Investors head back to DFM

Upturn: Seif Fikry says investors are returning to DFM.

UAE stock markets are witnessing increased levels of interest from institutional investors, with a significant rise during the first quarter and despite overall market volumes being lower, according to regional investment bank EFG-Hermes.

Seif Fikry, head of UAE brokerage at EFG-Hermes, said: "Institutional volumes have been significant in recent months, and mark a change of behaviour on the Dubai Financial Market (DFM) in particular, where investors are addressing the fundamental value and performance of stocks, as well as technical dimensions.

"The interest of institutions reflects value opportunities created by recent market corrections, as well as the increasing maturity of the market, for which the implementation of best practice is key."

The brokerage arm of the bank added that the change in institutional levels also placed an "increased onus" on investment firms to be more rigorous in their stock research, which in turn will help investors to adopt a more strategic approach to portfolio management.

"We are seeing the investor community increasingly recognising the value of value-added services - equity research in particular. Our ranking is an endorsement of the services and strategy we have adopted in the UAE over the last two years and it is something we are keen to build on in the coming year," added Fikry.

EFG-Hermes was the top ranked broker in the UAE in terms of turnover for the first quarter of 2007 across the DFM and the Abu Dhabi Stock Market (ADSM) combined, on top of being placed first by the DFM for March 2007.

Meanwhile, the value of shares bought by foreign investors, or non-UAE nationals, during the first quarter of 2007 reached US$4.6bn, comprising 40% of the total value of shares bought during the period.

The value of stocks sold by foreign investors during Q1 2007 reached US$3.8bn, comprising 33% of the total value of stocks sold during the period. Net foreign investment on the market increased by 272% to US$816m during the first quarter of 2007, compared to US$219m during the first quarter of 2006.

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