In Focus 1: Recent Trends in the UAE Real Estate MarketsIn this section, we look at recent developments in the Dubai and Abu Dhabi real estate markets. All available evidence points to a slowdown in the rise in both selling prices and rental rates in both markets, although the decline appears to be more pronounced in Dubai. In 1Q2014, the slowdown even extended to the northern emirates. The underlying market remains quite buoyant in Abu Dhabi but is stabilizing in Dubai, with some segments even showing signs of a small, on-going correction. We view this positively, seeing it as a sign that the property bubble that seemed to be forming at the end of 2013 now looks as though it will be avoided. In Focus 2: Saudi Banks: 1Q2014 Results – What should we look out for?In this section, we examine the 1Q2014 results of Saudi banks. While credit growth in the sector contracted in the latter part of 2013, signs of improvement surfaced in 1Q2014. However, the expected introduction of a 70% loan-to-value (LTV) cap for mortgage loans (expected in November 2014) is a key factor that could affect consumer loan growth for Saudi banks. Net interest margin (NIM) trends were mixed among banks, but the majority of banks experienced contracting asset yields YoY. On the other hand, non-interest income came in strong, with the surprise coming mostly from investment income. Asset quality indicators remained robust, although risk costs continued to be relatively elevated. We remain cautious on the sustainability of non-interest income levels, particularly investment income.