Dubai sets up Dubai Investment Fund to boost financial stability

DUBAI, United Arab Emirates - Dubai will transfer shares it owns in Dubai Electricity and Water Authority, toll-road operator Salik and Dubai Taxi to a new investment fund that will aim to generate returns and bolster the emirate's financial stability, Dubai Media Office said on Monday.

Dubai's ruler Sheikh Mohammed bin Rashid al-Maktoum issued a law to set up the Dubai Investment Fund, which will be chaired by his son Sheikh Maktoum bin Mohammed bin Rashid al-Maktoum, deputy ruler of Dubai and the UAE's finance minister.

The fund will seek to generate returns for the emirate's current and future generations and take on responsibility for investing the emirate's government funds, surpluses and the general reserve locally and internationally.

"The fund also seeks to bolster the financial stability of the Dubai Government by financing the government’s deficit and establishing strong financial reserves, thereby promoting long-term financial sustainability," the media office added.

The fund will replace the Dubai government as owner of shares in companies, taking over all contracts, agreements, commitments, deposits, bank accounts, and loans associated with such shares, the media office said.

It will be an independent public entity operating on a commercial basis, the media office added.

Dubai government has a privatization plan to list 10 state-linked companies to boost stock market activity, it raised nearly $8.5 billion from five IPOs last year.

Sheikh Maktoum has overseen the sale of stakes in companies including DEWA and Salik.

DEWA raised $6.1 billion in an initial public offering last year.

The listing plans are designed to help the Dubai stock market compete more effectively with bigger exchanges in the region, such as those in Saudi Arabia and neighboring Abu Dhabi.

After pausing initial public offerings for most of this year, the emirate in November floated Dubai Taxi, raising $315 million for a 25% stake in the city's taxi service.

Abdulaziz Mohammed Al Mulla was appointed the fund's managing director and chief executive officer, the media office said. — Reuters