UAE bourses rebound on Dubai World's offer

With Dubai World reaching an agreement with its main lenders, the UAE bourses witnessed marginal rebound in equities on Thursday following the renewed buying support in the market heavy weights such as Emaar, Arabtec, EmiratesNBD, National Bank of Abu Dhabi, First Gulf Bank, Aldar and Etisalat.

Seven banks, which hold 60 per cent of Dubai World’s debt, yesterday signed the terms of proposal, which offers full repayment over five or eight years allowing lenders to opt for different options.

EmiratesNBD and Abu Dhabi Commercial Bank, which have exposure to Dubai World, moved in different directions as the Dubai-based bank shares rose 0.69 per cent, while ADCB stock eased 0.54 per cent.

After Wednesday’s fall, Dubai Financial Market (DFM) and Abu Dhabi Securities Exchange (ADX) staged a modest recovery as the DFM general index and ADX index regained 0.35 per cent and 0.19 per cent respectively. During the week, the DFM index gained in three sessions.

Banking, insurance, telecom, realty and utilities stocks supported the DFM general index to gain 5.95 points to end the week at 1691.71 points, while ADX index added 5.37 points and closed at 2780.63 points.

Hassan Awan, an analyst at The National Investor, told Emirates Business: “The market moved positively to the Dubai World news, but in a cautious way as investors are waiting for more details on the restructuring plan. With the confirmation from Dubai World, banks will have some visibility and clarity as far as their provisions and impairment charges are concerned.”

However, the overnight losses on US markets coupled with persistent concerns on recovery in Euro zone continued to impact the trading sentiment negatively. Asian stocks also closed lower yesterday. This has resulted in pressure on gains on the bourses.

“The UAE markets are in line with regional markets as pressure on Saudi has been mounting. The drop in oil prices to $70 a barrel also impacted the market sentiment,” said Awan.

The exchange witnessed a marginal trading value of Dh265.62mn as more than 128mn shares changing hands over 3044 deals in 30 stocks. Indicating the under current positive strength of the market, 17 stocks advanced, 10 declined and three closed flat at their previous levels.

“The major reason for low volumes was the liquidity issue. Adding to this, we are already into summer, during which trading volumes would generally be under pressure,” said Awan.

Al Salam Bank-Sudan, Ajman Bank, Shuaa Capital, Takaful Emarat and Arabtec were the major gainers of the day, while Aramex, Commercial Bank of Dubai, Hits Telecom and Ekttitab were the major losers. 

Contrary to the normal trading pattern, ADX outnumbered the Dubai’s bourse in trading turnover figures as the UAE capital’s bourse recorded Dh317.82mn trading value and volume of 93.86mn shares in 1399 transactions involving 31 stocks.

Bildco, RAK Ceramci, RAK White Cement, National Bank of Abu Dhabi and First Gulf Bank were the major gainers on ADX, while RAK National Insurance, Abu Dhabi Aviation, NMDC, GCIC, Sharjah Islamic Bank shed the most.

As part of its buy back exercise, Gulf Navigation continued to purchase shares as it placed 23 buy orders for 1.47mn shares at different prices ranging between Dh0.548 and Dh0.557. The stock gained 0.73 per cent and closed at Dh0.554.

Emaar gained 0.81 per cent and closed at Dh3.74. EmiratesNBD shares added 0.69 per cent to end at Dh2.91. Arabtec stock moved up 1.30 per cent and closed at Dh2.33.

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