DUBAI–Gulf markets resumed operations after the end of the Eid Al-Adha holiday, and some economic reports reflected satisfaction with recent measures taken by the governments of the Gulf Cooperation Council (GCC) states.
Al Mazaya Holding Company reported the merger of two property and finance institutions and two other financial firms to form the Emirates Development Bank and commented favourably on the commitment of the UAE government to inject new funds into it.
The report also cited the formation of a higher committee in Dubai to study the repercussions of the global financial crisis on the emirate's economy, assess the challenges they pose and devise means to overcome them.
Director of the Department of Finance in Dubai Nasser Al-Sheikh confirmed that the economy will face a number of challenges over the next 18 months and indicated that it will be necessary to change some development plans, especially in the real estate sector, but affirmed that there are no plans to postpone infrastructure development, especially the Dubai Airport expansion project.
The Al Mazaya also report expressed satisfaction with the establishment of the Abu Dhabi Finance Company by five major lending institutions that has US$136 million in initial capital. In Saudi Arabia, real estate markets have not been affected directly by the U.S. mortgage crisis because the financial mechanisms of the Saudi real estate market are different from those in the rest of the region. Liquidity in the kingdom comes from both individual and collective sources, which reduces the risks associated with speculation as happened in Kuwait and the UAE.
In Riyadh, the Bahraini International Investment Bank announced the establishment of a mortgage financing company. The bank will own 65 percent of the company's shares and open the door to subscription by regional banks for the remaining 35 percent. The new company aims to provide services and mortgage products that are compliant with Islamic Shariah Law.
In Oman, the real estate market in Muscat has increased 20 percent since the beginning of the year. Residential land recorded a rise of 22 percent, while the residential apartment and villa sector recorded a rise of 10 percent.
[Al Mazaya Company report]