Tuesday, April 18, 2006

Still Falling

Like Snow on the Cedars of Lebanon, the Gulf Stock markets in general, and the Dubai market in particular, are still falling, though the Dubai market is still above March levels (but not by much).

In April, 2004, the Dubai stock market was at 200. In Fall, 2005, it rose above 1,300. Now it's a bit above 600.

It is said (in the local 'newspapers') that, when the Gulf Stock Markets fall, so do other things, causing marital difficulties. It was also promised that the Gulf governments would do something to support the markets (and, a fortiori, certain marital assets). But the promises seem more like jawboning (jack)asses than actual support.

As one of my favourite sites reports, Gulf Governments have good memories, they recall when markets went up by a factor of 6, and they want to keep those kinds of profits for local Citizens. So, while they are now hoping non-Citizens will invest enough so that Citizens will get all their money back, they put enough obstacles that most cannot.

What we have, then, in the Gulf, are very thin markets. They could go up or down by much larger percentages than are possible in mature markets. For any reason. Or for no reason.

One day trader told me last Fall that he'd never trade in Gulf markets, because of the thinness and lack of transparency. Like many day traders, he now says he trades the Gulf Markets regularly, and easily makes money as stocks move up and down.

Which sounds better than the rest of us are doing.

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