Some speculators are betting on the Dubai Financial Market falling another 50 points today, but Ayman El Saheb, Darahem Financial Brokerage director of operations, believes they will be wrong.
Instead he claims the market is ripe for recovery and says the 6,000-point target remains within Dubai's sights, despite its present slump, and believes the index could recoup recent losses within a few days, providing volumes return.
The DFM has declined by nearly 190 points over the past six sessions
"We are over the worst and should enjoy some gains sooner than most people think. Liquidity has been lacking, with foreign funds staying away, especially in light of the recent problems in Lebanon," said Saheb.
"Whenever there's conflict in this part of the world, foreign institutions shy away from bringing their money into the region. As tensions ease, these overseas players will become more active."
The DFM's two-day London road show, which starts on Wednesday, could spark the UAE exchanges into life, although Mohammed Ali Yasin, Emirates Securities managing director, warns this is likely to be restricted to small advances until second quarter results are announced in July.
He said: "I don't think the market will return to above 5,800 points any time soon. It has been a gradual decline and so I think any advance will be at a similar pace.
"The market will move in a daily one per cent range up or down."
Yasin stressed the rude health of the UAE's listed companies, despite the present market doldrums, praising first quarter results as among the best in the region.
Ajman Bank is expected to list on the DFM by the end of this month. This will boost liquidity on the exchange and much of the recent profit-taking has been blamed on day traders freeing up cash ahead of the bank's debut.
Darahem's Saheb added: "I'm positive for the rest of May and June. We should see some really good gains before the summer slowdown, although this is becoming less significant than it has been in the past."
The DFM is the second-worst performing Gulf market this year, having fallen by 4.86 per cent in 2008. In contrast, Doha and Muscat have both increased by more than a quarter, while Kuwait has also enjoyed double digit growth.
Only the Saudi Tadawul has fared worse, shedding 14 per cent of its value in 2008. The Abu Dhabi Securities Market has added 9.95 per cent over the same period. Four out of seven Gulf markets fell yesterday.