Increase in turnover helps DFM advance

Julian Bruce of EFG-Hermes

The Dubai Financial Market advanced for the seventh time in eight sessions yesterday, while Abu Dhabi also finished in the green to reach a new 52-week high.

Turnover on the DFM's General Index topped Dh1 billion for the sixth session running to help it climb 0.3 per cent to 5,824 points, its best finish since May 8.

The rise of the Abu Dhabi Securities Exchange was more limited, increasing 0.15 per cent to 5,145 points, which is its highest close for a year.

"There seems to be growing interest from foreign institutions, while sentiment among local investors is also picking up," said Julian Bruce, EFG-Hermes director of institutional equity sales.

"The DFM has lagged behind the ADX and other regional markets so valuations are relatively more attractive. "Dubai has seen more gains and more of the action recently because it's still playing catch up with the ADX. Abu Dhabi real estate stocks have led the market, but most of the buying stimulated by Cityscape is now over and investors are looking for new targets, which mostly means Dubai."

Trading on the DFM was fairly balanced, with gainers eclipsing losers 15:12. Interestingly, four of Dubai's top five gainers – Public Warehousing, Al Salam Bank, Al Mazaya and Arab Insurance Group – were secondary listings, with all bar Al Salam seeing volumes of less than 25,000 shares. In contrast, the achievements of Dubai's most active stocks were more muted.

Dubai Investments was the top trader with 59 million shares changing hands to push it up 0.74 per cent, while second and third-placed Air Arabia and Amlak Finance fell 0.49 and 0.38 per cent respectively. The latter has reapplied for a banking licence, having previously been turned down by the UAE authorities.

Emaar's steady recovery continued, with the developer edging up 0.43 per cent to Dh11.75, its best finish for nearly a month. Bruce said: "Institutions are taking positions ahead of second quarter figures which will be good, although it's a bit early to be doing so.

Certain stocks such as Emaar are expected to report a significant improvement in their numbers." Newbie Ekittitab plunged 5.14 per cent to Dh3.51 to take its losses since Sunday to 14.4 per cent. Dubai Islamic Insurance also fell, dropping 1.9 per cent to Dh3.60.

The firm completed a 10-for-one stock split this week. Du and Tamweel were among the other losers, with the latter down 1.87 per cent and former slipping 0.81 per cent as investors cashed in recent gains. Du is up 3.6 per cent for the week, whole Tamweel has added 4.4 per cent over the same period.

Turnover on the ADX eclipsed that of its Dubai's rival for the 13th time in 14 sessions as investors once again focused on the capital's small cap, low cost stocks. Sharjah Islamic Bank was the top trader in cash terms, claiming more than a fifth of Abu Dhabi's Dh1.8 billion turnover to push it up 4.7 per cent to Dh3.13, its highest close since early March.

Thursday's volume was 27 times its 52-week average, so seems speculators seem to have found a new target. "In Abu Dhabi, First Gulf Bank has enjoyed strong buying and remains on investors' radar, while Rak Cement is another to have made significant gains," said EFG's Bruce.

"There will probably be a spill over into other cement stocks as investors take profits." Aabar Investments is also attracting heavy volumes and it climbed 2.3 per cent, while other penny stocks such as Waha, Dana Gas and Rak Cement all enjoyed a brisk trade. Waha was the only one of this trio to close up.

Rak Cement fell for only the second time in 11 sessions and has increased by a quarter since mid-May. Aldar Properties fell 1.2 per cent to Dh12.65 after the developer issues 1.6 million new shares as part of the terms of its convertible sukuk.

Rival Sorouh Real Estate also declined, with the company largely unmoved since hitting its 20 per cent foreign ownership limit in April. dp world falls DP World investors should probably stop reading now if they don't want their weekend spoiled.

The ports operator continued its descent yesterday, falling 1.03 per cent to $0.96, which means the company is down 26 per cent on its IPO price of $1.30. Yesterday's decline came despite reasonable volumes, with 5.4 million shares changing hands.

Depa, the other active stock on the Dubai International Finance Exchange, also toiled, slipping 1.9 per cent to $1.55.