Checking The Vital Signs: Debt, Deflation, And Dubai World

We wrote earlier this week that the UAE has good recovery potential (eventually), but would require some positive signals before this reality translates into market gains. Now we look at some recent news and indicators, none of which give us much hope that the bounce is imminent.• Inflation/deflation: CPI figures continue to paint a picture of very subdued demand. Overall UAE data puts y-o-y CPI at -0.3% in January, up only slightly from -0.4% in December 2009, although the household category (driven by rent prices) reportedly rose by 0.4% m-o-m. In Dubai, the rate was still in positive territory (at 0.7%

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