Source : The Business Times, January 28, 2008
It intends to open at least 3 non-gambling resorts with the MGM brand of its US partner
Dubai World, the state-owned investment group that agreed to invest as much as US$5.1 billion in MGM Mirage, plans to open at least three hotels in the Middle East and Asia with its United States partner.
Dubai World plans 'to take the brands of MGM for non-gaming hotels in Dubai, Singapore and China', chairman Sultan bin Sulayem said in an interview at the World Economic Forum in Davos, Switzerland. 'I assume we'll be investing, though they can join us if they want.'
Istithmar , an investment unit of Dubai World, agreed in September to pay US$1.1 billion with partners City Developments and Elad Group for rights to build a hotel and commercial development near Singapore's Raffles Hotel.
A five-star hotel on that site will probably be an MGM project, Mr Sultan said on Friday. A Chinese site is 'being investigated'.
He did not provide further details on the plans.
In October, Las Vegas-based MGM, the casino operator majority owned by billionaire Kirk Kerkorian, said it is in talks with Dubai to collaborate on resorts in the Middle East, Singapore, Vietnam and Beijing.
MGM opened a casino last month in Macau with Pansy Ho, daughter of Chinese gambling mogul Stanley Ho. Macau is the only location in China where casinos are legal.
Elsewhere, Mr Sultan also said that real estate and banks offer good acquisition opportunities after the US sub-prime mortgage crisis made assets cheaper.
'Banks give good opportunities' and Dubai World's board is assessing potential investments, he said. Real estate assets in the US, Europe and Australia are 'very attractive', he said.
He also disclosed that the Dubai government supports the United Arab Emirates' dollar peg and will resist a currency revaluation.
Mr Sultan is also a member of the Executive Council that advises Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum, who is also vice-president and prime minister of the UAE.
Central banks in six Gulf Cooperation Council states, including Saudi Arabia and the UAE, are under pressure to revalue their currencies as the dollar declines, stoking inflation to record levels. Kuwait was the first to drop its peg in May, choosing a basket of currencies instead.
The dollar has dropped in five of the past six years, weakening by 8 per cent on a trade-weighted basis in 2007.
'To change is very risky,' Mr Sultan said. 'It's important to continue with the dollar despite its weakness.'
UAE. central bank governor Sultan bin Nasser al-Suwaidi said recently that the federation will not drop the 30-year-old system of pegging the dirham to the dollar and doesn't see a need to revalue the currency because rising rents are the prime cause of inflation. The central bank governors of Saudi Arabia, Qatar, Oman and Bahrain have also said they have no intention of revaluing or dropping their pegs.
Qatar 'might' revalue its currency and a change in currency regime is 'under discussion' as the riyal is undervalued against the dollar by 30 per cent, Qatar Prime Minister Sheikh Hamad bin Jasim bin Jaber al-Thani said in an interview in Davos on Thursday.
'If we suddenly change, do you think anyone will trust our currency?' 'It's a matter of credibility for the dirham,' said Mr Sultan.
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