Despite yet another challenging year on the political front, we had a
few celebratory moments on a more cheerful business front. Stock
markets, particularly in the UAE, Saudi Arabia and Qatar had vigorously
shaken off the last residues of the financial crisis. Real estate prices
had a free run in a number of markets spearheaded by Dubai. And
companies rushed to take advantage of a buoyant ambience to secure cash
by issuing bonds or taking a plunge in primary markets. But while it all
seems so intoxicating, there are a few facts that should sober us up.
During the past couple of years, many have shied away from ringing the alarming bell regarding another exuberant inflation in asset prices. After all, the world was just recovering from one of the most frightening recessions in modern history, and frankly, anyone blowing the whistle was not welcomed! But these days, there is no shortage in the number of analysts and institutions crying out that another blow to the global economy might be inevitable.
The IMF has recently warned that the valuations of all major asset classes are stretched to the limits were they became a reason of concern. These same concerns were echoed previously by the Organization of Economic Cooperation and Development that went further to suggest that a sudden correction in major asset classes was not against the odds.
Even banks, which may be not as fond at predicting doom as the rest of the market participants, were more vocal about the current situation though their research departments. Societe General’s Albert Edwards bets on a stock market bubble on the verge of bursting. On the other hand, Deutsche Bank’s strategists believe that it is another asset class that has approached its doomsday: bonds!
Now, thankfully, gone are the days when our part of the world feels insulated from the external economic shocks. There is a lot of soberness in the way decision makers are reacting to the ever changing dynamics of the global economy.
Read more: What the IMF meetings could tell us - Al Arabiya News
During the past couple of years, many have shied away from ringing the alarming bell regarding another exuberant inflation in asset prices. After all, the world was just recovering from one of the most frightening recessions in modern history, and frankly, anyone blowing the whistle was not welcomed! But these days, there is no shortage in the number of analysts and institutions crying out that another blow to the global economy might be inevitable.
The IMF has recently warned that the valuations of all major asset classes are stretched to the limits were they became a reason of concern. These same concerns were echoed previously by the Organization of Economic Cooperation and Development that went further to suggest that a sudden correction in major asset classes was not against the odds.
Even banks, which may be not as fond at predicting doom as the rest of the market participants, were more vocal about the current situation though their research departments. Societe General’s Albert Edwards bets on a stock market bubble on the verge of bursting. On the other hand, Deutsche Bank’s strategists believe that it is another asset class that has approached its doomsday: bonds!
Now, thankfully, gone are the days when our part of the world feels insulated from the external economic shocks. There is a lot of soberness in the way decision makers are reacting to the ever changing dynamics of the global economy.
Read more: What the IMF meetings could tell us - Al Arabiya News
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