ADX fails to maintain run, ends flat on low turnover

The Abu Dhabi Securities Exchange could not maintain the bullish movements it achieved on Thursday and ended nearly flat yesterday after adding 7.43 points, or 0.34 per cent, to close at 2,181.81.

Turnover continued at extremely low levels with 61 million shares changing hands at a total value of Dh101.9 million.

Aldar, Sorouh and Dana Gas continued to dominate trading. The banking sector failed to maintain the bullish trend that started last week after Abu Dhabi Government announced a plan to support the emirate's banks. The sector created strong pressure on the index as First Gulf Bank lost 6.43 per cent to close at Dh7.86.

Ayman El Saheb, Director of Operations at Darahem Financial Brokerage, said that there were increasing rumours about the performance of the UAE banking sector, leading to sharp fluctuations in prices.

"There are increasing questions among investors regarding the sector," he added.

"Some banks announced cash dividends for shareholders and this attracted some investment because the prices of the stocks were extremely low, so investors wanted to benefit from the low prices and the cash dividends.

"However other investors raised concerns about the situation after the Abu Dhabi Government announced the rescue plans for the banks, because if they need cash they should not distribute cash dividends," he said.

El Saheb highlighted the need for clarifications and accurate data from listed companies to stop rumours in the UAE stock markets, especially at this critical stage.

"This period will witness the distribution of dividends by companies and investors are interested in building positions to benefit. The markets need to avoid rumours because prices have reached very low levels.

"Although trading is still weak in general the prices of stocks have been holding at their support levels since the beginning of the year. This is giving some indication that the UAE markets may formulate a bottom in the near future."

Meanwhile, Abu Dhabi Securities Exchange said it signed an agreement with the Shanghai Stock Exchange, seeking to attract Chinese companies to list in Abu Dhabi. The agreement will also see the two bourses work together in terms of information sharing and product development.


Shuaa AGM

Shuaa Capital's board has invited shareholders to attend the third session of its extraordinary assembly on March 1.

The first two sessions were postponed due to the lack of the required 75-per cent quorum. The third session will proceed with those shareholders present whether or not the quorum is reached.

The board is seeking shareholders' approval for the extension of a convertible bond issue for a further 12 months.

The Dh1.5 billion bond was due to mature on October 31 last year with the holder, Dubai Banking Group (DBG), receiving 250 million Shuaa shares at Dh6 each. The deal would give DBG a 32-per cent stake in Shuaa.

Shareholders will also be asked to approve the restructuring of Shuaa's board to give DBG three representatives.