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Tue 23 Jun 2009 12:00 AM

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DFM earns investors healthy return in H1

With $100,000 to invest, Arabian Business tests the performance of the Dubai Financial Market in 2009 so far.

DFM earns investors healthy return in H1
DUBAI MARKET: How would an investment of $100,000 perform on the DFM for the year to date. (Getty Images)

Islamic insurers look set to have been the best investment among stocks in the Dubai Financial Market (DFM) General Index during the first half of the year.


Click here to view the DFM's performance so far this year >>

At Sunday’s close, Dar Takaful and Takaful Emarat Insurance were up 137.4 percent and 91.2 percent, respectively, since the beginning of the year.

Arabian Business has tested the index's performance so far this year by investing an imaginary $100,000 at the beginning of 2009 into each of the companies listed on the General Index.

An investor putting $100,000 into the Dubai measure’s top performing company would now have had more than twice that: $237,400, to be exact.

“There is room for growth for Islamic insurance. The companies that can offer new products may witness growth,” said Khaled Akl, head of research at Abu Dhabi Commercial Bank (ADCB). ADCB does not have analyst coverage of the stocks.

Other top gainers in the period include the index’s real estate giants, Emaar, Union Properties and Deyaar, up 52.2 percent, 52.8 percent and 62 percent, respectively.

“The real estate market was hit very badly, it’s just that when you overdo it on the downside, you have to rebound to balance things out,” said Mohammed Ali Yasin, chief executive of Shuaa Securities in Abu Dhabi.

“Last year the market cap of Emaar was somewhere in the range of AED12bn…The market cap did not reflect the true value of the assets that those companies have.”

Looking ahead, Yasin sees further room on the upside for the real estate sector’s major stocks.

“If we continue seeing banks doing their normal role, which is lending to businesses and individuals, I think we may see a continued recovery.”

Islamic mortgage lenders Amlak and Tamweel resuming lending could be a catalyst for further gains, he added.

Dubai Islamic Bank (DIB) rose 64.5 percent in the period.

“DIB was one of the banks whose price had dropped significantly during the crisis and amid fears over its real estate exposure,” said Radwa El Swaify, an analyst at Beltone in Cairo.

“When investors looked afterwards they found that the bank has not reported significantly bad results.”

Among the index’s losers were National Cement Company (-39.9 percent), as demand for building products dried up, the illiquid Mashreq (-51.3 percent) stock and diversified holding company Gulf General Investment Company (-51.7 percent).

Overall, the DFM General Index is up 21.1 percent this year.

Look out for our similar reports on the other Gulf-based stock markets over the coming weeks.

Arabian Business digital magazine: read the latest edition online

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Salim 10 years ago

So what is the strategy or recomendation here? These are ytd statistics framed into an article, what have you "tested"?