Variables affect stock market

The continuing fall of the UAE stock market indices, although costly on various fronts, should be perceived as a step that would enable the market to perform better in the future. Like other markets, the local stock market is also affected by various variables - local, regional as well as international.

Weak regional and global markets, and the prices of oil and the dollar have influenced the exit of foreign funds from the local market. Recently, the Dubai Financial Market plunged by 4.64 per cent while the Abu Dhabi Securities Exchange index has fallen by 3.74 per cent. This slump has caused a combined loss of Dh28.77 billion.

But matters should be placed within the context of what has been unfolding over the past few weeks as one of the main factors affecting the local market's downfall is the performance of the real estate sector. Such a concern is justifiable to some extent.

Yet, the fact that the authorities have adopted a more transparent approach in handling the issues faced by this particular sector should stand as a guide on how matters should continue to be handled in the future. Such an approach is critical in maintaining investor confidence.