Stocks in the Middle East metropolis of Dubai continued to see wild fluctuations on Tuesday, with the benchmark index dropping 4 percent, before regaining ground to trade 3 percent higher.
The Dubai Financial Market (DFM) General Index ended the day up 3.17 percent at 4,067 points, after days of bumpy trading amid concerns about the city state's booming housing market. The stock index saw its biggest one-day fall since August on Tuesday, and finished June with a monthly drop of over 20 percent – its largest monthly fall since November 2008.
While this might be enough to scare away some risk-averse investors from the United Arab Emirates, the bourse was one of the best performers last year and is still up 20 percent year-to-date after a stellar rally in April and March.
Real estate stocks have been driving recent market movements. Dubai suffered a massive real estate crash in the wake of the 2008 financial crisis and there are fears that another bubble could be looming, with property prices growing 27.7 percent, year-on-year, in the first quarter of 2014, according to real estate agent Knight Frank. Regulators have been busying themselves with preventive cooling measures in response.
There has been a particular focus on Arabtec Holdings, the construction company behind the world's tallest building, the Burj Khalifa, over recent weeks. On Tuesday, the stock weighed down Dubai's wider index with a drop of 10 percent, before recovering to trade 10 percent higher.
The company has been under the microscope due to a bout of restructuring, with investors still unclear on the company's plans.
Nishit Lakhotia, head of research at Bahrain-based Securities & Investment Company, told CNBC that he hoped there would be more clarity from the new management on the company's strategy. He added that he was especially looking for more information about its real estate division and merger and acquisition plans.
"The stock remains very volatile and without sufficient details on their growth plans and ongoing restructuring, it is challenging to have a fair valuation for it," he said.
Amer Khan, a senior executive officer at Dubai-based SHUAA Asset Management, said he believed Arabtec stock's volatility was hardly surprising given its recent spectacular rise. The company's share price rose over 270 percent between the start of the year and mid-May.