Dubai Shares Rise on Upgrade Possibility

Dubai shares increased to the highest level in the last 4 years after HSBC Holdings stated that United Arab Emirates could be upgraded to the emerging market status at the MSCI Inc. They stated that the investor interest has increased in the asset of the country and that’s why the inclusion may take place.

Dubai Financial Market, incidentally, is the very first stock exchange in the Persian Gulf which started to sell shares. The stock index has jumped the most in the last 4 years. The DFM General Index surged ahead by 2.7% and the same is currently at 2,430. This is the highest close for the gauge since November, 2008. When it comes to the other stock exchanges, QE Index of Qatar was more or less unchanged, whereas, the stock index of Abu Dhabi went ahead by 0.8%. When it comes to the biggest bourse in the region, the stock index of Saudi Arabia, Tadawul All Share Index went ahead by 0.5%. On the other hand, the stock gauge of Bahrain went ahead by 0.2%. The SE Price Index of Kuwait experienced a decline of 3%, marking its biggest since last October. Hence, the rally of this stock gauge has now been trimmed to 36%. The MSM30 Index of Oman declined by 0.1%, whereas, EGX 30 Index of Egypt tumbled by 1.2%.

This is the 5th year when Qatar and United Arab Emirates are being considered for a possible upgrade from the current status of Frontier market that it enjoys at the MSCI. According to a recent report published by HSBC, both countries have been able to improve market accessibility and hence, both stand chance of getting an improved status at the MSCI. If the reclassification actually takes place, at least $430 million can flow into Qatar as direct foreign investment, whereas, for the United Arab Emirates, the same figure can be of $370 million. MSCI indexes are being tracked by investors from all over the world and the decision will be announced on 11th June.

According to the Senior Manager of Global Markets division of Quantum Investment Bank Ltd., Montasser Khelifi, for the United Arab Emirates, a possible MSCI upgrade has been the real catalyst. Apart from that, the investors are also being lured by the good market performance of 2013 and the positivity all over regarding the economy of Dubai.