The Dubai Financial Market opened on a higher note yesterday, taking positive cues from overnight gains in Saudi Arabia and on Wall Street, later turned weak on profit taking.
Early gains were wiped out as the general index fell 14.92 points, or 0.90 per cent, to close at 1,638.15 compared with last week's close of 1,653.07.
The market initially moved positively in response to the approval of the Roads and Transport Authority's projects worth Dh1.4 billion by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.
Trading moved in a narrow sideways range as investors remained wary about the immediate outlook for the global economy and the imminent announcement of first quarter earnings. "The market opened positively as investors were upbeat about global markets and the Saudi gains," Amjad Bakir, Trading Manager at Mac Sharaf Securities, told Emirates Business. "But early gains couldn't be sustained because of speculative selling. I see the next support levels at 1,630 and 1,580. If the market closes above 1,550 points today then it will hit next resistance levels at 1,655 and 1,680."
Mathew Wakeman, Managing Director for Cash and Equity-linked Trading at EFG Hermes, said: "Investors started the session in bullish mood but could not keep the momentum going amid lower than average volume.
"The school of thought that the worst is behind us and some glimmers of recovery are coming through is gathering pace and that's giving investors confidence to hold positions into Q1 earnings releases.
"Stable global markets are proving supportive and we are starting to see some foreign institutional cash returning to the markets."
Deyaar topped the list of gainers during the first half of the session over anticipation of substantial profits in the first quarter. But the stock closed at its previous price of Dh0.67. In the morning session the UAE's leading real estate major, Emaar Properties, moved up by 2.4 per cent but it later dipped to Dh2.48, losing 1.58 per cent. Union Properties rose by 1.1 per cent as real estate stocks dominated early trading and ended at last week's close of Dh0.90.
Bakir added: "Some information indicating negative performance in the first quarter was leaked into the market and this dragged the stocks down. Emaar shares closed with losses as market sentiment was further weakened by expectations of a bleak quarter performance. Deyaar was down on profit-taking by investors." Market experts have been anticipating growing buying momentum for some time and this is likely to be followed by some quick profit taking.
Sanyalaksna Manibhandu, research head at Emaar Financial Services, said: "The DFM was higher on a good start, taking positive cues from the gains on the Saudi and US markets, and came down as investors preferred to book profits. I would say the market undercurrent is bullish but it lacks any positive triggers."
All the indices on DFM closed in red. Banks index eased 8.71 points, insurance 11.69, investment 3.77, real estate index 33.26, transportation 3.49, materials 4.89, telecom 3.24 and utilities index 36.06 points.
Trading turnover was worth Dh351.31m as 293.76 million shares were changed hands in 4,807 transactions. Arabtec, Deyaar, Emaar, DSI and DFM were the main volume pushers. Arabtec recorded Dh75.88m trading, Deyaar Dh58m, Emaar Dh57m, DSI Dh35m and DFM Dh32.9m. After a positive opening, which lasted for only the first half-hour of the session, the index approached the intraday highs of 1,684 before meeting profit-booking.
Shiv Prakash, a technical analyst at MAC Capital, said: "Profit-booking on the higher levels made the market close 0.90 per cent lower. The real estate sector was hammered as it fell 1.24 per cent. The major losers were DSI, Ajman Bank, Tabreed and Aman.
"Volumes were very low and look that markets may continue the sideways movement in the days to come."
Only two scrips rise
All the traded stocks on the DFM – barring Shuaa Capital and Al Salam Bank – Bahrain, which recorded less than one per cent gains – closed lower on speculative selling.
Shuaa firmed up by 0.95 per cent at Dh1.06 and Al Salam Bank – Bahrain closed up 0.91 per cent at Dh 1.06. About 198,000 shares in Al Salam Bank – Bahrain worth Dh214 million were traded while more than 340 million Shuaa shares worth Dh362m changed hands. Of the 24 traded scrips, 16 declined and six remained at their previous closing levels.
Meanwhile, the DFM has informed the exchange that its board meeting will to be held on April 29. The meeting will discuss key issues such as approving the budget for 2009.
A semi-annual coupon payment on Dubai Global Sukuk is due on May 5, informs Standard Chartered Bank, the paying agent for the bonds. Bond-holders whose names are in the register on April 28 will be entitled to the coupon payment, which will be paid for the period of November 4, 2008, to May 4, 2009. Trading in DGS109 on DFM will be suspended from April 29 to May 4 and will resume on May 5.
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