UAE shares bounce back after Sunday sell-off

With UAE stock markets forming an integral part of the emerging markets, local markets continue to track their global peers and trended lower in initial trade this morning after a heavy sell-off yesterday.

Even as markets opened weak at 10am, both the Dubai Financial Market (DFM) general index as well as the Abu Dhabi Exchange (ADX) index closed in the green on Monday. 

The DFM index closed up almost 90 points (+1.93 per cent) while the ADX was up 47 points (+0.96 per cent). 

In Dubai, the top gainers were Takaful Emarat (up 9 per cent), Salama (+6.11 per cent), and IFA (+6 per cent). In Abu Dhabi, the gainers included Arkan (up 11.11 per cent), SCIDC (+5.26 per cent) and RAK Bank (+4.53 per cent).

Several regional markets opened after a nine-day Eid break yesterday, and investors decided to book their year-to-date profits as global markets have been impacted over the last week or so by concerns about deteriorating economic growth in major economies.

Earlier story

A couple of days after US stocks sank amid global gloom that led the world’s stocks lower on Friday, markets in the Middle East opened on a sombre note on Sunday but quickly mimicked their global peers.

What started as a slip quickly turned into a nose-dive, with shares across the region sinking deeper in the financial quicksand, prompting investors to book year-to-date gains in Dubai and elsewhere in the Middle East.

The Dubai Financial Market general index closed at 4,619.60 points, tumbling by 323.29 points, or 6.54 per cent, the most among its regional peers as markets reopened after a nine-day Eid break. The Dubai market is now back to where it was in late July, losing its gains made over a two-month period.

The Saudi Tadawul was only a whisker behind Dubai in its fall yesterday, plunging 6.51 per cent, or 706.1 points to close at 10,145.38 points, its weakest close since July 22.

The traditionally less volatile Abu Dhabi Exchange (ADX) saw the index plunge 3.5 per cent, or 177.76 points to end the day at 4,899.67 points, closing under 5,000 points for the first time in almost two months.

In Dubai, Arabtec was limit down at 10 per cent, followed by Takaful Emarat (-9.95 per cent), Union Properties (-9.95 per cent), GGICO (-9.91 per cent), and Dubai Investments (-9.86 per cent). Market benchmark Emaar Properties was down 7.42 per cent even as there were a number of other shares that closed down more than 9 per cent, suggesting that further declines may be in store on Monday.

In Saudi Arabia, the top losers were Tawuniya, or The Company for Cooperative Insurance (-9.99 per cent), Al Hokair Group (-9.99 per cent), Saudi Industrial (-9.98 per cent), Bawan (-9.98 per cent), Saudi Real Estate Co. (-9.96 per cent) and Arabian Pipe Co. (-9.95 per cent). A host of other shares closed down more than 9 per cent – in fact, more than a third of the traded shares on Sunday (56 shares out of a total of 161 traded scrips) closed down more than 9 per cent, indicating that a further rout is possible on Monday.

In Abu Dhabi, which saw comparatively smaller declines, Foodco was down 9.88 per cent, followed by Green Crescent Insurance Co (-8.79 per cent), Aldar (-8.02 per cent), Arkan (-7.27 per cent), and RAK Properties (-7.07 per cent).

Other major Middle Eastern markets too fell on Sunday. Qatar's benchmark fell 3 per cent with all 42 traded stocks ending in the red, while Egypt dropped 4.1 per cent, with 176 out of the 199 traded shares ending the day in the red.

The declines in regional markets came after global markets took a big hit on Friday as investors fled to the safety of government bonds after a raft of weak indicators from Europe and China collided with concerns about the US Federal Reserve’s plans to reduce monetary stimulus.

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