Dubai's index is up 22.3 percent in 2012, but has fallen 5.1 percent since March 5
Gulf Arab markets are seen treading water on Thursday as an early-year surge on UAE and Saudi Arabia bourses wanes, with investors slowly switching money from out-performing small-cap stocks to bluechip names.
Dubai's index is up 22.3 percent in 2012, but has fallen 5.1 percent since March 5's 16-month peak, while Saudi Arabia - closed on Thursday for the kingdom's weekend - is trading around levels last seen in 2008.
"In a lot of Gulf markets, the small-cap stocks have run way ahead of the more established names," says Ibrahim Masood, senior investment officer at Mashreq Bank.
That means institutions have largely missed out because they typically only trade the heavyweight stocks and leave the more obscure names for retail traders to speculate in, says Masood.
"As long as you were long in the likes of Tamweel, for example, you would have made money, but the first wave is more or less done and perhaps a move in the mid- to large-cap stocks should ensue," he adds.
"We need to catch our breath for a couple of weeks, wait for first-quarter earnings to come out and then take it from there.
"Today will probably be a flattish day and I wouldn't expect volumes to be big."
Shares in Islamic mortgage lender Tamweel have more than doubled this year, while property developer Deyaar has gained 84 percent to rebound from historic lows.
This compares with bluehcip names such as telecoms operator du, up 8.3 percent, and lender Emirates NBD, up 4.8 percent.