Sentiment-driven UAE bourses move sideways

The UAE bourses moved sideways, with volumes failing to gain momentum. The Dubai Financial Market (DFM) general index closed slightly lower at 5685.46 points, falling 0.02 per cent, while the Abu Dhabi Securities Exchange (ADX) declined 0.18 per cent to close at 5016.84 points.

Trading volumes continued to fall on the DFM, as 153 million shares changed hands during the day. The total value reached Dh811 million in 4,947 deals, as 12 scrips advanced and nine declined.

"The markets have been trading sideways for sometime now. Although the fundamentals are strong, it is more of a sentiment-driven market," Amro Diab, head of institutional sales at EFG-Hermes, told Emirates Business. Air Arabia scrips rose marginally by 0.50 per cent to end the day at Dh1.98.

More than 20 million shares worth Dh40m were traded in 392 deals, against Wednesday's volume of 59 million.

Earlier this week, investment bank Shuaa Capital said: "Burgeoning competition and cost inflation may have started to erode Air Arabia's first mover advantage in the region, partially reflected by lower margins."

In March, Dubai Government said it plans to launch a low-cost carrier by next year, while Qatar Air is also mulling to enter this sector. Amlak Finance moved back into the positive territory, gaining 0.62 per cent. The share reached an intra-day high of Dh4.86, but closed at Dh4.80 with 10.9 million shares worth Dh52.8m shares being traded.

The Islamic mortgage company said it has renewed its application to become a bank, for which it first applied more than two years ago. Tamweel shares rose 1.32 per cent to end at Dh7.63. More than 11.2 million shares worth Dh86.4m changed hands in 397 deals.

Emirates Business reported on Thursday that Tamweel is projecting a growth in profits by 70 per cent to 80 per cent this year compared to the previous year. "The market has been growing rapidly. With developments getting closer to completion, the mortgage conversion ratio has started rising rapidly," said Wasim Saifi, Chief Executive Officer, Tamweel.

Shuaa Capital, which declined for the past two days, rose 1.35 per cent to close at Dh8.22, as 977,036 shares worth Dh8m were traded. Shuaa Capital and Egypt's Orascom Hotels and Development said last week that they have set up a joint venture to build five business hotels in Egypt.

Among the other gainers was Arab Insurance Group, which increased by 9.06 per cent, while Al Firdous Holding rose 4.84 per cent. "There is indecision between buyers and sellers. The players are waiting for another US Fed rate cut, or some major announcement at the Cityscape in Abu Dhabi," said Amjad Bakir, Trading Manager, Mac Sharaf Securities.

Shares of Union Properties, which closed flat on Wednesday, declined 0.84 per cent to close at Dh4.71.

The Dubai-based company plans to take its F1-X Themepark overseas. "We are in talks to take the F1-X concept overseas," Union Properties' Chief Executive Officer Simon Azzam told Zawya Dow Jones.

On the ADX, real estate shares failed to lead the rally. Aldar Properties fell 0.43 per cent to Dh11.70, RAK Properties close flat at Dh2.18 and Arkan closed lower by 0.73 per cent to Dh5.45.

Sorouh bucked the trend, as it closed 0.21 per cent to Dh9.67, as more than seven million shares were traded.

Sorouh said earlier it plans to raise up to $1 billion (Dh3.6bn) on debt markets this year to support its expansion plans, while RAK Properties said it expected to double its real estate portfolio to $8.1bn within five years.

The Abu Dhabi-based company, which is the second-largest property developer by market value, also said it has no plans to change the percentage of shares open to foreigners. Fujairah Cement rose 2.56 per cent, Gulf Cement jumped 1.62 per cent, while RAK Cement increased 0.99 per cent.

The Ministry of Economy and the Cement Producers Group recently signed a memorandum of understanding to implement the necessary measures to ensure the availability of cement in the local market at reasonable prices.

"There is no doubt that mortgage companies, banks, developers and construction companies will benefit from the growth of real estate sector," Diab said.

Overall, 111 million shares worth Dh602 million were traded in 3894 deals, as 25 companies advanced and 16 declined.

Among the major losers was Gulf Medical Projects Company, which lost 6.16 per cent to end at Dh3.81. InvestBank declined 1.45 per cent to finish at Dh3.40, while Union Insurance lost 2.25 per cent to Dh3.91.

Foreign ownership

The Abu Dhabi National Insurance Company (Adnic), one of the largest insurance firms in the Middle East, approved plans yesterday to allow foreigners to own its shares after boosting capital by 25 per cent.

The company said citizens from the UAE's partners in the six-nation Gulf Co-operation Council (GCC) would be allowed to own up to 49 per cent of its capital, while non-GCC investors can have up to 25 per cent.

In a statement published at the Abu Dhabi Securities Exchange, Adnic said it had also decided to increase its capital by 25 per cent or Dh75 million to Dh375 million divided over 375 million shares. Minister of Economy Sultan Al Mansouri endorsed the company's decisions, said the statement.

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