Are we on the brink of a crash in global markets and a meltdown in UAE share prices? Or was the significance of last week’s volatility overdone, especially for local markets?
This was the question to which I searched for an answer in the weekend’s informed media – FT, Wall Street Journal, Economist – but in vain. There was no overall consensus. For every trusted commentator foretelling doom and gloom in bonds, equities and commodities there was another saying things are not so bad, a minor correction in share prices, manageable commodity levels and decent growth prospects around the world.
By Monday afternoon, when the Dubai Financial Market had closed after two days of reasonably healthy positive performance, I was fed up with the experts and decided to go to the man in the street.
Or rather, the man and woman in the main concourse of the Dubai International Financial Centre.
I’ve done a fair bit of financial vox pop in my time. Standing outside Bank Tube station in London and asking people what they thought was guaranteed to produce a few lines of good copy.
At 5.30pm I was by the revolving swing doors of entrance 5 of the DIFC, the main thoroughfare in Dubai’s financial hub, notebook and pen at the ready to put the question: “Sir/madam, I’m a financial journalist with The National newspaper in Abu Dhabi. Do you think stock markets will go up or down?”
What could be simpler, you might think.
Out of 14 “interviewees” in my random sample group, two brushed past me without a word. I felt like one of those perfume sprayers in Mall of the Emirates.
Three stopped politely, but as soon as they heard the word “journalist” and saw the pen decided to hurry on past with a silent smile.
Four stopped and thought about the question, sought assurances that their names would not be in the press, and told me in varying degrees of sophistication that they thought local markets were safe and on an upwards trend, mainly because property prices were stable.
Although they all looked like financial professionals (suits and ties for the men, office-like skirts and blouses for most of the women), two of the positives didn’t know what an IPO was when I grilled them further, and one confessed to being on a job hunt from Mumbai and didn’t know much about local financial markets at all.
The other five were all bears, to varying degrees, and all were men. The consensus was that oil prices were a big worry, that the bond market was a mess and there could be serious repercussions for local markets. “It’s the Americans’ fault again,” one said.
So an overall negative view for local markets, with most in the bears camp. But not conclusive, I felt as I got in a taxi outside DIFC.
Outside my apartment block in Dubai Marina, I bumped into a neighbour I’ve spoken to a few times. He’s in financial recruitment (he doesn’t like to be called a “headhunter”), and was wheeling into the building possibly the biggest TV I have ever seen.
In its packaging the set could barely fit in the lift.
I said that business must be good, and told him about my rather bearish DIFC vox pop.
“Nonsense, it’s all booming again. We’re hiring investment bankers by the shedload, all those IPOs, mergers and acquisitions and the rest. How do you think I could afford the new TV?”
Now that’s what I call conclusive evidence.
fkane@thenational.ae
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