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04 July, 2005

Bubble, bubble, oil and trouble

A good time perhaps to invest in Arabic worrybeads, as thousands of anxious fingers wear out their tasselled strings of amber and pearl on Nomura's The Great Arabian Bubble warning:

The Bahrain office of Japanese broking giant Nomura last week surprised clients with a report entitled "The Great Arabian Bubble" which pointed to a disconnect between the real economy and the financial instruments that are supposed to reflect it in the GCC stock markets in general, and the UAE and Saudi Arabia in particular.

The analysis traced the recent development of Saudi stocks and super-imposed the Nasdaq market during the dot-com years of the late 1990s and early 2000. Not only is the Saudi market's rise similar in shape to the Nasdaq, but stock price rises in Saudi Arabia are actually significantly higher than in the dot-com years.

Gambling is illegal in most Middle Eastern countries, so playing the stockmarkets is a popular substitute. IPO fever has ravaged the GCC over the past year, with wannabe investors even beating up bank managers in the rush to buy shares.



Anonymous Anonymous said...

Property market in Dubai is the one to watch followed by the banking system. The whole thing has a feel of deck of cards about to collapse.

04 July, 2005 23:55  
Blogger Emirati said...

Where is Emirates Economist when you need him..

05 July, 2005 10:14  
Blogger frigg said...

can anyone direct me to a copy of that nomura article - "the great arabian bubble"?

18 July, 2005 09:50  
Anonymous Anonymous said...

I just got back from dubai, and I spent 5 days driving around. I explored Dubai fully and even drove to Abu Dhabi..I've travelled a lot but I've never seen anything as scary as the unbelievable over-development of Dubai and surrounding area. Time will reveal the truth (despite the UEA propganda, and tight restrictions), but even if the country can afford to complete the overestimated development projects,with their 348 Billion reserves it's almost impossible to believe that they, could come close to filling those properties with people (even in the Boom Years). Dubai will clearly be the Great Ghost City of the next decade! RM Toronto

16 April, 2009 17:35  

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