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10 December 2023

ADX continues calm trading amid new local liquidity

By Mohamad Al Kady

The Abu Dhabi Securities Exchange (ADX) continued its slow upward trend after the index added 13.99 points, or 0.64 per cent, and closed at 2,213.63 at the end of yesterday's trading.

The ADX index is expected to continue its march to the resistance levels of 2,250-2,275 in the next few sessions. The turnover yesterday advanced at a similar rate, with 123.8 million shares changing hands at a total value of Dh246.3 million.

Analysts identified a trend in the ADX that is controlling the slow upward trend by injecting more liquidity in the market through government and semi-government institutions as well as investment funds from local banks.

"The impact of foreign institutions in Abu Dhabi is now minimal, while local institutions have turned out to be the main players in the market," said Hosam Al Husseini, head of brokerage at Emaar Financial Services.

Al Husseini said local institutions were making very cautious movements to support the market through real new liquidity and investments, away from the speculations that dominated the markets in the past few months.

"There are slow upward movements in the index and a slight increase in turnover and trading activities. There is a special focus on the real estate sector in general."

Al Husseini expected foreign institutional investors to take a different course on the ADX. "The movements by foreign institutions are still at a low level on the Abu Dhabi market, contrary to their movements on the DFM. However, active movements by local institutional investors are giving firm support to the ADX."

This trend is projected to support the ADX in the short-term as local institutions are injecting new liquidity for long-term investments.

"We see most active stocks advancing and the ADX index is projected to continue its upward trend to the resistance level at 2,250-2,275 points," Al Husseini added.

DP World surges

DP World's stock advanced sharply at Nasdaq Dubai yesterday, gaining $0.03, or 15.79 per cent, to close at $0.22, on the back of one of its highest single-day trading volumes since being listed.

The turnover on the stock was extremely high, with 214.8 million shares changing hands during the session – the highest volume of DP World stock ever traded in a single day apart from the first two days after its was listed in November 2007. On those two days, the volume was 303 million and 235 million, respectively.

Shiv Prakash, technical analyst at MAC Capital Advisors, said the DP World stock had earlier retreated sharply to $0.19, which was a very strong support level for it.

"This created very good investment opportunities for investors and this was reflected in the high turnover on the stock. The sentiment is very positive."

He attributed the general decline in the stock in the immediate past to the bearishness in the global markets. "The current trend in the DP World stock is bullish until its resistance level at $0.27," he said.