Interpreting Middle East Economic News and Analyzing Market Trends

The hottest market nobody is watching – the Dubai Financial Market

Headlines were made around the world when the Dow Jones Industrial Average (DJIA) broke above 14,000 recently reaching a five-year high.  The Japanese market has been making headlines recently as well after the new government pledged to fight the country’s 20 plus years of low growth and deflation.  Headlines aside, what has been the performance of these markets?  So far this year (up to Feb 20), the DJIA is up 6.3% and the Dow Jones Japan Index is up 4.6% in dollar terms.  In yen, the market did better since the yen has been depreciating with the stock market’s appreciation.  This leaves little upside for non-yen investors.

 

One market that has been out of the spotlight is the Dubai Financial Market (DFM).  Since the beginning of the year, the DFM index has gained 22%… in dollar terms (note: the UAE dirham is pegged to the dollar).  See the chart below for a visual comparison of the DFM versus other indexes.

Source: S&P Dow Jones Indices The Middle East and emerging markets have been flat since the beginning of the year.  Another exception in the region, however, is Dubai’s neighbor Abu Dhabi, the ADX is up over 14% for the year.  Qatar on the other hand is up just over 5%.