A bull market in Dubai stocks and strong gains around the Arabian Gulf all but vanished during the second quarter of the year as the euro-zone debt crisis reared its head and investors ran for cover.
Dubai's stock market remains the best performing in the Gulf so far this year, with the Dubai Financial Market (DFM) General Index up 7.2 per cent at 1,451.87 points.
But part of that reflects a bull market on the DFM during the first quarter of the year, which reversed almost completely during the second.
"The second quarter was a period of consolidation," said Yong Wei Lee, a senior fund manager at Emirates NBD.
"Regional indexes have lost over the quarter a good 11 to 12 per cent," he said.
"Saudi Arabia gave up quite a lot of its position, and Dubai as well." Dubai's benchmark fell 11.9 per cent by the end of the quarter, having dipped to within 35 points of entering a bear market between March and early last month.
But the quarter revealed deep investor unease over disclosure in the UAE.
During the first quarter, the open secret on trading floors behind Arabtec's meteoric rise, which resulted in shares gaining as much as 128.3 per cent between the start of the year and March, was that a big investor was accumulating shares.
When Aabar emerged in April as the buyer, it was revealed that Arabtec's rise was the biggest single factor behind the DFM's gains, accounting for more than half of the index's increases this year.
Aabar acquired the shares through multiple subsidiaries, each of which held fewer shares than the number required to breach the 5 per cent limit required for disclosure.
The use of this loophole sparked an outcry.
Ali Al Nuaimi, who heads the Federal National Council's finance committee, called for an investigation into the rumours preceding Aabar's announcement.
The Securities and Commodities Authority announced a move to amend takeover laws last month, although it did not specify when it expected the new regulations to take effect.
Last month culminated in the fourth straight year of disappointment for the UAE and Qatar over reclassification in the MSCI Emerging Markets index - one which, unlike previous tilts at an upgrade, was not accompanied by speculation among investors, who deemed local exchanges as having done too little to justify a promotion.
Investor fatigue over the much-anticipated reclassification was now entrenched in markets, said Aziz Unan, a portfolio manager at Renaissance Asset Managers.
"Honestly, I'd be surprised if people are still betting on that.
"I've been hearing that for the last 10 years or so."