News
DFM falls marginally on profit booking pressures
The Dubai Financial Market (DFM) suffered marginal losses following a mixed trading trend yesterday, and shed 5.21 points, or 0.24 per cent, to close the day at 2137.86 points.
A recovery at the end of the session eroded some of the early losses, which were brought about after trading started yesterday with profit bookings that took the index further down.
Speaking to Emirates Business, Mohammad Al Mortada Al Dandashi, Chief Executive Officer of Al Ramz Securities, said: "The market witnessed profit booking initially and later picked up in the last half an hour. There was little impact of Emaar's news on the market today, as investors believe in the economy and its fundamentals. Investors are now looking for second quarter results."
In early trade, the DFM general index fell 1.6 per cent to 2108 points and touched the day's low of 2092.88 points at 11am before moving upwards in the rest of the session. Before closing at 2137.86 points, the index reached the day's high of 2153.18 points.
"The DFM's closing level was still attractive, as its stayed above 2100 points, which is a support level. This is a good sign for investors but it doesn't mean that volatility is easing. There is still opportunity for further profit booking before the second quarter results start to flow in," said Wadah Al Taha, a senior financial analyst.
Mathew Wakeman, Managing Director for Cash and Equity-linked Trading at EFG-Hermes, said: "The market followed a similar pattern to last week's profit taking, with residual selling pressure from the previous day giving a weak opening, which was then clawed back through the session. The decision not to upgrade the UAE markets to Emerging Market status from Frontier Market was expected and had no bearing on today's session."
Shuaa Capital's shares rose 14.5 per cent to Dh1.97 following the company's announcement of the issue of 250 million shares to the Dubai Banking Group over a convertible bond entitling DBG for a 32 per cent stake in the investment firm.
Shiv Prakash, technical analyst at MAC Capital, said: "The market fell until the neckline support levels of 2100 and somehow found support. Then onwards, the DFM recovered smartly and closed almost near the previous day's closing. This intraday recovery from lower levels indicates that there is strength in the market, which can take us to the previous highs again."
Shuaa said yesterday that it has issued 250 million new shares to the Dubai Banking Group. The stock opened lower as there was some confusion initially over the price at which the shares were issued to DBG. When investors learnt that the issue price was higher than the current market price, they started buying in the scrip.
"Shuaa was given a buy near Dh1.78 in our intraday live trading calls service. It did meet the target of Dh1.97 and then fell later on profit booking to see Dh1.69, which was lower by 1.74 per cent from its previous closing," said Shiv Prakash.
Meanwhile, the DFM resumed trading in Global's shares yesterday after disclosing the resolutions of the company's AGM and EGM held on Monday. "Stocks which attracted attention were Takaful House, Takaful-EM, Emaar, Arabtec and IAIC. These stocks can go on to show good gains in the coming sessions. Takaful House, which was recommended a buy near Dh2.40 levels, surged higher to its upper limit levels of Dh2.80. The stock has attracted good volumes in the past few days and is nearing its previous highs of Dh3.10. IAIC saw some buying and looks set to reach Dh1.45 in the coming sessions. The stock gave a close at Dh1.34, which was up by 3.88 per cent," said Shiv Prakash.
Markets are trading well above the 14-day moving average on the daily charts and are finding good support near the neckline levels of 2100. The medium term trend, therefore, still remains bullish.
Recent developments impact trading
During the past three sessions, it was news that influenced the trading pattern on UAE bourses. News about Emaar, Shuaa Capital and UP impacted market sentiment as these stocks came under pressure. The UP stock continued under selling pressure for the second session following the resignation of its chief executive.
"Recently, Emaar has risen more than 23 per cent. More than fundamentals and technicals, it is news about recent developments that is impacting the market. There is lack of total transparency on market-sensitive information and the level of transparency needs to be well-defined," said Wadah Al Taha, a senior financial analyst.
The DFM suspended trading for a while in Shuaa shares based on an letter from the Dubai Banking Group regarding convertible notes by Shuaa. "The SCA should ensure that the main points of new agreements and projects should be disclosed clearly to the stock exchanges. Everybody should understand the critical period we are passing through. Rebuilding lost confidence is what we need now for the market to recover," Al Taha added.
However, investors were still unsure what was happening over Emaar's project in Saudi Arabia.
A recovery at the end of the session eroded some of the early losses, which were brought about after trading started yesterday with profit bookings that took the index further down.
Speaking to Emirates Business, Mohammad Al Mortada Al Dandashi, Chief Executive Officer of Al Ramz Securities, said: "The market witnessed profit booking initially and later picked up in the last half an hour. There was little impact of Emaar's news on the market today, as investors believe in the economy and its fundamentals. Investors are now looking for second quarter results."
In early trade, the DFM general index fell 1.6 per cent to 2108 points and touched the day's low of 2092.88 points at 11am before moving upwards in the rest of the session. Before closing at 2137.86 points, the index reached the day's high of 2153.18 points.
"The DFM's closing level was still attractive, as its stayed above 2100 points, which is a support level. This is a good sign for investors but it doesn't mean that volatility is easing. There is still opportunity for further profit booking before the second quarter results start to flow in," said Wadah Al Taha, a senior financial analyst.
Mathew Wakeman, Managing Director for Cash and Equity-linked Trading at EFG-Hermes, said: "The market followed a similar pattern to last week's profit taking, with residual selling pressure from the previous day giving a weak opening, which was then clawed back through the session. The decision not to upgrade the UAE markets to Emerging Market status from Frontier Market was expected and had no bearing on today's session."
Shuaa Capital's shares rose 14.5 per cent to Dh1.97 following the company's announcement of the issue of 250 million shares to the Dubai Banking Group over a convertible bond entitling DBG for a 32 per cent stake in the investment firm.
Shiv Prakash, technical analyst at MAC Capital, said: "The market fell until the neckline support levels of 2100 and somehow found support. Then onwards, the DFM recovered smartly and closed almost near the previous day's closing. This intraday recovery from lower levels indicates that there is strength in the market, which can take us to the previous highs again."
Shuaa said yesterday that it has issued 250 million new shares to the Dubai Banking Group. The stock opened lower as there was some confusion initially over the price at which the shares were issued to DBG. When investors learnt that the issue price was higher than the current market price, they started buying in the scrip.
"Shuaa was given a buy near Dh1.78 in our intraday live trading calls service. It did meet the target of Dh1.97 and then fell later on profit booking to see Dh1.69, which was lower by 1.74 per cent from its previous closing," said Shiv Prakash.
Meanwhile, the DFM resumed trading in Global's shares yesterday after disclosing the resolutions of the company's AGM and EGM held on Monday. "Stocks which attracted attention were Takaful House, Takaful-EM, Emaar, Arabtec and IAIC. These stocks can go on to show good gains in the coming sessions. Takaful House, which was recommended a buy near Dh2.40 levels, surged higher to its upper limit levels of Dh2.80. The stock has attracted good volumes in the past few days and is nearing its previous highs of Dh3.10. IAIC saw some buying and looks set to reach Dh1.45 in the coming sessions. The stock gave a close at Dh1.34, which was up by 3.88 per cent," said Shiv Prakash.
Markets are trading well above the 14-day moving average on the daily charts and are finding good support near the neckline levels of 2100. The medium term trend, therefore, still remains bullish.
Recent developments impact trading
During the past three sessions, it was news that influenced the trading pattern on UAE bourses. News about Emaar, Shuaa Capital and UP impacted market sentiment as these stocks came under pressure. The UP stock continued under selling pressure for the second session following the resignation of its chief executive.
"Recently, Emaar has risen more than 23 per cent. More than fundamentals and technicals, it is news about recent developments that is impacting the market. There is lack of total transparency on market-sensitive information and the level of transparency needs to be well-defined," said Wadah Al Taha, a senior financial analyst.
The DFM suspended trading for a while in Shuaa shares based on an letter from the Dubai Banking Group regarding convertible notes by Shuaa. "The SCA should ensure that the main points of new agreements and projects should be disclosed clearly to the stock exchanges. Everybody should understand the critical period we are passing through. Rebuilding lost confidence is what we need now for the market to recover," Al Taha added.
However, investors were still unsure what was happening over Emaar's project in Saudi Arabia.
Keep up with the latest business news from the region with the daily Emirates Business 24|7 newsletter. To subscribe to the newsletter, please click here.