The UAE stock markets are expected to get a new push from the recently-announced government incentives alongside the continued disclosure of companies’ third quarter results, which have recently attracted foreign and institutional investment portfolios, analysts told Mubasher.
Last week, UAE stocks gains around AED 14 billion ($3.81 billion), while the Dubai Financial Market (DFM) jumped 2.51% and the Abu Dhabi Securities Exchange (ADX) increased 0.78%.
UAE President issued last week seven federal decrees including one on foreign direct investment (FDI) with the aim of bolstering the UAE’s position as a centre for attracting FDI and expanding the country’s production and diversifying it.
These important economic decisions, issued last week, are likely to help the market rise, commented Ehab Rashad, CEO of Al Safwa Mubasher Financial Services, noting that they would have a positive impact on the market.
These government decisions have helped restore liquidity to UAE bourses after stocks had fallen to attractive price levels, Rashad added, indicating that stock prices will be attractive to local and foreign investors alike.
The analyst forecast that foreigners will pump more liquidity in the market particularly in large and leading companies.
The continued rise in UAE bourses is likely to attract other players such as real estate investment trust funds (REITs), he added.
Rashad also called on the UAE bourses to ask companies to request stock valuations from licensed valuation firms so as to confirm such companies’ value and also attract investors.
Similarly, Tarek Qaqish, general manager of asset management at MenaCorp Financial Services, forecast that UAE bourses were likely to see new foreign investments in the coming period.
Qaqish cited three factors as being the reason for the upcoming rise, namely attractive stock prices, companies’ positive financial disclosures, and an expected improvement in the UAE’s economic environment after the announcement of the new laws.