Thursday, 5 November 2009

Dubai signals a rocky recovery

Investing in Dubai’s stock market has not been for the fainthearted over the past year.

Whiplash slumps and soaring rallies against the backdrop of a severe property crash and fears that the emirate might default have made for an unnerving experience.

Though its 30 per cent rally this year is rivalled only by the Saudi stock market in the region, the Dubai Financial Market remains 28 per cent down from 12 months ago – the second-worst performance in the Gulf after Bahrain’s tiny bourse – and has shed two-thirds of its value since its peak in January 2008.

“All the regional markets have been highly correlated to global movements ever since Lehman, but Dubai has suffered from a double whammy – its own real estate market drop and concerns over whether it could repay its debts,” says Hashem Montasser, head of asset management at EFG-Hermes, the investment bank

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