5.31 AM Sunday, 3 December 2023
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 05:26 06:45 12:11 15:10 17:32 18:50
03 December 2023

Late rally helps Dubai index return to winning ways

By Matt Smith



A late rally helped the Dubai bourse return to winning ways yesterday, but Abu Dhabi fell for the second session running.

The Dubai Financial Market General Index climbed 0.66 per cent to 5,924 points, despite volumes slipping below the Dh2 billion mark. “The markets remain in an overall positive trend,” said Walid Shihabi, Shuaa Capital head of research. “The most important thing is that they are decoupling from other Asian markets.”

Emaar was again the main market driver. It fell in early trading, together with the rest of the market, but after holding steady at Dh12.50, investors felt sufficiently confident to resume buying in the property developer, helping it close up 0.39 per cent to Dh12.65.

Emaar’s rival, Deyaar, was the most traded stock, both in terms of value and volume, with 253 million shares worth a combined Dh692 million changing hands. This pushed its stock up 2.99 per cent to Dh2.75 thanks to speculative retail trading.

Ascana, which this column highlighted yesterday, surged a further 4.79 per cent to Dh2.84. Du and the DFM’s own stock were some of Dubai’s other blue-chips to prosper, adding 0.94 and 2.26 per cent respectively.

“The markets could see a lot of trading today after finishing so strongly yesterday,” said Mohamed Alami, Naeem Shares and Bonds relationship manager.

“But after that, things could go quiet for a few sessions because we are stuck in a fallow period between the end of the earnings season and companies’ annual meetings.”

From a technical viewpoint, Emaar could make a sudden burst to Dh16.50 if trading improves. Yesterday, the property giant saw 23.3m shares change hands, but 50m is considered the average – 70m to 80m is good, while 100m would be excellent.

This may seem an unlikely scenario, but Emaar has consolidated around yesterday’s closing figure and with institutions hungry for the stock – Morgan Stanley and Merrill Lynch are among the firms with Emaar buy orders outstanding – a major move upward cannot be ruled out. This would see the Dubai bourse break 6,000 points this week, providing Emaar can close above Dh13.

“The index is not a good indicator of the state of the market at the moment because of the poor performance of Emaar,” said Alami. Emaar, the DFM’s own stock and Air Arabia are all tipped to do well today after finishing with a flourish yesterday.

Alami said: “The close on Thursday will be interesting, because it will show which stocks investors are willing to take home over the weekend and what sort of investors each stock is attracting. “If the market closes down for the week, this will be a bad sign, but I don’t think this will happen,” he added.

Four of Dubai’s top five losers were from the insurance sector, with Arab Insurance taking the biggest tumble.

Meanwhile, the ADSM fell 0.29 per cent to 4,806 points, with the heavyweights conspicuously absent from the gainers list. Etisalat, Aldar and Sorouh, which were among the top five most traded shares in cash terms, all fell by less than one per cent. Volumes were a disappointment, with combined trading failing to cross the Dh1bn mark.

Alami added: “I see a lot of action on the market at the end of this week and the beginning of next, because the whole spectrum of investors, from speculators to long-term players to fund managers will be rearranging their positions ahead of Q1 results.”

AGM season may help drive trading

The forthcoming annual general meeting season (AGM) should drive trading on the UAE exchanges, according to Mohamed Alami, Naeem Shares and Bonds relationship manager. He said: “As these meetings take place, speculators will come to the fore and there’s likely to be considerable volatility. “Investors shouldn’t pay so much attention to full year earnings or dividends because these are already priced into stocks. Instead, they should focus on first quarter earnings forecasts.”

Aldar, du, Emaar and DFM are among the few companies that have already annouced their AGMs.

More foreign money expected into uae market

Shuaa Capital yesterday concluded a three-day Dubai conference for investors and the company reports strong interest from new overseas institutions to enter the UAE markets. These funds were typically from the established markets of Europe, the United States and East Asia.

“Institutions are turning to the GCC at a time when other emerging markets are not faring so well,” said Walid Shihabi, Shuaa Capital head of research. “There will be further foreign money coming into the UAE market – it won’t be an avalanche, but a steady flow.”

Shihabi said overseas funds were also keen to see more primary listings on all three UAE markets – the DIFX, DFM and ADSM – particularly in sectors that are central to the country’s economy, yet largely absent from its stock exchanges.

“Construction and engineering account for about a tenth of GDP, yet Arabtec is the only listed stock from these industries,” said Shihabi.
“Tourism is another sector critical to the UAE economic growth and funds would like exposure to it,” he added.

UAE oil and gas services firms are believed to be high on the shopping list. Meanwhile, the IPO pipeline is looking promising, with Al Qudra and Ajman Bank, plus interior designers Depa and mechanical engineering firm Drake and Scull among those poised to go public in 2008.