Investment Corporation of Dubai (ICD), the government investment group, has struck a landmark deal with the sovereign wealth fund of South Korea to cooperate on financial opportunities around the world.

The deal – signed in Dubai – involves ICD and Korea Investment Corporation (KIC) developing a platform that “facilitates communication between the two organisations, while empowering them to jointly explore investment opportunities in the UAE, South Korea and other countries”, ICD said.

ICD holds valuable stakes in assets such as Emirates Airline, Emirates NBD, and the Dubai Electricity and Water Authority. It has assets valued at US$160 billion, according to a bond prospectus issued last year.

KIC oversees the investments of the South Korean government, which span diverse industries in global markets. Total assets are estimated at $72bn.

The deal is thought to be the first time two sovereign wealth funds from different countries have signed a strategic deal to cooperate on global investments, rather than just working together on individual projects.

“International cooperation agreements and partnerships play a central role in expanding our market presence and expertise locally and abroad,” said Mohammed Al Shaibani, the chief executive of ICD. “We look forward to collaborating with KIC to further strengthen the well-established commercial ties between Dubai and South Korea.”

Hank Ahn, chief executive of KIC, added: “Dubai is a growing commercial and financial hub as well as an important gateway to emerging markets. We look forward to exchanging information and jointly finding new investment opportunities alongside such a solid partner.”

The UAE and South Korea have collaborated on a number of high-profile deals in recent years. Last month Seoul media reported that ICD had taken a controlling stake in Ssangyong Engineering & Construction, a building firm that has recently experienced financial difficulties. The price of the stake was about Dh667 million, according to reports.

Ssangyong has a long history of construction contracts in the Middle East, notably the Hadeed iron and steel mill and Jubail desalination plant, both in Saudi Arabia.

In September 2012 Ssangyong secured a deal to build a water treatment plant and transmission and storage facilities in northern Iraq.

In 2013 the Dubai-listed construction group Arabtec signed a joint venture with Samsung Engineering, part of South Korea’s biggest conglomerate, to bid for high-value contracts in infrastructure and refinery projects around the world, although no deals have yet materialised from the venture.

Arabtec also linked up with another South Korean company, GS Engineering and Construction, to build rail and other transport projects in the Middle East and elsewhere.

The move by ICD is a sign of the increasing grade flows between east Asia and the Middle East. This week it was announced that South Korea and Saudi Arabia would cooperate on the development and construction of two small to medium nuclear power plants in the kingdom at a cost of nearly $2bn.

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You would expect an ambassador to be a well-rounded individual, but Umej Bhatia, Singapore’s urbane envoy to the UAE, has a skill set that goes beyond the arts of mere diplomacy.

Maybe it’s the top-notch education (King’s College Cambridge, Harvard) or maybe it’s the earlier career in media as a TV broadcaster and presenter, but Mr Bhatia is self-confident and in charge in most situations, whether it’s a one-to-one lunch, a gathering of important UAE business people, or a formal media interview.

He is an eloquent advocate of the island city state that has one of the highest per capita GDPs in the world, and is becoming a hub for the global financial industry. And he is a staunch proponent of the UAE-Singapore relationship, which can only get deeper as the two countries find they have so much in common.

Mr Bhatia has for the past two years been the first permanent resident Singapore representative in the UAE. As Singapore gets ready to celebrate 50 years of independence, the Abu Dhabi Chamber of Commerce is about to open its first overseas office in the country.

“It’s in the last seven to eight years that it [the relationship] has blossomed, partly because Singapore leaders went on a Middle East engagement drive, and partly because, about the same time, UAE leaders wanted to know how Singapore had managed to successfully diversify,” Mr Bhatia explains. “They saw Singapore as a compact case history of economic diversification, almost a laboratory setting for development, open and accessible to the outside world,” he adds.

There was something about Singapore that attracted UAE policymakers almost from the start of the emirate’s dynamic economic growth from the 1990s onwards. At first, young Dubai leaders – such as Mohamed Alabbar – travelled to Singapore to see how it was being done there, and brought back the seeds of an urban development policy that led to the creation of Emaar Properties.

Then, as Abu Dhabi was mapping out its future growth strategy, Singapore became an obvious role model, and its experience was incorporated into the Abu Dhabi Economic Vision 2030.

Now, Singapore’s rapid growth as a global financial centre is also being emulated by the UAE capital, as it prepares to launch its own financial hub.

So what is it about Singapore that attracts the UAE so much? “The “soft knowledge” of Singapore – the legal, educational and social/cultural infrastructure the country has built up since independence – was of great interest,” Mr Bhatia says.

But UAE policymakers also wanted to discover how Singapore attracted foreign investment. For example, Japan has invested heavily in the oil refinery business in Singapore. Why, when the island has no natural energy resources?

The ambassador explains: “This was in the 1980s, and Japan was originally looking to invest in refineries in Iran. There was long-term political instability in Iran that did not exist in Singapore. That’s what I mean by “soft knowledge”: the social and political culture that could not be found elsewhere in South-East Asia, or even in the Middle East back then.

“That’s what the UAE – both Abu Dhabi and Dubai – wanted to learn. Perhaps Dubai even more so, because the oil assets were more limited. Singapore offered stability, one-party rule and economic dynamism,” he says.

The UAE was also impressed by Singapore’s prowess as a global trading power, which was more or less forced upon it in the 1960s, when the island state was expelled from the Malaysian federation, and had to fend for itself in a competitive world.

“Trade is what keeps Singapore alive. The value of our overseas trade is four times our GDP, so you can see how important it is. Trade with the UAE is bigger than trade with Saudi, which is a sign of how important we regard the relationship,” says Mr Bhatia.

“Trade is dominated by crude oil imports of course, but there is also a big market in oil services equipment. Singapore is one of the biggest producers of jack-up oil rigs in the world, and state oil company Enoc has got two oil terminals in Singapore, for example. Increasingly the trade is in other things too: TV equipment, jewellery, watches,” he adds. Total trade between the two countries was worth US$27.2 billion last year.

The deal-making also continues. Perhaps the best known is the 2009 multibillion dollar deal by which Mubadala launched a global semi-conductor business with most of its manufacturing capacity in Singapore, but there are many other examples of UAE-Singapore business cooperation.

The latest could be one of the most significant. The Abu Dhabi Global Market, the UAE capital’s shot at joining the global financial centre elite, will be regulated by a Singaporean executive, Richard Teng, and its overall approach to regulation of private banking and asset management will lean heavily on the Singaporean model.

That makes a lot of sense, Mr Bhatia believes. “We also had to convince the global financial community that Singapore is the right environment for the asset management industry. It has to offer the kind of principled but discreet environment that Switzerland used to offer so efficiently.

Abu Dhabi, in its new financial centre, also recognises the importance of the private banking and asset management business, so it is trying to raise standards in these areas. It is no coincidence that the lead regulator AD brought in is a Singaporean,” he says.

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I made a short but sad trip to Ireland last week. A man I’d known all my life, the father of my childhood friends, had died in his native county Kerry, right out on the far south-west tip of the island.

His funeral was last Thursday and I felt obliged to go, as much out of sympathy for my grieving friends as for the man himself, whom I hadn’t seen for 20 years. Anyway, it had to be done.

Thanks to two modern miracles – Emirates Airline and online car hire – it was all relatively easy. A restful seven hours on the Dubai to Dublin flight set me up for a four-hour drive across Ireland. It wasn’t especially far – just over 300 kilometres – but the Irish road network got progressively more primitive the farther away I travelled from the capital.

By the time I was in Kerry the roads were sometimes no better than single-lane tracks where you had to pull in to let somebody pass and avoid the potholes. Sheikh Zayed Road it was not.

Telecommunications were patchy. The mobile signal was on and off, with a high proportion of calls just cutting off in mid-sentence. Wi-Fi was, on the whole, non-existent except in the bar of Bunker’s Hotel in the little town of Killorglin (population 2,000 or so).

Consequently, for three whole days – two spent flying/driving, one spent mourning – I had no access to the internet at all. No work email, nothing from my two private email accounts. I must admit, after a guilty few hours I felt entirely liberated.

It was nice to soak up the lack of communicability for a while, but as I drove back across the country (with the road network conversely improving now) I realised the hour of reckoning couldn’t be put off forever. There would of course be Wi-Fi in the departure lounge at Dublin airport, and I’d have to come to terms with a monstrous backlog.

I took the two personal emails first. Yes, there were lot of them, but 30 minutes or so later I’d whittled them down to a manageable slug for later action. Then the one I was dreading – work email.

My work email has to be culled at least every couple of hours or it just gets out of hand, with hundreds of message waiting for attention. As I opened the account, however, I realised there was nothing there later than a couple of hours after I got on the plane, three nights back.

The email system had filled up in that short space of time, and simply stopped receiving. Marvellous. There was nothing to delete/answer/action.

So I got into the return flight in better mood. Until I realised I hadn’t seen my mobile phone for a while. I last had it while eating, it was right beside me in the chair, oh no … it must have slipped down the side of the airplane seat. It was now lying in the depths of the moving chair, unreachable. Engineers would have to be called to dismantle the seat. Or maybe the phone had already been crushed to bits when I swung the seat forward for the meal.

In stark contrast to my joy at having no email, I was panic-stricken at the thought of enforced mobile deprivation. Nomophobia, it’s called. The fear of being out of mobile phone contact.

I needn’t have worried. The Emirates cabin staff must have seen it all before, and one plunged his arm into the innards of the seat and retrieved my phone, in perfect condition. Utter relief.

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They must getting too close to the fumes from all that aviation fuel. How else can you explain the increasingly hysterical noises coming from American airline executives about their rivals in the Arabian Gulf?

First there was a refrain of the old, and often disproved rant about alleged subsidies by the governments of Qatar, Abu Dhabi and Dubai to their airlines, backed up by what was described as fresh research supposedly giving details of the supposed subsidies.

Then came the wild allegations by the Delta Air Lines chief executive Richard Anderson about the role of “Arabian peninsula” people in the attacks of 9/11.

Whatever next? It’s hard to see how much further Mr Anderson can go after the last smear, for which he only partially apologised. But there is a long tradition on the part of some Americans to invoke the “terrorism” threat whenever their business interests are (legitimately) challenged from this part of the world.

Look at the slurs DP World had to endure in 2006 when it was taking over P&O ports in the United States. So don’t be surprised if further far-fetched claims surface.

The 9/11 links were dismissed by most sane people for what they were – transparent and baseless smears. But the allegations about subsidies and other unfair commercial practices should be answered seriously.

Or at least they should be if they were presented seriously. Delta claimed that the allegations were contained in a “55-page white paper”, without giving many further details of how the document was prepared.

Delta is obviously reluctant to share the document with media in the Gulf region. It’s a sensitive issue. When I asked the London press office (which deals with Middle East press inquiries) if I could see it, like the American newspapers and news agencies which have been given copies, I was told it would have to be checked and approved in the US.

By the time of publication of this column, 72 hours after my initial call to Delta, no “55-page white paper” had been forthcoming. It was not “broadly available just yet”, emailed a Delta spokesman from the US.

But judging by reports of the contents, Delta seems to be mainly harping on again about the tired old issue of subsidies to Emirates, Etihad and Qatar.

Emirates points out that it received US$10 million in 1984 as its seed capital, and has ever since relied on internally generated cash to fuel its expansion plan. The airline makes profits of more than $1 billion and – in these days of sophisticated aircraft leasing packages – this is more than enough to fund fleet expansion for years to come.

The others have equally plausible explanations for their finances. The basic premise is this: as the Arabian Gulf airlines operate in a virtually unregulated labour environment, they make significant cost savings compared to the highly-unionised and rigidly hierarchical business models of the Americans.

That is the beauty of being a new entrant into an old market; you can make significant cost savings on traditional expenses such as wages, staff accommodation and allowances. What the Gulf airlines are doing is no more anti-competitive than what Uber, or Airbnb, are doing in their respective industries. They are remodelling the cost side of the equation.

Another allegation thrown at the Gulf carriers is that, as they are at the heart of an oil-rich region, they get cheap fuel from their governments. This is to simply misunderstand the economics of the oil market. The regional carriers have to buy their fuel on the global spot markets, just like any other carrier.

If there had been any aberrations in the accounting process, surely it would have been spotted by the auditors before they signed off the accounts? In fact, the Gulf airlines are audited by “Big Four” accounting firms, just like American and European airlines, to what we must assume are the highest standards.

The Americans’ aim is to persuade US federal authorities to review and revise “open skies” legislation, which has been the foundation of the remarkable expansion in global aviation over the past two decades.

They will probably be unsuccessful in this, but nonetheless have already proved themselves to be protectionist cavemen, determined to push back the aviation clock. If it requires legal action to prove the Gulf carriers’ case, as has been suggested, it should be vigorously pursued.

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Abu Dhabi Investment Authority (Adia) could be checking into London’s top hotels after expressing interest in buying shares in the company that owns Claridge’s, the Berkeley and the Connaught.

Ownership of the five-star properties have been the subject of speculation for years, as potential bidders, including some from the Middle East, have come and gone.

But Adia has put down an offer of £1.6 billion (Dh9.04bn) for the hotels in London’s affluent West End, according to reports in the British press.

That would equate to about £3 million per room, a big sum even for prime properties in one of the richest parts of the world.

An Adia spokesman declined to comment on the reports, but a person familiar with the matter said that Adia had written to the current shareholders of the holding company for the three properties in the past couple of weeks, expressing an interest in acquiring them, and is awaiting a response.

Ownership of the glittering assets is complicated. The holding company Coroin controls the Maybourne Hotel Group, which operates the hotels, and is majority owned by the Irish property tycoons Derek Quinlan and Patrick McKillen.

Although Mr Quinlan on paper controls the properties via his two-thirds stake in Maybourne, in fact his shares are legitimately controlled by Sir David and Sir Frederick Barclay, the entrepreneurial twins who also own the Telegraph media empire and other high-profile assets.

The twins have backed Mr Quinlan in a four-year legal struggle against Mr McKillen for control of the hotels.

The person familiar with the matter said: “There are a lot of moving parts here, and controversy among existing shareholders. An outside influence might just be able to fix the matter once and for all.”

Adia already owns considerable hotels assets in the UK, such as the London Lanesborough and a chain of Marriott-managed properties bought from Royal Bank of Scotland. It also owns three hotels under the Edition brand in London, New York and Miami.

Last year Al Habtoor Group was in detailed negotiations to buy the three Maybourne hotels. Khalaf Al Habtoor, the group chairman, eventually pulled out of the talks, accusing the Barclays of “wasting my time”.

There was speculation in London that the Adia interest could spark a bidding war among other Middle East investors keen to own such prime real estate.

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Abu Dhabi Investment Authority (Adia) could be checking into London’s top hotels after expressing interest in buying shares in the company that owns Claridge’s, the Berkeley and the Connaught.

Ownership of the five-star properties have been the subject of speculation for years, as potential bidders, including some from the Middle East, have come and gone.

But Adia has put down an offer of £1.6 billion (Dh9.04bn) for the hotels in London’s affluent West End, according to reports in the British press.

That would equate to about £3 million per room, a big sum even for prime properties in one of the richest parts of the world.

An Adia spokesman declined to comment on the reports, but a person familiar with the matter said that Adia had written to the current shareholders of the holding company for the three properties in the past couple of weeks, expressing an interest in acquiring them, and is awaiting a response.

Ownership of the glittering assets is complicated. The holding company Coroin controls the Maybourne Hotel Group, which operates the hotels, and is majority owned by the Irish property tycoons Derek Quinlan and Patrick McKillen.

Although Mr Quinlan on paper controls the properties via his two-thirds stake in Maybourne, in fact his shares are legitimately controlled by Sir David and Sir Frederick Barclay, the entrepreneurial twins who also own the Telegraph media empire and other high-profile assets.

The twins have backed Mr Quinlan in a four-year legal struggle against Mr McKillen for control of the hotels.

The person familiar with the matter said: “There are a lot of moving parts here, and controversy among existing shareholders. An outside influence might just be able to fix the matter once and for all.”

Adia already owns considerable hotels assets in the UK, such as the London Lanesborough and a chain of Marriott-managed properties bought from Royal Bank of Scotland. It also owns three hotels under the Edition brand in London, New York and Miami.

Last year Al Habtoor Group was in detailed negotiations to buy the three Maybourne hotels. Khalaf Al Habtoor, the group chairman, eventually pulled out of the talks, accusing the Barclays of “wasting my time”.

There was speculation in London that the Adia interest could spark a bidding war among other Middle East investors keen to own such prime real estate.

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Standard & Poor’s (S&P), a credit agency, has maintained top-notch ratings on Abu Dhabi debt despite concerns about the fiscal and economic fallout from lower oil price.

In new research, S&P says this country will be kept on a rating of AA-1 plus despite the global fall in energy prices. Oil revenue accounts for 55 per cent of Abu Dhabi’s GDP and 90 per cent of government revenue, the agency estimates.

“The ratings on Abu Dhabi are supported by its strong fiscal and external positions, which afford it fiscal policy flexibility.

“The exceptional strength of its net asset positions also provides a buffer to counter the negative impact of oil price swings on economic growth and government revenues, as well as on the external account,” S&P says in a new report on the country’s finances.

However, it adds that Abu Dhabi is still just off the most senior rating it awards because of structural factors. “The ratings are constrained by our view that the emirate has less-developed political institutions than non-regional peers in the same rating category.

“Limited monetary policy flexibility, in view of the dirham’s peg to the US dollar, and the underdeveloped local currency domestic bond market, also weigh on the ratings,” the agency says.

“We view Abu Dhabi’s economy as undiversified, notwithstanding government policy to encourage non-oil private sector growth,” the report adds.

In a snapshot of the country’s economy, S&P says: Rates of real GDP growth (adjusted for inflation) and nominal GDP growth have been robust.

“However, long-term real GDP per capita has contracted by about 4 per cent annually weighted by our criteria, largely due to the high flow of foreign workers into the emirate. This has led to an estimated cumulative jump in the population of more than 50 per cent between 2008 and 2014. Real GDP per capita growth is well below that of peers in the same category.

“We believe, however, that in a heavily resource-endowed economy such as Abu Dhabi, nominal GDP growth – which averaged 13 per cent annually during 2010-2014 – is a better measure of prosperity and could substantially cushion potential risk,” the report concludes.

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The global banking system will probably benefit from the dramatic fall in the price of oil – but the energy-revenue reliant banks of the GCC could face funding pressure if oil prices remain low, according to ratings agency Moody’s Investor Services.

“We do not see any imminent threats from rated banks from the recent precipitous decline in oil prices,” new research from Moody’s banking team concludes. “On balance, lower oil prices will broadly support bank creditworthiness globally and improve debt-service capacity for corporate and household borrowers.

“Nonetheless, direct and indirect exposures to the drop in oil prices pose the potential for asset quality and earnings deterioration for several banking systems, particularly in those countries that are net oil exporters the longer prices remain depressed.

“Banks in the GCC could face pressure on funding liquidity in the event that the historically high despot inflows from government and government-related entities decline,” Moody’s adds.

Analysts and policymakers in the GCC have been trying to analyse the financial effects of the big fall in oil prices over the past six months, when crude has dipped as much as 50 per cent to a low of about US$45 for benchmark Brent.

Most experts see the fall in energy costs as a positive for the world economy, with the IMF predicting a 0.7 per cent increase in global GDP as a result. American, Chinese and European manufacturers benefit from a big cut in their fuel bills.

The effect of the decline has been likened to a 1 per cent cut in tax rates for consumers in western economies, spurring domestic demand in these regions.

Conversely, producing countries like the GCC can expect a reduction in economic activity and a decline in oil-related spending power, leading to reduced banking deposits and a decline in the value of assets in their banks.

However, Moody’s says the financial capital GCC banks have accumulated during five years of historically high oil prices will cushion the effect of a decline. “While oil prices are currently below most GCC countries’ fiscal break-even point, governments generally have the resources to mitigate the immediate impact and maintain a supportive environment for banks.

“A prolonged period of depressed oil prices would reduce surpluses, weaken investor confidence and economic activity and exert pressure on GCC government to rationalise expenses,” Moody’s says.

“Loan growth and profitability are also likely to suffer, although a material impact on asset quality is unlikely in the near term.”

The ratings agency says the banks of Bahrain and Oman look the most vulnerable to sustained lower oil prices, given high break even prices, tighter fiscal positions and relatively low government reserves.

The Saudi and the UAE banking systems are likely to be “moderately” affected by low oil prices despite large buffers of reserves and growing non-oil prices, mainly because of what Moody’s calls “ relatively high fiscal break-even prices.

The agency estimates these at $106 for Saudi Arabia but as low as $77 for this country.

“Both countries can comfortably support elevated public sector spending levels over the next 12 to 18 months, which in turn will support bank fundamentals.

The effect of continued low prices on financial reserves is a crucial factor in estimating the repercussions for regional economies.

New research by the London economics consultancy Capital Economics shows some GCC economies are already trading at a deficit on their current accounts.

“The plunge in oil prices means that current account positions in parts of the [Arabian] Gulf have slipped from surplus into deficit.

In these countries, foreign exchange reserves are now being drawn upon to finance external shortfalls and sustain domestic spending but, so far at least, not at a pace that would raise serious concerns about the near-term sustainability of their external positions.

Accordingly, the risk of currency devaluations remains small,” the firm says.

“Having posted large surpluses in the past decade, current account positions in parts of the Gulf, namely Oman, Bahrain and Saudi Arabia, have probably slipped into deficit,” says the analyst Jason Tuvey.

He notes that UAE and Bahrain have not yet produced statistics on their foreign reserves position.

So far, Kuwait and Qatar have not had to draw on their foreign reserves.

In contrast, Saudi reserves have fallen by about $6.5 billion since the end of June, Mr Tuvey estimates.

“But, in the grand scheme of things, this is relatively small and represents less than 1 per cent of the kingdom’s total forex savings. Even at the most recent rate of depletion [reserves dropped by $8bn in December], Saudi’s reserves would last for around eight years.

It is no surprise then that the Saudi authorities have continued to take a relatively sanguine view of the drop in oil prices,” he says.

Perhaps the most worrying picture is painted in Oman.

Reserves have fallen by more than 10 per cent since the end of June, and the sultanate is regarded as the most vulnerable in the GCC to a prolonged period of low oil prices.

As with most things, only time will tell.

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I had a bit of a rant last summer about the lack of facilities in the DIFC, especially under the category of the three Bs – banks, barbers and bookshops.

I complained that DIFC workers were not very well served in three crucial areas: normal retail banking, such as making a deposit; getting a haircut; and buying anything more elaborate than a newspaper.

I had some reaction from the DIFC authorities back then, which can be summarised as: watch this space. They promised me there would be improvements, and quick.

I can report some progress, but none of it especially impressive. There’s still a lot to do to make the DIFC a pleasant and efficient place to conduct your daily business.

The banking area remains a problem that looks unsurmountable. It’s all to do with the laws that set up DIFC in the first place, apparently. As an offshore centre, DIFC was banned from providing any of the facilities – such as deposit-taking – that might imply it was home to normal retail banking businesses, which are overwhelmingly onshore.

So despite all the cash machines in the DIFC, you still cannot have a bank customer service centre, or even a machine that takes cash and cheques as deposit. That seems an unnecessarily strict interpretation of the rules, but I’m told there is no chance the situation will change.

On the haircut front, things have improved slightly. A “men’s grooming salon” opened under the banner Hommage Atelier last autumn, and it certainly is a treat to have your hair done by the professionals there, as well as a manicure or pedicure if you have time.

It’s a treat, but also a bit of a luxury. The Atelier is so swanky and upmarket, as well as a little on the expensive side, that much as I enjoyed it I couldn’t go there every couple of weeks just for a routine short-back-and-sides.

It’s much too grand for that. So I’ll have to keep making the trip across the SZR to my barber of eight years standing, George Habib in the Crowne Plaza hotel, who in any case is unbeatable and well worth the short taxi ride from DIFC.

On the question of the bookshop, I had the greatest hope. Ever since Borders shut down some time ago, there has just been nowhere with a full range of magazines, let alone stationery or books. The DIFC said it was looking into it, and I would be pleasantly surprised soon.

Now, I presume they were referring to The Bookshop, a pleasant cafe-cum-book vendor specialising in works about the Middle East, new and second-hand. If you want a snack, you can grab a coffee and a brownie while scanning the latest offering in the oeuvre of Alexander McNabb. The shop is great, and I cannot fault it for what it aims to do.

However, neither The Bookshop, nor the Magazine shop just across the bridge in Gate Village, have any aspirations to be a properly stocked book shop.

What I had more in mind was a branch of the fantastic Kinokuniya, the “world of books” store in The Dubai Mall that really is the best in the UAE, probably in the Middle East.

It would not have to be as grand as the mall store, which carries an incredible range of publications. Just an outlet that has bestsellers non-fiction and business books (but not too many of the latter), as well as the cream of the print newspapers and magazines.

I’m sure the DIFC’s big-spending clientele would provide the market to make such a venture a success. Come on DIFC, what about it?

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There appears to be a glimmer of light at the end of the tunnel for UAE markets.

It’s too early to say the bear market ushered in by the fall in oil prices last autumn is at an end. But it is, perhaps, the end of the beginning of a revaluation of equities in the emirates.

There are signs that financial professionals are coming to terms with the “new normal” in capital markets, as they are in oil markets, and starting to get on with life again.

In the past month there has been a revival of oil price shares, and a corresponding improvement in share prices across the markets. Although in theory there is no reason for oil prices to determine what happens to share prices, in practice, and as we have seen over the past few months, the oil price decides the basic economic health of the region. Everything else – including property prices and share values – follows.

So since the middle of December, when the Dubai Financial Market General Index hit a low of just over 3,000 points, there has been a significant recovery. It now stands about 26 per cent better off.

The Abu Dhabi Securities Market General Index is about 18 per cent ahead at about the 4,600 points level, having dipped below 3,900 in December when oil was falling fast.

In both markets, a level seems to have been found over the past month. It is about 15 per cent lower than the highs of last summer, boosted by talk of IPOs, but it’s respectable enough in the circumstances.

The best equity performer in the region over the past month has been the Saudi Tadawul, 10 per cent ahead. As the largest oil producer, biggest economy and highest valued market, that speaks volumes about the recovery of GCC markets. The smoothness of the royal succession in the kingdom appears to have reassured investors and oil traders.

Just as important in the overall recovery is the fact that few regional governments embarked on a knee-jerk spasm of public sector cuts, which could have seriously affected economic growth. Wiser counsels prevailed to the effect that the savage oil price falls of mid-December would prove only temporary.

It looks as though the Cassandras who predicted months, or even years, in the doldrums for UAE equities have been proved wrong. Two consecutive quarters of slower economic growth are looking like a real possibility for the country, but most investors will see that for what it is: a consequence of the global decline in energy prices, rather than an innate deterioration in the economics of the Emirates.

Indeed, there are even signs that market activity may be about to take another big leap forward. The listing of Orascom Construction on the Nasdaq Dubai market as well as its native Cairo exchange was a sign that the listing market has not dried up altogether.

Financial advisers report that there is still a stream of companies considering IPOs in Dubai and Abu Dhabi, with at least two marked for listing in the first half of the year. Added to the big ones that we know are being considered – Al Habtoor in Dubai and Gulf Capital in Abu Dhabi, as well as various Emaar entities – and that means that 2015 might not be the barren year for market debts some pessimists had suggested.

With the authorities seeming to rule out “greenfield” listings for the time being, and with the new (lower) valuations prevailing in the markets, vendors and their advisers might just be inclined to launch some offerings at reasonable prices again, a good thing after some of the overpriced flops of last year.

The markets are not entirely out of the woods. Energy experts are still divided as to whether the recovery in oil will be permanent and resilient. And geopolitical factors – in Ukraine, in the euro zone, and in the Middle East – have the eternal capacity to throw economic projections off course.

But UAE and regional markets have so far adapted the new economic climate of lower energy prices comparatively well. Prospects are much better than they were even just a month ago.

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