DFM slides 2.25% further on thin turnover

Led by realty stocks, the Dubai Financial Market (DFM) turned weaker yesterday owing to negative cues from both local and global markets. The market had fallen by 0.43 per cent on Thursday.

Unconfirmed news that creditors of Dubai World have rejected the one per cent interest offer on its outstanding debt hit the market in the morning, pushing stocks under pressure. Emaar, Arabtec, Deyaar, DSI and Union Properties came under selling pressure, pulling the index lower.

Reflecting the overall drab market sentiment, the DFM general index fell 2.27 per cent to end the session at 1775.56 points, a drop of 40.87 points from the previous week's close of 1816.43 points. All sub-indices closed in the red, with the realty index falling the most – 3.71 per cent – followed by the finance/investment index with 2.29 per cent, transport index with 1.78 per cent, utilities with 1.53 per cent, banks with 1.37 per cent and the insurance index 0.93 per cent.

Robert McKinnon, Chief Investment Officer at ASAS Capital, told Emirates Business: "I think the reason for today's fall was a combination of two factors – news about creditors of Dubai World and global cues."

Last week, the US regulators charged the Goldman Sachs Group with fraud pertaining to subprime mortgages and this factor had a negative impact on global markets on Friday. This dampened investor sentiment on the local bourses too.

"I believe the Dubai World factor is over, as the market has already discounted it. What we need now is fundamental support from some companies in the form of encouraging first quarter numbers," said McKinnon.

The market opened on a weak note yesterday at 1793 points and continued to move in a restricted range of 21 points throughout the session. It touched the day's low of 1753 points before closing at 1775.56, the lowest since March 21. The major losers of the day were Ekttitab, Arabtec, Al Madina, GGICO and Dartakaful.

"The market opened lower and continued its bearishness until close. The Saudi Arabian market, which also opened lower, added further bearish sentiments to the DFMGI," said Shiv Prakash, Equity Investment Analyst (Technical) at MAC Capital Advisors.

The major losers of the day were Ekttitab, Arabtec, Al Madina, GGICO and Dartakaful.

"As of now, the lower supports for the DFM index are seen at 1740/1720 points in the near term. Since the market has stayed below the pivot level of 1784 points, it could fall until the 1754/1732 support levels. A break above 1784 can be considered bullish until 1806 points," said Shiv Prakash.

Yesterday, Dubai Refreshments (DRC) disclosed the details of its board meeting, in which the net profit was revised to Dh7.3 million from the Dh6.93m preliminary numbers announced earlier. Global informed the bourse that its AGM and EGM would be held on May 5, while the DFM's board meeting is scheduled to be held on April 20. The market resumed trading in the DSI stock after the disclosure of the resolutions taken at its AGM held on April 15.

DSI consolidation this quarter

DSI shares eased 2.32 per cent yesterday and closed at Dh0.969. In a communiqué to the exchange, the company furnished details regarding its acquisition of Drake and Scull International, Qatar.

The equity value of DSI Qatar stands at QR85m and it recorded QR108m in revenues and QR14.23m in net profit for 2009. The consolidation process will be completed in the first quarter of 2010.

Turnover falls on the DFM

The DFM recorded another day of dreary trading yesterday with the turnover at a low Dh361.22m. Over 165 million shares changed hands yesterday in over 4378 deals in 26 stocks.

"Of late, the UAE markets have been witnessing low values. The turnover on the DFM increased when the Arabtec-Aabar deal was called off. Today's turnover was less than the normal average value," said Robert McKinnon ASAS Capital. Foreign investors were net buyers. They bought Dh153.52m worth of shares comprising 42.5 per cent of the total buying on the bourse, and sold Dh145.39m worth of shares. This resulted in FIs becoming net buyers of Dh8.13m.

Arabtec drops 5.64%

The Arabtec stock dropped 5.64 per cent and closed at Dh2.510 following the news that the construction major has backed out of the bidding process for Kingdom Tower in Saudi Arabia also influenced the trading in the Arabtec stock. Arabtec shares after the cancellation of deal with Aabar fell in two out of the three sessions. Meanwhile, SICO Investment has slashed target price (TP) of Arabtec by 24.4 per cent to Dh3.4 from Dh4.5 and assigned a long-term 'buy' rating to the stock.

Arabtec is one of the contractors of Dubai World and poised to be benefited following the Dubai government's support to the restructuring plan.

CBD lone star

Commercial Bank of Dubai (CBD) bucked the trend and managed to move 3.23 per cent higher to close at Dh3.20. The stock recorded a modest turnover of Dh12,921 involving transactions of 4230 shares. No other stock was trading higher as all the traded stocks were moving southwards.

Emaar slips

Market heavyweight Emaar's shares fell 3.94 per cent to close at Dh3.90 yesterday. The stock witnessed a turnover of Dh155.73m and a volume of 39.84 million shares.

The stock fell below the 14-day SMA and the RSI indicator also took the neckline resistance.