UNCLAS ABU DHABI 001101
STATE FOR NEA/ARP, NEA/RA, EB/CBA AND
USDOC FOR 4530/ITA/MAC/ONE/DGUGLIELMI,
E.O. 12958: N/A
TAGS: ECON EFIN EINV TC
SUBJECT: UAE PREPARES FOR IMPACT OF WAR ON STOCK MARKET
Â¶1. (U) Local press reported on March 3 that the General
Manager of the Stock and Commodity Authority -- the UAE
equivalent of the SEC -- Abdullah Al Turifi, told UAE
financial institutions that he expects the possible war with
Iraq to have long-term impact on UAE stock markets.
Nevertheless, the Stock and Commodity Authority will reduce
expected market volatility by putting stronger curbs in
place to prevent equity values from dropping too
precipitously. (Note: Current curbs are 10% movement per
day. End note.) Al Turifi also conceded that the market is
currently moribund as traders have postponed purchases until
after the war starts, since they expect stock prices to
tumble once it begins.
Â¶2. (SBU) Comment: While some in the UAE anticipate business
opportunities as a result of the Iraq crisis, the local
stock market regulatory authority is clearly taking no
chances, acting now to prevent potential market
destabilization in the event of a conflict.