TBY talks to Naser Nabulsi, Vice Chairman & CEO of Al Mal Capital, on sectoral trends, Dubai as a financial hub, and the Middle East as adestination for capital.

Which trends, such strengthening UAE-China ties and increasing limits on foreign ownership of banks, do you anticipate having the most influence? How do you foresee investors responding to these developments?

Among the global factors—US/China trade talks, US Elections, Global & EM GDP growth indicators, oil prices, central banks action and Brexit have some influence on our regional financial markets. Local factors do have strong impact as well, including the increase in foreign ownership of banks in UAE which can have a meaningful influence by driving in passive inflows, especially because banks are generally heavyweights in Indices. However, there are other variables which can move share prices in the banking sector; this includes NIM (Net Interest Margin) evolution, asset quality, further M&A/ consolidation, etc. Another factor is the leveling of off-plan sales for the real estate sector; it will be interesting to see if companies can stimulate demand at lower price points.

Also, further reforms to help population growth (or at least stabilization), perhaps going away from the employer sponsorship regime, is another variable. Another one is increased sector diversification of our regional stock markets, especially in under-represented areas such as education, healthcare, airlines, retail chains, and F&B. This could invigorate investor enthusiasm – however this will play out over a multiyear time period. Finally, Expo 2020 will feature prominently in the news over the coming year, and this is another important consideration