Bearish 2011 For UAE Stock Markets

The value of shares traded reached its lowest level since 2004.

The UAE stock markets maintained a bearish trend in 2011 for the second year in a row with sharply declining trading values, according to a report by Global Investment House. The value of shares traded reached its lowest level since 2004, falling 44.4 per cent year-on -year to reach Dhs57.7 billion. The volume of shares traded also decreased from Dhs56 billion in 2010 to Dhs41.69 billion in 2011. Transactions fell 36.7 per cent during the period.

The Dubai Financial Market (DFM) General Index reported the second highest decline among the GCC stock markets in 2011, with an annual decrease of 17 per cent. This is its lowest level since 2004. The Abu Dhabi Securities Exchange (ADX) General Index faired slightly better, dropping by 11.7 per cent year-on-year.

According to the report, some of the reasons for the decline include- low liquidity due to investors’ risk averse attitude, the volatile geopolitical situation in the region and the postponing on the decision related to UAE entry in MCI Emerging market indices. International factors such as the Eurozone crisis and expected lower growth in emerging markets also added to investors concerns.