Just when you thought there were enough Brits in this emirate, the Dubai government is launching a US$ 1.5 million marketing campaign to encourage even more to visit. The UK used to be the biggest feeder for the local tourism industry but has recently been surpassed by both Saudi Arabia and India. Despite a 10% drop in UK arrivals – down to about 650,000 last year – a staggering 9.3 million visitors still arrived in Dubai. Good news for the hotels which saw their Revenue jump 20% to an estimated US$ 4.4 billion.

A knock-on effect of this is that Emirates, now the biggest international carrier globally, continues to expand its operations so much so that the group  has recently announced that it will be adding a further 10,000 staff to its existing payroll of 60,000. This increase in its business has another welcome benefit as the airline’s bond yield continues to fall to record lows.

This rebound should go a long way in helping credit market confidence improve, particularly as within three months, the DIFC must repay a US$ 1.25 billion Islamic bond.

Even better news for Dubai real estate!  Mortgage lenders saw business jump nearly 60% last year whilst property transactions rose 12% to over US$ 23 billion. In addition, Q4 home sales saw a 65% gain over Q3. It seems that banks and other financial institutions have started cutting lending rates and are actively searching for new customers – a welcome change from the moribund state this sector has recently exhibited.

Initially most of the mortgage lending was carried out by Amlak and Tamweel and when the inevitable crash came in 2008, both entities hit the skids and their share trading was suspended. Since then, we have seen Tamweel being taken over by Dubai Islamic Bank in 2010 and now the government has cut Amlak’s debt by US$ 1.1 billion.

This week, the Dubai Financial Market continues its “correction phase” with the market 22 points lower at 1660.  Although down on the week it is still showing a healthy 20%+ hike already this year.

Talking about stock exchanges, the federal government is currently considering the viability of the Abu Dhabi and Dubai bourses merging their activities. To a layman, this looks a logical move and would prove beneficial for all stakeholders.

Of course, a global slowdown in trade will impinge on Dubai’s economy. Factors, such as the high oil price (currently around the US$ 106 mark) and a worsening of the euro-debt crisis, will inevitably reduce both the number of tourists coming here and a slowdown in air passenger numbers.

With the oil price set to hover above the US$ 100 a barrel mark for the foreseeable future, it is interesting to note the prices at the pump in different countries.  Rumblings continue that Dubai prices are relatively high at US$ 0.47 per litre when compared to other Gulf countries – Saudi Arabia (US$ 0.11), and Kuwait (US$ 0.20). However they pale into significance when looking at say UK (US$ 2.11) and Norway (US$ 2.58) but then a lot of people can have a whinge when in Venezuela, 1 litre will knock you back just over US$ 0.02!

Up the Gulf coast, news that the Bahraini investment bank, Arcapita, has filed for bankruptcy protection (Chapter 11) in the US following a breakdown in creditor talks over a US$ 1 billion debt. This could have repercussions for the Gulf region as European banks are becoming increasingly reluctant to lend as they need to shore up their own capital bases to meet the European challenges.

Continued sabre-rattling over Iran continues to dog the region and the increased sanctions recently imposed are beginning to affect trade. The latest blow came with the announcement that 44 Iranian financial institutions were blocked from using SWIFT, the messaging system which links many of the global banks. When one considers that Iran made over two million “SWIFT” payments in 2010, it is not difficult to see that their banking lifeline is being cut drastically. Consequently, the negative impact on bi-lateral trade with Dubai will be considerable.

And to conclude – no surprise to see the dearth of any positive moves in settling the Syrian crisis. Once again, the UN appears to be as useful as a chocolate teapot!