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DFM is Not Yet Out of the Woods, Says DCCI

DUBAI — Despite the overall overall improvement in sentiment pushing up the Dubai Financial Market, the bourse is not yet out of the woods, said the Dubai Chamber of Commerce and Industry.

Indicators such as higher trading volumes, some stocks closing limit up after a long gap, signs of a rebound in oil prices and an altogether general improvement in sentiment, point to the final stages of bottoming out and a steady consolidation process underway in the DFM, the DCCI said in its recent assessment of the Dubai bourse.

In the first quarter, DCCI noted that volumes have risen compared to the previous quarter. The number of shares traded reached 9.7 billion at the end of the quarter. The value of shares traded in January reached Dh 5.5 billion, compared to Dh4.2 billion recorded during December 2008 — an increase by 30.3 per cent, while the value of shares traded during February increased further by 97.1 per cent to reach Dh 10.9 billion. In March, the value of shares traded reached Dh11.2 billion, an increase by 2.2 per cent over the previous month.

However, DCCI said the value of shares bought by foreign investors has declined during the quarter. In January, foreign investors comprised 41.7 per cent of total stocks traded. This dropped to 40.1 per cent and 37.5 per cent in February and March.

“Despite these early gains in the year, the mood remains circumspect. Even though the markets are recovering slowly but it’s too soon to sound the all-clear just yet. With the markets gradually bottoming out, it’s time to relook at investment strategies. Though the markets are consolidating, even with some gains from lower levels for real estate and financials, challenges facing both the sectors are not underestimated by the traders and analysts,” said DCCI.

· business@khaleejtimes.com