They have been described as "biased" and "oligarchic".
Standard & Poor's (S&P), Moody's Investors Service and Fitch Ratings, the big three credit-rating agencies, have come under fire from Madrid to Manama.
Q&A: Credit ratings
Who are the main credit-rating agencies? Standard & Poor's, Moody's Investors Service and Fitch Ratings are the three big agencies that dominate 90 per cent of the ratings industry.
What do credit-rating agencies do? Ratings agencies carry out credit checks on companies and countries before either can borrow from financial markets.
Why are they so influential? Investors use credit ratings to help them decide whether to buy bonds and other financial products from companies or governments.
How do ratings agencies make money Companies pay agencies to provide them with a rating of their creditworthiness, enabling them to tap financial markets.
And some of the most vehement criticism has come from Wolfgang Schaeuble, the German finance minister.
"We must break the oligopoly of the ratings agencies," he said this month as the euro-zone debt crisis threatened to spiral out of control.
Jose Manuel Barroso, the European Commission president, went further. "There may be some bias in the markets when it comes to the evaluation of Europe," he said.
The actions of credit-rating agencies have long moved financial markets and caused sleepless nights for government officials and business executives.
But the big three have dominated the headlines more than usual after they downgraded the credit ratings of countries embroiled in the euro-zone turmoil and warned the US it would lose its top rating if it did not resolve the deadlock over the debt ceiling.
Eighteen months earlier, it was Dubai's turn to come under the microscope, when trouble with debt triggered downgrades of several corporations.
"I would not be surprised if, going forward, there would be some sort of realignment of rating agencies in terms of their role, mandate and structure," says John Sfakianakis, the chief economist at Banque Saudi Fransi.
By determining the risk of a country or company defaulting on its debts, credit ratings significantly influence the cost of raising funds.
With the region's governments and state-backed companies raising tens of billions of dollars a year on financial markets, ratings can have huge implications for the economy.
For years, agencies and investors had assumed the UAE Government would come to the rescue of troubled government-related companies. But Dubai World's US$24.9 billion (Dh91.45bn) debt restructuring triggered a change to that mindset.
Elsewhere in the Middle East, agencies have been busy after unrest in some countries. Sovereign downgrades sounded a note of caution amid a surging tide of optimism about the future during the so-called Arab Spring.
The ratings of Egypt, Tunisia, Libya, Jordan and Bahrain were lowered this year. Bahrain took exception, with officials in the kingdom asserting that the downgrades were based on flawed information and politicised reports.
The Middle East has endured an uneasy relationship with agencies in recent years. The global economic downturn made it harder for firms to raise debt, eventually straining relations between companies seeking funds and the agencies they hired to gauge their creditworthiness. Abu Dhabi National Energy Company (Taqa), a government-backed energy investor, in 2009 ended its relationship with S&P after the agency put the company on credit watch.
Despite the global criticism, the rating agencies remain bullish on their role in the markets.
"Our role is to call credit risk as we see it and to explain our views clearly, without fear or favour. That is what investors expect us to do and that is what we are focused on doing," says Martin Winn, S&P's vice president of communications in Europe, the Middle East and Africa.
The big three were also criticised for downgrading Greece and other indebted euro-zone countries such as Portugal.
They were also slammed during the global financial crisis for giving high ratings to subprime mortgage-based products that turned toxic, and as being too slow in warning investors.
This led to new rules in the EU designed to more closely regulate how the agencies work.
In the Middle East, calls have been made in some quarters to set up a home-grown agency to challenge the dominance of the big three. A regional organisation may have a better understanding of the structure of companies with government backing, the argument goes.
"Rating analysts are based in this region after previously being based in the London or New York, so there's probably a better understanding of the economics of the region, the companies of the region," says Nasser Saidi, the chief economist and head of external relations for the Dubai International Financial Centre Authority.
"Having said that, having more local rating agencies is important primarily because many companies are relatively small, and international rating agencies are only focused on the large companies. Having local rating agencies will mean the coverage is much wider and you'd have much more coverage of mid-size companies."
tarnold@thenational.ae
hall of shame
SUNDERLAND 2002-03
No one has ended a Premier League season quite like Sunderland. They lost each of their final 15 games, taking no points after January. They ended up with 19 in total, sacking managers Peter Reid and Howard Wilkinson and losing 3-1 to Charlton when they scored three own goals in eight minutes.
SUNDERLAND 2005-06
Until Derby came along, Sunderland’s total of 15 points was the Premier League’s record low. They made it until May and their final home game before winning at the Stadium of Light while they lost a joint record 29 of their 38 league games.
HUDDERSFIELD 2018-19
Joined Derby as the only team to be relegated in March. No striker scored until January, while only two players got more assists than goalkeeper Jonas Lossl. The mid-season appointment Jan Siewert was to end his time as Huddersfield manager with a 5.3 per cent win rate.
ASTON VILLA 2015-16
Perhaps the most inexplicably bad season, considering they signed Idrissa Gueye and Adama Traore and still only got 17 points. Villa won their first league game, but none of the next 19. They ended an abominable campaign by taking one point from the last 39 available.
FULHAM 2018-19
Terrible in different ways. Fulham’s total of 26 points is not among the lowest ever but they contrived to get relegated after spending over £100 million (Dh457m) in the transfer market. Much of it went on defenders but they only kept two clean sheets in their first 33 games.
LA LIGA: Sporting Gijon, 13 points in 1997-98.
BUNDESLIGA: Tasmania Berlin, 10 points in 1965-66
Tori Amos
Native Invader
Decca
The%20specs%3A%202024%20Mercedes%20E200
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The Brutalist
Director: Brady Corbet
Stars: Adrien Brody, Felicity Jones, Guy Pearce, Joe Alwyn
Rating: 3.5/5
Titanium Escrow profile
Started: December 2016
Founder: Ibrahim Kamalmaz
Based: UAE
Sector: Finance / legal
Size: 3 employees, pre-revenue
Stage: Early stage
Investors: Founder's friends and Family
What can you do?
Document everything immediately; including dates, times, locations and witnesses
Seek professional advice from a legal expert
You can report an incident to HR or an immediate supervisor
You can use the Ministry of Human Resources and Emiratisation’s dedicated hotline
In criminal cases, you can contact the police for additional support
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Game Changer
Director: Shankar
Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram
Rating: 2/5
Company%20profile
%3Cp%3EName%3A%20Cashew%0D%3Cbr%3EStarted%3A%202020%0D%3Cbr%3EFounders%3A%20Ibtissam%20Ouassif%20and%20Ammar%20Afif%0D%3Cbr%3EBased%3A%20Dubai%2C%20UAE%0D%3Cbr%3EIndustry%3A%20FinTech%0D%3Cbr%3EFunding%20size%3A%20%2410m%0D%3Cbr%3EInvestors%3A%20Mashreq%2C%20others%0D%3C%2Fp%3E%0A
COMPANY%20PROFILE
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COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Revibe%20%0D%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202022%0D%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Hamza%20Iraqui%20and%20Abdessamad%20Ben%20Zakour%20%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20UAE%20%0D%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Refurbished%20electronics%20%0D%3Cbr%3E%3Cstrong%3EFunds%20raised%20so%20far%3A%3C%2Fstrong%3E%20%2410m%20%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EFlat6Labs%2C%20Resonance%20and%20various%20others%0D%3C%2Fp%3E%0A
The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
Power: 350hp @ 7,400rpm
Torque: 374Nm @ 5,200rpm
Transmission: Seven-speed automatic
Fuel consumption, combined: 10.5L / 100km
DEADPOOL & WOLVERINE
Starring: Ryan Reynolds, Hugh Jackman, Emma Corrin
Director: Shawn Levy
Rating: 3/5
THE SPECS
Engine: 4.4-litre V8
Transmission: eight-speed automatic
Power: 523hp
Torque: 750Nm
Price: Dh469,000
Common OCD symptoms and how they manifest
Checking: the obsession or thoughts focus on some harm coming from things not being as they should, which usually centre around the theme of safety. For example, the obsession is “the building will burn down”, therefore the compulsion is checking that the oven is switched off.
Contamination: the obsession is focused on the presence of germs, dirt or harmful bacteria and how this will impact the person and/or their loved ones. For example, the obsession is “the floor is dirty; me and my family will get sick and die”, the compulsion is repetitive cleaning.
Orderliness: the obsession is a fear of sitting with uncomfortable feelings, or to prevent harm coming to oneself or others. Objectively there appears to be no logical link between the obsession and compulsion. For example,” I won’t feel right if the jars aren’t lined up” or “harm will come to my family if I don’t line up all the jars”, so the compulsion is therefore lining up the jars.
Intrusive thoughts: the intrusive thought is usually highly distressing and repetitive. Common examples may include thoughts of perpetrating violence towards others, harming others, or questions over one’s character or deeds, usually in conflict with the person’s true values. An example would be: “I think I might hurt my family”, which in turn leads to the compulsion of avoiding social gatherings.
Hoarding: the intrusive thought is the overvaluing of objects or possessions, while the compulsion is stashing or hoarding these items and refusing to let them go. For example, “this newspaper may come in useful one day”, therefore, the compulsion is hoarding newspapers instead of discarding them the next day.
Source: Dr Robert Chandler, clinical psychologist at Lighthouse Arabia
WHAT%20MACRO%20FACTORS%20ARE%20IMPACTING%20META%20TECH%20MARKETS%3F
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The%20specs
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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
How green is the expo nursery?
Some 400,000 shrubs and 13,000 trees in the on-site nursery
An additional 450,000 shrubs and 4,000 trees to be delivered in the months leading up to the expo
Ghaf, date palm, acacia arabica, acacia tortilis, vitex or sage, techoma and the salvadora are just some heat tolerant native plants in the nursery
Approximately 340 species of shrubs and trees selected for diverse landscape
The nursery team works exclusively with organic fertilisers and pesticides
All shrubs and trees supplied by Dubai Municipality
Most sourced from farms, nurseries across the country
Plants and trees are re-potted when they arrive at nursery to give them room to grow
Some mature trees are in open areas or planted within the expo site
Green waste is recycled as compost
Treated sewage effluent supplied by Dubai Municipality is used to meet the majority of the nursery’s irrigation needs
Construction workforce peaked at 40,000 workers
About 65,000 people have signed up to volunteer
Main themes of expo is ‘Connecting Minds, Creating the Future’ and three subthemes of opportunity, mobility and sustainability.
Expo 2020 Dubai to open in October 2020 and run for six months
The more serious side of specialty coffee
While the taste of beans and freshness of roast is paramount to the specialty coffee scene, so is sustainability and workers’ rights.
The bulk of genuine specialty coffee companies aim to improve on these elements in every stage of production via direct relationships with farmers. For instance, Mokha 1450 on Al Wasl Road strives to work predominantly with women-owned and -operated coffee organisations, including female farmers in the Sabree mountains of Yemen.
Because, as the boutique’s owner, Garfield Kerr, points out: “women represent over 90 per cent of the coffee value chain, but are woefully underrepresented in less than 10 per cent of ownership and management throughout the global coffee industry.”
One of the UAE’s largest suppliers of green (meaning not-yet-roasted) beans, Raw Coffee, is a founding member of the Partnership of Gender Equity, which aims to empower female coffee farmers and harvesters.
Also, globally, many companies have found the perfect way to recycle old coffee grounds: they create the perfect fertile soil in which to grow mushrooms.
