Capital Punishment Ends For Entrepreneurs

Saturday, September 19,2009 www.thenationa1.a~

The National personalfinance

nmeseetheglassas half full. and for others it's halfemply. For a; third e o n s t k u e n w t h a t appatently includesmany people to t h e UAE. t h e flaw ninneth over, even thnugharational appraisal of thevessel would conelude that there isnot nearly as much there.

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Thehalf-fanuartofthe13AEinvestmentpictureisthedoubling of the MSCI UAK index from its low in early February. After

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torsview present UAKecnnnmi conditions onsitivelv a s neva fively, but byain^rginof & & I t h a n 5 to 1they expect eondi irons toimproyemtnerthan de taiioiate. Assuming that the survey re spondents and their peers haw put their money where thei mauths are, they a r e taking h u m bet o n that rscovetv. If i it may be accounted fo msharepricesalready,andifi doesn't, the market may bevul

The prudent course for inves tors is, well, prudence. It's han t o envision a stock market tha has doubled i n seven month not undergoing a meaningfu correction, so why not wait fo one? Togetthehalfwaytyperspec- Another way t o play defence

the market hascaught up with othersaround thewnrld,including the United States, where the *Gee of the advance hasdowed. and China, where stocks have suffered a severe correction in tfaelast month.

tive,zoom.outandbokatalong- whmereryoudecideitlstimeti

huv- is to concentrate on corn panics whose earnings haw proven resilient throughout th. last awful year. A recent repor bv ~ i t i f f r o offers k~ some sue they would neverawaken from ffestions. * Air Arabia's second-quarte the Dubai dream, let alone see it turn imothenighunare it be- results showedprofitsthatwee Spercent higherthan the sam came last year. Against such a backdrop, you nfertod last year. ~ i thia s a bu would expect the mood ofinves- ratingonthe shares. tors to be cautiously optimistic Two o t h e r UAE c o m p a n i e at best. But thelatest readingsof reported second-quarter earn Middle East investor sentiment toes that were lowerbutatleas detectalotofoptimismand IiuJe within shouting distance o caution. Evidently thereareplen- theirresults ayearearlier,whei ty nfmarketparticipantswhnsee the economic and cnmmercia landscapewas much strnnget theglassasoverflowing. Shuaacapital'ssurvey of65 in- First GulfBank,whichalsn has: vestmentprofessionals based in buv recommendation fmm fit1 thesixGulfCooperatinnCouncil reported a 4 per cent decline countries and elsewhere found a National Bank of Abu Dhabi moderately positive bias toward which carries a neutral ratifis global stock marketsgenerally, h a d &10weeentfall. but overwhelming bullishness ,.onking a bit farther afield toward certain GCC markets, Nakilat, a Qatari shipping coin especially in the UAK. pany with a neutral assessmen By a margin of 10 to 1, the s u r from Citi, experienced 248 pe vey respondents expect share cent growth, and Wataiiiya, prices inAbu Dhabi to be higher Kuwaiti telecommunication rather thanlower insixmnnths, concern with a buy rating, hat more than forany other market 140percent higherearnings. There are n o guarantees, o The ratio of bulls to bears for course, but the ability of thes Dubaiwasabnut 3101. Lookingat the ntherGCC m a r companies to produce consist kets, investors were also bullish e n t earnings, o r better, make on Oman, Saudi Arabia and Qa- them good candidates to with tarand neutral on Bahrain and stand a renewed downturn o an anaemicrecovery. Jt'salmns Kuwait. As for stockma&eta inthed* like havinga shatterproofglass vdopedwarid,npiiyanwas,nesi- full, empty or in between. tralto sligMtyh6peful. ~y mar" ginsof3 to 2 orabitles6,survey takers espeeted higher prices for stock indlcss i n the United States, Bittaimnd Continental Rnmne - -rThe Shuaa results arecnnsisten1 with survey data of global o r l f o l i n manaeers compiled by Hanc of ~ m e r i c aSecuritiesMerrill Lynch.An overwhelming majority of Merrill's respondents said they were overweight in emerging markets; in fact, thegap between the proportion of overweight and underweight managerswas thepeatest since early 20M (the survey does not specifically keep track of npininn on GCC markets, which are considered too small). Sentiment surveys like these tend to work as contrarian indicators: the more bullish investors seem to be, the more likely sharesare todecline.Tha1 happensinpartbecause strong sentitneatreflectshigh expeetaflons,and reality hasa habit of dashingthose. O t h e r S g u r e s in t h e Shuaa report s h o w how it c a n work. More than twice as'(nany invegWrm chart. MSCI UAE. even after itsspectacular recent run, is still about 75 percent below theall time hieh reachedin late

wrealicence. Jeffrey EBienglThe National

rIPozam iseagertostart hislnternet-based businessnow that henolongerneedsDhl50

Capital punishment ends for entrepreneurs TheUAEGovernmenttookabig step when it eliminated minimum calaital requirements for new businesses, removing shackles from many fledgling start-ups., Keith Parker reports "To receive a license t o oper- have also made efforts to eradicate "Jungle Models is still a concept, hotelsinthe regionandratedthem hut that concept is now much based on the quality of attention ate in Ahu Dhahi, you had to have prohibitive harriers to entry for closertoreality."savsSabriPozam. hereceivedfrom staff.While he en- Dh300.000 in the bank. In Dubai. businesses. In Kuwait, for exam,. , 2 9 , a Dubai-bawd entrepreneur. joyed thiswork,.Mr lWam heganto that number was l .iu,tluu. Once ple, oflicials announced tliissuiii\o\v that tlie UAK no longer re- e\plorelii*~entrepreneurialspirit. you had your license, thougli,you imer that tIieyarecoiisideriiiu;(.aiiqinresa Dhl .it~,Ot~Ocapital require "lintlie UAK, thereare manv mod- had access 10 these fundsand lliev celling the"kafil8',or sponsorship, ment to start a business, we are ellingwebsites thatlinkcustomers can he used withinvour business," svstem. Under kafil. foreign comlooking at a much more t-omfort- to each of their agencies' ffash- he explains. , ~ o w i v e rman! , corn- panies must partner i + i t i alocal ahlestartiiigpoiiit." ion and runway1 models. As the names this requirement as an sponsor 10 operale ill l h e country, On ~ u g u s10,2009, t the UAE gov- number of agencies grows, it is he- additional expenseand added it to iniu~lilike the sv-.tein 111the UAI:. ernment announced that it was coming-difficult for clients to find their estimate for the cost of noen- In additon, ~ u k a i has t recently takinganothersteptowardseasing the right models for their needs inganofficeintheUAE." made moves to allow foreimers tn the cost ofstaringa businessin the without spending all of their time While Mr Pozam may now have sponsor themselves fora s$orkvisa, country. Previously, entrepreneurs browsing every single site." his sights set on setting u p i n bin thesewould appl! only under were required to haveDhl50,OOOin To fill the niche, Mr Pozam hopes Dubai, he is not fullysatisfiedwith specific conditionsand \\uuldii't the hank in order to move forward his site will serve as a one-stoo the ease of doing business in the affect thevast majority of foreign i l l a net$ company application, shop, l i ~ i k i ~ i ~ c l i e ~ i t s ~ i c l i a ' t ~emimle.As\lr iiodMaynereveals,"'I'he workers. liein incredibly lhigli cost of office a law that dates hack to lYU l.Tliis elmg agencies and iiiaga/mes 10 reiiiovaloftliecapilal requirement reslri~lionl h a s n o ~beenremoved. fashion iiiodels. Compiling infor- restriuion \$as a good Mart, hm space in the UAI' puseHet anuther 'We believe that the new decree mation about the many agencies nowwe are facing a n onslaught of challenge to entrepreneurs. "Even will definitely, helo, enhance the and model s i n the market. his cli- other start-uo costs. The fee for a in Knnwlede-eVillage.it will cost at l)li8tl,~011 peto n the next two months. ~ ~ $ ~ ~ , a & ~ is one ~ ~ n ~ l'ne!$orked wit11 Stan$ond Group alleviatetlii~froiit-I~~adedfiiiaiicial "Industry of~the sectorswe and jumeirahGroup,"savs Mr Po- burden bv¥tpreadiiigoutoperatm are trying to attract to the UAE and we want it to he a major contribuzam. "Then, for thepast two and a expenses over timethrough seGhalfvears. I was working icessuch as leasinruffice soace on tor to our GDP." said Sultan bin -as a 'mvs, tery ~,~t huer Minister i As a iniysteq shopper, Mr I1o/aiii thu-. reducing the~apitalrequired nfllie I'conomy for the UAK, ofthe announcement." tested the amenities of avariety of toestablish acompany.

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Source: Bloomberg