Dubai firms must back local bourse like DP World

16 November 2007
”With the exception of the capital markets in Dubai, everything else has grown,” says Mohammed Sharaf, chief executive officer of DP World. It is a failing that the Dubai government has been making strenuous efforts to address this year.

The listing of ports operator DP World on 26 November is the latest sign of that. It will mark an important moment in the emirate’s efforts to boost its credibility as a global business hub.

Already this year the two stock markets based in the emirate, the Dubai International Financial Exchange (DIFX) and the Dubai Financial Market, have been brought into a single holding company, Borse Dubai. It is widely expected that they will eventually merge.

Borse Dubai has also been courting major international exchanges, forming links with Nasdaq and the London Stock Exchange.

And while the standard of company reporting in the Middle East has been weak by international standards, it is improving.

But even if they are reassured about standards, investors still need attractive investment opportunities. DP World, as a large, profitable company operating in an expanding global market, fits into that category. There are too few others like it, particularly on the DIFX.

Sharaf says his firm has not been forced to list its shares by the Dubai government, which owns it. But the government should push more of its other major companies onto the exchange, such as Emirates Airline and property developer Nakheel.

There is no major international business centre without a properly functioning stock market, and Dubai does not want to be the exception to test the rule.

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