 The UAE Stock market entered
the last year of the century on positive note but after an eventful year. While most
equity markets around the world were experiencing a downtrend, the UAE stock market
witnessed a strong bullish sentiment last year. Though the year ended on a positive note
for UAE investors, the end result was the result of many upswings and down swings, and
especially on the strength of the gains made in the last week of trading.
Analysts however feel that the upturn made in
the last week is not an indication of the restoration of investors' confidence,
particularly the small ones who were affected during the downturn during the year. The
investors are expected to adopt a cautious approach this year.
The lack of regulations was said to be the
reason for the climbing of market to the dizzy heights in the month of August and the
crash there after due to the same reason. The market settled down as the Central Bank of
the UAE stepped in to save the situation and due to the pressure applied by the banks in
October and November to settle the outstanding accounts.
Market watchers foresee a market that is
difficult sell, though the market players' confidence in the market would be restored
slowly. They also feel that the market would definitely benefit once the official stock
market is established and proper regulations are introduced. They felt that there was no
rule at present to protect the small investors whereas the big players can get in and out
of the market as they wish.
At the end of the year the investors in the
UAE were better off than most of their counterparts in the GCC countries, said a study by
the Union National Bank. According to the UNB Market index since the beginning of 1998,
the market gained a total 24.4 per cent over the previous year. With the exception Qatar,
the bank study said all other GCC markets have declined. The Qatar market has gained 34.44
per cent during the year. The largest loser in the GCC countries was Oman (-51.48 %),
followed by Kuwait (-38.55%) Saudi Arabia (- 30.59) and Bahrain (-8.24%).
No doubt, a large percentage of the total
gains came from the spurt in the market during the last trading week of the year. The
market gained 8.7 per cent during the week ended December 31, 1998, mainly due to the rise
in the services banking and insurance sectors.
Though the market showed a big gains during
the end of the year, the fall from the peak reached in August was great. No sector and no
share could be saved from the turmoil. Even the bluest of the blue chips, the Etisalat,
was no e exception. Top among shares of companies which experienced the maximum volatility
during 1998 from standard deviation were Manasek (8.32 per cent), First Gulf Bank (7.26
per cent), Al Wathba Insurance (6.78 per cent), Dubai Islamic Bank (6.33 per cent) and
Tabreed (5.52 per cent). |
is
well That Ends Well