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The economic implications of Dubai crisis on Pakistan - Lahore_Real_Estate - 12-03-2009 05:26 PM
KARACHI - The ongoing Dubai financial crisis is unlikely to affect the local market directly but it can have some negative implications for the real estate market and property business.
The said crisis may also hurt the growth momentum of the remittances inflows come from UAE to Pakistan in the days to come. This would arrest the outflow of money by domestic investors into UAE market (mainly in real-estate). It is worth to mention here that the Dubai-based remittances had share of 12pc in FY09). The recent debt crisis of Dubai World, a leading state-owned investment company of the UAE, is being put some psychological pressure on the investors in the wake of potential fallout from Dubai World’s debt standstill.
However, inventors seem to track cues from Asian markets where equity values have suffered heavy declines following the Dubai World’s debt repayment problem. That said, Pakistan stocks resumed trading on negative note in Tuesday’s trading session as KSE index is down by 2pc with low trading volumes.
It is pertinent to mention here that amongst the listed stocks, PTCL, Bank Alfalah and UBL have UAE-based sponsors while Adamjee Insurance and cement companies have business exposures in the UAE market.
Market analysts do not see any impact of this debt crisis for PTCL and Bank Alfalah. On the other hand, UBL has retail and corporate loan exposures in international markets (mainly UAE) which occupy a share of above 25pc in total loan-book of the bank. UBL’s exposure to Dubai World and its entities is $20m. This accounts for only 2pc of the total UAE book and below 0.3pc of the total loan book.