Arabian Business Weekly Update September 4, 2005

Dubai must continue to bare its teeth to protect its financial market from fraudsters. DUBAI’S FINANCIAL WATCHDOGS must be applauded for reacting so efficiently and effectively in dealing with the attempted stock market swindle last week. It is clear that the regulators very quickly identified the culprits and acted to undo the damage they did.

  • E-Mail
By  Richard Agnew Published  September 4, 2005

Cash sharks caught in the net|~||~||~|Dubai must continue to bare its teeth to protect its financial market from fraudsters. DUBAI’S FINANCIAL WATCHDOGS must be applauded for reacting so efficiently and effectively in dealing with the attempted stock market swindle last week. It is clear that the regulators very quickly identified the culprits and acted to undo the damage they did. However, as an emerging financial market and one that has aspirations to become a player on the world stage, it is crucial that they drive further changes and implement rigorous controls, particularly in the area of transparency of information. This is key — how many times have we heard rumours and the “word on the street” before official statements are released? This flow of chatter and gossip must be restricted to ensure a level playing field for all wishing to invest on the market. It is therefore not just the responsibility, but the moral duty of the financial regulators to ensure the smaller and more vulnerable investors are protected from the damaging antics of the few that wish to wield their strength and make a quick profit at others’ expense. Until now, no concrete evidence has existed to prove suspicions of insider trading and price manipulations. But the sheer scale of last Sunday’s bungled raid has made the problem now impossible to ignore. Now is the time to grab the incentive and show the rest of the world how the financial markets can be run, with integrity, honesty and transparency. Here is an opportunity to show the world what the Dubai financial market stands for by coming down hard on the perpetrators of this apparent fraud and embracing tighter regulations — especially with the new Dubai International Financial Exchange set to open later this month. It is clear that further action must be taken and quickly to prevent Dubai’s bull market turning into a shark’s market. ||**||Take a hike|~||~||~|THE RISE in petrol prices announced by the UAE government last week was certainly not an easy political move, but a necessary one. The hike, adding 32% to fuel charges, will not have gone down well with consumers who see cheap petrol as a right, nor businesses who will have to absorb higher costs. After months of lobbying by retailers, however, the government correctly recognised that the benefits outweigh the costs. With congestion growing, many people will welcome any move that encourages drivers to spend less time on the road. As oil prices soar globally, the Emirates’ petrol stations have also had to sustain growing losses with little influence over pricing. Elsewhere in the world, businesses and consumers have complained about increased charges, but UAE prices still aren’t in the same league. At a time when huge revenues are being generated from oil price rises abroad, it seems strange to complain when they happen at home. ||**||Costly business|~||~||~|FOR AN industry that has never made a profit in its century long history, the airline sector has an excellent safety record. But it is becoming increasingly clear that, in a time of rising fuel costs, increasing competition, and wafer-thin margins, commercial pressures are increasingly forcing companies to cut corners in order to stay afloat. In this issue, we highlight a worrying decline in morale among pilots as work is increasingly piled onto them by struggling airlines, and the claims of engineers that company bean-counters are squeezing maintenance costs, to the detriment of safety. These kind of risks are clearly not acceptable at a time when many consumers are already losing confidence in the industry’s record. Safety is a non-negotiable issue. ||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code