Dubai bourse slips further on unabated profit taking

Profit taking continued on the Dubai Financial Market for a third session running yesterday in the absence of any positive triggers as investors avoided taking new positions until the current uncertainty is resolved.

The general index shed 2.76 per cent, or 59 points, to close the day at 2078.86 compared with the previous close of 2137.86.

Mirroring the weak trend, only four stocks advanced and 24 declined, while one remained unchanged. And 18 stocks fell by more than three per cent.

"Profit taking continued yesterday and if the DFM slips below the 2000 level then the market will become bearish," Amjad Bakir, Trading Manager at MAC Sharaf Securities, told Emirates Business. The next resistance levels will be seen at 2100 and 2200.

"The market is nearing the weekend and I think the trading pattern will depend on how it reacts to other new developments. Encouragingly foreign investors are still active in the UAE markets, while speculators are liquidating their positions ahead of the weekend."

Barring insurance and materials indices, which gained 0.45 per cent and 4.72 per cent respectively, the remaining sectors closed in the red. The utilities index, with a 5.56 per cent loss, suffered most, followed by financial and investment at 4.38 per cent, real estate at 3.14 per cent, banking at 2.34 per cent and telecom at 2.38 per cent.

Mathew Wakeman, Managing Director for Cash and Equtity-linked Trading at EFG Hermes, said: "Today is the key to indicating the short-term direction as a rebound would allow us to label this move profit taking. But a further move lower would indicate that this is a correction and make tests of market support at 2000 on the DFM and 2800 on the ADX very likely in the coming days."

The DFM reached the day's high of 2144.30 points in the first hour of trading and then moved in a 20-point range until 12.30pm. The second half of the session saw stocks moving down on profit taking.

Shiv Prakash, a technical analyst at MAC Capital, said: "The general index opened flat then moved sideways until mid-session and later, due to a lack of buying support, fell lower and broke the support level of 2100. The market is expected to move sideways in the range from 1900 to 2200 in the coming months. For bullishness to continue we must see a breakout above 2200 in the next few sessions."

Elsewhere, Asian stocks eased as banking suffered the most. And US President Barack Obama's warning that unemployment might reach 10 per cent affected global sentiment.

In Dubai, Shuaa Capital fell by almost nine per cent in the morning but later recovered some of the early losses to end the day at Dh1.61, a loss of 4.73 per cent.

Wakeman said: "The lack of further clarity on the Shuaa-DBG situation kept trading in the stock choppy and volatile. Insurance stocks remain the outperformers and are resilient on the back of local and foreign investor demand."

Takaful-EM registered a high of Dh2.29 before closing with a net gain of 5.37 per cent.

Prakash added: "Takaful House met our targets as it formed a high of Dh3.16 and later closed at Dh2.90 with a net gain of 3.57 per cent. The stock was given a buy near Dh2.44 a few days back on our online trading call service and in the on-the-day trader report. IAIC moved higher to Dh1.42 but later met profit booking ended the day at the previous day's close of Dh1.34."

There was selling pressure on Tabreed, Aramex, GGICO, Shuaa and DFM. DSI was the most actively traded stock, recording turnover of more than Dh181 million as 173 million shares changed hands. The other major volume pushers were Deyaar, Emaar, Takaful-EM, Gulf Navigation, Arabtec and UPP. Emaar – which issued another statement about its position in Saudi Arabia – fell 3.08 per cent to Dh4.10. Group CEO VK Gomber told the DFM: "Emaar Middle East is Emaar's joint venture with the Al Qula Group in the Kingdom of Saudi Arabia. The company is developing two projects including Jeddah Gate and Al Khobar lakes. The company has been reviewing a number of propositions including a large master planned development in Riyadh. However, such proposals are still being reviewed in line with Emaar's development and return criteria and no transaction has yet been finalised."


Trading value eases but stays above Dh1bn mark

The DFM recorded turnover above the Dh1 billion level yesterday despite having gone through three successive sessions of downward movement.

The trading turnover was Dh1.09bn as more than 728 million shares were traded in 12,040 transactions involving 29 shares.

There have been good volumes in all four sessions so far this week, reflecting the interest shown in the market by both retail and institutional investors.

The week began with a trading turnover of Dh2.47bn and a volume of 1.42 billion shares on Sunday, the second-largest volume since July 1, 2008. Monday was another good session in terms of turnover and volume as the DFM recorded Dh1.99bn of trading value and a volume of 1.33 billion shares.

Tuesday saw Dh1.22bn trading turnover as more than 896 million shares changed hands. But the general index has fallen 5.43 per cent, or 119.45 points, since Sunday.

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