Short - Dubai Property

[UncleNed]

Does anyone know of a trade that I can enter to go short on the dubai property market? After coming back from a recent holiday there, i think the whole place is ripe for a massive downturn. But the problem is its not covered very well by brokers, although there are a few indices that track the dubai property market.

I usually go in to ETF's and I managed to get onto the DB Xtrackers short ETF on banks and its down quite well so far (obviously!), but I'm looking to take my profit and move into something else.

Any ideas or thoughts would be appreciated.

 

[shadowninja]

They think it will last forever. Just like the Americans in 1929... and everyone else in 2007.

Short property stocks in Dubai! The problem is in the stop loss size. A few hedge fund managers were shorting in 2007; many bottled it due to massive potential losses as the market continued to soar but a few such as John Paulson held out.

 

[UncleNed]

ideally i would like to short an index, because there major property companies are heavily involved with the govt, and a bail out could send my short the wrong way, even though the fundamentals are there for a short position. A bit like whats happening in the UK with banks.

 

[anley]

don't think it's possible but I would suggest anyway that you've missed the boat. That market was so speculative and there's so much development out there, much of it half finished that prices have already crashed I think at least 25%.

I think the market will go down by at least 50% if not more by the time the dust settles.

 

[porph]

don't think it's possible but I would suggest anyway that you've missed the boat. That market was so speculative and there's so much development out there, much of it half finished that prices have already crashed I think at least 25%.

I think the market will go down by at least 50% if not more by the time the dust settles.

Have you not contradicted yourself there?

 

[UncleNed]

Have you not contradicted yourself there?

my sentiments exactly. I would love to go short on the dubai property market if it has another 25% to fall!

 

[MOD_MOD]

Its with some reluctance that I offer this advice, since my positions on Dubai are long... but anyway unless you're a huge market maker it won't affect the index that much!

Short Emaar, Deyaar and Nakheel shares. Those 3 are the biggest developers in Dubai.

 

[anley]

Possibly but the first 25% is always the easy money. The last 25%, assuming it's going to fall is usually very hard to make money on because of the volatility - easy to get knocked out of your position if your timing is not spot on.

Plus I was talking about shorting physicaly property which of course you cannot do.

Whatever the case, Dubai is a busted flush. Hard to think otherwise as the most speculative markets on the upside normally end up the worse performers on the downside, purely because of the hot money and especially the wave of very hot money which buys right around the highs.

So has Dubai got anything going for it? Yes, if you love chavs (with money, or at least who love to give the impression they've got money) and overly vulgar people.

 

[UncleNed]

after giving this some further thought, i think shorting the dubai stock exchange could serve my purpose to gain short exposure to the dubai property market. The stock exchange itself is largely dependant on the property bubble in dubai (in fact the majority of the region is!).

 

[anley]

The trouble is about shoring a Dubai stock index is that I think the market is already down 75% or so over the last year. That means it's too late to short, unless of couse it's going to zero.

See this chart - http://www.advfn.com/p.php?pid=qkchart&symbol=FT^DUAE

I don't know if it's the right index though, kind of hard to find a chart even from the official Dubai stock exchange website which is strange. Wonder if they showed the performance chart when things were going well?

 

[UncleNed]

i think there is room for it to fall further. we are only just hearing of construction halting, credit tightening in the region. I think a default in the region could set off further falls, but i do see where your coming from.

 

[anley]

i think there is room for it to fall further. we are only just hearing of construction halting, credit tightening in the region. I think a default in the region could set off further falls, but i do see where your coming from.

You might be right Ned but can you handle the volatility? There's nothing to say that we go down another 50% from here but the market might rally 50% or 60% before it goes lower. Can you afford to short, suffer major open losses against your position before the market eventually goes to say 60 (re that index chart).

Study your market history, I think in the great depression Wall Street once rallied at least 100% from its then low before sinking to a lower low.

The volatility in all stock markets is going to remain high, the trick for you or anyone else looking to make good cash from further falls will be purely down to your market timing, and not so much your overall view on the market. By that I mean you could easily be right, but lose a tonne of money by shorting at the wrong price. And those are the most painfull losses of all.

Good luck anyway. Also, don't forget that the market always discounts the news in advance. This means that a market should start rallying even when the news is at its darkest.