A good fortnight for the UAE bourse

Just when everyone is counting the days until their summer vacation the UAE stock market has sprung to life with an 84 point rise in the Emnex to 2,461.56 points over the past two weeks.

The financial services sub-index, which comprises more than half of the UAE index, was up by 83 points to 2,849.45. Demand for the blue-chips such as National Bank of Dubai, Abu Dhabi Commercial Bank, National Bank of Abu Dhabi and Union National Bank, has been strong.

Other key stocks have fared less well. Emaar Properties continues to be heavily traded but its value has remained static, with some investors concerned about plans to build the world's tallest building, while Etisalat lost ground in the last few days in trading on the Abu Dhabi Securities Market.

However, the UAE stock market continues to be more lowly-rated than its regional peers such as Kuwait and Saudi Arabia. A price/earnings ratio of 15 compares with more than 20 in the Kingdom, and a dividend yield of 3.47% are well ahead of deposit account rates.

But the UAE authorities now seem to be getting their act together. The newly appointed board of the Emirates Securities and Commodities Authority is preparing an electronic linkage of the two trading floors and planning to compel all public shareholding companies to list on the bourse.

Moreover, this September will see the annual meetings of the International Monetary Fund and World Bank held in Dubai. For one week Dubai will be the financial capital of the world and this should focus attention on the local stock market to an unusual degree. Perhaps this will be enough to get the UAE bourse really motoring upwards.