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27 May 2024

UAE markets gain despite low turnover

By Matt Smith




Low turnover could not stop the UAE stock markets from making gains yesterday. Trading on the Dubai Financial Market slumped to Dh1.3 billion as the index climbed 1.12 per cent to 5,778 points. The Abu Dhabi Securities Market fared even better, surging 1.85 per cent to 4,778 points as Dh1.26bn worth of shares changed hands.


“The market moved very slowly – investors are cautious after the latest downturn on the international exchanges,” said Sherif Abdul Khalek, Al  Futtaim HC Securities dealing room manager. “There weren’t may sellers, so limited accumulation helped push the market up, despite the low turnover.”


However, the subdued trading value indicated that investors were targeting low-cost stocks. Of the 500 million shares traded on the two markets, just under half were worth less than Dh3 each.


“Investors stayed away from the more expensive stocks to focus on the likes of Air Arabia and Gulf Navigation,” said Krishna Murthy, Chief Executive of Al Rostamani Group’s financial services division.

The former climbed 1.47 per cent, while the latter added 4.57 per cent. “People are still unsure in which direction the market is heading. It’s going to be range-bound for the time being. The low turnover is a good sign in a declining market as it shows investors are not desperate to sell.”


In Dubai, Gulf Finance House and Al Mazaya enjoyed double-digit gains, while Emaar Properties made a limited recovery following Wednesday’s four per cent decline. The property developer added 0.41 per cent to close on Dh12.15.


Meanwhile, etisalat was the most significant move in the capital, with the telecoms giant jumping 3.97 per cent to Dh24.85. National Bank of Fujairah and First Gulf Bank were other notable gainers, adding 6.13 and 3.34 per cent, respectively. Long-term favourites Sorouh, up 2.79 per cent, and Aldar, up 1.36 per cent, also made progress.

Khalek said: “Aldar picked up in the middle of the session, before selling dragged it down.”


“The global macro economy doesn’t have a strong correlation with the UAE indices, but the latter are still affected by the whims of the international markets,” said Murthy.

Khalek said: “We will have to wait to see how the global markets perform for the rest of the week, before gauging how the UAE exchanges will perform on Sunday.”


With the markets experiencing gains and losses in alternating sessions, investors and analysts are struggling to call which way the market is heading in the short term. Buoyant liquidity, decent valuations and strong fundamentals all point to an imminent bull run, but such predictions have so far proved premature.

“The UAE is an emerging market, so when the stock exchanges go up they overshoot and when they go down they over correct,” said Amro Diab, EFG-Hermes head of institutional sales.