With the launch of the first UK retail fund focused on the Emirates, private investors are set to gain greater access to the Dubai growth story.
Even as oil-rich sovereign wealth funds of Dubai and Qatar are considering large investments in the UK stock market, some analysts believe there are also good opportunities for investors to put their money into the Gulf markets.
“The returns from the major stocks in Dubai over the last couple of years have been very negative,” explained Graham Neale, head of equities at Killick, who will be running the fund. “But throughout that time earnings growth has been steadily building with the economy growing and activity in construction, insurance and financial services staying strong.”
Stocks like Emaar, the property giant that is building the iconic Burj Dubai tower, have lost around half their value in the last two years, despite the fact that the outlook for construction remains buoyant.
Mr Neale said interest from retail investors in Dubai had picked up recently following the Dubai government’s decision to float part of DP World, the port operator that bought P&O last year, in what will the Middle East’s biggest ever IPO.
However, he warned that major increases in political tension in the Middle East have the potential to destabilise the Dubai market and its economy.
Meanwhile, a London-based stockbroker, Killick and Co, hopes that its new fund will tap into the fast-growing Dubai economy while taking advantage of the relatively undervalued shares on the local stock market.
