Oil price drop will not alter Dubai's spending or investment plans: Shaibani

The sustained slump in oil prices will not alter Dubai's spending or investment plans, a senior official said on Wednesday.

Oil makes up two per cent or less of Dubai's economy, said Mohammad Al Shaibani, chief executive of state-owned Investment Corporation of Dubai (ICD).

"There won't be a lot of shift in terms of strategy," Shaibani told a media round table.

Dubai's Department of Finance does not have any immediate plans to raise debt and "should really balance the budget", he said.

"The growth in the country and in the income is (through) services and is more or less enough to support the planned budget."

Shaibani was bullish on the immediate prospects for Dubai banks. ICD owns stakes in two of Dubai's biggest lenders Emirates NBD and Dubai Islamic Bank.

ICD's assets under management are worth $190 billion, he estimated. These include stakes in Dubai banks Emirates NBD and Dubai Islamic Bank (DIB), Emirates airline, the air services company dnata, and Emirates Global Aluminium, which it owns equally with Mubadala Development, the Abu Dhabi state-owned investment fund.

Shaibani was upbeat on the prospects for Dubai's banks. Emirates NBD and DIB posted profits growth of 7 per cent and 44 per cent in the third quarter.

"I don't think we'll have a lot of NPLs on the balance sheet because I think the banks have learned a good lesson and they are very careful," said Shaibani.

"The banks are going to do really well this year. Overall, the results will be very positive. That's what we expect. Next year will be slightly challenging." 

Dubai open to ideas from financial sector to support projects

Dubai's government is seeking more investment from the financial sector in its infrastructure projects, including those related to the Expo 2020 global event, said Shaibani.

The emirate has planned a range of large projects, spanning a new airport, extension to its metro line and a huge exhibition centre.

Shaibani said all of the funding was planned and secured for the expo and that it would come mainly from the government.

"We would like to see more participation from the financial sector to support these projects," he said. "We're always open to new ideas from the private sector or international investors to take part in these projects."

HSBC has estimated total spending related to the Expo, including private sector projects, could reach $18.3 billion.

 

 

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