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Fri 8 Apr 2011 10:17 AM

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Dubai set to rebound amid unrest, says Bank Sarasin

Research says emirate is likely to gain favour with investors, see uplift in tourism sector in 2011

Dubai set to rebound amid unrest, says Bank Sarasin

Dubai is likely to gain favour with investors in 2011 as the UAE's stable political situation contrasts much of the Middle East region, Bank Sarasin has said in a new report.

Its financial sector and tourism industry are predicted to see uplifts this year, helping it to rebound from the impact of the global financial crisis, the bank added.

It said the continuing rise in oil prices will generate a "spectacular amount of additional revenue" for the Gulf states.

"Dubai is likely to emerge as the regional beneficiary of the crisis. Dubai suffered for a long time under the excesses of the boom years and the lack of financial transparency in many of its major property projects," the bank said.

The latest Global View investment outlook for the second quarter of 2011 sees the global economy continuing on its growth trajectory - despite numerous crises.

It said higher oil prices will be offset by the recovery in the labour markets, adding that the equity markets are also expected to resume their upward trend on the back of positive growth momentum in the industrialised countries.

Bank Sarasin's research team said that while investor confidence has waned in recent months due to the fear that the political unrest in North Africa will spread to the Gulf, the higher oil price would provide a good backdrop for investments into the GCC region.

"Due to the stable political situation in the United Arab Emirates, Dubai is likely to gain favour with investors," the report said.

"The same applies to Qatar and Kuwait, where political tensions have not yet surfaced. Therefore we believe that the setback in markets provides a good entry opportunity for longer term investors."

 By contrast, Bank Sarasin's outlook for the Indian equity market saw it suffering under the threat of rising commodity prices.

Bank Sarasin said that the recent natural disasters in Australia, New Zealand and Japan had a "minimum impact on the global economy because the labour market recovery has been so significant".

Jan Amrit Poser, head of Research and Chief Economist at Bank Sarasin, said: "The force of the upswing after the deepest recession in 80 years has surpassed all expectations.

"Nonetheless, it is becoming increasingly clear that the global economy needs to be put on a more consistent but lower growth trajectory after another year of exuberant growth."

The powerful economic growth recorded in 2010 in the Southeast Asian economies is unlikely to continue in the next two quarters, with weaker growth expected until autumn 2011, similar to China, the bank said.

David Robertson 8 years ago

Crises in the region is Dubai' blessing. What a unfortunate way to benefit from others misery.

Jamal 8 years ago

Dubai is just different than others. Dubai has a fabulous infrastructure and shopping experiance compared to any city or country in the region.

Dubai is reach of hotel (7 stars hotels), restaurants, malls, and many other entertainment activities.

This is a city that will always attract businessmen and tourist from the region.

John M. King, Ph.D. 8 years ago

Dubai always bounces back; I expect that many people in the nations with civil unrest will flock to Dubai, Abu Dhabi and the rest of the UAE where they will find relative peace, prosperity and hope for the future!