The UAE’s bourses are set to usher in a new era this year with the inclusion in emerging market indices compiled by MSCI and S&P Dow Jones. The foreign investment inflows, positive economic indicators and strong rebound in real estate  and possible integration of the DFM and ADX are expected to push the equities to new peaks this year.
Today, on the first trading day of 2014, markets will start on high note and further strengthen the 2013 gains, as the region has become a mainstream destination for international funds. The upbeat investors are ready to inject funds worth millions of dollars in the emirate’s equity markets that will extend the bull-run and improve trading volume on the two exchanges.
Analysts and market insiders believe the UAE stocks will remain bullish throughout the year , but the gains will not match the 2013 growth due to higher valuations of scrips. They expect a slower growth and profit-taking in key shares, but have consensus that bourses will extend this bull run.
The Dubai Financial Market’s General Index,  which is the second best performer in 2013 with 108 per cent gains, is trading more than 15 times of 2013 earnings. The best performing bourse in Middle East and North Africa still has room to extend 2013 rally into new year to incorporate gains from emerging market status, booming property sector, flourishing tourism industry, brighter outlook for corporate earnings and hosting of World Expo 2020.  Abu Dhabi market also surged 72.85 per cent in 2013 and will further advance to mark another remarkable year.
The UAE and Qatar — which is also upgraded to emerging market — are expected to see approximately $8 billion of investment inflows into various sectors of the two nations over a period of time. The Qatar market, which rose 31.01 per cent with a market capitalisation of $338.39 billion last year, is also expected to reap the benefits of positive economic indicators, massive spending on infrastructure projects and inclusion in MSCI index.
By Muzaffar Rizvi