Tuesday, November 28, 2006

DFM, again

The Dubai Financial Market continues to make new lows, almost every day. New lows made the front page of the local papers at first, but now new lows aren’t even news.

The fall seems inexorable.

A few weeks ago, the local newspapers reported (after the market had fallen more than 60%) that the government had been propping it up, but had been ordered to cease. Apparently, the newspapers were reporting accurately. The fall of only 60% seems to have been the result of government intervention, and, now that it’s gone, a mere 60% seems like a small fraction of the amount by which the market will drop.

At current prices, the return is good, price to book is good, price to earnings are good, but everyone wants to sell, not buy.

And the bottom is nowhere in sight.

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