Financial markets is set to revive during the second and third quarters of 2009 due to various factors, which include the rise of oil price per barrel to more than $45, presence of liquidity due to implementation of infrastructure projects by private sector, expected good financial results of companies and alleviation of banks' restrictions on giving loans for companies and individuals, experts told Emirates Business.
Mohammed Ali Yaseen, CEO of Shuaa Securities, said the past few days revealed the UAE economy will grow in good rates just as in last years. The federal budget and budgets of local governments confirmed the government will be the main motivator of economy during 2009 through the launch of giant projects in infrastructure sectors.
"Undoubtedly, such projects will be a source of confidence for investors. The private sector will continue performing its role and fears of its exposure to recession are unreal and revenues will not drop. I can confirm the financial markets will recover with the announcement of new projects, which will pump liquidity in the economy. The sings of improvement are expected to be seen during the second and third quarters of 2009.
"Banks are still afraid of giving loans. But they should be pushed for giving loans to the private sector after getting sufficient guarantees and according to the regulations of the UAE Central Bank to offer investors the opportunity to continue their investments in the real estate sector and shares as it was the situation before. Definitely, that will happen in the end, but in gradually."
Dr Hummam Al Shamaa, a financial consultant with Al Fajr Securities, agreed with Yaseen the exchanges will revive during the second and third quarters of 2009.
"The prices of oil will rise during the second or third quarter at the latest. The more the price of oil rises, the more liquidity will increase. Then, the banks will be in better situation and will return to giving loans.
"The prices of oil did not drop recently due to the falling global demand. But it mainly dropped due to the fall of speculations as a result of rising value of the dollar."
However, Ziyad Al Dabbas, a financial consultant with NBAD, said despite of obscurity, these markets definitely will not revive during the first and second quarters.