Dubai’s real estate stocks rebounded on New Year’s eve, with Emaar Properties gaining 3.3 per cent and Damac Properties adding 4.1 per cent.

Exchange data showed buying by local institutions supported the market on Monday.

Slumping Dubai real estate prices, a major cause of the stock market’s weakness in 2018, still show no clear sign of recovering. Foreign investors sold a net $77.9 million (Dh286 million) of Dubai stocks in the last quarter of 2018, a large amount by historical standards, exchange data shows.

Other big Gulf markets fared much better during 2018, however. Saudi Arabia rose 0.2 per cent on Monday, bringing its annual gain to 8.3 per cent — far outperforming a 16.9 per cent drop by MSCI’s emerging market index.

A $30 slide in oil prices since October has cast a shadow over Gulf markets’ performance in 2019.

Partly because of weak oil prices, “consumer and business sentiment remains depressed across the region,” said Akber Khan, head of asset management at Al Rayan Investment in Doha.

However, Saudi Arabia is due to join the emerging market indexes of MSCI and FTSE Russell next year, which is expected to attract $15 billion of passive, index-linked funds to Riyadh and billions more in active funds.

As a result, Saudi Arabia was the favourite market of fund managers polled by Reuters late this month, with 54 per cent expecting to raise their Saudi equity allocations and none to reduce them in the next three months.