ha ...I don't hate anyone I probably fundamentally disagree with some of your principles thats all, life is too short to hate any one.
If I were to advise anything I would probably say GOLD. It will hit 1000 dollars again by spring.
The idea of pass the parcel with property is totally correct, I actually wrote then deleted that as my post was quite long.
I have written before on another forum than I think a few years ago the prices on the Pearl and Zig Zag along with many Dubai projects were deliberately under priced, the units were then released onto the market and almost immediately sold bringing quite good returns (Diamond Girl has done this) Now news of these returns hit the market and made great for great PR. Remember if you were a cash buyer you only needed a small down payment to secure a property, cash rich local buyers could purchase whole floors for very preferential rates, then sell them for profits legitimate profits. That profit was good for them but ensured great PR for the Pearl and others and ensured the demand, for them it was a win win.
The stories of the returns was passed on so demand was created for these properties, second hand users also saw a profit when they sold and so on. The problem is the fundamentals, there just isn't the demand for the properties as HOMES, not investments. So if you are unfortunate enough to end up with a property at completion. You are the won stuck with the parcel, now what do you do ?
Once the projects are completed the supply of flats will be massive, but they are high end flats, with rent projected from 3,000 Dollars a month.
Does that seem realistic, for a 1 bed flat. Now we keep hearing that rents are going up and people can't find a decent place to live, but ask your self this, Why are the rents high and where is the demand coming from.
Now here is a paragraph that is on no way meant to demean or be derogatory, I am not trying to provoke, read it and see if you get what I mean:
I was in Villagio the other day, it was heaving, packed out with locals, Indians, Philippinos and Arabs from every where, out of the vast crowds I hardly saw a western face. Now I don't know the exacts figures but from what I gather from this forum, the aforementioned nationalities do not seem to be pulling in very big money, many packages posted on this site are woefully low, now of course there will be exceptions pulling the big bucks but according to this site unless you are European or American the money just isn't there.
Now I saw perhaps a few dozen, Western Faces, and assuming they really do get paid the big money, would they choose to live in a pokey 2 bed flat for 3,000 Dollars a month no matter how good the view. It's all about the fundamentals.
Dubai is in serious trouble but no one wants to admit it, much like the banking sector last year, everyone knew there was a big problem looming but didn't want to admit it.
Dubai is the same, they have relied on "if you build it they will come" which is great when everyone has money to travel and Jet fuel is cheap but not such a great philosophy when no one has any cash and jet fuel is expensive. Witness the figures reported this week even in Qatar ! that Middle East carrier passenger numbers are down 5% year on year, expect this to keep falling.
Adding to Dubai's problems have been the steady stream of negative P.R. stories and you have a recipe for declining visitor numbers and falling revenues. With hotels already too expensive there I expect the fall to be precipitous. Figures this Summer showed occupancy in Dubai and Qatar 71% at present bed numbers, now double or quadruple (in the case of Dubai) the number of beds and what will the occupancy levels then be ?
When you buy shares you are warned "past performance is not an indicator of future gains"
Qatar and Dubai have based their entire economy on the basis that their past growth will continue, but there are no fundamentals to support it. Just because your economy is growing by 10 % year does not mean it can continue at 10% a year. Qatar is supposed to be the Richest country in the World but does Doha feel like Geneva.
Distribution of wealth is not something it seems the Country is keen on, without this the Country will never and can NEVER grow organically like other Countries can and will.
Witness the growth of the middle class in China, where is the expanding middle class here ? The Qatari's don't count as they are middle class by being Qatari, if you know what I mean.
So at the end of this long rambling post, I say this, yes I am still alive, no I don't hate anyone. I am working hence delays in posting.
Pay attention to the fundamentals, the information is all around us, even the local papers report the the figures, they just remove the context to cover the facts.
Oh I used to own a flat in the Zig Zag, I sold about 6 weeks ago for a profit, I doubled my investment, but the question is could I have done the same today, I wager not. :(
If you own right now in the region, put the place up for sale, see if you get any interest, perhaps I can be proved wrong.
AbuAmerican said
Thanks for the post avid, ...Thanks for the post avid, this is a rhetorical question but more for others than for myself.
Would you recommend owning actual physical gold or the paper option stating you have so and so much gold?
I have been saying buy gold since the Euro came out.
______________________________________________
Brazilian Jujitsu in Qatar
http://iloveqatar.ne...
aviduser said
ETFs ...Get into the Gold ETFs try:
SPDR Gold Trust (ETF) listed on the NY:SE It's a fund that tracks gold, Gold is presently about 835 dollars the SPDR fund is presently 82.59. As the price of Gold goes up the ETF price goes up. The two are tied together, this way you can get into Gold without having to own a safe :)
The fundamental of gold is good, the current credit crisis means that the FED in the USA will soon be printing trillions of dollars, whether this causes a Weimar Republic inflationary spiral remains to be seen but it WILL devalue the Dollar, and when this happens gold will be a good place to be.
clearbluesky said
Gold is 861 right now ...Something is better than nothing but nothing is better than nonesense :p
AbuAmerican said
Ok last question before you ...Ok last question before you start charging for advice. How about currency?
Is it viable to save in Euros at this time? I noticed that a lot of Europe is going to come out of this in half decent condition. No one will be unscathed but places like Germany seem to be coming out ok.
You think saving some euos would be a smooth move?
______________________________________________
Brazilian Jujitsu in Qatar
http://iloveqatar.ne...
MagicDragon said
If you care for an opinion, ...If you care for an opinion, abu, I think Germany is embedded very deeply in the EU. That's why it cannot be looked at isolated. If France fails, or Iceland, that will affect the Euro. I would opt for a currency further off like Australian Dollar or SA Rand.
aviduser said
There are panic ...Calls at the moment to bring Iceland into the EU. The Dollar is finished, Euros will be the place to be, right now it's a little low as we have seen a couple of big banks collapse in Europe, the difference is that it's a couple of banks, the FED currently has a list of over 100 banks in the USA that are ready to go bust.
Once the dollar collapses the GCC will be forced to re-peg. As I mention this will come after much procrastination, the problem they will be faced with is that even if the price of oil hovers around 85 dollars a barrel if the exchange rate falls to 3 dollars to the pound or .25 euro cent to the dollar they are really gonna struggle to finance anything at all here or invest anywhere abroad.
Saudi pulling out of the Dollar will exacerbate the fall this was the reason they resisted pressure this year, the question is how long they will be able to hold out under a full scale dollar collapse.
Qatar will be hit by massive inflation, I can already see the Country making panic moves and over inflating wages or "hand outs" We could see an inflation spiral here, the country has already shown it's woefully unable to control both growth and inflation. A Country like China for example is growing at a pace of 11.4% last year their inflation rate is 7.1 %
Our growth rate is 13.8 % but with inflation of over 14%, again this is due to the fundamentals of the country being all wrong along with totally uneven distribution of wealth. The growth versus inflation is unsustainable.
One tip
If you see any local bank suddenly offer 10% interest on your savings PANIC.
It means they are desperate for liquidity to bolster the balance sheet and make their report look good for Moody's, Commercial bank tried this last year with 7%.
Once you have some decent savings transfer them abroad, use someone like HSBC offshore. Transfer once every 3 or months to avoid too many charges.
Don't keep your money here, if a bank fails us ex-pats will be last in the queue for ay compensation. Of course I am not saying the banks will collapse here but offshore is the safe option, just type HSBC offshore into Google for all the info you will need.
You don't have to deal with HSBC here, at all, remember the HSBC here is in name ONLY.
An inflation spiral could cripple the value of the Rial, that isn't such a bad thing but my advice is keep large sums abroad.
I know this sounds gloomy but honestly if I wrote last year that by the end of 2008 there would be no investment banks left in the USA you would have laughed, look what happened.
Three words vital here: HEDGE YOUR BETS :)
Pieman said
Does'nt seem to be any ...Does'nt seem to be any liquidity problems just above me, or is she heading for a soft landing
just eat another pie
Pieman said
WOW, I pressed post comment ...WOW, I pressed post comment button and she was gone!!!!!!
just eat another pie
mjamille28 said
who's she? ...who's she?
Pieman said
I swear she was there just ...I swear she was there
just eat another pie
mjamille28 said
who? ...who?
Pieman said
the dancing maddona with the ...the dancing maddona with the big boobies
just eat another pie
mjamille28 said
lol, where..... :P ...lol, where..... :P
aviduser said
Er my fault ...I haven't posted in such a long time I forgot I had added her to my signature, it only appears as code in my post's till I actually submit it and I forgot what it was for. They were great though :)
mjamille28 said
so now you know where she ...so now you know where she went, pieman... :P
Pieman said
Yes...................can we ...Yes...................can we have her back please..........please, please, please
just eat another pie
janeyjaney said
Ooooooooooh! Brilliant!! Mj, ...Ooooooooooh! Brilliant!! Mj, I've been here longer and your QL points are waaaaaaay past the roof! ;) Swell! Good job my fellow Lasallite!
mjamille28 said
lol janey..... thanks.. nice ...lol janey..... thanks.. nice to meet a fellow Lasallite here in QL...
MySpace Graphics & MySpace Layouts
Pieman said
Whats a ...Whats a Lasallite??????????????????just eat another pie
mjamille28 said
it's one who graduated from ...it's one who graduated from De La Salle University... :P
janeyjaney said
A cult of green archers!! ;) ...A cult of green archers!! ;)
Pieman said
aaahhhhhhhhhhhhhhhhhhhhhhhhhh ...aaahhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh
just eat another pie
qatartico said
...in the meantime out there ......in the meantime out there in the markets it's getting furiously ugly... OMG the DJ under 10000!!
**Sic dixit Zarathustra**
AbuAmerican said
aviduser I think you for ...aviduser I thank you for your insight. Has been very helpful and informative.
______________________________________________
Brazilian Jujitsu in Qatar
http://iloveqatar.ne...
vignale said
Aviduser, very valuable ...Aviduser, very valuable information - thanks !!!
eu61 said
Avid very valuable post. ...Avid very valuable post. Thank you.
War looking for peace,
is like fornication looking for virginity.
Vegas said
Hmmmm...and yet the USD rises again...LOL ...Europe must be worse off than the US....
You can't teach experience...
eu61 said
Honestly Im starting to be a ...Honestly Im starting to be a little worried about my money abroad...
10% to be scared you said?
Thanks to god Im poor and my savings account level dont go over the guaranteed level
(lolz)
War looking for peace,
is like fornication looking for virginity.
MagicDragon said
The problem with Europe, ...The problem with Europe, vegas, they are not one like the US. They have a hard time to work together. But I said before, go for Australian currency.
flanostu said
It has already hit the GCC ...It has already hit the GCC guys, we have already witnessed large declines on the DSM over the last few weeks and the Qatar property market is at risk of overheating as well as being overvalued given the current market conditions.
As such there remains completed housing developments where the vacancy rates remain high and therefore is at risk of deteriorating rental yields over the coming year. We are already seeing rental incomes plateau and in some cases falling.
As a benchmark given the current crisis, unfortunately what I once thought was a very sound/safe economy given its vast resources (yes Australia) has tumbled heavily recently. As an example the Aussie Dollar fell from its 25-year high of around 98 US cents in July, to around 71 cents today.
Having said this, there is no better place in the world I'd rather be right now than right here in Doha (or GCC).
In any recession, there will always be good buying opportunites whether it be here or in your home country. As someone once told me, people will always DRINK, SMOKE or GAMBLE during a recession!!!
MagicDragon said
If the aussie Dollar is low ...If the aussie Dollar is low now, then it's the right time to buy it!
Vegas said
Yup... ...And they shop at Walmart...
And eat at Mcdonalds...
LOL sad but true...
You can't teach experience...
MagicDragon said
Let's open a casino, ...Let's open a casino, Flanostu. You can scare "unwanted bachelors" away.
mjamille28 said
still not over the ...still not over the 'bachelor' fever i see... :P
flanostu said
agree MD, a casino would be ...agree MD, a casino would be cool!!!! and without being biased towards Aust, buying the AUD isn't a bad thing right now....i usually wait for uptrends though (the arse fell out of it today).
MagicDragon said
Well, then you can bring ...Well, then you can bring them in, mjamille, pretending you're a couple.
mjamille28 said
lol MD... no thanks.. ...lol MD... no thanks..
Scotiabank said
we'll have to wait and see ...we'll have to wait and see
MagicDragon said
As you said, Flan, the vast ...As you said, Flan, the vast resources of Australia are the point. Including Uranium, by the way. So commodities might be a wise choice, too. Silver? (Has much more industrial meaning than gold). And the fluctuations are milder.
Gold
Silver
marhabtain said
Mj! ...Be carefull - he's into leather shorts etc etc etc! Yippee, Yippeee, its Bombay gin for me!
mjamille28 said
who's into leather shorts, ...who's into leather shorts, marhabtain? :P
marhabtain said
Mj! ...Please dont embarrass moi! I love tight leather shorts, tight tank tops and tight boots but rather mainly on women - unlike MD !!!!! Yippee, Yippeee, its Bombay gin for me!
MagicDragon said
He means this kind of ...He means this kind of Bavarian dress, mj.
mjamille28 said
lol marhabtain... too much ...lol marhabtain... too much gin now... :P
mjamille28 said
lol MD, is that one of your ...lol MD, is that one of your pics by any chance... :P
flanostu said
MD, I'll take you in as my ...MD, I'll take you in as my adopted Aussie.
As long the China and India keep signing the mining contracts (mmm Uranium), we shouldn't see "as large" fluctuations as with the other stocks....of course providing the demand is there.
MagicDragon said
No, no, my grand father wore ...No, no, my grand father wore these things.
mjamille28 said
oh ok,.... :P ...oh ok,.... :P
MagicDragon said
I can see you are clever, ...I can see you are clever, flan, despite your "looks". Did anybody ever tell you that the expression in your face is "stupid"?
Alexa said
Ah...but if MD wore those ...Ah...but if MD wore those for the Octoberfest at the Intercon, they might even let him sing!
You mess with the cat, you get the claws....
flanostu said
huh!!!?? i thought eveybody ...huh!!!?? i thought eveybody liked my avatar?
Alexa said
Flan....don't listen to ...Flan....don't listen to MD...you are one of the best looking men in Doha!
You mess with the cat, you get the claws....
MagicDragon said
Not anymore when they know ...Not anymore when they know who is behind it, flan.
mjamille28 said
hmm, MD in leather shorts, ...hmm, MD in leather shorts, singing...worth a try.. ;)
Alexa said
MJ...that would be ...MJ...that would be "Lederhosen".....
You mess with the cat, you get the claws....
MagicDragon said
I guess Alexa expressed what ...I guess Alexa expressed what I tried to say, much better, of course.
MagicDragon said
And "Dirndl", Alexa. ...And "Dirndl", Alexa.
flanostu said
Ah thanks Alexa. MD - :P ...Ah thanks Alexa.
MD - :P
Alexa said
Yep....that "Bavarian" ...Yep....that "Bavarian" thing...not for me...lol
You mess with the cat, you get the claws....