In spite of Dubai's financial troubles, including the missed payments recently by financial services company the Dubai Group, managing director of EFG-Hermes , Matt Wakeman, told CNBC Monday that Dubai is a good place to do business, because of its infrastructure and low taxes.
“Dubai has been very fortunate in the last year that the ongoing infrastructure spend has acted like a natural stimulus, tourism numbers have been good, and we still have net inflows of people moving here,” Wakeman said of the Middle Eastern emirate, one of seven states that make up the United Arab Emirates.
“It’s still a very vibrant place and given the tax regime here, it’s always going to be looked at favorably on businesses relocating here compared to places in the world where taxes are going higher. It’s a very good place to do business because the infrastructure is here.”
Wakefield said news of the Dubai Group's two missed payments on separate loans in recent weeks has been misinterpreted because at this stage the company isn’t in default. One of the loans was arranged by Citibank.
Wakeman recommended investing in Air Arabia, a low-cost multi-hub carrier, which he said is undervalued by the market. He added: “The cash pile alone is 75 percent of its current price.”