Dubai: Union Properties is seeking ways to take action against Morgan Stanley, saying its recent report has had a negative impact on the company's share price.
Zaid Ghoul, chief financial officer of Union Properties, said: "We're not sure what action we can take as there are no laws against analysts. But we've notified the regulator and we'll see what they decide."
He said Union Properties met with Morgan Stanley in February but nothing was discussed regarding a future report.
Morgan Stanley recently published a report predicting property prices in Dubai could drop by 10 per cent by 2010 as an oversupply of housing floods the market.
Morgan Stanley assigned Union Properties a base case price of Dh5.7 per share, based on it forecast for the next two years.
Since the report's release, the company's share prices have fallen from Dh5.68 to Dh4.89 on the Dubai Financial Market.
Ghoul dismissed the report's claims that housing prices would drop 10 per cent as it was not sector-specific.
"The report neglected areas such as affordability and mortgage penetration," Ghoul said. He also said the report was too general in its analysis and failed to differentiate between the different sectors of the real estate market.
"The office segment and low-rise segments will still be in demand. If there is a correction [in prices] it will be in the high-rise luxury apartments," Ghoul said.
"Also, if contractors continue to be slow, as we're used to, there might not be a correction anywhere," Ghoul added.
On whether rumours of a capital gains tax being applied in DIFC were true, Ghoul said he had not heard.
"We do know that if an investor buys in DIFC and then rents it out, he will be charged a percentage of that rent," Ghoul said.
