Marginal gains by Emaar Properties failed to keep the Dubai Financial Market (DFM) in the green after Tamweel lost 4.09 per cent of its value and closed at Dh5.86.

The market continued its slide down to close at 4,988.82 points, just below the critical level of 5,000 points, after losing 28.74 points, or 0.57 per cent.

Ten stocks advanced in the session but their gains were very limited, while 14 declined and four remained unchanged. Air Arabia and Ajman Bank continued to top the lists of the most actively traded stocks by value and volume. However, both stocks were among the losers with Air Arabia closing at Dh1.57, down by 2.48 per cent, and Ajman Bank at Dh 2.96, losing 0.33 per cent. Trade value and volume remained low at Dh491.9 million and 127.2 million shares respectively.

Analysts considered the low turnover as a positive signal during the current downturn.

"The market still enjoys low selling pressures from investors at the current prices," said Khalid Essa, Assistant General Manager of Rasmala Brokerage.

"There are also low buy bids in the DFM for the last two months. This situation is expected to half the strong downturn for the next few weeks.

"The DFM was in a slow downturn trend until last week when the trend accelerated suddenly, causing sharp loses in the market. The rebound last week was very short-lived and the market has continued its downturn trend again. We expect this trend will return to a slow pace during the next six weeks."

Mohamad Al Beheiri, Trading Manager at Amana Financial Services, agreed that the rebound in the DFM was expected to be short-lived and the market would continue on the downturn trend.

"The DFM has lost around 500 points over four months and despite the sharp decline last week, the rebound took place for one session only," he said. "Yesterday the index returned to its slow downturn trend."

Essa expected that the real estate sector would continue to be the major player in the market due to the concentration of these stocks among major local, institutional and foreign investors.

"The real estate sector will continue to exert strong pressure on the DFM index," he said. "The sector is facing a very negative sentiment since the Morgan Stanley report about expectations for Dubai's real estate sector. Investors interpreted the report in a negative way. Recent news about investigations into misconduct by some real estate companies fuelled this negative sentiment."

Al Beheiri highlighted the need for more transparency in listed companies to avoid such negative sentiment in the future.

"The news about misconduct in the real estate sector during the downturn trend in the market created strong negative sentiment and uncertainty among investors about the sector," he said. "The real estate sector is a major component of the index and such negative sentiment puts high pressure on leading stocks."

Essa said the recent sale of shares by foreign investors would not have much negative impact on the index.

"Foreign investors are always more sensitive towards negative news and downturn trends in the market," he said. "However they are still there on the sidelines waiting for proper chances to enter again. This may lead to sharp gains in the index when the market changes its trend."

Essa predicted that the DFM would continue its downturn until the support level of 4,700 points.


Investors turn buyers

Foreign investors in the DFM were aggregate buyers of shares worth Dh17.38m yesterday. Market data shows that foreign investors – non-Nationals – bought stocks worth Dh191.92m, representing 39.01 per cent of the total purchased in the session. They sold shares valued at Dh174.54m, 35.48 per cent of sales.