Mubasher: Merrill Lynch assigned a “Marketweight” recommendation to Dubai’s EXD, according to a recent report.
Dubai's EXD is seen at tight spreads given still-high leverage and refinancing challenges, but the global backdrop suggests continued muddle through in terms of Dubai Inc. debt rollovers.
The wealth management firm expected the local bid on the shorter end to weaken due to oil price decline, yet there is less supply risk than in our GCC countries.
“Downside risks include a prolonged period of low oil prices, regional geopolitical threats, a loss of competitiveness due to a stronger USD, material domestic liquidity tightening, a real estate collapse, increased borrowing for projects with low return and global risk aversion, which may cut market access to Dubai Inc.,” according to the wealth management firm.
“Upside risks are the Iran-P5+1 Deal, which could boost trade activity in Dubai,”
The firm also hold Abu Dhabi at Marketweight as the sovereign balance sheet remains robust despite low oil prices.
