Banks help ADX close in positive territory

The Abu Dhabi Securities Exchange managed to close in positive territory yesterday thanks to heavyweights in the banking sector while profit booking was seen in leading active stocks in the real estate and energy sectors.

The general index moved up slightly, adding 2.35 points, or 0.08 per cent, to close at 2,931.67 as banking stocks advanced slightly. NBAD added 1.27 per cent to close at Dh11.80 while FGB rose 1.7 per cent to Dh17.90, ADCB rose 1.43 per cent to Dh2.07 and ADIB closed flat at Dh3.10.

Aldar, after witnessing strong selling pressure at the beginning of the session, reversed its direction and closed ahead, adding 0.2 per cent at Dh4.62.

The banking sector was the main player in neutralising the profit booking pressure that affected other active stocks. Sorouh ended the session 0.4 per cent down at Dh2.49 while Rakprop retreated 1.8 per cent to Dh0.54. Dana dropped 2.17 per cent to Dh0.89 and Aabar fell 0.8 per cent to Dh2.31.

Heavyweight etisalat declined slightly by 0.4 per cent to Dh12.65, which added to the pressure on the index.

The ADX continued to follow the trend set by the Dubai Financial Market and profit booking movements were seen in the real estate and construction sectors throughout the session. "Despite the selling pressure we noticed moderate buying interest from foreign institutions in active stocks," said Hosam Al Husseini, Head of Brokerage at Emaar Financial Services. "This buying interest wiped out the downside pressure and bullishness remained in the market."

Shiv Prakash, an equity investment analyst at MAC Capital Advisors, said he expected that the ADX index would maintain its uptrend until its next resistance level around 2910 points.

"After a breakout on an inverse head and shoulder pattern the ADX continued to move higher to test the anticipated resistance levels of 2,910," he said. "The last session was sideways and most of the stocks witnessed some profit taking. The index is remaining bullish above the 200-day SMA with good supports near the 14-day moving average of 2,850."

Prakash said the banks listed on the ADX were continuing to attract some buying interest which was helping the upside trend.

FGB Gains 1.7 Per Cent

First Gulf Bank remained in the upside trend yesterday as it gained 1.7 per cent to close at Dh17.90. The bank is continuing its buyback plan, acquiring 26,000 shares on Sunday at an average price of Dh17.60 per share, according to a statement on the ADX. The bank has bought back about 28.4 million shares and has approval from the Securities and Commodities Authority to add a further 109.1 million shares.

Waha Capital under pressure

Waha Capital faced selling pressure yesterday and the stock fluctuated between gains and loses throughout the session before closing in positive territory, adding one per cent to reach Dh0.94. This came after Waha's annual meeting approved the distribution of a 2.5 per cent cash dividend and 10 per cent bonus shares in respect of earnings in 2009. The AMG also approved the issuance of Dh1 billion of convertible bonds or sukuk, with current Waha shareholders having subscription rights. In addition one or more strategic investors and other investors will be able to subscribe.

Sorouh drops slightly

Sorouh moved down slightly yesterday and closed at Dh2.49. HC Securities has downgraded the stock to "hold" from "buy" after recent strong gains – the stock has added around 25 per cent since March 7.

It also adjusted the target price for Sorouh from Dh3.10 per share to Dh2.90.

"We recommend a shift into Aldar [target price: Dh9.70/share, upside 107 per cent] as we believe that on a like to like valuation methodology it offers the most unlocked value," HC Securities said in a note.

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