Dubai bourse sees heavy profit booking

The Dubai Financial Market (DFM) closed down yesterday after investors and institutions engaged in heavy profit booking to cash in on the rally on Sunday, the first session of the New Year.

Realty, finance/investment, telecom, utilities and transport stocks all hammered down the index, which lost 2.6 per cent. The general index fell 48.46 points to end the day at 1,817.13 points.

"After the previous day's surge the market witnessed profit taking," Hesham Bakry, Institutional Sales Manager at Al Futtaim HC, told Emirates Business. "The market has become very short-term and volatile as it is moving up and down each alternate day

Contrary to expectations that the market would continue to climb on the day of the Burj Dubai inauguration, Emaar and other property stocks retreated yesterday. Property stocks took the limelight on Sunday but could not sustain their gains following the heavy profit taking.

"There shouldn't have been any impact from the Burj Dubai launch as it had been a known factor in the market for quite a long time and had been discounted by the investors," said Bakry. "I didn't think realty stocks would gain further because of the Burj Dubai launch."

Burj developer Emaar Properties rose during early trading on the tower's inaugural day but later slipped off. Despite some challenges facing the company in 2010, the world's tallest man-made structure will have a positive impact on its revenues. The Burj Dubai project is expected to contribute 10 per cent returns to the company.

"Trading value is high. We might see volatility on the bourse throughout this week until companies' annual results start coming out. Institutions are neither inactive nor more active. We can say that institutions are fairly active considering the present uncertainty in the market. Some fund managers and experts from institutions are still on vacation. Once they are back, we can expect active trading on the bourse."

The market opened on a positive note at 1,872.66 points and immediately touched 1,875.73, which remained the day's high, as Emaar moved upwards. After 15 minutes of trading the index started showing its weakness owing to increasing selling pressure, while realty stocks led by Emaar traded lower. The index fell more than one per cent on turnover of Dh444 million.

Turnover picked up to Dh718.64m but the index eased by 1.35 per cent as 24 stocks traded lower at 12.33pm. By then only GGICO was trading higher, by 0.95 per cent, but had slipped 3.86 per cent by 1.10pm.

All 27 traded stocks were lower at 1.15pm and the index touched 1,820 points at noon still with no gainers. The index recorded continuous downward movement and touched the day's low at 1,810.23 points just before closing at 1,817.13 points. After rising over seven per cent on Sunday, Emaar shares fell 3.37 per cent and closed at Dh4.02. As usual, the property major was the biggest contributor to turnover as it clocked Dh669.32m trading and volume of 162.54 million shares.

Despite the fall in equity prices trading value on the DFM was encouraging as it stood at Dh976.29m. More than 355 million shares changed hands in 8,245 transactions involving 28 stocks.

After gaining more than 11 per cent on Sunday, Hits Telecom fell 9.35 per cent and closed at Dh1.26, while the other telecom major du eased 2.65 per cent and closed at Dh2.94. The index fell 2.49 per cent as selling continued in the heavy weights. But Takaful-Emarat shares turned positive as the stock gained 1.71 per cent to Dh1.19.

Among the banking stocks, Ajman Bank, Al Salam Bank-Bahrain, Dubai Islamic Bank, Emirates NBD and Gulf Finance House fell, pushing the index lower. Ajman Bank, Al Salam Bank-Sudan, DIB and Emirates NBD fell more than two per cent and closed at Dh0.91, Dh0.90, 2.29 and Dh2.87 respectively, while GFH eased more than four per cent to close at Dh1.01.

Meanwhile the DFM suspended trading in Bayan owing to a disclosure from the company. Bayan Investment informed the exchange that it had sold a 51 per cent stake in its subsidiary Idea Marketing and Advertising for KD838,075.


DP World Sukuk distributes profits

DP World Sukuk has announced that it has distributed profits to its investors. Profit for the period of 180 days from July 1 to December 31, 2009 has been distributed to sukuk holders, the port operator said in a statement issued to Nasdaq Dubai.

The profit rate is 6.25 per cent, giving away a total amount of $46.87 million. The distribution is in respect of $1.5 billion (Dh5.51) of trust certificates due in 2017. DP World, in a separate communiqué to the bourse, gave information about its coupon payment.

The periodic coupon distribution on its $1.75bn Notes due 2037 amounted to $59.93m for the period from July 1 to 31 December 2009, said the statement. DP World stock eased 2.09 per cent and closed at $0.421 on Nasdaq Dubai yesterday.

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