News Column

Dubai index dips despite Arabtec rise

May 18, 2014

Andy Staples Editor Universal Copy Desk

Dubai: The Dubai Financial Market index (DFM) slipped 45 points on Sunday to close 0.87 per cent down at 5,135.95, even though Arabtec, the best-selling stock by overall value of trades, increased its price.

Abu Dhabi Securities Exchange index (ADX) saw similar declines, which the ADX losing 0.7 per cent to close at 4986.09, and declines in all subindices except the services sector, which gained 0.9 per cent.

Independent investor Adel Al Hammadi said the falls were a correction after a period of significant increases, and the falling prices were likely to continue for several days.

"It's an expected correction," he said. "This is what's happening, especially to the leading companies. There's a big amount of liquidity going to Arabtec; I expect lower trading levels in Arabtec over the next few days all the news about Arabtec is known to everyone now."

Analyst Osama Al Ashri considered the dips consolidation, rather than correction. "If the DFM breaks support levels of 5033 we will see a correction, maybe going down to second support at 4,872. But if it doesn't touch 5,033 then the trend is still up but the up target has a condition; it must touch the resistance level at 5,627.

"The ADX, in spite of breaking 5.000, still has very positive signals. It has an up target of 5,442, maybe within four months. It didn't go down strongly, less than 1 per cent."

Arabtec accounted for 46 per cent of the total value of trades on the DFM Dh714 million of the Dh1.5 billion value on Sunday and its price increased 1.25 per cent to close at Dh7.27.

But all the other markets highest traded shared by value declines. Emaar lost 1.91 per cent to close at Dh10.25; Dubai Islamic Bank lost 1.17 per cent to close at Dh7,61; Union Properties closed 0.87 per cent down at Dh2.29; Air Arabia lost 1.44 per cent to close at Dh1.37; and market operators Dubai Financial Market closed 1.37 per cent down at Dh3.60.

All the DFM subindices that recorded trades declined save for the telecoms sector, which gained 1.35 per cent.

Aldar, the ADX's most-traded stock by value, accounting for Dh191 million of the total Dh509 million worth of trades, lost 0.13 per cent to close at Dh3.91.

Eshraq, which saw trades worth Dh93 million, lost 0.03 per cent to close at Dh1.78.

Abu Dhabi Commercial Bank and the National Bank of Abu Dhabi had similar trading levels Dh44.6 million and Dh42 million, respectively and saw small increases. ADCB finished 0.04 per cent up at Dh8.18 and NBAD 0.15 per cent up at Dh14.40.

Al Ashri, a member of Britain'sSociety of Technical Analysts, said Arabtec shares continued to have targets above Dh8, with resistance at Dh8.17.

He considered Gulf Finance House to be a good stock for both traders and investors. "It's very rare to find a share that is good for both traders and investors. It's moving fast, and it's very strong.

He believed the firm was performing better than its first quarter profits indicated, as it has invested a considerable portion of its first-quarter revenues in potentially profitable acquisitions, and it had made good profit on the sale of England's Leeds United football team, which would go into its second quarter figures. Its purchase of a Dubai school would bringing in revenues of up to Dh120 million a year, he believed.

"I expect very good results in the second quarter," he said.

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Source: Gulf News (United Arab Emirates)

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