The Abu Dhabi Securities Exchange declined sharply yesterday in comparison with its general performance over the past two weeks. Almost all traded stocks retreated during the session, with wide gaps in the downside, on very low turnover.
The general index lost 44.61 points, or 1.62 per cent, and closed at 2,713.64. The fall was triggered by a sharp decline in the real estate sector, which fell 4.8 per cent. Aldar was the most active stock as it declined by 5.35 per cent to close at Dh4.65. Sorouh also went down by 4.03 per cent to Dh2.63, while Rakprop fell 3.45 per cent to Dh0.56.
All active stocks retreated during the session amid a general bearish trend as a total of 28 stocks declined and only Invest Bank advanced while three stocks remained unchanged.
However, the ADX's fall came on very low turnover as 59.6 million shares worth Dh149.9 million changed hands, the lowest turnover since January 4. Aldar accounted for almost 50 per cent of turnover while other active stocks retreated on very low turnover.
Energy stocks also faced selling pressure as Aabar retreated by 3.24 per cent to Dh2.40 amid profit booking after the stock rallied on the back of its acquisition of a 70 per cent stake in Arabtec. Dana declined by two per cent to Dh0.99 despite its positive announcement about a new gas discovery in Egypt.
Banks put pressure
Banking stocks put more pressure on the ADX yesterday amid increasing worries among investors and growing negative expectations about provisioning for bad debts and non-performing loans.
CBI and ADCB were among the biggest losers while FGB turned bearish despite the bank resumed its buyback programme, which was expected to support its stock.
However analysts stressed that these expected provisions would clean up the banks' financial statements.
"Investors regard increasing provisions as negative in the short term," said an analyst. "But the banks will benefit from the clean-up of their financial statements and this will lead to increased earnings in the long term."
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