Friday, October 18, 2019

Analyze the Market efficiency of Dubai Stock Exchange Thesis Proposal

Analyze the Market efficiency of Dubai Stock Exchange - Thesis Proposal Example The purpose of the study is to analyse the Market efficiency of Dubai Financial Market (DFM). The thesis will be based around Efficient Market Hypothesis (EMH) of Fama 1970. The term market efficiency is itself derived from the concept of Fama in 1970 which was then formalized and operationalized. The efficient market hypothesis (EMH) describes an efficient market as an entity where fresh statistics or facts are instantly mirrored in the correct format and value in its current security price (Lim, 2009). However the efficiency of financial markets has always been a debatable question which has also been examined empirically by Fama in the form of information sets accessible to the market and then classified Efficient Market Hypothesis into weak-format, semi-strong format and strong-format. It has to be kept in mind that the market efficiency does not really mean that the price of the market should be equal to the market value. It means that that the over-valued stocks and under-valued stocks should be deviated with randomness without incorporation of any kind of biasedness in it. Another implication of the efficient market analysis phenomenon is that the prices of the stock should be of some random walk and all the additional price changes in the near and far future should be only for practical purposes involved and incorporated in it (Abdmoulah, 2010). As the theory of time related with market efficiency came into existence UAE started to flourish. In past 30 years, UAE has exceptionally transformed its market and the growth rates have been tremendously making UAE the most sought out market after Gulf countries. With this transformation into the economic world, UAE started structuring financial markets like Dubai Financial Market (DFM) and Abu Dhabi Securities Market (ADSM) in the year 2000. Since their establishment the ADSM has grown by an estimated 343% while DFM (Dubai Financial Market) has increased by an astonishing

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