Dubai Stocks have witnessed a 27 month low in the backdrop of sharp falls in the real estate market paired with sharp fall in liquidity levels. The Dubai Financial market Index ended after trading down 1.83 percent on 2,947.99 points breaching the 3,000-point psychological barrier on Wednesday.
One of most exposed to the global markets in the Gulf region, The Dubai Bourse too saw a drop of 3.1 percent by the close of the trading week. Meanwhile, the market has shed 12.5 perecnt since the start of this year with the main plunge coming from the real estate sector.
M R Raghu, Head of Research at Kuwait Financial Center (Markaz) said,
Dubai market has underperformed its (Gulf Cooperation Council) GCC markets losing over 12 percent (YTD) dragged by the sell-off in Real Estate sector.
Raghu informed that most of the Golf bourses have made good gains in 2018 mainly due to a partial recovery in oil prices with Saudi rising 12 percent. He believes that fundamentally the real estate prices have been falling and the market has been sluggish.
Real Estate sector is one of the main pillars of Dubai’s highly diversified economy that stands independent of oil. The massive falls in liquidity levels have led international investors to move Saudi Arabia, are other causes for the downturn, analysts believe.
The local economic reports have reported a massive drop of 35 percent in April alone.