Wealthy Opinions: Dubai Financial Market Performance Report for 2009 and Current Opportunities

In this section I am going to discuss about the DFM’s 2009 performance and the current opportunities after the Dubai World (DW) crises.

Below are the two charts showing the performance of the DFM . Chart one showing YTD performance and chart two focusing from the period after the declaration of the DWs’ debt problem till date.

The year, for DFM index, started in a negative note, as the fall of 2008 continued in the year 2009. The index kept loosing ground till Feb touching all time low (for the year 2009) on 2^nd of Feb touching 1,433.14 levels and had a bumpy ride till April.

In the middle of the year the index spiked 29%, only to crash by 25%. Since then (around mid July) the market was constant and touched all time high of 2,373.37 on October 14^th but fell back due to the DW crisis.

As you can see from below chart, the market came down 35% from the all time high levels. The investors and traders gained confidence only after Abu-Dhabi’s intervention, forming ‘V’ shaped angle.

I don’t know why people sold off, as I feel that was the best time to purchase securities.

For those who want to know the absolute return, please note that AED 100 invested at the start of the Year 2009 would have had made a total of around AED 110 ONLY by 30^th Dec compared to a total of 118, if invested at the bottom during the DW crisis (b/w 10^th to 12^th of Nov).

Anyhow, those who invested at the lows will be sitting happily, and for those who invested at the top will be thinking of averaging the cost, maybe.

I have found a good list of fundamentally strong companies based on my screening criteria.

Hope this will help you to gain in future.