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16 April 2024

Heavier trading lifts UAE markets

By Matt Smith


Buoyant trading helped the UAE markets climb a combined 110 points yesterday, although analysts warn the fledgling recovery may be squashed by events from abroad.


The Dubai Financial Market (DFM) climbed 1.46 per cent to 5,735 points, while the Abu Dhabi Securities Market (ADSM) made modest gains, adding 0.81 per cent to 4,774.


After a subdued few days trading, with combined volumes slipping to below Dh1.5 billion, dealing was brisk yesterday. The capital’s bourse saw 351 million shares worth Dh1.5bn change hands, while for Dubai these figures were 462 million and Dh2.27bn respectively.


“The exchange fluctuations are still psychologically linked to the international markets,” said Wadah Al Taha, Emaar Financial Services’ head of research.


“This could be the start of an uptrend, but it’s too early to be certain – for that we will require three or four days of consecutive days, together with volumes of more than Dh5bn.


“I doubt what happened today will be repeated early next week and we will probably witness another correction very soon.”


Other analysts echo Al Taha’s caution, with few prepared to declare the beginning of a new bull run. In the medium term, there seems consensus that super full year results, bumper liquidity and the ongoing expectation of a revaluation of the dirham make a major market rally inevitable at some point within the next two months.


Meanwhile, Emaar enjoyed a return to form, increasing 2.7 per cent to Dh11.40, although it slipped back from an intraday high of Dh11.55.


“Emaar and the DFM’s own stock led the market,” said Alaa El Din Moustafa, EFG-Hermes chief dealer.


“Borse Dubai has announced it is close to sealing the deal for OMX, while Emaar plans to set a minimum dividend, so these news drove buying.”


The DFM started strongly, surging almost 100 points upon opening and the upward trend continued until past the mid session mark, before a sustained sell off wiped out some of the gains.


“Day traders and speculators wanted to close their positions at the end of the week after making some good profit,” said Moustafa.


Foreign institutional investors were relatively quiet yesterday, with local funds, high net worth individuals and speculators behind the rise in volumes.


“There was some serious buying in Dubai Islamic Bank shares as investors wait for the lender to announce plans for dividends distribution,” Ayman El Saheb, Darahem Financial Brokerage director of operations, told Dow Jones Newswires.


“If it is anything close to what they gave out last year, investors will be happy.”

In value terms, Dubai trading was concentrated on the blue chips, most notably the DFM, Emaar and Dubai Islamic Bank.


“The smaller stocks will follow their lead and if Emaar continues to make a recovery, then it should bring the rest of the market with it,” added Moustafa.


On the ADSM, Rak Properties, National Bank of Abu Dhabi and Sorouh gained more than one per cent.