So far the UAE key stock indices are all up by more than 5% this year, a notable contrast to the major global stock markets which are already struggling to stay in positive territory.
It looks as if those commentators who tipped the UAE bourse as the place to watch in 2004 are vindicated, with the Emnex Index now solidly above 3,000 points, and closing at 3,131.80 last week.
Certainly the tremendous response to the Amlak Finance initial public offering bodes well for the future. For although a 33-times oversubscription will leave investors with very few shares on a pro rata basis, there is clearly a massive amount of money looking for a home.
Investors may well turn to UAE mutual funds as an answer. However, these funds will find it difficult to allocate cash in the marketplace without bidding up stock prices.
However, with a price to earnings ratio of 18.8, and a yield of 4% the UAE stock market is probably undervalued in any case. And certainly by comparison with Saudi Arabia and Kuwait, the only GCC stock markets of similar scale.
Surely this is the year for the UAE bourse with market reform moving apace, new IPOs on the cards and the Dubai International Financial Centre about to launch.
Investors might wonder if a country undergoing such a transformation can hold its stock market at pre-1998 levels for much longer.
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UAE bourse up 5% so far in 2004
- United Arab Emirates: Saturday, February 07 - 2004 at 10:41
The UAE bourse has got off to a strong start in 2004 and many commentators feel this is the year that the region's second fastest growing economy will finally see some heady stock market performance.
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Peter J. CooperSaturday, February 07 - 2004 at 10:41 UAE local time (GMT+4)
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This article was updated on Tue Mar 27 2007.
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