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DFM profits soar on market recovery

dfm interiorDubai Financial Market, the Gulf Arab region’s only listed bourse, said on Wednesday that first-quarter net profit surged eightfold, outstripping analysts’ expectations as trading volumes ballooned.

The exchange made 215.1 million dirhams ($58.6 million) in the opening three months of 2014, compared with 27 million dirhams in the corresponding period of last year, it said in a statement.

Analysts at HSBC and Global Research had expected a quarterly profit of 202 million and 109 million dirhams respectively.

Trading commissions are the main source of income for DFM, and trading activity rose sharply as the Dubai equity market recovered from the global financial crisis.

The value of traded securities jumped 429 percent during the first quarter of 2014 to 110 billion dirhams, DFM said.

The company’s total revenue increased 289 percent to 255.6 million dirhams in the quarter. Operating expenses rose to 40.5 million dirhams from 38.7 million dirhams.

Dubai’s stock market is one of the best performers in the world this year and DFM’s main index rose 32 percent in the first quarter.

Index compiler MSCI will upgrade Dubai, as well as Abu Dhabi and Qatar, to emerging market status at the end of May, which has prompted increased interest from foreign investors.

Dubai’s government, which has a majority stake in DFM, has long been in talks with neighbouring Abu Dhabi about merging the two emirates’ main bourses. A top Dubai economic policy maker said this month that such an agreement had been reached in principle but nothing had been finalised.-Reuters