UAE stocks bounce back as key shares rally

Dubai and Abu Dhabi stock markets recovered a day after hitting multi-month lows as investors saw value in the share prices on offer.

The benchmark Dubai Financial Market (DFM) index rallied a solid 6.1 per cent, or 244 points, on Wednesday, a day after the index suffered its biggest daily loss in 10 months, declining by 6.7 per cent on the day.

After briefly falling below the psychological 4,000-mark in intra-day trade yesterday, the benchmark DFM index closed at 4,253 points on Wednesday.

On the other hand, the Abu Dhabi Exchange (ADX) general index, which fell 3.3 per cent yesterday, recovered by about 2 per cent. The benchmark ADX index, which closed at 4,553.20 yesterday, was up 86 points, or 1.89 per cent on Wednesday to close at 4,639 points.

Dubai shares were in caught in margin call frenzy yesterday after market heavyweight Arabtec fell to its lowest level in almost 5 months.

On Wednesday, however, the share surged 5.13 per cent to close at Dh3.28 (yesterday’s close: Dh3.120) and remained trading topper for the day, with more than 211 million Arabtec shares, worth Dh654 million, changing hands.

Among the top gainers in Dubai on Wednesday were Takaful Emarat (up 12.54 per cent), Takaful House (up 12.29 per cent), Islamic Arab Insurance (up 11.82 per cent), Shuaa Capital (up 11.43 per cent) and Deyaar Properties (up 11.11 per cent). Shares in market heavyweight Emaar Properties, which closed at Dh8.5 yesterday, rallied by 8.8 per cent intra-day today to reach a high of Dh9.25 apiece. At the close of the market, however, Emaar shares gave up a bit of their gains and closed at at Dh9.10, up 7.06 per cent over yesterday’s close.

In Abu Dhabi, top gainers were Eshraq (up 10.62 per cent), Aldar Properties (up 8.73 per cent), RAK Properties (up 7.78 per cent), Union National Banks (up 6.14 per cent), and Waha capital (up 5.98 per cent).

YESTERDAY'S PERFORMANCE

UAE stock markets are witnessing price-corrections and perhaps the effect of upcoming holy month of Ramadan when trading levels traditionally decline.
 
On June 24, the benchmark Dubai Financial Market (DFM) index fell below the psychological 4,000-mark in intra-day trade, with the index down by 8.25 per cent to 3,940 points at around 1.40pm this afternoon. 
 
Abu Dhabi Exchange (ADX) too fell by about 3.9 per cent by around the same time, with the index declining by about 185 points to 4,525 points in intra-day trade this afternoon.

Shares on Dubai’s stock market have plunged by almost 27 per cent in seven weeks since hitting a multi-year peak on May 6, when the index reached an intra-day high of 5,389.80. However, since then, the benchmark index has slid, with analysts fearing an end to the bourse’s biggest bull market since 2005.

On the other hand, shares on ADX are down more than 13.5 per cent in less than a month, from a high of 5,255.35 on May 29 to 4,525 in today’s intra-day trade. 

Both DFM and ADX indices are at multi-month lows, with DFM index falling below 4,000 points for the first time since March. Meanwhile, the ADX last saw these levels (below 4,550) in January this year. 

Shares on DFM rallied almost 350 per cent in a little over three years after hitting a multi-year-low of 1,360 on March 2, 2011. The emirate’s economic recovery, aided by a booming trade, tourism and real estate sectors, boosted share trade.

After more than three years of solid gains, the market was indeed looking at some sort of correction, and the DFM General Index declined almost 7 per cent, or 360 points, to 3,940 at about 13.40 Tuesday afternoon, after falling from a high on May 6.
 
The drop was led by several real estate and financial services stocks that hit the circuit-breaker on the downside, sliding by 10 per cent, including Deyaar Development, Gulf General Investments Company (GGICO), Dubai Islamic Insurance and Reinsurance (Aman), Dubai Investments, National Cement Company, and  Islamic Arab Insurance Co. (Salama).

In addition, Gulf Finance House, Drake & Scull International, Union Properties, and the bourse’s own listing DFM were down 9.9 per cent each around that time.
 
On the ADX too, several stocks were down 10 per cent, including property developer Aldar and oil & gas major Dana Gas. Additionally, Methaq Takaful Insurance, Abu Dhabi Ship Building and Gulf Cement were down about 9.9 per cent.
 
On the DFM, trading topper Arabtec Holding, which tumbled 9.9 per cent yesterday, was again down 9.8 per cent today and was last trading at Dh3.120. Arabtec has been the primary mover of the market in the past few days.

The stock is down 53 per cent since the beginning of this month (June) amidst reports of layoffs and the fact that its major shareholder, Abu Dhabi-based Aabar Holdings, has liquidated part of its stake in the Dubai-based construction firm.

Hasan Ismaik, the CEO of Arabtec resigned last week after volatility in the company’s share prices. Ismaik became the first Jordanian billionaire to join the Forbes’ billionaire league after the businessman increased his stake in the publicly-traded Arabtec.

Emaar Properties, the stock with the biggest weighting on Dubai’s index, fell 8.5 per cent to 8.010 after falling almost 5 per cent yesterday.

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