Five stocks accounted for 91 per cent of the total volume of 272.4 million shares traded on the Dubai Financial Market yesterday as investors made a beeline for Air Arabia after the airline announced encouraging financial results.
Air Arabia, Arabtec, Emaar, DFM and DIC were the main volume pushers, but only Air Arabia and Arabtec figured among the top-five price gainers. The other three top gainers were Al Salam Bank, Aman and Tabreed. The day's top losers were Arig, Dar Takaful, Shuaa, DNIR and Union Properties.
Considering the Air Arabia scrip's 52-week high (Dh2.19) and low (Dh0.79) prices, its shares, which closed at Dh0.95, became the focal point of trading, with 124.3 million shares changing hands. Arabtec closed at Dh1.32 compared to its 52-week high of Dh19.90 and low of Dh0.71. "Investors are coming back to stocks that are available at lower prices. Trading volume is increasing because some investors who want to buy at lower prices are taking positions. Last week also it was positive. Whatever activity we are seeing will be temporary as investors are buying because of short-term and medium-term perspectives. The market is still concerned about future direction," Vyas Jayabhanu, head of Al Dhafra Financial Services, said.
Air Arabia's total traded value of Dh121m made it the top performer on the DFM yesterday. Analysts see it as a defensive play that can outperform in a falling market.
"Market felt the effects of residual selling from Sunday early on. Buyers returned in the last hour to gloss over a largely weak session. Some concern over whether Emaar will announce a dividend at yesterday's board meeting kept volume below recent average. The bulk of the kneejerk reaction selling on Emaar was done on Sunday and wasn't a surprise even though the figures were essentially priced in at these levels," said Mathew Wakeman, Managing Director of cash and equity linked trading at EFG-Hermes.
The Arabtec stock has gained 73 per cent over the past seven sessions.
"It is hard to draw any conclusions about future earnings potential from Q4 numbers as they are correlated to regional and global demand as well as natural resource prices. Both these variables remain volatile and so will earnings. These rallies may well come back and retest lows, but this is a traders' market right now and volatility is not a bad thing if that's your strategy," Wakeman said.