ANALYSIS-Gulf stocks plagued by opacity, structural problems

Cheap Gulf bluechip stocks are set to stay off-radar for many foreign investors because of issues over transparency, a ban on short-selling, a lack of diversification and the region's absence from key indexes.

From January 2008 to the end of May 2009, net selling of Dubai-listed stocks by international funds totalled $2.07 billion.

Gulf indexes fell between 28 and 72 percent in 2008 as the region's oil-powered boom faltered. Crude prices slumped from a record high of $147 a barrel in July 2008 to below $35 by December. Oil is now at $65, yet rising revenues will not attract risk-averse overseas funds unless transparency improves.