The first session of 2010 on the Dubai Financial Market (DFM) witnessed encouraging and positive buying across the board, as investors and institutions turned keen on taking positions in select scrips.
The DFM general index added 62.01 points to close the session at 1865.59 points, registering a net gain of 3.44 per cent against the previous year's close of 1803.58 points.
Ayman El Saheb, Director of Operations at Darahem Financial Brokerage, told Emirates Business: "Trading was extremely positive. Some companies are expecting some surprises and this will also boost the market appetite. Considering Sunday's positive gain, Monday will be crucial for the market to see whether it can hold on to the present momentum or not. Strategic reports citing improvement in consumer confidence in the UAE also strengthened market sentiment. After the vacations, foreign investors and fund managers are coming back to trading, which is another major reason for the market's buoyancy."
While 23 stocks advanced yesterday on the bourse and two remained unchanged at their previous levels, only three declined.
"The DFM general index sustained above the trend line supports of 1790 points and later showed a good bounce, which broke the resistance of the 14-day moving average at 1840 points. Emaar, DFM, Arabtec and Deyaar gave good support to the rally," said Shiv Prakash, Senior Technical Analyst at MAC Capital.
The market opened at 1819.38 points and showed upward movements throughout the session. The index was moving flat between 11am and 1pm and surged in the last hour of trading. The closing level of 1865 points was the day's high, which showed the undercurrent of positive sentiment.
"Intraday, if the market remains above the critical pivot levels of 1845 points, there could be a continuation of the bullish move until the 1886/1907-point resistance levels. A break below 1845 points will bring profit taking until the 1824 support levels," said Shiv Prakash.
Reflecting the buying support across all verticals, all the sub-indices closed higher. Realty stocks witnessed the highest gains on the bourse, while banking stocks had limited gains. With a whopping gain of 7.07 per cent, the real estate index led the rally, followed by the telecom index with 3.78 per cent, utilities with 3.70 per cent, the finance/investment index with 3.05 per cent, the transport index with 2.64 per cent, insurance with 0.67 per cent and banking with 0.43 per cent.
The newly listed scrip, Hits Telecom, which listed on December 23, rose at a record rate of 11.20 per cent, its shares closing at Dh1.39. The stock recorded trading of 20,000 shares worth Dh27,071 in two trades that pushed the stock higher.
The list of major gainers included, besides Hits Telecom, Emaar, Deyaar, Arabtec and Global. The major losers of the day were GGICO, Takaful Emarat and Gulf Finance House. Hits Telecom and Global gained 11.20 per cent and 1.32 per cent respectively and closed at Dh1.39 and Dh1.32. GGICO shares closed 4.55 per cent lower at Dh1.05. Takaful Emarat's stock shed 2.50 per cent to close at Dh1.17, while GFH shares shed 0.93 per cent and closed at Dh1.06.
Arabtec and Aabar Investments were volatile over a speculation of an investment of the latter in the former. However, both companies denied such a proposal. Arabtec had issued a statement on December 30 denying any such proposal of investment by Aabar. Arabtec in its statement clarified that there have been no discussions between the two companies. Meanwhile, Aabar Investments informed the Abu Dhabi Securities Exchange (ADX) yesterday that it had no proposal of investing in Arabtec.
Barring GFH, all the remaining stocks traded in the banking/financial services segment moved up in a limited range. Ajman Bank's shares gained 3.33 per cent and closed at Dh0.93. Al Salam Bank-Bahrain's stock added 2.22 per cent to close at Dh0.92.
Burj Dubai boosts realty stocks
Market players are upbeat about the launch of Burj Dubai, the world's tallest man-made structure, as they anticipate growth in the earnings of Emaar. This has also buoyed Arabtec and Drake and Scull International (DSI) – both contractors in the mega project. The three clocked a combined turnover of Dh709.73 million on the DFM yesterday, accounting for 78.18 per cent of the total trading on the bourse.
"Active buying was seen in Emaar's stock ahead of the Burj Dubai launch. Investors are optimistic about the firm, as the launch will increase its revenues. Another major reason why investors are upbeat about the stock is expectation of high revenues from overseas business," said Ayman El Saheb.
Market heavyweight Emaar rose 7.77 per cent to close the day at Dh4.16. The stock recorded a total trading value of Dh507.53m. Arabtec shares added 6.34 per cent and closed at Dh2.85. The stock registered trading of more than 65 million shares valued at Dh183.58m. The DSI stock gained 3.33 per cent to close at Dh0.93.
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