The Dubai Financial Market (DFM) maintained its uptrend for a third consecutive session yesterday as the index added 13.88 points, or 0.84 per cent, to close at 1,663.02 points.

The index has added a total of 78.81 points, or 4.93 per cent, over the past three sessions amid improving sentiment triggered by expectations that agreement over Dubai World's restructuring plan is about to be reached.

The general index encountered some profit booking at the start of trading but rebounded quickly and went on to fluctuate up and down several times throughout the session before closing in positive territory.

Turnover continued to increase significantly as 425.1 million shares worth Dh795.2 million changed hands during the session – the highest trade value since January 4.

Emaar Properties continued to lead the rally on the market as the stock added 1.8 per cent to close at Dh3.40 after advancing to Dh3.46 during intraday trading.

This was the stock's highest close in eight weeks. The trade volume for Emaar exceeded 94 million shares, the highest since January 4.

The previous two sessions had been marked by a deep concentration of trading on Emaar, but yesterday saw strong movements in other active stocks, including Arabtec, DFM and Air Arabia, which rallied during the session. This was in line with analysts' expectations that the rally in Emaar would trigger a bullish trend for other stocks.

"There is optimism in the market in general and there is good buying interest in some stocks," said Humam Al Shamaa, Financial Consultant at Al Fajr Securities.

"This positive sentiment is expected to continue over the coming few weeks and will improve the valuations of listed stocks.

"The DFM saw positive movement during the past three sessions, which added around five per cent to the index. New liquidity was entering the market during the first two days of the week but yesterday the increasing turnover came from speculators who were benefiting from fluctuations in prices. This was clear in the strong up and down movements in the DFM index," he said.

Ahmed Tabbo, a financial analyst at Darahem Brokerage, said he expected the uptrend on the DFM to continue over the coming weeks as positive movers were seen on the market. "The DFM managed to consolidate above 1,570 points last month and broke through the 1,600-point level," he added. "This gave a positive signal for a rally. Currently, the index is facing important resistance at 1,660-1,680 points and there may be some profit booking later this week, which could drag the index to the support area of 1,610 points.

"However, the trend will remain in the upside during the coming few weeks and the DFM index may jump to 1,800 points in the medium term. Emaar will play a major role as expectations are high that the company will announce very positive first quarter results."

He said he expected rallies across the board as the current uptrend was triggered by market heavyweights.

"We expect to see rallies by low-cap stocks in the short term as they benefit from the uptrend in the market. Shares priced below Dh1, such as DSI, may also bounce up significantly as investors book profits from stocks that rallied during the past few sessions." 

Emaar in limelight 

Emaar Properties has surged by 13.7 per cent over the past three sessions on improving sentiment. There were sharp fluctuations amid waves of profit booking and buying interest from the start of the session as the stock moved in a wide range between Dh3.30 and Dh3.46.

This opened the way for speculators to make quick movements.

In addition the stock moved after Emaar said it had submitted an expression of interest to the Bali Tourism Development Corporation in accordance with the tendering procedure recently launched by the Government of Indonesia for the Mandalika development in Lombok.

"Emaar has also provided recommendations on how it intends to proceed with the development of the project and awaits responses from BTDC and the Government of Indonesia," it said in a statement. 

Pressure 

Union Properties continued to encounter downside pressure and lost 2.13 per cent as it closed at Dh0.46, very near its 12-month low of Dh0.44.

The stock attracted selling pressure and insider trading. 

Tabreed leads losers 

Tabreed continued to lead the losers in the market for a second day as it dropped by 8.77 per cent to Dh0.52.

The company reported disappointing results for 2009 as it lost Dh1.12 billion compared with profits of Dh73 million in 2008. However, market sources said some institutional investors were strong buyers of the stock yesterday as they believed the company would recover after introducing a positive recapitalisation plan.

 

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