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29 February 2024

Profit booking on active stocks drags ADX down

By Mohamad Al Kady

Profit booking on some active stocks yesterday put pressure on the Abu Dhabi Securities Exchange, which lost 27.73 points, or 1.15 per cent, to close at 2,389.95.

Turnover was low with 76.7 million shares changing hands at a trade value of Dh119.2 million.

Arkan, First Gulf Bank, Dana Gas, Taqa, Aldar and Sorouh stocks all saw profit-taking movements.

The real estate and energy sectors continued to dominate trading with Aldar, Sorouh, Ras Al Khaimah Cement and Dana Gas leading the active stocks in the market.

Arkan lost 9.98 per cent to close at Dh5.23 while Aldar and Sorouh declined by 0.85 and 1.36 per cent respectively.

The ADX continued to show stability and a steady trend with constant support from local institutional investors.

"Although the market is stable and steady in its movements the trade volume is still low," said analyst Taimur Saadat.

"Local investors, including banks, have been net buyers in the ADX since the beginning of the year.

"They bought shares worth Dh2.2 billion and sold shares worth Dh2.1bn. Selling pressure came from foreign investors who bought shares worth Dh438m and sold shares worth Dh590m.

"The ADX is still strong and the overall trend is changing to bullishness. During the next three days the market could face resistance at 2,433 points, while the support level will be 2,360 points."

Saadat said he expected etisalat, RAKCC and Aabar to show bullishness in the short term.

"Etisalat could continue its rally to Dh12.70 during the next two days as the stock remains very strong and bullish," he said. "Also RAKCC could cross Dh1.40 while Aabar could advance to Dh1.83."

Ten target equities in GCC markets

Al Mal Capital has listed 10 target equities in GCC markets – half of which are listed in the UAE.

The firm recommends investors to focus on the companies due to the good quality of their earnings and because their profitability is not driven by leverage and they do not have an immediate need for financing.

Those companies also have no need for potentially dilutive bailouts and have good or improving levels of transparency. The recommendations include Air Arabia, DP World, Dana Gas, etisalat and National Bank of Abu Dhabi, which are all listed on UAE markets. The others on the list are Agthia, Almarai, Saudi Telecom, Commercial Bank of Qatar and Qatar Electricity & Water Company.

The 10 target equities are weighted towards consumer staples, telecoms and transportation.

"We are seeing the first signs of differentiation in regional investment flows," said Al Mal. "Looking at regional trends in liquidity, we have seen traditionally more stable sectors, such as transportation and consumer goods, benefit from 123 per cent and 78 per cent respective increases in daily liquidity."