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28 February 2024

Correction at DFM after 10% jump

By Matt Smith

The Dubai bourse dropped 150 points on Thursday as volatility continued to plague the market. Brokers had warned that Wednesday’s sudden resurgence, which saw the Dubai Financial Market jump more than 10 per cent, was driven by speculators trying to create an artificial euphoria to push up prices. This, they correctly predicted, would lead to a subsequent correction.

“We were expecting some profit taking in Dubai yesterday,” said Wadah Al Taha, Emaar Financial Services head of research.

“Speculators booked profits to cover losses from earlier in the week.”

The DFM’s General Index fell 2.66 per cent to 5,602 points as Dh3.78 billion worth of shares changed hands. There was better news in the capital, where the Abu Dhabi Securities Market retained Wednesday’s gains to close up 0.14 per cent at 4,581 points.

“Abu Dhabi shares traded sideways with also a decrease in volume,” said Amro Diab, EFG-Hermes head of GCC institutional sales.

“Sorouh and etisalat shined today, while banks lost some steam with the exception of National Bank of Abu Dhabi. I expect the markets to stabilise at these levels and start moving sideways,” he added.

There were two marked bouts of profit taking on the DFM yesterday, with investors selling up in the first hour of trading and the final 40 minutes. In between, there was measured accumulation in particular stocks, most notably the DFM and Amlak. The former climbed 3.97 per cent to Dh5.23, but the latter slipped 3.77 per cent to Dh4.59.

Emaar, which saw almost Dh1bn of shares traded, was among the losers, declining 4.05 per cent to Dh13.

Gainers outnumbered losers 19:5, with du the worst hit after an 8.18 per cent slump. Tamweel and Dubai Islamic Bank also dropped 5.1 and 4.4 per cent respectively.

“Investors are cautious after losses this week and preferred to book gains from Wednesday’s 10.5 per cent rise,” Ramy Samy, Pioneers Securities operational manager, told Zawya Dow Jones.

“They are likely to watch for news from around the world on Friday before entering the markets on Sunday,” he added.

This apprehension is likely to see the UAE markets move sideways in the early part of next week.

Such a move would be welcome, analysts say, because it would allow stocks to consolidate and build new support levels.


Slump in Emaar shares brought down the price of each share to Dh13. Almost Dh1bn worth of its shares were traded.