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29 November 2023

Late profit booking wipes out early gains

By Sreenivasa Rao Dasari

The buoyancy on the Dubai Financial Market (DFM) that followed the inauguration of the Burj Khalifa was short-lived yesterday as late profit booking eroded early gains.

The trading pattern was mixed as insurance, real estate and materials stocks fell and finance/investment, banks and transport shares rose.

The general index moved in a narrow range of 30 points and closed flat on the positive side at 1818.7 points, netting a minuscule gain of 1.57 points or 0.09 per cent from its previous close of 1817.13.

The market opened 0.71 per cent higher at 1830 as Emaar, Arabtec, DFM, Tabreed, DIC and DSI found themselves in demand. Before giving up its leading position to Emaar, Tabreed was the main gainer in early trading, during which 10 stocks moved upwards while only du came under pressure.

"It was a good day in general," Eyad Abdulnabi, COO of Al Ramz Securities, told Emirates Business. "The market started well but at the end we saw profit taking that reduced the profits."

As the gainers outnumbered the losers in the first hour of trading the index rose to 1841.36 – which remained the day's high – at 11am. But the market could not hold on to its gains as NCC, Takaful Emarat and Deyaar started to face selling pressure.

The list of major gainers included Gulf Finance House, Dar Takaful, Aman, DIC and Union Properties which gained 7.92 per cent, 4.35 per cent, 4.17 per cent, 3.03 per cent and 2.94 per cent respectively and closed at Dh1.09, Dh1.68, Dh1.00, Dh1.02 and Dh0.70.

The day's major losers were NCC, Dubai Insurance, Shuaa Capital, Takaful Emarat and Al Salam Sudan. NCC eased 4.93 per cent to Dh3.28, Dubai Insurance fell 4.84 per cent to Dh27.50, Shuaa fell 3.45 per cent to Dh1.40, Takaful Emarat slipped 3.36 per cent to Dh1.15 and Al Salam Sudan closed 2.78 per cent lower at Dh2.45.

Not all fund managers and institutions have returned to full-scale trading yet after the Christmas and New Year holidays. Foreign investors and institutions are participating to a limited degree, say analysts. Net buying by non-UAE investors stood at Dh61.07 million as they bought shares worth Dh292.10m and sold Dh231.03m.

"The participation of foreign investors and institutions was very limited and their impact on the market was also low," said Abdulnabi of Al Ramz Securities.

The New Year saw an encouraging trend on global stock markets as growing prospects of an economic recovery improved investor sentiment. In addition to equities there has also been an encouraging upward movement in commodity and oil markets globally.

However, the Dubai's bourse was mostly moving in response to local factors, according to analysts.

"I don't see any impact from the global markets on the local bourses. Local economic news is influencing the market, which is being supported by regional investors."

Despite the prevailing underlying positive market sentiment, the DFM moved in a restricted manner throughout the session. The index inched up at noon and hovered at 1,833 points as 20 stocks were trading higher, pushing the index up by 0.89 per cent. NCC, Takaful Emarat and Deyaar were under selling pressure at this stage.

Among banking stocks, only Ajman Bank and Gulf Finance House rose as they added 2.2 per cent and 7.92 per cent respectively to close at Dh0.93 and Dh1.09. Al Salam Bank-Sudan fell 2.78 per cent to close at Dh2.45 and Al Salam Bahrain fell 1.11 per cent and closed at Dh0.89. Banking major Emirates NBD closed flat at Dh2.87.

Meanwhile, Arabtec informed the exchange that it had postponed a board meeting scheduled for today until Thursday.

Burj Khalifa boosts market sentiment

The opening of the Burj Khalifa strengthened market sentiment yesterday as stocks – led by Emaar, the giant tower's developer – traded higher on the DFM for most of the day.

However, the last half hour of the session saw quick profit booking in Emaar, which had touched a day's high of Dh4.12 but closed flat at Dh4.02. The stock accounted for more than 60 per cent of total trading on the bourse, recording Dh324.38 million of turnover and volume of 79.77 million shares in 1,925 deals.

"The opening of the Burj Khalifa strengthened market sentiment," said Eyad Abdulnabi. "The Burj Khalifa stands as a mark of attachment between Dubai and Abu Dhabi. This will strengthen the UAE's image and have a positive impact on the market."

The DFM recorded Dh540.14m trading turnover as more than 238 million shares changed hands in 5,123 transactions involving 30 stocks.

"Volume was encouraging," added Abdulnabi. "High volume in addition to good prices showed positive market sentiment. However, I don't anticipate any large ups or downs."

Yesterday's other major value churners were Arabtec, DFM, DIC and UP, which together contributed combined turnover of Dh156.07m.


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