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03 December 2023

Dubai bounces back but Abu Dhabi ends in the red

By Matt Smith

The Dubai bourse bounced back on Tuesday, adding 0.64 per cent, but Abu Dhabi made it eight losses out of nine.


Tuesday’s slight improvement on the Dubai Financial Market, which closed on 5,671 points, is probably only a temporary respite, with the index continuing to follow a sideways downward pattern of falling for two sessions then rising for one.


“We are still caught in the global dilemma and the question remains whether we can decouple from international markets,” said Chahir Hosni, EFG Hermes sales manager.


“The dollar is weakening and global exchanges will remain bearish for the foreseeable future, so Gulf investors are pulling this money back into the region with cash deposits at local banks increasing. The money is coming back to the Gulf, but it’s not filtering into our equities markets yet.”


The Abu Dhabi Securities Market (ADSM) slipped 0.51 per cent to 4,578 points. It has now dropped 4.93 per cent this month to erase its early-year gains and is now up just 0.58 per cent in 2008. On March 1, this figure was 5.8 per cent.


“Investors are conservative, still spooked by the move of international markets on Monday, though they are trading higher,” Majdi Mansour, Rasmala Brokerage Chief Executive, told Dow Jones.


Analysts are divided over the immediate fate of the UAE markets, with some expecting a limited rebound, while others believe the downtrend will persist for some time to come. “The rebound will continue today or next week, although this will not be very strong and the market will remain in a 400 point range,” said Hosni.


“We are undoubtedly correlated to global markets, because everyone is affected when the US goes bad, but I don’t see this link lasting. I expect the UAE markets to move in a different direction soon.”


Ganesh Mani, a Waves Investments research analyst, said the spreads between buy and sell orders have been increasing, indicating that investors desperate to offload shares are being forced to reduce their asking price.


He said: “We are watching and waiting and I don’t know what it will take for the markets to move away from the global exchanges. Investors don’t know what’s happening. The market is taking its cue from global events in absence of any other news.”


Gainers outnumbered losers five to one on the DFM, with the likes of du, Tamweel and Air Arabia all recouping some of Monday’s losses. The latter was the best performer of this trio, adding 2.06 per cent to close on Dh1.98. Dubai Islamic Bank endured another testing session, falling three per cent to Dh9.99. It has lost 7.3 per cent in March.


Shuaa Capital was a notable loser, dropping 1.55 per cent to Dh8.24, which is 3.9 per cent below its 52-week high of March 11.


Meanwhile, the ADSM fell despite improved volumes as investors continue to book profits in the real estate sector. Aldar and Sorouh slipped 0.5 and 0.9 per cent respectively. Etisalat was the capital’s key loser however, with the ADSM’s largest cap company falling 1.27 per cent to Dh23.40.


There was better news for energy stocks, with Taqa climbing 1.18 per cent, while Aabar added a modest 0.55 per cent.


“The Sunday news that Aldar received approval to increase its capital through a sukuk conversion is still affecting the share,” said Rasmala’s Mansour.





Emaar mirrored Tuesday’s minor increase on the DFM. The property developer climbed 0.88 per cent to Dh11.45 ahead of its annual meeting on Wednesday.


“Investors are hopeful that Emaar will rethink their proposed cash dividends during tomorrow’s annual general meeting to a higher figure,” Majdi Mansour, Rasmala Brokerage chief executive, told Dow Jones.