Just as a rising tide lifts all boats, so a rising stock market lifts all spirits. As 2013 approaches its midpoint, equity markets in Abu Dhabi and Dubai are booming. As The National reported yesterday, the Dubai Financial Market's general index has climbed by 40.9 per cent this year, and the comparable index at the Abu Dhabi Securities Exchange shows 33.5 per cent growth.
Is this too much of a good thing? Investors who remember 2009 may be wary of market volatility even when it works in their favour. Certainly few people see 30 or 40 per cent growth as sustainable.
There are however good reasons to be optimistic, not necessarily about share prices but about the long-term vigour and stability of equity markets.
To be sure, the new money pouring into stock markets is partly a reflection of problems overseas, notably instability or worse in some Mena countries and economic stagnation or contraction in Europe and elsewhere. Also, low interest rates and bond returns add allure to equities.
Even without those factors, however, the UAE's stock markets would be more appealing than they were a few years ago. Over 40 regulatory changes in the last two years - on margin selling and short-selling, for example - have revealed official determination to build the solid infrastructure that mature exchanges require.
Government has also moved to clean up the detritus of the 2008-09 collapse. The merger of Aldar and Sorouh, for example, avoided a potentially nasty result for shareholders.
But what are the next steps towards making the country's stock markets bigger, more stable and better respected? The long-awaited graduation from "frontier" to "emerging" market status, as bestowed by the rating service MSCI, would be helpful, as investors around the world are naturally more comfortable with the higher rating.
But what a stock market needs most is stocks, and the exchanges, with barely 65 listings each, would benefit greatly from a chance to trade shares in some of the companies now wholly owned by governments.
Nobody can control the direction of the indexes. But continued prudent planning and oversight can make the UAE's stock markets more useful, to investors and to the national and regional economy as well.