DFM has 50% chance of slipping through support level

The Dubai bourse has a 50-50 chance of crashing through its next support level this week.

That is the verdict of Ayman El Saheb, Darahem Financial Brokerage director of operations, although he is hopeful lower prices will tempt back both individual and institutional investors.

The Dubai Financial Market is stuck in a torrid spell, falling 2.83 per cent last week after three times failing to crack 5,850 points. It will open today on 5,659 and further downward pressure could see it fall through a major prop at 5,600.

"There wasn't panic selling last week," said Saheb. "The market is consolidating and bottoming out. In a couple of weeks, second quarter disclosures will start, which provides an incentive for investors to accumulate before speculators get into action. When the latter do move, it will be swift and I expect a couple of spikes in trading this week, which will be mostly flat with a few surprises."

However, the short-term market prospects are likely to be hampered by the listing of Ajman Bank, with many investors selling other positions to free up cash ahead of its debut next Sunday.

"Some people claim the global markets are to blame for the current decline, but foreign investors haven't been active in cashing in recent gains."

The ADX is looking robust, having fallen 0.54 per cent last week to open this week just below its 12 month peak. More money is set to flow into capital's energy sector.

"The number of stocks available for trading in the UAE is relatively low," said financial analyst Wadah Al Taha. He cited Asmak, Waha and Arkan as three stocks that have been subjected to manipulation by speculators.

However, he believes the recent spike in trading in Abu Dhabi-listed banks such as Sharjah Islamic and National Bank of Umm Al Qaiwain is not speculative.