The number of private shareholding companies in the UAE reached 134 as of Dec. 31, 2009, according to statistics issued by the Ministry of Economy. A total of 15 private shareholding companies were newly registered in the country last year, indicating robust economic activity and continuing confidence in the local business environment. Nine of these new entities are investment companies while two each are from real estate and finance and the remaining one from the services sector. Together the new companies registered in 2009 accounted for a capital of AED1.338 billion taking the total paid-up capital of private shareholding companies in the country to AED117.14 billion and total capital to AED122.39 billion. A major contributor to the national economy, private shareholding companies operate in almost all critical sectors in the UAE including finance, investment, services, industry, real estate, and utilities. Abu Dhabi had 72 private shareholding companies as 2009 came to a close, while Dubai had 47 and the emirates of Sharjah, Ras Al Khaimah, Ajman and Fujairah together had 15. Mohammed Ahmed bin Abdul Aziz Al Shihhi, director general of the Ministry of Economy, said: “The very fact that the UAE private sector continued on the growth track even during such difficult times proves the strength of our economic fundamentals. In spite of the global economic downturn the UAE remains focused on offering effective legislation to protect investors and ensuring a robust economic environment for investments.” He added “the Ministry of Economy is committed to strengthen this focus and enhance growth by facilitating economic activity and reinforcing investor confidence, thus fulfilling our commitment to the economic development goals set forth in the UAE Vision 2021.” Meanwhile, Moody's ratings agency said on Thursday the impact of conglomerate Dubai World's restructuring plan is expected to be “manageable” for United Arab Emirates banks, “The proposed framework for the restructuring of Dubai World Group (DWG) is unlikely to have direct negative rating implications for banks in the United Arab Emirates,” the agency said in a statement. “However ... the sustained adverse economic conditions are continuing to pressure the country's banking system,” it added. Two local banks, Emirates NBD (ENBD) and Abu Dhabi Commercial Bank (ADCB), are part of a seven-member committee that has been leading the negotiations between state-owned Dubai World and its nearly 100 creditors. These seven banks are said to hold a majority of exposure to the indebted investment holding firm. Dubai's government in March unveiled a $9.5 billion support plan for its flagship conglomerate Dubai World. Most of the major creditors to the group expressed their support for the restructuring plan, though final details are still to be disclosed as negotiations are ongoing. “Moody's conservatively estimates that no more than $10 billion of UAE banks' exposures relates to the DWG (Dubai World Group) proposed restructuring,” the statement said, quoting Moody's analyst John Tofarides. “Using this estimate ... even a 25 percent impairment loss represents three to four months of pre-provision earnings for the rated banks, which can therefore be easily replenished,” Tofarides added. The impact, however, would differ “considerably” from one bank to another, with the most exposed banks seeing a maximum loss of six to eight months of pre-provision profits, he said. “We also note that this risk comes at a time when profitability is already under pressure as a result of the country's adverse economic conditions,” Tofarides said. Analysts and lenders initially welcomed the restructuring plan because banks were not being asked to take a discount on their loans. Moody's warned that this year's profitability could slide into negative territory for some banks if asset quality continues to weaken. The agency rates 13 UAE banks, of which four have been assigned a negative outlook and another four placed on review for possible downgrade. On Wednesday, Standard and Poor's downgraded ports operator DP World, a unit of Dubai World, and two other Dubai government-related entities. “The ratings on DP World Ltd, Dubai Multi Commodities Centre Authority, and Emaar Properties PJSC were all lowered by one notch,” S&P said in a statement.
