Pressure on Dubai’s financial markets has escalated and suffered further losses as property in the emirate shrinks, facing one of its worst economic crises ever.
Dubai’s market recorded further declines and losses after Emirates NBD, the emirate’s largest bank, halted a four-day winning streak.
The Dubai index closed 0.7% lower, with NBD falling 2.9%. The bank’s shares rose in recent sessions after raising its foreign ownership ceiling to 20% from 5% and announced its intention to increase it to 40% in the future.
Real estate developers also weighed on the Dubai index, with Damac Properties and Arabtec Holding down 1.2% each.
Dubai house prices are expected to fall sharply in the next two years as already weak prospects expose more risks from a slowdown in the economy and an oversupply of residential units, a Reuters survey found after Dubai property prices contracted by 25% and 35% since the mid-2014 peak.
In Abu Dhabi, the index fell 0.2% on the decline of Abu Dhabi Commercial Bank heavyweight 1.6%. But Aldar Properties closed 0.9% higher after launching a residential project on Saadiyat Island, which the company said was due to open to all nationalities.
This is the first project on Saadiyat Island since the enactment of new laws allowing foreign buyers freehold land in investment zones in Abu Dhabi, which in April amended its real estate law to allow all foreigners freehold land and real estate in investment areas.
The UAE is witnessing a steady increase in its economic crisis to the extent of its borrowing.
Abu Dhabi plans to return to borrowing from the international market through the issuance of dollar-denominated bonds for the first time since 2017 in order to obtain financial resources to offset the impact of falling oil prices.
The UAE is seeking to cover its financial needs in light of the high cost of the war in Yemen.
UAE bonds worth at least $ 1 billion are likely to be offered, Reuters news agency reported.
The move comes as an expression of the worsening of the UAE’s economic crisis, with statistics showing that only 8% of the country’s families are able to save money.
The UAE’s share of the UAE’s GDP fell by 3.5% due to high inflation and higher tax rates, while unemployment rates in the UAE for youth increased by 24%.
The UAE central bank has already cut its forecast for the UAE’s economy this year.
The most notable signs of the UAE’s economic crisis include a real estate crash, a faltering investment sector, economic downturn and asset sales.