DFM rebounds and gains 1.24% on late buying

The Dubai Financial Market (DFM) saw a rebound in trading yesterday as all the indices closed on a positive note on renewed buying support during the second half of the session.

Reflecting the upward movement, the index finished at 2004.43 points, a net gain of 24.55 points, or 1.24 per cent, from the previous close of 1979.88 points.

Hesham Bakry, institutional sales manager at Al Futtaim HC, told Emirates Business: "The DFM recovered in the second half of the session, while earlier in the day there was a continuation of what happened yesterday. Investors built up positions by the end of the session and this pushed the index up. Foreign investors were also seen trading actively – they sold in the morning and bought later. The upward movement will continue tomorrow, too."

At 11.00am, the index went down to the day's low of 1947.13 points, as a fall in Emaar's stock impacted the trading. At one point, the index lost 1.5 per cent, as market bellwether Emaar went down 2.7 per cent to Dh3.66.

The DFM general index opened flat and continued its forward march on the back of buying interest in market heavyweights. Moving in a range of about 60 points during the session, the index registered the day's high of 2009.94 points just before close of the session.

Technical charts indicate that the index is likely to correct downwards to 1850 before making further upward movements.

Mathew Wakeman, Managing Director for Cash and Equity-linked Trading at EFG Hermes, said: "Trading followed our script perfectly today, with a low opening recovering through the day to end higher. Buyers that sat lower on the bids lost patience quickly following oil's rebound from $66 yesterday back to 'knocking on the door' of $70. Tomorrow's expected data from the US energy agency could take us through this big resistance, further underpinned by today's news of a 34 per cent rise in Chinese car sales in the last quarter."

An overnight drop on Wall Street also influenced sentiment, as investors are still wary about the future direction because the recent rally has been overdone.

Realty majors Deyaar, Drake and Scull International and Arabtec rose, while Emaar closed flat at Dh3.76. Arabtec's shares were up 4.69 per cent at Dh2.90, Deyaar by 7.59 per cent at Dh0.85, and DSI up 2.27 per cent at Dh0.90. Gulf Navigation shares rose 7.59 per cent to Dh 0.85.

"Gulf Navigation looks a rising star in Dubai and aggressively snapped back from yesterday's weakness on above average volume during the past week. Union Properties also proved to be a coiled spring today and clawed back all of yesterday's eight per cent fall," said Wakeman. The utilities index was a major gainer as the index rose 5.56 per cent following the upsurge in Tabreed's stock, which closed at Dh0.95.

The finance and investment index rose 1.26 per cent as the DFM and Dubai Investment stocks, rose 2.16 and 1.48 per cent respectively. The transportation index was up 1.22 per cent, with the upward movement in Air Arabia and Gulf Navigation leading the index. The Air Arabia shares rose 0.96 per cent.

Active trading was witnessed in low cap stocks, such as Al Salam Bank-Sudan and Al Salam Bank-Bahrain. Since the index closed above its key resistance level of 1990 points, the DFM is likely to witness further upward movement in share prices towards 2100. If it breaks below the present level it will result in a bearish trend taking the index downwards to the 1890-level.

Despite some correction seen on global markets and other GCC bourses, the DFM has rallied continuously for nine sessions. After gaining 19.5 per cent since May 25, when the rally took off, further correction is now likely on the DFM, as Monday's profit booking was only an indication to adjustment. Correction will follow profit booking before another rally takes off.

Earlier, on Monday, after a nine-session winning streak, the DFM recorded its second largest single-session fall this year. The general index on Monday fell 93.41 points, or 4.51 per cent, the biggest single-session fall since January 21, when the market fell 5.4 per cent.



Volumes remain strong

Turnover continues to remain high on the DFM, indicating strong market sentiment. Yesterday, the market recorded a Dh1.08 billion turnover, as against the Dh1.54bn on Monday.

Combined net buying by Arab and Gulf investors surpassed foreign investors, who played a major role in the recent rally. Arab and Gulf investors together bought shares worth Dh276.94 million and sold Dh307.07m. Foreign investors bought Dh105.12m and sold Dh123.91m worth of shares.

More than 726 million shares changed hands in 11,760 transactions in 25 scrips yesterday. Showing a positive trend, 16 stocks advanced and four declined, while five remain unchanged in value. Stocks such as Emaar, DFM, Deyaar, Arabtec and Gulf Navigation were the major volume pushers. Deyaar recorded Dh150m worth of trading, Gulf Navigation Dh103m, Emaar Dh83m, DFM Dh66m and UPP Dh65m. Emaar saw the largest volume, as more than 309 million of its shares were traded.

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.