Of course, the GCC was also impacted by the fall in oil prices. Nonetheless, the surge in liquidity this year shows that some of the liquidity unleashed by the world’s major central banks is reaching the shores of GCC.

So we can expect higher trading volumes this year. Moreover, oil prices are stable, which reduces the macro-economic risk. GCC indices are also expected to benefit from recent capital market reforms, the launch of new financial instruments, better corporate governance practices and disclosure as well as inclusion of their markets in global benchmarks like MSCI and FTSE Russell.

DFM’s quarterly results lay testimony to this fact. The exchange attracted 3,194 new investors and foreign investors now account for 51 per cent of trading value. The profit for first nine months rose by 26 per cent to Dh120.1 million while total revenue was Dh271 million, when compared with Dh241.6 million in the same period last year.

The launch of equity futures and the proposed listing of a new real estate investment trust is likely to further boost volume. For investors interested in riding the liquidity wave, the DFM is a good proxy.

Besides, they need not worry whether markets are going up or down. DFM, with a market capitalization of Dh6.696 billion yields 2.99 per cent.

– Vijay Valecha is Chief Investment Officer at Century Financial.