Turnover on the Abu Dhabi Securities Exchange remained at a very low level yesterday even though the market bounced up. The shortage of liquidity remained acute as investors stayed away amid concerns about the direction of the market.
The general index added 22.57 points, or 0.84 per cent, and closed at 2,704.23 points. The market managed to close above the important level of 2,700 points for the second time in three weeks, which gave positive indicators.
However, the very low turnover continued to cast doubts over the ADX's ability to maintain its upward movement as just 40.5 million shares worth Dh75.1 million changed hands during the session. This was the lowest trade value recorded by the market since the beginning of the year.
"There has been a sort of sideways movement on the ADX during the past few sessions and the index is moving in a very narrow range around 2,700 points," said Omar Al Kurdi, Financial Analyst at Tadawul Shares and Bonds Mediation. "This is creating stability in the market.
"However, the low turnover is not encouraging and all categories of investors are absent. Institutional investors have stayed away for a long time while speculators and day traders have reduced their activities because prices are moving in a narrow range so they cannot book quick profits."
Al Kurdi said the market's concentration on very few stocks had increased during the past few sessions.
Most GCC markets up
Most GCC markets rose to a limited degree yesterday, with the DFM the leading gainer followed by the ADX. Other markets advanced slightly, while Bahrain was the only loser.
"The trend in global markets will continue to lead regional indices during the coming few weeks," said Sami Saydam, Chief Executive Officer of Vip Gold & SS Forex.
"GCC markets are facing the third corrective wave in the long term. This wave may continue during the coming six months and the downturn may be severe for some stocks."
However Saydam said oil prices would remain high and might average between $65 and $69 per barrel in 2010.
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