UAE markets likely to rise 21% in 2009

Stock markets in the UAE, which fell as much as 72 per cent last year, are likely to rise 21 per cent in 2009 as confidence begins to recover in the second half of the year, Shuaa Capital said on Sunday according to a Reuters report.. "Negative economic and corporate news flow will present a headwind for stocks throughout 2009, setting a grim mood, especially during the first half of the year," the investment bank said in a note.
"But a sluggish economic recovery towards the second half of the year will allow the UAE markets to record gains of around 21 per cent in 2009."
Dubai's main index slumped 72 per cent last year, the worst performer in the Gulf. Abu Dhabi's benchmark fell 47.5 per cent. Shuaa said UAE markets were likely to exhibit lower correlation with global markets this year as most foreign investors had already exited.
Meanwhile, local government bodies could invest in equities, which "could provide the stimulus for a sustained market rally".
"Local governments, having accumulated massive reserves from the previous oil boom, have announced that they will use their resources to stimulate the local economies, and some might even invest in local equity markets," Shuaa said.