The benchmark Dubai Financial Market general index climbed 0.4 per cent on Wednesday, after sliding precipitously by almost 13 per cent just this week.
The gauge remains over 20 per cent down this month, making it the worst performing stock market in the world over that period, FTAdviser sister publication FastFT reports.
Index provider MSCI formally upgraded the United Arab Emirates – where Dubai is one of seven statelets – from frontier to emerging markets status at the start of the month, which many hoped would lead to international investor inflows and add further fuel to this year’s strong rally.
Instead it led to profit-taking from investors who had anticipated the move – a classic ‘buy the rumour, sell the fact’. The subsequent losses appear to then have forced leveraged locals to sell, turning an expected correction into a rout. Concerns over Iraq may also have contributed to the sell-off.
