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
6 thoughts on “Middle East Economic Boom”
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.
So it all looks like Houston?
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.
Of course, they’re just about facing riots for the recent drops in their stock markets.
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.
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:
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).
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