Property boom, sin stocks and debt management

Property boom, sin stocks and debt management
03 June 2013

Investment freefall?

One of the biggest equity losers during the 2008 UAE property crash is enjoying the economic upturn. Nakheel, the property developers behind several ‘mega projects’ including Palm Island, lost a staggering $3.64 billion from September 2008 to December 2009. But now it appears to be firmly back in business, with reports of $550,000 profits in 2012 and a brand new villa development project which has already had investors rushing to buy off-plan. The IMF recently warned Dubai investors to maintain caution to help prevent another property bubble forming, but this doesn't appear to have been a deterent, with more than AED1 billion invested on the sales launch night. Find out more.

Up in smoke?

Whether you agree with it in principle or not, tobacco growers are enjoying resurgence in market prices and sales.  Investment professionals are betting on the nicknamed ‘sin stocks’ despite the economic downturn and a rise in taxation on the goods. Tobacco has proved to be a ‘safe haven’ during the tough financial downturn. While health concerns have led to a huge drop in counter sales of tobacco products, the MSCI World Tobacco index still showed that tobacco companies enjoyed the highest return out of all industry groupings from 2001 to 2011. Read more here.

Delivery from debt

A new financial literacy programme to help young people understand the impact of debt has been launched by the Emirates Foundation for Youth Development. Called Spend Right, the programme was started because of concerns over the the growing number of young UAE nationals in debt. A 2012 survey from The National Family Status Observatory found almost 60 per cent of Emirati families spent about a quarter of their income on loans. The Central Bank has also reported a 17% growth in personal lending in 2013. Lack of financial education and too much ease in loan accessibility has been blamed for the rise. Read more here.



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