Dubai: For investors, who made a windfall in 2014, beware. The pace of gains may slow on the Dubai index in 2015, and may not provide you with stellar gains seen in 2014.
The Dubai index moved from a bull to bear and back again to bull market territory in 2014, witnessing the most volatile movements in its history due to similar trend in crude oil prices.
“I see growth continuing in 2015, but not at the pace we saw last year or the year before that. The problem is that investors in general are getting used to Dubai stock market giving you 20-30 per cent performance. As you become more mature markets these kind of performance is not available,” Mousa Haddad, equity fund manager at NBAD’s asset management group told Gulf News.
The Dubai Financial Market General Index has gained more than 20 per cent so far in the year, still a top performer among the regional indices.
“People need to change their investment view and accept that markets won’t be giving you a 40-50 per cent per year. The performance of equity markets won’t see 30-40 per cent as it was used to be but it could be somewhere between 10-15 per cent over the coming couple of years, he said.
Osama Al Ashri, member of British organisation, Society of Technical Analysts, also agreed.
“The Dubai index is very positive for the long term. We may a levels of above 5,700 next year. I see Dubai market and Abu Dhabi market going at new highs. The long-term chart is very positive, but medium and short term chart is negative,” said Al Ashri.
Watchout
Investors would continue to watch for crude oil prices next year.
“Bottoming is in process in crude oil, but we will see some sort of stability in oil prices. This will take a little bit of time,” said NBAD’s Haddad.
When they start looking at the fundamentals of the company then they will have direction. Volatile crude oil prices may not have a major impact on GCC economies.
“I don’t see any problem on GCC markets as they have sufficient reserves and strong assets in place and I see markets in the GCC are trying to diversify away from the oil sector. They will be giving high priority to projects that contribute to growth,” said Haddad.
