Etisalat, NBAD lead ADX gains on calm trading
Telecom and banking stocks remained bullish on the Abu Dhabi Securities Exchange yesterday and helped the index to remain in positive territory despite pressure from active stocks in the real estate and energy sectors.
The general index gained 11.92 points, or 0.42 per cent, and closed at 2871.79 points. The market remained in a calm upside trend as it approached its resistance level of 2900 points on low turnover. About 56.3 million shares worth Dh101.9 million changed hands, with Aldar, Sorouh and Dana accounting for almost 70 per cent of the turnover.
Real estate and energy stocks faced downside pressure as Aldar retreated 2.84 per cent to Dh4.12 and Sorouh lost 1.24 per cent to Dh2.40, while Dana declined to Dh0.88.
Heavyweight etisalat remained on a gradual uptrend and climbed 0.4 per cent to Dh12.60, which helped the index to maintain its gains throughout the session.
Etisalat's annual meeting had approved a distribution of a 35 per cent cash dividend for earnings during the second half of 2009. Shareholders registered on the shareholders' register by April 18 will be eligible for the dividend.
Banking stocks added more bullishness to the market as National Bank of Abu Dhabi advanced 3.34 per cent to Dh11.65. The stock attracted good interest yesterday after the bank announced the launch of the first exchange-trade fund (ETF) in the GCC region.
The new fund, NBAD OneShare Dow Jones UAE 25 ETF, will be listed on the ADX from today. It will follow the performance of the Dow Jones UAE 25 Total Return Index and provide investors with exposure to 25 blue-chip companies from across the country.
FGB closed flat at Dh17.55 as the bank continued its buyback programme. The bank bought 51,000 of its shares at an average price of Dh17.53, according to a statement to the ADX.
"There is good sentiment regarding banking stocks and this is creating good upside movements," said Fadi Al Said, Head of Mena Equities at ING Investment. "The banking sector looks in a good position and there are expectations of positive first quarter results after the banks cleaned up their financials last year."
Liquidity shortage
The ADX continued to face a deep shortage of liquidity yesterday as investors focused on movements on the Dubai Financial Market while banks and brokerage firms remained cautious about increasing funding for margin traders, according to analysts.
Ziad Dabbas, a financial consultant at the National Bank of Abu Dhabi, said credit facilities for investors in the market would remain tight due to uncertainty and sharp fluctuations in prices.
“There is a tight liquidity situation in the market as banks have reduced loans for investment in stocks in general,” he added, “Uncertainty about some sectors as well as fluctuations in prices created high risk for those investing in stocks so the banks are not ready to expand credit in this sector.
“Also brokerage firms have suffered severe losses and face tight liquidity or are not ready to provide margin trading facilities for their clients to reduce the risk in their operations.”
Tadawul at 17-month high
The GCC stock markets had a mixed day yesterday as Saudi Arabia’s Tadawul index climbed to a new 17-month high of 6756.98 points, a rise of 0.27 per cent.
Banking and telecom stocks played a major role in the rally on the kingdom’s last trading session of the week.
Zain helped the Kuwait Stock Market to close up amid speculation on the company’s plan to sell its African assets to India’s Bharti Airtel for a total price of around $9 billion (Dh33bn).
Meanwhile, banking stocks dragged the Qatar Securities Exchange down amid profit booking. Qatar’s banks witnessed a very strong rally over the past two weeks after the central bank indicated that it would allow banks to trade in stocks triggered strong buying interest.