Emirati Numbers

Here are some important facts and financial figures about the UAE. Last updated (25/03/2019).

Stock MarketRecession (of 4 years)
GDP Ranking27th (out of 193 countries)
PresidentSheikh Khalifa (son of Zayed)
Interest Rates2.75%
Return on 5Yr Government Bond2.75% (-1.9%=0.6%)
Country Risk Premium0.69% (return needed to switch from a zero risk country)
Equity Risk Premium6.65% (return needed to switch from a zero risk country's stocks to UAE stocks)
IdeologyMonarchy within Federal Gov.

Political and Economic Ideologies Clash ⚔

An inescapable point to take away from this primer is that  the UAE has a climate of fear . The government will do whatever it takes to mute uprisings like the Arab Spring in 2010, or even minor whimpers of change. Women as well are only just starting to enjoy more empowerment.

Why’s that a problem in investing? Because the  free market system that will develop their economy , diversify it and make it autonomous from oil (in other words, less risky and more valuable) is at odds with a climate of fear.  It’s at odds with a controlling regime  where freedom of speech, expression, association and media is limited.  A free market system is applied to the population of a country . The people. Not just the flag or just the legislature. So, if you exclude a huge chunk of your population from participating in that system fully, then the enrichment process of your country will be slowed down.

 Fix this and the UAE have already built themselves a FastTrack  to a very sound, diversified economy. It’s a great place to do business if you’re able, especially with those free trade zones. But remember the virtue of patience. The aim of the game is to earn more back from your UAE stock investment than what you put in. We measure the probability of that happening by how reasonably you plot those paybacks. When you look at the UAE as an investment prospect, be honest about what is surely predictable versus what is simply up in the air. Hopefully, what you’ve learn’t about how to invest in UAE stocks from this primer can get you off to a good start.

Chris Morrissey

Chris started in financial advisory, assembling client portfolios with pension companies and investment banks. Following that, he worked at an agricultural commodities trader in London and now various "fintech" start-ups. He's also studying business full-time at Lancaster University. Feel bewildered by the stock market? Chris will help you get things under control.

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