Global asset manager cuts exposure to UAE markets

Blackrock unit says it has seen signs the markets are overheating amid positive sentiment
Global asset manager cuts exposure to UAE markets
By Daniel Shane
Thu 20 Feb 2014 01:43 PM

BlackRock, the world’s biggest asset manager, has “substantially” cut stock holdings in the UAE on fear of “speculative excess” in the Gulf state’s markets.

In a regulatory filing in London, the fund said it had reduced its allocation to the Gulf state in its BlackRock Frontiers Investment Trust to 9.1 percent in January from 13.4 percent in December.

“While the UAE economy in general is performing well and Dubai is booming, we are increasingly concerned about the level of speculation in the market,” wrote investment managers Sam Vecht and Emily Fletcher.

The UAE’s Dubai Financial Market General Index has risen by about 24 percent this year on the back of a recovery in the country’s banking and real estate sectors, while the Abu Dhabi Securities Exchange is up 14 percent.

Vecht and Fletcher said that these rises were driven by retail, rather than institutional, investment.

Among the securities that BlackRock reduced its exposure to were Dubai’s Emaar Properties and Abu Dhabi’s Aldar Properties. The fund increases its holdings in NMC Health, the UAE private healthcare provider that listed on the London Stock Exchange in 2012.

The fund has around $297m in assets under management and returned about 33 percent last year.

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