Global equity prices are likely to grow up to 30 percent over the next two years, a member of Dubai’s ruling family told Arabian Business as the emirate announced it was considering selling shares in some of its biggest assets.
“I think within the next, by 2012, I think you will really see a 20 or 30 percent increase in prices globally for equities,” HH Sheikh Maktoum Hasher Al Maktoum, nephew of Dubai’s Ruler, Sheikh Mohammed bin Rashid Al Maktoum and CEO of the Al Fajer Group, to Arabian Business.
Speaking on the sidelines of the Arabian Business Forum in Dubai, his comments came following reports that Dubai may consider selling parts of government-owned companies as it continues to restructure its debts.
“Selling anything in this period of time, unless you have to, you shouldn’t,” Sheikh Maktoum said. However, he added that “it is a very tough balancing act and I think it is going to be challenging. But the good thing is Dubai has a lot of high quality assets.”
However, Dr John Sfakianakis, group general manager and chief economist of Banque Saudi Fransi, said it was too early to predict a recovery in the global equities market.
Sfakianakis added that Dubai may also have to suffer a loss on the sale of shares in some of its assets as they have dropped in value since the boom days in 2008.
“Dubai would need to sell some assets in 2011 and 2012 irrespective of how markets behave… It depends what they want to sell now but I would say that it would be hard to get the money they paid for some of their assets because for some of these assets they over-paid. So even if markets go up it might be difficult for their assets to reach the prices they paid for prior to 2008,” he told Arabian Business.
Some of the assets Dubai is reportedly considering selling shares in to raise cash to service its debts include DP World, the Atlantis Hotel and its partnership of the Las Vegas casino resort CityCenter. There is also keen interest in other state-linked assets such as Emirates airlines and Dubai Electricity and Water Authority (DEWA).
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