Selling pressures hit real estate stocks in Abu Dhabi

Real estate and energy stocks put strong pressure on the Abu Dhabi Securities Exchange (ADX) yesterday as the UAE capital's market lost 28.2 points, or 0.99 per cent, to close at 2826.18. The ADX retreated on relative high turnover as 420.5 million shares with a total value of Dh658 million changed hands. Real estate stocks Aldar, Sorouh and Rakprop accounted for around 55 per cent of both volume and value. There was selling pressure on the three stocks from the beginning of the session. Aldar and Sorouh declined by 4.36 and 3.65 per cent respectively, while Rakprop ended the session flat at Dh0.77 after going down to Dh0.71 during intraday trading. Selling pressure also hit the energy sector with Dana, Taqa and Aabar retreating. Banking declined by 2.14 per cent even though there was low turnover in the sector. National Bank of Abu Dhabi, Abu Dhabi Commercial Bank and Abu Dhabi Islamic Bank fell while Bank of Sharjah was among the top gainers. Analysts say the ADX's decline was a reflection of the retreat by regional markets as well as the DFM's fall. "Selling pressure on the ADX started after sharp profit booking was seen on the DFM," said Humam Al Shamaa, a financial consultant at Al Fajr Securities. "Speculators and foreign investors, who had been accumulating selected stocks during the recent rally, rushed to sell. This put more pressure on the Abu Dhabi exchange. "Real estate stocks appreciated during the past two weeks and foreign investors were strong buyers. Yesterday, we saw Aldar and Sorouh facing strong profit booking. However, this trend is still positive as it will help the market to reduce its volatility." Shiv Prakash, an equity investment analyst at MAC Capital Advisors, said the profit booking is a good opportunity for investors to enter the market at lower levels. "The ADX met the channel resistance levels of 2890, as was predicted a few days ago, and met profit booking which caused the market to shed 0.99 per cent with selling seen on Aldar, Dana, FGB and Sorouh. "Investors always start selling before the market reaches the exact resistance levels. This correction will be an opportunity to enter at lower levels for selected stocks. Profit booking should be considered as a healthy sign and was very much expected as we were trading near resistance levels. There will be a period of consolidation in the coming sessions." Etisalat's power The telecommunications heavyweight etisalat continued its rally and helped to reduce the ADX's losses yesterday. The stock added 1.85 per cent to close at Dh11.00, its highest level since March 30. Humam Al Shamaa said etisalat's price used to move slowly as foreign investors were not allowed to buy the stock. "However, we have noticed some changes in investment strategies among local investors," he added. "There are increasing movements and turnover in the stock, which indicated some speculation," he said. "The fundamentals and outlook of the company are strong and will help the stock to continue its rally. We expect this will continue on a gradual bases," said Shamaa. Keep up with the latest business news from the region with the daily Emirates Business 24|7 newsletter. To subscribe to the newsletter, please click here