Foreign investors' interest lifts Dubai bourse

Sustained buying by foreign institutional investors helped Dubai bourse recoup Sunday's losses, as the index closed one per cent higher yesterday.

Volatility was witnessed on the market with the Dubai Financial Market General Index fluctuating with a high of 5820.6 points, before closing the day at 5799.15 points. "There is entry of foreign buyers into the market and they have started accumulation stocks, which are trading at very attractive prices," Sherif Abdelkalek, Institutions Sales Manager, Al Futtaim HC Securities, told Emirates Business.

Shares of Air Arabia continued to fall for the second day despite the Sharjah-based low cost carrier reporting a first quarter net profit rise of 81 per cent to Dh78 million.

The scrip, which topped the volume and value chart, rose to an intraday high of Dh2.07 before losing 0.49 per cent to close at Dh2.04. More than 107 million shares worth Dh219 million were traded in 917 deals, compared to Sunday's trading of 34 million shares worth Dh69m.

Shares of Emaar Properties recovered as it closed the day at Dh11.80, gaining 1.72 per cent. The counter saw more than 12.2 million shares worth Dh144m being traded.

Emaar reported net income of Dh1.65 billion, which declined by 3.8 per cent year over year, while operating margins were adversely impacted by a 33 per cent rise in selling, general and administrative expenses year-on-year. However, the company booked sales of Dh5.6bn in UAE driven by robust sales in the domestic market and land sales by associates in India and Morocco.

Overall, the market saw an increase of 25 per cent in trading volumes, with more than 339 million shares worth Dh1.22bn exchanging hands against 271 million shares of Dh1.14bn on Sunday. Of the 25 companies that traded on the bourse, 18 advanced and six declined.

"The index has been trading in a very tight range and has broken the support level of 5,750 points. Although investors are cautious, we have to 'wait and see' what happens," added Abdelkalek.

Arabtec Holding counter gained 1.25 per cent to finish at Dh16.10, with more than one million shares worth Dh17.44m being exchanged.

Last week, the company had reported a consolidated profit of Dh231.4m for the first quarter, compared to Dh60.1m for the same period last year, an increase of 285 per cent.

According to market analysts, Arabtec is among one of the few stocks in Dubai that has a "bullish" tendency and an "upside" is expected.

Accumulation was seen on the Amlak Finance and Tamweel counters. The former rose 0.41 per cent to Dh4.89, while the latter closed at Dh7.78, up 0.25 per cent.

Amlak Finance said recently it was in talks with First Dubai for Real Estate Development to acquire one of its buildings for about Dh1.65bn, while Tamweel received regulatory approval to end the lock-up period for its founding members.

The founders have the right to sell their shares in the company, according to a statement posted on the website of Dubai's bourse yesterday.

Dubai Investments rose 0.51 per cent to close at Dh3.90, as 6.4 million shares worth Dh25m were traded.

Among the banking shares, Al Salam Bank – Bahrain and Emirates NBD jumped by 0.40 per cent and 1.23 per cent at Dh2.46 and Dh12.30, respectively.

The Abu Dhabi Securities Exchange rose marginally by 0.41 per cent to end at 5026.57 points. Shares of etisalat went up by 0.23 per cent to Dh21.45, with more than 606,106 shares being traded.

Aldar Properties gained 1.28 per cent to Dh11.90, as the counter saw 9.8 million shares being exchanged.

However, energy stocks regained momentum with Aabar Investments rising 4.64 per cent to Dh3.61. Dana Gas rose 0.98 per cent to Dh2.07, while Taqa jumped four per cent to end at Dh3.64.

Overall, 227 million shares of Dh1.15bn were traded in 5435 deals, with 26 shares advancing and 14 declining.

Upside potential for Sorouh

Shares of Sorouh, Abu Dhabi-based real estate developer, have a 25 per cent upside potential, according to a report.

"The gross margins improved to more than 66 per cent for the quarter and we believe this reflects the company's pricing power in its domestic market. At current price, the stock offers approximately 25 per cent upside potential," Robert Mckinnon, managing director (Equity Research), Al Mal Capital, said in a report.

Sorouh reported weaker than expected results with net income of Dh361 million and revenues of Dh624 million.

However, this could be a timing issue or a reflection of the company's commitment to liaise with quality partners for its projects.

"We maintain our ratings for Emaar, Deyaar and Union Properties as current prices offer approximately 49.1 per cent, 53.3 per cent and 47.1 per cent upside respectively. We have not adjusted our estimates for the companies," he added.

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