2008 is drawing to a close with the nation’s stock indexes having their values cut and a banking sector set to enter a difficult year with restricted lending capabilities.

A lacklustre first-quarter earnings report from the property developer, Emaar, prompted a steady decline for the DFM that would continue for the rest of the year.

At the start of the third quarter, the EFG Hermes Dubai and Abu Dhabi indexes tumbled as foreign investors, jaded about any hope of currency reform, pulled out. The property and construction sector was the worst performer, dropping 67% amid negative sentiment. Banks and financial services, which comprise 45 % of the market’s capitalisation, fell 49 per cent over increasing concerns about the exposure of UAE banks to the US subprime mortgage crisis and worries that the Dubai property bubble may burst.

The National