Dubai: Dubai stocks are fairly valued at current levels after a violent correction recently, but 2015 will be a challenging year for investments, a senior official at Emirates NBD Wealth Management said on Sunday.

The Dubai Financial Market General Index witnessed volatile swings late last year, to a point it gave away all of its 2014 gains in early December, before ending the year about 13 per cent higher.

“The drop in crude had significant impact on asset prices. Real estate has corrected somewhat. Stock market saw violent correction and that will ease off very soon,” said Arjuna Mahendran, chief investment officer, with Emirates NBD Wealth Management.

Crude prices have tumbled 50 per cent since June.

“[This] is not a healthy sign and a symptom of a deeper malaise,” he added.

Emirates NBD had been bullish on assets in the United States over the last two years as a recovery there gained steam. Purchasing manager’s index has shown positive results on manufacturing, pointing to robust growth in the GDP.

The quantitative easing also lifted assets prices, creating artificial demand, but caution has now set in as the US stopped buying bonds since October last year.

There is significant disparity in incomes happening in the western economies, which has been weighing on demand. Western consumers in Europe, United States and Japan are not buying as much as they used to.

The median household income has fallen significantly since 2008 and the brunt of the adjustments that happened post the sub-prime crises was felt by low-middle class income households.

“There is a lot of catching up to be done in terms of income, which is the basis of my contention of the end of commodities cycle,” said Mahendran.

“We are sitting in the cusps of a mini collapse of the commodity super cycle, which started in 1998, said Mahendran. The best proxy for general state of commodities demand is Australian dollar, which has seen a depreciation.

China and India, Asia’s fastest growing economies, formed the backbone of demand for various commodities like gold, copper, iron ore, and agricultural commodities, which might be tapering off.

“We saw demand for commodities exponentially step up in China and India over the past few years. In 2015, we are wondering if we are running out of speed with new government heads in China and India,” said Mahendran.