News Column

Arabtec plunge weighs on Dubai index

June 26, 2014

Sarah Diaa Staff Reporter



Abu Dhabi: The Dubai Financial Market (DFM) index fell 0.71 per cent on Thursday to reach 4,222.75, while the Abu Dhabi Securities Exchange (ADX) general index rose 0.55 per cent to end at 4,664.77.

Most Dubai powerhouses ended the day's trade in the red, as Arabtec plunged 5.49 per cent, while Union Properties dropped 4.48 per cent, and Deyaar Developments declined 1.87 per cent. Emaar also fell 1.32 per cent to reach a share price of Dh8.98. Dubai Islamic Bank, however, gained 0.75 per cent.

Construction giant, Arabtec, reached a price of Dh3.10 on Thursday after a week marred with instability that saw share prices slide more than nine per cent each day from Sunday till Tuesday, and then grow 5.13 per cent on Wednesday.

On Thursday, Arabtec began the day at an opening price of Dh3.30, and almost immediately fell to Dh3.15. Prices continued to fluctuate throughout the day, reaching a maximum of Dh3.30, and closing at Dh3.10.

Analyst Osama Al Ashri said that the change in both DFM and ADX indexes was insignificant.

"The change in both markets is less than one per cent, and at this level, it is considered a minor amendment. Plus, the volume of trade in DFM is quite weak, which means people are not selling their stocks so the change in index is only natural," he said.

Al Ashri, a member of British organisation, Society of Technical Analysts, added that Arabtec's performance also accounts for the drop in DFM. "There is a lot of mystery surrounding Arabtec at the moment, and this is a leading company on DFM, so a drop in Arabtec almost automatically means a drop in DFM. Arabtec today alone carried around 35 per cent of the total value of trade on DFM," he said.

Discussing Arabtec, Al Ashri added, "I think the company may surprise us with a new low of Dh2.67 if it manages to break the support of Dh2.88. If Arabtec does have a new low, this will negatively impact DFM as a whole."

As for ADX, the analyst said he was optimistic with Aldar Properties' stocks, and that it could approach a share price of Dh4 in the next quarter.

"Aldar could be the next Arabtec in terms of being a market leader, and reaching new highs," Al Ashri said.

Of the 31 stocks traded on DFM, 18 went down, 11 went up, and two remained unchanged. Of the 29 stocks traded on ADX, 16 advanced, 10 declined, and three remained flat.

Regarding trade in Ramadan, the Securities and Commodities Authority has announced that the trading session schedule for all financial markets in the country during the holy month shall remain without any change, opening at 10am and closing at 2pm.


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Source: Gulf News (United Arab Emirates)


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