Abu Dhabi index hits 5-week high as it nears key 4,000

ANALYSTS ARE ADVISING INVESTORS TO WAIT AND WATCH ‘AS SITUATION YET TO STABILISE’

The Abu Dhabi Securities Exchange (ADX) General Index index hit its highest level in five weeks to close in on a keenly watched 4,000-level as oil prices rebounded while in regional trade, Qatar’s index rose the most, gaining 5.51 per cent to close at 8,986.50.

Abu Dhabi’s index touched a high of 3,907 in trade, a level last seen on December 13, before retreating slightly to close 2.48 per cent higher than the previous day’s trading session at 3,889.24.

“The bounce back was due to oil and even the index has taken a beating for the past two weeks,” Muhammad Shabbir, head of equity funds and portfolios at Rasmala Investment Bank, told Gulf News.

Oil jumped more than 5 per cent to trade above $30 (Dh110.19) per barrel on the back of record demand from China.

Resistance level

Osama Al Ashri, a member of British organisation, the Society of Technical Analysts, said the index is expected to hit a resistance level of 4,039 but there remains a possibility of it going down to a support level of 3,717.

In stock-specific action, Aldar Properties ended more than 4 per cent higher at Dh2.03, while Abu Dhabi Commercial Bank closed 2.41 per cent higher at Dh5.53.

Aldar Properties is under risk as uptrend has been breached on the medium-term chart, with Al Ashri saying that the stock might reach support level of Dh1.57 within few months. He added that Abu Dhabi Commercial Bank may fall to a new low of Dh4.67 by next month. Dana Gas ended more than 2 per cent higher at Dh0.42.

Out of a total 27 stocks traded on the exchange, the shares of

[The Tadawul index] is in a high risk area, as the uptrend has been breached on monthly and quarterly chart. The first important support is at 4,789.”

Osama Al Ashr | Analyst

17 companies rose while those of nine others fell.

Elsewhere, the Dubai Financial Market General index closed 3.3 per cent higher at 2,765.97. “Dubai’s index is still trading in [the] high risk area and we are waiting for a new low of 2,925 by within few weeks,” Al Ashri said.

Arabtec closed more than 10 per cent higher at Dh1.17 while Emaar Properties closed more than 5 per cent higher at Dh4.64. Arabtec is still in an uptrend on the medium- and long-term chart and this may push it up to resistance level of Dh1.39, said Al Ashri. He added that Gulf Finance House (GFH) was oversold on the chart and sees it rising to hit a new target of Dh0.57 by next month. GFH ended the session nearly 7.5 per cent higher at Dh0.490.

Emaar Properties will likely hit a new low at Dh3.84 in the next few weeks, Al Ashri said. The stock ended 5.45 per cent higher at Dh4.64.

“The situation is yet to stabilise,” Rasmala Investment Bank’s Shabbir said. “If US markets do well for a couple of days, then it might be the time to re-enter but right now we are not advising [investors] to do anything. Investors should wait and watch.”

The Dubai index has shed more than 15 per cent since the start of the year.

“Investors should watch out for all the risky names that were aggressively sold like Emaar [and] ADCB,” Shabbir said.

In other markets, the Kuwait Stock Exchange (KSE) index ended up 0.59 per cent at 5,084.21. The Muscat Securities MSM 30 index closed steady at 4,981.58.

Egypt’s main index closed 2.63 per cent higher at 6,097.45. Amer Group was the top gainer, surging 14.4 per cent to 0.40 Egyptian pound after the company’s board decided to buy back 125 million shares at a price of 0.43 pound (20 fils), according to a bourse statement.