Middle East Economic Boom
Posted by In-Cog-Nito on March 15th, 2006 (All posts by In-Cog-Nito)
Here’s a very good Opinion Journal oped piece on the Mid East economic boom thanks to the high price of oil.
The recent performance of Arab stock markets makes the Nasdaq of the late 1990s look like a slouch. Since January 2002, the Egyptian, Dubai and Saudi stock markets are up respectively by over 1,100%, 630% and 600%. Only four years ago, gulf companies were priced at around twice book value. Today they trade on an average of 44 times historic earnings and at over eight times book value. gulf banks are valued at over nine times book value, according to Credit Suisse.
Here’s a website with pictures of Dubai. Very impressive.
Photos from Visit Dubai at www.dubai-city.de
March 15th, 2006 at 3:22 pm
What is really impressive is that as late of the early 1960′s most of the infrastructure of the Gulf states was built of the local version of adobe. There are virtually no modern buildings in the entire region that are more than 40 years old. The vast majority of them were built after 1973.
March 15th, 2006 at 4:10 pm
So it all looks like Houston?
March 15th, 2006 at 4:34 pm
They want to be like Houston and/or Hong Kong … and we should reward them for that. Instead we are rewarding Saudi royal family which is bankrolling terror.
March 15th, 2006 at 10:11 pm
Of course, they’re just about facing riots for the recent drops in their stock markets.
March 16th, 2006 at 8:42 pm
I’m with Ginny; looks like a boom town to me, hope they get that tourism industry going before the next bust, because I’m not sure what other business goes on there.
March 17th, 2006 at 8:26 am
The Dubai Stock Market has not been having a good week (down 11% on Tuesday), In fact, it’s down 57% from it’s high:
http://www.aleablog.com/?p=99
Actually, this is part of a region-wide stock market crash/correction.
Don’t forget that all or most of those buildings in Dubai were built with oil money. If/when oil prices go down, something has to sustain them and I’m not sure tourism can sustain them all. Are there any other business strengths in Dubai?
(Of course the ports deal shows that the guys at UAE are doing their best to diversify, but beyond owning P&O and their other assets, I’m not sure how secure they are against a boom-bust cycle).