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27 May 2024

Banking and realty drag DFM below 1600

By Sreenivasa Rao Dasari

The Dubai Financial Market (DFM) moved downwards for a fourth consecutive session yesterday as across-the-board selling – particularly in the realty and banking sectors – pulled the general index below the critical 1600 mark.

Reflecting the bearish mood of the market, the index fell 35.87 points and closed at 1,586.14, a net fall of 2.21 per cent from 1,622.01 points the day before.

Banking major Emirates NBD touched its lower limit while Emaar, Al Madina, UP, Gulf Finance House and Takaful Emarat fell the most. There were only four gainers on the day – Aman, Global, GGICO and DSI.

Nearly all the sector sub-indices closed in the red as the banking index fell 2.07 per cent, realty 3.43 per cent, utilities 3.03 per cent, materials 2.23 per cent, finance and investment 1.71 per cent and insurance 0.5 per cent.

"The appetite for risk clearly has disappeared from the market," senior financial analyst Wadah Al Taha told Emirates Business. "Falling below 1600 points is clearly a negative sign. The critical issue is the need for a clear announcement about Dubai World and only this will improve market conditions."

Market heavyweight Emaar fell 3.65 per cent and closed below the Dh3 level at Dh2.90. "Emaar may slip further to the Dh2.87-Dh2.80 levels as buying interest is not being seen on the market," added Al Taha.

Banking majors Ajman Bank, Al Salam Bank Bahrain, Al Salam Bank Sudan, Dubai Islamic Bank and Gulf Finance House closed lower. After Ajman Bank announced its results its share price fell for the second session running as the stock eased 1.22 per cent to close at Dh0.81.

Al Salam Bank-Bahrain fell 1.22 per cent to Dh0.81, Al Salam Bank –Sudan eased 5.78 per cent to Dh2.61, Dubai Islamic Bank fell 1.73 per cent to Dh2.27 and Gulf Finance House fell six per cent to Dh0.94.

The market opened weakly at 1614.43 points and traded in a narrow range of 30 points. Reflecting the downward movement seen throughout the session, the closing level of 1586.14 points was the session's low.

Shiv Prakash, a senior technical analyst at MAC Capital, said: "If the market remains below the pivot levels of 1,598 level intraday we could see a continuation of the fall until the lower supports of 1,574/1,561. Higher resistance comes at 1,610/1,634."

Arabtec fell 3.24 per cent to Dh2.09 and Deyaar eased 4.08 per cent to Dh0.47. Islamic Arab Insurance (Salama) fell 2.44 per cent to close at Dh0.80, while DFM shares fell 3.33 per cent and closed at Dh1.45. Meanwhile the DFM suspended trading in UFC and OIC shares ahead of their board and shareholder meetings.



Up at lowest


Union Properties hit an all-time-low as it fell 6.12 per cent to close at Dh0.46. The stock recorded turn- over of Dh1.87 million.



Turnover under pressure


Low volumes are still affecting the DFM, which is stuck in a directionless trading pattern. The index recorded Dh188.68 million of trading turnover as 129.84 million shares changed hands in 2,909 deals involving 30 stocks.

"Though the total value was higher than in the previous few sessions it was still at a moderate level," said Wadah Al Taha. "The lack of trading volume means there is no support for any direction in the market."

With Dh64.14m trading, Emaar alone accounted for 33.99 per cent of the total trading value on the bourse. The other majors that contributed the most to the turnover were Arabtec with Dh23.64m, DFM with Dh18.87m, DSI with Dh13.44m and Air Arabia with Dh11.28m.

Shiv Prakash said: "For the market to turn bullish in the short term we need to see an increase in volumes with a break above the 1,650 resistance. Otherwise, we may continue to move lower towards the 1,540/1,510 level in the coming weeks."



Emirates NBD hits lower limit


Emirates NBD fell five per cent and closed at Dh2.47 as the stock recorded Dh1.62 million of trading and volume of 652,200 shares.

"Emirates NBD stock reached its limit down of five per cent following expectations that the banks will come under further pressure," said Wadah Al Taha.



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