Dubai Stocks: Jawbones and Asses (con't)
This morning's newspapers announced the big bounce of yesterday and concluded that the stock market decline was over once and for all. The government was not going to leave Gulf women frustrated.
Today, my market-close newsletter re-appeared with the gloomy announcement of a small (3%) decline in Dubai, and smaller declines in other Gulf markets.
Where is Samson (or Shamsung) when we need him? The jawbone in the hands of the Dubai government doesn't seem to be working, and the government does not seem to be stepping in with money in the form of cash to prevent further declines.
There's another problem: last year, a huge run-up Jan-May was followed by a big decline over the summer when buyers (but not sellers) went on vacation. Presumably, the winners went on vacation using their winnings, while the losers must have closed out their losing positions to pay for salve for their wounds. In any case, there was a big decline (about 30%) last summer. This year, there's been an even bigger decline (so far 50%) over the winter, a time when (last year) the market was up 100%. Now if summer repeats...
Of course, since this winter was opposite of last winter, maybe this summer will be opposite of last summer?
We can always hope.
***
And at least now, Dubai Citizens living in €10,000,000 mansions are allowed to sell the mansions (but only to other UAE citizens) to cover their losses in the Dubai stock market. Before (see previous post) there was no property ownership, so someone could be assigned by the government to live in a €10,000,000 mansion and not have a tosser to his name: he couldn't sell, lease, borrow against, or otherwise use the mansion to raise any cash, rather like a welfare recipient in the West living in public housing. Only the Dubai housing for impecunious locals (at least for those related to the Ruling Family) was rather more luxurious than Western public housing.
But now, as of 13 Mar, any Citizen with property in Dubai is free to sell to any other Citizen. And it looks like they'll have to sell to pay off their stock market losses. The only problem is (like selling the Dubai stocks that caused the problem), sell to whom?
Today, my market-close newsletter re-appeared with the gloomy announcement of a small (3%) decline in Dubai, and smaller declines in other Gulf markets.
Where is Samson (or Shamsung) when we need him? The jawbone in the hands of the Dubai government doesn't seem to be working, and the government does not seem to be stepping in with money in the form of cash to prevent further declines.
There's another problem: last year, a huge run-up Jan-May was followed by a big decline over the summer when buyers (but not sellers) went on vacation. Presumably, the winners went on vacation using their winnings, while the losers must have closed out their losing positions to pay for salve for their wounds. In any case, there was a big decline (about 30%) last summer. This year, there's been an even bigger decline (so far 50%) over the winter, a time when (last year) the market was up 100%. Now if summer repeats...
Of course, since this winter was opposite of last winter, maybe this summer will be opposite of last summer?
We can always hope.
***
And at least now, Dubai Citizens living in €10,000,000 mansions are allowed to sell the mansions (but only to other UAE citizens) to cover their losses in the Dubai stock market. Before (see previous post) there was no property ownership, so someone could be assigned by the government to live in a €10,000,000 mansion and not have a tosser to his name: he couldn't sell, lease, borrow against, or otherwise use the mansion to raise any cash, rather like a welfare recipient in the West living in public housing. Only the Dubai housing for impecunious locals (at least for those related to the Ruling Family) was rather more luxurious than Western public housing.
But now, as of 13 Mar, any Citizen with property in Dubai is free to sell to any other Citizen. And it looks like they'll have to sell to pay off their stock market losses. The only problem is (like selling the Dubai stocks that caused the problem), sell to whom?
posted by Dubai@Random at 7:45 pm
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