Dubai: Wednesday night’s announcement that Dubai will host Expo 2020 will have a mixed immediate impact, driving up stocks and job opportunities, while consumer prices remain relevantly unchanged.
Arjuna Mahendran, Chief Investment Officer of Emirates NBD Wealth Management, told Gulf News the Expo 2020 will drive stocks up by “10 to 15 per cent in the next two to three months.”
Over the next seven years, Dubai and the UAE is set to benefit from an estimated $6.9 billion (Dh25.3 billion) in infrastructure projects tied to Expo 2020, increasing the country’s attractiveness to investors.
Money created by the Western Central banks is already going into assets, Mahendran said, while investments in the UAE property market increased in anticipation of Dubai winning the right to host Expo 2020.
Mahendran said he would not be surprised if the stock market increases by 10 to 15 per cent over the next two to three months with a lot of money heading into banks and the construction sector. This is because Expo 2020 will attract global investors to the UAE markets. He said real estate sale prices were unlikely to be accelerated because investors had factored a winning Expo bid into their purchase.
However, Craig Plumb, head of research for the Middle East and North Africa (Mena) region at Jones Lang LaSalle said that landlords will have higher asking prices.
Tightening monetary policies in countries like China, Indonesia, and India will keep consumer prices in the UAE in check. Mahendran said consumer demand in large emerging markets was slowing and because inflation is fairly muted globally consumer prices were unlikely to increase on the back of the Expo announcement.
Projects surrounding Expo 2020 are expected to create more employment opportunities in the UAE for both professionals and labour workers.
“There will be more demand for jobs, in construction, infrastructure, hospitality, and services- both lower-level and professional jobs,” said Larisa Muravska, partner at Mercer, a human resources consulting firm.
Jawad Khawaja, managing director of Atad International General Trading, a supplier of building materials, said he expects companies in the field to increase hiring by between “15 and 20 per cent” over the next three years, starting from mid to end of the first quarter of 2014.
Gareth Clayton, Director at recruitment consultancy Charterhouse Middle East agreed there would be a boost in job opportunities tied to Expo 2020 projects in the near future, but it would not be felt in other sectors until closer to 2020.
