Christie's, Tussauds and a fall in shares

Almost 500 artists are touting their wares, with prices ranging from a few hundred to $12 million. But will there be any buyers, after the global recession sent local real estate and stock markets into a tailspin?

"It hasn't killed the art market, but it isn't thriving," says Sheikh Sultan Sooud Al-Qassemi, a collector from the neighbouring city of Sharjah. He says prices have fallen 20% from their peak last year, and expects further declines - a trend he welcomes. "It's now reaching a level where prices are becoming affordable."

An accurate bellwether may come next month, when Christie's holds its annual auction in Dubai. Last year's sale raised $40 million, a record for a regional event. "This year it will be lower, everyone would expect that," says David Warren, a director with Christie's in London and Dubai.

"You won't see nearly as many blockbuster pieces selling for millions of dollars. But the long-term future is very, very strong. There is massive potential in the Middle East."

Sheikh Sultan agrees. Guggenheim and The Louvre are both building huge galleries in Abu Dhabi, just an hour's drive away, while popular demand for Middle Eastern art is only just taking off.

"People have seen the light. Most of the interest this week is in Middle Eastern artists. The British and American art stories, wonderful though they are, have been told many, many times. Middle East art tells a new story."

* Another day, another Dubai downgrade. This time Standard & Poor's cut its ratings on six state-backed companies by one notch. They included Dubai Holding, which counts the seven-star Burj Al Arab Hotel and London Eye stakeholder Madame Tussauds among its assets.

* Shares of a local engineering company fell 26% on their stock-market debut in Dubai this week. Drake and Scull raised about $300 million through an IPO last summer. Since then, though, benchmark indexes have fallen sharply. Shares of Drake & Scull were adjusting to the new reality.