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29 November 2023

UAE stock indices likely to strengthen in H2

Analysts expect the DFM to open soft in the first half and strengthen in the second. (FILE)

By Matt Smith

In a reversal of last year's trend, UAE stock indices are expected to open soft in the first half of 2009, only to strengthen in the second half, analysts said.

Trading for year 2009 will open as both the UAE stock markets struggle to keep their heads above water. However, the good news is that both the Dubai and Abu Dhabi indices will begin trading tomorrow above key technical support levels. More good news came from a strong start to the year by the Tadawul stock exchange in Riyadh, which gained 4.6 per cent yesterday.

The Dubai Financial Market (DFM) lost more than two-thirds of its value last year, in spite of relatively high optimism on the economic front. The Abu Dhabi Securities Exchange (ADX) contracted by almost half.

The International Monetary Fund has forecast that the UAE economy will grow by almost three per cent this year, a level that most regional analysts have supported. This is in stark contrast to the growth contraction that has been recorded as well as forecast in most other regions of the world.

"2009 could be the reverse of 2008, with a slow start giving way to stronger trading in the second half of the year," Mohammed Ali Yasin, Chief Executive, Shuaa Securities, told Emirates Business in a round-table discussion on the prospects of the UAE stock markets this year.