Investors watch a monitor at Dubai Financial Market April 27, 2014. (REUTERS/Mounir Saidi)
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When the Dubai market started its ascent at the beginning of 2012, it was cheap. By some measures, that is no longer the case; analysts estimate the market is trading at about 19 times estimated earnings for 2014, compared to about 10 times for MSCI's emerging markets index.Retail investors account for some 60 to 70 percent of daily trading, analysts estimate, compared to levels well below 50 percent for many other stock markets around the world.That makes retail players more powerful than institutional investors in dictating day-to-day market moves. It could also be seen in this month's response to an initial public offer of shares in Dubai, the first IPO on the DFM since the emirate's financial crisis froze primary market issuance five years ago.The IPO was designed to appeal to retail investors – shares were sold through a wide network of subscription banks – and the 275 million dirham ($75 million) offer, representing 55 percent of Marka's capital, was a massive 36 times subscribed.Retail investors' optimism appears to be built mainly on three pillars.
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