x Abu Dhabi, UAESaturday 20 January 2018

MSCI decision next week

Markets Update: It's the final countdown until the UAE and Qatar learn whether they will be upgraded to emerging market status by index provider MSCI.

The Dubai Index rose 0.2 per cent. Nikhil Monteiro / Reuters
The Dubai Index rose 0.2 per cent. Nikhil Monteiro / Reuters

The clock is ticking on an expected decision by the MSCI on whether it will upgrade the UAE and Qatar to "emerging market" status.

The global index provider is expected to issue a report next Wednesday on whether to reclassify the two Gulf markets, and traders are optimistic that both will be successful at last in their bids to attract international investors.

The Dubai Financial Market General Index rose 0.2 per cent to 1,386.27 yesterday, while the Abu Dhabi Securities Exchange General Index slid 0.3 per cent to 2,443.08.

"People are cautiously hopeful," said Talal Touqan, the head of research at Al Ramz Securities. "No one knows at this point, and it'll be a surprise either way. The market hasn't discounted for being included."

The inclusion of the UAE on the MSCI Emerging Markets Index is expected to spur global investors to return to the Emirates after a long absence. The UAE is currently classified as a "frontier" market, typically considered too risky by international fund managers.

"GEM [global emerging markets] funds show no willingness to own the UAE," analysts from Bank of America Merrill Lynch wrote in a research report this week, with data showing that the UAE has accounted for less than 0.1 per cent of emerging-market investors' portfolios since early 2009.

Internationally exposed stocks such as Emaar Properties and Drake & Scull International made gains on the main Dubai bourse, which was weighed down by a dip in Emirates NBD. In the capital, Etisalat, National Bank of Abu Dhabi and Sorouh dipped.