Following an abysmal second quarter, Morgan Stanley downgraded the Dubai Financial Market to underweight. The distinguished financial services firm substantially lowered its DFM traded value forecasts by 39% for 2008 and 2009, with the average traded value of the market approaching the bank’s forecasted ‘bear scenario’ of $400 million. In the report entitled Dubai Financial Market: Consensus too optimistic given poor trading, Tammam El Barbir, a Morgan Stanley banking analyst for the MENA Region, states that “the market remains too optimistic, in our view, with earnings forecasts implying 65% year on year growth in trading values, in contrast to our forecast of 17%. Bearing in mind the special circumstances that drove the strong Q4 2007 figures we see further downside risk to DFM’s price.” DFM shares have endured a dismal 2008, plunging with relative consistency from a year-best of $1.81 in early January. Subsequently, Morgan Stanley has reduced its target
