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AGCC investors buy UAE stocks

Many investors and market intermediaries see this as a systematic move by a few AGCC investors and a few in the broking community to make a windfall gain from these stocks when the market opens up for AGCC nationals. A recent UAE cabinet resolution in favour of opening up the bourse to AGCC nationals on equal footing with local investors is said to have fuelled the speculative buying.

Many market operators see the speculative buying in anticipation of change in the law will adversely impact on the stability and reputation of the UAE bourse. The reputation of the UAE market had come under threat recently following the allegations of insider trading in Dubai Islamic Bank shares. The market came under cloud as the information about a proposed rights issue was selectively leaked to market operators a day prior to it was made public, resulting in a sudden surge in trading volumes and prices of the stock on DFM.

The new allegations have cropped up barely two weeks since the DIB episode. A UAE investor, on condition on anonymity said that a few brokers are buying up stocks on behalf of regional investors and some AGCC operators are perpetrating speculative buying and called on authorities to investigate the issue. Responding to Khaleej Times queries on the alleged speculative buying by AGCC investors on the UAE market, Eisa Kazim, Director of Dubai Stock Market, said only Emaar, Amlak and Tabreed were open to AGCC investors prior to the Council of Minister's resolution. He rejected that there have been any clandestine operations, and said the surge in trading volumes in some stocks during the last few days have been attributed to increased activity on the market.