Daman chief bullish on Dubai's debt

Dubai: Dubai's debt situation is manageable, despite a more sober period ahead, according to a senior official at Daman Investments.

"Dubai's situation is interesting because it is on the fast-track of growth... but indications are that its debt situation is manageable. There is no doubt we are coming into a more difficult period ahead. But there is enough resilience in the Dubai story to see it through," Shehab Gargash, chairman of Daman Investments, told the media yesterday.

Speaking on the recent fluctuations in world markets, Gargash said although there is a "tough period" ahead, the liquidity crunch is a worldwide problem and a comprehensive one.

"The period ahead will be more sober, but it is not a UAE phenomenon, it is a world phenomenon. We're all in the same boat," Gargash said.

Protection

He also said Dubai and the UAE are protected by the government. "With its [government] firmness and speed and the clear message that it will stand behind its economy and not let it falter," Gargash said.

The UAE Government has taken practical steps to ensure liquidity is available, Gargash said. His comments are likely to calm frayed investor nerves.

Gargash believes the stock markets' bounce-back is temporary as it is impossible to sustain a 10 per cent growth over several days. "It is a reaction to the over-reaction of previous days when the market dropped to a negative 37 per cent, which was unwarranted," he said.

He also said other GCC markets "haven't fared that badly". "In the major economic shake-up around the world, we note it's a liquidity crunch. We're living in one of the sources of liquidity, the Gulf," Gargash said.

Gargash noted there has been a certain amount of hype surrounding the issue.

"It's been a long time since it's happened at this magnitude so nerves are raw. The hype will kick in and the drama will kick in. Economically, we're living in dramatic times. It's the economic equivalent of watching war on TV," Gargash said.