Local Institutions Urged to Buy UAE Equities
17 September 2008
“Local institutions should contribute,” said Chamel Fahmy, a senior regional sales trader at Beltone Securities Brokerage. “They are currently sitting on the sidelines holding liquidity. However, they should start accumulating high-growth stocks assuming foreign investors continue to leave.”
Shares in Dubai tumbled for a fifth day to 2.2 per cent at 3,954.30 points on Tuesday, with the main index losing 33.3 per cent so far this year. Abu Dhabi’s benchmark stock index added 0.4 per cent to close at 3,770.44 after Monday’s plunge of 4.4 per cent.
Fahmy said stocks in the Gulf Arab states would continue to drop, tracking losses in global markets following the bankruptcy of Lehman Brothers Holdings Inc, the fourth-largest US investment bank and the takeover of Merrill Lynch & Co by the Bank of America Corp.
“Yes, it is related,” he stressed. “If you check the trade volume, foreign investors’ outflow has been increasing dramatically. As the UAE is an open market, it is prone to reactions of foreign investors.”
Foreign investors sold Dh2.47 billion worth of shares on the Dubai Financial Market last week compared with the Dh1.75 billion worth of shares they purchased, the bourse said in a statement on Sunday.