By Claire Ferris-Lay
Value of shares on Dubai bourse fell to AED69.7bn in 2010 from AED173.5bn in 2009
Turnover on the Dubai Financial Market declined nearly 60 percent last year, the lowest in six years, the exchange’s annual report said on Wednesday.
The value of shares on the bourse slumped to AED69.7bn ($18.9bn) from AED173.5bn a year earlier.
Overall performance decreased 9.6 percent to 1630.5 points compared to 1803.6 the previous year while market capitalisation dropped 6.6 percent to AED 199.1bn.
UAE stock exchanges have been hit hard by the global downturn. The DFM merged its trading platform with rival Nasdaq Dubai in June in a bid to boost liquidity while the governments of Dubai and Abu Dhabi are in talks to merge the bourses.
Real estate stocks were the most traded in terms of value contributing to 67.3 percent of the total traded followed by shares in the investment and financial services sector, which accounted for 15.1 percent of the total value. Shares in the communications sector accounted for just 3.6 percent or AED 2.5bn.
Foreign investors bought 44.2 percent (or AED 30.8bn) of the total stock traded and sold AED 30.6bn of stock compared to 23 percent of stock bought by institutional investors and 21.8 percent of sold shares.
Those that lost money have learned their lessons to not return. Many that held Tamweel shares and Amlak shares which had their accounts taken to the cleaners learned their lessons. Those that bought EMAAR shares and watched their stock share price drop from 20 Dhms. to 2 Dhms. learned a painful lesson and we wonder today why turnover is so low?
One day we will all look back and wonder why we did not buy shares at this time. But the problem is still knowing what to buy. Sadly everybody always buys shares at the top of the market and not the bottom, and yet you go shopping in the sales!