Government stimulus plan woos back foreign funds

When the global financial tremor jolted key markets and rocked the UAE, foreign investors fled the country with most of their funds. They began to trickle back after the government announced a series of counter-measures and their numbers rose sharply after those measures started to make an impact.

During the peak of capital flight, many analysts blamed the exit of those funds for the collapse of the UAE markets but regulators have dismissed such claims. Some experts again believe the recent surge in local markets have to do with the return of those funds but others see the rise as natural results of growing public confidence in the government's commitment to fiscal stability and its massive overseas financial muscle to carry out this task.

After a steady decline in foreign investment in the UAE bourses in the few months that followed the eruption of the global crisis in mid-September 2008, such funds began to stream back into the country in the second quarter of 2009 and largely gained momentum in the following months.