Extended gains on banking, realty and construction stocks pushed the Abu Dhabi Securities Exchange (ADX) index further upwards yesterday for the sixth session in a row.
Interestingly, after announcing huge provisions for long-term debts, ADCB is gaining investors' confidence and the stock witnessed reasonable buying interest. Except for Bank of Sharjah and InvestB, all remaining banking stocks traded closed higher.
Mirroring the undercurrent of positive market sentiment, the ADX general index gained 33.09 points, or 1.23 per cent, to close the session at 2723.96 points against its previous close of 2690.87 points.
Wadah Al Taha, senior financial analyst, told Emirates Business: "The fourth quarter earning numbers continued to move the market up. I think the market performs well as long as oil trades above $70 a barrel. Oil prices will have an indirect impact on the UAE bourses."
ADCB shares added 4.68 per cent and closed at Dh1.79. Market players have turned out to be positive over the bank's performance as they expect that after heavy provisions, the bank will start afresh in 2010.
"Strategic investors don't depend upon mere profit factor. Of course, high provisions cut off profits, but give confidence to investors as the banks are cleaning off their records. Moreover, banks like ADCB have higher adequacy ratios of Tier-1 and Tier-2 capital, when compared to other banks. This gives a signal of stability to the investors and improves the confidence level among them," said Al Taha.
GCC MARKETS POSITIVE
Owing to several positive factors, all GCC bourses closed higher yesterday with most bluechips, particularly banking stocks, keeping the indexes moving upwards.
With a 1.50 per cent rise, Qatar led the gains in the region's markets followed by the ADX with 1.23 per cent, Bahrain with 0.83 per cent, the DFM with 0.67 per cent, Saudi Arabia's Tadawul with 0.31 per cent, Muscat with 0.29 per cent and Kuwait with 0.23 per cent.
The Zain stock on the Kuwaiti bourse was under pressure following news reports that its CEO, Saad Al Barrak, had resigned.
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