UAE bourses see corrections after Sunday’s plunge
DFM INDEX UP 0.9% AS ANALYSTS PREDICT MARKETS ARE CLOSE TO BOTTOMING OUT
The UAE’s equity markets rose slightly yesterday, just a day after the Dubai Financial Market (DFM) dropped to its lowest levels in over 11 months, weighed down by a five per cent drop in oil prices on Friday and the terrorist attacks in Paris.
The attacks by the Daesh terror group in Paris on Friday night, which killed 129 people, took a toll on global financial markets, with European and Asian shares opening lower yesterday.
When UAE markets opened a day earlier, the DFM index slid nearly four per cent.
The DFM index yesterday rose 0.89 per cent to 3,174.27 while the Abu Dhabi Securities Exchange (ADX) general index rose 0.96 per cent to end the day’s trade at 4,135.99.
In Dubai, the market’s powerhouses ended with a mixed performance, with Arabtec share prices surging 8.41 per cent to reach Dh1.16, Amlak jumping 8.21 per cent, and Damac Properties up 2.88 per cent.
Arabtec and Amlak had each suffered as much as 10 per cent declines over the past week, making valuations more attractive for speculative investors.
Meanwhile, Emaar was down 0.85 per cent, Emaar Malls slid 2.73 per cent, and Drake and Scull International fell 0.48 per cent.
Trade values on DFM were higher than average, reaching Dh500.6 million, though Arabtec alone accounted for 23 per cent of the trade value.
Lot of exits
Tariq Qaqish, head of asset management at Al Mal Capital, said that there had been a lot of exits from the market by foreign investors during the day, explaining the drop in share prices of companies like Emaar, Air Arabia, and Dubai Parks.
“The market is oversold, and I believe we’re closer to the bottom. I don’t see a significant downside from here ... I think most of the negative news has already been priced in. The most important news coming up will be the US interest rates, but some of the expectations about rate hikes are priced in already,” he said.
Analysts have long expected the US Federal Reserve will announce a hike in interest rates this December, with the Reserve’s chairman describing that as a “live possibility” supported by growing US jobs data and falling unemployment rates.
Qaqish added that he expected more corrections in the markets over the next month and a half.
“I think investors will be looking at rebalancing their portfolio, looking at stocks that make sense and are feasible in terms of revenue stream and cash flow,” he said.
In the capital, Ras Al Khaimah Co. for White Cement and Construction Material topped the gainers’ list with a 6.84 per cent increase, followed by Methaq Insurance with 6.25 per cent, Ras Al Khaimah Cement Company with 5.06 per cent, Waha Capital with 4.88 per cent, and RAK Properties with 4.35 per cent.
Etisalat stands out
Etisalat was the most actively traded stock in terms of value, accounting for 38 per cent of the Dh227.8 million traded on ADX after an announcement on Saturday that Etisalat will be added to MSCI’s Emerging Markets Index at the end of this month.
In Saudi Arabia, the Tadawul index also saw corrections, ending trade 1.14 per cent higher to reach 6,960.09.
Of the 33 stocks traded on DFM, 19 went up, 13 went down, and one remained unchanged. Of the 27 stocks traded on ADX, 15 advanced, eight declined, and four remained flat.