There is no secret to the bad situation experienced by the local markets in the UAE financial markets due to many reasons that have accumulated to produce in the end a non-profitable experience that influenced the decisions of investors and their view towards the market. Some of these reasons and challenges are as follows:
First, market management has taken a series of decisions over the past years that have enhanced the speculative rather than investment orientation, such as increasing the number of brokerage offices in a small market that has led to increased speculative competition between offices, and possibly insidious listings of losing foreign companies that have boosted the flow of hot money Foreign investors on a limited number of speculative stocks, as well as investors' constant sense of lack of oversight role over companies and their business results and sudden statements that reinforced the gap between the public and the market. These practices have led to a decline in institutional and foreign investment. For real transformation to market speculators rather than market Bafilsat to be an investment market as a whole
Second: The issuance of many contradictory statements from the local and international organizations on the performance of companies and distributions, especially in the real estate sector, which led to the strengthening of the lack of confidence, which has been exploited by senior speculators to achieve practices may be unreasonable by pressing the prices of some stocks to levels did not reach Even in a year of financial crisis
Thirdly, it should be borne in mind that the results of the companies at the end of 2017 were generally modest and the process of decorating the balance sheets by re-evaluating the allocations is no secret to anyone. I believe that 2018 will witness some companies important challenges that will show their accounting effect directly through the results of the first quarter 2018 After the mandatory application of Article 9 accounting for valuations of assets of traded financial instruments and hedging instruments. It seems that some know what others do not know and this is contrary to the principle of transparency, disclosure, and control
Fourth: The negative practices of some banks and brokers seeking to enhance their own gains by dumping the market by margin trading by tempting customers with financial leverage in the hope of compensating their losses and then exerting selling pressure on them as the market declines. These practices led to direct financial losses to a large segment of investors. To sink a large segment under the pretext of debt and financial deficit
Fifth: For all or some of the previous reasons, liquidity has weakened or may have been absent due to the tendency of a large number of investors to search for alternative investment opportunities, whether in regional markets such as the Saudi market or global markets. In particular, the last six months have witnessed a large demand for investment in digital currencies Of the opportunities promising and latent, although the total Arab investment despite all the light of the media actually does not represent so far more than 15-20% of the size of this global market, which filled the world from East Asia to America through Europe from individuals and large investment portfolios
In general, we believe that the performance of the local financial markets since January 2017 does not reflect the civilized and economic face and the political stability of the magnificent UAE planet. This is the feeling of most traders in the market. This blatant contradiction created a wave of questions looking for answers. Unfortunately, Which requires a full effort to restore confidence through the convergence of all the efforts of those concerned with the local markets of officials and departments of markets and houses of expertise and technical analysts and traders to spread the culture of investment and away from the random irrational decision-making and strengthening mechanisms supporting all administrative and social levels
Positive driving messages
We believe that the historical picture attached to this issue is an important positive message directed by the wise leadership to investors in the local markets of the UAE, but we believe that such positive messages should be more clear, more direct and more numerous and closer to investors and reinforced by executive decisions awaited by observers of local financial markets Which would raise the level of confidence in the market, such as the establishment of new sovereign funds to take advantage of current prices and play the role of a real market maker, and restructuring the regulations and internal systems of markets to reach perhaps to the expected merger between the two markets, Coordination principle of transparency, disclosure and corporate governance departments and markets
Spotlight and Hopes
Despite all these challenges, constraints and reasons, the current price decline has exceeded the limit of natural impact, but reached the height of extremism in the practice of reaction to any negative may exist, and we think we have reached prices became attractive to re-positioning, especially in the Dubai Financial Market, which does not Technical remains at 3081 as a support level targeting 3171 points and 3220 points which, if returned, will strengthen the technical movement and return to attract new investments, while the final bottom of the market seems so far unknown, although we think it is very close even though the pessimists and skeptics The numbers look very While the technical performance of the Abu Dhabi Financial Market was better in the past weeks with the return of the market over the top of January at 4651 to achieve a distinct weekly closing at 4688 points, achieving a rise by more than 2.25% and technically the road became open to returning to resistance to 4900 points
