The Abu Dhabi Securities Exchange (ADX) edged up yesterday with support from heavyweights in the banking sector and a rally in real estate and energy stocks.
The general index added 20.46 points, or 0.75 per cent, and closed at 2747.29 points. Banking heavyweights, in particular NBAD, advanced and played a major role in the bounce. NBAD added 2.75 per cent and closed at Dh11.20 after it received approval from the Securities and Commodities Authority to cancel its share buyback programme.
First Gulf Bank (FGB) retreated slightly to close at Dh17.65. The bank continued its buyback programme and acquired a total of 26.75 million shares. FGB can buy an additional 110.75 million shares before December 30.
The strong positive sentiment on ADX came from active stocks in the real estate and energy sectors. Aldar and Sorouh received a push from the bullish trend in Emaar on DFM while energy stocks attracted buying interest due to the rising price of oil in the international markets.
"ADX witnessed calm trading as investors focused on the positive movement on DFM," said Hosam Al Husseini, Head of Brokerage at Emaar Financial Services. "However, this trend was reflected in selected stocks in the capital. Heavyweights played a major role in supporting the ADX index.
"Active stocks also turned bullish and helped the upward movement in the market. However, turnover remained at a low level."
Almost 85.2 million shares worth Dh169.2 million changed hands during the session yesterday.
Aldar attracted about 45 per cent of the trade value as it advanced slightly to close at Dh3.48 after announcing plans to distribute a five per cent cash dividend to its shareholders.
Abdul Hakim Jamil, a financial analyst at Al Brooge Securities, said Aldar and Sorouh turned active and rallied yesterday amid renewed buying interest after Emaar advanced.
"Active real estate stocks witnessed some fluctuations, which attracted speculators yesterday," he added. "There is a trend towards accumulations at current prices and the market may advance further in the coming sessions."
Al Husseini said he believed the ADX might witness further upside movements in the short term as the rally by the international markets and oil prices would give positive indicators to investors.
Meanwhile, despite Moody's decision to downgrade Taqa's credit rating to A3 (stable), the stock advanced slightly to Dh1.24.
Dana gains from discoveries
Dana Gas advanced by 3.7 per cent yesterday to close at Dh0.86 amid strong buying interest in the stock. The company announced two gas discoveries on the Nile Delta in northern Egypt and said production would start later this year. "Dana Gas has faced strong selling pressures, especially from foreign institutional investors, during the past few weeks," said Hosam Al Husseini of Emaar Financial Services. "Positive news renewed buying interest in the stock, which turned very active."
GCC indices advance
The regional stock markets, led by the DFM and the ADX, advanced yesterday on a wave of positive sentiment after oil prices rallied at the weekend.
Saudi Arabia's Tadawul advanced for a second session this week as petrochemical stocks continued to lead the market up.
Kuwait was the only loser among the regional markets as banks continued to drag the index down. The Qatar market was closed for a holiday yesterday.
Analysts see oil prices as the main mover of sentiment in the regional markets due to their impact on GCC revenues.
"Though there is no direct correlation between regional stocks and oil prices, there is a psychological impact on investor sentiment," said one trader. "High oil prices will enable the GCC states to expand their expenditure on infrastructure projects, which will be reflected in the earnings of listed companies."
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