The good second quarter corporate earnings and the positive macroeconomic scenario has failed to lift the UAE equities in the dull summer period, indicating the bottom has not been reached, said analysts.
Apart from the lukewarm response from the local investors, foreign investors are also choosing to stay off the market.
Low-cost carrier Air Arabia has seen the biggest drop in foreign ownership from 26.27 per cent (July 7) to 22.43 per cent (July 28). Foreign ownership in Emaar Properties, has seen a drop to 12.04 per cent (July 28) as compared to 12.63 per cent on July 7. Arabtec has seen foreign ownership fall to 34.83 per cent from 35.10 per cent.
Julian Bruce, Institutional Sales, EFG-Hermes Brokerage, told Emirates Business, that in the current environment the local investors are staying away from the market, while the foreign investors are also adopting a cautious approach this week.
"The constant supply of good results for the second quarter is yet to make a difference," he added.
In the week ending July 24, the value of shares bought by foreign investors on the DFM was put at Dh1.92 billion comprising 34 per cent of the total value of stocks traded. The value of stocks sold by foreign investors reached Dh2.07bn comprising 36.64 per cent of the total value of stocks traded during the period. Net foreign investment reached Dh148.8 million as aggregate sell.
Institutions dominated the trading with the value of stocks bought by them reaching Dh2.07bn comprising 36.7 per cent of the total value. The value of stocks sold by institutional investors reached Dh1.69bn, which is 29.9 per cent of the total value of stocks traded during the period. Net institutional investment on the market reached Dh385.5 million during the period. as aggregate buy.
Bruce said: "5,200 is a good support level, and there is no reason why it will fall below that."
The DFM is expected to remain rangebound during the entire summer, he said.
Recently, HSBC said in a mid-year report the Gulf equity markets remain "the strongest call".