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“What doom & gloom” you ask? We know
The question was asked by the chairman of Al Barari, Zaal Mohammed Zaal in an advertisement. Come with us, we’ll show where ‘doom and gloom’ are hiding.
December 23, 2008 1:10 by Dana El Baltaji
A full page advertisement by Al Barari features a quotation by the company’s chairman, Zaal Mohammed Zaal. It reads “What doom & gloom? Standing tall. Steaming ahead. Confident. Well positioned for the next boom!”
Where do we begin? Aside from investors’ lack of confidence in the local property and stock markets, we’ve got some hard facts to show the chairman exactly where “doom and gloom” are hiding.
According to The National, the Dubai Financial Market (DFM) fell a whopping 71 percent in 2008, which makes the DFM the worst performing market in the region, and according to Bloomberg, one of the world’s top 10 worst performing markets.
Stocks fell to their lowest levels on Monday due to a drop in oil prices. The DFM fell by 3.91 percent to 1,732 points yesterday. Local developers led the fall: market leader Emaar Properties’ stocks dropped 4.94 percent; and Union Properties plummeted 8.42 percent.
The latest round of frantic selling has baffled analysts. “There is a fresh round of selling that the market has been experiencing… with a lack of any new news to really explain it,” said Ali Khan, the director of Dubai-based Arqaam Capital, to The National.
That’s where the gloom is. It’s part negative sentiment and part stark reality. As oil prices fall, investors fear Dubai will not be able to finance and sustain the enormous projects it plans to develop.
And although one way of coping with the plummeting market is to improve investor confidence, making statements like “steaming ahead” and “well positioned for the next boom!” don’t cut it anymore. If Al Barari is bucking the current trend and is truly “standing tall,” the company needs to explain why this is the case. Given that mammoth developers such as Emaar are struggling with their plummeting stocks, why is Al Barari any better?
Developers need to bear in mind that investors in Dubai aren’t just more skeptical than they just to be; they’re also smarter and more scrupulous. Therefore, loud declarations that aren’t backed up with hard facts are simply not good enough.