At what point are the bonds offered by the Dubai government?
What does it mean to offer financial bonds by the state?
Lending the investor to the government for a certain period and interest.
An official document revealed that Dubai Investments Corporation, the main investment arm of the Dubai government, has started marketing five-year bonds at 300 basis points above average fixed and variable interest rates.
And the sale of the bonds in standard size will be completed later on Wednesday, according to the document issued by one of the banks leading the process, according to “Reuters”.
Citi, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, JP Morgan and Standard Chartered banks were appointed to arrange the transaction.
Government bonds or (bills) are a type of debt-based investment where you lend money to the government in exchange for an agreed interest rate.
Governments use the bonds to raise money that can be spent on new projects or infrastructure, and investors can use it to obtain a specified return that is paid out at regular intervals.
And the Coronavirus epidemic has a major impact on the economies of the Gulf countries, especially the UAE; With the drop in oil prices accompanied by a lack of demand for it, the economy went through a crisis that prompted both Abu Dhabi and Dubai to offer short and long-term financial bonds from time to time.
Earlier Tuesday, Emirates NBD announced a decline in net profits during the first nine months of 2020, by 55% year-on-year. Because of the financial allocations that he directed to deal with the repercussions of the Corona virus.
The largest bank in Dubai by assets said, in a statement, that the net profit for the period at the end of last September recorded 5.643 billion dirhams ($ 1.54 billion), compared to 12.482 billion dirhams ($ 3.4 billion) in the same period of 2019.
The bank stated that the decline in profits is due to the results of the same period of 2019 that included exceptional profits as a result of the disposal of a stake in a jointly controlled company, amounting to 4.39 billion dirhams ($ 1.19 billion).
The bank said that provisions for depreciation due to Corona increased by 41% to 2.15 billion dirhams ($ 585 million) at the end of last September, compared to the same period last year.
UAE banks are facing high levels of costs and low revenues, in light of the double blow to the economy due to the repercussions of the new Corona and the low oil prices.
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