Equity Investors of the UAE hope for a Relief from the Global Turmoil

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After all the chaos from last week, the investors of the UAE are looking forward for the equity markets to get back to their normal state with the trading now being open; which hints towards a more positive time for business from the indicators of the great global economy.

Last Sunday, the stock markets of Abu Dhabi and Dubai underwent the worst of their one-day failures in the business. They opened at 6.96% and 5.01% and steadily went down from there. The decreasing shares of the Chinese and the falling oil prices have caused an uncertainty in the economy of the world. Despite this, the UAE equities have managed to control their damage on a personal level and maintain relative stability at the end of the week.

The benchmark index of Dubai dropped to a 1.1% while the headline index of Dubai was at 1.7% by the time the week ended. Some of the blue-chip stocks, like Arabtec Holding, Abu Dhabi Commercial Bank, Aramex, and Aldar Properties remained in their positive zones all throughout the week.

An Emirati investor in Abu Dhabi recently commented on the situation by saying that sometimes the market goes down, but at the end of the day, they always get up right back again.

The current situation is that the financial institutions and the banks are buying shares at a low price because the prices have come down so much in the last week. But the oil prices are rising for the better, so it can be hoped that the market prices will get back to normal within a few months even if it doesn’t immediately get back to where it was.

Last Sunday, the UAE markets opened to a huge backdrop of corrections made in the global stock market and the oil prices, so the situation is much better now. The main source of the panic set on the global market last week, that is, The Shanghai Composite Index, rose up to 10.4% on Thursday and Friday!

The Dow Jones Industrial Average, in New York, which was still in dark waters on Friday, was able to turn it around for themselves by the end of the week and finally was in its own positive territory again.

What’s more encouraging for the share-holders, is that the price of oil, which was finally rallied on Thursday and Friday after being hit by the six-year lows constantly in the course of the week.

On a short, relief rally held on Friday, Brent Crude broke the $50 mark on a barrel, as the traders were just starting to cover their positions after the stabilization of the markets in the middle of the second week. But Brent’s gains on Thursday and Friday may as well turn out to be unsustainable for a long time, so expectations of any high sales better be kept low until further stability is reached.

Senior officials of The Federal Reserve in the United States also suggested a rise in the rate of interests by next month. The New York Federal President, William Dudley, thought this to be less compelling, which, given the strong state of the US economy, is once again a possibility.

Many Emirati retail investors still don’t know what to expect, as they realize that no matter how many assumptions you make, what really matters is what actually ends up happening on the market in the week. The market prices can seriously take any direction, positive or negative, and no number of assumptions or calculations made can determine the future.

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