The Abu Dhabi Securities Exchange could fall by more than three per cent by the end of August, analysts believe, with the capital's index unable to support current prices unless volumes improve.

The ADX fell 0.61 per cent to 4,925 points yesterday, despite turnover more than doubling from the day before to Dh552 million.

However, Methaq claimed 58 per cent of this figure, as fervent speculation in Dubai's new Islamic insurer, Takaful House, spread to the ADX's star performer over the past three months.

"I can't see the ADX pushing through 5,000 points with an aggressive move," said Julian Bruce, EFG-Hermes director of institutional equity sales.The ADX could gradually slide back to 4,750 over the next few weeks. This is a fairly decent support level."

Such a move would represent a fall of 3.55 per cent and would erode most of the market's hard-won gains this year, having opened 2008 on 4,581 points. "With the current mood of local investors we are probably more likely to see ongoing weakness in the ADX," said Bruce. It has outperformed Dubai by about 17 per cent this year, so if there are profits to be taken it's more likely to be on the ADX, which should track back more strongly than Dubai."

The capital's real estate sector was hit hard, with Aldar and Sorouh falling 2.04 and 1.01 per cent respectively, while Rak Properties dropped 1.61 per cent.Since July 27, Aldar has lost 6.25 per cent, while Sorouh has declined by 3.4 per cent over the same period. Foreign funds have typically restricted their involvement in the ADX to real estate stocks and so this ongoing decline seemingly indicates that these overseas institutions are reducing their positions.

Methaq was the only one of the five most active stocks to advance, with Aldar Rak Properties and Dana Gas, down 1.6 per cent, all retreating. Commercial Bank International was unchanged to complete this quintet. Eitsalat added 0.3 per cent.

 

The Global Dow launched

Dow Jones Indexes, a leading global index provider, will launch The Global Dow, an index whose components are selected by the editors of the Wall Street Journal.

Rupert Murdoch, chairman and chief executive of News Corporation, owner of both the WSJ and Dow Jones, unveiled the new index in Mumbai yesterday.

He said: "The world is changing and how we measure that change economically and financially is clearly a challenge and an opportunity," he said.

As with the Dow Jones Industrial Average, the component choices for the new index will be based on the editorial judgment of WSJ journalists. The Global Dow will track the share prices of existing and future global leaders in every industry. Vigorous companies from emerging economies will be included along with companies from emerging sectors such as alternative energy.