DFM bull run to pass 6,000 pts

(SUPPLIED)  

The bull run on the Dubai Financial Market is expected to propel the index across the psychologically important 6,000-point barrier before the year ends. The optimism will spill into 2008, with analysts estimating the DFM general index will add 20 to 25 per cent in value next year.

The index has soared 45.18 per cent since the beginning of the year, opening at 4,127 points and reaching 5,992.21 points Tuesday.  The Abu Dhabi Securities Market (ADSM) index, however, has outstripped Dubai in terms of year-to-date growth, adding 54.12 per cent.

In the current bullish phase the DFM has gained 4.4 per cent since it re-opened on Sunday after the Eid break. Trading volume has risen 80 per cent to 801 million shares from 444 million. The ADSM index gained 2.4 per cent in the last three days.

After breaking past the 5,861-point technical barrier, the DFM index will cross the 6,000 mark in the next few days, experts forecast.

“At current valuations, a number of stocks look attractive. A lot of liquidity is coming into the UAE market as foreign investors, institutions and high-net worth individuals are shifting their investments to local markets,” P Krishnamurthy, Chief Executive of the Al Rostamani Group’s financial services division, told Emirates Business.

Investment banks and international research firms have upgraded their outlook for the country and its companies, which is fuelling overseas interest. The US Federal Reserve’s rate cut in September added to the wave of Western liquidity flowing into the UAE. At about 12 times price-to-earnings ratio, the UAE markets are considered the most attractive among the emerging markets.