DFM declines 1.10% on listless trading

Trading on Dubai Financial Market (DFM) on the last day of the week remained weak with the benchmark index tanking 18.74 points or 1.10 per cent to close at 1,683.69, just above what analysts maintain the support level of 1,680 points.

Of the  28 stocks traded, 20 declined while just 5 managed to advance, with all sectoral indices,  except telecom pulling the market down on Thursday.

However, analysts believe the market has yet to reflect the positive news flows in the past few days, mainly, Dubai bond issue and Emaar’s announcement regarding its offering of $450 million of convertible notes.

“The correction seen on DFM today has to do with profit booking by investors. The market got in the end-of-month mode as trading was weak throughout the session. The market had moved up quite significantly in the recent weeks, and now there're no further catalysts to push the market higher. However, today's market movement didn't reflect the Dubai bond positive news,” Chahir Hosni, Sales Manager (Mena equities), EFG Hermes, told this website.

He said there seems to be a little bit of ambiguity among investors over Emaar Properties' announcement regarding its offering of $450 million of convertible notes.

Major decliners on Thursday included Aramex, Al Madina for Finance & Investment, Global Investment House, DFM and Tabreed.

Going forward, the short to medium term outlook remains stable and positive for DFM, Hosni said.

“The oversubscription of sovereign bond issued by Dubai is a positive news and shows that there is tremendous appetite for Dubai government bond among investors. It is also a signal that confidence is returning to the UAE's fixed income issues. Overall, these positive news flows would boost investment sentiments on the DFM in the short to mid term,” he added.

“DFM Index again could not cross the 1,720 -mark and remains sideways just above the support levels of 1,680 from last few sessions. A close below the support of 1,680 may form a short-term top. Lower supports are seen at 1,657/1,630 the 200 day and 20 day EMA,” Shiv Prakash, Head Technical Analyst, CapitalTA, a trading advisory firm on Indian, UAE, Forex, and commodity markets said.

Profit taking was seen on Emaar from the highs of Dh3.83 and later ended near the previous lows of Dh3.72 with a net loss of 1.84 per cent. Du on the day chart broke the long-term trend line resistance and looks to move sideways up until Dh2.85 in the near term. Lower supports are at Dh2.45, which can be used as the stop loss on the long positions, he added.
 

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