Financials, telecom and real estate help ADX rise amid calm trading

All sectors on the Abu Dhabi Securities Exchange (ADX) advanced yesterday with the exception of insurance, which remained flat as the market went through a bullish spell even though trading remained calm.

The general index added 27.08 points, or 0.99 per cent, and closed at 2774.37 points thanks to upside movements by market heavyweights including etisalat and banking stocks.

Etisalat advanced slightly to Dh12.10 while NBAD and FGB witnessed strong upward movements as they added 4.46 per cent and 1.42 per cent respectively. ADCB surged by 4.71 per cent to close at Dh1.78.

"Even though there are no fundamental changes in the banking sector there is a rally in its stocks," said senior market analyst Wadha Al Taha. "There is still a liquidity issue on the markets and according to the UAE Central Bank the gap between deposits and loans widened during January.

"Also the current bullish trend in banking stocks has no relation to their results. For example ADCB is the only bank on the ADX that reported losses yet we see strong rallies by the stock. "

He said the rally by banking stocks was the major factor behind the ADX's gains during the past two sessions.

Hassan Al Saleh, Deputy Head of Institutional Equities at Al Ramz Securities, believes banking stocks are advancing on the ADX because of accumulations by foreign institutional investors. "There are accumulations on selected stocks such as NBAD and this is creating bullishness in banks," he added.

Real estate and energy stocks remained the main players on the market. The turnover advanced with 92.2 million shares worth Dh181 million changing hands. There was concentration of trading on the real estate stocks Aldar and Sorouh as they accounted for 60 per cent of the total trade value. The stocks advanced by two per cent and 2.33 per cent respectively.

Omar Al Kurdi, a trader at Tadawul for Shares and Bonds Mediation, said: "Real estate stocks have turned bullish due to the rally in Emaar."

 

Dana rises

 

Dana Gas remained the most active stock on the ADX by volume for the second consecutive session as it jumped 4.76 per cent to close at Dh0.89. There was strong buying interest after the company announced two gas discoveries in Egypt. Increasing oil prices also added to the sentiment.

 

Mixed trading in GCC

 

The GCC stock markets had mixed fortunes yesterday as the indices in Saudi Arabia, Kuwait, Oman and Bahrain fell while Qatar, the DFM and the ADX advanced.

This mixed trend came amid a strong rally by the global markets and oil prices, which were seen as the main movers of regional stocks. Qatar's index jumped by the largest amount seen in 12 weeks on strong market sentiment while Saudi Arabia's Tadawul index fell from its four-month highs on profit booking.

Oman's index went down on selling pressures while National Bank of Kuwait dragged other Kuwaiti stocks down. "There are some differences in the performances of regional markets on a daily basis but these differences reduce on a monthly basis," said Wadha Al Taha. "The main issue for the regional markets is the level of liquidity in the banking sector. Their performance depends on the banks' ability to recover from crisis."

 

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