UAE bourses to see additional growth in 2014: Analysts

The UAE and other Gulf bourses are expected to continue their upward trend during the remainder of the year, analysts said.

Fouad Fahmi Darwish, Senior Vice-President of Brokerage Department at Kuwait’s Global Investment House, expects the emirate’s two bourses to rise, but the Abu Dhabi bourse is set for slower growth.

“We are and continue to be bullish on both Abu Dhabi Securities Exchange and the Dubai Financial Market; we continue to see additional growth in DFM albeit current and year-to-date growth level noting a somewhat slower pace in Abu Dhabi bourse,” Darwish told Emirates 24l7 in an interview.

He said: “Although this isn’t fundamentally substantiated, I believe that we will continue to see inventory buildup on and upward movement on real estate stocks (mainly Emaar, Arabtec, UPP and Aldar); in addition to a couple of picks from the banking sector albeit profit taking activity becoming much due and needed to establish new inventory build-up and support levels.”

UAE shares dropped on Thursday after sellout by frontier funds.

Dubai's bourse fell 1.2 per cent with most stocks in the red. Builder Arabtec, which dominated trading, fell 1.7 per cent to Dh4.71, even though its biggest shareholder and former chief executive Hasan Ismaik said on Wednesday the stock was worth over Dh5.

Abu Dhabi's bourse slid 1.1 per cent and three large banks, all parts of the MSCI index, were the main drags on the index.
Abu Dhabi Commercial Bank dropped 5.8 per cent, National Bank of Abu Dhabi fell 2.1 per cent and First Gulf Bank was down 1.4 per cent.

Global Investment House’s Darwish said good fundamentals, recovery in economy, renewed interest in the real estate market and foremost the bullish sentiment of the investor will be the major factors driving the market.

“Overall earnings for Q2 2014 have also been good and encouraging in addition to a very supportive government and improving regulatory framework becoming more accommodating for local and institutional clients alike,” he said, adding that banks and construction/real estate sectors usually stand out as the movers and shakers in the UAE markets.

Darwish advised day traders to identify a profit margin and/or a floor to retain stocks and avoid trading on margin.

Amon the other Gulf indices, Saudi and Qatari stocks last week hit record highs with Tadawul All Share Index hitting 6-year high while Qatar index touched 6-year high.

“Though the (Saudi) index is currently trading above where market analysts see its fair value, we expect it to maintain these levels, with consensus earnings growth forecast at 20 per cent for 2014 and 15 per cent for 2015.

“The near term economic outlook for Saudi Arabia remains positive and is centered on the outlook for the global oil market,” said Arjuna Mahendran, Chief Investment Officer at Emirates NBD.

“Barring any untoward geo-political events unfolding, we expect regional GCC equity markets to continue to be well bid,” he added.
 

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