DFM market capitalisation fell by 22 per cent in 2006
MATT SMITH BUSINESS REPORTER
The capitalisation of the Dubai Financial Market (DFM) fell by 22 per cent in 2006 compared to the year before.
In 2005, the market was valued at Dh399.3 billion, but last year this figure slumped to Dh311.3bn, following a 44 per cent decline in the adjusted value of the Dubai Financial Market General Index (DFMGI), from 7,426 to 4,127 points.
Last year’s correction followed an exceptional 2005, when the DFMGI increased by 195 per cent, while in 2004 it rose by 152 per cent.
The DFM’s 2006 capitalisation was almost three times its 2004 figure of Dh128.9bn, despite the correction, while in 2003 it stood at just Dh51.6bn.
Trading value also peaked in 2005 when shares worth Dh405.2bn were sold on the exchange. By 2006, this had dropped by 14.2 per cent to Dh347.5bn.
Nonetheless, this figure represents a 681 per cent increase on 2004, when trading totalled Dh51bn, while the exchange processed only Dh4bn worth of share sales in 2003.
Daily trading declined slightly between 2005 and 2006, with the former aver aging Dh1.35bn and the latter Dh1.28bn.
These figures dwarf the DFM’s performance in 2004, when average daily trading stood at Dh170m, while in 2003 it was Dh13m.
The market correction of 2006 failed to subdue investor interest in the DFM, with total trading volume increasing by 55.2 per cent to 39.6 billion shares last year, compared to 25.5 billion shares in 2005.
This pushed the daily average up 71 per cent over the same period, from 85 million to 146 million. In 2004, this figure was 17 million and in 2003 it was one million.
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