Dubai

The UAE stock market is capable of growing by around 15-20 per cent next year while the short- to medium-term outlook is bullish, industry experts said.

“Real estate shares are recovering due to the recovery in real estate market, Dubai in particular. Abu Dhabi realty sector still has room for growth in 2014. The recovery in Abu Dhabi real estate market has not reached the same level as in Dubai,” Mohammad Ali Yasin, managing director at NBAD Securities, told Gulf News.

Emirates NBD, Emaar, Waha Capital, DIB and Dubai Investments have done pretty well this year.

The best performers on Dubai bourse for the year are Union Properties with 206.33 per cent, DIC with 187.56 per cent, Deyaar with 183.24, DIB with 164.68 per cent and GGICO by 150.86 per cent.

The bellwether Emaar rose 100.53 per cent year to date while Emirates NBD by 117 per cent.

In Abu Dhabi, Waha Capital rose 296.36 per cent year to date, followed by GCIC by 237.50 per cent, ADSB by 215.38 per cent, Bildco by 184.21 per cent and RAK Ceramics by 180.73 per cent.

Aldar rose 113.39 per cent year to date while ADCB by 111.76 per cent.

Dubai Chamber of Commerce and Industry study states that the UAE’s strong economic growth has been accompanied by growth in value of stocks traded on UAE stock exchanges as the value of stocks traded on the Dubai Financial Market (DFM) in the year 2000 was about Dh437 million, while in the first three quarters of 2013 it shot up to Dh107.863 billion.

In the short and medium term, improved investor expectations about future company earnings and increase in equity indices of major economies are some important reasons for the increase in the value of the DFM index.

Yasin said that the capital appreciation of stocks in 2014 will be the reflection of the better spending and the economic growth will provide positive returns to shareholders.

“Although, I don’t believe it will be in the same levels as in 2015. The next five to six months of 2014 will be strong year and will be supported by REIT stocks, telcos and banks,” he said.

But according to Vijay Harpalani, Assistant Fund Manager at Al Mal Capital, banking shares will lead the pack followed by construction and real estate shares.

“The outlook for the real estate shares is neither positive nor negative. I will be optimistic but cautious.

Any movements are driven by fundamentals. So if the fundamentals are not strong enough, then profit-taking or correction has to take place,” he said.

“Emaar will be a growth story that will continue next year also before it touches a peak in 2015. Arabtec is a strong story and the capital increase they have done in 2013 will help it to achieve higher revenues looking forward. Aldar will make remarkable gains in 2014 but Nakheel will move sideways,” Yasin said.

Emaar, Aldar, RAK Properties, First Gulf Bank, NBAD, ADCB, Emirates NBD, DIB, Air Arabia, Waha Capital are the stocks to watch in the medium term.

Yasin said that telcos will give good distribution but will trade sideways in 2014.