Dubai stocks jump 8% since the New Year and daily trading volumes rocket to 600 million sharesPosted on 10 January 2013 with no comments from readers
Anybody who rushed to buy shares on the Dubai Financial Market on New Year’s Day is laughing all the way to the bank with an eight per cent surge in the index to 1,750. Share trading volumes have rocketed ten-fold compared with quieter days last year to touch 600 million shares a day.
Readers of the ArabianMoney investment newsletter may well have reacted to our special report on the Dubai business cycle which pointed out that local investments could double or triple in value over a relatively short period from here (subscribe here).
We highlighted the strength of the recovery in transport, trade and tourism that has spread to real estate and the retail sector. Even the UAE Central Bank’s recent action to limit mortgage lending can be read as a bullish sign as it would not be doing this unless it thought a fresh boom was developing in the Dubai economy. Have the frustrated home buyers just gone out and bought shares?
The index chart says it all:
If you look at volumes the jump is equally impressive.
The retail investor is back in Dubai and this has brought the stock market back to life. We did comment recently when Shuaa Capital closed its brokerage that this might well be a case of giving up the long swim to safety just a few metres from the seashore.
Where will the DFM go from here? It’s by no means clear. Abu Dhabi stocks do not show anything like this performance. Any new weakness on Wall Street would immediately reverse this upturn. Will that happen?
Our old favorite Dr. Marc Faber sees an imminent 20 per cent US correction and 20-30 per cent for emerging markets like Dubai, so enjoy this while it lasts!