The National personalfinance Saturday, September 19,2009 www.thenationa1.

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nmeseetheglassas half torsview present UAKecnnnmi

full. and for others it's conditions onsitivelv a s neva

0 halfemply. For a; third

e o n s t k u e n w t h a t ap-
patently includesmany people
to t h e UAE. t h e flaw ninneth
over, even thnugharational ap-
praisal of thevessel would con-
elude that there isnot nearly as
much there.
Thehalf-fanuartofthe13AEin-
vestmentpictureisthedoubling
of the MSCI UAK index from
its low in early February. After
fively, but byain^rginof & &
I
t h a n 5 to 1they expect eondi
irons toimproyemtnerthan de
taiioiate.
Assuming that the survey re
spondents and their peers haw
put their money where thei
mauths are, they a r e taking
h u m bet o n that rscovetv. If i
it may be accounted fo
msharepricesalready,andifi
doesn't, the market may bevul

the market hascaught up with The prudent course for inves

othersaround thewnrld,includ-
tors is, well, prudence. It's han
ing the United States, where the
t o envision a stock market tha
*Gee of the advance hasdowed.
has doubled i n seven month
not undergoing a meaningfu
and China, where stocks have
suffered a severe correction in
correction, so why not wait fo
tfaelast month. one?
Togetthehalfwaytyperspec- Another way t o play defence
tive,zoom.outandbokatalong- whmereryoudecideitlstimeti
Wrm chart. MSCI UAE. even huv- is to concentrate on corn
after itsspectacular recent run, panics whose earnings haw
is still about 75 percent below proven resilient throughout th.
rIPozam iseagertostart hislnternet-based businessnow that henolongerneedsDhl50 wrealicence. Jeffrey EBienglThe National theall time hieh reachedin late last awful year. A recent repor
bv ~ i t i f f r o offers
k~ some sue
they would neverawaken from ffestions. *
the Dubai dream, let alone see Air Arabia's second-quarte

Capital punishment
it turn imothenighunare it be- results showedprofitsthatwee
came last year. Spercent higherthan the sam
Against such a backdrop, you nfertod last year. ~ i thia s a bu
would expect the mood ofinves- ratingonthe shares.
tors to be cautiously optimistic Two o t h e r UAE c o m p a n i e
at best. But thelatest readingsof reported second-quarter earn
Middle East investor sentiment toes that were lowerbutatleas

ends for entrepreneurs

detectalotofoptimismand IiuJe within shouting distance o
caution. Evidently thereareplen- theirresults ayearearlier,whei
ty nfmarketparticipantswhnsee the economic and cnmmercia
theglassasoverflowing. landscapewas much strnnget
Shuaacapital'ssurvey of65 in- First GulfBank,whichalsn has:
vestmentprofessionals based in buv recommendation fmm fit1
thesixGulfCooperatinnCouncil reported a 4 per cent decline
countries and elsewhere found a National Bank of Abu Dhabi
moderately positive bias toward which carries a neutral ratifis
global stock marketsgenerally, h a d &10weeentfall.
but overwhelming bullishness ,.onking a bit farther afield
TheUAEGovernmenttookabig step when it eliminated minimum calaital requirements toward certain GCC markets, Nakilat, a Qatari shipping coin
especially in the UAK. pany with a neutral assessmen
for new businesses, removing shackles from many fledgling start-ups., Keith Parker reports By a margin of 10 to 1, the s u r from Citi, experienced 248 pe
vey respondents expect share cent growth, and Wataiiiya,
prices inAbu Dhabi to be higher Kuwaiti telecommunication
"Jungle Models is still a concept, hotelsinthe regionandratedthem "To receive a license t o oper- have also made efforts to eradicate rather thanlower insixmnnths, concern with a buy rating, hat
hut that concept is now much based on the quality of attention ate in Ahu Dhahi, you had to have prohibitive harriers to entry for more than forany other market 140percent higherearnings.
closertoreality."savsSabriPozam.
,. , hereceivedfrom staff.While he en- Dh300.000 in the bank. In Dubai. businesses. In Kuwait, for exam- The ratio of bulls to bears for There are n o guarantees, o
2 9 , a Dubai-bawd entrepreneur. joyed thiswork,.Mr lWam heganto that number was l .iu,tluu. Once ple, oflicials announced tliissuiii- Dubaiwasabnut 3101. course, but the ability of thes
\o\v that tlie UAK no longer re- e\plorelii*~entrepreneurialspirit. you had your license, thougli,you imer that tIieyarecoiisideriiiu;(.aii- Lookingat the ntherGCC m a r companies to produce consist
qinresa Dhl .it~,Ot~Ocapital require "lintlie UAK, thereare manv mod- had access 10 these fundsand lliev celling the"kafil8',or sponsorship, kets, investors were also bullish e n t earnings, o r better, make
ment to start a business, we are ellingwebsites thatlinkcustomers can he used withinvour business," svstem. Under kafil. foreign com- on Oman, Saudi Arabia and Qa- them good candidates to with
looking at a much more t-omfort- to each of their agencies' ffash- he explains. , ~ o w i v e rman! , corn- panies must partner i + i t i alocal tarand neutral on Bahrain and stand a renewed downturn o
ahlestartiiigpoiiit." ion and runway1 models. As the names this requirement as an sponsor 10 operale ill l h e country, Kuwait. an anaemicrecovery. Jt'salmns
On ~ u g u s10,2009,
t the UAE gov- number of agencies grows, it is he- additional expenseand added it to iniu~lilike the sv-.tein 111the UAI:. As for stockma&eta inthed* like havinga shatterproofglass
ernment announced that it was coming-difficult for clients to find their estimate for the cost of noen- In additon, ~ u k a i has t recently vdopedwarid,npiiyanwas,nesi- full, empty or in between.
takinganothersteptowardseasing the right models for their needs inganofficeintheUAE." - made moves to allow foreimers tn tralto sligMtyh6peful. ~y mar"
the cost ofstaringa businessin the without spending all of their time While Mr Pozam may now have sponsor themselves fora s$orkvisa, ginsof3 to 2 orabitles6,survey
country. Previously, entrepreneurs browsing every single site." his sights set on setting u p i n bin thesewould appl! only under takers espeeted higher prices
were required to haveDhl50,OOOin To fill the niche, Mr Pozam hopes Dubai, he is not fullysatisfiedwith specific conditionsand \\uuldii't for stock indlcss i n the United
the hank in order to move forward his site will serve as a one-stoo the ease of doing business in the affect thevast majority of foreign States, Bittaimnd Continental
i l l a net$ company application, shop, l i ~ i k i ~ i ~ c l i e ~ i t s ~ i c l i a ' t ~emimle.As\lr iiod- Maynereveals,"'I'he workers. Rnmne
- -r-
a law that dates hack to lYU l.Tliis elmg agencies and iiiaga/mes 10 reiiiovaloftliecapilal requirement liein incredibly lhigli cost of office The Shuaa results arecnnsist-
reslri~lionl h a s n o ~beenremoved. fashion iiiodels. Compiling infor- restriuion \$as a good Mart, hm space in the UAI' puseHet anuther en1 with survey data of global
'We believe that the new decree mation about the many agencies nowwe are facing a n onslaught of challenge to entrepreneurs. "Even o r l f o l i n manaeers compiled
will definitely, helo, enhance the and model s i n the market. his cli- other start-uo costs. The fee for a in Knnwlede-eVillage.it will cost at by Hanc of ~ m e r i c aSecurities-
UAVs appeal to investments and enisshould beabletolind thenglit sponsor can range from anywhere a l)li8tl,~011pe<viar fora cuhi- Merrill Lynch.An overwhelming
will pro! ide the pnvale '¥¥e~lor~vil individuals forthejob mnreeasily. het!\een DhlO,lIuuand l)h20u,Ot111 cle in a large room with about luu majority of Merrill's respond-
the right impetus it needs in these Topicalofasmallstart-upsite, Mr dependingonwhatyouarelooking iithercubides," i a v s .Mr Po/am. ents said they were overweight
challenging- times." said Hamad Pozam isn't working with a huee for. After this. vou'll need to oava "Leasing desk space is required, in emerging markets; in fact,
~ u a m i m the . director general of budget check. "sincewe are creit- fee to the economic deoartke"nt so evervbndv has t o s o e n d this thegap between the proportion
l i e ~ u b a ~i h a m b e r o f C o m m e r c e mg&iiiteniet-basedcompany,~$e and set-up fees that vary depend- m o n e y . ' ~ ~ people M don't even of overweight and underweight
and Indiistry. don't iieces\ariI, lhaveto be located ingon the typeofcompany you are need i t tliougli,espe~iallyifyoiiare managerswas thepeatest since
Thegovernment'smlingwillhave in the UAE. When researching our opening," mnningavew small business, like early 20M (the survey does not
the hierest effects on those inter- business clan. we beean to look at
ested ~ ~ ~ o p e n m g s mbusinesses all n ~ o l o c a t i ~ n s ~ o r headquarters:
our
.,
"At the end of it all. on average.. awebsite. In fact, only about 10 to
one can expect to spend anywhere 15 per cent of the approximately
specifically keep track of npin-
inn on GCC markets, which are
in the country, a move lauded b! Dubaiand London." het!\een Dh lt~.tluuaiidl)h2:)u,Ouu 100 cubicles in Knowledge Village considered too small).
Mr I'o/ain.The lifeblood ofalnioM Upon disc-overmi;the Dhl Jtl,tltlU toget started - and that doesn't in- Building #7 are ever being used. Sentiment surveys like these
every economy around the world, capital requirement in the UAE, cl<deofficespace," hecnntinoes. Therestofthemjusthave thename tend to work as contrarian in-
smaller enterprises are now in the MrPozam leaned towardsLondon. ,. .
"We see manv oeoole come to us ofthe comoanvhanffinffon
spotlight as the health nflheecoii- whereliebelieved liecould hemore 10 takecareofall oftlie paperwork lie says. "I Ihis is a completel) uii-
. ., .,
. them." dicators: the more bullish in-
vestors seem to be, the more
only reinain't uiicertain. prolitable,e~eiiafterUKtaxes. and upfront costi becauie they iiecessaq cost ofduing husiness likely sharesare todecline.Tha1
Governments areeager toencnur- "Weweregoing to have to find an find that theywaste ton much time for many people. he^, once yon happensinpartbecause strong
age new investment. esoeciallv in investor forthe Dhl50.000reauire- mnningaround evaloatingoffices. have an office, you get charged for sentitneatreflectshigh expeeta-
l ~ ~ l i t o f r e c e ~ i t r e ~ o r t s t h ~ t t l i e hm i - , who would then expect a s u p p l i ~ ~ s , s p o n s o r s h i p a ~ d s e t - u pevery little thing. A Non-Objection
~ se w flons,and reality hasa habit of
iies-.environment isonthecuspof pnrtio~iofourprolit'ti~iret~ir~i.'l'he options rather than focusing on Letter, for example, costs Dhl.000. dashingthose.
recovery.Just last inionth a Yielsen çholidea oI'<tartingin l)nbaii$as tlieirbiisiiiess.".\lr Mavnesa\s. This is simply for a piece of paper O t h e r S g u r e s in t h e Shuaa
survey O ~ W Aconsumers E revealed put intoquestion," h i says. Other governments in the region withsome inkonit." report s h o w how it c a n work.
that nearly 50 per cent of respond- "With the requirement removed, However. Mr Pozam does not More than twice as'(nany inveg-
ents believe that the economywill the decision was made for us: we warn to underplay hi\ approval of
recoverfrom the current downturn are definitely startingin Dubai," he l i e receiit ruling. "I he removal of
in the next 12months. continues."Sincewedidn'thave to a capital requirement is a strong
way, w a y
MrPozam, who is now in the early find an investorto putup the initial
stages of developing a web-based ~ h i 5 o , o o oitwas , then cheaper to Some organisations
move in the right direction."
Mr Mayne also points out that a
U W W V I I
I
company called Jungle Models, workin Dubai thanin the UK." might h f ~ ~ e re-evaluation of the local sponsor-
studied hospitality in Switzerland Steve Mayne, the sales andopera-
and Canada, where he received his tions director at ~ubai-basedSenti- decided to Owdl
hachelor'sdegree. Growing up in a inel business Centres, iscertmn the elsewherebased
ship requirement may be on the
horizon. Earlier this month it was
reonrted that new leeislation that
I ADCB-MSCI UAE Index Fund, April 10,2007
,A
to Sept 14,2009 (Dh

family involved 111Ihospitality,liede- removal ofthis restnctionwill help would eliminate the ¥~pon*iorshi
velopeda knack for thelield. per\uade in01 oiily \inall bu\iiie\\ requirement for businessesowned
I made the move to ~ u b a ahum i hiiteveii~oiiieiiiediuiiisi/ediniulti- that included this hviioii-iiatioiialswould besuhinit-
.iyearsagobecausethehnipitalit~ ~ i a t i o ~ i a l ' i t o e ~ i t e r ~ ~ i t o t l i e ~ i i a r kr@fBment
et. t i d to the UAE Governmentwithin
industrywas hooming. Since then, \lr MayneS o ~ a n i s a t ~ olielp*>to
n the next two months.
l'ne!$orked wit11 Stan$ond Group alleviatetlii~froiit-I~~adedfiiiaiicial ~ ~ $ ~ ~ , a "Industry
& ~ is one
~ of~the sectorswe
~ n ~ ~ ~ ~ ~ ~ ~ s
and jumeirahGroup,"savs Mr Po- burden bv¥tpreadiiigoutoperatm are trying to attract to the UAE and
zam. "Then, for thepast two and a expenses over timethrough seG- we want it to he a major contribu-
halfvears. I was working -as a 'mvs- , icessuch as leasinruffice soace on tor to our GDP." said Sultan bin
tery<hopper."' a iiioiithly b a ~ *instead
t ofyearly, Saeed al ~ a i i * > ~,~t huer Minister
i
As a iniysteq shopper, Mr I1o/aiii thu-. reducing the~apitalrequired nfllie I'conomy for the UAK, ofthe
I
tested the amenities of avariety of toestablish acompany. announcement." Source: Bloomberg