The UAE stock markets are looking to positive news from creditors of Dubai World and encouraging first quarter numbers, which will set the tone for the next level of indices. The markets are expected to be stable to positive this week. After the recent volatility following the news about Arabtec-Aabar deal and other corporate news, the markets are likely to be range-bound as market players are in a wait-and-watch mode and cautious ahead of Dubai World news and Q1 earnings.
"I think the market is likely to be stable to positive depending upon outcome of the news from Dubai World and its creditors. At present, the market is very sensitive and may move significantly to any news. I believe that creditors of Dubai World would announce positive news soon," Wadah Al Taha, senior financial analyst, told Emirates Business.
"Global markets entered into correction phase and this might impact the local markets up to certain extent. Since the UAE markets are trading lower, I don't expect there would be significant correction. News from Dubai World would impact the market positively, but this was discounted by the market already," said Taimur Saadat, Head of Technical Analysis at Arab Capital Markets Resource Centre.
The first week of the month saw the DFM index easing more than five per cent. Many stocks were in oversold position and this resulted in rebound on the bourse in the second week despite some volatility following the market sensitive developments took place.
The index added 2.90 per cent last week as it closed at 1816.43 points netting a gain of 51.20 points from the previous week's close of 1765.23 points. ADX general index marginally gained 1.17 per cent or 33.22 points during the period and closed the week at 2856.66 points, when compared with 2823.44 points of previous weekend. DFM witnessed upward movement in three sessions and downward in two sessions.
"Last week's closing was good. The cancellation of Aabar's stake buying in Arabtec influenced the trading on the both the exchanges," said Al Taha.
Foreign investors sold Dh1.53bn worth stocks accounting for 45.40 per cent of the total trading, while their buying stood at Dh610.70 million comprising 18 per cent of the total value of the stocks traded on the bourse. Though DFM recorded heavy trading from foreign investors, it witnessed more on the sell side as net selling stood at Dh36.71m.
It was the support extended by institutions, companies and banks that lifted the index upwards. The net investment of banks stood at Dh32.08m, companies' buying at Dh11.54m and total institutional investment at Dh39.78m. This institutional support eroded the losses caused by foreign investors selling.
Arabtec and Aabar Investments stocks hogged the limelight on the UAE bourses after the deal to acquire 70 per cent stake in the former was called off. The Arabtec stock soared to three-month high gained 2.26 per cent on Wednesday and later retreated on Thursday as the stock eased 1.85 per cent to close at Dh2.66.