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14 April 2024

ADX bearish as turnover drops on calm trading

By Mohamad Al Kady

The Abu Dhabi Securities Exchange moved in a bearish direction throughout yesterday's session to close at 2,208.96 points, down 27.95 or 1.25 per cent.

The ADX shared the DFM's story of declining turnover as 93.3 million shares changed hands at a total value of Dh145.3 million. The session witnessed calm trading with around 2,100 deals taking place.

The market is expected to continue to see a bearish trend during the next few sessions and this could drag the index to its next support level at 2,100-2,150 points.

Despite active trading in the last hour the index continued to decline under heavy selling pressure on real estate and banking stocks.

The majority of trading focused on real estate and construction companies such as Aldar, Sorouh, Ras Al Khaimah Properties and Ras Al Khaimah Cement which accounted for 55 per cent of the total volume.

All these stocks retreated during the session, with Aldar and Sorouh falling 5.91 and 4.33 per cent respectively. The construction sector lost 5.07 per cent while the real estate sector plunged 4.93 per cent.

The banking sector retreated slightly by 0.09 per cent, but Abu Dhabi Islamic Bank suffered selling pressure and closed 5.42 per cent down at Dh2.62.

Kefah Al Maharmah, General Manager of Aldar Shares and Bonds, said the ADX faced selling pressure for the second session running and real estate and banking stocks were particularly affected.

"The turnover increased significantly by the end of the session with more liquidity from institutional investors coming to the market," he added. "However, this trend failed to change the market's behaviour and active stocks continued to retreat."

He stressed that turnover would be critical in determining the direction of the markets.

"Both UAE markets need increasing turnover and more liquidity to ensure a real rebound. There are some movements up and down and this will continue until there is strong liquidity buying in the markets," Al Maharmah said.

Bearish trend

The ADX market will remain bearish if it trades below the pivot of 2,216 points and finds support at between 2,193 and 2178, according to Shiv Prakas, an analyst at MAC Capital Advisors.

He said bullishness could emerge if the market stayed above the pivot and could see the resistance levels of 2,231 to 2,254 points.

Dana Gas leads

Dana Gas was the leading active stock on the ADX yesterday as 19.9 million shares were traded at a value of Dh11.3 million.

The stock attracted increasing movements after the company announced in a statement on the ADX website that it had made its second gas discovery this year at the West Manzala Concession in Egypt's Nile Delta region.

However, the reaction to the announcement was negative as the company faced increasing selling pressure and lost 1.72 per cent to close at Dh0.57.