Dubai bonds defy IMF’s warning on realty bubble:
"Dubai’s Islamic bond gains are showing that investors are downplaying an International Monetary Fund warning that the emirate’s real-estate industry is at risk of another bubble.
Dubai’s 6.45% sukuk yield fell 54 basis points in July, the most in 13 months, to 5.19%. That was twice the monthly drop to 3.79% in the average yield on Gulf Co-operation Council debt tracked by HSBC/Nasdaq Dubai’s GCC US Dollar Sukuk Index.
The IMF urged Dubai to consider levying higher charges on real estate to generate more revenue and prevent the industry from “overheating,” according to a July 30 report. Home prices in Dubai have risen 28%, on average, this year, Cluttons data shows. A property crash spurred by the 2008 global credit crisis drove Dubai to the brink of default almost four years ago, before it was rescued with a $20bn bailout from Abu Dhabi and the United Arab Emirates central bank."
'via Blog this'
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