"We have noted the positive sentiment surrounding both
As of Janaury 31,
Shares in the
Foreign institutional investors do not have a massive presence in the
Institutional investors, both in the region and outside, were also net sellers, divesting Dh23 billion in January, according to a monthly bulletin from the
The company was not alone in voicing concern about the possibility that valuations may be overheating.
"After the huge increase, the question is, is there room for growth in terms of value," said JÉrÔme Droesch, the chief executive of AXA Gulf. "Current valuations need to be monitored because after a good year like 2013, we have to compare the level of the market to the level of profit that has been delivered by the different companies and what is the potential of future growth. We haven't had enough visibility yet to assess really the situation."
Not all money managers agree with the assessment that stocks in the Emirates are too expensive.
Many analysts point out that shares were undervalued for a long time and that the oil-rich region's current account surplus as well as its currency peg to the US dollar make it stand out in an emerging market landscape littered with deficits and currencies that are losing their value.
"When you look at our markets, they have run a long way but they've come from a very low base," said
"It is coming to what I would call fairish valuation rather than being very undervalued. When you compare us to the other GCC markets, we're similar in terms of valuation. The underlying economies in the GCC are pretty strong. The next couple of years look very promising," he added.
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