Emaar, Arabtec and DFM push index up
Stocks on the Dubai Financial Market (DFM) rebounded yesterday after positive reactions of investors and institutions to the fourth quarter results provided a bounce to the trading. Market heavyweight Emaar, Arabtec and DFM stocks mainly propelled the index to surpass the key 1600-point level.
Led by Arabtec and Emaar, the DFM index opened on a positive note and moved in a narrow range of 28 points throughout the session on marginal trading turnover of Dh313.59 million. The Dubai bourse recorded volume of 192.82 million shares in over 4331 transactions.
Led by Emaar, major realty stocks enjoyed buying support during the session. The market bellwether, Emaar, gained 3.26 per cent to close at Dh3.17. Arabtec shares closed 2.67 per cent higher at Dh2.31, while DFM shares added 2.58 per cent and closed at Dh1.59.
Reflecting the overall positive trading pattern, 22 stocks advanced, six fell and two closed flat on the bourse. Telecom and realty indices added more than three per cent, while the utility index added 2.94 per cent and the finance/investment index closed 2.78 per cent higher, followed by the banking index with a gain of 1.58 per cent. The insurance index rose 0.78 per cent and the transport index by 0.32 per cent.
Ayman El Saheb, Director of Operations at Darahem Financial Brokerage, told Emirates Business: "Yesterday was a positive day for both the UAE bourses. The market sentiment improved on earnings disclosed so far. Investors and institutions were seen buying following the better-than-expected results for the fourth quarter. Foreign investors were seen participating in the market. I don't have any figures to show active participation by foreign investors."
Opening at 1600.57 points, the index immediately eased to 1598.25 points, which remained the day's low, but surpassed the key 1600-mark in the second attempt. Registering a 1.85 per cent gain, the DFM index moved up to the 1619 points level in the first half of trading, while trading turnover was hovering at a modest Dh199m. Twenty-one stocks were trading higher and seven were under pressure.
"Yesterday's session was good as it was a follow-through of the results. It's good to see that market players were reacting positively to the latest earning numbers from companies. Most banks have announced encouraging results so far," said Vyas Jayabhanu, Head of Al Dhafra Financial Broker.
Union Properties (UP), which slipped into the red on Sunday following its announcement of debt rescheduling, made a rebound after news hit the market that the property major may sell its luxury Ritz Carlton hotel. UP, the third largest developer by market value in the emirate, may sell its luxury hotel for about Dh1.5 billion.
UP shares recovered by 3.92 per cent and closed at Dh0.53.
The Gulf Navigation stock came under pressure after an announcement of share buyback on Sunday. The board has given approval to buy back five per cent of its shares.
The company has informed the exchange that its AGM and EGM would be held on March 4. The board has also approved the proposal to distribute a cash dividend of three fils per share for 2009, which will be equivalent to three per cent of the share capital. DSI informed the bourse that its board meeting would be held today. CBD's board meeting will be held on February 24.
Interestingly, the Gulf Navigation stock yesterday witnessed insider trading only with sell orders. At Dh0.58 per share, sell orders for 2.60 million shares were recorded in the stock, while sell orders for a million shares were registered at Dh0.59 a share, according to the DFM website.
Gulf Navigation, which was among the day's top losers, eased 3.33 per cent and closed at Dh0.58.
Mashreq informed the exchange that its board meeting would be held on February 04. OIC has disclosed audited consolidated financial statements for 2009 year.
All eyes on Emaar
The market lacks clear direction amid announcements of fourth quarter results by several companies.
Market players have priced in the fourth quarter results at the present levels. The market needs more positive triggers to move upwards as the present volumes are not sufficient to result in the next rally.
Investors and institutions are looking towards fourth quarter results from Emaar, which can set the tone for the next level of movement.
"Emaar went up to Dh3.20 at one point in yesterday's session and later eased to close at Dh3.17. This shows lack of confidence in the market. Investors are not confident enough to take fresh positions. The market should continue to trade in this range as long as it hovers above 1600 points level," said Vyas Jayabhanu.
If Emaar's results cheer the market, it will result in a short-term rally in the immediate future.
The chances are higher that it may continue until the next strong resistance level at 1750 points.
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