The news out of Dubai this week and last has primarily been focused on the country's debt, so we decided to take a look at how stocks in Dubai have performed both recently and over the last six years. The Dubai Financial Market (DFM) General Index is the main equity index in Dubai, and it starts with a base value of 1,000 on 12/31/03.
While the DFM General was closed last Thursday and Friday, it traded down 7.3% on Monday and 5.61% on Tuesday. While this is a big two-day drop, it doesn't seem as bad as it could have been given the global concerns about the country's sovereign debt. Since its 2009 high reached on October 14th, the index is down 22.83%, yet it is still up 12% year to date.
Since 2004, Dubai's stock market has taken investors on a wild roller-coaster ride. Unfortunately, investors are at the bottom of the ride and not the top at the moment. From the start of 2004 to November 9th, 2005, the DFM General rose a whopping 748% as oil prices shot up along with the global economy. After the DFM General peaked on 11/9/05, however, it declined 57% over the next year and a half. The index staged a 72% snap-back rally from 4/3/07 to 1/15/08, but then it jumped on the global meltdown bandwagon and has declined 71% since then. Currently, the DFM General is down 78% from its peak on November 9th, 2005, but it is still up 83% since the start of 2004. Click on the chart below for a better look.