Emaar Properties led a bounce on the Dubai Financial Market (DFM) yesterday amid positive indicators from the global and regional markets and improving investor sentiment on the local markets.

Emaar witnessed a strong movement and rallied during the second half of the session to close at Dh3.17, up six per cent. The stock's rally helped the general index to add 36.92 points, or 2.33 per cent, and close at 1621.73.

The market opened in positive territory and rose in early trading, but most of its gains were wiped out later in the first half of the session. The last hour of trading saw heated trading in Emaar and the stock continued to advance until it closed at the highest price recorded during the session.

The bullish trend in Emaar came amid positive news about the company as reports said its Indian subsidiary had received approval for an initial public offering. Sentiment on the DFM improved as global markets witnessed a strong rally during the weekend and oil prices jumped above $80 per barrel, giving positive indicators to investors about the outlook for the UAE economy and the GCC region in general. Yesterday's rally in Emaar increased expectations that the bounce on the DFM could continue during the coming sessions as investors start to inject some liquidity into the market.

"Emaar led the rally after several positive indicators about the company as well as the global and regional markets," said Hosam Al Husseini, Head of Brokerage at Emaar Financial Services.

"Emaar has consolidated around Dh3 during the past two weeks and we noticed accumulations in the stock by local investors.

"Yesterday, foreign investors and institutions started to buy the stock and this supported the bounce."

"Even though some investors accumulated the stock at lower prices, we did not see selling pressure during Emaar's rise and this is a very positive indicator that the stock, and the DFM in general, will maintain this bounce during the coming few sessions. Investors are holding their positions in the market and this is another positive indicator."

However, there was strong concentration of trading on Emaar, which accounted for 49 per cent of the total trade value. The turnover on the market almost tripled compared with last Thursday's session when the DFM recorded the lowest turnover since the beginning of the year.

Almost 166.8 million shares worth Dh279.4 million changed hands during yesterday's session, and the trade value in Emaar reached about Dh137.2m.

Other active stocks, including Arabtec, DFM, DSI and Air Arabia, also advanced during the session.

Abdul Hakim Jamil, a financial analyst at Al Brooge Securities, said: "Despite the general uptrend, Emaar and Arabtec showed relatively wide price gaps, which attracted some speculators.

"This positive movement may attract investors to other stocks that did not move and this may help the DFM index to advance during the coming few sessions. Emaar may face some profit booking in the near future before it resumes its rally to Dh3.25.

"The price gaps in leading active stocks opened the way for speculators and this was clear from the relatively strong turnover as daily traders were turning over the same liquidity several times during the session."

Ehab Rashad, Trading Manager of Director Broker for Financial Services, agreed that the DFM's current bounce could continue in the short term.

"The DFM index went through a negative period of fluctuations below the 1,600-point level during the recent sessions. Yesterday was a positive session and the index broke through this level, which turned to be its support area."

"The index will face a critical test tomorrow [today] to confirm this breakout. The index should move above 1,640 points to give confirmation and then rally to 1670 points. The current sentiment is giving positive indicators that the market may be able to continue this bounce. The turnover increased significantly yesterday and this will attract more investors who have remained on the sidelines for a long time."

However, Rashad stressed the turnover would have to pass the Dh400m level to confirm that the DFM was changing its long-term downside trend.

"There is concentration on Emaar and few active stocks and this situation is expected to continue in the near term. The sentiment will continue to be choppy until there is a rally across the board and other stocks can produce strong price gaps to attract investors and new liquidity to the market."

DNIR among top gainers

Dubai National Insurance and Reinsurance Company (DNIR) was among the top gainers on the DFM yesterday as it added 4.57 per cent to close at Dh2.29.

The stock advanced from the start of the session and was the top gainer during the first half of trading after the company's board considered a proposal to distribute 25 per cent cash dividends and 10 per cent bonus shares to shareholders. The company is to hold a general meeting on April 14.

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