UPDATE 2-GFH to sell stake in Bahrain Financial Harbour

DUBAI, May 31 (Reuters) – Gulf Finance House GFHB.BH (GFHK.KW) will sell its 50 percent stake in Bahrain Financial Harbour Holding to Emar Bahrain, GFH said in a statement on Monday.

The sale, which is part of the cash-strapped firm’s strategy of divesting non-core assets, come as Gulf Finance House raises funds to repay the remaining $100 million of a $300 million loan.

Analysts have valued GFH’s stake in Bahrain Financial Harbour at about $175 million.

Emar Bahrain already owned about 50 percent in Bahrain Financial Harbour, according to Bahrain’s commercial registry. Bankers say Emar Bahrain is linked to the country’s royal family.

The asset sale will help assuage investor fears of immediate liquidity concerns.

GFH was once one of the bigger investment houses in the Gulf but it was badly hit by the regional property crunch, shrinking its balance sheet to about $1.3 billion.

In February, the company narrowly avoided default after it struck an eleventh-hour deal with lenders to roll over $100 million of its loan by six months. [ID:nLDE6190SB]

In addition to cutting costs and diversifying its revenues, GFH promised lenders that it would sell down its assets.

GFH, which arranged property projects from Morocco to India stands for the rise and fall of Bahrain’s investment sector like no other company.

It reaped in the money during a five-year oil and property boom in the Gulf by booking largely upfront fees on the money it raised for real estate projects, a business model which was swept away by the burst of Dubai’s property bubble late in 2008.

Other Bahrain-based investment houses have also struggled but had been more diversified than GFH, which bankers say was not much more than a trader of real estate across the numerous financial companies and special purpose vehicles it set up.

The Kuwait-listed shares in GFH closed down 2.4 percent while its Bahrain-listed shares ended 6.9 percent lower on Monday.

(Reporting by Frederik Richter; Writing by Shaheen Pasha; Editing by Hans Peters and Firouz Sedarat)

In building boom, no place like home

Beijing, April 23 — This year, the term ‘naked marriage’ started appearing in the staid pages of China’s State-run newspapers and the Internet. Luo hun or naked marriage is how the Chinese refer to the trend of couples getting married without the traditional wedding feast, diamond ring, car – and critically – a new apartment. Chinese analysts may disagree with hedge fund manager James Chanos’ controversial comparison of China’s property boom as ‘Dubai times 1,000 or worse’. But you know Beijing is worried about its failure to control property prices when it discusses social instability. An essay in the official media on Thursday said that decision-makers now believe that the housing crisis could cause ‘social instability’ if handled ineffectively. Right after China posted nearly 12 per cent first quarter economic growth, the cabinet moved to cool the overheating economy by issuing the strictest property control measures since 2007. Regional officials were held responsible for stabilising the ‘abnormally high’ property prices. Developers were warned of penalties for artificially hiking prices and hoarding. Property prices in 70 Chinese cities rose 11.7 per cent in March, the fastest rate since 2005. Premier Wen Jiabao has compared the housing prices to a wild horse that must be tamed. A majority of professionals in the world’s fastest-growing economy cannot afford an apartment even on the capital’s outskirts. Thousands of Chinese respondents in a recent online survey said they plan to exit big cities like Beijing, Shanghai and Guangzhou because of the costly, competitive lifestyle. A Thursday poll linked the Chinese middle-class’ health problems to the housing crisis. Recent surveys rank China’s big cities lower on the happiness index than the less developed and cheaper cities. “Achieving balance in China’s real estate market is the government’s most difficult task,” said the Global Times on Wednesday. The latest rules curb lending for third-home purchases and require higher down payment and mortgage rates for property sales.

Advertising professional Li Jie left Beijing for lesser-known Zhengzhou city in central China in 2006, because he couldn’t afford a post-marriage apartment. “As a traditional Chinese, I think a house is most important for married life,” he said. This year, he says, his apartment in cheaper Zhengzhou is worth the same price as the apartment he couldn’t afford in Beijing four years ago.

South has shifted ‘out’

Mason Ranjit Singh could not get medical attention for six hours after a dog bit him in the ankle last month. The nearest hospital – the government-run Safdarjung Hospital – lay almost at the other end of town from his home in Tughlakabad Village.

“The only private nursing home is too costly and a dispensary near Asola village never has any stock,” said Singh. Welcome to the post-delimitation South Delhi, no longer the posh vision that the name conjures up.

With a vast rural expanse covering half the city from Bijwasan and Palam in the west to Badarpur on the eastern skirt and the ‘farmhouse-land’ of the Chhattarpur-Mahipalpur-Merhrauli belt in the south, this is one constituency where the Nuclear Deal and economic slowdown are non-issues. Instead, good-old promises of civic amenities still strike a chord.

So, politicians are promising jobs, access to healthcare, higher/technical education, and permanent civic amenities to woo voters. Sangam Vihar is Delhi’s biggest unauthorised resettlement colony near Tughlakabad.

“Politicians come and talk about permanent residence certificates, ration cards and sewer lines for the houses and clean drinking water,” said Kailash Kumar, a trader at the Sangam Vihar main market. In the Gujjar farmer-dominated Chhattarpur, the educated younger generation wants jobs in the ‘city’.

“I need to learn English and get out of here. I cannot work at the farmhouse like my brother or as a labourer like my father,” said Subhash Gujjar, a 22-year-old Arts graduate working as an office help in a farmhouse.

Farmhouses here stand as little islands in the sea of shanties of migrant labourers and landless farmers, most of whom sold their plots before the property boom arrived. Some 20 km to the west, 60-year-old Rajpal Shehrawat in the Jat-belt of Palam village shares the same ambition, albeit for his grandsons.

“Our generation was fooled by promises of development. We are neither in a city nor in a proper village.

Now, for the younger lot, we want colleges and industries here. They need to learn English and work for big companies,” he said between puffs on his hookah.

Amidst the squalor, the posh residential colony of Kalkaji sticks out. A part of the old South Delhi constituency with neatly painted houses, tree-lined parking lots and guarded colony gates, this Punjabi dominated area has very different concerns.

“If all work is directed towards the rural belt, I’m afraid our area might get neglected,” said businessman and resident Haran Anand.