Wednesday 5 October 2011

Investors see upside of Gulf’s low liquidity - FT.com

The Dubai Financial Market, Dubai’s main stock exchange, turned over only $8m on Sunday, its lowest level since August 2004, according to EFG-Hermes, the investment bank.

Middle East markets have had a rough ride this year as political unrest has spread across the region, hurting investor confidence and causing international buyers to withdraw. Fears over the global economy have not helped.

“Poor liquidity in Gulf markets is a prevailing theme,” says Julian Bruce, director of equity sales at EFG-Hermes in Dubai. “There is no incentive to make new allocations against such an uncertain backdrop – and sellers are reluctant to offload at such low levels unless forced to do so, preferring to try to ride out the storm.”

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