Abu Dhabi index closes flat on weak global cues

After two sessions of gains, the Abu Dhabi Securities Exchange (ADX) index retreated yesterday on profit booking and weak global cues.

Realty stocks fell the most, while the construction, banking, insurance and consumer sub-indices closed with losses of less than one per cent. Led by Aabar and Abu Dhabi Aviation, the industrial and energy sectors closed higher.

After registering upward movements in the previous two sessions, the ADX general index eased 0.43 per cent, or 10.92 points, to close at 2551.06 points yesterday. Reflecting the lack of clarity over the future direction of the market, the trading value on the bourse was a bleak Dh126.61 million.

In sideways trading, seven stocks advanced, 17 fell and two closed flat, as the exchange saw 65.22 million shares changing hands in 1743 deals.

Hesham Bakry, senior relationship manager at Prime Emirates, told Emirates Business. "Marginal profit booking and weak global cues pulled the ADX index lower. Aabar was the most active stock on the ADX after the announcement of its proposal for delisting."

Abu Dhabi Aviation, Aabar, Sudan Telecom, Waha Capital and Agthia were the top gainers of the day, while GLS, Asmak, UCC, Sorouh and Aldar were the major losers.

"One can buy select good growth stocks for a long-term perspective. The RSI indicator gives a clear breakout on the trend line. The stocks to watch are ADCB, Aldar, Dana Gas and Waha Capital," said Shiv Prakash, Equity Investment Analyst (Technical) at MAC Capital Advisors.

Aldar's shares fell 2.79 per cent to end at Dh3.14, the RAK Properties stock eased 2.63 per cent and closed at Dh0.37, while Sorouh dropped 3.48 per cent and ended at Dh1.94.

"Intraday today, if the ADX index remains below the pivot levels of 2552 points the profit taking may continue until the lower supports of 2535 points. A break above the pivot may start a rally until the resistance levels of 2570 points," said Shiv Prakash. Among banking and financial stocks, only Union National Bank and Waha Capital gained, adding 0.33 per cent and 1.82 per cent respectively to end at Dh3 and Dh0.55. Bank of Sharjah, First Gulf Bank, National Bank of Abu Dhabi and NBQ all fell less than one per cent.

Abu Dhabi Commercial Bank and RAK Bank dropped more than two per cent to end at Dh1.54 and Dh00.84 respectively. Though the market is attractive on strong fundamentals, it's unable to witness good volumes owing to uncertainty over the next direction. Market players have started looking towards the second-quarter results, which are expected to have a significant impact on the market in the weeks to come.

Aabar in limelight

Aabar was the most volatile stock on the bourse yesterday after the announcement of its delisting proposal. The stock fell five per cent in the first half and recovered in the second to end the session at Dh1.68 – a gain of 2.44 per cent.

"Investors have their fingers crossed over what the offer price will be. It is possible that it could be a premium offer. For the first time, a UAE-based company is considering delisting. We have to wait and see what the mechanism is going to be. I guess the company will buy shares from minority shareholders at a premium offer. I expect the stock could go up further today," said Hesham Bakry.

Shiv Prakash said: "Aabar, which was given a buy near Dh1.60, staged a smart recovery and is almost near the target levels of Dh1.85. The next resistance can be at Dh1.90. Those holding the stock shall trail the stop loss higher to lock the gains."

GCC retreats

The DFM and the Saudi market fell the most among GCC bourses yesterday following profit booking and weak global cues, including a drop in oil prices. The oil price slipped below $77 a barrel in global markets, leading petrochemical stocks downwards and pulling the Saudi Tadawul index lower by 1.35 per cent. The Qatar and Muscat bourses suffered minor losses, while the Kuwait and Bahrain indices had gains of less than one per cent.

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