Dubai shares
surged in 2013, boosted by stronger trading volumes, as foreign investors
returned to the Dubai Financial Market amid a recovery in the emirate’s
property and banking sector. The DFM index rose 107.6 per cent, ranking it the
second best performing benchmark in US dollar terms after Venezuela.
Shares listed on
the Abu Dhabi exchange outperformed as well, with a gain of 63 per cent for the
year.
“I expect a lot
of stocks to disappoint, those who have challenging models and went up because
they went up with the market,” said Mr Al Said. “Valuations are rich and people
are expecting a lot.”
The fund manager
declined to name the stocks he was bearish about.
“There’s two
ways investors can be disappointed. If they expect a certain number and the
stocks reflect the new reality, or if they expect a major turnaround for a
company and nothing changes,” Mr Al Said said.
Sebastien Henin,
a portfolio manager at The National Investor, an Abu Dhabi-based investment
bank, said finding winners would be tougher this year than last year.
“It will be more
difficult because some of the stocks have performed extremely well. It’s not
the big opportunities we had one and a half years ago where you were able to
buy with a big discount. Now it’s a big difference, this year you have to buy
on earnings growth.”
Mr Henin said
that he expected some volatility over the coming year but that the overall
trend was positive.
“We have strong
visibility from the economy and we have more and more projects coming, and more
money coming to Dubai and Abu Dhabi,” he said.
Trading volumes
were thin yesterday.
“The market is
flat,” Mr Henin said. “Maybe we need to take a break and digest the strong
rally in the past week. It’s a bit quiet as well, with a lack of local and
international news flow.”
Internationally,
results were mixed for national indexes yesterday.
Shanghai’s index
slipped 0.3 per cent to 2,109.39 points, while Mumbai’s Sensex 30 Index slipped
1.1 per cent to 20,888.33 points. Hong Kong’s Hang Seng Index added 0.1 per
cent to 23,340.05 points. Japan’s Nikkei was closed yesterday, but had ended
2013 with a rise over the year of 57 per cent.
In Europe, many
stocks spent their first day of 2014 in the red. At mid-afternoon the major
indexes were falling, though by less than 1 per cent.
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