The Dubai Financial Market has never recovered from its January 16 crash, with its Big Five all taking massive tumbles from this date.
Emaar leads the way, having fallen 28 per cent in the past 23 weeks, while DFM Company, Dubai Islamic Bank and du are down around 20 per cent over the same period. Emirates NBD has lost 9.1 per cent.
"The situation in global markets led many foreign institutions to sell their UAE holdings, which are in our major stocks," said Sherif Abdul Khalek, Beltone Financial Institutional trading manager.
"DIB has suffered in particular because investors are not comfortable holding the stock when there are doubts about its transparency. Institutions are not necessarily liquidating their entire holdings, but they're reducing the size of their stakes across emerging markets."
For Ayman El Saheb, Darahem Financial Brokerage director of operations, Emaar, DFM and DIB are Dubai's three most important stocks, driving the index up when bullish, but also dragging sentiment down when they slump.
"What's happening on global markets, geopolitical worries and doubts about financial irregularities closer to home haven't helped an already worsening situation, and so in the light of these problems we're actually doing quite well," said Saheb.
He warns many investors have suffered huge losses over the past couple of weeks and they continue to lose money day after day. "Investors have lost a bucket-load of money and they're not happy. They're feeling insecure and have lost confidence in the market and themselves in terms of their decision making," said Saheb.
He urged investors not to sell unless they have to, with paper losses likely to be recouped in an eventual market rally.
Saheb added: "If these people lose hope of a recovery, they may decide to cut their losses and sell up now. Or they might sell in the belief prices will fall further before rebounding and in that way they can recoup some their original losses."
He predicts the DFM will be flat today, although some stocks offered worrying signals yesterday, with heavy selling towards the session end.
Beltone's Khalek added: "Institutions are waiting for fundamental news before taking positions and if the Q2 results are good I can see the market moving back up towards 5,750 points.
"The market should mount a recovery in the next 10 days to two weeks."
DP World falls
DP World sank another 2.2 per cent to its lowest close since April 15, while the two other active stocks on the Dubai International Finance Exchange also fell.
DP World finished on $0.89 after recovering from an intraday low of $0.87 and it has closed in the green just once this month.
Meanwhile, Depa's descent continued, with the interiors contractor falling 0.68 per cent to $1.46, which is 5.8 per cent below its initial public offer price.
In comparison, DP World is 32 per cent under its own initial public offering price.
Finally, the normally dormant Kingdom Hotels also saw some selling to push it down 6.02 per cent to $6.25.