When investing in the financial markets, the best investors use performance metrics to identify profitable opportunities. Of course, each country has their own set of factors that impacts their stock market. In the United States, many point to the major industries nationwide or happenings on Wall Street. However, abroad, the factors and dynamics are quite different. For example, the Dubai stock market, as known as the Dubai Financial Market (DFM), is tied to its own set of financial performance indicators. Like the US, markets, it has had its own ups and downs. To assess the market, the following factors may be taken into consideration.
3 UAE Stock Exchanges
Before investing in the Dubai Financial Market, you should compare the market’s performance against the others in the region. Since there are 2 other stock exchanges in the United Arab Emirates, a performance comparison can reveal a good buy or sell opportunity. Of course, if necessary, you could always choose to invest in one of the other foreign markets as well.
Dependency On Oil Prices
Many investors look at stability in a stock exchange. The DFM is highly tied to the success of oil. Since the government owns the exchange while earning their profits through oil, the fluctuating prices may sway investors one way or another. While prices are high, there could be overconfidence in the markets. Or, while prices remain low, there could be a bargain due to market concerns. In both cases, the Dubai market is highly impacted by oil prices.
UAE Dirham Trading Value
The Dirham (DH) has a strong impact on investment options. Depending on Dubai’s economic factors, along with the entire UAE, the currency strength fluctuates against the United States dollar. For US investors, stock prices and investments could earn additional profits due to currency fluctuations. These trades may require some foreign exchange trading experience. If done in high value transactions, the currency performance should be carefully considered.
Dubai Sector Performance
Like the US stock market, the DFM has major sectors investors can buy into. If you are able to speculate growth or decline in any specific sector like Investment & Financial Services, Real Estate & Construction or Transporation. Then, you can pick one sector to invest in. Being a less diverse exchange, the number of companies requires investors to really do their research with each sector. Odds are, you will have to single out a few key companies like Intuit stock that can influence the entire sector or market overall.
Consumer Income In Dubai
Finally, some investors look at the economy from the ground up. The consumer income in Dubai can show market expectations of the people. From working teenagers to homeowners, they might be expecting more expensive lifestyle choices, healthcare and salaries. As the salary and income trends are monitored, investors can develop an idea of which way the country will be going. Of course, a strong economy at the consumer level will indicate growth ahead.
To successfully invest in the Dubai stock market, these performance indicators will help you make profitable business decisions. In addition, you can keep up with the latest news, trends and happenings, to determine more opportunities or risks. Certainly, the more tools and analysis you can use, the more likely you are to make a profitable investment.