The purpose of good writing is to briefly handcuff the story, to stop time and stop motion.
Likewise, the goal of good regulation is to take this moment of stillness and breathe silence so that it gives way to beauty, facilitating ease and access, so that in years to come, when a stranger comes along, they can instantly recognize it as an inflection point.
This is the privilege of good governance – coming to life as a body and changing the course of events. DEWA’s IPO is one of those times when investors big and small move beyond the debate about whether to invest, but rather about how much. The backdrop of regulations that have facilitated access to markets, both public and private (from crypto to startups) lead to the fundamental question of wealth creation.
Capital allocations change, as do market prices. This is the best possible position for detective work.
take real estate
The radical change in capital markets, triggered by the IPO of DEWA, has posed the fundamental question of whether savings should be allocated to public stock markets, whereas in the past this distinction was reserved for the real estate field. Long responsible for generating cash income streams, the era of near-zero interest rates, combined with rapid urbanization, has led to tantalizing prospects for capital gains that millions have enjoyed.
Capital markets, on the other hand, have had a tougher time, and given that skepticism, the current dynamic mood is a marker of the changing zeitgeist. Admittedly, access to capital markets was historically seen as a riskier alternative. Real estate was the foundation for the formation of capital generation, while stocks were for the more speculative class.
A savings magnet too?
As private markets began to flourish, the opportunistic mindset shifted to startups and cryptocurrencies, but the small investor remained confined to investing in real estate markets – both off-plan and on-premises. plan – as a way to grow your savings. That era is now over, where regulators were on hand to answer questions about a phenomenon that just a few years ago would have been considered unsuitable material for serious discussion.
By setting up a framework where blue chip companies, with guaranteed dividend income streams, were offered, in a tumultuous environment of rising interest rates and global volatility, the money of small conservative investors was suddenly on the table.
If in the process the event seems unreal, it is only because of the polite unreality of the questioning. The post-Covid era was like a youngster standing in wonder at the altar.
Quickly followed by other leading companies such as Empower, Salik and Tecom, as well as market making funds that will stabilize market movements, the savings allocation calculation has swung decidedly in favor of the markets. of capital, which, compared to those in the West, seems like a bargain and more.
Long term horizons
Admittedly, it will be necessary to hold hands as investors continue to make the switch, but it is equally clear that the fuse has been lit. Capital markets investing has arrived in Dubai, and alongside investing for one’s home, it will serve as a cornerstone for wealth accumulation and generation, especially for the conservative investor.
In 1939, Jorge Luis Borges published an essay in which he imagined a “total library” containing all possible books, a theme he called “The Bibliotheca of Babel”. In the investment world, Dubai has created this library, providing a plethora of options for both conservative and opportunistic investors.
The long-missing book was the lingua franca for the conservative investor, who needed to look abroad for a more stable set of returns. DEWA’s IPO (and those that followed) ended this struggle and replaced it with a competitive series of investment alternatives, where capital market investment will serve the both a competitor and a complement to that of real estate.
The regulations, which sparked the freehold asset ownership revolution in 2002, have also released the shackles of investing in capital markets and come at a watershed moment in 2021. Like the markets that preceded, this decision will henceforth definitively reinforce the formation of a new middle class. .