Dubai's financial market index has been in a downtrend since 2015.
Residents living there can you tell you the index mimicked overtime the overall sentiment in Dubai, with oil and property prices never really recovering since 2008 with the exception of a a small bubble formed in 2013-2014 and visible on this chart.
Strengths for the Dubai economy:
- With it's outstanding covid management policies Dubai was able to thrive through the crisis while the rest of the world was closed.
- Weak dollar likely to give a significant boost to both foreign and local investment
- Crude recovering and Saudi Arabia announcing they are starting to limit supply
- New policies to bring in foreign qualified expats
- As Europe, US & other western countries will likely be forced to raise taxes after the covid spending, Dubai has no social welfare system thereforce has not spent as much to provide support. In addition, low income taxes and a favorable business environment is likely to bring in more expats as years go by
- Biden administration expected to be more leniant on Iran
- Qatar embargo lifted
- Israel tourism and business agreement
Weaknesses in the current environment:
- Inflation in the US might force the FED to start raising rates faster than expected. Watch out for the dollar
- White collared jobs with high salaries being replaced by lower skilled but cheaper workforce
- Tech & digital innovation in Dubai is at high levels which might prove to keep the current deflation in place
Added this on my watchlist, with a bias that a break above 2992 is likely to mark the end of the multiyear downtrend.
Residents living there can you tell you the index mimicked overtime the overall sentiment in Dubai, with oil and property prices never really recovering since 2008 with the exception of a a small bubble formed in 2013-2014 and visible on this chart.
Strengths for the Dubai economy:
- With it's outstanding covid management policies Dubai was able to thrive through the crisis while the rest of the world was closed.
- Weak dollar likely to give a significant boost to both foreign and local investment
- Crude recovering and Saudi Arabia announcing they are starting to limit supply
- New policies to bring in foreign qualified expats
- As Europe, US & other western countries will likely be forced to raise taxes after the covid spending, Dubai has no social welfare system thereforce has not spent as much to provide support. In addition, low income taxes and a favorable business environment is likely to bring in more expats as years go by
- Biden administration expected to be more leniant on Iran
- Qatar embargo lifted
- Israel tourism and business agreement
Weaknesses in the current environment:
- Inflation in the US might force the FED to start raising rates faster than expected. Watch out for the dollar
- White collared jobs with high salaries being replaced by lower skilled but cheaper workforce
- Tech & digital innovation in Dubai is at high levels which might prove to keep the current deflation in place
Added this on my watchlist, with a bias that a break above 2992 is likely to mark the end of the multiyear downtrend.
