Take a chance on me

It’s just another day at the Dubai Financial Market. But for many hopefuls, it’s a nightmare come true. Alicia Buller reports from the trading floor.

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By  Alicia Buller Published  June 25, 2006

|~|30_NIK0980-200.jpg|~|Pensive: Many DFM punters are disillusioned after heavy fluctuations in the stock market.|~|It’s just another day at the Dubai Financial Market. But for many hopefuls, it’s a nightmare come true. Alicia Buller reports from the trading floor. It’s only 10.32am and Vidya Sidhu is already having a bad day. In fact, like many of the other ladies huddled around the screens at Dubai Financial Market (DFM), she’s had a bad six months. But this is not all that Sidhu has in common with her trading peers — like many of her new associates, she admits that trading stocks has become “like an addiction.” “It began because my husband sent me here,” she says, looking down. “Now I can’t help it but to come here every day.” And with this, the eight or so women Sidhu has met through her days at the DFM take it in turns to look at the floor, their hands clasped by their fronts, as if in some kind of implicit agreement. The trading floor is medium-busy today. And, for now, punters can choose to invest in 35 public companies, with a total DFM value of US$68.9 billion. The listed securities register boasts many of the UAE’s corporate darlings, including Amlak (US$7.8 billion), Aramex (US$5.6 billion) and Emaar Properties, the Dubai stock market's lynchpin (US$35 billion). A little later, barely 11.30am, and the markets have fallen 1.07%. Sidhu’s gaze is fixed firmly on one of the many screens that dictate real time DFM share values. She brushes the yellow cloth of her sari away from her face. “I first came here with minimal knowledge of the market, but it didn’t matter then as the market was so good. It was something new and exciting to do and it was the best way to occupy my free time as I don’t work,” she says. “But now I have lost a lot of money.” Sidhu says that she chose to invest most of her cash in Emaar last year. At the time, the property giant seemed something of a surety — thanks to the cash that was unabashedly flooding into the region. And the nation’s mood, like Sidhu’s bank balance, remained unerringly high. The 49-year-old housewife from Bombay was just one of the many open-mouthed beneficiaries of the gold rush. In her own words, she “made a pot” — until September 2005, that is, when the no-lose casino started to show signs of strain. And, like many of her associates, Sidhu hadn’t considered the broad-based factors that lead to the flux of share prices in any given market. On March 14 2006, or what is now referred to as ‘Black Tuesday’, the DFM took a major hit, shedding some US$10 billion or 11.7% of its market capitalisation. The correction converged with adjustments in Saudi Arabia where the market declined 17%. Industry pundits put the huge loss down to a range of factors, mainly that the regional market had been falsely inflated with large amounts of cash, which were then withdrawn. And it was Emaar Properties that took the biggest punch. Its shares slid, and slid — while Sidhu and her friends could only watch in horror. “No one saw it coming,” she says. “When I bought the Emaar shares, they were at about AED29, now look,” she points at the screen, where her friends remained transfixed — some with a supportive arm around one another, “they have dropped to around 12. Sometimes the prices fluctuate by as much as AED10 a day.” She draws a short breath, as if wondering how much to say. She says it anyway. “This is why we come here. We have to get our money back.” The smartly dressed woman behind Sidhu nods, eager to confess — her relief palpable. Zena Hussein is a dentist by trade. But she admits that she hasn’t been to the surgery all that much lately. “In some ways I wish I’d just stuck to my day job. By April I had lost 50% of what I invested. I first came here because of the ‘heat in the city’ vibe, but I have been so disappointed,” she says, peering out from her designer spectacles. Originally from Iran, Hussein says that she spends most mornings scouring business magazines with her newfound friends in the DFM coffee shop. “Every day I try to get what back I lost. It’s an entirely different game now because I have spent all my savings and I’m using my regular salary to try and win on the market,” she says, her voice disappearing into a whisper. “It’s affects my day-to-day life and I can’t buy the things I used to.” But unlike Sidhu, the Iranian dentist says that she is experienced at trading and blames her misfortune on the lack of transparency in the market. “There are no firm rules and regulations. I can’t trust the figures on the board. Something is up — I don’t know whether it is the brokers or the central government that seem to affect the figures. There is no rhyme or reason to them and I get confused. You can’t speculate in such a sentimental, rumour-driven and manipulative market.” Maybe so, but protest aside, on the surface there is little to differentiate the Iranian trader from the other women sat around the computers — legs crossed, and gazes tense. Take away their evident fragility, and this sea of well-dressed middle-aged females could easily be mistaken for a coffee morning confederate. But, for the ladies who were lured by the thrill of a quick buck, today’s gathering is nowhere near as innocuous. “If you trade internationally then it’s okay, because you’ll never get rich, or bankrupt, overnight — but here you can lose everything at once. There are lots of people here with very high blood pressure,” explains Hussein. Then — a shout from the back. The womens' necks crane collectively to get a look at the petite Indian woman dressed in a cerise gown and gold jewellery. She could be anyone’s mum — and she probably is. “Emaar is up,” the more-mature Indian lady hollers, “40 fils,” she adds for good measure. But the group looks disappointed. 40 fils is not enough. 40 fils, as one lady from Egypt tells me, is “nothing”. Still, in the face of crisis, these women from across the globe have united. They speak only one language: money. And the recouping of their life savings. But, according to Humeera Khan, a 29-year housewife originally from Kerala, it’s not like that for everyone. “The rich ladies, they are different,” she says. “They come here and they spend millions of dirhams, and they have lost lots of money — not small amounts. It means nothing to them. They have made the market unpredictable because they are gambling entirely without market knowledge. At least with us, we knew nothing before when our husbands sent us — but now we try to learn more.” It’s now 12.00 noon, and despite a small rise in Emaar’s stocks, there has been precious little else to shout about. The lady in the cerise gown is filing her nails amid the hubbub of the trading floor — barely pausing to glance up at the flickering red, green and yellow screens. There’s no point because she’s “seen it all before.” And perhaps she’s right. But cheery-faced Yassif Alraeesi begs to differ. The 21-year-old UAE national only started trading on the DFM three weeks ago, and he’s already made AED4000. Alraeesi, who works as a customer services assistant for a DFC trading account firm, says that it is easy for anyone to get an account. “As long as you’ve got a UAE bank account, then within a few days you’re eligible to trade,” he explains. “In ten years time, I hope to be a millionaire. I’ve invested AED100,000 (US$27,000) overall, some in Emaar and Amlak, and I’m confident,” he says with a wink. And there is reason to hope — somewhat. The UAE government has removed some restrictions on share buybacks, hoping to encourage companies to add some support to tumbling stock markets. The new rules allow firms to purchase up to 10% of their own stock, following calls from fund managers and brokers for support in reviving the market. First Gulf Bank recently became the first company to confirm plans for a buyback in anticipation of the new rules. And Emaar is also thought to be considering a similar move because, despite announcing record profits, the stock market reacted badly to the property company’s Q106 results. While the firm's first quarter revenues of US$610 million were 21% lower than the corresponding period in 2005, they were still significantly higher than last year’s average quarterly revenue of US$569 million. But still Emaar shares closed at AED16.25 (US$4.43) on 17 April 2006, down from about AED19 (US$5.18) the day before. But, today at 12.15pm, things remain uneventful with Emaar at a steady AED12-13 a share. Adbul Sharaf is twiddling his thumbs. The UAE national has been keeping a careful eye on the price since first thing this morning — and over the past four years, along with his equally keen group of friends. “I’m happy with the market, so happy, in fact, that I’m teaching my child the ropes.” And, with this, Abdul’s son, Mohammed, breaks his eyes away from the trading screen to offer a quiet nod. “The problems in the DFM stemmed from the fact that a huge amount of money was leaked from the market, the market was falsely inflated by Saudi investors and then they were told to take their money out, after the Saudi crash,” Abdul continues. “The KSA market came down so fast that it shocked people. But we are the masters here, and this is our boys’ club. The market is improving step by step, and we feel safer with it this way. Now we’re just waiting on the results for the second quarter.” Abdul adds that share prices don’t seem to be related to Emaar’s performance because the company is growing exponentially and expanding globally. “I’m confident of their success. Those who are worried about Emaar’s price now aren’t looking at the big picture, it takes time to build and grow a company. Shares are about the long game, not the short haul where you put money in and take it out like a casino,” says Abdul. But a few metres away, upstairs, in the ladies-only lounge, another collective of women traders has a different story to tell. Sonya, a local lady, is trading tips with her Egyptian and Iraqi friends. “We are careful, but some women who come here play with millions of dirhams. And these people get stuck here, because they are losing. It’s not a fair game. It’s only really a winner for the big people. Not for the new starters,” she says. And it’s not just the women who have lost out; many men have similar complaints about the difficult market. Jordanian Khaled Dejani says: “Everyone is losing. At the moment the market is not stable. It goes up and down so much that nobody trusts the companies even when they release good news.” It’s 12.25pm, and the mood on the floor remains defiantly mixed. It’s an extraordinary scene: on the trading floor, there are no barriers. Amongst the sacred flickering screens, men and women of all ages, backgrounds and nationalities mingle freely. But while losing money may appear to be a great equaliser, more lucrative times are in the offing, according to Mostafa Rasti, an independent broker from Iran. “People are drawn here by the fast growing economy, but they forget that oil prices take a few months to affect the market. They have no understanding. This not a gambling casino — where you might win or you might lose. All buyers should know about the companies they are investing in — from A to Z. I believe in the market and I know that in the long-term things will grow, I’m certain of it.” 12.30pm and the market closes. The overall UAE market indicator has risen by 0.17% to 468.6. And the shares of the much-discussed Emaar have finished 3.2% higher at AED12.9 apiece. So, not a great day. But, most important of all — not another bad day. Khan and Sidhu are sitting in the corner with the lady in cerise. All three women are deep in conversation. They are smiling. Because nothing has changed today. And tomorrow they are destined to meet again. Khan, for one, is resigned. When asked whether she regrets playing the market, an emotional cocktail spreads across her face — a mix of elation and shame. “I can’t say I do. It’s become like a full time job. It’s like gambling. And like any addiction — it’s hard to break,” she admits. But in the long term, if the more optimistic analysts are to be believed, the market may just come good. And, one day, the gold could pour back into Khan’s increasingly empty savings account. But for now, the imaginary jingle-jangle of money yet to be made is sounding ever more distant.||**||

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