Dubai World Debt Agreement Reactivates Local Exchanges

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(DUBAI, UAE) -- The news that 99 percent of Dubai World's creditors had agreed to a restructuring deal was released on Friday, the first day of the weekend in the UAE and during the Eid Al Fitr holiday that celebrates the end of Ramadan - the local equivalent of breaking a big story on Thanksgiving Day or Christmas Eve. Yesterday when markets reopened, it was clear that this was what they had been waiting for.

The Dubai Financial Market (DFM) index and the Abu Dhabi Securities Exchange (ADX) general index were up 2.4 and 1.4 percent respectively, but the real story was volume. Yesterday 234 million shares were traded on DFM and 117 million on ADX. Where DFM used to trade more than 300 million shares each day, since the financial crisis, daily volume has averaged closer to 50 million.

On DFM yesterday's gainers were DFM's own shares which jumped six percent and perennial winners Emaar - developer of Burj Khalifa, Arabtec, DP World, Dubai Islamic Bank, and du. On ADX the star was Aldar - developer of Al Raha Gardens and Abu Dhabi's leading developer, with 39 million shares traded, nearly one third of the exchange's total volume.

More good news is reported in today's The National. The regional director of London's Financial Times Stock Exchange (FTSE) told the newspaper yesterday that 21 companies from the UAE will be included in the Global Equity Index Series beginning Monday. Last year the UAE was classified by FTSE as a "secondary emerging market." The listings are another indication that the UAE is coming up in the financial world.

What everyone has been waiting for is a clear sign that Dubai is back as a financial center for the region and globally. It's far from clear whether the good news yesterday was just a blip or the beginning of a longer term upward movement in share prices, volume, and - perhaps most important, real estate prices.

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