The level of investor interest was reaffirmed by the early May IPO in Finance House, a joint venture between the National Investorand Abu Dhabi Investment Company, which closed more than 74 times oversubscribed. 'The offering was a small one [at AED 110 million], but that there should be such interest in a greenfield company, which has yet to begin operations, illustrates the scale of demand in a still relatively underdeveloped market,' says Walid Shihabi, senior analyst at the local Shuaa Capital. The IPO in Amlak Finance, the property finance arm of Dubai-based Emaar Properties, set the standard in February, closing 33 times oversubscribed.

Further IPOs are in prospect. There remains considerable speculation that shares in Dubai-based carrier Emirates and industrial firm Dubai Aluminium Companywill come to market by the end of 2004, while a number of smaller IPOs are in the arranging phase. Two new stocks were listed in April - Amlak, on the Dubai Financial Market (DFM), and Bank of Sharjah, on the Abu Dhabi Securities Market (ADSM). Both stocks were among the heaviest traded over the course of the month, during which accelerating market activity led to total trading volumes more than doubling.

Dubai Islamic Bank (DIB)and Emaar stocks continue to stand out among the top performers. Emaar shares were April's most traded by value, as the developer aired plans for overseas expansion. DIB's share price has been rising since the start of the year on the back of a string of high-profile deals. In mid-May, the bank announced that it was raising its paid-up capital by 50 per cent and establishing a lease financing firm to serve local and regional investors.

Moving in the opposite direction have been the shares of Emirates Telecommunications Corporation (Etisalat), since the government in early April decreed the formation of a regulatory commission to oversee the introduction of competition to the local market. 'The market overreacted somewhat to the decree, which is still quite restrictive on the potential entry of competitors,' says Shihabi. 'I would expect to see some correction in the coming months.'

Among the sectors represented on the UAE's bourses, cement stocks continue to dominate upward movement, as prices for construction materials climb. 'Banking stocks also still have life left in them,' says Shihabi. 'Most are not yet fully priced.'

With no immediate end in sight to frenetic construction activity and high oil prices, the conditions that have been driving UAE stock prices upwards in recent months should continue. And investor interest is set to rise as increasing depth marks the market's growing maturity.