Dubai's bid for Expo 2020 should positively benefit stock market: CFA Member survey

Dubai: CFA Society Emirates, the local UAE member society of the CFA Institute, has yesterday published its Dubai Expo 2020 Survey ahead of the final decision on the host nation by the Bureau International des Expositions (BIE) on 27th November. Based on the feedback from approximately 216 investment professionals in the United Arab Emirates, the survey highlights key insights on the potential effect of a successful bid from Dubai and views on the potential of another economic bubble in the UAE. In summarising the research, Amer Khansaheb, President of CFA Society Emirates, said, "Investment professionals in the UAE are very supportive of Dubai's bid for Expo 2020 and are nearly unanimous in their belief that Dubai will win the bid. The stock market, real estate and foreign direct investment sectors are all expected to be beneficiaries if Dubai wins but many are concerned that a successful bid will create another economic bubble. CFA members believe more government regulation and easier procedures for starting new businesses in the UAE would potentially help protect the economy from excessive speculation." According to the survey, CFA members were of the opinion that a successful bid will have a positive impact on the stock market (87 per cent of respondents believe it will be positive), real estate (90 per cent of respondents) and foreign direct investments (85 per cent ). 56 per cent of respondents expected a positive impact on stock market prices if Dubai wins Expo 2020 but noted that a lot of speculative activity has already taken place in anticipation of the win, 19 per cent of CFA members expect there will be a significant impact and 27 per cent believe there will be only a selective impact. If Dubai wins Expo 2020, 76 per cent of respondents expect a positive or significant impact on the real estate sector, while only 11 per cent would expect a limited impact on market pricing. Only 4 per cent believe that the costs associated with hosting Expo 2020 will create a debt burden on the UAE economy. More than half of respondents (55 per cent) are concerned that a successful bid for Expo 2020 will create another economic bubble with only one-quarter of members believing that the UAE has done enough to make its economy immune since the 2008 slump. Members overwhelmingly support increasing regulation to increase the economy's immunity to another bubble, with 87 per cent of respondents favouring real estate regulation and 75 per cent of respondents favouring bank regulation. More than half of respondents (56 per cent) predict that having easier procedures for starting businesses would help protect the UAE from another bubble. – Emirates News Agency, WAM